Filed with the Securities and Exchange Commission on November 24, 1997
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:
<TABLE>
<CAPTION>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission Only
[X] Definitive Proxy Statement (as permitted by Rule 14a-6(e)(2))
[ ] Definitive Additional Materials [ ] Soliciting Material Pursuant to Rule 14a-11(c)
or Rule 14a-12
</TABLE>
Mentor Funds
Mentor Institutional Trust
Cash Resource Trust
(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):
[X] No fee required
[ ] Fee computed on a 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 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>
Mentor Family of Funds
901 East Byrd Street
Richmond, Virginia 23219
November 21, 1997
Dear Shareholder:
You are cordially invited to attend a Meeting of Shareholders of Mentor
Funds, Mentor Institutional Trust, and Cash Resource Trust to be held on
Monday, December 22, 1997, at 9:00 a.m., Eastern Standard Time, at 901 East
Byrd Street, Richmond, Virginia. At the Meeting, shareholders will be asked to
approve new investment advisory and sub-advisory agreements for each of the
mutual funds in the Mentor Family of Funds, to become effective upon
consummation of the proposed merger of Wheat First Butcher Singer, Inc.,
corporate parent of the Mentor group of companies, with First Union
Corporation.
In addition, shareholders will be asked to approve new investment advisory
and sub-advisory agreements for certain of the funds in contemplation of the
potential acquisition of an additional interest in Mentor Investment Group, LLC
by EVEREN Securities Holdings, Inc. and to vote on the election of Trustees of
the Mentor Family of Funds.
Although the Trustees of the Mentor Family of Funds would like very much
to have each shareholder attend the Meeting, they realize that this is not
possible. Whether or not you plan to be present at the Meeting, your vote is
needed. Please complete, sign, and return the enclosed proxy card(s) promptly.
A postage-paid envelope is enclosed for this purpose.
We look forward to seeing you at the Meeting or receiving your proxy
card(s) so your shares may be voted at the Meeting.
Sincerely yours,
/s/Paul F. Costello /s/ Daniel J. Ludeman
- ------------------- ------------------
Paul F. Costello Daniel J. Ludeman
President Chairman
SHAREHOLDERS ARE URGED TO SIGN AND RETURN THE ENCLOSED PROXY CARD(S) IN THE
ENCLOSED ENVELOPE SO AS TO BE REPRESENTED AT THE MEETING.
<PAGE>
Mentor Family of Funds
Mentor Funds
Mentor Institutional Trust
Cash Resource Trust
---------------------------------
NOTICE OF MEETING OF SHAREHOLDERS
---------------------------------
A Meeting of Shareholders of Mentor Funds, Mentor Institutional Trust, and
Cash Resource Trust (collectively, the "Trusts"), which will constitute a
special meeting in the case of Mentor Funds, will be held at 901 East Byrd
Street, Richmond, Virginia, on Monday, December 22, 1997, at 9:00 a.m., Eastern
Standard Time, for the following purposes:
1. To approve or disapprove new investment advisory agreements between each
of the Funds or Portfolios comprising the Trusts and Mentor Investment
Advisors, LLC or Mentor Perpetual Advisors, LLC, as the case may be, and,
where applicable, related sub-advisory agreements, in each case as
described in the attached Proxy Statement;
2. To approve or disapprove new investment advisory agreements between
certain of the Funds or Portfolios comprising the Trusts and Mentor
Investment Advisors, LLC, and, where applicable, related sub-advisory
agreements, in contemplation of the potential acquisition of an additional
interest in Mentor Investment Group, LLC by EVEREN Securities Holdings,
Inc.;
3. To elect Messrs. Daniel J. Ludeman, Troy A. Peery, Jr., Arnold H.
Dreyfuss, Thomas F. Keller, Peter J. Quinn, Jr., Louis W. Moelchert, Jr.,
Arch T. Allen, III, Weston E. Edwards, Jerry R. Barrentine, and J. Garnett
Nelson Trustees of each of the Trusts; and
4. To consider and act upon such other matters as may properly come before
the Meeting.
Shareholders of record as of the close of business on November 5, 1997 are
entitled to notice of and to vote at the Meeting.
By order of the Trustees
John M. Ivan
Secretary/Clerk
November 21, 1997
<PAGE>
Mentor Family of Funds
901 East Byrd Street
Richmond, Virginia 23219
---------------
PROXY STATEMENT
---------------
The enclosed proxies are solicited by the Boards of Trustees of Mentor
Funds, Mentor Institutional Trust, and Cash Resource Trust (each a "Trust," and
collectively, the "Trusts") for use at the Meeting of Shareholders of each of
the Trusts to be held at 901 East Byrd Street, Richmond, Virginia, on December
22, 1997, at 9:00 a.m., Eastern Standard Time, and at any adjournment thereof.
Shareholders of record at the close of business on November 5, 1997 (the
"Record Date") are entitled to vote at the Meeting or any adjourned session.
These proxy materials are first being made available to shareholders on or
about November 21, 1997.
The shares of Mentor Funds are divided into eleven portfolios: Mentor
Growth Portfolio, Mentor Capital Growth Portfolio, Mentor Strategy Portfolio,
Mentor Income and Growth Portfolio, Mentor Perpetual Global Portfolio, Mentor
Quality Income Portfolio, Mentor Municipal Income Portfolio, Mentor
Short-Duration Income Portfolio, Mentor Balanced Portfolio, Mentor
Institutional Money Market Portfolio, and Mentor Institutional U.S. Government
Money Market Portfolio. The shares of Mentor Institutional Trust are divided
into five portfolios: Mentor U.S. Government Cash Management Portfolio, Mentor
Intermediate Duration Portfolio, Mentor Fixed Income Portfolio, Mentor
Perpetual International Portfolio, and SNAP Fund. The shares of Cash Resource
Trust are divided into five funds: Cash Resource Money Market Fund, Cash
Resource U.S. Government Money Market Fund, Cash Resource Tax-Exempt Money
Market Fund, Cash Resource California Tax-Exempt Money Market Fund, and Cash
Resource New York Tax-Exempt Money Market Fund. For convenience, the word
"Fund" will be used throughout this proxy statement to refer to both the
Portfolios and Funds that comprise the Trusts.
If you own shares of more than one Fund, you should sign and return a
proxy card for each Fund of which you are a shareholder; for example, if you
own shares of Mentor Growth Portfolio and shares of Mentor U.S. Government Cash
Management Portfolio, you should sign and return the enclosed proxy cards for
each of those Funds. You should sign and return each of the enclosed cards.
Shares represented by duly executed proxies will be voted in accordance
with the specification made. If no specification is made, shares will be voted
in accordance with the recommendation of the Trustees of the Trusts. You may
revoke a proxy at any time before it is exercised by sending or delivering a
written revocation to the Secretary or Clerk of the relevant Trust (which will
be effective when it is received by the Secretary/Clerk), by properly executing
a later-dated proxy, or by attending the Meeting, requesting return of your
proxy, and voting in person.
Copies of the most recent annual and semi-annual reports issued by any of
the Trusts may be obtained without charge by calling Mentor Investment Group,
LLC at 1-800-382-0016 or writing to Mentor Investment Group, LLC at P.O. Box
1357, Richmond, Virginia 23218-1357.
I. APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS
On August 20, 1997, Wheat First Butcher Singer, Inc. ("Wheat First")
entered into an Agreement and Plan of Merger with First Union Corporation
("First Union"), pursuant to which Wheat First would be merged into First
Union. Upon the consummation of the merger (expected to occur as early as
December of this year), First Union will become the owner of a majority of the
beneficial interest in Mentor Investment Advisors, LLC ("Mentor Advisors") and
one-half of the outstanding interest in Mentor Perpetual Advisors, LLC ("Mentor
Perpetual"). (In this Proxy Statement this series of transactions is referred
to as the "Merger.")
Your Trustees are recommending that shareholders of each Fund approve a
new investment advisory agreement between the Fund and Mentor Advisors or
Mentor Perpetual, as the case may be. The new agreements will replace the
existing investment advisory agreements between the Funds and Mentor Advisors
and Mentor Perpetual. Your approval of the new agreements is being sought
because the Merger will result in an "assignment," as defined in the Investment
Company Act of 1940, as amended (the "1940 Act"), of the existing agreements,
resulting in their automatic termination.
The Agreement and Plan of Merger (the "Merger Agreement"). Under the
Merger Agreement, Wheat First will be merged into First Union, and will cease
to exist as a separate entity. (The successor entity to Wheat First following
the Merger is referred to in this Proxy Statement as "Wheat First Union.")
<PAGE>
Under the terms of the Merger Agreement, First Union will exchange up to
10,267,029 shares of First Union common stock, valued at $471 million based on
First Union's closing stock price of $45.875 on August 15, 1997, for all of the
outstanding stock of Wheat First. In addition, First Union has agreed to
establish an employee retention pool consisting of approximately 1.7 million
shares of restricted First Union common stock to be granted to certain key
employees of Wheat First, to vest over a three-year period following the Merger
if they remain employed by First Union during that period. In addition, First
Union has entered into employment agreements with the five senior executive
officers of Wheat First, which provide for salary, bonus, and continuing
payments with a three-year term for four of such executives, and salary, bonus,
and a termination payment over a one-year term for one such executive.
Mentor Advisors has informed the Trusts that the purpose of the retention
pool is principally to provide an incentive to certain Wheat First employees,
including key professionals in the Mentor companies, to continue their
association with First Union following consummation of the Merger. Any such
employee who voluntarily terminates employment with First Union will forfeit
any shares of restricted stock not yet vested.
The Merger Agreement does not contemplate any changes in the management or
operations of Mentor Advisors or Mentor Perpetual, including any changes in the
personnel managing the Funds or other services or business activities relating
to the Funds. Neither Mentor Advisors nor Mentor Perpetual anticipate that the
Merger will cause any reduction in the quality of services now provided to any
of the Funds, or have any adverse effect on Mentor Advisors' or Mentor
Perpetual's ability to fulfill its obligations to the Funds.
First Union. First Union is a bank holding company registered under the
Bank Holding Company Act of 1956, as amended. Through its network of
subsidiaries, First Union provides numerous banking and banking-related
products and services, including retail and commercial banking, retail
investment, and capital markets services. First Union also provides other
financial products and services including mortgage banking, home equity
lending, leasing, insurance, and securities brokerage services. At September
30, 1997, First Union had assets of $144 billion, making it the sixth largest
banking company in the United States.
The existing investment advisory agreements. Mentor Advisors and Mentor
Perpetual currently act as investment advisors to each of the Funds pursuant to
investment advisory agreements in effect between the Funds and them (the
"Existing Agreements"). Under the Existing Agreements and subject to the
general oversight of the Trustees, Mentor Advisors and Mentor Perpetual manage
each of the Funds in accordance with the stated policies of that Fund. Each
makes investment decisions for the Fund and places purchase and sale orders for
portfolio transactions (although investment decisions for the Municipal Income
Portfolio and Income and Growth Portfolio are made by their respective
sub-advisors; see "Sub-advisory agreements" below). Mentor Advisors and Mentor
Perpetual bear all their expenses in connection with the performance of their
services (except as may be approved from time to time by the Trustees) and pay
the salaries of all officers and employees who are employed by them and the
Trusts.
Mentor Advisors and Mentor Perpetual are both located at 901 East Byrd
Street, Richmond, Virginia 23219.
Each of the Funds pays Mentor Advisors or Mentor Perpetual, as the case
may be, fees as compensation for the services provided under the Existing
Agreements, except that certain of the Funds comprising Mentor Institutional
Trust pay no fees under the Existing Agreements. The amount of the fees is
calculated daily and payable monthly at the annual rate applicable to each
Fund, based on the average daily net assets of that Fund. Except in respect of
Mentor Institutional Trust, the annual rates applicable to and the fees paid to
Mentor Advisors or Mentor Perpetual by each of the Funds under the Existing
Agreements during the most recently completed fiscal year are set forth in
Table 1. In the case of Mentor Institutional Trust, only the SNAP Fund and the
Perpetual International Portfolio pay investment advisory fees. The SNAP Fund
pays investment advisory fees at the following annual rate: 0.09% of the first
$500 million of the Fund's average daily net assets; 0.08% of the next $250
million; 0.07% of the next $250 million; 0.06% of the next $250 million; and
0.05% of any amounts over $1.25 billion. During the fiscal year ended June 30,
1997, the SNAP Fund incurred investment advisory fees of $784,372. The
Perpetual International Portfolio pays investment advisory fees at an annual
rate of 1.00% of its average daily net assets. During the fiscal year ended
October 31, 1996 it paid fees of $12,402, reflecting a fee waiver in the amount
of $23,292.
Each of the Existing Agreements was approved by the initial shareholder of
the Fund in question at the time of the Fund's organization. The year in which
each of the Funds comprising Mentor Funds and Cash Resource Trust was organized
is set out in Table 1 below. In the case of Mentor Institutional Trust, each of
the U.S. Government Cash Management Portfolio, Intermediate Duration Portfolio,
and Fixed Income Portfolio was organized in 1994; the SNAP Fund and Perpetual
International Portfolio were organized in 1995 and 1996, respectively.
2
<PAGE>
Administrative fees. Each of the Portfolios comprising Mentor Funds (other
than the Institutional Money Market Portfolio and the Institutional U.S.
Government Money Market Portfolio) and Mentor Institutional Trust has entered
into an Administration Agreement with Mentor Investment Group, LLC ("Mentor
Group"), an affiliate of Mentor Advisors and Mentor Perpetual, pursuant to
which Mentor Group provides continuous business management services to the
Portfolios and, subject to the general oversight of the Trustees, generally
manages all of the business and affairs of the Portfolios subject to the
provisions of the relevant Trust's Declaration of Trust and By-laws and the
1940 Act, and other policies and instructions the Trustees may from time to
time establish. Mentor Group pays the compensation of all officers and
executive employees of the Trusts (except those employed by or serving at the
request of an investment advisor or sub-advisor) and makes available to the
Trusts the services of its directors, officers, and employees as may be elected
Trustees or officers of the Trusts. In addition, Mentor Group provides all
clerical services relating to the Portfolios' business. Mentor Group's address
is 901 East Byrd Street, Richmond, Virginia 23219.
Each of the Portfolios comprising Mentor Funds pays Mentor Group fees
under the Administration Agreements, calculated daily and payable monthly, at
the annual rate of 0.10% of its average daily net assets. The fees paid by each
Portfolio to Mentor Group under the Administration Agreements during fiscal
1997 are set forth in Table 1 below. None of the Funds comprising Mentor
Institutional Trust pays any fees under the Administration Agreements.
In addition, certain of the Funds reimburse Mentor Group for certain
accounting and operations-related costs not covered by their respective
administration arrangements. The amounts paid in the Funds' most recently
completed fiscal year are set forth in Table 1.
The Administration Agreements will terminate by their terms upon
consummation of the Merger. The Trustees have approved new Administration
Agreements with Mentor Group upon substantially identical terms, to become
effective upon consummation of the Merger.
Table 1
<TABLE>
<CAPTION>
Investment Amount of Amount of
Advisory Investment Administrative Cost
Fund (year organized) Fee Advisory Fee (1) Fee (1) Reimbursement
- -------------------------------------------------- ----------------- ------------------ ---------------- --------------
<S> <C> <C> <C> <C>
Mentor Funds (fiscal year ended 9/30/97)
Growth Portfolio (1985) ........................ 0.70% $3,238,498 $462,643 $ 17,457
Capital Growth Portfolio (1992) ............... 0.80% $1,063,903 $132,988 $ 5,036
Strategy Portfolio (1993) ..................... 0.85% $2,807,549 $330,300 $ 11,846
Income and Growth Portfolio (1993) ............ 0.75% $ 947,267 $126,302 $ 4,851
Perpetual Global Portfolio (1994) ............... 1.10% (2) $ 998,592 $ 92,753 $ 3,672
Quality Income Portfolio (1992) ............... 0.47% (3) $ 449,325 $ 95,423 $ 3,617
($ 123,214)
Municipal Income Portfolio (1992) ............ 0.60% $ 370,232 $ 61,705 $ 2,293
Short-Duration Income Portfolio (1994) ......... 0.35% (3) $ 129,833 -- $ 1,443
($ 55,521) ($ 37,151)
Balanced Portfolio (1994) ..................... 0.23% (4) $ 8,854 -- --
($ 20,072)
Institutional Money Market Portfolio (1997) ... 0.22% (5) -- -- --
U.S. Government Institutional Money Market
Portfolio (1997) ........................... 0.22% (5) $ 29,982 -- --
Cash Resource Trust (fiscal year ended 7/31/97)
Money Market Fund (1993) ..................... 0.19% (5) $4,041,000 -- $166,495
U.S. Government Money Market Fund (1993) ...... 0.19% (5) $4,470,000 -- $216,922
Tax-Exempt Money Market Fund (1993) ............ 0.22% (5) $1,326,000 -- $ 50,912
California Tax-Exempt Money Market Fund (1996) 0.22% (5) $ 121,000 -- $ 3,114
New York Tax-Exempt Money Market Fund (1996) ... 0.10% (5) $ 5,000 -- $ 312
($ 6,000)
</TABLE>
- ---------
(1) Amounts shown as paid are net of amounts waived or reimbursed. Amounts
shown in parentheses reflect fees waived or reimbursed by Mentor Advisors
or Mentor Group, as the case may be.
(Footnotes continued on next page)
3
<PAGE>
(2) The Global Portfolio pays fees to Mentor Perpetual equal to 1.10% of its
average daily net assets up to and including $75 million and 1.00% of the
average daily net assets of the Portfolio in excess of $75 million.
(3) After expense limitation. Mentor Advisors agreed to limit its investment
advisory fees from each of the Quality Income and Short-Duration Income
Portfolios until September 30, 1997 to the extent necessary to limit the
total operating expenses of those Portfolios. In the absence of these
expense limitations, investment advisory fees for the Quality Income and
Short-Duration Income Portfolios would have been 0.60% and 0.50%,
respectively.
(4) After expense limitation. In the absence of the expense limitation, the
investment advisory fee for the Balanced Portfolio would have been 0.75%.
(5) The Institutional Money Market Portfolio, the Institutional U.S. Government
Money Market Portfolio, and each of the Funds comprising Cash Resource
Trust pays investment advisory fees at the following annual rates: 0.22%
of the first $500 million of the Fund's average daily net assets; 0.20% of
the next $500 million; 0.175% of the next $1 billion; 0.16% of the next $1
billion; and 0.15% of any amounts over $3 billion.
The new investment advisory agreements. Each of the Existing Agreements
will by its terms terminate upon the consummation of the Merger, since the
Merger will constitute a "change of control" of Mentor Advisors and Mentor
Perpetual for purposes of the 1940 Act. The Trustees are recommending that
shareholders of each Fund approve new investment advisory agreements (each, a
"New Agreement") to be effective immediately upon consummation of the Merger.
Each New Agreement is substantially identical to the Existing Agreement it
replaces, other than its effective and termination dates. Each contemplates
that, subject to the supervision of the Trustees of the Trusts, Mentor Advisors
or Mentor Perpetual, as the case may be, will manage a Fund's assets in
accordance with its investment objective, policies, and limitations, make
investment decisions for the Fund, and place all orders for the purchase and
sale of the Fund's investments with broker-dealers. Investment decisions for
the Municipal Income Portfolio and the Income and Growth Portfolio will be made
by their respective sub-advisors. See "Sub-advisory agreements" below.
Each of the New Agreements provides that it will continue in effect for an
initial term of two years from its effective date (which is expected to be the
date on which the Merger is consummated) and thereafter only so long as such
Agreement is approved at least annually by (i) the vote, cast in person at a
meeting called for such purpose, of a majority of the Trustees who are not
"interested persons" (as defined in the 1940 Act) of Mentor Advisors or Mentor
Perpetual, as the case may be, or the Trust in question, and by (ii) the vote
of a majority of the Trustees of the Trust in question or the vote of a
majority of the outstanding voting securities (as defined in the 1940 Act) of
the Fund in question. It is intended that each of the proposed New Agreements
will take effect upon consummation of the Merger, with its continuing
effectiveness subject to the receipt of shareholder approval, as described
below.
The New Agreements provide, as do the Existing Agreements, that Mentor
Advisors or Mentor Perpetual, as the case may be, shall not, in the absence of
willful misfeasance, bad faith, gross negligence, or reckless disregard by it
of its obligations or duties, be subject to liability to the Trusts, the Fund
in question, or the shareholders of the Fund in respect of its services
provided under the Agreements.
Any of the New Agreements may be terminated, without penalty, on 30 days
notice (or, in the case of certain of the Funds, 60 days).
A copy of the form of each of the New Agreements is attached to this proxy
statement as Exhibit A.
Sub-advisory agreements. Van Kampen American Capital Management, Inc.
("Van Kampen") provides sub-advisory services to the Municipal Income Portfolio
pursuant to a sub-advisory agreement among Mentor Advisors, the Portfolio, and
Van Kampen. Similarly, Wellington Management Company, LLP ("Wellington
Management") provides sub-advisory services to the Income and Growth Portfolio
pursuant to a sub-advisory agreement among Mentor Advisors, the Portfolio, and
Wellington Management.
Because the Merger will result in a change of control of Mentor Advisors
and so in the termination of the sub-advisory agreements, Mentor Funds' Board
of Trustees is recommending that shareholders of each of those Portfolios
approve new sub-advisory agreements with Van Kampen and Wellington Management.
Each of the new sub-advisory agreements will be substantially identical to the
existing agreements, other than its effective and termination dates.
Van Kampen, located at One Parkview Plaza, Oakbrook Terrace, Illinois
60181, is a wholly owned subsidiary of Van Kampen American Capital, Inc.,
which, in turn, is a wholly-owned subsidiary of VK/AC Holding, Inc. VK/AC
Holding, Inc.
4
<PAGE>
is an indirect wholly owned subsidiary of Morgan Stanley, Dean Witter, Discover
& Co. Morgan Stanley, Dean Witter, Discover & Co. and various of its
subsidiaries, including Morgan Stanley & Co. Incorporated, a registered
broker-dealer, are engaged in a wide range of financial services. As of
September 30, 1997, Van Kampen, together with its affiliates, advised or
supervised approximately $67.5 billion of assets. Under the sub-advisory
agreement, Van Kampen receives a fee from Mentor Advisors at the following
annual rate: 0.25% of the first $60 million of the Municipal Income Portfolio's
average daily net assets and 0.20% of the Portfolio's average daily net assets
over $60 million. During the Portfolio's fiscal year ended September 30, 1997,
Van Kampen received sub-advisory fees of $153,577.
Wellington Management is a Massachusetts limited liability partnership
with principal offices at 75 State Street, Boston, Massachusetts 02109.
Wellington Management is a professional investment counseling firm which
provides investment services to investment companies, employee benefit plans,
endowments, foundations, and other institutions and individuals. Wellington
Management and its predecessor organizations have provided investment advisory
services for over 60 years. As of September 30, 1997, Wellington Management had
investment management authority with respect to approximately $168.7 billion in
assets. Under the sub-advisory agreement, Wellington Management receives a fee
from Mentor Advisors at the following annual rate: 0.325% of the first $50
million of the Income and Growth Portfolio's average daily net assets, 0.275%
of the next $150 million of the Portfolio's average daily net assets, 0.225% of
the next $300 million of the Portfolio's average daily net assets, and 0.200%
of the Portfolio's average daily net assets over $500 million. During the
Portfolio's fiscal year ended September 30, 1997, Wellington Management
received sub-advisory fees of $373,115.
Under the sub-advisory agreements, Van Kampen and Wellington Management,
subject to the supervision of Mentor Advisors and the Trustees of Mentor Funds,
manage the Portfolios' assets in accordance with their respective investment
objectives, policies, and limitations, make investment decisions for the
Portfolios, and place all orders for the purchase and sale of the Portfolios'
investments with broker-dealers. Each of Van Kampen and Wellington Management
pays all expenses incurred by it and its staff, including salaries of its
personnel, in connection with the performance of its obligations under the
sub-advisory agreement.
The sub-advisory agreement with Wellington Management was approved at the
time of the Income and Growth Portfolio's organization. The sub-advisory
agreement with Van Kampen was approved by shareholders of the Municipal Income
Portfolio in October 1996.
In executing portfolio transactions and selecting brokers and dealers, Van
Kampen and Wellington Management seek the best overall terms available. The
sub-advisory agreements provide that, in assessing the best overall terms
available for any transaction, Van Kampen and Wellington Management shall
consider all factors they deem relevant, including, but not limited to, the
breadth of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission for the specific transaction and on a
continuing basis. Each of Van Kampen and Wellington Management may enter into
transactions with broker-dealers that furnish it, without cost to it, certain
brokerage and research services of value to it and its affiliates in advising
the Portfolios and other clients. In doing so, Van Kampen and Wellington
Management may cause the Portfolios to pay greater brokerage commissions than
they might otherwise pay.
Each sub-advisory agreement provides that Van Kampen or Wellington
Management, as the case may be, shall not, in the absence of its willful
misfeasance, bad faith, gross negligence, or reckless disregard of its
obligations or duties, be liable for any loss suffered by Mentor Advisors or
the Trust in connection with matters to which the applicable sub-advisory
agreement relates. The sub-advisory agreements may be terminated at any time,
without penalty, by Mentor Advisors, the Trust, or by Van Kampen or Wellington
Management, as the case may be, upon 60 days' written notice. Each of the sub-
advisory agreements terminates automatically in the event of its assignment.
5
<PAGE>
Set forth below is information regarding the management of Van Kampen and
Wellington Management.
Van Kampen
<TABLE>
<CAPTION>
Name and Address Position Principal Occupation
- ------------------------- --------------------------------------- ---------------------------------------------
<S> <C> <C>
Don G. Powell Chairman and Director Chairman and Director,
2800 Post Oak Boulevard VK/AC Holding, Inc.,
Houston, Texas 77056 Van Kampen American Capital, Inc., Van
Kampen American Capital Distributors, Inc.,
Van Kampen American Capital Asset
Management, Inc., Van Kampen American
Capital Investment Advisory Corp., and Van
Kampen American Capital Advisors, Inc.
Philip N. Duff Chief Executive Officer President and Chief Executive Officer,
One Parkview Plaza and Director VK/AC Holding, Inc. and Van Kampen
Oakbrook Terrace, American Capital, Inc.
Illinois 60181
Dennis J. McDonnell President, Chief Operating Executive Vice President, VK/AC Holding,
One Parkview Plaza Officer, and Director Inc. and Van Kampen American Capital, Inc.;
Oakbrook Terrace, President and Chief Operating Officer, Van
Illinois 60181 Kampen American Capital Advisors, Inc., Van
Kampen American Capital Asset Management,
Inc., and Van Kampen American Capital
Investment Advisory Corp.
Ronald A. Nyberg Executive Vice President, Executive Vice President and General
One Parkview Plaza General Counsel, and Director Counsel, VK/AC Holding, Inc., Van Kampen
Oakbrook Terrace, American Capital, Inc., Van Kampen
Illinois 60181 American Capital Distributors, Inc., Van
Kampen American Asset Management, Inc.,
Van Kampen American Investment Advisory
Corp., and Van Kampen American Capital
Advisors, Inc.
William R. Rybak Executive Vice President, Executive Vice President and Chief Financial
One Parkview Plaza Chief Financial Officer, and Director Officer, VK/AC Holding, Inc., Van Kampen
Oakbrook Terrace, American Capital, Inc., Van Kampen
Illinois 60181 American Capital Distributors, Inc., Van
Kampen American Capital Asset Management
Inc., Van Kampen American Capital
Investment Advisory Corp., and Van Kampen
American Capital Advisors, Inc.
Peter W. Hegel Executive Vice President Executive Vice President, Van Kampen
One Parkview Plaza American Capital Asset Management, Inc.,
Oakbrook Terrace, Van Kampen American Capital Investment
Illinois 60181 Advisory Corp., and Van Kampen American
Capital Advisors, Inc.
Alan T. Sachtleben Executive Vice President Executive Vice President, Van Kampen
2800 Post Oak Blvd. American Capital Asset Management, Inc.,
Houston, Texas 77506 Van Kampen American Capital Investment
Advisory Corp., and Van Kampen American
Capital Advisors, Inc.
</TABLE>
Wellington Management
Wellington Management is managed by its active partners. The managing
partners of Wellington Management as of September 30, 1997 were Robert W.
Doran, Duncan M. McFarland, and John R. Ryan. Set forth below is a listing of
the general partners and Senior Vice Presidents of Wellington Management, each
of whom may be reached at the principal offices of the firm. The principal
occupation of each is as general partner, or Senior Vice President of
Wellington Management. Paul D. Kaplan, Senior Vice President of Wellington
Management, serves as portfolio manager of the fixed-income and U.S. Government
securities portion of the Income and Growth Portfolio; Wellington Management's
Equity Income Team manages the equity securities portion of the Portfolio.
6
<PAGE>
<TABLE>
<S> <C> <C>
Kenneth L. Abrams Paul D. Kaplan Robert D. Rands
Nicholas C. Adams John C. Keogh Eugene E. Record, Jr.
Rand L. Alexander Mark T. Lynch John R. Ryan
Deborah L. Allinson Nanch T. Lukitsh Joseph H. Schwartz
Nancy T. August Christine S. Manfredi David W. Scudder
James H. Averill Patrick J. McCloskey Binkley C. Shorts
Marie-Claude Bernal Earl E. McEvoy Trond Skramstad
William N. Booth Duncan M. McFarland Catherine A. Smith
Paul Braverman Paul M. Mecray, III Stephen A. Soderberg
William D. DiIanni Matthew E. Megargel Harriett Tee Taggart
Pamela Dippel James N. Mordy Perry M. Traquina
Robert W. Doran Diane C. Nordin Gene R. Tremblay
Charles T. Freeman Edward P. Owens Mary Ann Tynan
Laurie A. Gabriel Saul J. Pannell Ernst H. von Metzsch
Frank J. Gilday Thomas L. Pappas Clare Villari
John H. Gooch David M. Parker James L. Walters
Nicholas P. Greville Jonathan M. Payson Kim Williams
William C.S. Hicks Stephen M. Pazuk Frank V. Wisneski
</TABLE>
A copy of the form of each of the new sub-advisory agreements is attached
to this proxy statement as Exhibit B.
Exhibit C and Exhibit D provide information relating to investment
companies similar to the Portfolios for which Van Kampen and Wellington
Management, respectively, provide investment advisory services.
Request for exemption. It is possible that shareholders will not have
acted on all of the New Agreements prior to the consummation of the Merger. The
Trusts and their advisors and sub-advisors have filed with the Securities and
Exchange Commission an application for an exemption from relevant provisions of
the 1940 Act permitting each of the Funds to enter into a New Agreement
(including, for this purpose, any sub-advisory agreement) following the
consummation of the Merger, even if the Fund's shareholders have not yet
approved the Agreement by that time. Any New Agreement implemented under those
circumstances will provide that the fees payable by the Fund under the
Agreement prior to shareholder approval of the New Agreement will be held in an
interest-bearing escrow account to be paid to Mentor Advisors or Mentor
Perpetual, as the case may be, only upon shareholder approval of the New
Agreement, or, if shareholders do not approve the Agreement within the 60 days
following consummation of the Merger, to the Fund. A vote to approve a New
Agreement with respect to a Fund will include a vote in favor of this provision
and in favor of the release to Mentor Advisors, Mentor Perpetual, or the
sub-advisor in question, as the case may be, upon receipt of shareholder
approval of the New Agreement, of any amounts held in the escrow account. There
can be no assurance that the Securities and Exchange Commission will grant the
requested exemption.
Trustee Action. The Trustees of the Trusts approved each of the New
Agreements at a meeting held on October 14, 1997, at which a representative of
First Union was present.
In evaluating the New Agreements, the Trustees considered the fact that
the Existing Agreements and the New Agreements are substantially identical,
including the terms relating to the services to be provided and the fees to be
paid by the Funds thereunder. The Trustees considered the performance of Mentor
Advisors and Mentor Perpetual to date in providing services to the Funds, and
the skills and capabilities of the personnel of Mentor Advisors and Mentor
Perpetual.
The Trustees also considered statements made at their meeting by a
representative of senior management of First Union. He indicated, among other
things, that First Union expects that Mentor Group would continue to operate as
a separate operating unit of First Union after the Merger; that the Mentor
group of companies as an operating unit would remain substantially intact; that
First Union intended to maintain Mentor Group's ownership interest in Mentor
Perpetual at the current level; and that there would be no change in the
investment advisory or administration services, or the pricing of those
services, provided by the Mentor group of companies to the Funds.
The Trustees also considered generally the financial resources of First
Union, and the reputation, expertise, and resources of First Union and its
affiliates, including those engaged in investment management businesses, and in
domestic and international financial markets.
7
<PAGE>
The Trustees also considered the fact that key members of senior
management of Wheat First had entered into the employment agreements, described
above, with First Union, and that key members of management of Mentor Group
would be entitled to receive restricted shares of First Union common stock from
the retention pool described above.
Mr. Stanley F. Pauley, a Trustee of each of the Trusts, will become an
"interested person," as that term is defined in the 1940 Act, of each Trust,
and of Mentor Advisors and Mentor Perpetual, following the Merger by virtue of
his ownership of approximately 16,000 shares of First Union common stock.
General. Investment decisions for the Funds and for the other investment
advisory clients of Mentor Advisors and Mentor Perpetual and their affiliates
are made with a view to achieving their respective investment objectives.
Investment decisions are the product of many factors in addition to basic
suitability for the particular client involved. Thus, a particular security may
be bought or sold for certain clients even though it could have been bought or
sold for other clients at the same time. Likewise, a particular security may be
bought for one or more clients when one or more other clients are selling the
security. In some instances, one client may sell a particular security to
another client. It also sometimes happens that two or more clients
simultaneously purchase or sell the same security, in which event each day's
transactions in such security are, insofar as possible, averaged as to price
and allocated between such clients in a manner which in the opinion of Mentor
Advisors or Mentor Perpetual, as the case may be, is equitable to each and in
accordance with the amount being purchased or sold by each. There may be
circumstances when purchases or sales of portfolio securities for one or more
clients will have an adverse effect on other clients. Mentor Advisors and
Mentor Perpetual employ professional staffs of portfolio managers who draw upon
a variety of resources for research information for the Funds.
Each Fund pays all expenses related to its operation which are not borne
by Mentor Advisors or Mentor Perpetual, including but not limited to taxes,
interest, brokerage fees and commissions, compensation paid under a Fund's Rule
12b-1 plans and shareholder service plans, investor services fees, fees paid to
Trustees who are not officers, directors, stockholders, or employees of Mentor
Advisors or Mentor Perpetual, Securities and Exchange Commission fees and
related expenses, state Blue Sky qualification fees, charges of custodians,
transfer agents, registrars, or other agents, outside auditing, accounting, and
legal services, charges for the printing of prospectuses and statements of
additional information for regulatory purposes or for distribution to
shareholders, certain shareholder report charges, and charges relating to
corporate matters.
It has for many years been a common practice in the investment advisory
business for advisers of investment companies and other institutional investors
to receive brokerage and research services (as defined in the Securities
Exchange Act of 1934, as amended (the "1934 Act")) from broker-dealers that
execute portfolio transactions for the clients of such advisers and from third
parties with which such broker-dealers have arrangements. Consistent with this
practice, Mentor Advisors and Mentor Perpetual receive brokerage and research
services and other similar services from many broker-dealers with which they
place a Fund's portfolio transactions and from third parties with which these
broker-dealers have arrangements. These services include such matters as
general economic and market reviews, industry and company reviews, evaluations
of investments, recommendations as to the purchase and sale of investments,
newspapers, magazines, pricing services, quotation services, news services, and
personal computers utilized by Mentor Advisors and Mentor Perpetual's managers
and analysts. Where the services referred to above are not used exclusively by
Mentor Advisors and Mentor Perpetual for research purposes, Mentor Advisors and
Mentor Perpetual, based upon their own allocations of expected use, bear that
portion of the cost of these services which directly relates to its
non-research use. Some of these services are of value to Mentor Advisors and
Mentor Perpetual and their affiliates in advising various of their clients
(including the Funds), although not all of these services are necessarily
useful and of value in managing the Funds. The investment advisory fees paid by
a Fund are not reduced because Mentor Advisors or Mentor Perpetual or their
affiliates receive these services even though Mentor Advisors and Mentor
Perpetual might otherwise be required to purchase some of these services for
cash.
Mentor Advisors and Mentor Perpetual place all orders for the purchase and
sale of portfolio investments for the Funds and buy and sell investments for
the Funds through a substantial number of brokers and dealers. Mentor Advisors
and Mentor Perpetual seek the best overall terms available for the Funds,
except to the extent Mentor Advisors and Mentor Perpetual may be permitted to
pay higher brokerage commissions as described below. In doing so, Mentor
Advisors and Mentor Perpetual, having in mind a Fund's best interests, consider
all factors they deem relevant, including, by way of illustration, price, the
size of the transaction, the nature of the market for the security or other
investment, the amount of the commission, the timing of the transaction taking
into account market prices and trends, the reputation, experience, and
financial stability of the broker-dealer involved, and the quality of service
rendered by the broker-dealer in other transactions. Mentor
8
<PAGE>
Advisors and Mentor Perpetual may enter into transactions with broker-dealers
that furnish them, without cost to them, certain brokerage and research
services of value to them and their affiliates in advising the Funds and other
clients. In doing so, Mentor Advisors and Mentor Perpetual may cause the Funds
to pay greater brokerage commissions than they might otherwise pay.
As permitted by Section 28(e) of the 1934 Act, Mentor Advisors and Mentor
Perpetual may cause a Fund to pay a broker-dealer which provides "brokerage and
research services" (as defined in the 1934 Act) to Mentor Advisors and Mentor
Perpetual an amount of disclosed commission for effecting securities
transactions on stock exchanges and other transactions for the Fund on an
agency basis in excess of the commission which another broker-dealer would have
charged for effecting that transaction. Mentor Advisors' and Mentor Perpetual's
authority to cause a Fund to pay any such greater commissions is also subject
to such policies as the Trustees may adopt from time to time. Neither Mentor
Advisors nor Mentor Perpetual currently intends to cause the Funds to make such
payments.
Wheat, First Securities, Inc. and EVEREN Securities, Inc., affiliates of
Mentor Advisors and Mentor Perpetual, may receive brokerage commissions from
certain of the Funds in accordance with procedures adopted by the Trustees. See
"Ownership of Mentor Advisors and Mentor Perpetual," below, for a description
of the affiliation between EVEREN Securities, Inc. and Mentor Advisors and
Mentor Perpetual.
The aggregate amount of commissions paid to Wheat, First Securities, Inc.
by each of the Funds during their most recently completed fiscal years, and the
percentage that such amounts represent of the aggregate brokerage commissions
paid by the Fund for that year, are as follows: Growth Portfolio -- $101,434
(6.84%); Capital Growth Portfolio -- $29,226 (10.62%); Strategy Portfolio --
$287,495 (21.30%); Income and Growth Portfolio -- $101,454 (33.52%); and
Balanced Portfolio -- $50 (1.05%). The corresponding figures for commissions
paid to EVEREN Securities, Inc. during the same period are: Growth Portfolio --
$2,331 (0.16%) and Capital Growth Portfolio -- $9,793 (3.56%).
Distribution plans. Mentor Distributors, LLC ("Mentor Distributors"), an
affiliate of Mentor Advisors and Mentor Perpetual, currently serves as the
principal underwriter of the shares of each Fund (other than SNAP Fund). Each
of the Funds (other than certain of the Funds comprising Mentor Institutional
Trust) has adopted a Distribution Plan under Rule 12b-l of the 1940 Act (each,
a "Plan"). The Plans relate to a Fund's Class B shares, or, in the case of the
various money market funds, to the single class of shares currently
outstanding. The purpose of each Plan is to permit a Fund to compensate Mentor
Distributors for services provided and expenses incurred by it in promoting the
sale of shares of the Fund (or Class B shares of the Funds, as the case may
be), reducing redemptions, or maintaining or improving services provided to
shareholders by Mentor Distributors or financial institutions.
The fees paid by each of the Funds comprising Mentor Funds and Cash
Resource Trust under their respective Plans both as a percentage of average
daily net assets and the dollar amounts paid during the most recently completed
fiscal year are set forth in Table 2 below. In each case where a Fund issues
more than one class of shares, the fees shown are paid out of the Fund's assets
attributable to its Class B shares. None of the Funds comprising Mentor
Institutional Trust pay 12b-1 fees, except the Perpetual International
Portfolio, under whose Plan the Portfolio is permitted to pay such fees at the
annual rate of 0.75% of its average daily net assets attributable to its Class
B shares. During the fiscal year ended October 31, 1996, the Perpetual
International Portfolio incurred no 12b-1 fees (because no Class B shares were
outstanding during the year).
9
<PAGE>
Table 2
<TABLE>
<CAPTION>
Amount of
Fund 12b-1 Fees 12b-1 Fees(1)
- ------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Mentor Funds (fiscal year ended 9/30/97)
Growth Portfolio .............................. 0.75% $2,989,388
Capital Growth Portfolio ..................... 0.75% $ 656,743
Strategy Portfolio ........................... 0.75% $2,224,816
Income and Growth Portfolio .................. 0.75% $ 645,243
Perpetual Global Portfolio .................. 0.75% $ 481,581
Quality Income Portfolio ..................... 0.50% $ 317,465
Short-Duration Income Portfolio ............... 0.30% $ 73,558
Municipal Income Portfolio .................. 0.50% $ 197,295
Balanced Portfolio ........................... 0.75% --
($ 28,926)
Cash Resource Trust (fiscal year ended 7/31/97)
Money Market Fund ........................... 0.38% $8,221,000
U.S. Government Money Market Fund ............ 0.38% $9,126,000
Tax-Exempt Money Market Fund .................. 0.33% $2,039,000
California Tax-Exempt Money Market Fund ...... 0.33% $ 181,000
New York Tax-Exempt Money Market Fund ......... 0.38% $ 19,000
($ 6,000)
</TABLE>
- ---------
(1) Amounts shown as paid are net of amounts waived or reimbursed. Amounts
shown in parentheses reflect fees waived or reimbursed by Mentor
Distributors.
Mentor Distributors will not, due to limitations imposed by applicable
banking laws, continue to serve as the principal underwriter of the any of the
Funds' shares following the Merger. Mentor Distributors will, however, likely
continue to provide marketing support to the Funds, including, among other
things, contact with financial intermediaries to recommend the Funds and
primary responsibility for the development of marketing plans and the
preparation of advertising and sales literature for the Funds. As a result,
Mentor Distributors will likely continue to receive, either directly from the
Funds or from the Funds' principal underwriter, a substantial portion of any
amounts paid by the Funds under their Distribution Plans.
It is expected that the Boards of Trustees will select a new principal
underwriter for each of the Funds, which will be responsible for effecting
sales of shares of the Funds, either on a principal or agency basis, and
ensuring compliance with applicable laws. Any such principal underwriter would
also likely be compensated out of amounts paid by the Funds under the Plans.
Implementation of these arrangements would not result in any increase in the
amounts paid by the Funds under the Plans.
Shareholder servicing plans. Each of the Portfolios comprising Mentor
Funds and the Perpetual International Portfolio of Mentor Institutional Trust
has adopted a shareholder servicing plan (each, a "Service Plan") with Mentor
Distributors. The Service Plans contemplate that Mentor Distributors will enter
into shareholder service agreements with financial institutions whose customers
own shares of the Portfolios, pursuant to which the financial institutions will
provide administrative support services to their customers. In return for
providing those support services, a financial institution may receive payments
from Mentor Distributors at an annual rate not exceeding 0.25% of the average
daily net assets of the Class A or Class B shares of the particular Portfolio
or Portfolios (and, in the case of the International Portfolio, the Class E
shares) owned by the financial institution's customers.
10
<PAGE>
The Portfolios paid the following shareholder service fees to Mentor
Distributors under the Service Plans during the fiscal year ended September 30,
1997 (or, in the case of the Perpetual International Portfolio, ended October
31, 1996):
Table 3
<TABLE>
<CAPTION>
Amount of
Shareholder
Fund Service Fees(1)
- ---------------------------------------------------- ----------------
<S> <C>
Growth Portfolio .................. $1,156,606
Capital Growth Portfolio ............ $ 332,470
Strategy Portfolio ............... $ 825,750
Income and Growth Portfolio ......... $ 315,756
Perpetual Global Portfolio ......... $ 231,883
Quality Income Portfolio ............ $ 238,558
Municipal Income Portfolio ......... $ 154,263
Short-Duration Income Portfolio ... $ 92,677
Balanced Portfolio ............... --
($ 9,642)
Perpetual International Portfolio --
</TABLE>
- ---------
(1) Amounts shown as paid are net of amounts waived or reimbursed. Amounts
shown in parentheses reflect fees waived or reimbursed by Mentor
Distributors.
Contingent deferred sales charges. Mentor Distributors receives contingent
deferred sales charges in connection with redemption of certain shares of each
of the Funds comprising Mentor Funds and the Perpetual International Portfolio
of Mentor Institutional Trust within a specified period following the initial
purchase. During the fiscal year ended September 30, 1997 (or, in the case of
the Perpetual International Portfolio, ended October 31, 1996), Mentor
Distributors received contingent deferred sales charges in the following
amounts:
Table 4
<TABLE>
<CAPTION>
Amount of
Contingent Deferred
Fund Sales Charges
- ------------------------------------------------- --------------------
<S> <C>
Growth Portfolio .................. $362,277
Capital Growth Portfolio ......... $ 40,502
Strategy Portfolio ............... $727,513
Income and Growth Portfolio ...... $ 57,856
Perpetual Global Portfolio ...... $ 83,936
Quality Income Portfolio ......... $ 30,436
Municipal Income Portfolio ......... $ 26,274
Short-Duration Income Portfolio ... $ 33,870
Balanced Portfolio ............... --
Perpetual International Portfolio --
</TABLE>
Sub-transfer agency fees. Wheat, First Securities, Inc. and EVEREN
Clearing Corp., an affiliate of EVEREN Securities, Inc., receive sub-transfer
agency fees in respect of assets of the Funds comprising Cash Resource Trust
attributable to their respective clients. Sub-transfer agency fees are paid by
the Funds' transfer agent, which in turn receives transfer agency fees from the
Funds. In the fiscal year ended July 31, 1997, Wheat, First Securities, Inc.
earned sub-transfer agency fees of $2,251,535, $3,407,010, $308,427, $16,693,
and $454, respectively, in respect of Cash Resource Money Market Fund, U.S.
Government Money Market Fund, Tax-Exempt Money Market Fund, California Tax
Exempt Money Market Fund, and New York Tax Exempt Money Market Fund. For the
same period, EVEREN Clearing Corp. earned fees of $2,257,900, $719,160,
$99,017, and $25,994, respectively, in respect of Cash Resource Money Market
Fund, U.S. Government Money Market Fund, Tax Exempt Money Market Fund, and
California Tax Exempt Money Market Fund.
Ownership of Mentor Advisors and Mentor Perpetual. Mentor Group owns 99%
of the outstanding interest in Mentor Advisors; Wheat First owns the remaining
1%. Wheat First also owns a 79.8% interest in Mentor Group, which, together
11
<PAGE>
with its 1% direct interest in Mentor Advisors, gives Wheat First an 80%
economic interest in Mentor Advisors. EVEREN Securities Holdings, Inc. owns the
20.2% interest in Mentor Group not owned by Wheat First and may increase its
ownership based principally on the amount of Mentor Group's revenues derived
from assets attributable to clients of EVEREN Securities Holdings, Inc. and its
affiliates. EVEREN Securities, Inc. is an affiliate of EVEREN Securities
Holdings, Inc. See "Approval of New Investment Advisory Agreements --
Acquisition of Additional Interest in Mentor Group by EVEREN Securities
Holdings, Inc." below.
Mentor Perpetual is owned equally by Mentor Advisors and Perpetual plc, a
diversified financial services holding company.
Wheat First is located at 901 East Byrd Street, Richmond, Virginia 23219;
EVEREN Securities Holdings, Inc. is located at 77 West Wacker Drive, Chicago,
Illinois 60601; Perpetual plc is located at 48 Hart Street, Henley-on-Thames,
Oxfordshire RG92A2, England.
Directors and principal executive officer of Mentor Advisors and Mentor
Perpetual. The names and principal occupations of the principal executive
officer and each director of Mentor Advisors are set forth below:
<TABLE>
<CAPTION>
Name Position Principal Occupation
- --------------------- ------------------- --------------------------------------------------
<S> <C> <C>
Daniel J. Ludeman Chairman Chairman and Chief Executive Officer, Mentor
Investment Group, LLC.
Paul F. Costello Managing Director Managing Director, Mentor Investment Group, LLC.
John G. Davenport Managing Director Managing Director, Mentor Investment Group, LLC.
P. Michael Jones Managing Director Managing Director, Mentor Investment Group, LLC.
R. Preston Nuttall Managing Director Managing Director, Mentor Investment Group, LLC.
Theodore W. Price Managing Director Managing Director, Mentor Investment Group, LLC.
Peter J. Quinn, Jr. Managing Director Managing Director, Mentor Investment Group, LLC.
Karen H. Wimbish Managing Director Managing Director, Mentor Investment Group, LLC.
In the case of Mentor Perpetual, the names and principal occupations of the principal executive
officer and each director are:
Scott A. McGlashan President Director, Perpetual Portfolio Management Limited.
Martyn Arbib Director Chairman, Perpetual Portfolio Management Limited.
Roger C. Cornick Director Deputy Chairman -- Marketing, Perpetual Portfolio
Management Limited.
Paul F. Costello Director Managing Director, Mentor Investment Group, LLC.
Daniel J. Ludeman Director Chairman and Chief Executive Officer, Mentor
Investment Group, LLC.
David S. Mossop Director Director, Perpetual Portfolio Management Limited.
Peter J. Quinn, Jr. Director Managing Director, Mentor Investment Group, LLC.
Roderick A. Smyth Managing Director Managing Director, Mentor Investment Group, LLC.
</TABLE>
Messrs. Ludeman and Costello are Chairman and Trustee, and President,
respectively, of each of the Trusts. Mr. Quinn is a Trustee of Mentor Funds and
Cash Resource Trust. Mr. John M. Ivan, Secretary of Mentor Advisors, is also
Secretary or Clerk of each of the Trusts.
The address of each of the above named individuals is 901 East Byrd
Street, Richmond, Virginia 23219, except that the address of Messrs. McGlashan,
Arbib, and Mossop is 48 Hart Street, Henley-on-Thames, Oxfordshire RG92A2,
England.
Section 15(f). The Trusts have been advised that Mentor Advisors, Mentor
Perpetual, and First Union intend to comply with Section 15(f) of the 1940 Act.
Section 15(f) provides a non-exclusive "safe harbor" for an investment
company's investment adviser or any affiliated persons to receive any amount or
benefit in connection with a change in control of the investment adviser, as
long as two conditions are met. First, for a period of three years after the
change of control, at least 75% of the trustees of the investment company must
not be interested persons of the adviser or the predecessor adviser. Second, an
"unfair burden" must not be imposed on the investment company as a result of
the transaction or any express or implied terms, conditions, or understandings
applicable thereto. The term "unfair burden" is defined in Section 15(f) to
include any arrangement during the two-year period after the transaction
whereby the investment adviser, or any interested person of any such adviser,
receives or is entitled to receive any compensation, directly or indirectly,
from the investment company or its security holders (other than fees for bona
fide investment advisory or other services) or from any person in
12
<PAGE>
connection with the purchase or sale of securities or other property to, from,
or on behalf of the investment company (other than bona fide ordinary
compensation as principal underwriter for such investment company). The Trusts
have been advised that none of Mentor Advisors, Mentor Perpetual, and First
Union, and their affiliates, is aware of any express or implied term,
condition, arrangement or understanding which would impose an "unfair burden"
on the Trusts as a result of the Merger. First Union has undertaken to pay all
costs and expenses of the Meeting.
Required vote. Shareholders of each Fund will vote separately on the New
Agreement with respect to that Fund. In addition, shareholders of the Municipal
Income and Income and Growth Portfolios will vote separately as to the new sub-
advisory agreements proposed in respect of those Portfolios. As provided in the
1940 Act, approval of the New Agreement (or a sub-advisory agreement) as to a
Fund requires the affirmative vote of a "majority of the outstanding voting
securities" of the Fund, which for this purpose means the affirmative vote of
the lesser of (i) more than 50% of the outstanding shares of the Fund and (ii)
67% or more of the shares of the Fund present at the Meeting if more than 50%
of the outstanding shares are present at the Meeting in person or by proxy. If
the shareholders of a Fund do not approve the New Agreement (or a sub-advisory
agreement), the Trustees will take such further action with respect to that
Fund as they may deem to be in the interests of the Fund.
The Trustees unanimously recommend that shareholders of each of the Funds
vote to approve the New Agreement and any applicable sub-advisory agreement.
II. APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENTS -- ACQUISITION OF ADDITIONAL
INTEREST IN MENTOR GROUP BY EVEREN SECURITIES HOLDINGS, INC. (ALL FUNDS
OTHER THAN MENTOR PERPETUAL GLOBAL PORTFOLIO AND MENTOR PERPETUAL
INTERNATIONAL PORTFOLIO)
EVEREN Securities Holdings, Inc. ("EVEREN") may in the future acquire an
additional interest in Mentor Group. For the reasons stated below, any such
acquisition might be seen to result in a change of control of Mentor Group, and
so to result in the termination of the investment advisory and sub-advisory
agreements to which Mentor Advisors is a party. The Trustees are recommending
that shareholders approve new investment advisory and sub-advisory agreements
at the Meeting, to take effect upon the occurrence of any such change of
control of Mentor Group.
Possible change of control; need for shareholder approval. Wheat First
owns 79.8% of the outstanding interest in Mentor Group. EVEREN owns the
remaining 20.2%. EVEREN acquired its interest in Mentor Group in connection
with Mentor Group's organization in 1996. Wheat First also owns a 1% interest
in Mentor Advisors, which, together with Wheat First's 79.8% interest in Mentor
Group, gives Wheat First an 80% economic interest in Mentor Advisors.
By agreement among Mentor Group, Wheat First, and EVEREN, EVEREN has the
right to acquire an additional interest in Mentor Group. (That transaction is
referred to herein as the "Final Acquisition.") The amount of that interest
will be calculated based on the amount of Mentor Group's revenues attributable
to EVEREN during a period immediately prior to the Final Acquisition. The
amount of EVEREN's interest in Mentor Group may not, however, exceed 50%. The
effective date of the Final Acquisition will be not later than March 31, 1999.
It is also possible, in light of the continuing relationship between Wheat
First and EVEREN and EVEREN's success to date in the distribution of the Funds'
shares, that EVEREN will, by agreement with Wheat First (or its successor),
receive an additional interest in Mentor Group prior to the Final Acquisition.
(In any event, EVEREN's interest in Mentor Group would not exceed 50%.)
If, as a result of any acquisition of additional interest in Mentor Group,
EVEREN's interest in Mentor Group exceeds 25%, the acquisition may be deemed to
result in a "change of control" of Mentor Group, and, as a result, of Mentor
Advisors. Any such change of control would, in turn, result in an "assignment,"
as defined in the 1940 Act, of the investment advisory and sub-advisory
agreements in effect at the time to which Mentor Advisors is a party, resulting
in their automatic termination.
The Boards of Trustees are recommending that shareholders of the Funds for
which Mentor Advisors serves as investment adviser approve new investment
advisory agreements between the Funds and Mentor Advisors. The Boards of
Trustees are also recommending that shareholders of the Income and Growth
Portfolio and Municipal Income Portfolio approve new sub-advisory agreements
with Wellington Management and Van Kampen, respectively. Each of the agreements
would be implemented immediately following any such change of control.
Each of the new agreements would be substantially identical to the
existing agreements and to the New Agreements, except as to their effective and
termination dates.
13
<PAGE>
Management of Mentor Group. Mentor Group is a limited liability company
organized under the laws of the Commonwealth of Virginia. It is managed by a
Management Committee consisting of members nominated by Wheat First and members
nominated by EVEREN. Under the Operating Agreement pursuant to which Mentor
Group was organized, Wheat First currently is entitled to nominate a majority
of the members of the Management Committee, and, so long as the amount of
EVEREN's interest in Mentor Group is less than the amount of Wheat First's
interest, Wheat First should continue to have that right.
The Operating Agreement provides that the Management Committee acts by the
vote of a majority of the members of the Committee. It also provides that, at
any time when EVEREN owns 40% or more of the outstanding interest in Mentor
Group, the Management Committee may only vote to admit any additional member to
Mentor Group, or to merge or consolidate with any corporation or other entity,
or sell, lease, transfer, distribute, or otherwise dispose of all or
substantially all of its assets, with the vote of a majority of the members of
the Committee nominated by Wheat and the vote of a majority of the members of
the Committee nominated by EVEREN.
The effect of a possible change of control of Mentor Group. At any time
when EVEREN's interest in Mentor Group is less than the amount of Wheat First's
interest, EVEREN should be entitled to nominate only a minority of the members
of the Management Committee; Wheat First's nominees to the Management Committee
would continue to constitute a majority of its members. Accordingly, Mentor
Advisors has advised the Boards of Trustees that it does not expect that
EVEREN's acquisition of any additional interest in Mentor Group would result in
any material change in the management or control of Mentor Group. Mentor
Advisors has also advised the Boards of Trustees that EVEREN's owning
additional interest in Mentor Group would not reduce the quality of services
now provided to any of the Funds, or have any effect on Mentor Advisors'
ability to fulfill its obligations to the Funds under the investment advisory
agreements. In any event, no new investment advisory or sub-advisory agreement
would be implemented unless the Board of Trustees of the Trust in question,
including a majority of the disinterested Trustees, had approved the agreement,
under the specific facts and circumstances then prevailing.
Shareholders are not being asked to vote on any investment advisory or
sub-advisory agreement to be implemented following an acquisition by EVEREN of
an interest in Mentor Group if, after the acquisition, EVEREN would be
permitted to nominate a number of members of the Management Committee equal to
the number Wheat First is permitted to nominate.
EVEREN Securities Holdings, Inc. EVEREN is a wholly owned subsidiary of
EVEREN Capital Corporation. EVEREN Capital Corporation, through its
subsidiaries, is a full-service securities brokerage firm that provides a broad
range of investment services and products primarily to individuals and to
institutions, corporations, and municipalities. It also engages in capital
markets, asset management, and clearing activities. At September 30, 1997,
EVEREN Capital Corporation, through its subsidiaries, held over $40 billion of
customer assets in approximately 500,000 client accounts.
EVEREN Capital Corporation is a public company whose common stock is
traded on the New York Stock Exchange. The EVEREN Capital Corporation 401(k)
and Employee Stock Ownership Plan ("KSOP") owns approximately 62% of EVEREN
Capital Corporation. EVEREN Capital Corporation's employees and directors,
through the KSOP and otherwise, own in excess of 70% of the outstanding common
stock of EVEREN Capital Corporation.
Required vote. Shareholders of each Fund will vote separately on the new
investment advisory agreement with respect to that Fund. In addition,
shareholders of the Municipal Income and Income and Growth Portfolios will vote
separately as to the new sub-advisory agreements proposed in respect of those
Portfolios. As provided in the 1940 Act, approval of the new investment
advisory agreement (or a sub-advisory agreement) as to a Fund requires the
affirmative vote of a "majority of the outstanding voting securities" of the
Fund, which for this purpose means the affirmative vote of the lesser of (i)
more than 50% of the outstanding shares of the Fund and (ii) 67% or more of the
shares of the Fund present at the Meeting if more than 50% of the outstanding
shares are present at the Meeting in person or by proxy. If the shareholders of
a Fund do not approve the new investment advisory agreement (or a sub-advisory
agreement), the Trustees will take such further action with respect to that
Fund as they may deem to be in the interests of the Fund.
The Trustees unanimously recommend that shareholders of each of the Funds
vote to approve the new investment advisory agreement and any applicable
sub-advisory agreement.
III. ELECTION OF TRUSTEES
The Boards of Trustees of the Trusts have fixed the number of Trustees of
each of the Trusts at ten, and are proposing that shareholders elect Messrs.
Daniel J. Ludeman, Troy A. Peery, Jr., Arnold H. Dreyfuss, Thomas F. Keller,
Peter J.
14
<PAGE>
Quinn, Jr., Louis W. Moelchert, Jr., Arch T. Allen, III, Weston E. Edwards,
Jerry R. Barrentine, and J. Garnett Nelson to serve as Trustees of the Trusts.
Messrs. Ludeman, Peery, Dreyfuss, Keller, and Moelchert currently serve as
Trustees of each of the Trusts, and Mr. Quinn currently serves as Trustee of
Mentor Funds and Cash Resource Trust. Information as to each of the nominees is
provided below.
Messrs. Ludeman and Quinn are "interested persons" of the Trusts, and of
Mentor Advisors and Mentor Perpetual, the Trusts' investment advisors, by
virtue of their positions with each of those firms and their affiliates.
Trustees and Officers
The following table presents information about each of the nominees for
election as Trustee, and about each of the executive officers of the Trusts.
Each nominee for Trustee has agreed to serve if elected. However, if any of
them declines or becomes unavailable for election, the proxy confers
discretionary power on the persons named therein to vote in favor of substitute
nominees. Each person named as an officer has been elected to the indicated
office by the Trustees and serves at the pleasure of the Trustees. Each
Trustee's and officer's principal occupation for the past five years is listed;
similar prior positions within the same company may be omitted.
Trustees.
*DANIEL J. LUDEMAN, Chairman and Trustee
901 East Byrd Street, Richmond, Virginia 23219.
Mr. Ludeman, 40, is Chairman and Chief Executive Officer of Mentor Group.
He is also Chairman of Mentor Advisors and Director of Mentor Perpetual,
the Trusts' investment advisors. In addition, he is Managing Director of
Wheat First, and Director of Wheat, First Securities, Inc., Mentor Income
Fund, Inc., and America's Utility Fund, Inc. He has been a Trustee of each
of the Trusts since its organization.
TROY A. PEERY, JR., Trustee
12560 West Creek Parkway, Richmond, Virginia 23238
Mr. Peery, 51, is President of Heilig-Meyers Company, a retail furniture
company. He is also Director of S&K Famous Brands, Inc. and Open Plan
Systems, Inc. He has been a Trustee of each of the Trusts since its
organization.
+ARNOLD H. DREYFUSS, Trustee
901 Morefield Park Drive, Richmond, Virginia 23236
Mr. Dreyfuss, 69, is Chairman of Eskimo Pie Corporation. He is also
Director of Old America Stores. He was formerly Chairman and Chief
Executive Officer of Hamilton Beach/Proctor-Silex, Inc. He has been a
Trustee of each of the Trusts since its organization.
THOMAS F. KELLER, Trustee
Fuqua School of Business, Duke University, Box 90120, Durham, North Carolina
27708-0120
Mr. Keller, 66, is R. J. Reynolds Industries Professor of Business
Administration and Former Dean of Fuqua School of Business, Duke
University. Mr. Keller is also Director of LADD Furniture, Inc., Wendy's
International, Inc., American Business Products, Inc., Dimon, Inc., and
Biogen, Inc. Mr. Keller is also Director of Nations Balanced Target
Maturity Fund, Inc., Nations Government Income Term Trust 2003, Inc.,
Nations Government Income Term Trust 2004, Inc., Hatteras Income
Securities, Inc., Nations Institutional Reserves, Nations Fund Trust,
Nations Fund, Inc., Nations Fund Portfolios, Inc., and Nations LifeGoal
Funds, Inc. He has been a Trustee of each of the Trusts since its
organization.
*PETER J. QUINN, JR., Trustee
901 East Byrd Street, Richmond, Virginia 23219
Mr. Quinn, 37, is President of Mentor Distributors. He is also Managing
Director of Mentor Group and Wheat First. In addition, he is Managing
Director of Mentor Advisors and Director of Mentor Perpetual, the Trusts'
investment advisors. He has been a Trustee of Mentor Funds and Cash
Resource Trust since their organization.
+LOUIS W. MOELCHERT, JR., Trustee
University of Richmond, Maryland Hall, Richmond, Virginia 23173
Mr. Moelchert, 56, is Vice President for Investments at the University of
Richmond. He also serves as Trustee of The Common Fund, Director of Venture
Lending & Leasing II, Inc. (a closed-end investment company), and Director
of America's Utility Fund, Inc. He has been a Trustee of each of the Trusts
since its organization.
ARCH T. ALLEN, III
1214 Cowper Drive, Raleigh, North Carolina 27608
Mr. Allen, 57, is an attorney at law in Raleigh, North Carolina. He was
Director of America's Utility Fund, Inc. until October 1997. Formerly, he
was Vice Chancellor for Development and University Relations of the
University of North Carolina at Chapel Hill.
15
<PAGE>
WESTON E. EDWARDS
361 Forest Avenue, Suite 205, Laguna Beach, California 92651
Mr. Edwards, 63, is President of Weston Edwards & Associates, a business
broker and consulting firm. He is also Director of Mentor Income Fund,
Inc., and Founder and Chairman of The Housing Roundtable. He was formerly
President of Smart Mortgage Access, Inc.
JERRY R. BARRENTINE
17716 River Ford Drive, Davidson, North Carolina 28036
Mr. Barrentine, 63, is President of J.R. Barrentine & Associates, a
mortgage banking consulting firm. He is also Director of Mentor Income
Fund, Inc. Formerly, he was Executive Vice President and Chief Financial
Officer of Barclays American/Mortgage Director Corporation, and Managing
Partner of Barrentine Lott & Associates, Inc., financial services
consultants.
J. GARNETT NELSON
101 Shockoe Slip, Richmond, Virginia 23219
Mr. Nelson, 58, is Consultant, Mid-Atlantic Holdings, LLC and Director of
Mentor Income Fund, Inc. He is also Director of GE Investment Funds, Inc.
and Lawyers Title Corporation, and is a Member of the Investment Advisory
Committee, Virginia Retirement System. He was formerly Senior Vice
President of The Life Insurance Company of Virginia.
Officers.
PAUL F. COSTELLO, President
901 East Byrd Street, Richmond, Virginia 23219
Mr. Costello, 37, is Managing Director of Wheat First and Mentor Group. He
is also President of America's Utility Fund, Inc. and Mentor Income Fund,
Inc. In addition, he serves as Managing Director of Mentor Advisors and
Director of Mentor Perpetual, the Trusts' investment advisors. He has
served as President of Mentor Funds since 1995 and of Mentor Institutional
Trust and Cash Resource Trust since their organization.
TERRY L. PERKINS, Treasurer
901 East Byrd Street, Richmond, Virginia 23219
Mr. Perkins, 50, is Senior Vice President of Mentor Group. He is also
Treasurer and Senior Vice President of America's Utility Fund, Inc. and
Treasurer of Mentor Income Fund, Inc. He was formerly Treasurer and
Comptroller of Ryland Capital Management, Inc. He has served as Treasurer
of Mentor Funds and Mentor Institutional Trust since 1994 and of Cash
Resource Trust since 1993.
JOHN M. IVAN, Secretary/Clerk
c/o Mentor Investment Group, 901 East Byrd Street, Richmond, Virginia 23219
Mr. Ivan, 41, is Managing Director, Director of Compliance, and Assistant
General Counsel of Wheat, First Securities, Inc. He is also Managing
Director and Assistant Secretary of Wheat First, and Secretary of America's
Utility Fund, Inc. and Mentor Income Fund, Inc. He has served as Secretary
or Clerk, as the case may be, of Mentor Funds since 1995 and of Mentor
Institutional Trust and Cash Resource Trust since their organization.
- ---------
* "Interested Person" of the Trusts, Mentor Advisors, and Mentor Perpetual,
as that term is defined in Section 2(a)(19) of the 1940 Act.
+ Member of the Audit Committee of each Trust.
Certain information regarding Trustees and officers. The term of office of
each person elected as a Trustee will be until he or she retires, resigns, is
removed, or dies (or in the case of Mentor Institutional Trust and Cash
Resource Trust until the next meeting of shareholders called for the purpose of
electing Trustees, and until his or her successor is elected and qualified).
The Trusts' Agreements and Declarations of Trust and By-laws do not provide for
the annual election of Trustees. However, in accordance with the 1940 Act, (i)
a Trust will hold a shareholders' meeting for the election of Trustees at such
time as less than a majority of the Trustees holding office has been elected by
shareholders and (ii) if, as a result of a vacancy among the Trustees, fewer
than two-thirds of the Trustees holding office have been elected by the
shareholders, that vacancy may only be filled by a vote of the shareholders. In
addition, Trustees of a Trust may be removed from office by vote of the holders
of two-thirds of the outstanding shares of the Trust (and, in the case of
Mentor Funds, by vote of at least two-thirds of the Trustees then in office).
Each of the Trusts has a standing Audit Committee. The Trusts do not have
standing compensation or nominating committees.
16
<PAGE>
During each Trust's most recently completed fiscal year, the Trustees met
four times. The Audit Committee met twice. Under a fee schedule that took
effect as of October 31, 1997, each Trustee who is not an officer or employee
of Mentor Advisors or Mentor Perpetual, the Trusts' investment advisors, or
their affiliates, receives an annual fee of $20,000 from the Mentor Family of
Funds and an additional fee of $3,000 for each meeting attended. A portion of
the annual fee will be paid by each Fund based on its net assets relative to
the other Funds comprising the Mentor Family of Funds. Members of the Audit
Committee receive a fee of $1,000 for each meeting of the Audit Committee they
attend. The Chairman of the Audit Committee receives an additional fee of
$2,000 per year. The Trusts do not pay any compensation to their officers or to
Trustees who are affiliated with Mentor Advisors or Mentor Perpetual.
The table below sets forth the compensation received by the Trustees
during the most recently completed fiscal years for which figures are
available.
COMPENSATION TABLE
for the most recently completed fiscal year for which figures are available.
<TABLE>
<CAPTION>
(2) (3)
Aggregate Total Compensation from
(1) Compensation from Trusts and Fund Complex
Name of Trustee Trusts Paid to Trustees
- ------------------------------------ ------------------- ------------------------
<S> <C> <C>
Daniel J. Ludeman -- --
Troy A. Peery, Jr. $11,175+ $ 11,175
Arnold H. Dreyfuss $12,200+ $ 12,200
Thomas F. Keller $12,200+ $ 12,200
Peter J. Quinn, Jr. -- --
Louis W. Moelchert $12,200+ $ 18,450*
Stanley F. Pauley $12,200+ $ 12,200
Weston E. Edwards -- $ 28,000*
Jerry R. Barrentine -- $ 20,000*
J. Garnett Nelson -- $ 20,000*
</TABLE>
- ---------
+ The compensation figures listed in column (2) reflect the fees paid in
accordance with a fee schedule in effect through October 31, 1997. Under
that schedule, Trustees of Mentor Funds and Cash Resource Trust received an
annual fee of $4,000 from each Trust, and an additional fee of $500 from
each Trust for each meeting attended; Trustees of Mentor Institutional Trust
received from the Trust an annual fee of $100 and an additional fee of $25
for each meeting attended. Fees payable under the current schedule will be
higher.
* The Total Compensation listed in column (3) for Mr. Moelchert includes
compensation for services as Director of America's Utility Fund, Inc. The
Total Compensation listed in column (3) for Messrs. Edwards, Barrentine, and
Nelson includes compensation for services as Director of Mentor Income Fund,
Inc. The Trusts, America's Utility Fund, Inc., and Mentor Income Fund, Inc.
are considered part of the same "Fund Complex" for this purpose.
The Agreements and Declarations of Trust and By-laws of the Trusts provide
that each Trust will indemnify its Trustees and officers against liabilities
and expenses incurred in connection with litigation in which they may be
involved because of their offices with the Trusts, except if it is determined
in the manner specified in the Agreements and Declarations of Trust and By-laws
that such indemnification would relieve any officer or Trustee of any liability
to a Trust or its shareholders by reason of willful misfeasance, bad faith,
gross negligence, or reckless disregard of his or her duties. The Trusts, at
their expense, provide liability insurance for the benefit of their Trustees
and officers.
17
<PAGE>
The table below shows the shares of the Trusts held on or about November
7, 1997 by (i) each nominee and current Trustee of the Trusts and the President
of each Trust and (ii) all Trustees and the President of the Trusts as a group.
<TABLE>
<CAPTION>
Ownership of
Shares of the Percent
Name Trusts of Shares
- -------------------------------------------------------- --------------- ----------
<S> <C> <C>
Daniel J. Ludeman ........................ 16,278.131(1) *
Troy A. Peery, Jr. ........................ -- --
Arnold H. Dreyfuss ........................ -- --
Thomas F. Keller ........................... -- --
Peter J. Quinn, Jr. ........................ 1,151.375(2) *
Louis W. Moelchert, Jr. .................. -- --
Stanley F. Pauley ........................... -- --
Arch T. Allen, III ........................ -- --
Weston E. Edwards ........................ -- --
Jerry R. Barrentine ........................ -- --
J. Garnett Nelson ........................ -- --
Paul F. Costello ........................... 14,742.837(3) *
All Trustees and the President as a group 32,172.343(4) *
</TABLE>
- ---------
* Less than 1% of the outstanding shares of the Fund and the Trust in
question.
(1) Includes 2,604.866 shares of the Strategy Portfolio; 1,338.311 shares of
the Growth Portfolio; 440.135 shares of the Quality Income Portfolio;
379.242 shares of the Municipal Income Portfolio; 402.483 shares of the
Income and Growth Portfolio; 964.711 shares of the Capital Growth
Portfolio; 269.250 shares of the Perpetual Global Portfolio; 23.601 shares
of the Balanced Portfolio; 160.772 shares of the Perpetual International
Portfolio; and 9,694.76 shares of Cash Resource U.S. Government Money
Market Fund.
(2) Includes 232.742 shares of the Growth Portfolio; 108.739 shares of the
Capital Growth Portfolio; 91.534 shares of the Perpetual Global Portfolio;
and 718.36 shares of Cash Resource U.S. Government Money Market Fund.
(3) Includes 0.673 shares of the Strategy Portfolio; 137.916 shares of the
Growth Portfolio; 0.782 shares of the Quality Income Portfolio; 0.657
shares of the Municipal Income Portfolio; 37.539 shares of the Income and
Growth Portfolio; 84.865 shares of the Capital Growth Portfolio; 0.529
shares of the Perpetual Global Portfolio; 0.814 shares of the Short-Duration
Income Portfolio; 148.462 shares of the Perpetual International Portfolio;
and 14,330.600 shares of the Cash Resource Money Market Fund.
(4) Includes 2,605.539 shares of the Strategy Portfolio; 1,708.969 shares of
the Growth Portfolio; 440.917 shares of the Quality Income Portfolio;
379.899 shares of the Municipal Income Portfolio; 440.022 shares of the
Income and Growth Portfolio; 1,158.315 shares of the Capital Growth
Portfolio; 361.313 shares of the Perpetual Global Portfolio; 0.814 shares
of the Short-Duration Income Portfolio; 23.601 shares of the Balanced
Portfolio; 309.234 shares of the Perpetual International Portfolio;
14,330.600 shares of Cash Resource Money Market Fund; and 10,413.12 shares
of Cash Resource U.S. Government Money Market Fund.
Required vote. The candidates receiving the affirmative vote of a
plurality of the votes cast by shareholders of a Trust at the Meeting, if a
quorum is present, shall be elected Trustees of that Trust. Shares of each
Trust shall vote as a single class for Trustees.
The Trustees unanimously recommend election of each nominee for Trustee
listed above.
IV. MISCELLANEOUS
Ownership of Shares. As of the Record Date, the number of shares
outstanding of each Fund was as follows: Mentor Growth Portfolio --
30,079,137.189; Mentor Capital Growth Portfolio -- 9,364,066.432; Mentor
Strategy Portfolio -- 22,392,204.364; Mentor Income and Growth Portfolio --
9,634,997.680; Mentor Perpetual Global Portfolio -- 6,116,436.829;
18
<PAGE>
Mentor Quality Income Portfolio -- 11,173,059.285, Mentor Municipal Income
Portfolio -- 5,130,028.131; Mentor Short-Duration Income Portfolio --
5,674,686.778, Mentor Balanced Portfolio -- 230,078.660; Mentor Institutional
Money Market Portfolio -- 151; Mentor Institutional U.S. Government Money Market
Portfolio -- 74,229,604.930; Mentor U.S. Government Cash Management Portfolio --
2,604,830,166.530; Mentor Intermediate Duration Portfolio -- 0; Mentor
Fixed-Income Portfolio -- 9,659,281.996; Mentor Perpetual International
Portfolio -- 5,408,734.575; SNAP Fund -- 970,071,800.380; Cash Resource Money
Market Fund -- 2,845,303,458.530; Cash Resource U.S. Government Money Market
Fund -- 2,631,889,354.690; Cash Resource Tax-Exempt Money Market Fund --
670,609,739.030; Cash Resource California Tax-Exempt Money Market Fund --
102,448,188.780; and Cash Resource New York Tax-Exempt Money Market Fund --
11,819,351.520. Each share is entitled to one vote, with fractional shares
voting proportionally.
The following persons are known to the Trusts to have owned of record or
beneficially (within the meaning of Rule 13d-3 under the 1934 Act), as of the
dates shown, 5% or more of the outstanding shares of the following Funds.
<TABLE>
<CAPTION>
Number of Percentage of Approximate Percentage
Shareholder Shares Fund Shares of Trust Shares
- ------------------------------------------------- --------------- --------------- -----------------------
<S> <C> <C> <C>
Mentor Growth Portfolio
(as of November 17, 1997)
Bank of New York TTEE 1,723,485.26 5.10% 1%
Wheat First Butcher Singer 401K
Attn: Greg Tyrka
P.O. Box 11010
New York, NY 10286-1010
Mentor Short Duration Portfolio
(as of November 17, 1997)
EVEREN Clearing Corp. 328,956.77 5.73% *
A/C 7975-7628
David A. Vandervelde
111 East Kilbourn Avenue
Milwaukee, WI 53202-6611
Mentor Balanced Portfolio
(as of November 5, 1997)
WFBS Foundation 221,009.70 96% *
Attn: Bill Fields
P.O. Box 1357
Richmond, VA 23219
Mentor Institutional U.S. Government Money Market Portfolio
(as of November 12, 1997)
Chase Manhattan Bank TTEE 44,826,229.08 59.11% 26%
For EVEREN Capital Corp. 401(k) & ESOP Plan
Attn: Sandra Madrid
770 Broadway, 10th Floor
New York, NY 10003-9527
Valley Childrens Hospital 5,893,605.36 7.77% 3.3%
Restricted Building Fund
Attn: Darrell Fischer
1990 E. Gettysburg Avenue
Fresno, Ca 93726-0244
Loren Dooley & Ken Waterman TTEES 4,709,810.11 6.21% 2.7%
Telenetworks ESOP PL DTD 1/1/93
2455 Bennett Vallue Rd., STE 301B
Santa Rosa, CA 95404-5654
Vintage Properties LP 3,901,168.07 5.14% 2.2%
Special Account
3366 Overland Road
Boise, ID 83705-3048
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Number of Percentage of Approximate Percentage
Shareholder Shares Fund Shares of Trust Shares
- ---------------------------------------- ---------------- --------------- ------------------------
<S> <C> <C> <C>
Mentor U.S. Government Cash Management Portfolio
(as of November 12, 1997)
Clark County Nevada 155,052,302.85 60.12% 4.3%
P.O. Box 1357
Richmond, VA 23218-1357
Mentor Fixed Income Portfolio
(as of November 12, 1997)
Wachovia Bank N.A. 413,269.20 8.86% *
Heilig-Meyers PSP A/C 02-46976-60
Attn: Sherrie Prevette-Trust OPS
Settlement Section M31051
P.O. Box 3073
Winston Salem, NC 27150
Reliance Trust Company 407,867.04 8.72% *
FBO Maguire Woods Battle & Boot
Target Benefit Pension Plan
3384 Peachtree Rd., NE STE 900
Atlanta, GA 30326-1106
Mentor Perpetual International Portfolio
(as of November 17, 1997)
Crestar Bank TTEE 401,632.65 7.98% *
Carpenter Co. PSP
UA DTD 6/30/74 A/C 10741001
Attn: Barbara Crossman
P.O. Box 26665
Richmond, VA 23261-6665
Wachovia Bank & Trust Co. TTEE 381,142.86 7.57% *
Heilig-Meyers PSP A/C 02-46976-60
Attn: Sherrie Prevette - Trust OPS
Settlement Section M31051
P.O. Box 3075
Winston Salem, NC 27102-3075
SNAP Fund
(as of October 22, 1997)
Arlington County 56,370,529.70 5.52% 1.6%
c/o Frank O'Leary
31 Court House Plaza
Arlington, VA 2216-0530
City of Chesapeake 140,804,652.27 13.78% 3.9%
c/o Barbara Carraway
P.O. Box 15245
Chesapeake, VA 23320
City of Suffolk 53,486,732.18 5.23% 1.5%
c/o Ronald Williams
P.O. Box 1583
441 Market Street, Room 108
Suffolk, VA 23439
Commonwealth of Virginia 263,323,487.34 25.77% 7.3%
c/o Tracey Edwards
Department of Treasury
P.O. Box 1879
Richmond, VA 23218
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Number of Percentage of Approximate Percentage
Shareholder Shares Fund Shares of Trust Shares
- ------------------------ ------------ --------------- ------------------------
<S> <C> <C> <C>
Cash Resource Trust New York Tax-Exempt Money Market Fund
(as of November 14, 1997)
Dr. Gary Baum 698,935.68 5.91% *
1430 Stevenson Rd.
Hewlett, NY 11557
Mrs. Patricia May 563,555.68 5% *
27 Wincanton Drive
Fairport, NY 14450
</TABLE>
- ---------
* Less than 1%.
Other business. The Trustees know of no other business to be brought
before the Meeting. However, if any other matters properly come before the
Meeting, it is the Trustees' intention that proxies which do not contain
specific restrictions to the contrary will be voted on such matters in
accordance with the judgment of the persons named in the enclosed form of
proxy.
Solicitation of proxies. The costs of solicitation of proxies will be
borne by First Union. Solicitation of proxies by personal interview, mail,
telephone, and telegraph may be made by officers and Trustees of the Trusts
(who will receive no compensation therefor in addition to their regular
salaries). In addition, the firm of D.F. King & Co., Inc., has been retained by
Mentor Group to assist in the solicitation of proxies at a cost to First Union
which is not expected to exceed $6,000.
The Trusts may also arrange to have votes recorded by telephone. The
telephone voting procedure is designed to authenticate shareholders'
identities, to allow shareholders to authorize the voting of their shares in
accordance with their instructions, and to confirm that their instructions have
been properly recorded. The Trusts have been advised by counsel that these
procedures are consistent with the requirements of applicable law. If these
procedures were subject to a successful legal challenge, such votes would not
be counted at the Meeting. The Trusts are unaware of any such challenge at this
time. Shareholders would be called at the phone number a Trust (or a
shareholder's financial institution) has in its records for their accounts, and
would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to authorize
proxies to vote their shares at the Meeting in accordance with their
instructions. To ensure that the shareholders' instructions have been recorded
correctly, they will also receive a confirmation of their instructions in the
mail. A special toll-free number will be available in case the information
contained in the confirmation is incorrect.
Quorum. Thirty percent of the shares entitled to vote on a matter shall
constitute a quorum for the transaction of business on that matter at a meeting
(except that in the case of Mentor Funds any number greater than 50% shall
constitute a quorum). However, approval of any new agreement will require the
presence of a greater percentage of a Fund's shares at the Meeting in person or
by proxy.
Adjournment. In the event that sufficient votes in favor of any of the
proposals set forth in the Notice of the Meeting are not received by the time
scheduled for the Meeting, the persons named as proxies may propose one or more
adjournments of the Meeting with respect to those proposals for a period or
periods of not more than 60 days in the aggregate to permit further
solicitation of proxies with respect to those proposals. In addition, if, in
the judgment of the persons named as proxies, subsequent developments make it
advisable to defer action on one or more proposals, but not all proposals, the
persons named as proxies may propose one or more adjournments of the Meeting
with respect to those proposals for a reasonable time in order to defer action
on such proposals as they deem advisable. Any such adjournments will require
the affirmative vote of a majority of the votes cast on the question in person
or by proxy at the session of the Meeting to be adjourned. The persons named as
proxies will vote in favor of such adjournment with respect to a proposal those
proxies which they are entitled to vote in favor of the proposal. They will
vote against any such adjournment those proxies which they have been instructed
to vote against such proposal, and they will vote to abstain any such proxies
which they are required to abstain from voting on such proposal. The costs of
any such additional solicitation and of any adjourned session will be borne by
First Union. Any proposals for which sufficient favorable votes have been
received by the time of the Meeting may be acted upon and considered final
regardless of whether the Meeting is adjourned to permit additional
solicitation with respect to any other proposal.
21
<PAGE>
Tabulation of votes. Votes cast by proxy or in person at the Meeting will
be counted by one or more persons appointed by the Trusts to act as tellers for
the Meeting. The tellers will count the total number of votes cast "for"
approval of each proposal for purposes of determining whether sufficient
affirmative votes have been cast. The tellers will count shares represented by
proxies that withhold authority to vote or that reflect abstentions or "broker
non-votes" (i.e., shares held by brokers or nominees as to which (i)
instructions have not been received from the beneficial owners or persons
entitled to vote and (ii) the broker or nominee does not have the discretionary
voting power on a particular matter) as shares that are present and entitled to
vote on the matter for purposes of determining the presence of a quorum.
Abstentions and broker non-votes will have the effect of negative votes on the
proposal to approve the New Agreements.
Date for receipt of shareholders' proposals for subsequent meetings of
shareholders. The Trusts' Agreements and Declarations of Trust do not provide
for annual meetings of shareholders, and the Trusts do not currently intend to
hold such a meeting in 1998. Shareholder proposals for inclusion in a Trust's
proxy statement for any subsequent meeting must be received by the Trust a
reasonable period of time prior to any such meeting.
22
<PAGE>
Exhibit A-1
[Mentor Capital Growth Portfolio, Mentor Quality Income Portfolio, Mentor
Municipal Income Portfolio, Mentor Income and Growth Portfolio]
MENTOR FUNDS
MANAGEMENT AGREEMENT
Mentor Investment Advisors, LLC
901 East Byrd Street
Richmond, Virginia 23219
Dear Sirs:
Mentor Funds (the "Trust"), a Massachusetts business trust, confirms its
agreement with Mentor Investment Advisors, LLC (the "Adviser") with respect to
the Adviser's serving as investment adviser of the Trust as set forth below.
Section 1. Investment Description; Appointment
The Trust desires to employ its capital by investing and reinvesting in
investments of the kind and in accordance with the investment objectives,
policies and limitations specified in the prospectus (the "Prospectus") and in
the statement of additional information (the "Statement of Additional
Information") filed with the Securities and Exchange Commission (the "SEC") as
part of the Trust's Registration Statement on Form N-1A, as amended from time
to time (the "Registration Statement"). Copies of the Trust's Prospectus and
the Statement of Additional Information have been or will be submitted to the
Adviser. The Trust desires to employ and hereby appoints the Adviser to act as
its investment manager. The Adviser accepts the appointment and agrees to
furnish the services described in Section 2 of this Agreement for the
compensation set forth in Section 6 of, and Appendix I to, this Agreement.
Section 2. Services as Adviser; Appointment of Sub-Advisers
(a) Subject to the supervision and direction of the Trust's Board of
Trustees, the Adviser shall provide such services reasonably requested by the
Trust, including but not limited to the following:
(i) monitoring and supervising the services provided to the Trust by its
administrator (the "Administrator") pursuant to a separate agreement
between the Trust and the Administrator, a copy of which has been or will
be submitted to the Adviser; and
(ii) providing to the Trust investment management evaluation services
principally by performing initial due diligence on prospective investment
advisers ("Sub-Advisers") for each existing series of its capital stock and
any series or class which the Trust may offer from time to time in the
future (each, a "Portfolio"), thereafter monitoring and supervising
Sub-Adviser performance through quantitative and qualitative analysis as
well as periodic in-person, telephonic and written consultations with
Sub-Advisers and considering and approving investments and use of certain
investment strategies when the Trust requests review and consideration of
such matters by the Adviser. The Adviser will be responsible for
communicating performance expectations and evaluations to Sub-Advisers and
ultimately recommending to the Board of Trustees of the Trust whether
Sub-Advisers' contracts should be renewed, modified or terminated. The
Adviser will provide written reports to the Board of Trustees regarding the
results of its evaluation and monitoring functions; and
(iii) conducting all operations of the Trust except those operations
contracted to the Sub-Advisers, custodian, transfer agent and
administrator.
(b) The Adviser will, at its own expense, maintain sufficient staff,
employ or retain sufficient personnel, and consult with any other persons that
it determines may be necessary or useful to the performance of its obligations
under this Agreement.
A1-1
<PAGE>
Section 3. Brokerage
The Adviser is authorized to permit the Sub-Advisers to execute portfolio
transactions for the Trust. In executing transactions and selecting brokers or
dealers, each Sub-Adviser will seek the best overall terms available. In
assessing the best overall terms available for any portfolio transaction, the
Sub-Adviser will consider all factors it deems relevant including, but not
limited to, the breadth of the market in the security or commodity interest,
the price of the security or commodity interest, the financial condition and
execution capability of the broker or dealer and the reasonableness of any
commission for the specific transaction and on a continuing basis. In selecting
brokers or dealers to execute a particular transaction and in evaluating the
best overall terms available, the Adviser shall have the right to request of
the Sub-Advisers in writing that transactions giving rise to brokerage
commissions shall be executed by brokers and dealers that provide brokerage and
research services (as those terms are defined in Section 28(e) of the
Securities Exchange Act of 1934) to the Trust and/or other accounts over which
the Sub-Adviser or an affiliate exercises investment discretion. In addition,
subject to the above and the applicable Rules of Fair Practice of the National
Association of Securities Dealers, Inc., the Trust shall have the right to
request that such transactions be executed by brokers and dealers by or through
whom sales of shares of the Trust are made.
Section 4. Information Provided to the Trust
The Adviser will keep the Trust informed of developments materially
affecting the Sub-Advisers and the Portfolios and, in addition to providing the
Trust with whatever statistical or other information the Trust may reasonably
request with respect to its investments, the Adviser will, on its own
initiative, furnish the Trust from time to time with whatever information the
Adviser believes is appropriate for this purpose.
Section 5. Standard of Care
The Adviser shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Trust in connection with the matters to
which this Agreement relates, provided that nothing in this Agreement shall be
deemed to protect or purport to protect the Adviser against any liability to
the Trust or to holders of the Trust's shares of beneficial interest to which
the Adviser would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or by
reason of the Adviser's reckless disregard of its obligations and duties under
this Agreement.
Section 6. Compensation
(a) In consideration of services rendered pursuant to this Agreement, each
of the Trust's Portfolios will accrue daily and pay monthly a fee at the annual
rate applied to the value of that Portfolio's average daily net assets as set
forth in the schedule attached hereto as Appendix I. From time to time the
Adviser may agree to reimburse the Trust additional expenses or waive a portion
or all of its fee, in the sole discretion of the Adviser.
(b) The fee for the period from the commencement of investment operations
to the end of the month during which investment operations commence will be
prorated according to the proportion that such period bears to the full monthly
period, and will be payable that month. Upon any termination of this Agreement
before the end of a month, the fee for such part of that month shall be
prorated according to the proportion that such period bears to the full monthly
period and will be payable upon the date of termination of this Agreement.
(c) For the purpose of determining fees payable to the Adviser under this
Agreement, the value of the Trust's net assets will be computed in the manner
described in the Trust's current Prospectus and/or Statement of Additional
Information.
[To be included if this Agreement is implemented prior to its approval by the
Portfolios' shareholders --
(d) Any fees payable by the Portfolios under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolios shall be paid by the Trust, on behalf of the
Portfolios, into an interest-bearing escrow account with such unaffiliated
financial institution as the Trust and the Adviser may establish, to be
released to the Adviser only upon such initial approval of this Agreement, or,
if such approval shall not occur within the 60 days following consummation of
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation, to
the Portfolios.]
A1-2
<PAGE>
Section 7. Costs and Expenses
The Adviser will bear all expenses in connection with the performance of
its services under this Agreement, including the payment of salaries of all
officers and employees who are employed by it and the Trust as well as the
payment of the fees of the Sub-Advisers.
Section 8. Reimbursement to the Trust
From time to time the Adviser may agree to reimburse the Trust additional
expenses or waive a portion or all of its fee payable pursuant to Section 6, in
the sole discretion of the Adviser. If, in any fiscal year of the Trust, the
aggregate expenses of the Trust (including fees pursuant to this agreement and
the Trust's Administration Agreement with the Administrator, but excluding
interest, taxes, brokerage fees, and, if permitted by state securities
commissions, extraordinary expenses) exceed the expense limitation imposed by
any state having jurisdiction over the Trust, the Adviser will reimburse the
Trust to the extent required by state law in the same proportion as its fees
bear to the combined fees paid by the Trust for investment management and
administration. The Adviser's expense reimbursement obligation will be limited
to the amount of its fees received pursuant to this Agreement. Such expense
reimbursement, if any, will be estimated, reconciled and paid on a monthly
basis.
Section 9. Service to Other Companies or Accounts
The Trust understands that the Adviser and the Sub-Advisers may act as
investment managers or advisers to fiduciary and other managed accounts,
including other investment companies, and the Trust has no objection to the
Adviser's and Sub-Advisers' so acting, provided that whenever the Trust and one
or more other accounts advised by any Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed to be equitable to each account or company.
The Trust recognizes that in some cases this procedure may adversely affect the
size of the position obtainable for the Trust. In addition, the Trust
understands and acknowledges that the persons employed by the Adviser to assist
in the performance of the Adviser's duties under this Agreement will not devote
their full time to such service and nothing contained in this Agreement shall
be deemed to limit or restrict the right of the Adviser or any affiliate of the
Adviser to engage in and devote time and attention to other businesses or to
render services of any kind or nature.
Section 10. Term of Agreement
(a) This Agreement shall become effective upon its execution and shall
continue for an initial period of two years and thereafter shall continue
automatically for successive annual periods, provided such continuance is
specifically approved at least annually by (i) the Trust's Board of Trustees or
(ii) a vote of a "majority" of the Trust's outstanding voting securities (as
defined in the Investment Company Act of 1940, as amended (the "Act")),
provided that in either event the continuance is also approved by a majority of
Trustees who are not "interested persons" (as defined in the Act) of any party
to this Agreement, by vote cast in person at a meeting called for the purpose
of voting on such approval.
(b) This Agreement is terminable, without penalty, on 60 days' written
notice, by the Trust's Trustees or by vote of holders of a majority of the
Trust's outstanding voting securities, or upon 60 days' written notice, by the
Adviser.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the Act or in rules adopted under the Act).
Section 11. Amendments
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 whom enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved in
accordance with applicable law.
Section 12. Limitations of Liability of Trustees, Officers, Employees, Agents
and Shareholders of the Trust
The Adviser is expressly put on notice of the limitation of liability as
set forth in the Declaration of Trust and agrees that the obligations assumed
by the Trust pursuant to this Agreement shall be limited in any case to the
Trust and its assets and that the Adviser shall not seek satisfaction of any
such obligations from the shareholders of the Trust, the Trustees, officers,
employees or agents of the Trust, or any of them.
A1-3
<PAGE>
Section 13. Miscellaneous
(a) This Agreement shall be governed by the laws of the Commonwealth of
Virginia, provided that nothing herein shall be construed in a manner
inconsistent with the Act, the Investment Advisers Act of 1940, as amended, or
rules or orders of the Securities and Exchange Commission thereunder.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Adviser as an
agent of the Trust.
If the foregoing is in accordance with your understanding, kindly indicate
your acceptance of this Agreement by signing and returning the enclosed copy of
this Agreement.
Very truly yours,
MENTOR FUNDS
By:----------------------------------------
Name:
Title:
Accepted:
MENTOR INVESTMENT ADVISORS, LLC
By:------------------------------------
Name:
Title:
A1-4
<PAGE>
APPENDIX I
<TABLE>
<CAPTION>
Adviser's Rate
of Fee in
Accordance With
Section 6 of
Mentor Funds the Agreement
- -------------------------------------------------- ----------------
<S> <C>
Mentor Capital Growth Portfolio .80%
Mentor Quality Income Portfolio .60%
Mentor Municipal Income Portfolio .60%
Mentor Income and Growth Portfolio .75%
</TABLE>
MENTOR FUNDS
By:-----------------------------------------
Name:
Title:
Accepted:
MENTOR INVESTMENT ADVISORS, LLC
By:------------------------------------
Name:
Title:
A1-5
<PAGE>
Exhibit A-2
[Mentor Strategy Portfolio, Mentor Short-Duration Income Portfolio, Mentor
Balanced Portfolio]
MENTOR FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Management Contract dated as of between MENTOR FUNDS, a
Massachusetts business trust (the "Trust"), on behalf of the [NAME OF
PORTFOLIO], and MENTOR INVESTMENT ADVISORS, LLC, a Virginia limited liability
company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO TRUST.
(a) The Manager, at its expense, will furnish continuously an investment
program for the series of shares of beneficial interest of the Trust designated
for such purpose by the Trustees (the "Portfolio"), will determine what
investments shall be purchased, held, sold, or exchanged by each of the Funds
and what portion, if any, of the assets of a Portfolio shall be held uninvested
and shall, on behalf of each Portfolio, make changes in the Portfolio's
investments. In the performance of its duties, the Manager will comply with the
provisions of the Agreement and Declaration of Trust and Bylaws of the Trust
and each Portfolio's stated investment objectives, policies, and restrictions,
and will use its best efforts to safeguard and promote the welfare of the Trust
and to comply with other policies which the Trustees may from time to time
determine and shall exercise the same care and diligence expected of the
Trustees.
(b) The Manager, at its expense, except as such expense is paid by the
Trust as provided in Section 1(d), will furnish all necessary investment and
related management facilities, including, salaries of personnel, required for
it to execute its duties faithfully. The Manager will pay the compensation, if
any, of certain officers of the Trust carrying out the investment management
and related duties provided for by this Contract.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for each Portfolio's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall give primary consideration to
securing for each Portfolio the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage commissions
for brokerage and research services as described below. In doing so, the
Manager, bearing in mind the Trust's best interests at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability
of the broker or dealer involved, and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine, the Manager shall not be deemed to have
acted unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused the Portfolio to pay a broker
or dealer that provides brokerage and research services to the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission that another broker or dealer would have charged
for effecting that transaction, if the Manager determines in good faith that
such amount of 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 Manager's overall
responsibilities with respect to the Portfolio and to other clients of the
Manager as to which the Manager exercises investment discretion.
(d) The Trust, on behalf of the Portfolio, hereby authorizes any entity or
person associated with the Manager which is a member of a national securities
exchange to effect any transaction on the exchange for the account of each
Portfolio which is permitted by Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and each Portfolio hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(e) The Manager shall not be obligated to pay any expenses of or for the
Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
A2-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and any person controlled by
or under common control with the Manager have and may have advisory,
management, service, or other contracts with other organizations and persons,
and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, each Portfolio shall pay the Manager, as promptly as
possible after the last day of each month, a fee, calculated daily, of [0.85 of
1% in the case of Mentor Strategy Portfolio; 0.50 of 1% in the case of Mentor
Short-Duration Income Portfolio; 0.75 of 1% in the case of Mentor Balanced
Portfolio] annually of the Portfolio's average daily net assets. The first
payment of the fee shall be made as promptly as possible at the end of the
month next succeeding the effective date of this Agreement in respect of the
Portfolio, and shall constitute a full payment of the fee due the Manager for
all services prior to that date. If this Agreement is terminated as of any date
not the last day of a month, such fee shall be paid as promptly as possible
after such date of termination, shall be based on the average daily net assets
of the Portfolio in that period from the beginning of such month to such date
of termination, and shall be that proportion of such average daily net assets
as the number of business days in such period bears to the number of business
days in such month. The average daily net assets of the Portfolio shall in all
cases be based only on business days and be computed as of the time of the
regular close of business of the New York Stock Exchange, or such other time as
may be determined by the Trustees. Each such payment shall be accompanied by a
report of the Trust prepared either by the Trust or by a reputable firm of
independent accountants which shall show the amount properly payable to the
Manager under this Agreement and the detailed computation thereof.
[To be included if this Contract is implemented prior to its approval by the
Portfolio's shareholders --
Any fees payable by the Portfolio under this Contract during the period
commencing on the effective date of this Contract and ending on the date of the
initial approval of this Contract by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Trust, on behalf of the
Portfolio, into an interest-bearing escrow account with such unaffiliated
financial institution as the Trust and the Manager may establish, to be
released to the Manager only upon such initial approval of this Contract, or,
if such approval shall not occur within the 60 days following consummation of
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation, to
the Portfolio.]
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Portfolio, and by the vote, cast in
person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract as to one
or more Funds or as to the Trust as a whole by not more than sixty days nor
less than thirty days written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of any Portfolio, and
(ii) a majority of the Trustees of the Trust who are not interested persons of
the Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically approve at least
annually the continuance of this Contract, then this Contract shall
automatically terminate at the close of business on or the expiration of one
year from the effective date of the last such continuance, whichever is later.
Action by the Trust under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the affected Portfolio.
A2-2
<PAGE>
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of a Portfolio means the affirmative vote, at a duly
called and held meeting of such shareholders, (a) of the holders of 67% or more
of the shares of the Portfolio present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding shares
of the Portfolio entitled to vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of the outstanding shares of the
Portfolio entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, MENTOR FUNDS and MENTOR INVESTMENT ADVISORS, LLC, have
each caused this instrument to be signed in duplicate in its behalf by its
President or Vice President thereunto duly authorized, all as of the day and
year first above written.
MENTOR FUNDS
on behalf of [Name of Portfolio]
By:-----------------------------------------
Title:
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
Title:
A2-3
<PAGE>
Exhibit A-3
[Mentor Growth Portfolio]
MENTOR FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT, made this th day of by
and between MENTOR FUNDS, a Massachusetts business trust (the "Trust"), and
MENTOR INVESTMENT ADVISORS, LLC, a Virginia limited liability company (the
"Adviser").
RECITALS OF THE PARTIES
A. The Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940 (the "1940 Act")
and has registered the shares of beneficial interest of Mentor Growth
Portfolio, a series of shares of beneficial interest of the Trust (the
"Portfolio"), for sale to the public under the Securities Act of 1933 and
various state securities laws; and
B. The Trust, on behalf of the Portfolio, wishes to retain the Adviser to
provide investment advisory and management services to the Portfolio; and
C. The Adviser is willing to furnish such services on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and mutual covenants
herein contained, it is agreed as follows:
1. Information Furnished. The Trust, on behalf of the Portfolio, shall at
all times keep the Adviser fully informed with regard to the securities owned
by the Portfolio, its funds available, or to become available, for investment,
and generally as to its investments and investment program. It shall furnish
the Adviser with such other documents and information with regard to its
investments and investment program as the Trustees may from time to time
reasonably request.
2. Research, Purchase, Sale, etc. of Securities.
(a) Subject to the direction and control of the Trustees of the Trust, the
Adviser shall regularly provide the Portfolio with investment research,
investment advice, and investment management and supervision and shall furnish
a continuous investment program for the Portfolio's portfolio of securities
consistent with the Portfolio's investment goals and policies. The Adviser
shall determine from time to time what securities will be purchased, retained
or sold by the Portfolio, and shall implement those decisions, all subject to
the supervision and direction of the Trustees, the provisions of the Agreement
and Declaration of Trust and Bylaws of the Trust, the 1940 Act, the applicable
rules and regulations of the Securities and Exchange Commission, and other
applicable federal and state law, as well as the investment goals and policies
of the Portfolio.
(b) The Trust, on behalf of the Portfolio, hereby authorizes any entity or
person associated with the Adviser which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the
Portfolio which is permitted by Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Portfolio hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
3. Management Policies. In providing investment management services to the
Portfolio, the Adviser shall give primary consideration to securing the most
favorable price and efficient execution. In so doing, the Adviser may consider
the financial responsibility, research and investment information and other
services provided by brokers or dealers who may effect or be a party to any
such transaction or other transactions to which other clients of the Adviser
may be a party. The Portfolio recognizes that it is desirable that the Adviser
have access to supplemental investment and market research and security and
economic analyses provided by brokers and that such brokers may execute
brokerage transactions at a higher cost to the Portfolio than may result when
allocating brokerage to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore, the Adviser is authorized
to pay higher brokerage commissions for the purchase and sale of securities for
the Portfolio to brokers who provide such research and analyses, subject to
review by the Trustees from time to time with respect to the extent and
continuation of this practice. It is understood that the services provided by
such brokers may be useful to the Adviser in connection with its services to
other clients.
A3-1
<PAGE>
4. Aggregation of Orders. On occasions when the Adviser deems the purchase
or sale of a security to be in the best interest of the Portfolio as well as
other clients, the Adviser, to the extent permitted by applicable laws and
regulations, may aggregate the securities to be so sold or purchased in order
to obtain the most favorable price or lower brokerage commissions and efficient
execution. In such event, allocation of the securities so purchased or sold, as
well as the expenses incurred in the transaction, will be made by the Adviser
in the manner it considers to be the most equitable and consistent with its
fiduciary obligations to the Portfolio and to such other clients.
5. Nonexclusive Agreement.
(a) The Trust understands that the Adviser now acts and will continue to
act as investment adviser to various fiduciary or other managed accounts, and
the Portfolio has no objection to the Adviser's so acting. In addition, it is
understood that the persons employed by the Adviser to assist in the
performance of its duties hereunder will not devote their full time to such
service and nothing contained herein shall be deemed to limit or restrict the
right of the Adviser or any affiliate of the Adviser to engage in and devote
time and attention to other businesses or to render services of whatever kind
or nature.
(b) The Trust understands that from time to time hereafter the Adviser may
act as investment adviser to one or more other investment companies, and the
Trust has no objection to the Adviser's so acting, provided that when two or
more companies managed by the Adviser have available funds for investment in
money market instruments, available money market investments will be allocated
in accordance with a formula believed to be equitable to each company. It is
recognized that in some cases this procedure may adversely affect the size of
the position obtainable for the Portfolio.
6. Expenses.
(a) The Adviser shall maintain all books and records with respect to the
Portfolio's securities transactions and keep the Portfolio's books of account
in accordance with all applicable federal and state laws and regulations. The
Adviser shall authorize and permit any of its directors, officers and
employees, who may be elected as Trustees or officers of the Trust, to serve in
the capacities in which they are elected.
(b) The Adviser shall bear the cost of rendering the investment management
services to be performed by it under this Agreement, and shall, at its own
expense, pay the compensation of the officers and employees, if any, of the
Trust who are employees of the Adviser.
(c) Other than as herein specifically indicated, the Adviser shall not be
responsible for the Portfolio's expenses. Specifically, the Adviser will not be
responsible, except to the extent of the reasonable compensation of employees
of the Trust whose services may be used by the Adviser hereunder, for any of
the following expenses of the Portfolio, which expenses shall be borne by the
Portfolio: interest, taxes, governmental fees or membership dues; brokerage
commissions or charges, if any; fees of custodians, transfer agents, registrars
or other agents; expense of preparing share certificates; expenses relating to
the redemption or repurchase of the Portfolio's shares; expenses of registering
and qualifying Portfolio shares for sale under applicable federal and state
law; expenses of preparing, setting in print, printing and distributing
prospectuses, reports, notices and dividends to Portfolio shareholders; cost of
stationery; costs of shareholders' and other meetings of the Portfolio;
traveling expenses of officers, Trustees and employees of the Trust, if any;
fees of the Trust's independent Trustees and salaries of any officers or
employees who are not affiliated with the Adviser; and the Portfolio's pro rata
portion of premiums on any fidelity bond and other insurance covering the Trust
and its officers and Trustees.
(d) If, in any fiscal year, the Portfolio's total operating expenses,
exclusive of taxes, interest, brokerage fees, distribution fees and
extraordinary expenses (to the extent permitted by applicable state securities
laws and regulations), exceed the lowest applicable annual expense limitation
established pursuant to statute or regulation of any jurisdiction in which
shares of the Portfolio are offered for sale, the Adviser will reimburse (or
assume expenses of) the Portfolio for the amount of such excess. Such expense
reimbursement (or assumption), will be estimated, reconciled and paid (or
assumed) on a monthly basis.
7. Salaries. No Trustee, officer or employee of the Trust shall receive
from the Trust any salary or other compensation as such Trustee, officer or
employee while he is at the same time a Trustee, officer or employee of the
Adviser or any affiliated company of the Adviser. This paragraph shall not
apply to Trustees, executive committee members, consultants and other persons
who are not regular members of the Adviser's or any affiliated company's staff.
8. Compensation of Adviser. As compensation for the services performed and
the facilities furnished and expenses assumed by the Adviser, including the
services of any consultants retained by the Adviser, the Portfolio shall pay
the Adviser, as promptly as possible after the last day of each month, a fee,
calculated daily, of .70 of 1% annually of the Portfolio's average daily net
assets. The first payment of the fee shall be made as promptly as possible at
the end of the month next
A3-2
<PAGE>
succeeding the effective date of this Agreement, and shall constitute a full
payment of the fee due the Adviser for all services prior to that date. If this
Agreement is terminated as of any date not the last day of a month, such fee
shall be paid as promptly as possible after such date of termination, shall be
based on the average daily net assets of the Portfolio in that period from the
beginning of such month to such date of termination, and shall be that
proportion of such average daily net assets as the number of business days in
such period bears to the number of business days in such month. The average
daily net assets of the Portfolio shall in all cases be based only on business
days and be computed as of the time of the regular close of business of the New
York Stock Exchange, or such other time as may be determined by the Trustees.
Each such payment shall be accompanied by a report of the Trust prepared either
by the Trust or by a reputable firm of independent accountants which shall show
the amount properly payable to the Adviser under this Agreement and the
detailed computation thereof.
[To be included if this Agreement is implemented prior to its approval by the
Portfolio's shareholders --
Any fees payable by the Portfolio under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Trust, on behalf of the
Portfolio, into an interest-bearing escrow account with such unaffiliated
financial institution as the Trust and the Adviser may establish, to be
released to the Adviser only upon such initial approval of this Agreement, or,
if such approval shall not occur within the 60 days following consummation of
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation, to
the Portfolio.]
9. Responsibility of Adviser. The Adviser assumes no responsibility under this
Agreement other than to render the services called for hereunder, in good
faith, and shall not be responsible for any action of the Trustees in following
or declining to follow any advice or recommendation of the Adviser; provided,
however, that nothing in this Agreement shall protect the Adviser against any
liability to the Portfolio or its shareholders to which it would otherwise be
subject by reason of willful misfeasance, bad faith, or gross negligence in the
performance of its duties or by reason of its reckless disregard of its
obligations and duties hereunder.
10. Limitation of Employment. Nothing in this Agreement shall limit or restrict
the right of any director, officer, or employee of the Adviser who may also be
a Trustee, officer, or employee of the Trust, to engage in any other business
or to devote his time and attention in part to the management or other aspects
of any other business whether of a similar nature or a dissimilar nature, nor
to limit or restrict the right of the Adviser to engage in any other business
or to render services of any kind, including investment advisory and management
services, to any other corporation, firm, individual or association.
11. Definitions. As used in this Agreement, the terms "securities," and "net
assets," shall have the meanings ascribed or attributed to them in the
Registration Statement of the Trust on Form N-1A; and the terms "assignment,"
"interested person," and "majority of the outstanding voting securities" shall
have the meanings given to them by Section 2(a) of the 1940 Act, subject to
such exemptions as may be granted by the Securities and Exchange Commission by
any rule, regulation or order.
12. Term. Subject to the provisions of paragraphs 13 and 14 below, this
Agreement will remain in effect for two years from the date of its execution
and from year to year thereafter, provided that the Adviser does not notify the
Trust in writing at least sixty (60) days prior to the expiration date in any
year that it does not wish continuance of the Agreement for an additional year.
13. Termination. This Agreement shall terminate automatically in the event of
its assignment by the Adviser and shall not be assignable by the Portfolio
without the consent of the Adviser. This Agreement may also be terminated at
any time, without the payment of any penalty, by the Trustees or by vote of a
majority of the outstanding voting securities of the Portfolio by sixty (60)
days' written notice addressed to the Adviser at its principal place of
business.
14. Approval of Trustees. This Agreement shall be submitted for approval to the
Trustees annually and shall continue in effect only so long as specifically
approved annually by vote of a majority of the Trustees who are not parties to
this Agreement or interested persons of such parties, cast in person at a
meeting called for that purpose, and either by vote of the holders of a
majority of the outstanding voting securities of the Portfolio or by majority
vote of the Trustees.
15. Agreement and Declaration of Trust. A copy of the Agreement and Declaration
of Trust of the Trust is on file with the Secretary of Sate of The Commonwealth
of Massachusetts, and notice is hereby given that this instrument is executed
on behalf of the Trustees of the Trust as Trustees and not individually and
that the obligations of this instrument are not binding upon any of the
Trustees, officers, or shareholders of the Trust but are binding only upon the
assets and property of the Trust.
A3-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized.
MENTOR FUNDS
on behalf of Mentor Growth Portfolio
By:-----------------------------------------
Title:
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
Title:
A3-4
<PAGE>
Exhibit A-4
[Mentor Perpetual Global Portfolio]
MENTOR FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement dated as of
between MENTOR FUNDS, a Massachusetts business trust (the "Trust"), and MENTOR
PERPETUAL ADVISORS, LLC, a Virginia limited liability company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO TRUST.
(a) The Manager, at its expense, will furnish continuously an investment
program for Mentor Perpetual Global Portfolio (the "Portfolio"), will determine
what investments shall be purchased, held, sold, or exchanged by the Portfolio
and what portion, if any, of the assets of the Portfolio shall be held
uninvested and shall make changes in the Portfolio's investments. In the
performance of its duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and Bylaws of the Portfolio and the
Portfolio's stated investment objectives, policies, and restrictions, and will
use its best efforts to safeguard and promote the welfare of the Portfolio and
to comply with other policies which the Trustees may from time to time
determine and shall exercise the same care and diligence expected of the
Trustees.
(b) The Manager, at its expense, except as such expense is paid by the
Portfolio as provided in Section 1(e), will furnish all necessary investment
and related management facilities, including salaries of personnel, required
for it to execute its duties faithfully. The Manager will pay the compensation,
if any, of certain officers of the Trust carrying out the investment management
and related duties provided for by this Agreement.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Portfolio's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall give primary consideration to
securing for the Portfolio the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage commissions
for brokerage and research services as described below. In doing so, the
Manager, bearing in mind the Portfolio's best interests at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability
of the broker or dealer involved, and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine, the Manager shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Portfolio to pay a broker
or dealer that provides brokerage and research services to the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission that another broker or dealer would have charged
for effecting that transaction, if the Manager determines in good faith that
such amount of 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 Manager's overall
responsibilities with respect to the Portfolio and to other clients of the
Manager as to which the Manager exercises investment discretion.
(d) The Trust, on behalf of the Portfolio, hereby authorizes any entity or
person associated with the Manager which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the
Portfolio which is permitted by Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Portfolio hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(e) The Manager shall not be obligated to pay any expenses of or for the
Portfolio not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
A4-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Portfolio. It is also understood that the Manager and any person controlled
by or under common control with the Manager have and may have advisory,
management, service, or other agreements with other organizations and persons,
and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE PORTFOLIO TO THE MANAGER.
As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Portfolio shall pay the Manager, as promptly as
possible after the last day of each month, a fee, calculated daily, of 1.10%
annually of the Portfolio's average daily net assets up to $75 million, and
1.00% annually of the Portfolio's average daily net assets over $75 million.
The first payment of the fee shall be made as promptly as possible at the end
of the month next succeeding the effective date of this Agreement, and shall
constitute a full payment of the fee due the Manager for all services prior to
that date. If this Agreement is terminated as of any date that is not the last
day of a month, such fee shall be paid as promptly as possible after such date
of termination, shall be based on the average daily net assets of the Portfolio
in that period from the beginning of such month to such date of termination,
and shall be that proportion of such average daily net assets as the number of
business days in such period bears to the number of business days in such
month. The average daily net assets of the Portfolio shall in all cases be
based only on business days and be computed as of the time of the regular close
of business of the New York Stock Exchange, or such other time as may be
determined by the Trustees. Each such payment shall be accompanied by a report
of the Trust prepared either by the Trust or by a reputable firm of independent
accountants which shall show the amount properly payable to the Manager under
this Agreement and the detailed computation thereof.
[To be included if this Agreement is implemented prior to its approval by the
Portfolio's shareholders --
Any fees payable by the Portfolio under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Trust, on behalf of the
Portfolio, into an interest-bearing escrow account with such unaffiliated
financial institution as the Trust and the Manager may establish, to be
released to the Manager only upon such initial approval of this Agreement, or,
if such approval shall not occur within the 60 days following consummation of
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation, to
the Portfolio.]
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Agreement shall not be
amended unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Portfolio, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon its execution and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
(a) Either party hereto may at any time terminate this Agreement by not
more than sixty days nor less than thirty days written notice delivered or
mailed by registered mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of the Portfolio, and
(ii) a majority of the Trustees of the Trust who are not interested persons of
the Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically approve at least
annually the continuance of this Agreement, then this Agreement shall
automatically terminate at the close of business on or the expiration of
one year from the effective date of the last such continuance, whichever is
later.
Action by the Trust under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Portfolio.
Termination of this Agreement pursuant to this Section 5 will be without
the payment of any penalty.
A4-2
<PAGE>
6. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding shares" of the Portfolio means the affirmative vote, at a duly
called and held meeting of such shareholders, (a) of the holders of 67% or more
of the shares of the Portfolio present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding shares
of the Portfolio entitled to vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of the outstanding shares of the
Portfolio entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person",
"control", "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, MENTOR FUNDS and MENTOR PERPETUAL ADVISORS, LLC, have
each caused this instrument to be signed in duplicate in its behalf by its
President or Vice President thereunto duly authorized, all as of the day and
year first above written.
MENTOR FUNDS
on behalf of Mentor Perpetual Global
Portfolio
By:-----------------------------------------
MENTOR PERPETUAL ADVISORS, LLC
By:-----------------------------------------
A4-3
<PAGE>
Exhibit A-5
[Mentor Institutional Money Market Portfolio, Mentor Institutional U.S.
Government Money Market Portfolio]
MENTOR FUNDS
INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement dated as of
between MENTOR FUNDS, a Massachusetts business trust (the "Trust"), and MENTOR
INVESTMENT ADVISORS, LLC, a Virginia limited liability company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO TRUST.
(a) The Manager, at its expense, will furnish continuously an investment
program for the [Name of Portfolio], a series of the Trust (the "Portfolio"),
will determine what investments shall be purchased, held, sold, or exchanged by
the Portfolio and what portion, if any, of the assets of the Portfolio shall be
held uninvested and shall make changes in the Portfolio's investments. In the
performance of its duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and Bylaws of the Portfolio and the
Portfolio's stated investment objectives, policies, and restrictions, and will
use its best efforts to safeguard and promote the welfare of the Portfolio and
to comply with other policies which the Trustees may from time to time
determine and shall exercise the same care and diligence expected of the
Trustees.
(b) The Manager, at its expense, except as such expense is paid by the
Portfolio as provided in Section 1(e), will furnish all necessary investment
and related management facilities, including salaries of personnel, required
for it to execute its duties faithfully. The Manager will pay the compensation,
if any, of certain officers of the Trust carrying out the investment management
and related duties provided for by this Agreement.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Portfolio's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall give primary consideration to
securing for the Portfolio the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage commissions
for brokerage and research services as described below. In doing so, the
Manager, bearing in mind the Portfolio's best interests at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability
of the broker or dealer involved, and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine, the Manager shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Portfolio to pay a broker
or dealer that provides brokerage and research services to the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission that another broker or dealer would have charged
for effecting that transaction, if the Manager determines in good faith that
such amount of 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 Manager's overall
responsibilities with respect to the Portfolio and to other clients of the
Manager as to which the Manager exercises investment discretion.
(d) The Trust, on behalf of the Portfolio, hereby authorizes any entity or
person associated with the Manager which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the
Portfolio which is permitted by Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Portfolio hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(e) The Manager shall not be obligated to pay any expenses of or for the
Portfolio not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
A5-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Portfolio. It is also understood that the Manager and any person controlled
by or under common control with the Manager have and may have advisory,
management, service, or other agreements with other organizations and persons,
and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE PORTFOLIO TO THE MANAGER.
As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Portfolio shall pay the Manager, as promptly as
possible after the last day of each month, a fee, calculated daily, at the
following annual rates (as a percentage of the Portfolio's average daily net
assets): 0.22% of the first $500 million; 0.20% of the next $500 million;
0.175% of the next $1 billion; 0.16% of the next $1 billion; 0.15% of any
amounts over $3 billion. The first payment of the fee shall be made as promptly
as possible at the end of the month next succeeding the effective date of this
Agreement, and shall constitute a full payment of the fee due the Manager for
all services prior to that date. If this Agreement is terminated as of any date
that is not the last day of a month, such fee shall be paid as promptly as
possible after such date of termination, shall be based on the average daily
net assets of the Portfolio in that period from the beginning of such month to
such date of termination, and shall be that proportion of such average daily
net assets as the number of business days in such period bears to the number of
business days in such month. The average daily net assets of the Portfolio
shall in all cases be based only on business days and be computed as of the
time of the regular close of business of the New York Stock Exchange, or such
other time as may be determined by the Trustees. Each such payment shall be
accompanied by a report of the Trust prepared either by the Trust or by a
reputable firm of independent accountants which shall show the amount properly
payable to the Manager under this Agreement and the detailed computation
thereof.
[To be included if this Agreement is implemented prior to its approval by the
Portfolio's shareholders --
Any fees payable by the Portfolio under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Trust, on behalf of the
Portfolio, into an interest-bearing escrow account with such unaffiliated
financial institution as the Trust and the Manager may establish, to be
released to the Manager only upon such initial approval of this Agreement, or,
if such approval shall not occur within the 60 days following consummation of
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation, to
the Portfolio.]
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Agreement shall not be
amended unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Portfolio, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter until the close of business on
(unless terminated automatically as set forth in Section 4), and shall
continue for successive one-year periods thereafter, if approved in accordance
with Section 6, until terminated by either party hereto at any time by not more
than sixty days nor less than thirty days written notice delivered or mailed by
registered mail, postage prepaid, to the other party. Such action by the Trust
with respect to termination may be taken either (i) by vote of a majority of
its Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of the Fund.
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. ANNUAL APPROVAL.
For additional terms after the initial term of this Contract, this
Contract shall be submitted for approval to the Trustees annually and shall
continue in effect only so long as specifically approved annually by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval.
A5-2
<PAGE>
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding shares" of the Portfolio means the affirmative vote, at a duly
called and held meeting of such shareholders, (a) of the holders of 67% or more
of the shares of the Portfolio present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding shares
of the Portfolio entitled to vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of the outstanding shares of the
Portfolio entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person",
"control", "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulations thereunder.
8. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, MENTOR FUNDS and MENTOR INVESTMENT ADVISORS, LLC, have
each caused this instrument to be signed in duplicate in its behalf by its
President or Vice President thereunto duly authorized, all as of the day and
year first above written.
MENTOR FUNDS
on behalf of [Name of Portfolio]
By:-----------------------------------------
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
A5-3
<PAGE>
Exhibit A-6
[Mentor Fixed-Income Portfolio, Mentor Intermediate Duration Portfolio,
and Mentor U.S. Government Cash Management Portfolio]
MENTOR INSTITUTIONAL TRUST
MANAGEMENT CONTRACT
This Management Contract dated as of between MENTOR INSTITUTIONAL
TRUST, a Massachusetts business trust (the "Trust"), and MENTOR INVESTMENT
ADVISORS, LLC, a Virginia limited liability company (the "Manager")
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO TRUST.
(a) The Manager, at its expense, will furnish continuously an investment
program for each of the series of shares of beneficial interest of the Trust
designated for such purpose by the Trustees (each, a "Portfolio"), will
determine what investments shall be purchased, held, sold, or exchanged by each
of the Portfolios and what portion, if any, of the assets of a Portfolio shall
be held uninvested and shall, on behalf of each Portfolio, make changes in the
Portfolio's investments. In the performance of its duties, the Manager will
comply with the provisions of the Agreement and Declaration of Trust and Bylaws
of the Trust and each Portfolio's stated investment objectives, policies, and
restrictions, and will use its best efforts to safeguard and promote the
welfare of the Trust and to comply with other policies which the Trustees may
from time to time determine and shall exercise the same care and diligence
expected of the Trustees.
(b) The Manager, at its expense, will furnish (i) all necessary investment
and related management facilities, including, salaries of personnel, required
for it to execute its duties faithfully, (ii) suitable office space for the
Trust, and (iii) administrative facilities, including bookkeeping, clerical
personnel, and equipment necessary for the efficient performance of its
obligations. The Manager will pay the compensation, if any, of certain officers
of the Trust.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for each Portfolio's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall give primary consideration to
securing for each Portfolio the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage commissions
for brokerage and research services as described below. In doing so, the
Manager, bearing in mind the Trust's best interests at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability
of the broker or dealer involved, and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine, the Manager shall not be deemed to have
acted unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused a Portfolio to pay a broker or
dealer that provides brokerage and research services to the Manager an amount
of commission for effecting a portfolio investment transaction in excess of the
amount of commission that another broker or dealer would have charged for
effecting that transaction, if the Manger determines in good faith that such
amount of 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 Manager's overall responsibilities
with respect to the Portfolio and to other clients of the Manager as to which
the Manager exercises investment discretion.
(d) The Trust, on behalf of the Portfolios, hereby authorizes any entity
or person associated with the Manager which is a member of a national
securities exchange to effect any transaction on the exchange for the account
of each Portfolio which is permitted by Section 11(a) of the Securities
Exchange Act of 1934 and Rule 11a2-2(T) thereunder, and each Portfolio hereby
consents to the retention of compensation for such transactions in accordance
with Rule 11a2-2(T)(2)(iv).
A6-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and any person controlled by
or under common control with the Manager have and may have advisory,
management, service, or other contracts with other organizations and persons,
and may have other interests and business.
3. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the affected Portfolio, and by the vote,
cast in person at a meeting called for the purpose of voting on such approval,
of a majority of the Trustees of the Trust who are not interested persons of
the Trust or of the Manager.
4. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 3) until terminated as follows:
(a) Either party hereto may at any time terminate this Contract as to one
or more Portfolios or as to the Trust as a whole by not more than sixty days
nor less than thirty days written notice delivered or mailed by registered
mail, postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of any Portfolio, and
(ii) a majority of the Trustees of the Trust who are not interested persons of
the Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically approve at least
annually the continuance of this Contract, then this Contract shall
automatically terminate (as to the Trust as a whole or as to the affected
Portfolio, as the case may be) at the close of business on or the
expiration of one year from the effective date of the last such continuance,
whichever is later.
Action by the Trust under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the affected Portfolio.
Termination of this Contract pursuant to this Section 4 will be without
the payment of any penalty.
5. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of a Portfolio means the affirmative vote, at a duly
called and held meeting of such shareholders, (a) of the holders of 67% or more
of the shares of the Portfolio present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding shares
of the Portfolio entitled to vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of the outstanding shares of the
Portfolio entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulations thereunder.
6. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act of omission in the course of, or
connected with, rendering services hereunder.
A6-2
<PAGE>
7. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust, but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, MENTOR INSTITUTIONAL TRUST and MENTOR INVESTMENT
ADVISORS, LLC, have each caused this instrument to be signed in duplicate in
its behalf by its president or Vice President thereunto duly authorized, all as
of the day and year first above written. This document is executed by each of
the parties hereto under seal. This Agreement shall be governed and construed
in accordance with the laws (other than conflict of laws rules) of The
Commonwealth of Massachusetts.
MENTOR INSTITUTIONAL TRUST
By:-----------------------------------------
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
A6-3
<PAGE>
Exhibit A-7
[SNAP Fund]
MENTOR INSTITUTIONAL TRUST
MANAGEMENT CONTRACT
This Management Contract dated as of between MENTOR INSTITUTIONAL
TRUST, a Massachusetts business trust (the "Trust"), on behalf of SNAP Fund
(the "Fund"), a series of shares of beneficial interest of Trust, and MENTOR
INVESTMENT ADVISORS, LLC, a Virginia limited liability company (the "Manager")
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO FUND.
(a) The Manager, at its expense, will furnish continuously an investment
program for the Fund, will determine what investments shall be purchased, held,
sold, or exchanged by the Fund and what portion, if any, of the assets of the
Fund shall be held uninvested and shall, on behalf of the Fund, make changes in
the Fund's investments. In the performance of its duties, the Manager will
comply with the provisions of the Agreement and Declaration of Trust and Bylaws
of the Trust and the Fund's stated investment objectives, policies, and
restrictions, and will use its best efforts to safeguard and promote the
welfare of the Trust and to comply with other policies which the Trustees may
from time to time determine and shall exercise the same care and diligence
expected of the Trustees.
(b) The Manager, at its expense, will furnish (i) all necessary investment
and related management facilities, including, salaries of personnel, required
for it to execute its duties faithfully, (ii) suitable office space for the
Trust, and (iii) administrative facilities, including bookkeeping, clerical
personnel, and equipment necessary for the efficient performance of its
obligations. The Manager will pay the compensation, if any, of certain officers
of the Trust.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Fund's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall give primary consideration to
securing for the Fund the most favorable price and execution available, except
to the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. In doing so, the Manager,
bearing in mind the Trust's best interests at all times, shall consider all
factors it deems relevant, including, by way of illustration, price, the size
of the transaction, the nature of the market for the security, the amount of
the commission, the timing of the transaction taking into account market prices
and trends, the reputation, experience, and financial stability of the broker
or dealer involved, and the quality of service rendered by the broker or dealer
in other transactions. Subject to such policies as the Trustees of the Trust
may determine, the Manager shall not be deemed to have acted unlawfully or to
have breached any duty created by this Contract or otherwise solely by reason
of its having caused the Fund to pay a broker or dealer that provides brokerage
and research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission that
another broker or dealer would have charged for effecting that transaction, if
the Manager determines in good faith that such amount of 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 Manager's overall responsibilities with respect to the Fund
and to other clients of the Manager as to which the Manager exercises
investment discretion.
(d) The Trust, on behalf of the Fund, hereby authorizes any entity or
person associated with the Manager which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the Fund
which is permitted by Section 11(a) of the Securities Exchange Act of 1934 and
Rule 11a2-2(T) thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)(2)(iv).
A7-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and any person controlled by
or under common control with the Manager have and may have advisory,
management, service, or other contracts with other organizations and persons,
and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.
As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Fund shall pay the Manager, promptly (but in any
event within three business days) after the last day of each calendar month, a
fee, calculated daily, at an annual rate as follows: for the first $500 million
of assets under management, .09% of the average daily net assets in the Fund;
for the next $250 million under management, .08% of the average daily net
assets in the Fund; for the next $250 million under management, .07% of the
average daily net assets in the Fund; for the next $250 million under
management, .06% of the average daily net assets in the Fund; and for any
amounts over $1.25 billion under management, .05% of the average daily net
assets in the Fund.
If this Contract is terminated as of any date not the last day of a
calendar month, the fee payable to the Manager shall be paid promptly (but in
any event within three business days) after such date of termination.
The average daily net assets of the Fund shall in all cases be based only
on business days and be computed as of the time of the regular close of
business of the New York Stock Exchange, or such other time as may be
determined by the Board of Directors. Each such payment shall be accompanied by
a report of the Fund prepared either by the Fund or by a reputable firm of
independent accountants which shall show the amount properly payable to the
Manager under this Contract and the detailed computation thereof.
[To be included if this Contract is implemented prior to its approval by the
Fund' shareholders --
Any fees payable by the Fund under this Contract during the period commencing
on the effective date of this Contract and ending on the date of the initial
approval of this Contract by a majority of the outstanding voting securities of
the Fund shall be paid by the Trust, on behalf of the Fund, into an
interest-bearing escrow account with such unaffiliated financial institution as
the Trust and the Manager may establish, to be released to the Manager only
upon such initial approval of this Contract, or, if such approval shall not
occur within the 60 days following consummation of the merger of Wheat First
Butcher Singer, Inc. with First Union Corporation, to the Fund.]
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority
of the Trustees of the Trust who are not interested persons of the Trust or of
the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter until the close of business on
(unless terminated automatically as set forth in Section 4), and shall
continue for successive one-year periods thereafter, if approved in accordance
with Section 6, until terminated by either party hereto at any time by not more
than sixty days nor less than thirty days written notice delivered or mailed by
registered mail, postage prepaid, to the other party. Such action by the Trust
with respect to termination may be taken either (i) by vote of a majority of
its Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of the Fund. Termination of this Contract pursuant to this Section 5
will be without the payment of any penalty.
A7-2
<PAGE>
6. ANNUAL APPROVAL.
For additional terms after the initial term of this Contract, this
Contract shall be submitted for approval to the Trustees annually and shall
continue in effect only so long as specifically approved annually by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval.
7. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly
called and held meeting of such shareholders, (a) of the holders of 67% or more
of the shares of the Fund present (in person or by proxy) and entitled to vote
at such meeting, if the holders of more than 50% of the outstanding shares of
the Fund entitled to vote at such meeting are present in person or by proxy, or
(b) of the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person",
"control", "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulations thereunder.
8. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, MENTOR INSTITUTIONAL TRUST and MENTOR INVESTMENT
ADVISORS, LLC, have each caused this instrument to be signed in duplicate in
its behalf by its President or Vice President thereunto duly authorized, all as
of the day and year first above written. This document is executed by each of
the parties hereto under seal. This Agreement shall be governed and construed
in accordance with the laws (other than conflict of laws rules) of The
Commonwealth of Massachusetts.
MENTOR INSTITUTIONAL TRUST
On behalf of SNAP Fund
By:-----------------------------------------
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
A7-3
<PAGE>
Exhibit A-8
[Mentor Perpetual International Portfolio]
MENTOR INSTITUTIONAL
TRUST INVESTMENT ADVISORY AND MANAGEMENT AGREEMENT
This Investment Advisory and Management Agreement dated as of
between MENTOR INSTITUTIONAL TRUST, a Massachusetts business trust (the
"Trust"), and MENTOR PERPETUAL ADVISORS, LLC, a Virginia limited liability
company (the "Manager").
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO TRUST.
(a) The Manager, at its expense, will furnish continuously an investment
program for Mentor Perpetual International Portfolio (the "Portfolio"), will
determine what investments shall be purchased, held, sold, or exchanged by the
Portfolio and what portion, if any, of the assets of the Portfolio shall be
held uninvested and shall make changes in the Portfolio's investments. In the
performance of its duties, the Manager will comply with the provisions of the
Agreement and Declaration of Trust and Bylaws of the Portfolio and the
Portfolio's stated investment objectives, policies, and restrictions, and will
use its best efforts to safeguard and promote the welfare of the Portfolio and
to comply with other policies which the Trustees may from time to time
determine and shall exercise the same care and diligence expected of the
Trustees.
(b) The Manager, at its expense, except as such expense is paid by the
Portfolio as provided in Section 1(e), will furnish all necessary investment
and related management facilities, including salaries of personnel, required
for it to execute its duties faithfully. The Manager will pay the compensation,
if any, of certain officers of the Trust carrying out the investment management
and related duties provided for by this Agreement.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Portfolio's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall give primary consideration to
securing for the Portfolio the most favorable price and execution available,
except to the extent it may be permitted to pay higher brokerage commissions
for brokerage and research services as described below. In doing so, the
Manager, bearing in mind the Portfolio's best interests at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability
of the broker or dealer involved, and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine, the Manager shall not be deemed to have
acted unlawfully or to have breached any duty created by this Agreement or
otherwise solely by reason of its having caused the Portfolio to pay a broker
or dealer that provides brokerage and research services to the Manager an
amount of commission for effecting a portfolio investment transaction in excess
of the amount of commission that another broker or dealer would have charged
for effecting that transaction, if the Manager determines in good faith that
such amount of 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 Manager's overall
responsibilities with respect to the Portfolio and to other clients of the
Manager as to which the Manager exercises investment discretion.
(d) The Trust, on behalf of the Portfolio, hereby authorizes any entity or
person associated with the Manager which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the
Portfolio which is permitted by Section 11(a) of the Securities Exchange Act of
1934 and Rule 11a2-2(T) thereunder, and the Portfolio hereby consents to the
retention of compensation for such transactions in accordance with Rule
11a2-2(T)(2)(iv).
(e) The Manager shall not be obligated to pay any expenses of or for the
Portfolio not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
A8-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Portfolio. It is also understood that the Manager and any person controlled
by or under common control with the Manager have and may have advisory,
management, service, or other agreements with other organizations and persons,
and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE PORTFOLIO TO THE MANAGER.
As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Portfolio shall pay the Manager, as promptly as
possible after the last day of each month, a fee, calculated daily, of 1.00%
annually of the Portfolio's average daily net assets. The first payment of the
fee shall be made as promptly as possible at the end of the month next
succeeding the effective date of this Agreement, and shall constitute a full
payment of the fee due the Manager for all services prior to that date. If this
Agreement is terminated as of any date that is not the last day of a month,
such fee shall be paid as promptly as possible after such date of termination,
shall be based on the average daily net assets of the Portfolio in that period
from the beginning of such month to such date of termination, and shall be that
proportion of such average daily net assets as the number of business days in
such period bears to the number of business days in such month.
The average daily net assets of the Portfolio shall in all cases be based
only on business days and be computed as of the time of the regular close of
business of the New York Stock Exchange, or such other time as may be
determined by the Trustees. Each such payment shall be accompanied by a report
of the Trust prepared either by the Trust or by a reputable firm of independent
accountants which shall show the amount properly payable to the Manager under
this Agreement and the detailed computation thereof.
[To be included if this Agreement is implemented prior to its approval by the
Portfolio's shareholders --
Any fees payable by the Portfolio under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Trust, on behalf of the
Portfolio, into an interest-bearing escrow account with such unaffiliated
financial institution as the Trust and the Manager may establish, to be
released to the Manager only upon such initial approval of this Agreement, or,
if such approval shall not occur within the 60 days following consummation of
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation, to
the Portfolio.]
4. ASSIGNMENT TERMINATES THIS AGREEMENT; AMENDMENTS OF THIS AGREEMENT.
This Agreement shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Agreement shall not be
amended unless such amendment be approved at a meeting by the affirmative vote
of a majority of the outstanding shares of the Portfolio, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter until the close of business on
(unless terminated automatically as set forth in Section 4), and shall
continue for successive one-year periods thereafter, if approved in accordance
with Section 6, until terminated by either party hereto at any time by not more
than sixty days nor less than thirty days written notice delivered or mailed by
registered mail, postage prepaid, to the other party. Such action by the Trust
with respect to termination may be taken either (i) by vote of a majority of
its Trustees, or (ii) by the affirmative vote of a majority of the outstanding
shares of the Fund.
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. ANNUAL APPROVAL.
For additional terms after the initial term of this Contract, this
Contract shall be submitted for approval to the Trustees annually and shall
continue in effect only so long as specifically approved annually by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval.
A8-2
<PAGE>
7. CERTAIN DEFINITIONS.
For the purposes of this Agreement, the "affirmative vote of a majority of
the outstanding shares" of the Portfolio means the affirmative vote, at a duly
called and held meeting of such shareholders, (a) of the holders of 67% or more
of the shares of the Portfolio present (in person or by proxy) and entitled to
vote at such meeting, if the holders of more than 50% of the outstanding shares
of the Portfolio entitled to vote at such meeting are present in person or by
proxy, or (b) of the holders of more than 50% of the outstanding shares of the
Portfolio entitled to vote at such meeting, whichever is less.
For the purposes of this Agreement, the terms "affiliated person,"
"control," "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulationsthereunder.
8. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.
9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, MENTOR INSTITUTIONAL TRUST and MENTOR PERPETUAL
ADVISORS, LLC, have each caused this instrument to be signed in duplicate in
its behalf by its President or Vice President thereunto duly authorized, all as
of the day and year first above written.
MENTOR INSTITUTIONAL TRUST
on behalf of Mentor Perpetual International
Portfolio
By:-----------------------------------------
MENTOR PERPETUAL ADVISORS, LLC
By:-----------------------------------------
A8-3
<PAGE>
Exhibit A-9
[Cash Resource Money Market Fund, Cash Resource U.S. Government Money Market
Fund, Cash Resource Tax-Exempt Money Market Fund, Cash Resource California Tax-
Exempt Money Market Fund, and Cash Resource New York Tax-Exempt
Money Market Fund]
CASH RESOURCE TRUST
MANAGEMENT CONTRACT
This Management Contract dated as of between CASH RESOURCE TRUST, a
Massachusetts business trust (the "Trust"), and MENTOR INVESTMENT ADVISORS,
LLC, a Virginia limited liability company (the "Manager")
WITNESSETH:
That in consideration of the mutual covenants herein contained, it is
agreed as follows:
1. SERVICES TO BE RENDERED BY THE MANAGER TO TRUST.
(a) The Manager, at its expense, will furnish continuously an investment
program for each of the series of shares of beneficial interest of the Trust
(each, a "Fund"), will determine what investments shall be purchased, held,
sold, or exchanged by each of the Funds and what portion, if any, of the assets
of a Fund shall be held uninvested and shall, on behalf of each Fund, make
changes in the Fund's investments. In the performance of its duties, the
Manager will comply with the provisions of the Agreement and Declaration of
Trust and Bylaws of the Trust and each Fund's stated investment objectives,
policies, and restrictions, and will use its best efforts to safeguard and
promote the welfare of the Trust and to comply with other policies which the
Trustees may from time to time determine and shall exercise the same care and
diligence expected of the Trustees.
(b) The Manager, at its expense, except as such expense is paid by the
Trust as provided in Section 1(d), will furnish all necessary investment and
related management facilities, including, salaries of personnel, required for
it to execute its duties faithfully. The Manager will pay the compensation, if
any, of certain officers of the Trust carrying out the investment management
and related duties provided for by this Contract.
(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for each Fund's account with brokers or
dealers selected by the Manager. In the selection of such brokers or dealers
and the placing of such orders, the Manager shall use its best efforts to
obtain for each Fund the most favorable price and execution available, except
to the extent it may be permitted to pay higher brokerage commissions for
brokerage and research services as described below. In using its best efforts
to obtain for a Fund the most favorable price and execution available, the
Manager, bearing in mind the Trust's best interests at all times, shall
consider all factors it deems relevant, including, by way of illustration,
price, the size of the transaction, the nature of the market for the security,
the amount of the commission, the timing of the transaction taking into account
market prices and trends, the reputation, experience, and financial stability
of the broker or dealer involved, and the quality of service rendered by the
broker or dealer in other transactions. Subject to such policies as the
Trustees of the Trust may determine, the Manager shall not be deemed to have
acted unlawfully or to have breached any duty created by this Contract or
otherwise solely by reason of its having caused a Fund to pay a broker or
dealer that provides brokerage and research services to the Manager an amount
of commission for effecting a portfolio investment transaction in excess of the
amount of commission that another broker or dealer would have charged for
effecting that transaction, if the Manager determines in good faith that such
amount of 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 Manager's overall responsibilities
with respect to the Fund and to other clients of the Manager as to which the
Manager exercises investment discretion. The Manager agrees that in connection
with purchases or sales of portfolio investments for the Trust's account,
neither the Manager nor any officer, director, employee, or agent of the
Manager shall act as a principal or receive any commission other than as
provided in Section 3.
(d) The Manager shall not be obligated to pay any expenses of or for the
Trust not expressly assumed by the Manager pursuant to this Section 1 other
than as provided in Section 3.
A9-1
<PAGE>
2. OTHER AGREEMENTS, ETC.
It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and any person controlled by
or under common control with the Manager have and may have advisory,
management, service, or other contracts with other organizations and persons,
and may have other interests and business.
3. COMPENSATION TO BE PAID BY THE TRUST TO THE MANAGER.
The Trust will pay to the Manager as compensation for the Manager's
services rendered, for the facilities furnished and for the expenses borne by
the Manager pursuant to Section 1, a fee in respect of each of the Funds,
computed and paid monthly at the following annual rates (based on the assets of
each Fund taken separately): 0.22% of the first $500 million of the Fund's
average net assets; 0.20% of the next $500 million; 0.175% of the next $1
billion; 0.16% of the next $1 billion; and 0.15% of any amounts over $3
billion.
Such average net asset value shall be determined by taking an average of
all of the determinations of such net asset value during such month at the
close of business on each business day during such month which this Contract is
in effect. Such fees shall be payable for each month within 7 days after the
close of such month and shall commence accruing as of the date of the initial
issuance of shares of the Trust to the public.
The fees payable by the Trust to the Manager pursuant to this Section 3
shall be reduced by any commissions, fees, brokerage, or similar payments
received by the Manager or any affiliated person of the Manager in connection
with the purchase and sale of portfolio investments of the Trust, less any
direct expenses approved by the Trustees incurred by the Manager or any
affiliate of the Manager in connection with obtaining such payments.
In the event that expenses of any Fund for any fiscal year should exceed
the expense limitation on investment company expenses imposed by any statute or
regulatory authority of any jurisdiction in which shares of that Fund are
qualified for offer or sale, the compensation due the Manager for such fiscal
year shall be reduced by the amount of such excess by a reduction or refund
thereof. In the event that the expenses of any Fund exceed any expense
limitation which the Manager may, by written notice to the Trust, voluntarily
declare to be effective subject to such terms and conditions as the Manager may
prescribe in such notice, the compensation due the Manager shall be reduced,
and, if necessary, the Manager shall assume expenses of that Fund, to the
extent required by such expense limitation.
If the Manager shall serve for less than the whole of a month, the
foregoing compensation shall be prorated.
[To be included if this Contract is implemented prior to its approval by the
Fund's shareholders --
Any fees payable by the Fund under this Contract during the period commencing
on the effective date of this Contract and ending on the date of the initial
approval of this Contract by a majority of the outstanding voting securities of
the Fund shall be paid by the Trust, on behalf of the Fund, into an
interest-bearing escrow account with such unaffiliated financial institution as
the Trust and the Manager may establish, to be released to the Manager only
upon such initial approval of this Contract, or, if such approval shall not
occur within the 60 days following consummation of the merger of Wheat First
Butcher Singer, Inc. with First Union Corporation, to the Fund.]
4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.
This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the affected Fund, and by the vote, cast
in person at a meeting called for the purpose of voting on such approval, of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of Cambridge or the Manager.
5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.
This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter (unless terminated
automatically as set forth in Section 4) until terminated as follows:
A9-2
<PAGE>
(a) Either party hereto may at any time terminate this Contract as to one
or more Funds or as to the Trust as a whole by not more than sixty days nor
less than thirty days written notice delivered or mailed by registered mail,
postage prepaid, to the other party, or
(b) If (i) the Trustees of the Trust or the shareholders by the
affirmative vote of a majority of the outstanding shares of any Fund, and (ii)
a majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval, do not specifically approve at least
annually the continuance of this Contract, then this Contract shall
automatically terminate (as to the Trust as a whole or as to the affected Fund,
as the case may be) at the close of business on or the expiration of one
year from the effective date of the last such continuance, whichever is later.
Action by the Trust under (a) above may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the affected Fund.
Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.
6. CERTAIN DEFINITIONS.
For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of a Fund means the affirmative vote, at a duly called
and held meeting of such shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting, whichever is less.
For the purposes of this Contract, the terms "affiliated person,"
"control," "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may
be granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services"
shall have the meaning given in the Securities Exchange Act of 1934, as
amended, and the Rules and Regulations thereunder.
7. NON-LIABILITY OF MANAGER.
In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.
8. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.
A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.
IN WITNESS WHEREOF, CASH RESOURCE TRUST and MENTOR INVESTMENT ADVISORS,
LLC have each caused this instrument to be signed in duplicate in its behalf by
its President or Vice President thereunto duly authorized, all as of the day
and year first above written.
CASH RESOURCE TRUST
By:-----------------------------------------
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
A9-3
<PAGE>
Exhibit B-1
[Mentor Municipal Income Portfolio]
MENTOR FUNDS
INVESTMENT ADVISORY AGREEMENT
Van Kampen American Capital Management, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Dear Sirs:
Under an agreement (the "Management Agreement") between Mentor Funds, a
Massachusetts business trust (the "Trust"), and Mentor Investment Advisors,
LLC, a Virginia limited liability company, (the "Adviser"), the Adviser serves
as the Trust's investment adviser and has the responsibility of evaluating,
recommending, supervising and compensating investment advisors to each series
of the Trust.
The Adviser hereby confirms its agreement with Van Kampen American Capital
Management, Inc. (the "Sub-Adviser") and the Trust with respect to the
Sub-Adviser's serving as the sub-adviser of the Mentor Municipal Income
Portfolio (the "Portfolio"), a series of the Trust, as follows:
Section 1. Investment Description; Appointment
(a) The Trust desires to employ the Portfolio's capital by investing and
reinvesting in investments of the kind and in accordance with the investment
objectives, policies and limitations specified in the prospectus (the
"Prospectus") and in the statement of additional information (the "Statement of
Additional Information") filed with the Securities and Exchange Commission (the
"SEC") as part of the Trust's Registration Statement on Form N-1A, as amended
from time to time (the "Registration Statement"). The Adviser has herewith
furnished the Sub-Adviser copies of the Trust's Prospectus, Statement of
Additional Information, Declaration of Trust and By-Laws as currently in effect
and agrees during the continuance of the Agreement to furnish the Sub-Adviser
copies of any amendments or supplements thereto before or at the time the
amendments or supplements become effective. The Sub-Adviser will be entitled to
rely on all such documents furnished to it by the Adviser or the Trust.
(b) The Adviser, with the approval of the Trust, hereby appoints the
Sub-Adviser to act as investment adviser to the Portfolio for the periods and
on the terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
Section 2. Portfolio Management Duties
(a) Subject to the supervision of the Adviser and the Trust's Board of
Trustees, the Sub-Adviser will (i) manage the Portfolio's assets in accordance
with the Portfolio's investment objectives, policies and limitations as stated
in the Trust's Prospectus and Statement of Additional Information; (ii) make
investment decisions for the Portfolio; and (iii) place orders to purchase and
sell securities (and where appropriate) commodity futures contracts for the
Portfolio.
(b) The Sub-Adviser will keep the Trust and the Adviser informed of
developments materially affecting the Portfolio and shall, on the Sub-Adviser's
own initiative and as reasonably requested by the Adviser or the Trust, furnish
to the Trust and the Adviser from time to time whatever information the Adviser
reasonably believes appropriate for this purpose.
(c) The Sub-Adviser agrees that, in the performance of the duties required
of it by this Agreement, it will comply with the Investment Company Act of
1940, as amended (the "Act"), and all rules and regulations thereunder, all
applicable federal and state laws and regulations and with any applicable
procedures adopted by the Trust's Board of Trustees and identified in writing
to the Sub-Adviser. The Adviser will provide to the Sub-Adviser any specific
procedures that must be followed in the performance of Sub-Adviser's duties
hereunder by reason of the affiliation of other sub-advisers or service
providers with the Trust.
B1-1
<PAGE>
Section 3. Brokerage
(a) The Sub-Adviser agrees that it will place orders pursuant to its
investment determinations for the Portfolio either directly with the issuer or
with brokers or dealers selected by the Sub-Adviser in accordance with the
standards specified in paragraphs (b) and (c) of this Section 3. Until notified
to the contrary by the Adviser, the Sub-Adviser may place orders for the
Portfolio with affiliates of the Adviser in accordance with Section 11(a) of
the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder, Section
17(e) of the Act and Rule 17e-1 thereunder and other applicable laws and
regulations. The Sub-Adviser will identify to the Adviser in writing any
brokers or dealers which are affiliates of the Sub- Adviser. The Adviser will
identify to the Sub-Adviser in writing any brokers and dealers which are
affiliates of the Adviser and will forward to each Sub-Adviser information
provided by the other Sub-Advisers with respect to affiliated broker-dealers of
such Sub-Advisers.
(b) In placing orders with brokers and dealers, the Sub-Adviser will seek
the best overall terms available. In assessing the best overall terms available
for any portfolio transaction, the Sub-Adviser will consider all factors it
deems relevant including, but not limited to, the breadth of the market in the
security, the price of the security, the financial condition and execution
capability of the broker or dealer and the reasonableness of any commission for
the specific transaction and on a continuing basis.
(c) Subject to the requirements of subsections (a) and (b) above, in
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Adviser shall have the right
to request in writing that transactions giving rise to brokerage commissions
shall be executed by brokers and dealers that provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Trust or will be of value to the Trust in the
management of its assets or the Adviser's performance of its management
services provided to the Trust. In addition, subject to the requirements of
subsections (a) and (b) above and the applicable Rules of Fair Practice of the
National Association of Securities Dealers, Inc., the Trust shall have the
right to request that such transactions be executed by brokers and dealers by
or through whom sales of shares of the Trust are made.
Section 4. Information Provided to the Adviser and the Trust
(a) The Sub-Adviser agrees that it will make available to the Adviser and
the Trust promptly upon their request copies of all of its records with respect
to the Portfolio to assist the Adviser and the Trust in monitoring compliance
with the Act and the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), as well as other applicable laws. The Sub- Adviser will furnish the
Trust's Board of Trustees with respect to the Portfolio such periodic and
special reports as the Adviser and the Board of Trustees may reasonably
request.
(b) The Sub-Adviser agrees that it will immediately notify the Adviser and
the Trust in the event that the Sub-Adviser or any of its affiliates: (i)
becomes subject to a statutory disqualification that prevents the Sub-Adviser
from serving as investment advisor pursuant to this Agreement; or (ii) if it is
or expects to become the subject of an administrative proceeding or enforcement
action by the SEC or other regulatory authority. The Sub-Adviser has provided
the information about itself set forth in the Registration Statement and
acknowledges that, as of the date hereof, it is true and correct and contains
no material misstatement or omission, and the Sub-Adviser further agrees to
notify the Adviser immediately of, (i) any material fact known to the
Sub-Adviser respecting or relating to the Sub-Adviser that is not contained in
the Prospectus or Statement of Additional Information of the Trust, or any
amendment or supplement thereto, if the omission of such would make such
document misleading, (ii) any statement contained therein relating to the
Sub-Adviser that becomes untrue in any material respect, or (iii) any material
change in the investment objective and policies of the mutual fund advised by
the Sub-Adviser and identified in the Prospectus as being a model for the
Portfolio.
(c) The Sub-Adviser represents that it is an investment adviser registered
under the Advisers Act and other applicable laws and that the statements
contained in the Sub-Adviser's registration under the Advisers Act on Form ADV,
as of the date hereof, are true and correct and do not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. The Sub-Adviser agrees to maintain the
completeness and accuracy of its registration on Form ADV in accordance with
all legal requirements relating to that Form. The Sub-Adviser acknowledges that
it is an "investment advisor" to the Portfolio within the meaning of the Act
and the Advisers Act.
Section 5. Books and Records
In compliance with the requirements of Rule 31a-3 under the Act, the
Sub-Adviser hereby agrees that all records that it maintains for the Trust are
the property of the Trust and further agrees to surrender promptly to the Trust
copies of any such records upon the Trust's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2
B1-2
<PAGE>
under the Act the records with respect to the Sub-Adviser's duties hereunder
required to be maintained by Rule 31a-1 under the Act and to preserve the
records required by Rule 204-2 under the Advisers Act for the period specified
in that Rule.
Section 6. Compensation
(a) In consideration of services rendered pursuant to this Agreement, the
Adviser will pay the Sub-Adviser a fee that is computed daily and paid monthly
at the annual rate set forth in Appendix I to this Agreement (the "Portfolio
Advisory Fee"). From time to time the Sub-Adviser may agree to reimburse the
Trust additional expenses or waive a portion or all of its fee, in the sole
discretion of the Sub-Adviser.
(b) The Portfolio Advisory Fee for the period from the date that the
Portfolio commences investment operations to the end of the month during which
the Portfolio commences investment operations shall be prorated according to
the proportion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement.
(c) For the purposes of determining fees payable to the Sub-Adviser, the
value of the Trust's net assets shall be computed at the times and in the
manner specified in the Trust's Prospectus and/or the Statement of Additional
Information.
[To be included if this Agreement is implemented prior to its approval by the
Portfolio's shareholders --
(d) Any fees payable by the Adviser under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Adviser into an
interest-bearing escrow account with such unaffiliated financial institution as
the Trust and the Adviser may establish, to be released to the Sub-Adviser only
upon such initial approval of this Agreement, or, if such approval shall not
occur within the 60 days following consummation of the merger of Wheat First
Butcher Singer, Inc. with First Union Corporation, to the Portfolio.]
Section 7. Costs and Expenses
During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it and its staff in connection with the performance of its services
under this Agreement, including the payment of salaries of all officers and
employees who are employed by it, but not including expenses to be paid by the
Trust or the Adviser such as brokerage fees and commissions and custodian
charges. The Trust shall assume and pay any expenses for services rendered by a
custodian for the safekeeping of the Trust's securities or other property, for
keeping its books of account, for any other charges of the custodian, and for
calculating the net asset value of the Trust as provided in the prospectus of
the Trust. The Sub-Adviser shall not be required to pay and the Trust (or the
Adviser) shall assume and pay the charges and expenses of the Trust's
operations, including compensation of the trustees, charges and expenses of
independent auditors, of legal counsel, of any transfer or dividend disbursing
agent, and of any registrar of the Trust, costs of acquiring and disposing of
portfolio securities, interest, if any, on obligations incurred by the Trust,
costs of share certificates and of reports, membership dues in the Investment
Company Institute or any similar organization, costs of reports and notices to
shareholders, other like miscellaneous expenses and all taxes and fees payable
to federal, state or other governmental agencies on account of the registration
of securities issued by the Trust, filing of trust documents or otherwise.
Section 8. Standard of Care
The Sub-Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Adviser or the Trust in connection with
the matters to which this Agreement relates, provided that nothing in this
Agreement shall be deemed to protect or purport to protect the Sub-Adviser
against any liability to the Adviser or the Trust to which the Sub-Adviser
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or by reason of the
Sub-Adviser's reckless disregard of its obligations and duties under this
Agreement.
Section 9. Services to Other Companies or Accounts
(a) Except as otherwise agreed between the Adviser and the Sub-Adviser, it
is understood that the services of the Sub-Adviser are not exclusive, and
nothing in this Agreement shall prevent the Sub-Adviser from providing similar
services to other investment companies (whether or not their investment
objectives and policies are similar to those of the Trust) or from engaging in
other activities.
B1-3
<PAGE>
(b) When the Sub-Adviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Sub-Adviser recommends the purchase or sale of the same security for the Trust,
it is understood that in light of its fiduciary duty to the Trust, such
transactions will be executed on a basis that it is fair and equitable to the
Trust.
(c) The Trust and the Adviser understand and acknowledge that the persons
employed by the Sub-Adviser to assist in the performance of its duties under
this Agreement will not devote their full time to that service; nothing
contained in this Agreement will be deemed to limit or restrict the right of
the Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote
time and attention to other businesses or to render services of whatever kind
or nature, except as otherwise agreed between the Adviser and the Sub-Adviser.
Section 10. Duration and Termination
(a) The Trust represents that this Agreement has been approved by the
Trust's Board of Trustees and shareholders pursuant to Section 15 of the Act.
This Agreement shall become effective on the date hereof and shall continue for
two years from that date, and thereafter shall continue automatically for
successive annual periods, provided such continuance is specifically approved
at least annually by (i) the Trust's Board of Trustees or (ii) a vote of a
majority of the Portfolio's outstanding voting securities (as defined in the
Act), provided that the continuance is also approved by a majority of the
Trustees who are not "interested persons" (as defined in the Act) of the Trust,
by vote cast in person at a meeting called for the purpose of voting on such
approval.
(b) Notwithstanding the foregoing, this Agreement may be terminated (i) by
the Adviser at any time without penalty, upon 60 days' written notice to the
Sub-Adviser and the Trust, (ii) at any time without penalty by the Trust, upon
the vote of a majority of the Trust's Trustees or by vote of the majority of
the Trust's outstanding voting securities, upon 60 days' written notice to the
Sub-Adviser and the Adviser, or (iii) by the Sub-Adviser at any time without
penalty, upon 60 days' written notice to the Adviser and the Trust.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the Act and in rules adopted under the Act).
Section 11. Amendments
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 whom enforcement of the change, waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved in
accordance with applicable law.
Section 12. Limitations of Liability of Trustees, Officers, Employees, Agents
and Shareholders of the Trust
The Sub-Adviser is expressly put on notice of the limitation of liability
as set forth in the Declaration of Trust and agrees that the obligations
assumed by the Trust pursuant to this Agreement shall be limited in any case to
the Trust and its assets and that the Sub-Adviser shall not seek satisfaction
of any such obligations from the shareholders of the Trust, the Trustees,
officers, employees or agents of the Trust, or any of them.
Section 13. Miscellaneous
(a) This Agreement shall be governed by the laws of the Commonwealth of
Virginia, provided that nothing herein shall be construed in a manner
inconsistent with the Act, the Advisers Act, or rules or orders of the SEC
thereunder.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
(d) Nothing herein shall be construed as constituting the Sub-Adviser as
an agent of the Trust or the Adviser.
B1-4
<PAGE>
If the terms and conditions described above are in accordance with your
understanding, kindly indicate your acceptance of this Agreement by signing and
returning to us the enclosed copy of this Agreement.
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
Name:
Title:
MENTOR FUNDS
By:-----------------------------------------
Name:
Title:
Accepted:
VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT, INC.
By:--------------------------------
Name:
Title:
B1-5
<PAGE>
APPENDIX I
The Adviser pays the Sub-Adviser an annual fee not to exceed the following
percentage of Portfolio assets as follows:
<TABLE>
<CAPTION>
Sub-Adviser's Rate
of Fee in
Accordance With
Section 6 of The
The Mentor Funds Agreement
- --------------------------------------------- -----------------------------
<S> <C>
Mentor Municipal Income Portfolio .25% of average net assets
of the Portfolio from $0 to
$60 million; .20% of average
net assets of the Portfolio
over $60 million
</TABLE>
B1-6
<PAGE>
Exhibit B-2
[Mentor Income and Growth Portfolio]
MENTOR FUNDS
INVESTMENT ADVISORY AGREEMENT
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109
Dear Sirs:
Under an agreement (the "Management Agreement") between Mentor Funds, a
Massachusetts business trust (the "Trust"), and Mentor Investment Advisors,
LLC, a Virginia limited liability company (the "Adviser"), the Adviser serves
as the Trust's investment adviser and has the responsibility of evaluating,
recommending, supervising and compensating investment sub-advisers to each
series of the Trust.
The Adviser hereby confirms its agreement with Wellington Management
Company, LLP (the "Sub-Adviser") and the Trust with respect to the
Sub-Adviser's serving as the investment sub-adviser of the Mentor Income &
Growth Portfolio (the "Portfolio"), a series of the Trust, as follows:
Section 1. Investment Description; Appointment
(a) The Trust desires to employ the Portfolio's capital by investing and
reinvesting in investments of the kind and in accordance with the investment
objectives, policies and limitations specified in the prospectus (the
"Prospectus") and in the statement of additional information (the "Statement of
Additional Information") filed with the Securities and Exchange Commission (the
"SEC") as part of the Trust's Registration Statement on Form N-1A, as amended
from time to time (the "Registration Statement"). The Adviser has herewith
furnished the Sub-adviser copies of the Trust's Prospectus, Statement of
Additional Information, Declaration of Trust and By-Laws as currently in effect
and agrees during the continuance of the Agreement to furnish the Sub-Adviser
copies of any amendments or supplements thereto before or at the time the
amendments or supplements become effective. The Sub-Adviser will be entitled to
rely on all such documents furnished to it by the Adviser or the Trust.
(b) The Adviser, with the approval of the Trust, hereby appoints the
Sub-Adviser to act as investment sub-adviser to the Portfolio for the periods
and on the terms set forth in this Agreement. The Sub-Adviser accepts such
appointment and agrees to furnish the services herein set forth for the
compensation herein provided.
Section 2. Portfolio Management Duties
(a) Subject to the supervision of the Adviser and the Trust's Board of
Trustees, the Sub-Adviser will (i) manage the Portfolio's assets in accordance
with the Portfolio's investment objectives, policies and limitations as stated
in the Trust's Prospectus and Statement of Additional Information; (ii) make
investment decisions for the Portfolio; and (iii) place orders to purchase and
sell securities (and where appropriate) commodity futures contracts for the
Portfolio.
(b) The Sub-Adviser will keep the Trust and the Adviser informed of
developments materially affecting the Portfolio and shall, on the Sub-Adviser's
own initiative and as reasonably requested by the Adviser or the Trust, furnish
to the Trust and the Adviser from time to time whatever information the Adviser
reasonably believes appropriate for this purpose.
(c) The Sub-Adviser agrees that, in the performance of the duties required
of it by this Agreement, it will comply with the Investment Company Act of
1940, as amended (the "Act"), and all rules and regulations thereunder, all
applicable federal and state laws and regulations and with any applicable
procedures adopted by the Trust's Board of Trustees and identified in writing
to the Sub-Adviser. The Adviser will provide to the Sub-Adviser any specific
procedures that must be followed in the performance of the Sub-Adviser's duties
hereunder by reason of the affiliation of other sub-advisers or service
providers with the Trust.
B2-1
<PAGE>
Section 3. Brokerage
(a) The Sub-Adviser agrees that it will place orders pursuant to its
investment determinations for the Portfolio either directly with the issuer or
with brokers or dealers selected by the Sub-Adviser in accordance with the
standards specified in paragraphs (b) and (c) of this Section 3. Until notified
to the contrary by the Adviser, the Sub-Adviser may place orders for the
Portfolio with affiliates of the Adviser in accordance with Section 11(a) of
the Securities Exchange Act of 1934 and Rule 11a2-2(T) thereunder, Section
17(e) of the Act of 1934 and Rule 17e-1 thereunder and other applicable laws
and regulations. The Sub-Adviser will identify to the Adviser in writing any
brokers and dealers which are affiliates of the Sub- Adviser. The Adviser will
identify to the Sub-Adviser in writing any brokers and dealers which are
affiliates of the Adviser and will forward to each Sub-Adviser information
provided by the other Sub-Advisers with respect to affiliated broker-dealers of
such Sub-Advisers.
(b) In placing orders with brokers and dealers, the Sub-Adviser will give
primary consideration to securing the most favorable price and efficient
execution. Within the framework of this policy, the Sub-Adviser may consider
the financial responsibility, research and investment information and other
services provided by brokers and dealers who may effect or be a party to any
such transaction or other transactions to which the Sub-Adviser's other clients
may be a party.
(c) It is understood that it is desirable for the Portfolio that the
Sub-Adviser have access to supplemental investment and market research and
security and economic analysis provided by brokers who may execute brokerage
transactions at a higher cost to the portfolio than may result when allocating
brokerage to other brokers on the basis of seeking the most favorable price and
efficient execution. Therefore, the Sub-Adviser is authorized to place orders
for the purchase and sale of securities for the Portfolio with such brokers,
subject to review by the Trust's Board of Trustees from time to time with
respect to the extent and continuation of this practice. It is understood that
the services provided by such brokers may be useful to the Sub-Adviser in
connection with the Sub-Adviser's services to other clients.
On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other clients of the
Sub-Adviser, the Sub-Adviser, to the extent permitted by applicable laws and
regulations, may, but shall be under no obligation to, aggregate the securities
to be so purchased or sold in order to obtain the most favorable price or lower
brokerage commissions and efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in the
transaction, will be made by the Sub-Adviser in the manner it considers to be
most equitable and consistent with its fiduciary obligations to the Portfolio
and to such other clients.
(d) Subject to the requirements of subsections (a), (b) and (c) above, in
selecting brokers or dealers to execute a particular transaction and in
evaluating the best overall terms available, the Adviser shall have the right
to request in writing that transactions giving rise to brokerage commissions
shall be executed by brokers and dealers that provide brokerage and research
services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Trust or will be of value to the Trust in the
management of its assets or the Adviser's performance of its management
services provided to the Trust. In addition, subject to the requirements of
subsections (a), (b) and (c) above and the applicable Rules of Fair Practice of
the National Association of Securities Dealers, Inc., the Trust shall have the
right to request that such transactions be executed by brokers and dealers by
or through whom sales of shares of the Trust are made.
Section 4. Information Provided to the Adviser and the Trust
(a) The Sub-Adviser agrees that it will make available to the Adviser and
the Trust promptly upon their request copies of all of its investment records
and ledgers with respect to the Portfolio to assist the Adviser and the Trust
in monitoring compliance with the Act and the Investment Advisers Act of 1940,
as amended (the "Advisers Act"), as well as other applicable laws. The
Sub-Adviser will furnish the Trust's Board of Trustees with respect to the
Portfolio such periodic and special reports as the Adviser and the Board of
Trustees may reasonably request.
(b) The Sub-Adviser agrees that it will immediately notify the Adviser and
the Trust in the event that the Sub-Adviser or any of its affiliates: (i)
becomes subject to a statutory disqualification that prevents the Sub-Adviser
from serving as investment sub-adviser pursuant to this Agreement, or (ii) is
or expects to become the subject of an administrative proceeding or enforcement
action by the SEC or other regulatory authority. The Sub-Adviser has provided
the information about itself set forth in the Registration Statement and
acknowledges that, as of the date hereof, it is true and correct and contains
no material misstatement or omission, and the Sub-Adviser further agrees to
notify the Adviser immediately of: (i) any material fact known to the
Sub-Adviser respecting or relating to the Sub-Adviser that is not contained in
the Prospectus or Statement of Additional Information of the Trust, or any
amendment or supplement thereto, if the omission of such would make such
document misleading; or (ii) any statement contained therein that becomes
untrue in any material respect.
B2-2
<PAGE>
(c) The Sub-Adviser represents that it is an investment adviser registered
under the Advisers Act and other applicable laws and that the statements
contained in the Sub-Adviser's registration under the Advisers Act on Form ADV,
as of the date hereof, are true and correct and do not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. The Sub-Adviser agrees to maintain the
completeness and accuracy of its registration on Form ADV in accordance with
all legal requirements relating to that Form. The Sub-Adviser acknowledges that
it is an "investment adviser" to the Portfolio within the meaning of the Act
and the Advisers Act.
Section 5. Books and Records
In compliance with the requirements of Rule 31a-3 under the Act, the
Sub-Adviser hereby agrees that all records that it maintains for the Trust are
the property of the Trust and further agrees to surrender promptly to the Trust
copies of any such records upon the Trust's request. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2 under the Act the
records with respect to the Sub-Adviser's duties hereunder required to be
maintained by Rule 31a-1 under the Act and to preserve the records required by
Rule 204-2 under the Advisers Act for the period specified in that Rule.
Section 6. Compensation
(a) In consideration of services rendered pursuant to this Agreement, the
Adviser will pay the Sub-Adviser a fee that is computed daily and paid monthly
at the annual rate set forth in Appendix I to this Agreement (the "Portfolio
Sub-Advisory Fee"). From time to time the Sub-Adviser may agree to reimburse
the Trust additional expenses or waive a portion or all of its fee, in the sole
discretion of the Sub-Adviser.
(b) The Portfolio Sub-Advisory Fee for the period from the date that the
Portfolio commences investment operations to the end of the month during which
the Portfolio commences investment operations shall be prorated according to
the portion that such period bears to the full monthly period. Upon any
termination of this Agreement before the end of a month, the fee for such part
of that month shall be prorated according to the proportion that such period
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement.
(c) For the purposes of determining fees payable to the Sub-Adviser, the
value of the Trust's net assets shall be computed at the times and in the
manner specified in the Trust's Prospectus and/or the Statement of Additional
Information.
[To be included if this Agreement is implemented prior to its approval by the
Portfolio's shareholders --
(d) Any fees payable by the Adviser under this Agreement during the period
commencing on the effective date of this Agreement and ending on the date of
the initial approval of this Agreement by a majority of the outstanding voting
securities of the Portfolio shall be paid by the Adviser into an
interest-bearing escrow account with such unaffiliated financial institution as
the Trust and the Adviser may establish, to be released to the Sub-Adviser only
upon such initial approval of this Agreement, or, if such approval shall not
occur within the 60 days following consummation of the merger of Wheat First
Butcher Singer, Inc. with First Union Corporation, to the Portfolio.]
Section 7. Costs and Expenses
During the term of this Agreement, the Sub-Adviser will pay all expenses
incurred by it and its staff in connection with the performance of its services
under this Agreement, including the payment of salaries of all officers and
employees who are employed by it, but not including expenses to be paid by the
Trust or the Adviser such as brokerage fees and commissions and custodian
charges. The Trust shall assume and pay any expenses for services rendered by a
custodian for the safekeeping of the Trust's securities or other property, for
keeping its books of account, for any other charges of the custodian, and for
calculating the net asset value of the Trust as provided in the Trust's
Prospectus. The Sub-Adviser shall not be required to pay and the Trust (or the
Adviser) shall assume and pay the charges and expenses of the Trust's
operations, including compensation of the trustees, charges and expenses of
independent auditors, of legal counsel, of any transfer or dividend disbursing
agent, and of any registrar of the Trust, costs of acquiring and disposing of
portfolio securities, interest, if any, on obligations incurred by the Trust,
costs of share certificates and of reports, membership dues in the Investment
Company Institute or any similar organization, costs of reports and notices to
shareholders, other like miscellaneous expenses and all taxes and fees payable
to federal, state or other governmental agencies on account of the registration
of securities issued by the Trust, filing of trust documents or otherwise.
Section 8. Standard of Care
The Sub-Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Adviser or the Trust in connection with
the matters to which this Agreement relates, provided that nothing in this
Agreement shall
B2-3
<PAGE>
be deemed to protect or purport to protect the Sub-Adviser against any
liability to the Adviser or the Trust to which the Sub-Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or by reason of the Sub-Adviser's
reckless disregard of its obligations and duties under this Agreement.
Section 9. Services to Other Companies or Accounts
(a) Except as otherwise agreed between the Adviser and the Sub-Adviser, it
is understood that the services of the Sub-Adviser are not exclusive, and
nothing in this Agreement shall prevent the Sub-Adviser from providing similar
services to other investment companies (whether or not their investment
objectives and policies are similar to those of the Trust) or from engaging in
other activities.
(b) When the Sub-Adviser recommends the purchase or sale of a security for
other investment companies and other clients, and at the same time the
Sub-Adviser recommends the purchase or sale of the same security for the Trust,
it is understood that in light of its fiduciary duty to the Trust, such
transactions will be executed on a basis that it is fair and equitable to the
Trust.
(c) The Trust and the Adviser understand and acknowledge that the persons
employed by the Sub-Adviser to assist in the performance of its duties under
this Agreement will not devote their full time to that service; nothing
contained in this Agreement will be deemed to limit or restrict the right of
the Sub-Adviser or any affiliate of the Sub-Adviser to engage in and devote
time and attention to other businesses or to render services of whatever kind
or nature, except as otherwise agreed between the adviser and the Sub-Adviser.
Section 10. Duration and Termination
(a) The Trust represents that this Agreement has been approved by the
Trust's Board of Trustees and shareholders pursuant to Section 15 of the Act.
This Agreement shall become effective on the date hereof and shall continue for
two years from that date, such continuance, to the extent required by the Act,
being subject to approval of this Agreement by the Trust's shareholders at the
first meeting of such shareholders following such date, and thereafter shall
continue automatically for successive annual periods, provided such continuance
is specifically approved at least annually by (i) the Trust's Board of Trustees
or (ii) a vote of a majority of the Portfolio's outstanding voting securities
(as defined in the Act), provided that the continuance is also approved by a
majority of the Trustees who are not "interested persons" (as defined in the
Act) of the Trust, by vote cast in person at a meeting called for the purpose
of voting on such approval.
(b) Notwithstanding the foregoing, this Agreement may be terminated (i) by
the Adviser at any time without penalty, upon 60 days' written notice to the
Sub-Adviser and the Trust, (ii) at any time without penalty by the Trust, upon
the vote of a majority of the Trust's outstanding voting securities, or by vote
of the majority of the Trust's outstanding voting securities, upon 60 days'
written notice to the Sub-Adviser and the Adviser, (iii) by the Sub- Adviser at
any time without penalty, upon 60 days' written notice to the Adviser and the
Trust.
(c) This Agreement will terminate automatically in the event of its
assignment (as defined in the Act and in rules adopted under the Act).
Section 11. Amendments
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 whom enforcement of the change waiver, discharge or termination is
sought, and no amendment of this Agreement shall be effective until approved in
accordance with applicable law.
Section 12. Limitations of Liability of Trustees, Officers, Employees, Agents
and Shareholders of the Trust
The Sub-Adviser is expressly put on notice of the limitation of liability
as set forth in the Declaration of Trust and agrees that the obligations
assumed by the Trust pursuant to this Agreement shall be limited in any case to
the Trust and its assets and that the Sub-Adviser shall not seek satisfaction
of any such obligations from the shareholders of the Trust, the Trustees,
officers, employees or agents of the Trust, or any of them.
B2-4
<PAGE>
Section 13. Reference to the Sub-Adviser
During the terms of this Agreement, the Trust and the Adviser agree to
furnish the Sub-Adviser at its principal office, prior to the use thereof, all
prospectuses, proxy statements, reports to stockholders, sales literature or
other materials prepared for distribution to stockholders of the Portfolio, the
Trust or the public that refer to the Sub-Adviser or its clients in any way and
not to use material if the Sub-Adviser reasonably objects in writing within
five business days (or such other period as may be mutually agreed) after
receipt thereof. The Sub-Adviser's right to object to such materials is limited
to the portions of such materials that expressly relate to the Sub-Adviser, its
services and its clients. The Trust and the Adviser agree to use their
reasonably best efforts to ensure that materials prepared by their employees or
agents or their affiliates that refer to the Sub-Adviser or its clients in any
way are consistent with those materials previously approved by the Sub-Adviser
as referenced in the first sentence of this paragraph. Sales literature may be
furnished to the Sub-Adviser by first-class or overnight mail, facsimile
transmission equipment or hand delivery.
Section 14. Miscellaneous
(a) This Agreement shall be governed by the laws of the Commonwealth of
Virginia, provided that nothing herein shall be construed in a manner
inconsistent with the Act, the Advisers Act, or rules or orders of the SEC
thereunder.
(b) The captions of this Agreement are included for convenience only and
in no way define or limit any of the provisions hereof or otherwise affect
their construction or effect.
(c) 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 and, to this extent, the provisions of this
Agreement shall be deemed to be severable. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors.
(d) Nothing herein shall be construed as constituting the Sub-Adviser as
an agent of the Trust or the Adviser.
(e) This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
(f) Any notice, advice or report to be given pursuant to this Agreement
shall be delivered or mailed.
To the Adviser at:
Mentor Investment Advisors, LLC
901 East Byrd Street
Richmond, Virginia 23219
To the Sub-Adviser at:
Wellington Management Company, LLP
75 State Street
Boston, Massachusetts 02109
To the Trust or the Portfolio at:
Mentor Funds
901 East Byrd Street
Richmond, Virginia 23219
(g) Where the effect of a requirement of the 1940 Act reflected in any
provision of his Agreement is altered by a rule, regulation or order of the
SEC, whether of special or general application, such provision shall be deemed
to incorporate the effect of such rule, regulation or order.
B2-5
<PAGE>
If the terms and conditions described above are in accordance with your
understanding, kindly indicate your acceptance of this Agreement by signing and
returning to us the enclosed copy of this Agreement.
MENTOR INVESTMENT ADVISORS, LLC
By:-----------------------------------------
Name:
Title:
MENTOR FUNDS
By:-----------------------------------------
Name:
Title:
Accepted:
WELLINGTON MANAGEMENT COMPANY, LLP
By:--------------------------------
Name:
Title:
B2-6
<PAGE>
APPENDIX I
The Adviser pays the Sub-Adviser an annual fee not to exceed the following
percentage of Portfolio assets as follows:
<TABLE>
<CAPTION>
Sub-Adviser's Rate
of Fee in
Accordance with
Level of Portfolio Assets Section 6 of the Agreement
- ------------------------------------------------ ---------------------------
<S> <C>
Up to and including $50 million 0.325%
In excess of $50 million up to and
including $200 million 0.275%
In excess of $200 million up to and
including $50 million 0.225%
In excess of $500 million 0.200%
</TABLE>
B2-7
<PAGE>
Exhibit C
Information relating to investment companies similar to the Portfolios for
which Van Kampen provides investment advisory services.
<TABLE>
<CAPTION>
Fund Net Assets Fee Schedule
- -------------------------------------- -------------------- ----------------------------
<S> <C> <C>
Van Kampen $179.2 million (1) .20% of average net assets
Sierra Trust Fund, up to $150 million; .15%
National Municipal Fund of average net assets over
$ 150 million.(2)
</TABLE>
- ---------
(1) As of September 30, 1997.
(2) Pursuant to investment sub-advisory agreements in respect of the National
Municipal Fund and the California Municipal Fund, another series of the
Sierra Trust Funds sub-advised by Van Kampen American Capital Management,
Inc., when the combined average daily net assets of the Funds (the
"Combined Assets") exceed $750 million, Van Kampen American Capital
Management, Inc., will be paid a fee with respect to each Fund in
proportion to each Fund's average net assets at the following annual rate:
.15% of the Combined Assets up to $1 billion, and .125%of the Combined
Assets over $1 billion.
C-1
<PAGE>
Exhibit D
Information relating to investment companies similar to the Income and
Growth Portfolio for which Wellington Management provides investment advisory
services.
<TABLE>
<CAPTION>
Schedule of Sub-Advisory
Fees
--------------------------
Net Assets Net Assets Annual
9/30/97 ------------------ -------
Fund ($mm) Fund Manager Rate
- -------------------------------- ----------- ----------------------------- --------------------------
<S> <C> <C> <C> <C>
Hartford Advisers (a) 7,865 HL Advisers, Inc. First 50mm 0.325%
Next 100mm 0.250%
Next 350mm 0.200%
Over 500mm 0.150%
Horace Mann Balanced (a) 382 Horace Mann Investors, Inc. First 100mm 0.325%
Next 100mm 0.275%
Next 300mm 0.225%
Over 500mm 0.200%
Vanguard/Wellington 2,787 The Vanguard Group First 1,000mm 0.100%
Next 2,000mm 0.050%
Next 7,000mm 0.040%
Over 10,000mm 0.030%
+/- incentive fee
</TABLE>
- ---------
(a) An underlying fund wrapped by a variable annuity.
D-1
<PAGE>
MENTOR FAMILY OF FUNDS
Mentor Quality Income Portfolio
---------------
SUPPLEMENTAL NOTICE OF MEETING OF SHAREHOLDERS
---------------
This Supplemental Notice relates to the Meeting of Shareholders of Mentor
Funds to be held at 901 East Byrd Street, Richmond, Virginia, on Monday,
December 22, 1997, at 9:00 a.m., Eastern Standard Time. The Meeting will be
held for the following purpose, in addition to those purposes stated in the
Notice of Meeting:
o To approve an amendment to the fundamental investment restrictions of
Mentor Quality Income Portfolio to permit the Portfolio to borrow money to
invest in additional securities.
By order of the Trustees
John M. Ivan
Secretary
November 21, 1997
<PAGE>
Mentor Family of Funds
901 East Byrd Street
Richmond, Virginia 23219
---------------------
Supplement to Proxy Statement
---------------------
This Supplement is intended to accompany the Proxy Statement being made
available to shareholders on or about November 21, 1997 (the "Proxy Statement")
relating to the Meeting of Shareholders of the Mentor Family of Funds (the
"Meeting") to be held at 901 East Byrd Street, Richmond, Virginia, on December
22, 1997, at 9:00 a.m., Eastern Standard Time, and at any adjournment thereof.
This Supplement is first being made available to shareholders on or about
November 21, 1997.
This Supplement describes a proposal to be presented to shareholders of
Mentor Quality Income Portfolio, a series of shares of Mentor Funds, at the
Meeting. It should be read as a supplement to and in conjunction with the Proxy
Statement. Capitalized terms not defined in this Supplement are used with the
meanings ascribed to them in the Proxy Statement.
APPROVAL OF AN AMENDMENT TO FUNDAMENTAL INVESTMENT RESTRICTIONS
OF MENTOR QUALITY INCOME PORTFOLIO TO PERMIT THE PORTFOLIO TO
BORROW MONEY TO INVEST IN ADDITIONAL SECURITIES.
At the recommendation of Mentor Advisors, the Board of Trustees of Mentor
Funds has approved a proposal that the Quality Income Portfolio of Mentor Funds
be permitted to borrow money to invest in additional securities. Mentor
Advisors would borrow money for the Quality Income Portfolio only if it
believed that such borrowing offered the potential for high current income
consistent with what Mentor Advisors believes to be prudent risk.
Implementation of the proposal requires an amendment to two of the Trust's
fundamental investment restrictions applicable to the Quality Income Portfolio,
as described below.
The technique of borrowing money to invest in additional securities is
known as "leverage." Leverage increases a fund's market exposure and risk. When
a fund has borrowed money for leverage and its investments increase or decrease
in value, its net asset value will normally increase or decrease more than if
it had not borrowed money. The interest that a fund must pay on borrowed money
will reduce its net investment income, and may also either offset any potential
capital gains or increase any losses.
Mentor Advisors currently intends to use leverage in order to adjust the
Quality Income Portfolio's dollar-weighted average duration. The Portfolio
would not always borrow money for investment and the extent to which the
Portfolio borrows money, and the amount it borrows, will depend on market
conditions and interest rates. Successful use of leverage depends on Mentor
Advisors' ability to predict market movements correctly. Under the proposed
amendment to the Portfolio's investment restrictions, the Portfolio would be
permitted to borrow money from a bank or enter into reverse repurchase
agreements, which have the same effect as if it had borrowed money.
Certain of the Quality Income Portfolio's fundamental investment
restrictions may be read to prohibit the Portfolio's borrowing money to invest
in additional securities. They read, in relevant part, as follows:
"The Portfolios will not issue senior securities except that a Portfolio
(other than the Municipal Income Portfolio) may borrow money directly or
through reverse repurchase agreements in amounts of up to one-third of the
value of its net assets, including the amount borrowed; and except to the
extent that a Portfolio may enter into futures contracts.... The Portfolios
will not borrow money or engage in reverse repurchase agreements for
investment leverage, but rather as a temporary, extraordinary, or emergency
measure or to facilitate management of the Portfolio by enabling it to meet
redemption requests when the liquidation of portfolio securities is deemed
to be inconvenient or disadvantageous. The Portfolios will not purchase any
securities while any borrowings in excess of 5% of its total assets are
outstanding. During the period any reverse repurchase agreements are
outstanding, the Quality Income Portfolio will restrict the purchase of
portfolio securities to money market instruments maturing on or before the
expiration date of the reverse repurchase agreements, but only to the
extent necessary to assure completion of the reverse repurchase agreements.
Notwithstanding this restriction, the Portfolios may enter into when-issued
and delayed delivery transactions."
"The Portfolios will not mortgage, pledge, or hypothecate any assets,
except to secure permitted borrowings. In these cases the Portfolios may
pledge assets having a value of 10% of assets taken at cost. For purposes
of this restriction,
<PAGE>
(a) the deposit of assets in escrow in connection with the writing of
covered put or call options and the purchase of securities on a when-issued
basis; and (b) collateral arrangements with respect to (i) the purchase and
sale of stock options (and options on stock indexes) and (ii) initial or
variation margin for futures contracts, will not be deemed to be pledges of
a Portfolio's assets. Margin deposits for the purchase and sale of futures
contracts and related options are not deemed to be a pledge."
The Board of Trustees has approved new restrictions applicable to the Quality
Income Portfolio, which would replace the restrictions quoted above. The new
restrictions read as follows:
"[The Quality Income Portfolio will not] Issue any class of securities
which are senior to the Portfolio's shares except that the Portfolio may
borrow money as contemplated by the following restriction."
"[The Quality Income Portfolio will not] Borrow more than 33 1/3% of the
value of its total assets less all liabilities and indebtedness (other than
such borrowings)."
Mentor Advisors believes that the proposed changes will make available to it a
significant investment technique with the potential to be of substantial
benefit to the Portfolio and its shareholders.
Required Vote. Shareholders of the Quality Income Portfolio will vote
separately to approve or disapprove the proposed amendment to the investment
restrictions applicable to the Portfolio. The vote necessary to approve the
amendment is the lesser of (i) 67% of the shares of the Portfolio represented
at the Meeting, if more than 50% of the shares of the Portfolio are represented
at the Meeting, and (ii) more than 50% of the outstanding shares of the
Portfolio.
The Trustees unanimously recommend that you vote "FOR" this proposal.
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR SHORT-DURATION INCOME PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Short-Duration Income Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows:[ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR SHORT-DURATION INCOME PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., , [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr.07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract [ ] [ ] [ ]
for the Portfolio to take effect upon the
merger of Wheat First Butcher Singer, Inc.
with First Union Corporation.
2. Proposal to approve new management contract [ ] [ ] [ ]
for the Portfolio to take effect upon the
acquisition of additional interest in
Mentor Investment Group, LLC by EVEREN
Securities Holdings, Inc.
-------------------------------------- ------------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR PERPETUAL GLOBAL PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Perpetual Global Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR PERPETUAL GLOBAL PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
--------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR STRATEGY PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Strategy Portfolio which the undersigned would be entitled to
vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR STRATEGY PORTFOLIO
<TABLE>
<CAPTION>
<S><C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., , [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr. 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR CAPITAL GROWTH PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Capital Growth Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR CAPITAL GROWTH PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., , [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr. 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------ ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR GROWTH PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Growth Portfolio which the undersigned would be entitled to
vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR GROWTH PORTFOLIO
<TABLE>
<CAPTION>
<S><C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
-------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take [ ] [ ] [ ]
effect upon the acquisition of additional interest in Mentor Investment
Group, LLC by EVEREN Securities Holdings, Inc.
------------------------------------ ------------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR INSTL US GOVT MM PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Institutional U.S. Government Money Market Portfolio which the
undersigned would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a
joint owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows:
[ ] KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR INSTL US GOVERNMENT MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
----------------------------------- ---------------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR INSTL MONEY MARKET PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Institutional Money Market Portfolio which the undersigned
would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR INSTL MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
For Withhold For All To withhold authority to vote for one
3. Proposal to elect Trustees: All All Except more of the nominees, mark "For All
The nominees for Trustees are: 01) Daniel J. Ludeman Except" and write the nominee's
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, [ ] [ ] [ ] number on the line below.
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., ,
06) Louis W. Moelchert, Jr.07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals
For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------ ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR BALANCED PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Balanced Portfolio which the undersigned would be entitled to
vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows:[ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR BALANCED PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
-------------------------------
Vote on Proposals
For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the
merger of Wheat First Butcher Singer, Inc. with First Union Corporation. [ ] [ ] [ ]
2. Proposal to approve new management contract for the Portfolio to take effect upon the
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities [ ] [ ] [ ]
Holdings, Inc.
-------------------------------------- ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR QUALITY INCOME PORTFOLIO
MENTOR FUNDS
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Quality Income Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, 3, AND 4, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR QUALITY INCOME PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
4. Proposal to amend fundamental investment restrictions of the Portfolio to permit it to invest [ ] [ ] [ ]
in additional securities.
------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS MENTOR INCOME AND GROWTH PORTFOLIO
901 E. BYRD STREET MENTOR FUNDS
RICHMOND, VA 23219 PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Income and Growth Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 1a, 2, 2a AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR INCOME AND GROWTH PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Directors: For Withhold For All To withhold authority to vote for one or
The nominees for Directors are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
Troy A. Peery, Jr. 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr. [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
----------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
a. Proposal to approve new sub-advisory agreement with Wellington Management [ ] [ ] [ ]
Company, LLP
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
a. Proposal to approve new sub-advisory agreement with Wellington Management [ ] [ ] [ ]
Company, LLP
------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR FUNDS MENTOR MUNICIPAL INCOME PORTFOLIO
901 E. BYRD STREET MENTOR FUNDS
RICHMOND, VA 23219 PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR SPECIAL MEETING OFSHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Special Meeting of Shareholders of the Trust, on December 22, 1997
at 9:00 a.m., Eastern Standard Time, and at any adjournments thereof, all of the
shares of Mentor Municipal Income Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 1a, 2, 2a AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR MUNICIPAL INCOME PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one or
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Perry, Jr. 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr. [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr. 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
__________________________________
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon [ ] [ ] [ ]
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
a. Proposal to approve new sub-advisory agreement with Van Kampen American [ ] [ ] [ ]
Capital Management, Inc.
2. Proposal to approve new investment advisory agreement for the Portfolio to take effect [ ] [ ] [ ]
upon the acquisition of additional interest in Mentor Investment Group, LLC by EVEREN
Securities Holdings, Inc.
a. Proposal to approve new sub-advisory agreement with Van Kampen American [ ] [ ] [ ]
Capital Management, Inc.
-------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR INSTITUTIONAL TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR PERPETUAL INTL PORTFOLIO
MENTOR INSTITUTIONAL TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Mentor Perpetual International Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as an executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR PERPETUAL INTL PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr.,07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR INSTITUTIONAL TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR FIXED INCOME PORTFOLIO
MENTOR INSTITUTIONAL TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Mentor Fixed Income Portfolio which the undersigned would be entitled to vote
if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR FIXED INCOME PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect [ ] [ ] [ ]
upon the merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect [ ] [ ] [ ]
upon the acquisition of additional interest in Mentor Investment Group, LLC by
EVEREN Securities Holdings, Inc.
------------------------------------- ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR INSTITUTIONAL TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR INTERMEDIATE DURATION PORTFOLIO
MENTOR INSTITUTIONAL TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Mentor Intermediate Duration Portfolio which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR INTERMEDIATE DURATION PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take [ ] [ ] [ ]
effect upon the merger of Wheat First Butcher Singer, Inc. with
First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take [ ] [ ] [ ]
effect upon the acquisition of additional interest in Mentor Investment Group, LLC
by EVEREN Securities Holdings, Inc.
------------------------------------- ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
CASH RESOURCE TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
CASH RESOURCE MONEY MARKET FUND
CASH RESOURCE TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Cash Resource Money Market Fund which the undersigned would be entitled to
vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows:[ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CASH RESOURCE MONEY MARKET FUND
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr.07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Fund to take effect upon [ ] [ ] [ ]
the merger of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Fund to take effect [ ] [ ] [ ]
upon the acquisition of additional interest in Mentor Investment Group, LLC
by EVEREN Securities Holdings, Inc.
-------------------------------------- -------------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
CASH RESOURCE TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
CASH RESOURCE US GOVERNMENT MM FUND
CASH RESOURCE TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Cash Resource U.S. Government Money Market Fund which the undersigned would
be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows:[ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CASH RESOURCE US GOVERNMENT MM FUND
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
-----------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Fund to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Fund to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------- -----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
CASH RESOURCE TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
CASH RESOURCE TAX-EXEMPT MM FUND
CASH RESOURCE TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Cash Resource Tax-Exempt Money Market Fund which the undersigned would be
entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CASH RESOURCE TAX-EXEMPT MM FUND
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Fund to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Fund to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------- ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
CASH RESOURCE TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
CASH RESOURCE CALIF TAX-EXEMPT MM FUND
CASH RESOURCE TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Cash Resource California Tax-Exempt Money Market Fund which the undersigned
would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows:[ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CASH RESOURCE CALIF TAX-EXEMPT MONEY MARKET FUND
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Fund to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Fund to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------ ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
CASH RESOURCE TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
CASH RESOURCE NEW YORK TAX-EXEMPT MM FUND
CASH RESOURCE TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Cash Resource New York Tax-Exempt Money Market Fund which the undersigned
would be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
CASH RESOURCE NEW YORK TAX-EXEMPT MM FUND
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Fund to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Fund to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
-------------------------------------- ------------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR INSTITUTIONAL TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
SNAP FUND
MENTOR INSTITUTIONAL TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of SNAP Fund which the undersigned would be entitled to vote if personally
present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
SNAP FUND
<TABLE>
<CAPTION
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr.,07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Fund to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Fund to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------- ----------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
<PAGE>
MENTOR INSTITUTIONAL TRUST
901 E. BYRD STREET
RICHMOND, VA 23219
MENTOR US GOVT CASH MANAGEMENT PORTFOLIO
MENTOR INSTITUTIONAL TRUST
PROXY SOLICITED BY THE BOARD OF TRUSTEES
PROXY FOR MEETING OF SHAREHOLDERS
DECEMBER 22, 1997
The undersigned hereby appoints Daniel J. Ludeman, Paul F. Costello, and Peter
J. Quinn, Jr., and each of them separately, proxies, with power of substitution
to each, and hereby authorizes them to represent and to vote, as designated
below, at the Meeting of Shareholders of the Trust, on December 22, 1997 at 9:00
a.m., Eastern Standard Time, and at any adjournments thereof, all of the shares
of Mentor U.S. Government Cash Management Portfolio which the undersigned would
be entitled to vote if personally present.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS 1, 2, AND 3, INCLUDING THE ELECTION OF TRUSTEES.
In their discretion, the proxies are authorized to vote upon such other business
as may properly come before the Meeting, and, if any nominee for Trustee
declines or becomes unavailable for election, to vote for a substitute nominee.
The Board of Trustees recommends a vote FOR each proposal.
Please sign your name exactly as it appears on this card. If you are a joint
owner, each owner should sign. When signing as executor, administrator,
attorney, trustee, or guardian, or as custodian for a minor, please give your
full title as such. If you are signing for a corporation, please sign the full
corporate name and indicate the signer's office. If you are a partner, sign in
the partnership name.
To vote, mark blocks below in blue or black ink as follows: [ ]
KEEP THIS PORTION FOR YOUR RECORDS
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
MENTOR US GOVERNMENT CASH MANAGEMENT PORTFOLIO
<TABLE>
<CAPTION>
<S> <C>
3. Proposal to elect Trustees: For Withhold For All To withhold authority to vote for one
The nominees for Trustees are: 01) Daniel J. Ludeman, All All Except more of the nominees, mark "For All
02) Troy A. Peery, Jr., 03) Arnold H. Dreyfuss, Except" and write the nominee's
04) Thomas F. Keller, 05) Peter J. Quinn, Jr., [ ] [ ] [ ] number on the line below.
06) Louis W. Moelchert, Jr., 07) Arch T. Allen, III,
08) Weston E. Edwards, 09) Jerry R. Barrentine, and
10) J. Garnett Nelson.
--------------------------------
Vote on Proposals For Against Abstain
1. Proposals to approve new management contract for the Portfolio to take effect upon the merger [ ] [ ] [ ]
of Wheat First Butcher Singer, Inc. with First Union Corporation.
2. Proposal to approve new management contract for the Portfolio to take effect upon the [ ] [ ] [ ]
acquisition of additional interest in Mentor Investment Group, LLC by EVEREN Securities
Holdings, Inc.
------------------------------------- ------------------------------------
Signature[PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
</TABLE>
