2
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
VISION GROUP OF FUNDS, INC.
(Name of Registrant as Specified In Its Charter)
FEDERATED SERVICES COMPANY
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction applies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
4. Proposed maximum aggregate value of transaction:
5. Total fee paid:
[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------
4) Date Filed:
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VISION GROUP OF FUNDS, INC.
IMPORTANT SHAREHOLDER INFORMATION
These materials are for a special meeting of shareholders scheduled for October
23, 2000 at 2:00 p.m., Eastern time. This information will provide you with
details of the proposals to be voted on at the special meeting, and includes
your Proxy Statement and proxy card. A proxy card is, in essence, a ballot. When
you vote your proxy, it tells us how you wish to vote on important issues
relating to your Fund(s). If you complete and sign the proxy, we'll vote it
exactly as you tell us. If you simply sign the proxy, we'll vote it in
accordance with the Board of Directors' recommendations on page 3 of the Proxy
Statement.
WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSALS IN THE PROXY
STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW HOW
YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY, THE
CORPORATION MAY BE ABLE TO SAVE MONEY BY NOT HAVING TO CONDUCT ADDITIONAL
MAILINGS.
WE WELCOME YOUR COMMENTS. IF YOU HAVE ANY QUESTIONS, CALL 1-800-836-2211 (OR, IN
THE BUFFALO AREA, 635-9368).
ii
1
VISION GROUP OF FUNDS, INC.
VISION TREASURY MONEY MARKET FUND
VISION MONEY MARKET FUND
VISION NEW YORK TAX-FREE MONEY MARKET FUND
VISION U.S. GOVERNMENT SECURITIES FUND
VISION NEW YORK MUNICIPAL INCOME FUND
VISION LARGE CAP VALUE FUND
VISION MID CAP STOCK FUND
VISION LARGE CAP GROWTH FUND
VISION LARGE CAP CORE FUND
A LETTER FROM THE PRESIDENT
Dear Shareholders:
I am writing to request that you consider a number of important matters relating
to your investment in Vision Group of Funds, Inc. (the "Corporation") in
connection with a special meeting of shareholders (the "Special Meeting") of the
Corporation's series listed above (together, the "Funds"), to be held on October
23, 2000 at 2:00 p.m., Eastern time, at 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237-7000. The materials that we have included discuss the
proposals to be voted on at the Special Meeting that will affect the future of
the Corporation and the Funds.
The Board of Directors (the "Board") of the Corporation recommends that
shareholders cast their votes IN FAVOR OF:
1. Electing the Board of Directors;
2. Ratifying the appointment by the Directors of Ernst & Young LLP as the
independent auditors for the Corporation, for the fiscal year ending
April 30, 2001;
3. Amending certain of the Funds' fundamental investment policies;
4. Amending certain of the Funds' fundamental investment policies and
reclassifying them as non-fundamental investment policies;
5. Eliminating certain of the Funds' fundamental investment policies;
6. Reclassifying the fundamental investment policy of the Vision New York
Municipal Income Fund concerning investments in exempt interest
obligations as a non-fundamental investment policy; and
7. Reorganizing the Corporation from a Maryland corporation to a Delaware
business trust.
PLEASE TAKE A MOMENT TO REVIEW THIS DOCUMENT AND FILL OUT, SIGN AND RETURN THE
ENCLOSED PROXY CARD.
We ask you to confirm the Board's recommendation by electing the current
Directors of the Corporation. We also ask that you ratify the Board's selection
of Ernst & Young LLP as independent auditors for the Corporation.
The Board has also proposed amending, reclassifying and/or eliminating certain
of the Funds' fundamental investment policies. We believe that the recommended
changes will provide additional investment opportunities to the Funds, as
further described in the attached Proxy Statement. We urge you to approve these
proposals that are designed to benefit all shareholders by providing the Funds
with greater flexibility in pursuing their investment objectives.
The Board has also recommended that the Corporation be reorganized as a Delaware
business trust because Delaware law permits a less complicated structure and
allows greater flexibility in an investment company's business operations. In
addition, Delaware business trusts are not subject to certain states' taxes,
which may result in a reduction in certain of the Corporation's expenses.
The Proxy Statement includes a question and answer format designed to provide
you with a simpler and more concise explanation of certain issues. Although much
of the information in the Proxy Statement is technical and is required by the
various regulations that govern the Corporation and the Funds, we hope that this
format will be helpful to you.
I am sure that you, like most people, lead a busy life and are tempted to put
this proxy aside for another day. Please don't. When shareholders do not return
their proxies, additional expenses are incurred by the Funds to pay for
follow-up mailings and telephone calls.
Sincerely,
Edward C. Gonzales
President
VISION GROUP OF FUNDS, INC.
VISION TREASURY MONEY MARKET FUND
VISION MONEY MARKET FUND
VISION NEW YORK TAX-FREE MONEY MARKET FUND
VISION U.S. GOVERNMENT SECURITIES FUND
VISION NEW YORK MUNICIPAL INCOME FUND
VISION LARGE CAP VALUE FUND
VISION MID CAP STOCK FUND
VISION LARGE CAP GROWTH FUND
VISION LARGE CAP CORE FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON OCTOBER 23, 2000
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the "Special
Meeting") of Vision Group of Funds, Inc. (the "Corporation"), which presently
consists of nine portfolios or series, the Vision Treasury Money Market Fund
(the "Treasury Fund"), Vision Money Market Fund (the "Money Market Fund"),
Vision New York Tax-Free Money Market Fund (the "New York Money Market Fund"),
Vision U.S. Government Securities Fund (the "Government Securities Fund"),
Vision New York Municipal Income Fund (the "Municipal Income Fund"), Vision
Large Cap Value Fund (the "Large Cap Value Fund"), Vision Mid Cap Stock Fund
(the "Mid Cap Stock Fund"), Vision Large Cap Growth Fund (the "Large Cap Growth
Fund"), and Vision Large Cap Core Fund (the "Large Cap Core Fund") (each
individually a "Fund," and collectively, the "Funds"), will be held at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, on October 23, 2000 at
2:00 p.m., Eastern time, to vote on the following Proposals:
1. To elect Directors of the Corporation;
2. To ratify the selection of Ernst & Young LLP as the independent
auditors of the Corporation;
3. To approve amendments to certain of the Funds' fundamental investment
policies:
(a) To amend the Funds' fundamental investment policies
regarding diversification (applies to the Money Market Fund,
New York Money Market Fund, Government Securities Fund and
Large Cap Value Fund ONLY);
(b) To amend the Funds' fundamental investment policies regarding
borrowing money and issuing senior securities (applies to all
Funds EXCEPT the Mid Cap Stock Fund, Large Cap Growth Fund and
Large Cap Core Fund);
(c) To amend the Funds' fundamental investment policies regarding
investments in real estate (applies to all Funds EXCEPT the
Mid Cap Stock Fund, Large Cap Growth Fund and Large Cap Core
Fund);
(d) To amend the Funds' fundamental investment policies regarding
investments in commodities (applies to all Funds EXCEPT the
Mid Cap Stock Fund, Large Cap Growth Fund and Large Cap Core
Fund);
(e) To amend the Funds' fundamental investment policies regarding
underwriting securities (applies to all Funds EXCEPT the Mid
Cap Stock Fund, Large Cap Growth Fund and Large Cap Core
Fund);
(f) To amend the Funds' fundamental investment policies regarding
lending (applies to all Funds EXCEPT the Mid Cap Stock Fund,
Large Cap Growth Fund and Large Cap Core Fund); and
(g) To amend the Funds' fundamental investment policies regarding
concentration of the Funds' investments in the securities of
companies in the same industry (applies to all Funds EXCEPT
the Mid Cap Stock Fund, Large Cap Growth Fund and Large Cap
Core Fund);
4. To approve amendments to, and the reclassification of, certain of
the Funds' fundamental investment policies:
(a) To amend, and to reclassify as non-fundamental, the Funds'
fundamental investment policies regarding buying securities on
margin (applies to all Funds EXCEPT the Mid Cap Stock Fund,
Large Cap Growth Fund and Large Cap Core Fund);
(b) To amend, and to reclassify as non-fundamental, the Funds'
fundamental investment policies regarding pledging assets
(applies to all Funds EXCEPT the Mid Cap Stock Fund, Large Cap
Growth Fund and Large Cap Core Fund);
(c) To amend, and to reclassify as non-fundamental, the Funds'
fundamental investment policies regarding investing in
securities of other investment companies (applies to the
Treasury Fund and Money Market Fund ONLY); and
(d) To amend, and to reclassify as non-fundamental, the Funds'
fundamental investment policies regarding investing in
restricted securities (applies to the Treasury Fund and Money
Market Fund only);
5. To approve the elimination of certain of the Funds' fundamental
investment policies:
(a) To eliminate the Funds' fundamental investment policies
regarding selling securities short (applies to all Funds
EXCEPT the Mid Cap Stock Fund, Large Cap Growth Fund and Large
Cap Core Fund);
(b) To eliminate the Funds' fundamental investment policies
regarding investing in issuers whose securities are owned by
officers and directors (applies to the Treasury Fund and Money
Market Fund ONLY);
(c) To eliminate the Funds' fundamental investment policies
regarding investing in puts and calls (applies to the Treasury
Fund and Money Market Fund ONLY);
(d) To eliminate the Funds' fundamental investment policies
regarding investing in new issuers (applies to the Treasury
Fund and Money Market Fund ONLY);
(e) To eliminate the Funds' fundamental investment policies
regarding investing in voting securities and revenue bonds
(applies to the Treasury Fund and Money Market Fund ONLY);
(f) To eliminate the Funds' fundamental investment policies
regarding investing to exercise control (applies to the
Treasury Fund and Money Market Fund ONLY); and
(g) To eliminate the Funds' fundamental investment policies
regarding investing in oil, gas and minerals (applies to the
Treasury Fund and Money Market Fund ONLY);
6. To approve reclassifying as non-fundamental the Municipal Income
Fund's fundamental investment policy regarding investing in
exempt interest obligations (applies to the Municipal Income Fund
ONLY); and
7. To approve the reorganization of the Corporation from a Maryland
corporation to a Delaware business trust.
To vote upon any other business that may properly come before the
Special Meeting or any adjournments thereof.
The Board of Directors has fixed August 30, 2000 as the record date for
determination of the shareholders entitled to notice of, and to vote at, the
Special Meeting or any adjournments of the Special Meeting.
By Order of the Board of Directors,
C. Todd Gibson
Secretary
September 11, 2000
(i)
TABLE OF CONTENTS
PAGE
Questions and Answers About the Special Meeting and the Proxy Statement 1
Proposal 1: Election of Directors of the Corporation.........................6
Proposal 2: Ratification of the Selection of Ernst & Young LLP as the
Independent Auditors for the Corporation................................10
Proposal 3: Approval of Amendments to Certain of the Funds' Fundamental
Investment Policies....................................................... 13
3(a):Diversification of Investments..................... 13
3(b):.Borrowing Money and Issuing Senior Securities..... 14
3(c):.Real Estate 17
3(d):.Commodities 18
3(e):.Underwriting Securities............................... 19
3(f):.Lending 20
3(g):.Concentration of Investments...................... 22
Proposal 4: Approval of Amendments to, and the Reclassification of, Certain of
the Funds' Fundamental Investment Policies......................... 24
4(a):.Buying Securities on Margin............................ 24
4(b):.Pledging Assets 25
4(c):Investing in Securities of Other Investment Companies.... 26
4(d):.Investing in Restricted Securities..................... 28
Proposal 5: Approval of the Elimination of Certain of the Funds' Fundamental
Investment Policies.................................................. 29
5(a):.Short Sales 30
5(b):.Purchasing Securities of Issuers Owned by Officers and Directors
30
5(c):.Investing in Puts and Calls............................ 31
5(d):.Investing in New Issuers............................... 31
5(e):.Investing in Voting Securities and Revenue Bonds....... 32
5(f):.Investing to Exercise Control.......................... 32
5(g):.Investing in Oil, Gas and Minerals..................... 33
Proposal 6: Approval of Reclassifying as Non-Fundamental the Municipal
Income Fund's Fundamental Investment Policy Pertaining to Investing in
Exempt Interest Obligations.......................................... 33
Proposal 7: Approval of the Reorganization of the Corporation from a Maryland
Corporation to a Delaware Business Trust........ ....................... 34
Other Business..................................... .................... 37
Information about the Corporation...................................... 37
Further Information about Voting and the Special Meeting............... 39
EXHIBITS
Exhibit A: Agreement and Plan of Reorganization ....................... A-1
Exhibit B: Comparison and Significant Differences between Delaware Business
Trusts and Maryland Corporations.............................. B-1
42
1
VISION GROUP OF FUNDS, INC.
VISION TREASURY MONEY MARKET FUND
VISION MONEY MARKET FUND
VISION NEW YORK TAX-FREE MONEY MARKET FUND
VISION U.S. GOVERNMENT SECURITIES FUND
VISION NEW YORK MUNICIPAL INCOME FUND
VISION LARGE CAP VALUE FUND
VISION MID CAP STOCK FUND
VISION LARGE CAP GROWTH FUND
VISION LARGE CAP CORE FUND
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237-7000
PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
AND PROXY STATEMENT
INFORMATION ABOUT VOTING
Q. WHO IS ASKING FOR MY VOTE?
A. The Board of Directors (the "Board" or the "Directors") of Vision Group of
Funds, Inc. (the "Corporation"), in connection with the special meeting of
shareholders to be held at 2:00 p.m., Eastern time, on October 23, 2000
(the "Special Meeting") at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7000, has requested your vote on several matters. The Directors
propose to mail the notice of the Special Meeting, the proxy card, and
this Proxy Statement to shareholders of record on or about September 20,
2000.
The Corporation was incorporated under the laws of the State of Maryland
on February 23, 1988. This Proxy Statement relates to the Corporation's
nine series or portfolios:
o Vision Treasury Money Market Fund (the "Treasury Fund"),
o Vision Money Market Fund (the "Money Market Fund"),
o Vision New York Tax-Free Money Market Fund (the "New York Money Market
Fund"),
o Vision U.S. Government Securities Fund (the "Government Securities Fund"),
o Vision New York Municipal Income Fund (the "Municipal Income Fund"),
o Vision Large Cap Value Fund (the "Large Cap Value Fund"),
o Vision Mid Cap Stock Fund (the "Mid Cap Stock Fund"),
o Vision Large Cap Growth Fund (the "Large Cap Growth Fund"), and
o Vision Large Cap Core Fund ("Large Cap Core Fund").
A series may be referred to in this Proxy Statement as a "Fund," and the
series are collectively called the "Funds."
Q. WHO IS ELIGIBLE TO VOTE?
A. Shareholders of record of the Funds at the close of business on August 30,
2000 (the "Record Date") are entitled to notice of and to vote at the
Special Meeting or at any adjournment of the Special Meeting. Shareholders
of record will be entitled to one vote for each full share and a
fractional vote for each fractional share that they hold on each matter
presented at the Special Meeting.
Q. WHAT IS BEING VOTED ON AT THE SPECIAL MEETING?
A. The Board is asking shareholders to vote on the following proposals
affecting the Corporation:
1. To elect the Board of Directors of the Corporation (Proposal 1);
2. To ratify the selection of Ernst & Young LLP as the independent
auditors for the Corporation for the fiscal year ending April 30, 2001
(Proposal 2);
3. To amend certain of the Funds' fundamental investment policies
(Proposals 3(a)-3(g));
4. To amend, and to reclassify as non-fundamental, certain of the Funds'
fundamental investment policies (Proposals 4(a)-4(d));
5. To eliminate certain of the Funds' fundamental investment policies
(Proposals 5(a)-5(g));
6. To reclassify a fundamental investment policy of the Municipal Income
Fund as a non-fundamental investment policy of the Fund (Proposal 6);
and
7. To reorganize the Corporation from a Maryland corporation to a
Delaware business trust (Proposal 7).
At its meeting on August 11, 2000, the Board reviewed and approved the
proposed changes to the fundamental investment policies of the Funds, and
the proposed Agreement and Plan of Reorganization relating to the proposal
to reorganize the Corporation as a Delaware business trust. All of the
proposed changes, along with the Agreement and Plan of Reorganization, are
subject to shareholder approval. The purposes of the Special Meeting are
set forth in the accompanying Notice.
The following table briefly identifies the proposals to be voted on at the
Special Meeting and the shareholders who are being solicited with respect
to each proposal. As reflected in the Notice and the Proxy Statement,
Proposals 3 through 5 contain sub-proposals that apply to only certain
Funds. Shareholders of a Fund to which a sub-proposal applies will vote
separately on that sub-proposal. The discussion in the Proxy Statement and
your proxy card(s) clarify which sub-proposals apply to your Fund(s).
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PROPOSAL SHAREHOLDERS SOLICITED
--------------------------------------------------------------------------
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1. Election of Directors of the Corporation All Funds of the
Corporation Voting
Together
--------------------------------------------------------------------------
--------------------------------------------------------------------------
All Funds of the
2. Ratification of the Selection of the Corporation Voting
Independent Auditors Together
--------------------------------------------------------------------------
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All Funds EXCEPT the Mid
Cap Stock Fund, Large
3. Amendments to the Funds' fundamental Cap Growth Fund and
investment policies Large Cap Core Fund
--------------------------------------------------------------------------
--------------------------------------------------------------------------
All Funds EXCEPT the Mid
4. Amendments to, and the Reclassification of, Cap Stock Fund, Large
Certain of the Funds' fundamental investment Cap Growth Fund and
policies Large Cap Core Fund
--------------------------------------------------------------------------
--------------------------------------------------------------------------
All Funds EXCEPT the Mid
5. Elimination of Certain of the Funds' Cap Stock Fund, Large
fundamental investment policies Cap Growth Fund and
Large Cap Core Fund
--------------------------------------------------------------------------
--------------------------------------------------------------------------
6. Reclassification of a fundamental
investment policy pertaining to investing in
exempt interest obligations as a Municipal Income Fund
non-fundamental investment policy ONLY
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7. Approval of an Agreement and Plan of All Funds of the
Reorganization whereby the Corporation would
be reorganized as a Delaware business trust Corporation
Voting Together
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Q. HOW DO THE DIRECTORS RECOMMEND THAT I VOTE ON THESE PROPOSALS?
A. The Directors recommend that shareholders vote FOR each proposal.
Q. ARE THERE ANY PROPOSALS THAT WILL IMPACT THE FUNDS' INVESTMENT POLICIES OR
LIMITATIONS?
A. Yes. Although none of the proposed changes is expected currently to
materially impact the day-to-day management of the Funds, it is proposed
that certain of the Funds' investment policies that are "fundamental" (that
is, those that cannot be changed without shareholder approval) be amended,
reclassified as non-fundamental, or eliminated. If these proposals are
approved by shareholders, the Funds' Board of Directors will have more
flexibility to respond to future developments by changing the Funds'
investment policies in a manner intended to achieve the Funds' investment
goals without obtaining shareholder approval. Shareholders, of course, will
be informed of any significant changes to the Funds' investment policies
before such changes are implemented, and any additional amendments to the
fundamental investment policies will have to be submitted to shareholders,
for their approval. These proposals are intended to eliminate the cost and
delay of seeking shareholder approval for changes in investment policies
that would not otherwise require convening a shareholder meeting. Given the
limited impact that these changes are expected to have currently on the
day-to-day management of the Funds, shareholder approval of these proposals
is not expected to increase the Funds' current overall level of risk.
Q. WHY AM I BEING ASKED TO APPROVE AMENDMENTS TO, AND RECLASSIFICATIONS OF,
CERTAIN OF THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES?
A. Certain of the Funds' fundamental investment policies were adopted in
response to state laws that are no longer applicable, or to market
conditions that no longer exist, and thus may be overly restrictive.
Approval of the proposed amendment and/or reclassification of these
fundamental policies will provide the Funds with greater investment
flexibility within the boundaries imposed by applicable law. The proposed
changes are not expected to have any immediate effect on the manner in
which the Funds are managed.
Q. WHY AM I BEING ASKED TO APPROVE THE ELIMINATION OF CERTAIN OF THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES?
A. Several of the Funds' current fundamental investment policies reflect past
regulatory, business or industry conditions, and practices or requirements
that are outdated, unnecessary or potentially burdensome. Approval of the
proposals to eliminate certain investment policies initially will not
result in any immediate changes to the management of the Funds, but will
provide the Funds with greater flexibility to pursue their investment
goals.
Q. WHY AM I BEING ASKED TO APPROVE THE REORGANIZATION OF THE CORPORATION FROM
A MARYLAND CORPORATION TO A DELAWARE BUSINESS TRUST?
A. Delaware law offers several advantages to investment companies organized
as a Delaware business trust as compared to Maryland corporations. The
Delaware business trust is a less complicated structure, allows greater
flexibility in an investment company's business operations, and may offer
certain state tax and fee savings.
Q. WHEN WILL THE PROPOSALS TAKE EFFECT IF THEY ARE APPROVED?
A. If approved, each of the proposals will become effective on or about
October 26, 2000.
Q. HOW DO I VOTE MY SHARES?
A. You may vote your shares (i) in person, by attending the Special Meeting or
(ii) by mail. To vote by mail, sign, date and send us the enclosed proxy in
the envelope provided.
Proxy cards that are properly signed, dated and received at or prior to
the Special Meeting will be voted as specified. If you specify a vote for
any of the Proposals 1 through 7, your proxy will be voted as you
indicate. If you simply sign, date and return the proxy card, but do not
specify a vote for any of the Proposals 1 through 7, your shares will be
voted by the proxies as follows:
o IN FAVOR of the nominees for the Board of Directors (Proposal 1);
o IN FAVOR of ratifying the selection of Ernst & Young LLP as independent
auditors (Proposal 2);
o IN FAVOR of amending the fundamental investment policies that apply to your
Fund(s) (Proposals 3(a)-3(g));
o IN FAVOR of amending and reclassifying certain of the fundamental
investment policies that apply to your Fund(s) (Proposals 4(a)-4(d));
o IN FAVOR of eliminating the fundamental investment policies that apply to
your Fund(s) (Proposals 5(a)-5(g));
o IN FAVOR of reclassifying the fundamental investment policy of the
Municipal Income Fund concerning investment in exempt interest
obligations as a non-fundamental investment policy (Proposal 6); and
o IN FAVOR of the reorganization of the Corporation from a Maryland
corporation to a Delaware business trust (Proposal 7).
Q. IF I SEND MY PROXY IN NOW AS REQUESTED, CAN I CHANGE MY VOTE LATER?
A. You may revoke your proxy at any time before it is voted by: (1) sending
to the Secretary of the Corporation a written revocation, or (2)
forwarding a later-dated proxy that is received by the Corporation at or
prior to the Special Meeting, or (3) attending the Special Meeting and
voting in person. Even if you plan to attend the Special Meeting, we ask
that you return the enclosed proxy. This will help us ensure that an
adequate number of shares are present for the Special Meeting to be held.
THE PROPOSALS
PROPOSAL 1: ELECTION OF THE DIRECTORS OF THE CORPORATION
WHO ARE THE NOMINEES FOR THE BOARD OF DIRECTORS?
The Board currently consists of five (5) Directors. The role of the Directors is
to oversee the operations of the Funds. The Board is responsible for managing
the Corporation's business affairs and for exercising all of the Corporation's
powers except those reserved for shareholders. The Directors seek to make
certain that the Corporation is operated for the benefit of shareholders. The
Directors review the Funds' performance, and select and oversee the services
provided to the Funds by the investment adviser, the subadvisers, and the
Corporation's other service providers. At the present time, the Corporation does
not have any standing audit, nominating or compensation committees of the Board
(or committees that perform similar functions).
The nominees for election to the Board are: Randall I. Benderson, Joseph J.
Castiglia, Mark J. Czarnecki, Daniel R. Gernatt, Jr., and George K. Hambleton,
Jr. (together, the "Nominees"). Each of the Nominees is presently serving as a
Director. Messrs. Castiglia, Gernatt and Hambleton have served as Directors of
the Corporation since February 23, 1988, and were elected Directors by the
shareholders of the Corporation on November 23, 1988. Messrs. Benderson and
Czarnecki, who have served as Directors of the Corporation since February 9,
1990 and August 11, 2000, respectively, have not previously been elected by
shareholders of the Corporation. Each Nominee is currently eligible and has
consented to continue to serve if elected. The Board has no reason to believe
that any Nominee will become unavailable for election as a Director.
If elected, the Directors will hold office without limit in time until death,
resignation, retirement or removal, or until the next meeting of shareholders to
elect Directors and the election and qualification of their successors. The
election of each Director requires a majority vote of the shares represented in
person or by proxy at the meeting and entitled to vote.
If any of the Nominees for election as a Director named above shall by reason of
death or for any other reason become unavailable as a candidate at the Special
Meeting, votes pursuant to the enclosed proxy will be cast for a substitute
candidate by the persons named on the proxy card, or their substitutes, present
and acting at the Special Meeting. Any substitute candidate for election as a
Director who is an "interested person" (as defined in the Investment Company Act
of 1940, as amended (the "1940 Act")) of the Corporation shall be nominated by
the Directors who are not "interested persons" (the "Independent Directors").
The selection of any substitute candidate for election as a Director who is not
an "interested person" shall be made by a majority of the Independent Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS DIRECTORS THE NOMINEES FOR
ELECTION TO THE BOARD OF DIRECTORS OF THE CORPORATION
AS DESCRIBED IN THIS PROPOSAL 1
Listed below, for each Nominee, is his address, birthdate, and a brief
description of his professional experience and principal occupations for the
past five years:
RANDALL I. BENDERSON
570 Delaware Avenue
Buffalo, NY
Birthdate: January 12, 1955
President and Chief Operating Officer, Benderson Development Company, Inc.
(construction)
JOSEPH J. CASTIGLIA
Roycroft Campus
21 South Grove Street, Suite 291
East Aurora, NY 14052
Birthdate: July 20, 1934
Director, The Energy East Corp., and its subsidiary New York State Electric &
Gas Corp.; Sevenson Environmental Services, Inc.; Blue Cross & Blue Shield of
Western New York, a division of HealthNow New York, Inc.; and Former President,
Chief Executive Officer and Vice Chairman, Pratt & Lambert United, Inc.
(manufacturer of paints) and chemical specialties.
MARK J. CZARNECKI*
Manufacturers and Traders Trust Company
One M&T Plaza
Buffalo, NY 14203
Birthdate: November 3, 1955
Trustee
Executive Vice President, Manufacturers and Traders Trust Company ("M&T Bank"),
division head for M&T Bank's investment area, M&T Investment Group.
DANIEL R. GERNATT, JR.
Richardson & Taylor Hollow Roads
Collins, NY
Birthdate: July 14, 1940
President and CFO of Gernatt Asphalt Products, Inc.; Executive Vice President,
Dan Gernatt Gravel Products, Inc.; Vice President, Countryside Sand & Gravel,
Inc.
GEORGE K. HAMBLETON, JR.
1003 Admiral's Walk
Buffalo, NY
Birthdate: February 8, 1933
Retired President, Brand Name Sales, Inc. (catalog showroom business); Retired
President, Hambleton & Carr, Inc. (catalog showroom business)
*This Director is deemed to be an "interested person" as defined in section
2(a)(19) of the 1940 Act.
HOW OFTEN DO THE DIRECTORS MEET AND WHAT ARE THEY PAID?
The Directors anticipate meeting at least four (4) times during the current
fiscal year to review the operations of the Funds and the Funds' investment
performance. The Directors also oversee the services provided to the Funds by
M&T Bank and the Corporation's other service providers. The Corporation
currently pays the Directors, except Mr. Czarnecki, who receives no
compensation, an annual retainer of $8,000, and a fee of $2,000 per Board
meeting attended.
During the fiscal year ended April 30, 2000, there were four meetings of the
Board. Each of the Directors, except as noted below, attended at least 75% of
the total number of meetings of the Board. The following table shows the fees
paid to the Directors by the Corporation.
NAME OF DIRECTOR1 TOTAL FEES RECEIVED
FROM THE
CORPORATION2, 3
----------------------------------------------
Randall I. Benderson $8,000
Joseph J. Castiglia $8,000
Daniel R. Gernatt, Jr. $8,000
George K. Hambleton, Jr. $7,500
1. Mr. Czarnecki, who became a Director of the Corporation on August 11, 2000,
was not a Director during the fiscal year ended April 30, 2000.
2. Compensation received for the fiscal year ended April 30, 2000.
3. Total fees is provided for the Corporation, which is comprised of nine
portfolios.
The Articles of Incorporation of the Corporation provide that Directors will
continue in office until their respective successors are elected, and therefore,
when elected, Directors will hold office during the lifetime of the Corporation,
except that: (a) any Director may resign; (b) any Director may be removed by
written instrument signed by at least two-thirds of the number of Directors
prior to such removal; (c) any Director who requests to be retired or who has
become mentally or physically incapacitated may be retired by written instrument
signed by a majority of the other Directors; and (d) a Director may be removed
at any special meeting of the shareholders by a vote of two-thirds of the
outstanding shares of the Corporation.
In case a vacancy shall exist for any reason, the remaining Directors will fill
such vacancy by appointment of another Director. The Directors will not fill any
vacancy by appointment if, immediately after filling such vacancy, less than
two-thirds of the Directors then holding office would have been elected by the
shareholders. If, at any time, less than a majority of the Directors holding
office have been elected by the shareholders, the Directors then in office will
call a shareholders' meeting for the purpose of electing Directors to fill
vacancies. Otherwise, there will normally be no meeting of shareholders called
for the purpose of electing Directors.
WHO ARE THE OFFICERS OF THE CORPORATION?
The officers of the Corporation are elected annually by the Directors. Each
officer holds the office until qualification of his or her successor. The names
and birthdates of the officers of the Corporation, as well as their principal
occupations during the past five years, are set forth below:
EDWARD C. GONZALES
Federated Investors Tower
Pittsburgh, PA
Birthdate: October 22, 1930
President and Treasurer
President, Executive Vice President and Treasurer of other funds distributed by
Federated Securities Corp.; Vice Chairman, Federated Investors, Inc.; Trustee,
Federated Administrative Services; formerly: Trustee or Director of other funds
distributed by Federated Securities Corp.; CEO and Chairman, Federated
Administrative Services; Vice President, Federated Investment Management
Company, Federated Investment Counseling, Federated Global Investment Management
Corp. and Passport Research, Ltd.; Director and Executive Vice President,
Federated Securities Corp.; Director, Federated Services Company; Trustee,
Federated Shareholder Services Company.
BETH S. BRODERICK
Federated Investors Tower
Pittsburgh, PA
Birthdate: August 2, 1965
Vice President and Assistant Treasurer
Vice President, Mutual Fund Services Division, Federated Services Company.
C. TODD GIBSON
Federated Investors Tower
Pittsburgh, PA
Birthdate: May 17, 1967
Secretary
Corporate Counsel, Federated Investors, Inc.; Assistant Vice President,
Federated Services Company.
None of the officers of the Corporation received salaries from the Corporation
during the fiscal year ended April 30, 2000. As of August 30, 2000, the
Corporation's Board and officers, as a group, owned less than 1% of each Fund's
and the Corporation's outstanding shares.
PROPOSAL 2: RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP
AS THE INDEPENDENT AUDITORS FOR THE CORPORATION
HOW ARE INDEPENDENT AUDITORS SELECTED?
The Independent Directors review the maintenance of the Funds' records and the
safekeeping arrangements of the Funds' custodian, review the arrangements for
and scope of the audit conducted by and the work of the Corporation's
independent auditors, and determine who will serve as the independent auditors
for the Corporation.
WHICH INDEPENDENT AUDITORS DID THE BOARD SELECT?
For the last fiscal year, the Board, including all of the Independent Directors,
selected the firm of Ernst & Young LLP, 200 Clarendon Street, Boston, MA
02116-5072, to serve as auditors for the Corporation. Ernst & Young LLP has
examined and reported on the fiscal year-end financial statements, dated April
30, 2000, and certain related U.S. Securities and Exchange Commission filings.
The auditors give an opinion on the financial statements in the Funds' annual
report to shareholders. You are being asked to ratify the Independent Directors'
selection of Ernst & Young LLP as auditors of the Corporation.
Neither the firm of Ernst & Young LLP nor any of its members have any material
direct or indirect financial interest in the Funds. Representatives of Ernst &
Young LLP are not expected to be present at the Special Meeting, but they will
have the opportunity to make a statement if they wish. Representatives of Ernst
& Young LLP are not expected to be available to respond to appropriate questions
at the meeting should any matter arise requiring their presence.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 2
APPROVAL OF CHANGES TO THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
INTRODUCTION TO PROPOSALS 3(A) THROUGH 3(G), PROPOSALS 4(A) THROUGH 4(D),
PROPOSALS 5(A) THROUGH 5(G) AND PROPOSAL 6.
WHY ARE THE FUNDS AMENDING, RECLASSIFYING OR ELIMINATING CERTAIN OF THEIR
FUNDAMENTAL INVESTMENT POLICIES?
The 1940 Act, which was adopted to protect mutual fund shareholders, requires
investment companies such as the Funds to adopt certain specific investment
policies or restrictions that can be changed only by shareholder vote. An
investment company may also elect to designate other policies or restrictions
that may be changed ONLY by shareholder vote. Both types of policies and
restrictions are referred to as "fundamental policies." These policies and
restrictions limit the investment activities of Manufacturers and Traders Trust
Company, the Funds' investment adviser (the "Adviser"), as well as the
investment activities of Federated Investment Management Company ("FIMCO"), the
sub-adviser to the New York Money Market Fund, and Independence Investment
Associates, Inc. ("IIA"), the sub-adviser to the Mid Cap Stock Fund (FIMCO and
IIA are together the "Sub-Advisers").
After the Corporation was formed in 1988, legal and regulatory requirements
applicable to mutual funds changed. Among other developments, certain
restrictions imposed by state laws and regulations were preempted by the
National Securities Markets Improvement Act of 1996 ("NSMIA"), and no longer
apply. As a result, the Funds are subject to fundamental policies that are no
longer required to be fundamental, and to other policies that are no longer
required at all. In addition, because the Funds have been formed at different
times, they are subject to differing fundamental investment policies regarding
the same types of investment activities. Accordingly, the Directors have
authorized the submission to the Funds' shareholders for their approval, and
recommend that shareholders approve, the amendment, reclassification and/or
elimination of certain of the Funds' fundamental investment policies.
The proposed amendments would:
(i) simplify, modernize and standardize the fundamental policies that
are required to be stated under the 1940 Act;
(ii) reclassify as operating policies those fundamental policies that
are not required to be fundamental under the 1940 Act; and
(iii)eliminate those fundamental policies that are no longer required
by the securities laws of the various states.
By reducing the number of policies that can be changed only by shareholder vote,
and by standardizing and streamlining those investment policies, the Directors
believe that the Funds would be able to minimize the costs and delays associated
with holding future shareholder meetings to revise fundamental policies that
become outdated or inappropriate. The Directors also believe that the Adviser's
(and the Sub-Advisers') ability to manage the Funds' assets in a changing
investment environment will be enhanced and that investment management
opportunities will be increased by these changes.
The chart that follows briefly describes the differences between fundamental
policies and non-fundamental policies.
FUNDAMENTAL POLICIES NON-FUNDAMENTAL POLICIES
--------------------------- --------------------------
Who must approve Board of Directors and Board of Directors
changes in the shareholders
policies?
How quickly can a Fairly slowly, since a Fairly quickly, because
change in the policies vote of shareholders is the change can be
be made? required accomplished by action of
the Board of Directors
alone
What is the relative Costly to change because Less costly to change
cost to change a a shareholder vote because a change can be
policy? requires holding a accomplished by action of
meeting of shareholders the Board of Directors
alone
The recommended changes are specified below. Each of Proposals 3(a) through
3(g), Proposals 4(a) through 4(d), Proposals 5(a) through 5(g) and Proposal 6,
will be voted on separately by shareholders of each Fund that is effected by the
proposed changes, and the approval of each Proposal by each Fund will require
the approval of a majority of the outstanding voting securities of the Fund as
defined in the 1940 Act. (See "FURTHER INFORMATION ABOUT VOTING AND THE SPECIAL
MEETING" below.)
DESCRIPTION OF PROPOSED CHANGES
The proposed standardized fundamental investment policies (discussed in
Proposals 3(a) through 3(g)) cover those areas for which the 1940 Act requires
the Funds to have a fundamental restriction. As modified, the proposed policies
will satisfy current regulatory requirements and are written to provide
flexibility to respond to future legal, regulatory, market or technical changes.
THE PROPOSED STANDARDIZED CHANGES WILL NOT AFFECT THE FUNDS' INVESTMENT
OBJECTIVES. ALTHOUGH THE PROPOSED CHANGES IN FUNDAMENTAL POLICIES WILL ALLOW THE
FUNDS GREATER FLEXIBILITY TO RESPOND TO FUTURE INVESTMENT OPPORTUNITIES, THE
BOARD OF DIRECTORS DOES NOT ANTICIPATE THAT THE CHANGES, INDIVIDUALLY OR IN THE
AGGREGATE, WILL RESULT AT THIS TIME IN A MATERIAL CHANGE (I.E., INCREASE) IN THE
LEVEL OF INVESTMENT RISK ASSOCIATED WITH INVESTMENTS IN THE FUNDS. NOR DOES THE
BOARD OF DIRECTORS ANTICIPATE THAT THE PROPOSED CHANGES IN FUNDAMENTAL
INVESTMENT POLICIES, INDIVIDUALLY OR IN THE AGGREGATE, WILL, AT THIS TIME,
CHANGE MATERIALLY THE MANNER IN WHICH THE FUNDS ARE CURRENTLY MANAGED. IN THE
EVENT THAT THERE IS A MATERIAL CHANGE IN THE FUTURE, SHAREHOLDERS WILL BE
NOTIFIED.
The following is the text and a summary description of the proposed changes to
the Funds' fundamental policies and restrictions. Any non-fundamental policy may
be modified or eliminated by the Directors at any future date without any
further approval of shareholders. Shareholders should note that certain of the
fundamental investment policies that are treated separately below currently are
combined within a single existing fundamental investment policy.
Presently, if a Fund adheres to a fundamental or non-fundamental percentage
restriction at the time of an investment or transaction, a later increase or
decrease in the percentage resulting from a change in the value of the Fund's
portfolio securities or the amount of its total assets does not create a
violation of the policy. This policy will continue to apply for any of the
proposed changes that are approved.
PROPOSAL 3: APPROVAL OF AMENDMENTS TO THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
PROPOSAL 3(A): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING DIVERSIFICATION
THIS PROPOSAL APPLIES TO THE MONEY MARKET FUND, NEW YORK MONEY MARKET FUND,
GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE FUND ONLY.
The Funds are presently subject to fundamental investment policies relating to
the diversification of their investments that provide:
MONEY MARKET FUND:
"The Fund will not purchase securities issued by any one issuer (other
than cash, cash items or securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, and repurchase agreements
collateralized by such securities), if as a result more than 5% of the
value of its total assets would be invested in the securities of that
issuer, except that up to 25% of the value of the Fund's total assets may
be invested without regard to this 5% limitation."
NEW YORK MONEY MARKET FUND:
"The Fund will not purchase securities issued by any one issuer (other
than cash, cash items or securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, repurchase agreements
collateralized by such securities, and securities of other investment
companies), if as a result more than 5% of the value of its total assets
would be invested in the securities of that issuer, except that up to 25%
of the value of the Fund's total assets may be invested without regard to
this 5% limitation."
GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE FUND:
"With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities issued by any one issuer
(other than cash, cash items or securities issued or guaranteed by the
government of the United States or its agencies or instrumentalities and
repurchase agreements collateralized by such securities), if as a result
more than 5% of the value of its total assets would be invested in the
securities of that issuer. The Fund will not acquire more than 10% of the
outstanding voting securities of any one issuer."
Under the 1940 Act, the Funds' policies relating to the diversification of their
investments must be fundamental. The 1940 Act prohibits a "diversified" mutual
fund from purchasing securities of any one issuer if, at the time of purchase,
more than 5% of the fund's total assets would be invested in securities of that
issuer or the fund would own or hold more than 10% of the outstanding voting
securities of that issuer. However, up to 25% of the fund's total assets may be
invested without regard to these limitations. In addition, the 5% and 10%
limitations do not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, or to securities issued by other
open-end investment companies.
In order to afford the Adviser and FIMCO maximum flexibility in managing the
Funds' assets, the Directors propose to amend the Funds' diversification
policies to be consistent with the definition of a diversified investment
company under the 1940 Act. The restated policies comply with the U.S.
Securities and Exchange Commission's (the "SEC" or the "Commission") general
definition of diversification, and the SEC Staff's interpretations regarding the
classification of certain portfolio investments for these purposes under the
1940 Act.
Upon approval of the Funds' shareholders, each Fund's fundamental investment
policy relating to diversification will be amended to provide:
"With respect to securities comprising 75% of the value of its total
assets, the Fund will not purchase securities of any one issuer (other
than cash; cash items; securities issued or guaranteed by the government
of the United States or its agencies or instrumentalities and repurchase
agreements collateralized by such U.S. government securities; and
securities of other investment companies) if, as a result, more than 5% of
the value of its total assets would be invested in the securities of that
issuer, or the Fund would own more than 10% of the outstanding voting
securities of that issuer."
WHAT EFFECT WILL AMENDING THE CURRENT FUNDAMENTAL DIVERSIFICATION POLICIES HAVE
ON
THE FUNDS?
Although the 1940 Act and the SEC Staff's interpretations thereof exclude the
securities of other investment companies from the statutory 75% limitation, as
well as those of the U.S. government and its agencies and instrumentalities
(including repurchase agreements collateralized by these securities), the
current policies (except for the policy of the New York Money Market Fund) do
not include such a carve-out for the securities of other investment companies.
The proposed policies exclude from the 5% and 10% limitations the purchase by
the Funds of the securities of other investment companies. With this exclusion,
the Funds would be able to invest cash held at the end of the day in money
market funds or other short-term investments without regard to the 5% and 10%
investment limitations (but remaining subject to other limitations contained in
the 1940 Act regarding investing in securities of other investment companies, or
any exemptions from such limitations).
Amending the Funds' diversification policies would make them consistent with the
definition of a diversified investment company under the 1940 Act (and the SEC
Staff's interpretations thereof) with respect to the securities of other
investment companies and U.S. government securities, and would provide the Funds
with greater investment flexibility. The proposed investment policies also
clarify that the 5% and 10% limitations do not apply to 25% of the Funds' total
assets. However, it is not currently anticipated that adoption of the proposed
policies would materially change the way the Funds are currently managed.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(A)
PROPOSAL 3(B): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
BORROWING MONEY AND ISSUING SENIOR SECURITIES
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are subject to the following fundamental investment policies
pertaining to borrowing money and issuing senior securities:
TREASURY FUND AND MONEY MARKET FUND:
"The Fund may borrow funds for temporary purposes by entering into reverse
repurchase agreements in accordance with the terms described in its
prospectuses. The Fund will not issue senior securities. The Fund does not
anticipate entering into reverse repurchase agreements in excess of 5% of
its net assets."
NEW YORK MONEY MARKET FUND:
"The Fund will not issue senior securities except that the Fund may borrow
money in amounts up to one-third of the value of its total assets,
including the amounts borrowed."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE
FUND: "The Fund will not issue senior securities except that the Fund may
borrow money and engage in reverse repurchase agreements in amounts up to
one-third of the value of its net assets, including the amounts borrowed.
The Fund will not borrow money or engage in reverse repurchase agreements
for investment leverage, but rather as a temporary, extraordinary, or
emergency measure to facilitate management of the portfolio by enabling
the Fund to meet redemption requests when the liquidation of portfolio
securities is deemed to be inconvenient or disadvantageous. The Fund will
not purchase any securities while borrowings (including reverse repurchase
agreements) in excess of 5% of its total assets are outstanding."
SENIOR SECURITIES - GENERALLY. Under the 1940 Act, the Funds must have a
fundamental investment policy describing their ability to issue senior
securities. A "senior security" is an obligation of an investment company, with
respect to its earnings or assets, that takes precedence over the claims of the
company's shareholders with respect to the same earnings or assets. The 1940 Act
generally prohibits an open-end investment company from issuing senior
securities in order to limit the use of leverage. In general, an investment
company uses leverage when it borrows money to enter into securities
transactions, or acquires an asset without being required to make payment until
a later time.
SEC staff interpretations allow an investment company to engage in a number of
types of transactions that might otherwise be considered to create "senior
securities" or "leverage," provided the investment company meets certain
collateral requirements designed to protect shareholders. For example, some
transactions that may create senior security concerns include short sales,
certain options and futures transactions, reverse repurchase agreements and
securities transactions that obligate the investment company to pay money at a
future date (such as when-issued, forward commitment or delayed delivery
transactions). According to regulatory interpretations, when engaging in such
transactions, an investment company must mark on its or its custodian bank's
books, or set aside in a segregated account with its custodian bank, cash or
other liquid securities to meet the SEC staff's collateralization requirements.
This procedure limits an investment company's ability to engage in these types
of transactions and thereby limits the investment company's exposure to risks
associated with these transactions.
BORROWING - GENERALLY. The 1940 Act requires investment companies to impose
certain limitations on borrowing activities. The limitations on borrowing are
generally designed to protect shareholders and their investments by restricting
an investment company's ability to subject its assets to the claims of creditors
who might have a claim to the company's assets that would take precedence over
the claims of shareholders. An investment company's borrowing policy must be
fundamental.
Under the 1940 Act, an investment company may borrow from banks up to one-third
of its total assets (including the amount borrowed). Within this limitation, an
investment company may borrow up to 5% of its total assets for temporary
purposes from any person. Investment companies typically borrow money to meet
redemptions in order to avoid forced, unplanned sales of portfolio securities.
This technique allows an investment company greater flexibility to buy and sell
portfolio securities for investment or tax considerations, rather than for cash
flow considerations.
Upon the approval of the Funds' shareholders, the fundamental investment
policies governing borrowing money and issuing senior securities by each Fund
will state:
"The Fund may borrow money, directly or indirectly, and issue senior
securities to the maximum extent permitted under the 1940 Act, any rule or
order thereunder, or any SEC staff interpretation thereof."
WHAT EFFECT WILL AMENDING THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
BORROWING MONEY AND ISSUING SENIOR SECURITIES HAVE ON THE FUNDS?
The Treasury Fund and Money Market Fund are presently limited to borrowing up to
5% of their assets only by entering into reverse repurchase agreements for
temporary purposes, rather than being permitted to engage in various borrowing
transactions in an amount not to exceed the 33 1/3% allowed under current law.
The New York Money Market Fund is limited to borrowing in amounts up to
one-third of its total assets. The current policies of the Municipal Income
Fund, Government Securities Fund and Large Cap Value Fund also state that the
Funds may not purchase any securities when borrowings in excess of 5% of the
value of the Funds' total assets are outstanding. In addition, the Municipal
Income Fund, Government Securities Fund and Large Cap Value Fund are presently
confined to engaging in these activities only as temporary, extraordinary or
emergency measures to facilitate management of the portfolios by enabling the
Funds to meet redemption requests when the liquidation of portfolio securities
is deemed to be inconvenient or disadvantageous.
The proposed policy for each Fund would permit borrowing up to the current
legally permissible limit of 33 1/3%. The proposed policy would also clarify
that the Funds may borrow: (1) from banks to the extent permitted by the 1940
Act or any exemptions therefrom, and (2) from any person for temporary or
emergency purposes. Under current law, borrowings must not exceed 33 1/3% of
total assets. The 1940 Act limits on borrowing historically were interpreted to
prohibit investment companies from making additional investments in securities
while borrowings exceeded 5% of total assets. However, such a 5% limit is not
required under the 1940 Act and originated from informal regulatory positions.
Accordingly, under the proposed policy, the Funds would be permitted to make
additional investments, even if borrowings exceed 5% of total assets.
Since the proposed borrowing policies would provide the Funds with greater
borrowing flexibility, the Funds may be subject to additional costs, as well as
the risks inherent to borrowing, such as reduced total returns.
The proposed senior securities policy would amend the Funds' current fundamental
investment policies and would permit the Funds to engage in permissible types of
leveraging transactions under the 1940 Act. Essentially, the proposed policy
clarifies the Funds' ability to engage in the investment transactions outlined
above, which, while appearing to raise senior security concerns, have been
interpreted as not constituting the issuance of senior securities under the
federal securities laws. It should be noted, though, that engaging in those
leveraging transactions may subject a Fund to additional costs and risks.
The Board does not anticipate that additional risk to the Funds will occur as a
result of amending the current policies because the Funds have no present
intention of changing their current investment practices or engaging in
transactions that may be interpreted as issuing senior securities.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(B)
PROPOSAL 3(C): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTMENTS IN REAL ESTATE
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are currently subject to fundamental investment policies relating to
investing in real estate that provide:
TREASURY FUND AND MONEY MARKET FUND:
"The Fund will not invest in real estate, except that it may purchase
marketable securities of companies engaged in such activities."
NEW YORK MONEY MARKET FUND:
"The Fund will not purchase or sell real estate although it may invest in
securities of issuers whose business involves the purchase or sale of real
estate or in securities which are secured by real estate or interests in
real estate."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE
FUND: "The Fund will not purchase or sell real estate, including limited
partnership interests, although the Fund may invest in securities of
companies whose business involves the purchase or sale of real estate or
in securities which are secured by real estate or interests in real
estate."
Under the 1940 Act, an investment company's policy concerning investments in
real estate must be fundamental. The proposed policies will clarify the types of
instruments in which the Funds may invest.
Upon shareholder approval, each Fund's fundamental investment policy relating to
investing in real estate will provide:
"The Fund may not purchase or sell real estate, provided that this
restriction does not prevent the Fund from investing in issuers which
invest, deal, or otherwise engage in transactions in real estate or
interests therein, or investing in securities that are secured by real
estate or interests therein. The Fund may exercise its rights under
agreements relating to such securities, including the right to enforce
security interests and to hold real estate acquired by reason of such
enforcement until that real estate can be liquidated in an orderly
manner."
WHAT EFFECT WILL AMENDING THE REAL ESTATE POLICIES HAVE ON THE FUNDS?
The proposed fundamental investment policy will not materially alter the Funds'
current investment practices, as the proposed fundamental policy will not permit
a Fund to purchase real estate directly, but will permit the purchase of
securities whose payments of interest or principal are secured by mortgages or
other rights to real estate in the event of default. The investment policy will
also enable the Funds to invest in companies within the real estate industry,
provided such investments are consistent with the Funds' investment objectives
and policies. The Funds do not presently anticipate changing their current
practices relating to investing in real estate if the new policy is approved by
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(C)
PROPOSAL 3(D): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTMENTS IN COMMODITIES
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are currently subject to fundamental investment policies relating to
investing in commodities that provide:
TREASURY FUND AND MONEY MARKET FUND:
"The Fund will not purchase or sell commodities, commodity contracts
(including futures contracts) except that it may purchase marketable
securities of companies engaged in such activities."
NEW YORK MONEY MARKET FUND:
"The Fund will not invest in commodities, commodity contracts or commodity
futures contracts."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE
FUND: "The Fund will not purchase or sell commodities, commodity
contracts, or commodity futures contracts except that the Fund may
purchase and sell futures contracts and related options."
Under the 1940 Act, the Funds' policy relating to commodities must be
fundamental. Historically, the most common types of commodities available for
purchase in the marketplace have been physical commodities, such as wheat,
cotton, rice and corn. However, under federal law, futures contracts are
considered to be "commodities" and, therefore, financial futures contracts, such
as futures contracts related to currencies, stock indices or interest rates, are
considered to be commodities. Financial futures contracts enable an investment
company to buy (or sell) the right to receive the cash difference between the
contract price for an underlying asset or index and the future market price, if
the market price is higher. If the future price is lower, the investment company
is obligated to pay (or, if the investment company sold the contract, the
investment company receives) the amount of the decrease. Investment companies
often desire to invest in financial futures contracts and options related to
such contracts for hedging or other investment reasons.
Upon shareholder approval, each Fund's fundamental investment policy relating to
investing in commodities will provide:
"The Fund may not purchase or sell physical commodities, provided that the
Fund may purchase securities of companies that deal in commodities.
For purposes of this restriction, investments in transactions involving
futures contracts and options, forward currency contracts, swap
transactions and other financial contracts that settle by payment of cash
are not deemed to be investments in commodities."
WHAT EFFECT WILL AMENDING THE COMMODITIES POLICIES HAVE ON THE FUNDS?
While the proposed policy for the Treasury Fund, Money Market Fund and New York
Money Market Fund alters the scope of the Funds' current permitted practices (by
removing the explicit prohibition on engaging in futures contracts), the Funds
do not presently intend to invest in financial futures contracts. In the case of
the Municipal Income Fund, Government Securities Fund and Large Cap Value Fund,
the proposed policy would accord each Fund greater flexibility to invest in
financial futures contracts and related options than each Fund enjoys currently.
As proposed, the policy would permit investments in financial futures
instruments for either investment or hedging purposes, which is broader than
these three Funds' current policies. Using financial futures instruments can
involve substantial risks, and would be utilized only if the Adviser determined
that such investments are advisable and such practices were appropriately
disclosed in the Funds' prospectuses or statement of additional information.
Gains or losses on investments in financial futures instruments depend on the
direction of securities prices, interest rates and other economic factors, and
losses from engaging in these types of transactions are potentially unlimited.
At the present time, the Funds do not intend to engage in these activities
beyond what is disclosed in the Funds' current prospectuses. As a matter of
non-fundamental operating policy, for purposes of the proposed policy,
investments in transactions involving futures contracts and options, forward
currency contracts, swap transactions and other financial contracts that settle
by payment of cash are not deemed to be investments in commodities.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(D)
PROPOSAL 3(E): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
UNDERWRITING SECURITIES
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are subject to the following fundamental investment policies
pertaining to underwriting securities:
TREASURY FUND AND MONEY MARKET FUND:
"The Fund will not engage in underwriting securities issued by others."
NEW YORK MONEY MARKET FUND, GOVERNMENT SECURITIES FUND, MUNICIPAL INCOME
FUND AND LARGE CAP VALUE FUND: "The Fund will not underwrite any issue of
securities, except as the Fund may be deemed to be an underwriter under
the Securities Act of 1933 in connection with the sale of securities in
accordance with its investment objective, policies, and limitations."
Under the 1940 Act, each Fund's policy concerning underwriting is required to be
fundamental. Under the federal securities laws, a person or company generally is
considered an underwriter if it participates in the public distribution of
securities of OTHER ISSUERS, usually by purchasing the securities from the
issuer with the intention of re-selling the securities to the public. From time
to time, an investment company may purchase a security for investment purposes
that it later resells or redistributes to institutional investors or others
under circumstances where the Funds could possibly be considered to be an
underwriter under the technical definition of underwriter contained in the
federal securities laws. For example, an investment company often purchases
securities in private securities transactions where a resale could raise a
question relating to whether or not the investment company is technically acting
as an underwriter. However, recent SEC interpretations clarify that re-sales of
privately placed securities by institutional investors do not make the
institutional investor an underwriter in these circumstances. The proposed
policies encompass these SEC positions.
Upon shareholder approval, each Fund's fundamental investment policy pertaining
to underwriting securities will provide:
"The Fund may not underwrite the securities of other issuers, except that
the Fund may engage in transactions involving 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."
WHAT EFFECT WILL AMENDING THE CURRENT UNDERWRITING POLICIES HAVE ON THE FUNDS?
The proposed policy is similar to the Funds' current investment policies.
However, the proposed underwriting policy clarifies that the Funds may sell
their own shares without being deemed to be an underwriter. Under the 1940 Act,
a mutual fund will not be considered an underwriter if it sells its own shares
pursuant to a written distribution plan that complies with Rule 12b-1 of the
1940 Act.
The proposed policy also specifically permits the Funds to resell restricted
securities in those instances where there may be a question as to whether the
Funds are technically acting as an underwriter. It is not anticipated that
adoption of the proposed policy would involve any additional risk as the
proposed policy would not affect the way the Funds are currently managed.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(E)
PROPOSAL 3(F): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING LENDING
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are presently subject to fundamental investment policies limiting
their ability to make loans that state:
TREASURY FUND, MONEY MARKET FUND AND NEW YORK MONEY MARKET FUND: "The Fund
will not make loans, except that it may purchase and hold debt
instruments, including repurchase agreements, in accordance with its
investment objective and policies."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE
FUND: "The Fund will not lend any of its assets except portfolio
securities, the market value of which does not exceed one-third of the
value of the Fund's total assets. This shall not prevent the Fund from
purchasing or holding U.S. government obligations, money market
instruments, variable rate demand notes, bonds, debentures, notes,
certificates of indebtedness, or other debt securities, entering into
repurchase agreements, or engaging in other transactions where permitted
by the Fund's investment objective, policies, and limitations."
Under the 1940 Act, an investment company's policy regarding lending must be
fundamental. Certain investment techniques could, under certain circumstances,
be considered to be loans. For example, if the Funds invest in debt securities,
such investments might be considered to be a loan from the Funds to the issuer
of the debt securities. In order to ensure that a Fund may invest in certain
debt securities or repurchase agreements, which also could technically be
characterized as the making of loans, the Funds' current fundamental policies
specifically carve out such activities from their prohibitions.
In addition, the current fundamental investment policies of the Municipal Income
Fund, Government Securities Fund and Large Cap Value Fund explicitly permit
those Funds to lend their portfolio securities. Securities lending is a practice
that has become common in the investment company industry and involves the
temporary loan of portfolio securities to parties who use the securities for the
settlement of other securities transactions. The collateral delivered to the
Funds in connection with such a transaction is then invested to provide the
Funds with additional income they might not otherwise have. Securities lending
involves certain risks if the borrower fails to return the securities. However,
management believes that with appropriate controls, such as 100% or greater
collateralization of the loan and regular monitoring of the creditworthiness of
the counterparty, the ability to engage in securities lending does not
materially increase the risks to which the Funds currently are subject. Also,
securities on loan cannot generally be sold until the term of the loan is over.
Upon shareholder approval, each Fund's fundamental investment policy relating to
lending will provide:
"The Fund may not make loans, provided that this restriction does not
prevent the Fund from purchasing debt obligations, entering into
repurchase agreements, lending its assets to broker/dealers or
institutional investors and investing in loans, including assignments and
participation interests."
WHAT EFFECT WILL AMENDING THE CURRENT LENDING POLICIES HAVE ON THE FUNDS?
The proposed policy is similar to the Funds' current policies, but would provide
the Funds, particularly the Treasury Fund, Money Market Fund and New York Money
Market Fund, with greater lending flexibility. Although the proposed policy
retains the exceptions reflected in the existing policies, it also would permit
the Funds to invest in loan participations and direct corporate loans,
investments which recently have become more common for investment companies. The
proposed policy also would provide the Funds with additional flexibility to make
loans to affiliated investment companies.
It is not anticipated that adoption of the proposed policy would pose any
significant additional risks as the proposed policy is not expected to affect
the way the Funds are currently managed.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(F)
PROPOSAL 3(G): TO AMEND THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING CONCENTRATION OF THE FUNDS' INVESTMENTS
IN THE SECURITIES OF COMPANIES IN THE SAME INDUSTRY
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are presently subject to fundamental investment policies relating to
the concentration of their investments that provide:
MONEY MARKET FUND:
"The Fund will not invest more than 25% of the value of its total assets
in issuers in the same industry.
With respect to the Fund, utilities will be divided according to their
services; for example, gas, gas transmissions, electric and gas, electric,
and telephone will each be considered a separate industry. Wholly-owned
finance companies will be considered to be in the industries of their
parents if their activities are primarily related to the financing
activities of their parents.
The Fund may invest more than 25% of the value of its total assets in
obligations issued by any state, territory, or possession of the United
States, the District of Columbia or any of their authorities, agencies,
instrumentalities or political subdivisions, in cash or cash items
(including instruments issued by a U.S. branch of a domestic bank or
savings and loan association and bankers' acceptances), securities issued
or guaranteed by the U.S. government, its agencies or instrumentalities,
or instruments secured by these money market instruments (i.e., repurchase
agreements)."
NEW YORK MONEY MARKET FUND:
"The Fund will not invest more than 25% of the value of its total assets
in issuers of the same industry, except that it may invest more than 25%
of the value of its total assets in obligations issued by any state,
territory, or possession of the United States, the District of Columbia,
or any of their authorities, agencies, instrumentalities or political
subdivisions, in cash or cash items (including instruments issued by a
U.S. branch of a domestic bank or savings association and bankers'
acceptances), securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, instruments secured by these money market
instruments (i.e., repurchase agreements), or in securities of other
investment companies."
MUNICIPAL INCOME FUND:
"The Fund will not invest 25% or more of the value of its total assets in
any one industry, except that the Fund for temporary defensive purposes
may invest 25% or more of the value of its total assets in cash or cash
items (including instruments issued by a U.S. branch of a domestic bank or
savings and loan association and bankers' acceptances), securities issued
or guaranteed by the U.S. government, its agencies, or instrumentalities,
and repurchase agreements collateralized by such securities.
In addition, the Fund may invest more than 25% of the value of its total
assets is obligations issued by any state, territory or possession of the
United States, the District of Columbia, or any of their authorities,
agencies, instrumentalities or political subdivisions."
GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE FUND:
"The Fund will not invest 25% or more of the value of its total assets in
any one industry, except that the Fund may invest 25% or more of the value
of its total assets in cash or cash items (including instruments issued by
a U.S. branch of a domestic bank or savings and loan association and
bankers' acceptances), securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, and repurchase agreements
collateralized by such securities."
Under the 1940 Act, each Fund's policy relating to the concentration of its
investments in securities of companies in a single industry must be fundamental.
Under the federal securities laws, an investment company "concentrates" its
investments if it invests more than 25% of its "net" assets (exclusive of
certain items such as cash, U.S. government securities, securities of other
investment companies, and tax-exempt securities) in a particular industry or
group of industries. An investment company is not permitted to concentrate its
investments in a particular industry unless it so states.
Upon the approval of shareholders, the Funds' fundamental investment policies
regarding concentration would provide:
"The Fund will not make investments that will result in the concentration
of its investments in the securities of issuers primarily engaged in the
same industry. For purposes of this restriction, the term concentration
has the meaning set forth in the 1940 Act, any rule or order thereunder,
or any SEC staff interpretation thereof. Government securities and most
municipal securities will not be deemed to constitute an industry."
In addition, the Board has approved certain related non-fundamental investment
policies for each Fund, which will be adopted if the new fundamental investment
policy is approved by shareholders. These non-fundamental policies will provide
that, in applying the concentration restriction: (a) utility companies will be
divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (b)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (c) asset-backed
securities will be classified according to the underlying assets securing such
securities. Also, to conform to the current view of the SEC that only domestic
bank instruments may be excluded from industry concentration limitations, as a
matter of non-fundamental policy, a Fund will not exclude foreign bank
instruments from industry concentration limits as long as the policy of the SEC
remains in effect. Moreover, investments in bank instruments, and investments in
certain industrial development bonds funded by activities in a single industry,
will be deemed to constitute investment in an industry, except when held for
temporary defensive purposes. The investment of more than 25% of the value of
the Fund's total assets in any one industry will constitute "concentration."
WHAT EFFECT WILL AMENDING THE CURRENT POLICIES REGARDING INDUSTRY CONCENTRATION
HAVE
ON THE FUNDS?
The proposed policy would significantly simplify the Funds' current
concentration policies. Also, the proposed concentration policy would clarify
the current concentration policies' application to the Funds' "net" assets,
rather than the Funds' total assets (in accordance with changes in the SEC
Staff's position). Further, the new policy would provide the Funds with
additional flexibility because the policy exempts from the 25% limitation
securities issued or guaranteed by the U.S. government or any of its agencies or
instrumentalities, or the securities of other investment companies as permitted
by the 1940 Act. (Currently, only the investment policy of the New York Money
Market Fund exempts the securities of other investment companies from this
limitation.) Such investment flexibility will help the Funds respond to future
legal, regulatory, market or technical changes. However, adoption of the
proposed policies is not expected to change materially the way in which the
Funds are currently managed, as the Funds do not intend to begin concentrating
in U.S. government securities or in shares of other investment companies.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 3(G)
PROPOSAL 4: APPROVAL OF AMENDMENTS TO, AND THE RECLASSIFICATION OF, CERTAIN OF
THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
PROPOSAL 4(A): TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL,
THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES
REGARDING BUYING SECURITIES ON MARGIN
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are not required under applicable law to have a fundamental investment
policy regarding margin transactions, provided the Funds adhere to the SEC's
collateralization requirements. Accordingly, it is proposed that the Funds'
existing fundamental policies be replaced with non-fundamental policies. The
Funds' current policies provide:
TREASURY FUND AND MONEY MARKET FUND:
"The Fund will not purchase any securities on margin, or participate on a
joint or joint and several basis in any securities trading account."
NEW YORK MONEY MARKET FUND:
"The Fund will not purchase any securities on margin but may obtain such
short-term credits as may be necessary for clearance of transactions."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE
FUND: "The Fund will not purchase any securities on margin, except as
described below and other than in connection with buying financial futures
contracts, put options on financial futures, put options on portfolio
securities, and writing covered call options, but may obtain such
short-term credits as are necessary for clearance of purchase and sales of
securities.
The deposit or payment by the Fund of initial or variation margin in
connection with financial futures contracts or related options
transactions is not considered the purchase of a security on margin."
The proposed non-fundamental investment policies make some language changes from
the existing fundamental restrictions, but they do not represent a material
change to the Funds' current policies with regard to these types of
transactions. Upon shareholder approval of the elimination of the existing
fundamental policies on engaging in margin transactions, the Funds would become
subject to the following non-fundamental investment policies:
TREASURY FUND, MONEY MARKET FUND AND NEW YORK MONEY MARKET FUND: "The Fund
will not purchase securities on margin, provided that the Fund may obtain
short-term credits necessary for the clearance of purchases and sales of
securities."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND AND LARGE CAP VALUE
FUND: "The Fund will not purchase securities on margin, provided that the
Fund may obtain short-term credits necessary for the clearance of
purchases and sales of securities, and further provided that the Fund may
make margin deposits in connection with its use of financial options and
futures, forward and spot currency contracts, swap transactions and other
financial contracts or derivative instruments."
As a general matter, the Funds' ability to purchase securities on margin raises
senior security issues and is specifically prohibited under the 1940 Act (in the
absence of collateralization). Reclassification of the restrictions, therefore,
would not affect the Funds' inability to purchase securities on margin.
Furthermore, the Funds have not previously engaged in these investment
activities, nor do they currently intend to do so in the future.
By reclassifying these fundamental investment policies as a non-fundamental
investment policy, the Board may, in the future, modify the policy without
shareholder approval. However, shareholders would be notified prior to any
material changes in the non-fundamental investment policy.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 4(A)
PROPOSAL 4(B): TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES REGARDING PLEDGING ASSETS
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are not required under applicable law to have a fundamental investment
policy with respect to the pledging of assets. The Board of the Corporation
believes that the Funds' policies on pledging assets should be made
non-fundamental. The non-fundamental policies would be similar to the
fundamental policies proposed to be reclassified, which state:
TREASURY FUND AND MONEY MARKET FUND:
"The Fund will not mortgage, pledge, or hypothecate any assets, except in
connection with any such borrowing and in amounts not in excess of the
lesser of the dollar amounts borrowed or 10% of the value of the Fund's
total assets at the time of its borrowing."
NEW YORK MONEY MARKET FUND:
"The Fund will not mortgage, pledge, or hypothecate any assets, except in
connection with any such borrowing."
MUNICIPAL INCOME FUND, GOVERNMENT SECURITIES FUND, AND LARGE CAP VALUE
FUND: "The Fund will not mortgage, pledge, or hypothecate any assets,
except to secure permitted borrowings. In those cases, the Fund may
mortgage, pledge, or hypothecate assets having a market value not
exceeding the lesser of the dollar amounts borrowed or 15% of the value of
total assets at the time of the borrowing. For purposes of this
limitation, the following are not deemed to be pledges: margin deposits
for the purchase and sale of futures contracts and related options and
segregation or collateral arrangements made in connection with options
activities or the purchase of securities on a when-issued basis."
The Board does not expect this change to have a material impact on the Funds'
operations. Upon shareholder approval of the elimination of the existing
fundamental policies on pledging assets, each Fund would become subject to the
following non-fundamental investment policy:
"The Fund will not mortgage, pledge, or hypothecate any of its assets,
provided that this shall not apply to the transfer of securities in
connection with any permissible borrowing or to collateral arrangements in
connection with permissible activities."
As a general matter, and similar to engaging in margin transactions (as
described in Proposal 4(a) above) the Funds' ability to pledge their assets
raises senior security issues and is specifically prohibited under the 1940 Act
(in the absence of collateralization). Reclassification of the restrictions,
therefore, would not affect the Funds' inability to pledge their assets.
Furthermore, the Funds have not previously engaged in these investment
activities, nor do they currently intend to do so in the future.
By reclassifying these fundamental investment policies as a non-fundamental
investment policy, the Board may, in the future, modify the policy without
shareholder approval. However, shareholders would be notified prior to any
material changes in the non-fundamental investment policy.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 4(B)
PROPOSAL 4(C): TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL,
THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING INVESTING
IN SECURITIES OF OTHER INVESTMENT COMPANIES
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND THE MONEY MARKET FUND ONLY.
The Treasury Fund and the Money Market Fund are currently subject to a
fundamental investment policy that prohibits each Fund's investment in
securities issued by any other investment company, except as part of a merger,
consolidation, reorganization or acquisition of assets. This policy, which is
more restrictive than the 1940 Act's provisions relating to investing in
securities of other investment companies, was originally included in the Funds'
fundamental investment policies in response to various state law requirements.
Under NSMIA, however, the Funds are no longer required to retain such a policy
as a fundamental policy.
If approved by shareholders, each Fund's non-fundamental investment policy
relating to investing in securities of other investment companies will state:
"The Fund may invest its assets in securities of other investment
companies as an efficient means of carrying out its investment policies.
It should be noted that investment companies incur certain expenses, such
as management fees, and, therefore, any investment by the Fund in shares
of other investment companies may be subject to such duplicate expenses.
At the present time, the Fund expects that its investments in other
investment companies may include shares of money market funds, including
funds affiliated with the Fund's investment adviser."
The proposed policy is consistent with the 1940 Act's restrictions. The 1940
Act's restrictions state that an investment company may not purchase more than
3% of another investment company's total outstanding voting stock, commit more
than 5% of its assets to the purchase of another investment company's
securities, or have more than 10% of its total assets invested in securities of
all other investment companies.
WHAT EFFECT WILL AMENDING THE CURRENT POLICIES REGARDING INVESTING IN OTHER
INVESTMENT COMPANIES HAVE ON THE FUNDS?
Amending the policy would expand the investment opportunities available to the
Funds, particularly by allowing the Funds to invest temporary cash reserves in
shares of other money market funds. These cash reserves typically arise from the
receipt of dividend and interest income from portfolio securities, the receipt
of payment for sale of portfolio securities, defensive cash positions and the
decision to hold cash to meet redemptions or make anticipated dividend payments.
Further, by changing the policy from fundamental to non-fundamental (or
operating) policies, the Directors believe that maximum flexibility will be
afforded to the Funds to amend the policy as appropriate in the future to
reflect regulatory changes without the burden and delay to the Funds and their
shareholders of holding a special meeting.
The money market funds in which the Funds may invest pay an advisory fee.
However, the Adviser and the Directors believe that the benefits derived from
having the cash invested outweigh any reduction in the amount earned as a result
of such a fee. The ability to purchase shares of money market funds would be
beneficial because it would provide investment opportunities to the Funds late
in each business day, when opportunities to acquire acceptable money market
instruments are limited. Otherwise, the Funds could be forced to leave some of
their cash uninvested resulting in little or no investment income.
Under an exemptive order received from the SEC, the Funds are permitted to
invest in affiliated money market funds, subject to certain SEC imposed
conditions. If shareholders approve the proposed change in the fundamental
investment policy, then the Funds would reserve the right to invest in
affiliated money market funds for cash management purposes.
By reclassifying these fundamental investment policies as a non-fundamental
investment policy, the Board may, in the future, modify the policy without
shareholder approval. However, shareholders would be notified prior to any
material changes in the non-fundamental investment policy.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 4(C)
PROPOSAL 4(D): TO AMEND, AND TO MAKE NON-FUNDAMENTAL, THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
REGARDING INVESTING IN RESTRICTED SECURITIES
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY.
The Treasury Fund and the Money Market Fund are presently subject to fundamental
investment policies pertaining to investments in restricted securities that
provide that each Fund "will not invest in securities subject to legal or
contractual restrictions."
These policies were adopted by the Funds because, historically, restricted
securities were viewed as illiquid, since restricted securities could not be
sold within seven days. Investment companies issuing redeemable securities are
required to meet a shareholder's redemption request at the current net asset
value within seven days of receiving the request for redemption. In order to do
this, some portion of the securities in each Fund's portfolio must be "liquid,"
so that the securities can be sold in sufficient time to obtain the necessary
cash to meet redemption requests. It is important to note that many restricted
securities are, in fact, quite LIQUID and can be purchased without jeopardizing
the liquidity of a Fund's portfolio.
Certain state securities regulators previously required mutual funds to have a
fundamental investment policy limiting investment in restricted securities.
Since the enactment of NSMIA, states no longer have the jurisdiction to impose
such requirements. Furthermore, rules adopted by the SEC have substantially
increased the number of restricted securities that can now be considered liquid
and, in addition, have given to the directors and trustees of investment
companies the ability to determine, under specific guidelines, that a security
is liquid. The Directors may delegate this duty to the Adviser, provided the
Adviser's determination of liquidity is made in accordance with the guidelines
established and monitored by the Directors.
Each Fund's current restricted securities policy prohibits the Fund from
investing in restricted securities, even if the securities are determined by the
Adviser to be liquid. This policy went well beyond the prior state requirements.
As a result, the Funds' management has suggested that the policies be revised to
allow the Funds flexibility to invest in restricted securities that are
considered to be liquid under the Board's guidelines on such securities. The
revised policies will allow each Fund to invest up to 10% of its net assets in
restricted securities. The SEC Staff takes the position that an investment
company, such as a money market fund, should not invest more than 10% of its net
assets in restricted securities (the SEC Staff allows a non-money market fund -
a fluctuating net asset value fund - to invest up to 15% of its net assets in
restricted securities). The proposed policy would comply with the SEC Staff's
guidelines. Finally, it has been proposed that the revised restricted securities
policy be made non-fundamental. Establishing the policy as non-fundamental would
enable the Funds to change the policies in the future without shareholder
approval. However, shareholders would be notified prior to any material changes
in the non-fundamental investment policy.
Upon shareholder approval of the elimination of the existing fundamental
policies on investing in restricted securities, the Funds would become subject
to the following non-fundamental investment policies:
"The Fund may invest in restricted securities. Restricted securities are
any securities in which the Fund may invest pursuant to its investment
objective and policies but which are subject to restrictions on resale
under federal securities law. Under criteria established by the Directors,
certain restricted securities are determined to be liquid. To the extent
that restricted securities are not determined to be liquid, the Fund will
limit their purchase, together with other illiquid securities, to 10% of
its net assets."
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 4(D)
PROPOSAL 5: ELIMINATION OF CERTAIN OF THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
WHY IS THE BOARD RECOMMENDING THAT THE FUNDAMENTAL POLICIES BE ELIMINATED, AND
WHAT EFFECT WILL THEIR ELIMINATION HAVE ON THE FUNDS?
The Board has determined that certain of the Funds' current fundamental
investment policies are unnecessary and should be removed. Until NSMIA was
adopted in 1996, the securities laws of several states required every investment
company that intended to sell its shares in those states to adopt policies
governing a variety of operational issues, including investments in certain
securities. As a consequence of those restrictions, the Funds adopted the
investment policies described below and agreed that the policies would be
changed only upon the approval of shareholders. Since these prohibitions are no
longer required under current law, and are not in accordance with SEC Staff
positions, the management of the Funds has recommended, and the Board has
determined, that these policies should be eliminated. The elimination of these
policies would provide greater flexibility in the management of the Funds by
permitting the Funds to purchase a broader range of securities provided that the
investments are consistent with the Funds' investment objectives and policies.
Also, the Board believes that the Funds will be able to eliminate the costs and
delays associated with holding future shareholder meetings to revise policies in
the future.
WHAT ARE THE RISKS IN ELIMINATING THE POLICIES?
The Board does not anticipate that eliminating the policies will result in any
additional material risk to the Funds. Although the Funds' current policies, as
drafted, are no longer legally required, the Funds' ability to employ the
investment strategies covered by them will continue to be subject to the
limitations of the 1940 Act, and any exemptive orders granted under the 1940
Act. Further, the Funds have no current intention of changing their present
investment practices as a result of eliminating these policies, except to the
limited extent described below. The Board believes that eliminating the policies
is in the best interest of the Funds' shareholders, as it will provide the Funds
with increased flexibility to pursue their investment goals.
PROPOSAL 5(A): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING SELLING SECURITIES SHORT
THIS PROPOSAL APPLIES TO ALL FUNDS EXCEPT THE MID CAP STOCK FUND, LARGE CAP
GROWTH FUND AND LARGE CAP CORE FUND.
The Funds are not required under applicable law to have a fundamental investment
policy with respect to short sales of securities provided the Funds adhere to
the SEC's collateralization requirements. Each Fund's current fundamental
investment policy states that "the Fund will not sell any securities short."
To provide the Funds with enhanced flexibility, the Board believes that each
Fund's policy prohibiting short sales of securities should be eliminated. These
restrictions were imposed by state laws and NSMIA preempts that requirement.
Notwithstanding the elimination of these policies, the Funds do not expect to
engage in short sales of securities, except to the extent that the Funds
contemporaneously own or have the right to acquire, at no additional cost,
securities identical to, or convertible into or exchangeable for, those sold
short. To the extent that the Funds engage in short sales (including short sales
that are properly collateralized), the Funds are subject to certain risks
because short selling is an aggressive trading practice with a high risk/return
potential. For example, if the price of a stock sold short by a Fund rises, the
Fund will lose money.
Upon shareholder approval of Proposal 5(a), the existing fundamental investment
policies on selling securities short by the Funds will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(A)
PROPOSAL 5(B): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES REGARDING INVESTING IN ISSUERS OWNED BY OFFICERS AND DIRECTORS
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY.
The Treasury Fund and the Money Market Fund are subject to fundamental
investment policies that provide:
"The Fund will not purchase or retain securities of any issuer if the
officers or Directors of the Corporation or the Fund's investment adviser
owning beneficially more than one-half of 1% of the issuer's securities
together own beneficially more than 5% of such securities."
The Funds' current investment policy limits each Fund's ability to invest in
securities issued by companies whose securities are owned in certain amounts by
Directors and officers of the Corporation or the Adviser. This policy was
adopted many years ago pursuant to now obsolete state securities laws concerning
conflicts of interest. As a general matter, elimination of this fundamental
investment policy should not have any impact on the day to day management of the
Treasury Fund or the Money Market Fund, as the 1940 Act's conflict of interest
restrictions would continue to apply to the Funds.
Upon shareholder approval of Proposal 5(b), the existing fundamental investment
policies regarding investing in certain issuers owned by officers and Directors
by the Treasury Fund and Money Market Fund will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(B)
PROPOSAL 5(C): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTING IN PUTS AND CALLS
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY.
The Treasury Fund and Money Market Fund are subject to fundamental policies that
state that "the Fund will not write or purchase put or call options." These
policies were required to be adopted by certain states until the adoption of
NSMIA in 1996. Since these restrictions are no longer required under current
law, the Adviser has recommended that they be eliminated.
Notwithstanding the elimination of these policies, the Funds do not currently
expect to engage in these activities. In the event that the Funds do engage in
these activities, the Funds will do so in accordance with the limitations
contained in the 1940 Act and the SEC Staff's interpretations thereof. The use
of puts and calls involves the Adviser's opinion about movements in interest
rates, markets and other economic factors. Substantial losses can be sustained
from these activities if the Adviser is incorrect in its predictions or
judgments about these factors. Such activities, and their attendant risks, would
be described in the Funds' prospectuses and/or statement of additional
information.
Upon shareholder approval of Proposal 5(c), the existing fundamental investment
policies prohibiting the use of puts and calls by the Treasury Fund and Money
Market Fund will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(C)
PROPOSAL 5(D): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT
POLICIES PROHIBITING INVESTMENT IN NEW ISSUERS
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY.
Each of the Treasury Fund and Money Market Fund is subject to a fundamental
investment policy that states:
"The Fund will not invest more than 10% of the value of its total assets
in the securities of issuers which have records of less than three years
of continuous operation, including the operation of any predecessor."
The Funds' current fundamental investment policies limit the Funds' ability to
invest in companies that have a record of less than three years continuous
operation. Following the adoption of NSMIA, such limitations are no longer
required to be a fundamental investment policy. As a general matter, elimination
of this fundamental policy is not intended to have a material impact on the day
to day management and operation of the Funds.
Upon shareholder approval of Proposal 5(d), the existing fundamental investment
policies limiting investments in new issuers by the Treasury Fund and Money
Market Fund will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(D)
PROPOSAL 5(E): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTING IN VOTING SECURITIES AND REVENUE BONDS
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY. Each of
the Treasury Fund and the Money Market Fund is subject to a fundamental
investment policy that provides:
"The Fund will not buy common stock or voting securities of state,
municipal or industrial revenue bond issuers."
The Directors have determined that the Funds' current policies prohibiting the
purchase of common stocks and voting securities of these issuers are
unnecessary, since most municipal money market instruments do not carry voting
rights and are not common stock. Therefore, the Directors are recommending that
these policies be deleted.
Upon shareholder approval of Proposal 5(e), the existing fundamental investment
policies regarding investing in common stock or voting securities of state,
municipal or industrial revenue bond issuers by the Treasury Fund and Money
Market Fund will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(E)
PROPOSAL 5(F): TO REMOVE THE FUNDS' FUNDAMENTAL
INVESTMENT POLICIES REGARDING INVESTING TO EXERCISE CONTROL
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY.
The Treasury Fund and the Money Market Fund are subject to fundamental
investment policies that state that each Fund "will not invest in any issuer for
purposes of exercising control or management."
The Funds' current fundamental investment policies limit the Funds' ability to
invest for purposes of exercising control or management. These policies were
adopted in response to various state securities laws and are no longer required
following the adoption of NSMIA. Often, if an investment company acquires a
large percentage of the securities of a single issuer, it will be deemed to have
invested in such issuer for the purposes of exercising control or management.
These policies were intended to ensure that an investment company would not be
engaged in the business of managing another company.
Eliminating the policies will not have any impact on the day to day management
of the Funds because the Funds have no present intention to invest in an issuer
for the purposes of exercising control or management. In addition, as
diversified investment companies and money market funds, the Funds are subject
to other stringent restrictions under the 1940 Act relating to acquiring voting
securities and the Funds' permissible portfolio securities.
Upon shareholder approval of Proposal 5(f), the existing fundamental investment
policies prohibiting investing for control or management by the Treasury Fund
and Money Market Fund will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(F)
PROPOSAL 5(G): TO REMOVE THE FUNDS' FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTING IN OIL, GAS AND MINERALS
THIS PROPOSAL APPLIES TO THE TREASURY FUND AND MONEY MARKET FUND ONLY.
Each of the Treasury Fund and the Money Fund is subject to a fundamental
investment policy that provides:
"The Fund will not invest in oil, gas or mineral exploration or
development programs, except that it may purchase marketable securities of
companies engaged in such activities."
These policies were required to be adopted by certain states prior to the
enactment of NSMIA. As these policies are no longer required under present law,
the Adviser has recommended that they be eliminated. Notwithstanding the
elimination of these fundamental policies, the Funds do not expect to engage in
these investments.
Upon shareholder approval of Proposal 5(g), the existing fundamental investment
policies prohibiting investing in oil, gas and minerals by the Treasury Fund and
Money Market Fund will be eliminated.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 5(G)
PROPOSAL 6: TO RECLASSIFY THE FUNDAMENTAL INVESTMENT POLICY OF THE MUNICIPAL
INCOME FUND, REGARDING INVESTING IN EXEMPT INTEREST OBLIGATIONS, AS A
NON-FUNDAMENTAL INVESTMENT POLICY
THIS PROPOSAL APPLIES TO THE MUNICIPAL INCOME FUND ONLY.
Presently, the Municipal Income Fund is subject to a fundamental investment
policy that states:
"The Fund will not invest less than 80% of its net assets in securities
the interest on which is exempt from federal regular income tax, except
during temporary defensive periods. AMT obligations are not counted as
securities the interest on which is exempt from federal regular income
tax."
The Adviser has recommended that this fundamental investment policy be
reclassified as an IDENTICAL, non-fundamental investment policy. If approved by
shareholders, the Municipal Income Fund will continue to be managed by the
Adviser in the same manner as presently, and the Municipal Income Fund will
continue to pursue its fundamental investment goal of providing current income
which is exempt from federal regular income tax and the personal income taxes
imposed by the State of New York and New York municipalities as is consistent
with the preservation of capital. If approved by shareholders, no changes are
presently contemplated in the operation or management of the Municipal Income
Fund. The Adviser has proposed this change solely to enhance the flexibility of
the Municipal Income Fund to
respond to any future regulatory developments or changes. The Adviser notes
that the SEC Staff currently requires an investment company, such as the
Municipal Income Fund, to have an investment policy regarding the percentage of
the company's assets that are invested in exempt interest obligations. In the
event that the SEC Staff's requirement were to change, this policy may be
changed by the Board without shareholder approval. No material change would be
effected, however, without prior notification to shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR PROPOSAL 6
PROPOSAL 7: APPROVAL OF THE REORGANIZATION OF THE
CORPORATION FROM A MARYLAND CORPORATION TO A
DELAWARE BUSINESS TRUST
WHAT WILL THE REORGANIZATION MEAN FOR THE CORPORATION AND ITS SHAREHOLDERS?
The Directors recommend that you approve a change in the state and form of
organization of the Corporation from a Maryland corporation to a Delaware
business trust. This proposed change will be referred to in this Proposal 7 as
the "Reorganization." The Board of Directors has approved an Agreement and Plan
of Reorganization (the "Reorganization Plan"), substantially in the form
attached to this Proxy Statement as Exhibit A. The Reorganization Plan provides
for the Reorganization, which involves the continuation of the current business
of the Corporation (referred to in this Proposal 7 as the "MD Corporation") in
the form of a newly-created Delaware business trust, named "Vision Group of
Funds" (and referred to in this Proposal 7 as the "DE Trust").
The existing series of the DE Trust will have the same investment objectives,
policies and restrictions as the nine current Funds of the MD Corporation
(including, if approved by shareholders at the Special Meeting, the revised
investment polices described in Proposals 3 through 6 in this Proxy Statement).
The Board and officers of the DE Trust will be the same as those of the MD
Corporation, and will operate the DE Trust in the same manner as they previously
operated the Funds of the MD Corporation. On the closing date of the
Reorganization, you will hold an interest in the series of the DE Trust that is
equivalent to your interest in the Fund(s) in the MD Corporation. For all
practical purposes, a shareholder's investment in a Fund will not change.
WHY ARE THE DIRECTORS RECOMMENDING THAT I APPROVE THE REORGANIZATION?
The Directors have determined that mutual funds formed as Delaware business
trusts have certain advantages over those funds organized as Maryland
corporations. Delaware law contains provisions specifically designed for mutual
funds, which take into account their unique structure and operations. Under
Delaware law, investment companies are able to simplify their operations by
reducing administrative burdens. The Delaware law allows greater flexibility in
drafting an investment company's governing documents, which can result in
greater efficiencies of operation and savings for an investment company and its
shareholders. Delaware law also provides favorable state tax treatment.
Furthermore, there is a well-established body of corporate legal precedent that
may be relevant in deciding issues pertaining to the DE Trust.
A comparison of the Delaware business trust law and the Maryland General
Corporation law, and a comparison of the relevant provisions of the governing
documents of the DE Trust and the MD Corporation, are included in Exhibit B to
this Proxy Statement, which is entitled, "Comparison and Significant Differences
between Delaware Business Trusts and Maryland Corporations."
For these reasons, the Directors believe that it is in the best interests of the
shareholders to approve the Reorganization.
WHAT ARE THE PROCEDURES AND CONSEQUENCES OF THE REORGANIZATION?
Upon completion of the Reorganization, each series of the DE Trust will continue
the business of the corresponding series (Fund) of the MD Corporation with the
same investment objective and policies as exist on the date of the
Reorganization, and will hold the same portfolio of securities previously held
by the series of the MD Corporation. The DE Trust will be operated under
substantially identical overall management, investment management, distribution
and administrative arrangements as those of the MD Corporation. As the successor
to the MD Corporation's operations, the DE Trust will adopt the MD Corporation's
registration statement under the federal securities laws with amendments to show
the new Delaware business trust structure.
The DE Trust was created solely for the purpose of becoming the successor
organization to, and carrying on the business of, the MD Corporation. To
accomplish the Reorganization, the Reorganization Plan provides that each series
(Fund) of the MD Corporation will transfer all of its portfolio securities and
any other assets, subject to its related liabilities, to the corresponding
series of the DE Trust. In exchange for these assets and liabilities, the DE
Trust will issue its own shares to the MD Corporation, which will then
distribute those shares pro rata to you as a shareholder of the Fund(s) of the
MD Corporation. Through this procedure, you will receive exactly the same number
and dollar amount of shares of each series of the DE Trust as you previously
held in the Fund(s) of the MD Corporation. The net asset value of each share of
each series of the DE Trust will be the same as that of the corresponding Fund
of the MD Corporation on the date of the Reorganization. You will retain the
right to any declared but undistributed dividends or other distributions payable
on the shares of the Funds of the MD Corporation that you may have had as of the
effective date of the Reorganization. As soon as practicable after the date of
the Reorganization, the MD Corporation will be dissolved and will go out of
existence.
The Directors may terminate the Reorganization Plan and abandon the
Reorganization at any time prior to the effective date of the Reorganization if
they determine that such actions are in the best interests of the MD
Corporation's shareholders. If the Reorganization is not approved, or if the
Directors abandon the Reorganization, the MD Corporation will continue to
operate as a corporation under the laws of the State of Maryland.
WHAT EFFECT WILL THE REORGANIZATION HAVE ON THE CURRENT INVESTMENT MANAGEMENT
AGREEMENTS AND THE SUB-ADVISORY AGREEMENTS?
As a result of the Reorganization, the DE Trust will be subject to new
investment management agreements between the DE Trust and the Adviser. The new
advisory agreements will be substantially identical to the current management
agreements between the Adviser and the MD Corporation. It is anticipated that
there will be no material change to the investment advisory agreements as a
result of the Reorganization. Similarly, the Reorganization will have no
material impact on the sub-advisory agreements in place for the New York Money
Market Fund, Mid Cap Stock Fund and Large Cap Growth Fund.
WHAT EFFECT WILL THE REORGANIZATION HAVE ON THE SHAREHOLDER SERVICING AGREEMENTS
AND DISTRIBUTION PLANS?
The DE Trust will enter into an agreement with Federated Administrative Services
for administrative personnel and services that is substantially identical to the
agreement currently in place for the MD Corporation. The DE Trust will enter
into agreements with Federated Services Company ("FSC") and its affiliate,
Federated Shareholder Services Company ("FSSC"), and State Street Bank & Trust
Company for certain financial, administrative, transfer agency and fund
accounting services that are substantially identical to the agreements currently
in place for the MD Corporation. Federated Securities Corp. will serve as the
distributor for the shares of the DE Trust under a separate distribution
agreement that is substantially identical to the distribution agreement
currently in effect for the MD Corporation.
The DE Trust will have a distribution plan under Rule 12b-1 of the 1940 Act
relating to the distribution of shares of the series of the DE Trust that is
substantially identical to the current distribution plan. There will be no
material change to the distribution plan as a result of the Reorganization.
WHAT IS THE EFFECT OF SHAREHOLDER APPROVAL OF THE REORGANIZATION?
Under the 1940 Act, the shareholders of a mutual fund must vote on the
following: (1) the election of Directors; (2) selection of the independent
auditors; and (3) approval of the initial investment advisory agreements and the
sub-advisory agreements for the investment company. Theoretically, if the
Reorganization is approved, the shareholders would need to vote on these three
items for the DE Trust. In fact, the DE Trust must have shareholder approval of
these issues or else it will not comply with the 1940 Act. However, the
Directors have determined that it is in the best interests of the shareholders
to avoid the considerable expense of another shareholder meeting to obtain these
approvals after the Reorganization. Therefore, the Directors have determined
that approval of the Reorganization also will constitute the requisite
shareholder approval for the Reorganization Plan contained in Exhibit A, and
also, for purposes of the 1940 Act, constitute shareholder approval of: (1) the
election of the Directors of the MD Corporation who are in office at the time of
the Reorganization as Trustees of the DE Trust,1 (2) the selection of Ernst &
Young LLP as independent auditors for the DE Trust; and (3) new investment
advisory agreements between the DE Trust and the Adviser, which are
substantially identical to the investment advisory agreements currently in place
for the MD Corporation.
Prior to the Reorganization, the officers will cause the MD Corporation, as the
sole shareholder of the DE Trust, to vote its shares FOR the matters specified
above. This action will enable the DE Trust to satisfy the requirements of the
1940 Act without involving the time and expense of another shareholder meeting.
WHAT IS THE CAPITALIZATION AND STRUCTURE OF THE DE TRUST?
The DE Trust was created on August 11, 2000 pursuant to Delaware law. The DE
Trust has an unlimited number of shares of beneficial interest without par
value. As of the effective date of the Reorganization, shares of the MD
Corporation and the DE Trust will have equal dividend and redemption rights,
will be fully paid, non-assessable, freely transferable, have the same
conversion rights, and have no preemptive or subscription rights. Shares of both
the DE Trust and the MD Corporation will have equal voting and liquidation
rights and have one vote per share. Both the DE Trust and MD Corporation provide
for noncumulative voting in the election of their Trustees/Directors. The DE
Trust also will have the same fiscal year as the MD Corporation.
WHO WILL BEAR THE EXPENSES OF THE REORGANIZATION?
Since the Reorganization will benefit the MD Corporation and its shareholders,
the Board has authorized that the expenses incurred in the Reorganization shall
be paid by the MD Corporation, whether or not the Reorganization is approved by
shareholders.
ARE THERE ANY TAX CONSEQUENCES FOR SHAREHOLDERS?
The Reorganization is designed to be tax-free for federal income tax purposes so
that you will not experience a taxable gain or loss when the Reorganization is
completed. Generally, the basis and holding period of your shares in the series
of the DE Trust will be the same as the basis and holding period of your shares
in the MD Corporation. Consummation of the Reorganization is subject to receipt
of a legal opinion from the law firm of Stradley, Ronon, Stevens & Young, LLP
that, under the Internal Revenue Code of 1986, as amended, the exchange of
assets of the series of the MD Corporation for the shares of the series of the
DE Trust, the transfer of such shares to the holders of shares of the MD
Corporation and the liquidation and dissolution of the MD Corporation pursuant
to the Reorganization Plan, will not give rise to the recognition of a gain or
loss for federal income tax purposes to the MD Corporation, the DE Trust, or
shareholders of either the MD Corporation or the DE Trust.
WHAT IF I CHOOSE TO SELL MY SHARES AT ANY TIME?
A request to sell MD Corporation shares that is received and processed prior to
the Reorganization will be treated as a redemption of shares of the MD
Corporation. A request to sell shares that is received and processed after the
Reorganization will be treated as a request for the redemption of the same
number of shares of the DE Trust. The value of your shares will not be affected
by the Reorganization.
WHAT IS THE EFFECT OF MY "YES" VOTE?
By voting "YES" to the Reorganization, you will be agreeing to become a
shareholder of a mutual fund that is organized as a Delaware business trust,
with its Trustees, independent auditors, investment advisory contracts,
distribution plan and Rule 12b-1 plan already in place, and all such
arrangements that are substantially identical to those of the MD Corporation.
THE BOARD OF DIRECTORS RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE REORGANIZATION
OTHER BUSINESS
The Directors know of no other business to be presented at the Special Meeting
other than Proposals 1 through 7, and do not intend to bring any other matters
before the Special Meeting. However, if any additional matters should be
properly presented, proxies will be voted or not voted as specified. Proxies
reflecting no specification will be voted in accordance with the judgment of the
persons named in the proxy.
INFORMATION ABOUT THE CORPORATION
THE ADVISER. The investment adviser (the "Adviser") of the Funds is
Manufacturers and Traders Trust Company, located at One M&T Plaza, Buffalo, New
York 14240. Pursuant to an investment advisory contract, the Adviser manages the
Funds' assets, including buying and selling portfolio securities. The Adviser is
the principal banking subsidiary of M&T Bank Corporation, a regional bank
holding company in existence since 1965.
THE ADMINISTRATOR. Federated Administrative Services ("FAS"), with offices at
Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, PA 15222-3779,
provides the Funds with certain administrative personnel and services necessary
to operate the Funds. FAS is an indirect, wholly owned subsidiary of Federated
Investors, Inc. ("Federated").
THE DISTRIBUTOR. Federated Securities Corp. ("FSC"), a registered broker-dealer
and a member in good standing of the National Association of Securities Dealers,
Inc., serves as the Corporation's distributor. FSC, an indirect, wholly-owned
subsidiary of Federated, is located at 1001 Liberty Avenue, Pittsburgh, PA
15222-3779.
THE TRANSFER AGENT AND DIVIDEND DISPERSING AGENT. Federated Services Company
("FSC") and its affiliate, Federated Shareholder Services Company ("FSSC"), a
registered transfer agent, provide the Funds with certain financial, transfer
agency and fund accounting services. FSC and FSSC, P.O. Box 8606, Boston MA,
02266-8600, are indirect, wholly-owned subsidiaries of Federated.
THE CUSTODIAN. The custodian for the Funds is State Street Bank & Trust Company,
P.O. Box 8609, Boston, MA 02266-8600.
OTHER MATTERS. The Funds' last audited financial statements and Annual Report,
for the fiscal year ended April 30, 2000, have been previously mailed to
shareholders, and are available free of charge. If you have not received this
Annual Report, or would like to receive additional copies, free of charge,
please write the Corporation at the address on the cover page of this Proxy
Statement or call the Corporation at 1-800-836-2211 (or in the Buffalo area,
635-9368), and the Annual Report will be sent by first-class mail within three
business days.
PRINCIPAL SHAREHOLDERS. As of August 30, 2000, the Funds had the following
number of outstanding shares of common stock:
NAME OF FUND SHARES
Treasury Fund 697,742,542.96
Money Market Fund 1,301,596,970.12
New York Money Market Fund 141,678,580.60
Government Securities Fund 7,726,166.685
Municipal Income Fund 6,437,031.099
Large Cap Value Fund 2,794,127.267
Mid Cap Stock Fund 7,138,177.809
Large Cap Growth Fund 754,463.426
Each share is entitled to one vote and fractional shares have proportionate
voting rights.
From time to time, the number of shares held in "street name" accounts of
various securities dealers for the benefit of their clients may exceed 5% of the
total shares outstanding. To the knowledge of the Corporation's management, as
of August 30, 2000, the following entities held beneficially or of record more
than 5% of each Fund's outstanding shares:
-----------------------------------------------------------------
NAME OF FUND SHAREHOLDER NAME AND Percentage
ADDRESS Owned
-----------------------------------------------------------------
-----------------------------------------------------------------
Treasury Fund Manufacturers & Traders 80.91%
Bank, Buffalo, NY
-----------------------------------------------------------------
-----------------------------------------------------------------
Money Market Fund Manufacturers & Traders 15.61%
Bank, Buffalo, NY
(#1660231560-8) 10.55%
National Financial
Services Co., New York, NY 9.83%
Health Solutions Limited, 7.32%
Albany, NY
Manufacturers & Traders 6.93%
Bank, Buffalo, NY
(#19008-8)
Osmose, Inc., Buffalo, NY
-----------------------------------------------------------------
-----------------------------------------------------------------
New York Money Market Manufacturers & Traders 27.75%
Fund Trust Co., Buffalo, NY
(#1660231560-8) 21.49%
National Financial
Services Co., New York, NY 12.83%
Manufacturers & Traders
Trust Co., Buffalo, NY
(#19009-1)
-----------------------------------------------------------------
-----------------------------------------------------------------
Government Securities Krauss & Company, 27.47%
Fund Buffalo, NY 18.12%
SEI Trust Company, Oaks, 14.72%
PA 11.91%
Tice & Co., Buffalo, NY
(#19015-6) 11.00%
Manufacturers & Traders
Bank, Buffalo, NY
(#19018-5)
Manufacturers & Traders
Bank, Buffalo, NY
(#136318492-1)
-----------------------------------------------------------------
-----------------------------------------------------------------
Municipal Income Fund Manufacturers & Traders 28.87%
Trust Co., Buffalo, NY
(#19013-0) 10.42%
Tice & Co.,, Buffalo, NY 7.07%
(#19016-9)
SEI Trust Company, Oaks,
PA
-----------------------------------------------------------------
-----------------------------------------------------------------
Large Cap Value Fund SEI Trust Company, Oaks, 20.97%
PA 17.09%
Tice & Co., Buffalo, NY 16.63%
Manufacturers & Traders
Bank, Buffalo, NY 11.43%
(#27081-4) 6.52%
Krauss & Company,
Buffalo, NY
Manufacturers & Traders
Bank, Buffalo, NY
(#27082-7)
-----------------------------------------------------------------
-----------------------------------------------------------------
Mid Cap Stock Fund Manufacturers & Traders 35.70%
Bank, Buffalo, NY
(#136318492-1) 6.83%
Tice & Co., Buffalo, NY 6.34%
SEI Trust Company, Oaks,
PA
-----------------------------------------------------------------
-----------------------------------------------------------------
Large Cap Growth Fund Manufacturers and Traders 82.74%
Bank, Buffalo, NY
(#27081-4) 5.17%
Manufacturers & Traders
Trust Co.,
Buffalo, NY (#19015-6)
-----------------------------------------------------------------
FURTHER INFORMATION ABOUT VOTING AND THE SPECIAL MEETING
RECORD DATE. Shareholders of record at the close of business on August 30, 2000
(the "Record Date") are entitled to be present and to vote at the Special
Meeting or any adjournment of the Special Meeting. Each share of record is
entitled to one vote on each matter presented at the Special Meeting.
VOTING METHODS. You may vote your shares by mail or in person at the Special
Meeting.
To vote by mail, sign, date and send us the enclosed proxy card in the envelope
provided.
Proxy cards that are properly signed, dated and received at or prior to the
Special Meeting will be voted as specified. If you specify a vote for any of the
Proposals 1 through 7, your proxy card will be voted as you indicated. If you
simply sign and date the proxy card, but don't specify a vote for any of the
Proposals 1 through 7, your shares will be voted IN FAVOR of the nominees for
Directors (Proposal 1), IN FAVOR of ratifying the selection of Ernst & Young LLP
as independent auditors (Proposal 2), IN FAVOR of the amendments to the Funds'
fundamental investment policies (Proposals 3(a)-3(g)), IN FAVOR of the amendment
and reclassification of certain of the Funds' fundamental investment policies
(Proposals 4(a)-4(d)), IN FAVOR of the elimination of certain fundamental
investment policies of the Funds (Proposals 5(a)-5(g)), IN FAVOR of the
reclassification of the Municipal Income Fund's fundamental investment policy
pertaining to investing in exempt interest obligations (Proposal 6) and IN FAVOR
of the Reorganization of the Corporation as a Delaware business trust (Proposal
7).
REVOCATION OF PROXIES. You may revoke your proxy at any time by sending to the
Corporation a written revocation or a later-dated proxy card that is received at
or before the Special Meeting, or by attending the Special Meeting and voting in
person.
SOLICITATION OF PROXIES. Your vote is being solicited by the Board of Directors
of the Corporation. The cost of preparing and mailing the notice of meeting,
proxy cards, this Proxy Statement, and any additional proxy materials, has been
or will be borne by the Corporation. The Corporation reimburses brokerage firms
and others for their expenses in forwarding proxy material to the beneficial
owners and soliciting them to execute proxies. The Corporation does not
reimburse Directors and officers of the Corporation, or regular employees and
agents of the Adviser or FAS involved in the solicitation of proxies. The
Corporation intends to pay all costs associated with the solicitation and the
Special Meeting.
Proxy solicitations will be made primarily by mail, but they may also be made by
telephone, telegraph, personal interview or oral solicitations conducted by
certain officers or employees of the Corporation, the Adviser, FSSC (the
Corporation's transfer agent), or FAS (the Corporation's administrator) or, if
necessary, a commercial firm retained for this purpose. If the Corporation
engages a solicitation firm to solicit proxies from brokers, banks, other
institutional holders and individual shareholders, the anticipated cost,
including out-of-pocket expenses, will range between $40,000 and $60,000.
VOTING BY BROKER-DEALERS. The Corporation expects that, before the Special
Meeting, broker-dealer firms holding shares of the Funds in "street name" for
their customers will request voting instructions from their customers and
beneficial owners. If these instructions are not received by the date specified
in the broker-dealer firms' proxy solicitation materials, the Funds understand
that New York Stock Exchange rules permit the broker-dealers to vote on certain
of the proposals to be considered at the Special Meeting on behalf of their
customers and beneficial owners. Certain broker-dealers may exercise discretion
over shares held in their name for which no instructions are received by voting
these shares in the same proportion as they vote shares for which they received
instructions.
QUORUM AND REQUIRED VOTE. The presence in person or by proxy of shareholders of
the Corporation entitled to cast at least a majority of the votes to be cast
shall constitute a quorum at the Special Meeting. For purposes of determining
the presence of a quorum and counting votes on the matters presented, shares
represented by abstentions and "broker non-votes" likely will be counted as
present, but likely not treated as votes cast, at the Special Meeting. The
affirmative vote necessary to approve a matter under consideration is determined
with reference to a percentage of votes considered to be present at the Special
Meeting, which would have the effect of likely treating abstentions and broker
non-votes as if they were votes AGAINST the proposal.
Shares of the Funds will be counted as a single group of shares for purposes of
determining the presence of a quorum and the requisite vote for the approval of
the election of Directors, the ratification of the selection of the independent
auditors and the approval of the Agreement and Plan of Reorganization. Shares of
each Fund will be counted separately for determining the presence of a quorum
and the requisite vote for the approval of the changes to a Fund's fundamental
investment policies as described herein. The presence of a quorum for the Funds,
separately and when counted as a single group, will be established by the
presence, in person or by proxy, of 50% of their outstanding shares.
The election of each Director and the ratification of the selection of the
independent auditors require a majority vote of the shares represented in person
or by proxy at the meeting and entitled to vote. The approval by shareholders of
the Funds of each of the changes to the Funds' fundamental policies and
limitations will be determined on the basis of a vote of a "majority of the
outstanding voting securities" of each Fund, as defined in and required by the
1940 Act. This vote requires the lesser of (A) 67% or more of the voting
securities of the Fund present at such meeting, if the holders of more than 50%
of the outstanding voting securities of such Fund are present or represented by
proxy; or (B) more than 50% of the outstanding voting securities of such Fund.
The approval of the Agreement and Plan of Reorganization of the Corporation as a
Delaware business trust requires the affirmative vote of a majority of the
Funds' shares outstanding and entitled to vote.
ADJOURNMENT. In the event that a quorum is not present at the Special Meeting,
the Special Meeting will be adjourned to permit further solicitation of proxies.
In the event that a quorum is present, but sufficient votes have not been
received to approve one or more of the Proposals, the persons named as proxies
may propose one or more adjournments of the Special Meeting to permit further
solicitation of proxies with respect to those Proposals. The persons named as
proxies will vote in their discretion on questions of adjournment those shares
for which proxies have been received that grant discretionary authority to vote
on matters that may properly come before the Special Meeting.
SHAREHOLDER PROPOSALS. The Corporation 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 should send their written proposals to the Corporation's
offices, 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7000, Attn:
Secretary, so they are received within a reasonable time before any such
meeting. The Directors know of no business, other than the matters mentioned in
the Notice and described above, that is expected to come before the Special
Meeting. Should any other matter requiring a vote of shareholders arise,
including any question as to an adjournment or postponement of the Special
Meeting, the persons named as proxies will vote on such matters according to
their best judgment in the interests of the Corporation.
By the Order of the Board of Directors of
Vision Group of Funds, Inc.
C. Todd Gibson
Secretary
September 11, 2000
68
VISION TREASURY MONEY MARKET FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision Treasury Money Market Fund (the "Fund"), a portfolio of Vision Group of
Funds, Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant
Anderson, Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or
any one of them, true and lawful attorneys, with the power of substitution of
each, to vote all shares of the Fund which the undersigned may be entitled to
vote at the Special Meeting of Shareholders (the "Special Meeting") to be held
on October 23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00
p.m., and at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
BYCHECKING THE BOX "FOR" BELOW, YOU WILL VOTE TO APPROVE EACH OF THE PROPOSED
ITEMS IN THIS PROXY, AND TO ELECT EACH OF THE NOMINEES AS DIRECTORS OF THE
CORPORATION
FOR [ ]
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2..TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3 (B) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
BORROWING MONEY AND ISSUING SENIOR SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (D) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN COMMODITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (E) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
UNDERWRITING SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (F) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
LENDING BY THE FUND
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(G) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
CONCENTRATION OF THE FUND'S INVESTMENTS IN THE SECURITIES OF
COMPANIES IN THE SAME INDUSTRY
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, CERTAIN OF THE FUND'S
FUNDAMENTAL INVESTMENT POLICIES
4 (A) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (B) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING PLEDGING ASSETS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (C) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING IN SECURITIES OF
OTHER INVESTMENT COMPANIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (D) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING IN RESTRICTED
SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO ELIMINATE CERTAIN FUNDAMENTAL INVESTMENT POLICIES OF THE FUND:
5 (A) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
SELLING SECURITIES SHORT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (B) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND
DIRECTORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (C) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN PUTS AND CALLS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (D) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN NEW ISSUERS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (E) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN VOTING SECURITIES AND REVENUE BONDS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (F) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING TO EXERCISE CONTROL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (G) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN OIL, GAS AND MINERALS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION MONEY MARKET FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision Money Market Fund (the "Fund"), a portfolio of Vision Group of Funds,
Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant Anderson,
Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or any one of
them, true and lawful attorneys, with the power of substitution of each, to vote
all shares of the Fund which the undersigned may be entitled to vote at the
Special Meeting of Shareholders (the "Special Meeting") to be held on October
23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m., and
at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
BYCHECKING THE BOX "FOR" BELOW, YOU WILL VOTE TO APPROVE EACH OF THE PROPOSED
ITEMS IN THIS PROXY, AND TO ELECT EACH OF THE NOMINEES AS DIRECTORS OF THE
CORPORATION
FOR [ ]
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3 (A) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
DIVERSIFICATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (B) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
BORROWING MONEY AND ISSUING SENIOR SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (D) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN COMMODITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (E) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
UNDERWRITING SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (F) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
LENDING BY THE FUND
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (G) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
CONCENTRATION OF THE FUND'S INVESTMENTS IN SECURITIES OF COMPANIES
IN THE SAME INDUSTRY
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, CERTAIN OF THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES:
4 (A) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (B) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING PLEDGING ASSETS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (C) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING IN SECURITIES OF
OTHER INVESTMENT COMPANIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (D) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTING IN RESTRICTED
SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 TO ELIMINATE CERTAIN FUNDAMENTAL INVESTMENT POLICES OF THE FUND:
5 (A) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
SELLING SECURITIES SHORT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (B) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN ISSUERS WHOSE SECURITIES ARE OWNED BY OFFICERS AND
DIRECTORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (C) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN PUTS AND CALLS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (D) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN NEW ISSUERS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (E) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN VOTING SECURITIES AND REVENUE BONDS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (F) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING TO EXERCISE CONTROL
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
5 (G) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTING IN OIL, GAS AND MINERALS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION NEW YORK TAX-FREE MONEY MARKET FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision New York Tax-Free Money Market Fund (the "Fund"), a portfolio of Vision
Group of Funds, Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C.
Grant Anderson, Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson,
or any one of them, true and lawful attorneys, with the power of substitution of
each, to vote all shares of the Fund which the undersigned may be entitled to
vote at the Special Meeting of Shareholders (the "Special Meeting") to be held
on October 23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00
p.m., and at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned, on the approval of, each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE VISION GROUP
OF FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3 (A) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
DIVERSIFICATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (B) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING BORROWING
MONEY AND ISSUING SENIOR SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENTS
IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (D) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENTS
IN COMMODITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (E) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
UNDERWRITING SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (F) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING LENDING BY
THE FUND
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (G) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
CONCENTRATION OF THE FUND'S INVESTMENTS IN THE SECURITIES OF
COMPANIES IN THE SAME INDUSTRY
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, CERTAIN OF THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES:
4 (A) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (B) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING PLEDGING ASSETS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 (A) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY
REGARDING SELLING SECURITIES SHORT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION U.S. GOVERNMENT SECURITIES FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision U.S. Government Securities Fund (the "Fund"), a portfolio of Vision Group
of Funds, Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant
Anderson, Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or
any one of them, true and lawful attorneys, with the power of substitution of
each, to vote all shares of the Fund which the undersigned may be entitled to
vote at the Special Meeting of Shareholders (the "Special Meeting") to be held
on October 23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00
p.m., and at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3 (A) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
DIVERSIFICATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (B) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING BORROWING
MONEY AND ISSUING SENIOR SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENTS
IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (D) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING INVESTMENTS
IN COMMODITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (E) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
UNDERWRITING SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (F) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING LENDING BY
THE FUND
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (G) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
CONCENTRATION OF THE FUND'S INVESTMENTS IN THE SECURITIES OF
COMPANIES IN THE SAME INDUSTRY
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, CERTAIN OF THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES:
4 (A) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (B) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S FUNDAMENTAL
INVESTMENT POLICY REGARDING PLEDGING ASSETS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 (A) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY
REGARDING SELLING SECURITIES SHORT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION NEW YORK MUNICIPAL INCOME FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision New York Municipal Income Fund (the "Fund"), a portfolio of Vision Group
of Funds, Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant
Anderson, Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or
any one of them, true and lawful attorneys, with the power of substitution of
each, to vote all shares of the Fund which the undersigned may be entitled to
vote at the Special Meeting of Shareholders (the "Special Meeting") to be held
on October 23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00
p.m., and at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3 (B) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
BORROWING MONEY AND ISSUING SENIOR SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (D) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN COMMODITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (E) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
UNDERWRITING SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (F) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
LENDING BY THE FUND
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (G) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
CONCENTRATION OF THE FUND'S INVESTMENTS IN THE SECURITIES OF
COMPANIES IN THE SAME INDUSTRY
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, CERTAIN OF THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES:
4 (A) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (B) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING PLEDGING ASSETS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5 (A) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY
REGARDING SELLING SECURITIES SHORT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 6 TO MAKE NON-FUNDAMENTAL THE FUND'S FUNDAMENTAL INVESTMENT POLICY
REGARDING INVESTING IN EXEMPT INTEREST OBLIGATIONS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION LARGE CAP VALUE FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision Large Cap Value Fund (the "Fund"), a portfolio of Vision Group of Funds,
Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant Anderson,
Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or any one of
them, true and lawful attorneys, with the power of substitution of each, to vote
all shares of the Fund which the undersigned may be entitled to vote at the
Special Meeting of Shareholders (the "Special Meeting") to be held on October
23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m., and
at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 3 TO MAKE AMENDMENTS TO THE FUND'S FUNDAMENTAL INVESTMENT POLICIES:
3 (A) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
DIVERSIFICATION
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (B) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
BORROWING MONEY AND ISSUING SENIOR SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (C) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN REAL ESTATE
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (D) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
INVESTMENTS IN COMMODITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (E) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
UNDERWRITING SECURITIES
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (F) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
LENDING BY THE FUND
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (G) TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
CONCENTRATION OF THE FUND'S INVESTMENTS IN THE SECURITIES OF
COMPANIES IN THE SAME INDUSTRY
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 4 TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, CERTAIN OF THE
FUND'S FUNDAMENTAL INVESTMENT POLICIES:
4 (A) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING BUYING SECURITIES ON MARGIN
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (B) TO AMEND, AND TO RECLASSIFY AS NON-FUNDAMENTAL, THE FUND'S
FUNDAMENTAL INVESTMENT POLICY REGARDING PLEDGING ASSETS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 5(A) TO ELIMINATE THE FUND'S FUNDAMENTAL INVESTMENT POLICY REGARDING
SELLING SECURITIES SHORT
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION MID CAP STOCK FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision Mid Cap Stock Fund (the "Fund"), a portfolio of Vision Group of Funds,
Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant Anderson,
Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or any one of
them, true and lawful attorneys, with the power of substitution of each, to vote
all shares of the Fund which the undersigned may be entitled to vote at the
Special Meeting of Shareholders (the "Special Meeting") to be held on October
23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m., and
at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION LARGE CAP GROWTH FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision Large Cap Growth Fund (the "Fund"), a portfolio of Vision Group of Funds,
Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant Anderson,
Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or any one of
them, true and lawful attorneys, with the power of substitution of each, to vote
all shares of the Fund which the undersigned may be entitled to vote at the
Special Meeting of Shareholders (the "Special Meeting") to be held on October
23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m., and
at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
VISION LARGE CAP CORE FUND
Proxy for Special Meeting of Shareholders - October 23, 2000
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of the
Vision Large Cap Core Fund (the "Fund"), a portfolio of Vision Group of Funds,
Inc. (the "Corporation"), hereby appoint Victor R. Siclari, C. Grant Anderson,
Mark Thompson, Susan Kimmel, Erin R. Dugan and Maureen Ferguson, or any one of
them, true and lawful attorneys, with the power of substitution of each, to vote
all shares of the Fund which the undersigned may be entitled to vote at the
Special Meeting of Shareholders (the "Special Meeting") to be held on October
23, 2000, at 5800 Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m., and
at any adjournment thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other.
Discretionary authority is hereby conferred as to all other matters as may
properly come before the Special Meeting or any adjournment thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF VISION GROUP OF
FUNDS, INC. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED "FOR" THE PROPOSALS.
PROPOSAL 1 TO ELECT RANDALL I. BENDERSON, JOSEPH J. CASTIGLIA, MARK J.
CZARNECKI, DANIEL R. GERNATT, JR. AND GEORGE K. HAMBLETON, JR., AS
DIRECTORS OF THE CORPORATION
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
IF YOU DO NOT WISH YOUR SHARES TO BE VOTED "FOR" A PARTICULAR
NOMINEE, MARK THE "VOTE FOR ALL EXCEPT" BOX AND STRIKE A LINE
THROUGH THE NAME OF EACH NOMINEE FOR WHOM YOU ARE NOT VOTING. YOUR
SHARES WILL BE VOTED FOR THE REMAINING NOMINEES.
PROPOSAL 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE CORPORATION'S
INDEPENDENT AUDITORS
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
PROPOSAL 7 TO APPROVE THE PROPOSED AGREEMENT AND PLAN OF REORGANIZATION,
WHEREBY THE CORPORATION WILL BE REORGANIZED AS A DELAWARE BUSINESS
TRUST
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Corporation. Directors and other fiduciaries should indicate the capacity in
which they sign, and where more than one name appears, a majority must sign. If
a corporation, this signature should be that of an authorized officer who should
state his or her title.
A-7
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made
as of this __ day of ______________, 2000 by and between Vision Group of Funds,
Inc., a corporation created under the laws of the State of Maryland (the
"Fund"), and Vision Group of Funds, a business trust created under the laws of
the State of Delaware (the "Trust") (the Fund and the Trust are hereinafter
collectively referred to as the "parties").
In consideration of the mutual promises contained herein, and
intending to be legally bound, the parties hereto agree as follows:
1. PLAN OF REORGANIZATION.
(a) Upon satisfaction of the conditions precedent described in
Section 3 hereof, the Fund will convey, transfer and deliver to the Trust, at
the closing provided for in Section 2 (hereinafter referred to as the
"Closing"), all of the Fund's then-existing assets, and the assets belonging to
each series of the Fund to be conveyed, transferred and delivered to the
corresponding series of the Trust. In consideration thereof, the Trust agrees at
the Closing (i) to assume and pay, to the extent that they exist on or after the
Effective Date of the Reorganization (as defined in Section 2 hereof), all of
the Fund's obligations and liabilities, whether absolute, accrued, contingent or
otherwise, including all fees and expenses in connection with the Agreement,
which fees and expenses shall in turn include, without limitation, costs of
legal advice, accounting, printing, mailing, proxy solicitation and transfer
taxes, if any, the obligations and liabilities allocated to each series of the
Fund to become the obligations and liabilities of the corresponding series of
the Trust, and (ii) to deliver, in accordance with paragraph (b) of this Section
1, to the Fund full and fractional shares of beneficial interest, no par value,
of each of the Trust's separate series and the respective classes of those
series, all as set forth in the Appendix attached hereto (hereinafter, the
series of the Trust are individually and collectively referred to as "Series of
the Trust," and the classes are individually referred to as a "Class of the
Trust" and collectively as "Classes of the Trust"), equal in number to the
number of full and fractional shares of common stock, par value one mill
($0.001) per share, of, respectively, each of the Fund's separate series and the
respective classes of those series, all as set forth in the Appendix attached
hereto (hereinafter, the series of the Fund are individually and collectively
referred to as "Series of the Fund," and the classes are referred to
individually as a "Class of the Fund" and collectively as "Classes of the Fund")
outstanding immediately prior to the Effective Date of the Reorganization. The
transactions contemplated hereby are intended to qualify as a reorganization
within the meaning of Section 368 of the Internal Revenue Code of 1986, as
amended ("Code").
(b) In order to effect such delivery, the Trust will establish an
open account for each shareholder of each Series of the Fund, and, on the
Effective Date of the Reorganization, will credit to such account full and
fractional shares of such Series and Class of the Trust equal to the number of
full and fractional shares such shareholder holds in the corresponding Series
and Class of the Fund at the close of regular trading on the New York Stock
Exchange on the business day immediately preceding the Effective Date of the
Reorganization; fractional shares of each Class of the Trust will be carried to
the third decimal place. On the Effective Date of the Reorganization, the net
asset value per share of beneficial interest of each Class of the Trust shall be
deemed to be the same as the net asset value per share of the corresponding
Class of the Fund at the close of regular trading on the New York Stock Exchange
on the business day immediately preceding the Effective Date of the
Reorganization. On the Effective Date of the Reorganization, each certificate
representing shares of a Series and Class of the Fund will represent the same
number of shares of the corresponding Series and Class of the Trust.
Simultaneously with the crediting of the shares of the Series and Classes of the
Trust to the shareholders of record of the Series and Classes of the Fund, the
shares of the Fund held by such shareholder shall be cancelled.
(c) As soon as practicable after the Effective Date of the
Reorganization, the Fund shall take all necessary steps under Maryland law to
effect a complete dissolution of the Fund.
2. CLOSING AND EFFECTIVE DATE OF THE REORGANIZATION. The Closing shall
consist of (i) the conveyance, transfer and delivery of the Fund's assets to the
Trust, in exchange for the assumption (and payment) by the Trust of the Fund's
liabilities; and (ii) the issuance and delivery of the Trust's shares in
accordance with Section 1(b) hereof, together with related acts necessary to
consummate such transactions. The Closing shall occur either on: (a) the
business day immediately following the later of receipt of all necessary
regulatory approvals and the final adjournment of the meeting of shareholders of
the Fund at which this Agreement will be considered, or (b) such later date as
the parties may mutually agree (the "Effective Date of the Reorganization"). The
Closing will take place at the principal offices of the Administrator of the
Fund and Trust at 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3770.
3. CONDITIONS PRECEDENT. The obligations of the Fund and the Trust to
effectuate the reorganization hereunder shall be subject to the satisfaction of
each of the following conditions:
(a) Such authority and orders from the U.S. Securities and Exchange
Commission (the "Commission") as may be necessary to permit the parties to carry
out the transactions contemplated by this Agreement shall have been received;
(b) (i) One or more post-effective amendments to the Fund's
Registration Statement on Form N-1A ("Registration Statement") under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"), containing such amendments to the Registration
Statement as are determined under the supervision of the Directors of the Fund
to be necessary and appropriate as a result of this Agreement shall have been
filed with the Commission; (ii) the Trust shall have adopted as its own such
Registration Statement, as so amended; (iii) the most recent post-effective
amendment or amendments to the Registration Statement filed with the Commission
relating to the Trust shall have become effective, and no stop-order suspending
the effectiveness of the Registration Statement shall have been issued, and no
proceeding for that purpose shall have been initiated or threatened by the
Commission (other than any such stop-order, proceeding or threatened proceeding
that shall have been withdrawn or terminated); and (iv) an amendment of the Form
N-8A Notification of Registration filed pursuant to Section 8(a) of the 1940 Act
("Form N-8A"), reflecting the change in legal form of the Fund to a Delaware
business trust, shall have been filed with the Commission and the Fund shall
have expressly adopted such amended Form N-8A as its own for purposes of the
1940 Act;
(c) Confirmation shall have been received from the Commission or the
Staff thereof that the Trust shall, effective upon or before the Effective Date
of the Reorganization, be duly registered as an open-end management investment
company under the 1940 Act;
(d) Each party shall have received an opinion from Stradley, Ronon,
Stevens & Young, LLP, to the effect that the reorganization contemplated by this
Agreement qualifies as a "reorganization" under Section 368(a) of the Code, and
thus will not give rise to the recognition of income, gain or loss for federal
income tax purposes to the Fund, the Trust or shareholders of the Fund or the
Trust;
(e) The Fund shall have received an opinion from Stradley, Ronon,
Stevens & Young, LLP, dated the Effective Date of the Reorganization, addressed
to and in form and substance satisfactory to the Fund, to the effect that (i)
this Agreement and the reorganization provided for herein, and the execution and
delivery of this Agreement, have been duly authorized and approved by all
requisite action of the Trust, this Agreement has been duly executed and
delivered by the Trust and constitutes a legal, valid and binding agreement of
the Trust in accordance with its terms; (ii) the shares of the Trust 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; and (iii) the
Trust is duly organized, validly existing and in good standing under the laws of
the State of Delaware;
(f) The Trust shall have received an opinion from Stradley, Ronon,
Stevens & Young, LLP, dated the Effective Date of the Reorganization, addressed
to and in form and substance satisfactory to the Trust, to the effect that (i)
this Agreement and the reorganization provided for herein, and the execution and
delivery of this Agreement, have been duly authorized and approved by all
requisite action of the Fund, this Agreement has been duly executed and
delivered by the Fund and constitutes a legal, valid and binding agreement of
the Fund in accordance with its terms; and (ii) the Fund is duly organized,
validly existing and in good standing under the laws of the State of Maryland;
(g) The shares of each Series and Class of the Trust shall have been
duly registered, qualified or otherwise authorized and are eligible for offering
to the public in those states of the United States and jurisdictions in which
the shares of their corresponding Series and Class of the Fund are presently
eligible for offering to the public so as to permit the issuance and delivery of
shares contemplated by this Agreement to be consummated;
(h) This Agreement and the reorganization contemplated hereby shall
have been adopted and approved by the appropriate action of the shareholders of
the Fund at an annual or special meeting or any adjournment thereof;
(i) The Trustees of the Trust shall have taken the following actions
at a meeting duly called for such purposes:
(1) Approval of the investment advisory contract between the
Trust and Manufacturers and Traders Trust Company ("M&T
Bank") substantially identical to the current investment
advisory contract between the Fund and M&T Bank;
(2) Approval of the Trust's Distributor's Contract;
(3) Approval of the Trust's Administrative Services
Agreement;
(4) Approval of the Trust's Agreement for Fund Accounting
Services and Transfer Agency Services;
(5) Approval of the Trust's Recordkeeping Agreement;
(6) Approval of the Trust's Custodian Agreement;
(7) Approval of the Rule 12b-1 Plans for the Trust;
(8) Approval of the Trust's Shareholders Services Plan;
(9) Approval of the Trust's Multiple Class Plan;
(10) Selection of Ernst & Young LLP, as the Trust's
independent auditors, for the fiscal year ending April
30, 2001;
(11) Authorization of the issuance by the Trust, prior to the
Effective Date of the Reorganization, of one share of
each Series and Class of the Trust to the Fund in
consideration for the payment of the current public
offering price of a share of each Series and Class of
the Trust, for the purpose of enabling the Fund to vote
on the matter referred to in paragraph (j) of this
Section 3;
(12) Submission of the matter referred to in paragraph (j) of
this Section 3 to the Fund as sole shareholder of each
Series of the Trust; and
(13) Authorization of the issuance and delivery by the Trust
of shares of each Series and Class of the Trust on the
Effective Date of the Reorganization in exchange for the
assets of the corresponding Series and Class of the Fund
pursuant to the terms and provisions of this Agreement.
(j) The shareholders of the Fund shall have voted to approve the
reorganization and, in connection with that vote, been informed that such a vote
would have the effect of directing the Fund to vote, as the sole shareholder of
the Trust, to approve a new investment advisory contract between the Trust and
M&T Bank, which is substantially identical to the current investment advisory
contract between the Fund and M&T Bank, and the Fund shall have voted to approve
each such item.
At any time prior to the Closing, any of the foregoing conditions may be
waived by the Board of Directors of the Fund if, in the judgment of such
Directors, such waiver will not affect in a materially adverse way the benefits
intended to be accorded to the shareholders of the Fund under this Agreement.
4. TERMINATION. The Board of Directors of the Fund may terminate this
Agreement and abandon the reorganization contemplated hereby, notwithstanding
approval thereof by the shareholders of the Fund, at any time prior to the
Effective Date of the Reorganization if, in the judgment of such Board of
Directors, the facts and circumstances make proceeding with this Agreement
inadvisable.
5. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between
the parties and there are no agreements, understandings, restrictions or
warranties among the parties other than those set forth herein or herein
provided for.
6. FURTHER ASSURANCES. The Fund and the Trust shall take such further
action as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
7. COUNTERPARTS. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
shall
constitute one and the same instrument.
8. GOVERNING LAW. This Agreement and the transactions contemplated hereby
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware.
IN WITNESS WHEREOF, the Fund and the Trust have each caused this Agreement
and Plan of Reorganization to be executed on its behalf by its President and its
seal to be affixed hereto and attested by its Secretary, all as of the day and
year first-above written.
Attest: VISION GROUP OF FUNDS
(a Delaware business trust)
By: By:
--------------------------- ---------------------------------
C. Todd Gibson Beth S. Broderick
Secretary Vice President
Attest: VISION GROUP OF FUNDS, INC.
(a Maryland corporation)
By: By:
--------------------------- ---------------------------------
C. Todd Gibson Beth S. Broderick
Secretary Vice President
APPENDIX
<TABLE>
<CAPTION>
<S> <C>
Series and Classes of Vision Series and Classes of Vision
GROUP OF FUNDS GROUP OF FUNDS, INC.
------------------------------ --------------------------------
Vision Treasury Money Market Fund Vision Treasury Money Market Fund
Class A Shares Class A Shares
Class S Shares Class S Shares
Vision Money Market Fund Vision Money Market Fund
Class A Shares Class A Shares
Class S Shares Class S Shares
Vision New York Tax-Free Money Vision New York Tax-Free Money
Market Fund Market Fund
Class A Shares Class A Shares
Vision U.S. Government Securities Fund Vision U.S. Government Securities
Fund
Class A Shares Class A Shares
Vision New York Municipal Income Fund Vision New York Municipal Income Fund
Class A Shares Class A Shares
Vision Large Cap Value Fund Vision Large Cap Value Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
Vision Mid Cap Stock Fund Vision Mid Cap Stock Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
Vision Large Cap Growth Fund Vision Large Cap Growth Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
Vision Large Cap Core Fund Vision Large Cap Core Fund
Class A Shares Class A Shares
Class B Shares Class B Shares
</TABLE>
B-8
EXHIBIT B
COMPARISON AND SIGNIFICANT DIFFERENCES BETWEEN
DELAWARE BUSINESS TRUSTS AND MARYLAND CORPORATIONS
GOVERNING DOCUMENTS
DELAWARE BUSINESS TRUST
A Delaware business trust (a "DBT") is created by a certificate of trust, which
certificate must be filed with the Delaware Secretary of State. The law
governing DBTs is referred to in this analysis as the "Delaware Act."
MARYLAND CORPORATION
A Maryland corporation (a "corporation") is created by filing articles of
incorporation with the Maryland Department of Assessments and Taxation. The law
governing corporations is referred to in this analysis as the "Maryland Law."
Delaware Business Trust
A DBT is an unincorporated association organized under the Delaware Act that
operates similarly to a typical corporation. A DBT's operations are governed by
its governing instruments (which may consist of one or more instruments,
including an agreement and declaration of trust, and bylaws) and its business
and affairs are managed by or under the direction of a board of trustees.
Maryland Corporation
A corporation is incorporated under the Maryland Law. A corporation's operations
are governed by charter documents, which include its articles of incorporation
and bylaws, and its business and affairs are managed by or under the direction
of a board of directors.
Delaware Business Trust
A DBT organized as an open-end investment company is subject to the Investment
Company Act of 1940, as amended (the "1940 Act"). Shareholders of business
trusts (sometimes referred to as "beneficial owners") own shares of "beneficial
interest," which are similar to the shares of "common stock" issued by
corporations.
Maryland Corporation
A corporation organized as an open-end investment company is subject to the 1940
Act. Stockholders own shares of "common stock" issued by the corporation, which
are similar to the shares of "beneficial interest" issued by DBTs.
MULTIPLE SERIES AND CLASSES
Delaware Business Trust
Under the Delaware Act, a declaration of trust may provide for classes, groups
or series of shares, or classes, groups or series of shareholders, having such
relative rights, powers and duties as the declaration of trust may provide. The
series and classes of a DBT may be described in the DBT's declaration of trust
or in resolutions adopted by the DBT's board of trustees. Additionally, no state
filings or shareholder approvals are required to create series or classes. The
Board of Directors (the "Board") of Vision Group of Funds, Inc. (the
"Corporation") has proposed to reorganize the Corporation from a Maryland
corporation into Vision Group of Funds, a Delaware business trust (the "DE
Trust"). The DE Trust's Agreement and Declaration of Trust (the "Declaration of
Trust") permits the creation of multiple series and classes and establishes the
provisions relating to the DE Trust's shares of beneficial interest.
Maryland Corporation
The Maryland Law permits a corporation to issue one or more classes of stock
and, if the stock is divided into classes, the articles of incorporation are
required to describe each class, including any preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends, qualifications
and terms or conditions of redemption among such classes. The amendments to a
corporation's charter documents that describe a new series or class, or a change
to an existing series or class, must be filed with the State of Maryland's
Department of Assessments and Taxation. Provided that the charter documents
contain the proper language, the Maryland Law allows a fund's board to classify
or reclassify any unissued stock from time to time by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications, or terms and conditions of
redemption, without stockholder approval, by filing articles supplementary in
Maryland. The Corporation's Articles of Incorporation ("Articles of
Incorporation") permit the Board to make such classifications and
reclassifications of the Corporation's unissued stock without stockholder
approval. The Maryland Law also permits a board of directors to increase or
decrease the aggregate number of shares of stock of the corporation or the
number of shares of stock of any class that the corporation has authority to
issue without stockholder approval.
LIMITATION OF SERIES LIABILITY
Delaware Business Trust
The Delaware Act explicitly provides for a reciprocal limitation of interseries
liability. Generally, the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular series of a
multiple series investment company registered under the 1940 Act are enforceable
only against the assets of such series, and not against the assets of a DBT, or
any other series, provided that: (i) the governing instruments create one or
more series, (ii) the DBT separately maintains the records and the assets of the
series; (iii) notice of the limitation of liabilities of the series is set forth
in the certificate of trust; and (iv) the governing instruments so provide. The
Declaration of Trust for the DE Trust specifically limits interseries liability.
Maryland Corporation
The Maryland Law does not contain specific statutory provisions addressing
interseries liability with respect to a multiple series investment company;
however, if the stock of a corporation is divided into classes, the Maryland Law
requires the corporation's charter documents to set forth any preferences or
restrictions relating to such classes. The Corporation's charter documents are
silent with respect to the issue of interseries liability.
SHAREHOLDER VOTING RIGHTS, QUORUM AND PROXY REQUIREMENTS
Delaware Business Trust
The Declaration of Trust provides that thirty-three and one-third percent (33
1/3%) of the shares entitled to vote at any meeting must be present in person or
by proxy to establish a proper quorum for voting purposes, unless a larger
quorum is required by applicable law, by the By Laws of the DE Trust ("Bylaws"),
or by the Declaration of Trust. Further, when a quorum is present, a majority of
votes cast shall decide any issues, and a plurality shall elect a Trustee of the
DE Trust ("Trustee"), unless a larger vote is required by the governing
documents or under applicable law. The effect of the quorum and voting
provisions is to make it easier for the DE Trust to seek appropriate shareholder
approvals for many actions not related to regulatory issues without experiencing
the added costs or delays of soliciting additional proxies or votes and without
being disadvantaged by abstentions or broker non-votes. The Delaware Act also
affords trustees the ability to adapt a DBT to future contingencies. For
example, trustees have the authority to incorporate a DBT, to merge or
consolidate a DBT or its series with another entity, to cause multiple series of
a DBT to become separate trusts, to change the state of domicile or to liquidate
a DBT, all without having to obtain a shareholder vote.
Maryland Corporation
Under the Maryland Law, unless the articles of incorporation of a corporation
provide otherwise, or there is another governing provision in the Maryland Law,
the presence in person or by proxy of stockholders entitled to cast a majority
of all the votes entitled to be cast at the meeting constitutes a quorum. The
Maryland Law requires a plurality of all votes cast at a meeting at which a
quorum is present to elect directors unless the corporation's articles of
incorporation require a larger vote. For most other stockholder votes, the
Maryland Law provides that a majority of all votes cast at a meeting at which a
quorum is present is sufficient to approve any matter, unless the corporation's
articles of incorporation provide otherwise. Certain other matters, such as
amendments to the corporation's articles of incorporation, consolidations,
mergers, share exchanges and transfers of assets, require the affirmative vote
of two-thirds of all votes entitled to be cast on the matter for approval of the
measure. However, under the Maryland Law, the articles of incorporation may
include a provision that requires less than a two-thirds vote, provided that the
articles of incorporation require at least a majority vote. The Articles of
Incorporation provide that unless the Maryland Law or another provision of the
Articles of Incorporation require otherwise, an action shall be effective and
authorized by the affirmative vote of the holders of a majority of the total
number of shares of stock outstanding and entitled to vote thereon, except as
otherwise provided therein. However, an amendment to the Articles of
Incorporation requiring a stockholder vote is not valid unless it has been
authorized by not less than a majority of the aggregate number of the votes
entitled to be cast thereon.
Delaware Business Trust
The Declaration of Trust provides that all shares of the Trust entitled to vote
on a matter shall vote separately by series, and if applicable, by class.
Shareholders are entitled to whole and fractional votes for each whole and
fractional share owned.
Maryland Corporation
Pursuant to the Maryland Law, unless a corporation's charter provides for a
greater or lesser number of votes per share, or limits or denies voting rights,
each outstanding share of stock is entitled to one vote on each matter submitted
to a vote at a meeting of stockholders. The Articles of Incorporation provide
that the holder of each share of stock is entitled to whole and fractional votes
for each whole and fractional share owned, irrespective of the class.
Delaware Business Trust
The Delaware Act and the Bylaws both permit the DE Trust to accept proxies by
any electronic, telephonic, computerized, telecommunications or other reasonable
alternative to the execution of a written instrument authorizing the proxy to
act, provided that such authorization is received within eleven (11) months
before the meeting. This flexibility may facilitate proxy solicitations and
result in savings to the DE Trust.
Maryland Corporation
The Maryland Law provides for stockholders to authorize another person to act as
proxy by providing such authorization by telegram, cablegram, datagram,
electronic mail, or any other electronic or telephonic means. In addition, a
copy, facsimile telecommunication or other reliable reproduction of the writing
or transmission authorized may be substituted for the original writing or
transmission for any purpose for which the original writing or transmission
could be used. The authorization must be received within eleven (11) months
before the stockholder meeting.
SHAREHOLDERS' MEETINGS
Delaware Business Trust
The Delaware Act permits special shareholder meetings to be called for any
purpose. However, the governing instruments determine shareholders' rights to
call meetings. The Declaration of Trust provides that the Board of Trustees may
call shareholder meetings for the purpose of: (i) electing Trustees, (ii) for
such other purposes as may be prescribed by law, the Declaration of Trust or the
Bylaws, and (iii) taking action upon any other matter deemed by the Trustees to
be necessary or desirable. The Bylaws further provide that a shareholder meeting
may be called at any time by the Board of Trustees, by the Chairperson of the
Board, or by the President, for the purpose of electing Trustees or for the
purpose of taking action upon any other matter deemed by the Board to be
necessary or desirable. An annual shareholders' meeting is not required by the
Delaware Act, the Declaration of Trust, or the Bylaws.
Maryland Corporation
The Maryland Law requires corporations operating as registered investment
companies to hold stockholder meetings when required to do so under the 1940
Act. Under Maryland Law, a special meeting of stockholders may be called by the
president, the board of directors, or any other person specified in the articles
of incorporation or bylaws. The Maryland Law also provides that a special
meeting shall be called by the secretary of the corporation upon written request
of the stockholders entitled to cast at least twenty-five percent (25%) of all
of the votes entitled to be cast at the meeting, unless the corporation's
articles of incorporation require a greater or lesser percentage. The
Corporation's Bylaws provide that a special meeting may be called by the
President, the Board of Directors, or at the request in writing of stockholders
entitled to cast at least 25% of the votes entitled to be cast at the special
meeting.
AMENDMENTS TO GOVERNING DOCUMENTS
Delaware Business Trust
The Delaware Act provides broad flexibility with respect to amending the
governing documents of a DBT. The Declaration of Trust provides that the
Declaration of Trust may be restated and/or amended at any time by an instrument
in writing signed by a majority of the then Trustees, and if required, by
approval of such amendment by shareholders.
Maryland Corporation
Under the Maryland Law, the articles of incorporation of a Maryland corporation
may be amended only: (i) upon adoption of a resolution by the directors which
sets forth the proposed amendment; and (ii) if shares are outstanding, approval
of the proposed amendment by the affirmative vote of two-thirds of all votes
entitled to be cast, unless the charter provides that a requirement of a
majority of such votes is permissible. The Articles of Incorporation provide the
Articles may be amended by a majority vote.
Delaware Business Trust
The Declaration of Trust also provides that the Trustees shall have the power to
amend the Declaration of Trust without shareholder approval so as to add to,
delete, replace or otherwise modify any provisions relating to the DE Trust's
shares of beneficial interest contained in the Declaration of Trust. If shares
have been issued, shareholder approval is required to adopt any amendments to
the Declaration of Trust which would adversely affect, to a material degree, the
rights and preferences of the shares of any series or class. Unlike the Maryland
Law, the Delaware Act does not require any state filings for amendments to be
made to a DBT's governing instruments.
Maryland Corporation
The Maryland Law does permit an investment company to amend its charter
documents without stockholder approval in order: to change its corporate name;
to change the name or other designation or the par value of any of its classes
or series; to classify or reclassify any of its unissued stock; to allocate or
re-allocate authorized but unissued shares; or to increase or decrease the
aggregate number of shares that the corporation has authority to issue. Under
the Maryland Law, a corporation must file articles of amendment or articles
supplementary, as appropriate, with the Maryland State Department of Assessments
and Taxation.
Delaware Business Trust
The Declaration of Trust provides that the Trustees may amend and repeal the
Bylaws. The Bylaws of the DE Trust provide that the Bylaws may be restated
and/or amended at any time, without the approval of shareholders, by an
instrument in writing signed by, or a resolution of, a majority of the Board of
Trustees.
Maryland Corporation
The Maryland Law provides that, after the organizational meeting of the board of
directors, the power to adopt, alter or repeal the bylaws is vested in the
stockholders, except to the extent that the articles of incorporation or bylaws
vest such powers in the board of directors. Consistent with the Maryland Law,
the Articles of Incorporation and the Corporation's Bylaws provide that they may
be amended, adopted or repealed by the affirmative vote of the holders of a
majority of the total number of shares outstanding and entitled to vote thereon,
or by a majority vote of the Board of Directors, as the case may be.
RECORD DATE/NOTICE
Delaware Business Trust
The Delaware Act permits a governing instrument to provide for the establishment
of record dates for determining voting rights.
Maryland Corporation
The Maryland Law contains specific provisions by which a corporation may
determine which stockholders are entitled to notice of a meeting, to vote at a
meeting, or to any other rights.
Delaware Business Trust
The Declaration of Trust provides that the Board of Trustees may fix in advance
a record date which shall not be more than one hundred eighty (180) days, nor
less than seven (7) days, before the date of any such meeting.
Maryland Corporation
The Maryland Law requires that the record date be not more than ninety (90) days
and not less than ten (10) days before the date on which the action requiring
determination will be taken. The Maryland Law also provides that a corporation
give stockholders notice not less than ten (10) days nor more than ninety (90)
days before the meeting.
Delaware Business Trust
The Bylaws provide that all notices of shareholder meetings shall be sent or
otherwise given to shareholders not more than ninety-three (93) days and not
less than seven (7) days before the date of the meeting.
Maryland Corporation
The Corporation's Bylaws mirror the Maryland Law with respect to setting the
record date and providing notice for a stockholder meeting.
REMOVAL OF TRUSTEES/
DIRECTORS
Delaware Business Trust
The Delaware Act is silent with respect to the removal of trustees. However, the
Declaration of Trust states that the Board of Trustees, by action of two-thirds
of the then Trustees at a duly constituted meeting, may fill vacancies in the
Board of Trustees or remove Trustees with or without cause. Further, the
Declaration of Trust states that shareholders shall have the power to remove a
Trustee only to the extent provided by the 1940 Act and the rules and
regulations thereunder.
Maryland Corporation
Under the Maryland Law, a director may be removed with or without cause by the
affirmative vote of at least a majority of all the votes entitled to be cast for
election of directors. The Corporation's Bylaws provide that Directors may be
removed with or without cause by the vote of stockholders entitled to cast a
majority of the votes.
SHAREHOLDER RIGHTS OF INSPECTION
Delaware Business Trust
The Delaware Act sets forth the rights of shareholders to gain access to and
receive copies of certain DBT documents and records upon written request by the
shareholders. These rights are qualified by the extent otherwise provided in the
governing instruments of the DBT, as well as a reasonable demand standard
related to the shareholder's interest as a shareholder of the DBT. Consistent
with the Delaware Act, the Bylaws provide that a shareholder shall have the
right to inspect and copy the minutes and accounting books and records of the DE
Trust upon written demand at any reasonable time during usual business hours for
a purpose reasonably related to the shareholder's interest as a shareholder.
Shareholders are also permitted to inspect the Bylaws during normal business
hours.
Maryland Corporation
Like the Delaware Act, the Maryland Law permits stockholders to make reasonable
demands to gain access to and receive copies of certain corporate documents and
records. Specifically, a stockholder may inspect and copy, during usual business
hours, the corporation's bylaws; minutes of the proceedings of stockholders;
annual statements of affairs; and voting trust agreements. In addition,
stockholders representing at least 5% of the outstanding shares of any class
may, upon written request, inspect and copy the corporation's books of accounts
and its stock ledgers and request a statement of its affairs. The Articles of
Incorporation provide that stockholders only have the inspection rights required
by law or authorized by resolution of the Board or stockholders.
SHAREHOLDER LIABILITY
Delaware Business Trust
Personal liability is limited by the Delaware Act to the amount of investment in
a DBT, and may be further limited or restricted by the governing instrument.
Shareholders of a DBT are entitled to the same limitation of personal liability
extended to shareholders of a private corporation organized for profit under the
general corporation law of the State of Delaware. The Declaration of Trust
specifically limits the personal liability of shareholders.
Maryland Corporation
As a general matter, the stockholders of a Maryland corporation are not liable
for the obligations of the corporation. The liability of stockholders is limited
to the consideration, if applicable, that the stockholders are obligated to pay
for the stock. There is no provision in the Articles of Incorporation varying
this protection. A stockholder of a Maryland corporation may be liable in the
amount of any distribution he or she accepts knowing that the distribution was
made in violation of the corporation's articles of incorporation or the Maryland
Law.
TRUSTEE/DIRECTOR LIABILITY
Delaware Business Trust
Subject to a DBT's declaration of trust, the Delaware Act provides that a
trustee, when acting in such capacity, may not be held personally liable to any
person other than a DBT or a shareholder for any act, omission or obligation of
the DBT or any trustee. A trustee's duties and liabilities to the DBT and its
shareholders may be expanded or restricted by the provisions of the declaration
of trust. The Declaration of Trust shields Trustees from liability for the acts
or omissions of any officer, agent, employee, manager or principal underwriter
or other Trustee. Trustees and officers of the DE Trust may be held liable to
the DE Trust and any shareholder for willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of their
office as a Trustee or officer, but may not be held liable for errors of
judgment or mistakes of fact or law.
Maryland Corporation
The Maryland Law requires a director to perform his or her duties in good faith,
in a manner he or she reasonably believes to be in the best interests of the
corporation and with the care that an ordinarily prudent person in a like
position would use under similar circumstances. A director who performs his or
her duties in accordance with this standard has no liability by reason of being
or having been a director. Under the Maryland Law, a corporation may include in
its charter a provision limiting liability for money damages of its directors to
the corporation or its shareholders. However, liability may not be limited when
a director has received an improper benefit or profit in money, property or
services or where a director has been actively and deliberately dishonest.
INDEMNIFICATION
Delaware Business Trust
The Delaware Act permits a DBT to indemnify and hold harmless any trustee,
shareholder or agent from and against any and all claims and demands. Consistent
with the Delaware Act, the Declaration of Trust provides for the indemnification
of officers and Trustees from and against any and all claims and demands arising
out of or related to the performance of their duties as an officer or Trustee.
The DE Trust will not indemnify, hold harmless or relieve a Trustee from
liability when the Trustee did not act in good faith in reasonable belief that
his or her action was in, or not opposed to, the best interests of the Trust; or
had acted with willful misfeasance, bad faith, gross negligence or reckless
disregard of his or her duties; and for a criminal proceeding, had reasonable
cause to believe his or her conduct was unlawful.
Maryland Corporation
There is no provision in the Maryland Law relating to indemnification of
stockholders. The Articles of Incorporation and the Corporation's Bylaws are
also silent with respect to this issue. The Maryland Law provides a
comprehensive statutory framework relating to the indemnification of directors
and officers. Under the Maryland Law, a director or officer who is threatened or
made a party to a proceeding, may be indemnified against judgments, penalties,
fines, settlements and reasonable expenses. Indemnification will not be
permitted if the act or omission of the director or officer: (i) was material to
the matter giving rise to the proceeding and was committed in bad faith, or was
the result of active and deliberate dishonesty; (ii) resulted in an improper
benefit to the individual; or (iii) if the director or officer had reasonable
cause to believe that the act or omission was unlawful. However, if the
proceeding was one by or in the right of the corporation, indemnification may
not be made in respect of any proceeding in which the director shall have been
adjudged to be liable to the corporation.
Delaware Business Trust
The Declaration of Trust also provides that any shareholder or former
shareholder that is exposed to liability by reason of a claim or demand related
to such person having been a shareholder, and not because of his or her acts or
omissions, shall be entitled to be held harmless and indemnified out of the
assets of the DE Trust.
Maryland Corporation
The Corporation's charter documents provide for the indemnification of Directors
and officers to the maximum extent provided by applicable law, provided that no
Director or officer of the Corporation shall be indemnified against any
liability to the Corporation or its stockholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
INSURANCE
Delaware Business Trust
The Delaware Act does not contain a provision specifically related to insurance.
The Declaration of Trust provides that the Trustees and officers shall be
entitled and empowered to the fullest extent permitted by law to purchase
insurance with the DE Trust's assets for liability and for all expenses
reasonably incurred or paid or expected to be paid by a Trustee or officer in
connection with any claim or proceeding in which he or she becomes involved by
virtue of his or her capacity (or former capacity) with the DE Trust, whether or
not the DE Trust would have the power to indemnify against such liability.
Maryland Corporation
Under the Maryland Law, a corporation may purchase insurance on behalf of any
director, officer or employee against any liability asserted against and
incurred by such person in any such capacity or arising out of such person's
position, whether or not the corporation would have the power to indemnify such
person against such liability. The Corporation's Articles of Incorporation
permit the purchase of such insurance for Directors, officers and agents.
--------
1 The members of the board of a Delaware business trust are referred to as
Trustees.
