<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
(Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant[ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to section 240.14a-11(c) or
section 240.14a-12
THE RIVERFRONT FUNDS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined);
----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
5) Total fee paid:
----------------------------------------------------------------
[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: _________________________________________
2) Form, Schedule or Registration Statement No.: ___________________
3) Filing Party: ___________________________________________________
4) Date Filed: _____________________________________________________
<PAGE> 2
THE RIVERFRONT FUNDS, INC.
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of The Riverfront Flexible
Growth Fund, a series of The Riverfront Funds, Inc.:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of The Riverfront Flexible Growth Fund (the "Fund"), a series of The
Riverfront Funds, Inc. (the "Company"), will be held on Friday, December 20,
1996, at 10:00 A.M., Eastern Daylight Savings Time, at 3435 Stelzer Road,
Columbus, Ohio 43219 for the purpose of considering and acting on the following
matters:
1. To approve an amendment to the arrangements with respect to the
management of the Fund such that The Provident Bank will become
the sole manager of the Fund's portfolio;
2. To approve amendments to the Company's Articles of Incorporation
to reclassify the currently issued and outstanding shares of the
Fund as shares of The Riverfront Balanced Fund; and
3. To consider and act upon any matters incidental to the foregoing
and to transact such other business as may properly come before
the Meeting and any adjournment or adjournments thereof.
The close of business of November 1, 1996, has been fixed as the record
date for the determination of shareholders of the Fund entitled to notice of and
to vote at the Meeting.
All shareholders of the Fund are cordially invited to attend the
Meeting in person. If you are unable to do so, please complete the enclosed
proxy and return it in the enclosed envelope.
By Order of the Directors,
November 22, 1996 James E. White, Secretary
YOUR VOTE IS IMPORTANT
IN ORDER TO AVOID THE ADDITIONAL EXPENSE OF A SECOND SOLICITATION, WE URGE YOU
TO COMPLETE, SIGN AND RETURN PROMPTLY THE ENCLOSED PROXY. FOR YOUR CONVENIENCE,
THE ENCLOSED ADDRESSED ENVELOPE REQUIRES NO POSTAGE.
<PAGE> 3
THE RIVERFRONT FUNDS, INC.
3435 STELZER ROAD
COLUMBUS, OHIO 43219
PROXY STATEMENT
FOR A SPECIAL MEETING OF SHAREHOLDERS
OF THE RIVERFRONT FLEXIBLE GROWTH FUND
GENERAL
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Directors of The Riverfront Funds, Inc., a Maryland
corporation (the "Company"), to be used in connection with a Special Meeting of
Shareholders (the "Meeting") of The Riverfront Flexible Growth Fund (the
"Fund"), a series of the Company, to be held on Friday, December 20, 1996.
The Directors have fixed the close of business of November 1, 1996, as
the record date (the "Record Date") for the determination of shareholders of the
Fund entitled to notice of and to vote at the Meeting. Investor A and Investor B
shareholders of record of the Fund are entitled to one vote for each share and a
proportionate fractional vote for any fraction of a share as to each issue on
which such shareholders are entitled to vote. As of the Record Date, the total
number of Investor A shares of capital stock, $.001 par value, of the Fund
entitled to vote at the Meeting is 1,102,612.256, and the total number of
Investor B shares of capital stock, $.001 par value, of the Fund entitled to
vote at the Meeting is 825,734 (the Investor A Shares and the Investor B
Shares hereinafter are collectively referred to as the "Shares").
Only shareholders of record of the Fund at the close of business on the
Record Date will be entitled to notice of and to vote at the Meeting. Shares
represented by management proxies, unless previously revoked, will be voted at
the Meeting in accordance with the instructions of the shareholders. If no
instructions are given, the proxies will be voted in favor of the proposals. To
revoke a management proxy, the shareholder giving such proxy must either submit
to the Company a subsequently dated proxy, deliver to the Company a written
notice of revocation or otherwise give notice of revocation in open Meeting, in
all cases prior to the exercise of the authority granted in the management
proxy.
The mailing address of the principal executive offices of the Company
is: 3435 Stelzer Road, Columbus, Ohio 43219. The approximate date on which this
Proxy Statement and form of proxy are first sent to shareholders is on or about
November 22, 1996.
In the event that sufficient votes are not received by the date of the
Meeting, a person named as proxy may propose one or more adjournments of the
Meeting for a reasonable period or periods to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of the holders
of a majority of the Fund's Shares present at the Meeting in person or by proxy.
The persons named as proxies will vote in favor of such adjournment those
proxies which they are entitled to vote in favor of the proposals and will vote
against any such adjournment those proxies required to be voted against the
proposals.
Management knows of no business which will be presented for
consideration other than that set forth in Proposals 1 and 2 of the Notice of
Special Meeting of shareholders. If any other matters are properly presented,
it is the intention of the persons named as proxy to vote the proxies in
accordance with their judgment on such matters.
<PAGE> 4
THE COMPANY WILL FURNISH, WITHOUT CHARGE, A COPY OF THE COMPANY'S MOST
RECENT ANNUAL REPORT TO SHAREHOLDERS, AND SEMI-ANNUAL REPORT TO SHAREHOLDERS
SUCCEEDING SUCH ANNUAL REPORT, UPON REQUEST, WHICH REQUEST MAY BE MADE EITHER BY
WRITING TO THE COMPANY AT THE ADDRESS ABOVE OR BY CALLING TOLL-FREE (800)
424-2295. THE ANNUAL REPORT AND SEMI-ANNUAL REPORT WILL BE MAILED TO YOU BY
FIRST-CLASS MAIL WITHIN THREE BUSINESS DAYS OF RECEIPT OF YOUR REQUEST.
PROPOSAL I -- AMENDMENT TO INVESTMENT ADVISORY ARRANGEMENTS
CURRENT AGREEMENTS
The Provident Bank, an Ohio banking corporation ("Provident"), One East
Fourth Street, Cincinnati, Ohio 45202, serves as the investment adviser to the
Fund pursuant to an Investment Advisory Agreement dated as of August 1, 1994, as
amended as of August 15, 1995 (the "Investment Advisory Agreement"). Pursuant to
the terms of the Investment Advisory Agreement, Provident is responsible for
managing, or providing for the management of, the investment and reinvestment of
the Fund's assets in conformity with the Fund's investment objectives,
fundamental policies and restrictions as set forth in the Fund's most recent
Prospectus and Statement of Additional Information. The Investment Advisory
Agreement as presently in effect with respect to the Fund was initially approved
by the Company's Board of Directors on June 8, 1994, was again reviewed and
approved by the Board of Directors on November 17, 1995, was most recently
approved, including the proposed amendments described below, by the Board on
October 21, 1996 and November 15, 1996, and was initially approved by the sole
initial shareholder of the Fund on August 31, 1994.
Pursuant to the terms of the Investment Advisory Agreement, Provident
entered into a Sub-Investment Advisory Agreement (the "Sub-Advisory Agreement")
with James Investment Research, Inc., 1349 Fairground Road, Beavercreek, Ohio
45385 ("JIR"). Pursuant to the terms of the Sub-Advisory Agreement, Provident
retained JIR to manage the day-to-day investment and reinvestment of the assets
of the Fund, subject to the direction and control of the Company's Board of
Directors, and Provident has been responsible for selecting and monitoring JIR
and reporting the activities of JIR to the Company's Board of Directors. The
Sub-Advisory Agreement was initially approved by the Company's Board of
Directors on June 8, 1994, was again reviewed and approved by the Board of
Directors on November 17, 1995, and was approved by the sole initial shareholder
of the Fund on August 31, 1994.
Neither the Investment Advisory Agreement nor the Sub-Advisory
Agreement has since been submitted to shareholders of the Fund for their
approval.
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<PAGE> 5
For services rendered and expenses assumed under the Investment
Advisory Agreement, Provident receives a fee computed daily and paid monthly
based on an annual rate of 0.90% of the Fund's average daily net assets. For
services rendered and expenses assumed under the terms of the Sub-Advisory
Agreement, JIR receives a fee from Provident, computed daily and paid monthly,
based on an annual rate of 0.50% of the Fund's average daily net assets. For the
fiscal year ended December 31, 1995, the Company, on behalf of the Fund,
incurred $76,231 in investment advisory fees, of which $25,332 (total fees of
$50,899 less voluntary fee reduction of $25,567) was retained by Provident and
$25,332 was paid by Provident to JIR as sub-investment adviser.
In addition to serving as investment adviser, Provident has entered
into an Amended and Restated Custodian, Fund Accounting and Recordkeeping
Agreement with the Company dated August 1, 1994, as amended as of July 6, 1995
(the "Custodian Agreement"), to provide custody and certain fund accounting
services to the Company's portfolios, including the Fund. Under the Custodian
Agreement, Provident receives an annual fee from the Fund, computed daily and
paid monthly, at an annual rate of 0.15% of the average daily net assets of the
Fund. Provident as custodian is responsible for safeguarding all securities and
cash of the Fund. For the year ended December 31, 1995, the Fund incurred
$12,666 for such custody and fund accounting services.
Provident also provides or arranges for the provision of transfer
agency services for the Fund. Under the Master Transfer and Recordkeeping
Agreement, Provident receives from the Fund for transfer agency services a fee
equal to the sum of (i) a fee, computed daily and paid monthly at the annual
rate of 0.04% of the average daily net asset value of the Fund's Investor A
shares and (ii) a $20,000 annual fee plus $25 per shareholder account and
certain other fees and out-of-pocket expenses attributable to the Fund's
Investor B shares. Pursuant to a Sub- Transfer Agency Agreement dated as of
January 1, 1995, between Provident and BISYS Fund Services Ohio, Inc. ("BISYS"),
an affiliate of BISYS Fund Services Limited Partnership, the Fund's distributor
and administrator, BISYS provides sub-transfer agency services for the Investor
B shares of the Fund. For such services, BISYS receives from Provident an annual
fee of $20,000 plus $25 per Investor B shareholder account and certain other
fixed fees and out-of-pocket expenses. For the year ended December 31, 1995, the
Fund incurred $22,857 for Provident's services as transfer agent, of which
$11,661 was paid by Provident to BISYS pursuant to the Sub-Transfer Agency
Agreement.
It is anticipated that these services, except the sub-transfer agency
services of BISYS, will continue to be provided whether or not the amendment to
the investment advisory arrangements is approved by shareholders. It is
anticipated that on or about January 1, 1997, the Sub-Transfer Agency Agreement
will be terminated, that Provident will assume all transfer agency services for
the Investor B shares as well as for the Investor A shares and that the fees
charged in connection with such services will be modified and increased.
The Investment Advisory Agreement and the Sub-Advisory Agreement by
their respective terms each continue in effect for successive one-year periods
ending December 31st of each year
3
<PAGE> 6
only so long as (1) such continuance is specifically approved at least annually
by the Company's Board of Directors or by a vote of a majority of the
outstanding voting securities of the Fund, and (2) such renewal has been
approved by the vote of a majority of Directors of the Company who are not
"interested persons," as that term is defined by the Investment Company Act of
1940 (the "1940 Act"), of any party to the Investment Advisory Agreement or the
Sub-Advisory Agreement, respectively, cast in person at a meeting called for the
purpose of voting on such approval. Any liability of Provident or JIR under
their respective Agreements is limited to situations involving its willful
misfeasance, bad faith, gross negligence or reckless disregard of its
obligations and duties under such Agreement. Neither the Investment Advisory
Agreement nor the Sub-Advisory Agreement is assignable and each may be
terminated without penalty on 60 days' written notice at the option of either
party or by a vote of the shareholders of the Fund.
INFORMATION REGARDING PROVIDENT AND JIR
Provident is a wholly owned subsidiary of Provident Bancorp, Inc.
("PBI"), a publicly held bank holding company located in Cincinnati, Ohio with
approximately $6.2 billion in consolidated assets as of December 31, 1995. PBI's
address is One East Fourth Street, Cincinnati, Ohio 45202. The following are the
persons known to the Company who own beneficially more than 5% of the
outstanding voting shares of PBI: Carl E. Lindner - 5.0%; Robert D. Lindner -
6.2%; S. Craig Lindner - 5.4%; Keith E. Lindner - 5.3%; Carl H. Lindner, III
- - 5.2%; American Financial Group, Inc., which may be deemed to be controlled by
the foregoing persons - 16.4%; and Lou Ann Flint - 8.4%. The business address
for such persons, other than Robert D. Lindner and Lou Ann Flint, is One East
Fourth Street, Cincinnati, Ohio 45202. The address for Robert D. Lindner is 3955
Montgomery Road, Cincinnati, Ohio 45212, and for Ms. Flint, 49 East Fourath
Street, Cincinnati, Ohio 45202. Such persons may be considered controlling
persons of PBI and therefore of Provident. Through offices in Ohio and Kentucky,
PBI and its subsidiaries provide a broad range of financial services to
individuals and businesses.
In September 1995, the Company, pursuant to an Agreement and Plan of
Reorganization and Liquidation, acquired all of the assets and liabilities of
the six separate funds (the "Acquired Funds") of MIM Mutual Funds, Inc. ("MIM")
(the "Reorganization"). The Reorganization was contingent upon the acquisition
of Mathematical Investing Management, Inc. ("Management"), by a subsidiary of
PBI (the "MIS Acquisition"). Management was the parent corporation of
Mathematical Investing Systems, Inc., the former investment adviser of the
Acquired Funds. In connection with the MIS Acquisition, Harvey M. Salkin, a
major shareholder and officer of Management and former director of MIM, received
shares of voting stock of PBI. Dr. Salkin has since become a director of the
Company and is considered to be an "interested person" of the Company, as that
term is defined in the 1940 Act, because of his ownership of shares in PBI. Dr.
Salkin owns less than 1% of the outstanding voting securities of PBI.
The name, address and principal occupation of the principal executive
officer and each director of Provident are as follows:
4
<PAGE> 7
<TABLE>
<CAPTION>
Position with Principal Occupation
Name Provident and Business Address(1)
- ---- --------- -----------------------
<S> <C> <C>
Allen L. Davis Director, President President and Chief Executive
and Chief Executive Officer of Provident.
Officer
Jack M. Cook Director President and Chief Executive
Officer, Christ Hospital, 2139
Auburn, Cincinnati, Ohio 45219.
Thomas D. Grote, Jr. Director President of Thomas J. Dyer
Company, 200 Mechanical
Enterprise Building, 5240 Lester
Road, Cincinnati, Ohio 45213-
2586.
S. Paul Mathews Director Attorney, President of Mathews
& Mathews Co., LPA, 4557
Montgomery Road, Room 206,
Cincinnati, Ohio 45212.
Philip R. Myers Director and Senior Vice Senior Executive Vice President
President of Provident.
Joseph A. Pedoto Director President, JLM Financial, Inc.
(financial consulting firm), 49
East Fourth Street, Suite 521,
Cincinnati, Ohio 45202; prior
thereto, Executive Vice
President, United Dairy
Farmers, Inc.
Sidney A. Peerless, M.D. Director Physician, ENT Associates of
Cincinnati, 3131 Harvey
Avenue, Suite 201, Cincinnati,
Ohio 45229.
Joseph A. Steger, Ph.D. Director President, University of
Cincinnati, Administrative
Building, Room 206, Cincinnati,
Ohio 45221-0063.
<FN>
- -----------------
(1) Unless otherwise noted, the business address for each Director is One East
Fourth Street, Cincinnati, Ohio 45202
</TABLE>
5
<PAGE> 8
JIR is owned by Frank E. James, Ph.D., who established it in 1972. JIR
provides advice to institutional as well as individual clients, including NYSE
listed companies, colleges, banks, hospitals, foundations, trusts, endowment
funds and individuals. The principal executive officers and directors of JIR are
Frank E. James, Ph.D. -- President and Director; Barry R. James -- Vice
President; Suzie Smith -- Treasurer; Francis E. James III -- Vice President; Ann
Marie Shaw -- Vice President Operations; Jerome G. Peppers -- Director; and
Robert G. Hawkins -- Director.
PORTFOLIO TRANSACTIONS
Under the Investment Advisory Agreement, Provident, under policies
established by the Board of Directors, will select broker-dealers to execute
transactions for the Fund. It is the policy of the Company, in effecting
transactions in portfolio securities, to seek best execution of and best price
for orders. The determination of what may constitute best execution and price in
the execution of a transaction by a broker involves a number of considerations,
including, without limitation, the overall direct net economic result to the
Fund, involving both price paid or received and any commissions and other costs
paid, the breadth of the market where executed, the efficiency with which the
transaction is effected, the ability to effect the transaction at all where a
large block is involved, the availability of the broker to stand ready to
execute potentially difficult transactions in the future and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by the Board of Directors in determining the overall reasonableness of
brokerage commissions paid. In determining best execution and selecting brokers
to execute transactions, Provident may consider brokerage and research services,
such as analyses and reports concerning issuers, industries, securities,
economic factors and trends and other statistical and factual information
provided to the Fund or to any other account over which Provident exercises
investment discretion. Provident is authorized to pay a broker-dealer who
provides such brokerage and research services a commission for executing the
Fund's transactions which is in excess of the amount of commission another
broker would have charged for effecting that transaction if, but only if,
Provident determines in good faith that such commission was reasonable in
relation to the value of the brokerage and research services provided by such
broker viewed in terms of that particular transaction or in terms of all of the
accounts over which it exercises investment discretion. Any such research and
other statistical and factual information provided by brokers to the Fund or to
Provident is considered to be in addition to and not in lieu of services
required to be performed by Provident under the Investment Advisory Agreement.
The cost, value and specific application of such information are indeterminable
and hence are not practicably allocable among the Fund and other clients of
Provident who may indirectly benefit from the availability of such information.
Similarly, the Fund may indirectly benefit from information made available as a
result of transactions effected for such other clients. Under the Investment
Advisory Agreement, Provident is permitted to pay higher brokerage commissions
for brokerage and research services in accordance with Section 28(e) of the
Securities Exchange Act of 1934. In the event Provident does follow such a
practice, it will do so on a basis which is fair and equitable to the Company
and the Fund.
Provident may direct from time to time some brokerage transactions for the
Fund to Provident Securities Investor, Inc., an affiliate of Provident, in
accordance with the provisions of section 17(e)
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<PAGE> 9
of the 1940 Act. For the fiscal year ended December 31, 1995, the total amount
of brokerage transactions directed and commissions paid to Provident Securities
Investor, Inc. under such arrangements were $821,764.50 and $6,265,
respectively. Such commissions were 11.75% of the total commissions paid by the
Fund.
REASONS FOR THE PROPOSED CHANGES
Provident, in its position as investment adviser, is responsible for
reporting to the Company's Board of Directors on the activities and performance
of the Fund. As such, Provident has determined that based upon the performance
of the Fund since its inception that it would be in the best interests of the
Fund's shareholders to terminate the Sub-Advisory Agreement with JIR. To replace
the services provided by JIR, Provident has proposed to the Board of Directors,
and now to the Fund's shareholders, that Provident be appointed to manage the
day-to-day investment and reinvestment of the Fund's assets. In connection with
its proposal to manage directly the Fund's assets, Provident has agreed to
continue under the terms of the Investment Advisory Agreement and has proposed
that it retain the full advisory fee payable by the Fund under the Investment
Advisory Agreement.
The Board of Directors in making its determination to approve the
amendment to the investment advisory arrangements for the Fund considered, as
more fully described below, the past performance of the Fund, the level and
quality of services provided by Provident and by JIR, comparative expense and
performance information and the current investment advisory fees paid by funds
similar in size and investment objective to the Fund. In making such
determinations, the Board of Directors determined that such amendment to the
investment advisory arrangements is in the best interests of the Fund and its
shareholders.
A copy of the current Investment Advisory Agreement is attached hereto
as Exhibit A. If shareholders approve the appointment of Provident to be
responsible for the direct day-to-day management of the Fund's portfolio, the
terms and provisions of the Investment Advisory Agreement as they relate to the
Fund would not be changed (except to reflect the change in the name of the Funds
as described below for Proposal 2). However, in the opinion of the Staff of the
Securities and Exchange Commission, section 15 of the 1940 Act requires the
approval by shareholders of a mutual fund of any material change in the
responsibilities between an investment adviser and a sub-investment adviser
regardless of whether there is any change in the fees charged to the mutual
fund.
The proposed change to the investment advisory arrangements has been
unanimously approved by the Company's Board of Directors, including a majority
of the Directors who are not parties to the Investment Advisory Agreement or
interested persons of any such party, at the meetings held on October 21, 1996
and November 15, 1996, and is being submitted to the shareholders of the Fund
for approval at the Meeting.
As described above, for the year ended December 31, 1995, Provident
earned $76,231 in investment advisory fees for its services to the Fund, of
which $25,332 was paid to JIR for its services as sub-investment adviser and
$25,567 was voluntarily reduced by Provident. If the proposed investment
advisory arrangement had been in place for the year ended December 31, 1995,
Provident would have earned and retained $76,231.
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<PAGE> 10
The Board of Directors, in approving the amendment to the investment
advisory arrangements, considered written material and information presented at
their October 21st and November 15th board meetings. Specifically, the Directors
considered the following factors, among others: (1) the nature, scope and
quality of the services provided by Provident and JIR, (2) the performance of
the Fund since its inception, (3) costs incurred and revenues generated by
Provident in rendering such services, (4) Provident's net pre-tax profits from
its mutual fund activities, (5) the compensation paid to investment advisers of
mutual funds with similar investment objectives and policies and asset sizes,
(6) the quality of personnel at Provident, and (7) comparative expense and
performance information.
In reaching its conclusion to approve the proposed amendment to the
investment advisory arrangements for the Fund, the Board recognized that
terminating the Sub-Advisory Agreement and retaining Provident to manage the
Fund directly was in the best interests of shareholders.
Approval of the amendment to the investment advisory arrangements with
respect to the Fund requires the affirmative vote of a majority of all votes
attributable to the outstanding Shares of the Fund, defined as the lesser of (a)
67% or more of the outstanding votes of the Fund present at such meeting, if
holders of more than 50% of the Shares are present or represented by proxy, or
(b) more than 50% of the Shares of the Fund. If the amendment to the investment
advisory arrangements is not approved, the Directors will be required to
consider other alternatives, including retaining another sub-investment adviser.
THE DIRECTORS RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 1.
PROPOSAL 2 -- AMENDMENTS TO ARTICLES OF INCORPORATION
Amendments to the Company's Articles of Incorporation are necessary to
reclassify the Shares of the Fund from those of "The Riverfront Flexible Growth
Fund" to those of "The Riverfront Balanced Fund." The Amendments are proposed to
be made to ARTICLE VI of the Company's Articles of Incorporation and are
attached hereto as Exhibit B. The purpose of the proposed change in the Fund's
name is to make it clearer to shareholders and potential investors the nature of
the Fund as a "balanced" fund as opposed to a fund that invests primarily in
common stocks which could be suggested from the word "growth." It is not
intended that the change to the Fund's name will have a material effect on the
investment objectives, policies or procedures of the Fund. However, it is the
position of the Staff of the U.S. Securities and Exchange Commission that a fund
that holds itself out as a "balanced" fund must maintain at least 25% of the
value of its assets in fixed income senior securities. While the Fund's
investment policies as stated in its current prospectus state that the Fund
expects to invest at least 15% of its total assets in such securities, since
commencement of the Fund's operations to the date of this Proxy Statement,
the Fund has had more than 25% of its assets invested in fixed income senior
securities.
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<PAGE> 11
Under Maryland law and the Company's Articles of Incorporation, the
affirmative vote of a majority of the outstanding Shares of the Fund entitled to
vote at the meeting of shareholders is required to adopt the amendments to the
Articles of Incorporation described above. If the amendments to the Company's
Articles of Incorporation are not approved by Shareholders, the Company will
continue to offer only Shares of The Riverfront Flexible Growth Fund.
THE DIRECTORS RECOMMEND THAT YOU VOTE "FOR" PROPOSAL 2.
FURTHER INFORMATION REGARDING THE COMPANY
DISTRIBUTOR AND ADMINISTRATOR
BISYS Fund Services Limited Partnership ("BISYS L.P.") serves as the
principal underwriter of Shares of the Fund pursuant to a Distribution Agreement
with the Company. In its capacity as principal underwriter, BISYS L.P. is
available to receive purchase orders and redemption requests relating to Shares
of the Fund. BISYS L.P. also serves as administrator of the Fund pursuant to an
Administration Agreement with the Company. BISYS L.P.'s address is 3435 Stelzer
Road, Columbus, Ohio 43219.
The sole general partner of BISYS L.P. is BISYS Fund Services, Inc.,
whose address is 3435 Stelzer Road, Columbus, Ohio 43219, and its sole limited
partner is WC Subsidiary Corporation, whose address is 150 Clove Road, Little
Falls, New Jersey 07424. BISYS Fund Services, Inc. and WC Subsidiary Corporation
are both wholly owned by The BISYS Group, Inc., 150 Clove Road, Little Falls,
New Jersey 07424, a publicly held corporation.
BISYS L.P. receives no compensation under its Distribution Agreement
with the Company, but may retain some or all of any sales charge imposed upon
the sale of Shares and may receive compensation under the Investor A and
Investor B Distribution and Shareholder Service Plans adopted by each Fund
(collectively, the "Plans"). Pursuant to the Plans, the Fund may bear some of
the costs of selling its Shares under a Plan adopted pursuant to rule 12b-1
under the 1940 Act. Under the Plans, the Fund is authorized to pay BISYS L.P.
for payments it makes to banks, including the Adviser, other institutions and
broker-dealers, and for expenses BISYS and any of its affiliates or
subsidiaries incur for providing distribution or shareholder service
assistance. Payments to such institutions may be made pursuant to agreements
entered into with BISYS L.P. As authorized by the Plans, BISYS L.P. has entered
into a Dealer Agreement with Provident Securities & Investment Company, an
affiliate of Provident ("PSI"), to provide certain distribution and shareholder
services in connection with the distribution of the Shares of the Fund. In
consideration of such services BISYS L.P. has agreed to pay PSI a monthly fee,
computed at the annual rate of (i) .25% of the average aggregate net asset
value of Investor A shares and (ii) .75% of the average aggregate net asset
value of Investor B shares, held during the period in accounts for which PSI
provided services under such Dealer Agreement. BISYS L.P. is compensated by the
Fund in an amount equal to its payments to PSI under the Dealer Agreement. For
the fiscal year ended December 31, 1995, PSI received from BISYS L.P., with
respect to Investor A shares of the Fund, $_________, and, with respect to
the Fund's Investor B shares, $_________, pursuant to the terms of the Dealer
Agreement.
PRINCIPAL HOLDERS OF VOTING SECURITIES
The following table sets forth certain information as of November 1,
1996, for The Riverfront U.S. Government Securities Money Market Fund (the
"Money Market Fund"), The Riverfront U.S. Government Income Fund (the "U.S.
Government Income Fund"), The Riverfront Income Equity Fund (the "Income Equity
Fund"), The Riverfront Ohio Tax-Free Bond Fund (the "Tax-Free Bond Fund"), The
Riverfront Stock Appreciation Fund (the "Stock Appreciation Fund") and the Fund,
each a separate portfolio of the Company, with respect to each person or group
known by the Company to be the beneficial owner of more than 5% of any class of
the Company's outstanding voting securities:
<TABLE>
<CAPTION>
AMOUNT AND
----------
NAME AND ADDRESS OF NATURE OF THE PERCENT
------------------- ------------- -------
TITLE OF CLASS BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------- ---------------- -------------------- --------
<S> <C> <C> <C>
Investor A Shares of The Provident Bank 123,139,921.310(1) 68.14%
the Money Market One East Fourth St.
Fund Cincinnati, OH 45202
</TABLE>
9
<PAGE> 12
<TABLE>
<S> <C> <C> <C>
BHC Securities, Inc. 43,856,634.670 (2) 24.27%
One Commerce Square
2005 Market Street
Suite 1200
Philadelphia, PA 19103
Investor A Shares of The Provident Bank 2,515,059.548 69.85%
the U.S. Government One East Fourth St.
Income Fund Cincinnati, OH 45202
The Provident Bank Trust 508,983.029 14.14%
Department Employee
Benefit Plan
3 East Fourth St.
Cincinnati, OH 45207
The Provident Bank Trust 268,456.484 (1) 7.46%
Department
3 East Fourth Street
Cincinnati, OH 45202
Investor B Shares of The Fifth Third Bank 23,513.000 19.78%
the U.S. Government FBO Cincinnati
Income Fund Institute of Fine Arts
P.O. Box 63074
Cincinnati, OH 45263
Investor A Shares of The Chase Manhattan Bank 2,202,847.654 41.25%
the Income Equity as Trustee for The General
Fund Cable Corporation
4 Tesseneer Drive
Highland Heights, KY
41076
The Provident Bank Trust 412,459.981 7.72%
Department Employee
Benefit Plan
3 East Fourth St.
Cincinnati, OH 45207
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C> <C> <C>
BHC Securities, Inc. 1,343,002.840 (2) 25.15%
One Commerce Square
2005 Market Street
Suite 1200
Philadelphia, PA 19103
Investor A Shares of The Provident Bank 1,000,000.000 (1) 97.33%
the Tax-Free Bond One East Fourth St.
Fund Cincinnati, OH 45202
Investor B Shares of BHC Securities, Inc. 55,274 (1) 73.88%
the Tax-Free Bond One Commerce Square
Fund 2005 Market Street
Suite 1200
Philadelphia, PA 19103
Investor B Shares of BHC Securities, Inc. 17,794 (2) 26.88%
the Stock One Commerce Square
Appreciation Fund 2005 Market Street
Suite 1200
Philadelphia, PA 19103
Investor A Shares of Provident Bank TTEE 92,997.076 8.36%
the Fund FBO Provident Bancorp
401K Equity
3 East Fourth Street
Cincinnati, OH 45202
The Provident Bank Trust 162,273.774 14.72%
Department Employee
Benefit Plan
3 East Fourth St.
Cincinnati, OH 45207
</TABLE>
11
<PAGE> 14
<TABLE>
<S> <C> <C> <C>
The Provident Bank 65,033.634 5.90%
FBO Trustmark 401(K)
P.O. Box 691198
Cincinnati, OH 45202
James Investment Research, 80,565.869 7.31%
Inc. Pension and Profit
Sharing Plan
P.O. Box 8
Alpha, Ohio 45301
BHC Securities, Inc. 487,621.369 (2) 44.22%
One Commerce Square
2005 Market Street
Suite 1200
Philadelphia, PA 19103
<FN>
(1) The designated beneficial owner possesses on behalf of its underlying
accounts voting or investment power with respect to these shares.
(2) BHC Securities, Inc. holds these securities as record owner for
various underlying beneficial owners.
</TABLE>
As of November 1, 1996, the Directors and officers of the Company as a
group owned beneficially fewer than 1% of the outstanding Shares of the Company
or of any of its portfolios.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at any future Meeting
of Shareholders must be received by the Company at its principal office a
reasonable time before the Company's solicitation of proxies for such meeting in
order for such proposal to be considered for inclusion in the Company's Proxy
Statement and form or forms of Proxy relating to such meeting.
ADDITIONAL INFORMATION
With respect to the actions to be taken by the shareholders of the
Company on the matters described in this Proxy Statement, (i) the presence in
person or by proxy of shareholders entitled to cast one-third of the shares of
capital stock of the Company entitled to be cast at the Meeting shall constitute
a quorum for purposes of voting upon such matters at the Meeting, provided that
no action required by law or the Company's Articles of Incorporation to be taken
by the holders of a designated proportion of Shares may be authorized or taken
by a lesser proportion; and (ii) abstentions and broker non-votes, as described
below, shall be treated as votes present for purposes of determining whether a
quorum exists, and for purposes of determining whether an issue has been
approved, abstentions and broker non-votes are treated as against votes. As used
above, broker non-votes are Shares for which a broker holding such Shares for a
beneficial owner has not received instructions from the beneficial owner and may
12
<PAGE> 15
not exercise discretionary voting power with respect thereto, although such
broker may have been able to vote such Shares on other matters at the Meeting
for which it has discretionary authority or instructions from the beneficial
owner. The Fund will bear all costs in connection with the solicitation of
proxies from shareholders of the Fund.
By Order of the Directors
November 22, 1996 James E. White, Secretary
13
<PAGE> 16
EXHIBIT A
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the 1st day of August, 1994 between The
Riverfront Funds, Inc., a Maryland corporation (the "Company"), and The
Provident Bank, an Ohio banking corporation (the "Investment Adviser").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company has previously retained the Investment Adviser to
manage the Company's investment portfolios and now desires to restate the terms
and conditions upon which it will retain the Investment Adviser to provide, or
arrange for the provision of, investment advisory services to one or more
investment portfolios of the Company (the "Portfolios"), and the Investment
Adviser represents that it is willing and possesses legal authority to so
furnish such services without violation of applicable laws (including the
Glass-Steagall Act); and
WHEREAS, the Investment Adviser is engaged in the business of rendering
investment advisory services to the Company and to others and desires to provide
the services described herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company and the Investment Adviser hereby agree as
follows:
1. APPOINTMENT. The Company hereby appoints the Investment Adviser to
act as investment adviser to the Portfolios identified on Schedule A hereto for
the period and on the terms set forth in this Agreement. The Investment Adviser
accepts such appointment and agrees to furnish the services herein set forth for
the compensation herein provided. Additional investment portfolios may from time
to time be added to those covered by this Agreement by the parties executing a
new Schedule A which shall become effective upon its execution and shall
supersede any Schedule A having an earlier date.
2. DELIVERY OF DOCUMENTS. The Company has furnished the Investment
Adviser with copies properly certified or authenticated of each of the
following:
(a) the Company's Articles of Incorporation, as amended to date
(the "Articles");
(b) the Company's By-Laws and amendments thereto;
(c) resolutions of the Company's Board of Directors authorizing
the appointment of the Investment Adviser and approving this
Agreement;
(d) Post-Effective Amendment No. 7 to the Company's Registration
Statement on Form N-1A filed under the Securities Act of 1933, as
amended ("1933 Act") (File
A-1
<PAGE> 17
No. 33-34154), and under the 1940 Act, as filed with the Securities
and Exchange Commission; and
(e) each Portfolio's most recent Prospectus and Statement of
Additional Information (such Prospectus and Statement of Additional
Information, as presently in effect, and all amendments and
supplements thereto are herein collectively called the "Prospectus").
The Company will furnish the Investment Adviser from time to time with
copies of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject to the supervision of the Company's Board of
Directors, the Investment Adviser will provide, or arrange for the provision of,
a continuous investment program for each of the Portfolios, including investment
research and management with respect to all securities and investments and cash
equivalents in the Portfolios. The Investment Adviser will determine, or arrange
for others to determine, from time to time what securities and other investments
will be purchased, retained or sold by the Company with respect to the
Portfolios and will implement, or arrange for others to implement, such
determinations through the placement, in the name of the Portfolios, of orders
for the execution of portfolio transactions with or through such brokers or
dealers as it may select. The Investment Adviser will provide, or arrange for
the provision of, the services under this Agreement in accordance with each of
the Portfolios' investment objectives, policies and restrictions as stated in
the Prospectus and resolutions of the Company's Board of Directors.
Subject to the provisions of this Agreement, the Articles and the 1940
Act, the Investment Adviser directly and indirectly may select and enter into
contracts with one or more qualified investment advisers ("Sub-Advisers") to
provide to the Company some or all of the services required by this Agreement.
With respect to any such appointment by the Investment Adviser of any of the
Sub-Advisers, the Investment Adviser will, as appropriate:
(a) advise the Sub-Advisers with respect to economic conditions and
trends;
(b) assist Sub-Advisers with the placement of orders for the purchase
and sale of securities;
(c) assist and consult with the Sub-Advisers in connection with the
Portfolios' continuous investment programs; and
(d) periodically review, evaluate and report to the Company's Board
of Directors with respect to the performance of the Sub-Advisers.
In fulfilling its responsibilities hereunder, the Investment Adviser
agrees that it will, or, with respect to services provided to the Company by any
of the Sub-Advisers appointed by the Investment Adviser, that it will require
that each of the Sub-Advisers:
A-2
<PAGE> 18
(a) use the same skill and care in providing such services as it
uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(b) conform with all applicable Rules and Regulations of the
Securities and Exchange Commission and in addition will conduct its
activities under this Agreement (or any applicable sub-investment
advisory agreement) in accordance with any applicable regulations of
any governmental authority pertaining to the investment advisory
activities of the Investment Adviser or Sub-Advisers;
(c) not make loans to any person to purchase or carry shares of
capital stock in the Company or make loans to the Company;
(d) place orders pursuant to investment determinations for the
Company either directly with the issuer or with an underwriter, market
maker or broker or dealer. In placing orders with brokers and dealers,
the Investment Adviser will use its reasonable best efforts to obtain,
or require that each of the Sub-Advisers obtain, prompt execution of
orders in an effective manner at the most favorable price. In
assessing the best execution available for any transaction, the
Investment Adviser or any of the Sub-Advisers shall consider all
factors it deems relevant, including the breadth of the market in the
security, the price of the security, the financial condition and
execution capability of the broker-dealer and the reasonableness of
the commission, if any (for the specific transaction and on a
continuing basis). Consistent with this obligation, the Investment
Adviser and any of the Sub-Advisers may, to the extent permitted by
law, purchase and sell portfolio securities to and from brokers and
dealers who provide brokerage and research services (within the
meaning of Section 28(e) of the Securities Exchange Act of 1934) to or
for the benefit of the Portfolios and/or other accounts over which the
Investment Adviser or any of the Sub-Advisers or any of their
respective affiliates exercises investment discretion. Subject to the
review of the Company's Board of Directors from time to time with
respect to the extent and continuation of the policy, the Investment
Adviser and any of the Sub-Advisers are authorized to pay a broker or
dealer who provides such brokerage and research services a commission
for effecting a securities transaction for any of the Portfolios which
is in excess of the amount of commission another broker or dealer
would have charged for effecting that transaction if, but only if, the
Investment Adviser or Sub-Advisers determine in good faith that such
commission was reasonable in relation to the value of the brokerage
and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall
responsibilities of the Investment Adviser or Sub-Advisers with
respect to the accounts as to which it exercises investment
discretion. In no instance will portfolio securities be purchased from
or sold to The Winsbury Company, the Investment Adviser or any
Sub-Adviser, or any affiliated person of the Company, except as may be
permitted by the 1940 Act;
A-3
<PAGE> 19
(e) maintain all books and records with respect to the
Company's securities transactions and will furnish the Company's Board
of Directors such periodic and special reports as the Board reasonably
may request;
(f) treat confidentially and as proprietary information of the
Company all records and other information relative to the Company and
prior, present, or potential shareholders, and will not use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except that, subject to prompt
notification of the Company, the Investment Adviser and any of the
Sub-Advisers may divulge such information to duly constituted
authorities, or when so requested by the Company, PROVIDED, HOWEVER,
that nothing contained herein shall prohibit the Investment Adviser or
any of the Sub-Advisers from advertising or soliciting the public
generally with respect to other products or services regardless of
whether such advertisement or solicitation may include prior, present
or potential shareholders of the Funds; and
(g) maintain its policy and practice of conducting its
fiduciary functions independently. In making investment recommendations
for the Company, the Investment Adviser's or Sub-Adviser's personnel
will not inquire or take into consideration whether the issuers of
securities proposed for purchase or sale for the Company's account are
customers of the Investment Adviser or Sub-Adviser or of their
respective parents, subsidiaries or affiliates. In dealing with such
customers, the Investment Adviser or Sub-Adviser and their respective
parents, subsidiaries, and affiliates will not inquire or take into
consideration whether securities of those customers are held by the
Company.
4. SERVICES NOT EXCLUSIVE. The services furnished by the Investment
Adviser and any Sub-Adviser hereunder are not to be deemed exclusive, and the
Investment Adviser and any Sub-Adviser shall be free to furnish similar services
to others so long as its services under this Agreement or any sub-advisory
agreement are not impaired thereby. It is understood that the action taken by
the Investment Adviser under this Agreement may differ from the advice given or
the timing or nature of action taken with respect to other clients of the
Investment Adviser, and that a transaction in a specific security may not be
accomplished for all clients of the Investment Adviser at the same time or at
the same price.
5. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Investment Adviser hereby agrees that all records, if
any, which it maintains for the Company are the property of the Company and
further agrees to surrender promptly, and to require each of the Sub-Advisers to
surrender promptly, to the Company any of such records upon the Company's
request. The Investment Adviser further agrees to preserve, and to require each
of the Sub-Advisers to preserve, for the periods prescribed by Rule 31a-2 under
the 1940 Act, the records required to be maintained by Rule 31a-1 under the 1940
Act.
6. EXPENSES. During the term of this Agreement, the Investment Adviser
will pay all expenses, including, as applicable, the compensation of any
Sub-Advisers directly appointed by
A-4
<PAGE> 20
it, incurred by it in connection with its activities under this Agreement other
than the cost of securities (including brokerage commissions, if any) purchased
for the Company.
7. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, each of the Portfolios will pay the Investment
Adviser and the Investment Adviser will accept as full compensation therefor a
fee set forth on Schedule A hereto. Each of the Portfolios' obligations to pay
the above-described fee to the Investment Adviser will begin as of the date of
the initial public sale of shares in that Portfolio. Except as permitted by
applicable law, the Investment Adviser shall not be compensated on the basis of
a share of capital gains upon or capital appreciation of any of the Portfolios
or any portion thereof.
If in any fiscal year the aggregate expenses of any of the Portfolios
(as defined under the securities regulations of any state having jurisdiction
over the Company) exceed the expense limitations of any such state, the
Investment Adviser will reimburse the Portfolio for a portion of such excess
expenses equal to such excess times the ratio of the fees otherwise payable by
the Portfolio to the Investment Adviser hereunder to the aggregate fees
otherwise payable by the Portfolio to the Investment Adviser hereunder and to
The Winsbury Company under the Administration Agreement between The Winsbury
Company and the Company. The obligation of the Investment Adviser to reimburse
the Portfolios hereunder is limited in any fiscal year to the amount of its fee
hereunder for such fiscal year, PROVIDED, HOWEVER, that notwithstanding the
foregoing, the Investment Adviser shall reimburse the Portfolios for such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Company so require. Such expense
reimbursement, if any, will be estimated daily and reconciled and paid on a
monthly basis.
8. LIMITATION OF LIABILITY. The Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the
Portfolios in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement. Any person, even though also an officer,
Director, partner, employee, or agent of the Investment Adviser, who may be or
become an officer, trustee, Director, employee or agent of the Company, shall be
deemed, when rendering services to the Company or acting on any business of the
Company (other than services or business in connection with the Investment
Adviser's duties hereunder or under any other agreements between the Investment
Adviser and the Company), to be rendering such services to or acting solely for
the Company and not as an officer, Director, partner, employee, or agent or one
under the control or direction of the Investment Adviser even though paid by it.
The Company agrees to indemnify and hold the Investment Adviser harmless from
all taxes, charges, expenses, assessments, claims and liabilities (including,
without limitation, liabilities arising under the Securities Act of 1933, the
1934 Act, the 1940 Act and any state and foreign securities and blue sky laws,
as amended from time to time) and expenses, including (without limitation)
attorneys' fees and disbursements,
A-5
<PAGE> 21
arising directly or indirectly from any action or thing which the Investment
Adviser takes or does or omits to take or do hereunder; provided that the
Investment Adviser shall not be indemnified against any liability to the Company
or to its shareholders (or any expenses incident to such liability) arising out
of a breach of fiduciary duty with respect to the receipt of compensation for
services, willful misfeasance, bad faith, or gross negligence on the part of the
Investment Adviser in the performance of its duties, or from reckless disregard
by it of its obligations and duties under this Agreement.
9. COMPLIANCE WITH ORDER. The Investment Adviser agrees that it will
comply with and be bound by the terms of the Order under Section 6(c) of the
1940 Act, Release No. 19949, December 13, 1993 (the "Order"), insofar as the
Order imposes obligations upon an investment adviser to a fund offering class
shares under the authority of the Order and for so long as compliance with the
Order is required by the 1940 Act.
10. DURATION AND TERMINATION. This Agreement will become effective as
to a particular Portfolio as of the date first written above (or, if a
particular Portfolio is not in existence on that date, on the date a
registration statement relative to that Portfolio becomes effective with the
Securities and Exchange Commission and Schedule A hereto is amended to add such
Portfolio thereto), provided that it shall have been approved by a vote of a
majority of the outstanding voting securities of such Portfolio, in accordance
with the requirements under the 1940 Act, and, unless sooner terminated as
provided herein, shall continue in effect until December 31, 1995.
Thereafter, if not terminated, this Agreement shall continue in effect
as to a particular Portfolio for successive periods of one year each ending on
December 31 of each year, PROVIDED such continuance is specifically approved at
least annually (a) by the vote of a majority of those members of the Company's
Board of Directors who are not parties to this Agreement or interested persons
of any party to this Agreement, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the vote of a majority of the
Company's Board of Directors or by the vote of a majority of all votes
attributable to the outstanding Shares of such Portfolio. Notwithstanding the
foregoing, this Agreement may be terminated as to a particular Portfolio at any
time on sixty days' written notice, without the payment of any penalty, by the
Company (by vote of the Company's Board of Directors or by vote of a majority of
the outstanding voting securities of such Portfolio) or by the Investment
Adviser. This Agreement will immediately terminate in the event of its
assignment. No assignment of this Agreement shall be made by the Investment
Adviser without the consent of the Board of Directors of the Company. (As used
in this Agreement, the terms "majority of the outstanding voting securities,
"interested persons" and "assignment" shall have the same meaning of such terms
in the 1940 Act.)
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
A-6
<PAGE> 22
12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not be
affected thereby. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and shall be
governed by the law of the State of Ohio.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
THE RIVERFRONT FUNDS, INC.
By /s/ William C. Buckham
-------------------------
Title Vice President
----------------------
THE PROVIDENT BANK
By /s/ A. David Davis
-------------------------
Title Vice President
----------------------
A-7
<PAGE> 23
Dated: August 15, 1995
SCHEDULE A
to the Investment Advisory Agreement
between The Riverfront Funds, Inc. and
The Provident Bank
Name of Portfolio Compensation Date
- ----------------- ------------ ----
The Riverfront U.S. Annual rate of 0.15% August 1, 1994
Government Securities of the average daily
Money Market Fund net assets of such Portfolio
The Riverfront U.S. Annual rate of 0.40% of August 1, 1994
Government Income the average daily net
Fund assets of such Portfolio
The Riverfront Income Annual rate of 0.95% of August 15, 1995
Equity Fund the average daily net
assets of such Portfolio
The Riverfront Annual rate of 0.90% of August 1, 1994
Flexible Growth Fund the average daily net
assets of such Portfolio
The Riverfront Ohio Tax Annual rate of 0.50% of August 1, 1994
Free Bond Fund the average daily net
assets of such Portfolio
The Riverfront Stock Annual rate of 0.80% of July 6, 1995
Appreciation Fund the average daily net
assets of such Portfolio
THE RIVERFRONT FUNDS, INC.
By /s/ Walter B. Grimm
---------------------------------
Title Vice President & Secy.
------------------------------
THE PROVIDENT BANK
By /s/ Drew T. Kagan
----------------------------------
Title Senior Vice President
------------------------------
- --------------
All fees are computed daily and paid monthly.
A-8
<PAGE> 24
EXHIBIT B
RESOLVED, That the Articles of Incorporation of the
Corporation be and they hereby are amended as follows:
ARTICLE VI, Section (a) of the Articles of Incorporation is
hereby amended by deleting the following language:
(a) The total number of shares of capital stock which the
Corporation shall have the authority to issue is Three Billion
(3,000,000,000) shares of the par value of $.001 per share.
There shall initially be four series of shares, designated as
"The Riverfront Ohio Tax-Free Bond Fund," consisting of Two
Hundred Fifty Million (250,000,000) shares, "The Riverfront
U.S. Government Income Fund," consisting of Two Hundred Fifty
Million (250,000,000) shares, "The Riverfront Income Equity
Fund," consisting of Two Hundred Fifty Million (250,000,000)
shares, "The Riverfront U.S. Government Securities Money
Market Fund," consisting of Seven Hundred Fifty Million
(750,000,000) shares, and additional series designated as "The
Riverfront Flexible Growth Fund," consisting of Two Hundred
Fifty Million (250,000,000) shares and "The Riverfront Stock
Appreciation Fund," consisting of Two Hundred Fifty Million
(250,000,000) shares (such series and any further series of
shares from time to time created by the Board of Directors
being referred to individually herein as a "series"). The
Board of Directors of the Corporation is hereby empowered to
increase or decrease, from time to time, the total number of
shares of capital stock of any class or series that the
Corporation shall have authority to issue without any action
by the shareholders, but the number of shares of any class or
series shall not be decreased by the Board of Directors below
the number of shares then outstanding.
and inserting in lieu thereof the following language:
(a) The total number of shares of capital stock which the
Corporation shall have the authority to issue is Three Billion
(3,000,000,000) shares of the par value of $.001 per share.
There shall initially be four series of shares, designated as
"The Riverfront Ohio Tax-Free Bond Fund," consisting of Two
Hundred Fifty Million (250,000,000) shares, "The Riverfront
U.S. Government Income Fund," consisting of Two Hundred Fifty
Million (250,000,000) shares, "The Riverfront Income Equity
Fund," consisting of Two Hundred Fifty Million (250,000,000)
shares, "The Riverfront U.S. Government Securities Money
Market Fund," consisting of Seven Hundred Fifty Million
(750,000,000) shares, and additional series designated as "The
Riverfront Flexible Growth Fund," consisting of Two Hundred
Fifty Million (250,000,000) shares, and "The Riverfront Stock
Appreciation Fund," consisting of Two Hundred Fifty Million
(250,000,000) shares, and "The Riverfront Large Company Select
B-1
<PAGE> 25
Fund," consisting of Two Hundred Fifty Million (250,000,000)
shares (such series and any further series of shares from time
to time created by the Board of Directors being referred to
individually herein as a "series"). The Board of Directors of
the Corporation is hereby empowered to increase or decrease,
from time to time, the total number of shares of capital stock
of any class or series that the Corporation shall have
authority to issue without any action by the shareholders, but
the number of shares of any class or series shall not be
decreased by the Board of Directors below the number of shares
then outstanding.
ARTICLE VI of the Articles of Incorporation is hereby further
amended by deleting the following language:
(f) On the effective date of the amendment to this Article,
One Hundred Twenty-Five Million (125,000,000) shares of each
of The Riverfront Ohio Tax-Free Bond Fund series, The
Riverfront U.S. Government Income Fund series, The Riverfront
Income Equity Fund series, The Riverfront Flexible Growth Fund
series and The Riverfront Stock Appreciation Fund series, and
Seven Hundred Fifty Million (750,000,000) shares of The
Riverfront U.S. Government Securities Money Market Fund
series, are hereby designated as a class of shares called
Investor A Shares and One Hundred Twenty-Five Million
(125,000,000) shares of each of The Riverfront Ohio Tax-Free
Bond Fund series, The Riverfront U.S. Government Income Fund
series, The Riverfront Income Equity Fund series, The
Riverfront Flexible Growth Fund series and The Riverfront
Stock Appreciation Fund series, and no shares of The
Riverfront U.S. Government Securities Money Market Fund
series, are hereby further designated as a class of shares
called Investor B shares. The Investor A Shares and Investor B
Shares represent interests in the same investment portfolio of
each series. Investor A Shares and Investor B Shares shall be
subject to all provisions of Article SIXTH hereof relating to
the capital stock of the Corporation generally and shall have
the same preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption, except
as follows:
and inserting in lieu thereof the following language:
(f) One Hundred Twenty-Five Million (125,000,000) shares of
each of The Riverfront Ohio Tax-Free Bond Fund series, The
Riverfront U.S. Government Income Fund series, The Riverfront
Income Equity Fund series, The Riverfront Flexible Growth Fund
series, The Riverfront Stock Appreciation Fund series and The
Riverfront Large Company Select Fund series, and Seven Hundred
Fifty Million (750,000,000) shares of The
B-2
<PAGE> 26
Riverfront U.S. Government Securities Money Market Fund
series, are hereby designated as a class of shares called
Investor A Shares and One Hundred Twenty-Five Million
(125,000,000) shares of each of The Riverfront Ohio Tax-Free
Bond Fund series, The Riverfront U.S. Government Income Fund
series, The Riverfront Income Equity Fund series, The
Riverfront Flexible Growth Fund series, The Riverfront Stock
Appreciation Fund series and The Riverfront Large Company
Select Fund series, and no shares of The Riverfront U.S.
Government Securities Money Market Fund series, are hereby
further designated as a class of shares called Investor B
shares. The Investor A Shares and Investor B Shares represent
interests in the same investment portfolio of each series.
Investor A Shares and Investor B Shares shall be subject to
all provisions of Article SIXTH hereof relating to the capital
stock of the Corporation generally and shall have the same
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption, except as follows:
B-3
<PAGE> 27
PRELIMINARY COPY
PROXY
THE RIVERFRONT FUNDS, INC.
THE RIVERFRONT FLEXIBLE GROWTH FUND
THIS PROXY IS SOLICITED ON BEHALF OF THE DIRECTORS OF THE COMPANY
The undersigned hereby appoints Walter B. Grimm, James E. White and
Charles L. Booth and each of them, with full power of substitution, proxies to
vote and act with respect to all Shares of The Riverfront Flexible Growth Fund
(the "Fund"), a series of The Riverfront Funds, Inc. (the "Company"), which the
undersigned is entitled to vote, at the Special Meeting of Shareholders of the
Company to be held on Friday, December 20, 1996, at 3435 Stelzer Road, Columbus,
Ohio 43219, at 10:00 A.M., EDST, and at any and all adjournments thereof, on the
following proposals and any other matters that may properly come before the
Meeting.
PROPOSAL 1 FOR [ ] AGAINST [ ] ABSTAIN [ ] - Approval of
an amendment to the arrangements with respect to
the management of the Fund such that The Provident
Bank will become the sole manager of the Fund's
portfolio.
PROPOSAL 2 FOR [ ] AGAINST [ ] ABSTAIN [ ] - Approval of
amendments to the Company's Articles of
Incorporation to reclassify the currently issued
and outstanding shares of the Fund as shares of
The Riverfront Balanced Fund.
The Shares represented by this Proxy will be voted upon the proposals
listed above in accordance with the instruction given by the Shareholder, but if
no instruction is given, this Proxy will be voted FOR the proposals and in
accordance with the best judgment of the proxies on any other matter which
properly comes before the Meeting.
<PAGE> 28
The undersigned hereby acknowledges receipt of the Notice of Special
Meeting of Shareholders dated November 22, 1996, and the Proxy Statement
attached thereto.
Dated _________________________
-------------------------------
(Signature of Shareholder)
-------------------------------
(Signature of Shareholder)
NOTE: Please sign legibly and exactly as name appears on this card.
If Shares are registered in the name of joint owners, each must sign
the proxy. When signing as executor, administrator, attorney, trustee or
guardian or as custodian for a minor, please give full title as such. If a
corporation, please sign in full corporate name and indicate the signer's
office. If a partner, please sign in partnership name.
*** Please mark, sign, date and return the proxy card promptly
using the enclosed envelope. ***
