<PAGE> 1
PACIFIC CAPITAL
U.S. TREASURY SECURITIES FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 7, 2000
3:00 P.M.
A Special Meeting of shareholders of the Pacific Capital U.S.
Treasury Securities Fund series (the "Treasury Fund") of Pacific Capital Funds
will be held on July 7, 2000 at 3:00 p.m., local time, at 3435 Stelzer Road,
Columbus, Ohio. At the meeting, we will ask the shareholders to vote on:
1. A proposal to reorganize the Treasury Fund into the Pacific Capital
Diversified Fixed Income Fund.
2. Any other matters that properly come before the Meeting.
The Board of Trustees has unanimously approved the
reorganization proposal and recommends you vote FOR it. Please read the enclosed
proxy statement for a full discussion of the proposal.
By order of the Board of Trustees
Gregory T. Maddox, Secretary
June 5, 2000
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WHO CAN VOTE?
Anyone owning shares on April 28, 2000.
WHY SHOULD I BOTHER TO VOTE?
Your vote is important. If the Fund doesn't receive enough votes, it
will have added expenses to mail proxies again or solicit voters by telephone so
the meeting can take place.
HOW CAN I VOTE?
- By mail - vote, sign and mail the enclosed ballot in the enclosed
envelope
- By fax - vote, sign and fax both sides to 1-631-254-7564
- By phone - call 1-800-454-8683
- In person at the meeting
DO YOU HAVE ANY QUESTIONS?
If you have any questions after reading the enclosed proxy statement,
please contact your Investment Consultant.
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<PAGE> 2
PACIFIC CAPITAL FUNDS
U.S. TREASURY SECURITIES FUND
COMBINED PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS
JULY 7, 2000
The Board of Trustees of Pacific Capital Funds (referred to in
this Proxy Statement as the "Trust") is soliciting the enclosed Proxy in
connection with the Special Meeting of shareholders of the Trust's U.S. Treasury
Securities Fund series (referred to below as the "Treasury Fund"). The Meeting
will be held on July 7, 2000 at 3:00 p.m. local time at 3435 Stelzer Road,
Columbus, Ohio.
The Meeting is being called to vote on the proposed tax-free
reorganization of the Treasury Fund into the Trust's Pacific Capital Diversified
Fixed Income Fund series (referred to below as the "Diversified Fund"). The
Trust is an open-end management investment company (referred to generally as a
mutual fund). The investment objective of the Treasury Fund is high current
income consistent with prudent investment risk, and secondarily capital
appreciation. It invests primarily in U.S. Treasury bonds, notes, and bills and
related repurchase agreements. The investment objective of the Diversified Fund
is high current income. It invests in the same types of securities as the
Treasury Fund as well as debt securities issued or guaranteed by U.S. Government
agencies and instrumentalities, investment grade corporate debt securities, and
(up to 25% of total assets) investment grade, dollar-denominated debt securities
of foreign companies and governments.
--------------------------------------------------------------------------------
This Combined Proxy Statement and Prospectus (referred to below as the
"Proxy Statement") is organized as follows:
1. Summary of the Proxy Statement - the summary begins on page 2.
2. Reorganization of the Treasury Fund - information begins on page 4.
3. Proxy Voting and Meeting Procedures - information begins on page 9.
4. General Information - information begins on page 11.
--------------------------------------------------------------------------------
The current Prospectus of the Diversified Fund and the
Treasury Fund accompanies this Proxy Statement and is incorporated into this
Proxy Statement by reference. This Proxy Statement and the accompanying
Prospectus set forth concisely the information about the proposed reorganization
that you should know before voting. You should retain them for future reference.
The Trust's Annual Report for the year ended July 31, 1999 and
Semi-Annual Report for the six months ended January 31, 2000 were previously
mailed to shareholders. To get a copy of the Reports free of charge, write
Pacific Capital Funds at 3435 Stelzer Road, Columbus, Ohio 43219 or telephone us
at 1-800-258-9232.
Additional information about the Trust has been filed with the
Securities and Exchange Commission. You can review it at the Public Reference
Room of the Commission (for the hours of operation, call 1-202-942-8090). You
can get text-only copies at no charge from the Edgar database on the
Commission's website at http://www.sec.gov. You can also get such copies for a
fee by writing the Public Reference Section of the Commission, Washington, D.C.
20549-0102, or by electronic request by e-mailing the Commission at
[email protected].
This Proxy Statement is being mailed to shareholders of the
Treasury Fund on or about June 5, 2000.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR PASSED ON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Dated: June 6, 2000
<PAGE> 3
SUMMARY OF THE PROXY STATEMENT
The Board of Trustees has approved a plan to reorganize the
Treasury Fund into the Pacific Capital Diversified Fixed Income Fund.
At its current asset size ($15.9 million as of March 31,
2000), the Treasury Fund is too small to operate efficiently, and the Fund's
service providers are not willing to continue subsidizing the Fund's operations
by reducing their fees and paying other Fund expenses. The purpose of the
reorganization is to lower the investment expenses paid by shareholders of the
Treasury Fund by combining their assets with those of the larger Diversified
Fund, which can spread expenses over a larger asset and income base.
The proposed reorganization will not change the Trust's
distribution and purchase procedures, exchange rights, or redemption procedures,
which are the same for both the Treasury Fund and the Diversified Fund. We
expect that the proposed reorganization will be tax free.
INVESTMENT OBJECTIVES, POLICIES, AND RISKS
The investment objectives and policies of the Diversified Fund
are substantially similar to the Treasury Fund. Each Fund's primary objective is
high current income. The Treasury Fund's secondary objective is capital
appreciation; the Diversified Fund does not have a secondary objective. The
Treasury Fund invests primarily in U.S. Treasury bonds, notes, and bills and
related repurchase agreements. The Diversified Fund invests in those securities
as well as debt securities issued or guaranteed by U.S. Government agencies and
instrumentalities, investment grade corporate debt securities, and (up to 25% of
total assets) investment grade, dollar-denominated debt securities of foreign
companies and governments.
Both Funds are subject to similar risks. The values of each
Fund's investments fluctuate in response to movements in interest rates. If
rates rise, the values of its debt securities generally fall. The longer the
average maturity of a Fund's investment portfolio, the greater the fluctuation
in value. The value of any of the Diversified Fund's investments may also
decline in response to events affecting the issuer or its credit rating.
However, the investments of the Diversified Fund are subject to additional
credit risk, because it may invest not only in U.S. Government securities, but
also in investment grade securities of domestic and foreign companies and
foreign governments. In addition, the risks of foreign securities held by the
Diversified Fund depend on different political and economic environments and
other overall economic conditions in countries where the Fund invests.
Income received on direct U.S. Government obligations is
exempt from Hawaii state income tax. A smaller portion of the Diversified Fund's
dividends will be exempt than the Treasury Fund's dividends, because the
Diversified Fund invests a smaller portion of its assets in qualifying
obligations.
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<PAGE> 4
EXPENSE COMPARISON
The following table shows the comparative fees and expenses
you would pay if you buy and hold Class A or Class Y shares of the Treasury Fund
and the Diversified Fund, based on the actual operating expenses of that Class
for the fiscal year ended July 31, 1999.
<TABLE>
<CAPTION>
A Share Y Shares
------------------------------- ---------------------------------
Treasury Fund Diversified Fund Treasury Fund Diversified Fund
------------- ---------------- ------------- ----------------
Shareholder Transaction Expenses (paid by
you directly)
<S> <C> <C> <C> <C>
Maximum sales charge (load) on 4.00%(1,2) 4.00%(1,2) None None
purchase (as a % of offering price)
Maximum deferred sales charge (load) None(3) None(3) None None
(as a % of offering price)
Annual Fund Operating Expense (paid from
Fund assets)
Management fee 0.60%(4) 0.60%(4) 0.60%(5) 0.60%5
Distribution (12b-1) fee 0.75%(4) 0.75%(4) None None
Other expenses 0.45%(4) 0.32%(4) 0.45%(5) 0.32%5
Total Fund Operating Expenses 1.80%(4) 1.67%(4) 1.05%(5) 0.92%5
</TABLE>
1. Lower sales charges are available depending upon the amount invested.
2. Long-term shareholders may pay indirectly more than the equivalent of the
maximum permitted front-end sales charge due to the recurring nature of
12b-1 fees.
3. For investments of $1 million or more, a contingent deferred sales charge
is applicable to redemptions within one year of purchase.
4. For Class A shares, the Adviser is limiting the Management fee to 0.35% for
the Treasury Fund and 0.45% for the Diversified Fund, the Distributor is
limiting the Distribution (12b-1) fee to 0.25% for both Funds, and the
Administrator is waiving a portion of its fee, so that Other expenses were
0.41% for the Treasury Fund and 0.28%% for the Diversified Fund. TOTAL FUND
OPERATING EXPENSES FOR CLASS A SHARES AFTER THESE FEE WAIVERS WERE 1.01%
FOR THE TREASURY FUND AND 0.98% FOR THE DIVERSIFIED FUND. Theses expense
limitations may be revised or cancelled at any time.
5. For Class Y shares, the Adviser is limiting the Management fee to 0.35% for
the Treasury Fund and 0.45% for the Diversified Fund, and the Administrator
is waiving a portion of its fee, so that Other expenses were 0.41% for the
Treasury Fund and 0.28% for the Diversified Fund. TOTAL FUND OPERATING
EXPENSES FOR CLASS Y SHARES AFTER THESE FEE WAIVERS WERE 0.76% FOR THE
TREASURY FUND AND 0.73% FOR THE DIVERSIFIED FUND. These expense limitations
may be revised or cancelled at any time.
-3-
<PAGE> 5
EXPENSE EXAMPLE. Use the following table to compare fees and
expenses of the Funds with those of other funds. It illustrates the amount of
fees and expenses you would pay assuming a $10,000 investment, a 5% annual
return, redemption at the end of each period, and no changes in the Funds'
operating expenses. Because the example is hypothetical and for comparison only,
your actual costs will be different.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
A Shares
Treasury Fund $ 576 $ 944 $1,336 $2,431
Diversified Fund $ 563 $ 905 $1,271 $2,297
Y Shares
Treasury Fund $ 107 $ 334 $ 579 $1,283
Diversified Fund $ 94 $ 293 $ 509 $1,131
PROPOSED REORGANIZATION OF THE TREASURY FUND
The Board of Trustees has approved a plan to reorganize the
Treasury Fund into the Diversified Fund. The purpose of the reorganization is to
lower the investment expenses paid by the shareholders of the Treasury Fund. To
proceed, we need the approval of the shareholders of the Treasury Fund. The next
several pages outline the important details of the reorganization plan:
- Why we want to reorganize the Treasury Fund
- How we plan to accomplish the reorganization
- How the reorganization will affect the Treasury Fund
- Financial and legal information
WHY WE WANT TO REORGANIZE THE TREASURY FUND
The Board of Trustees believes that the proposed
reorganization will benefit the shareholders of the Treasury Fund. The Fund has
substantial overhead costs for accounting, legal, printing, insurance, custody,
transfer agency, advisory and administrative services. At its current asset size
($15.9 million as of March 31, 2000), the Fund is too small to operate
efficiently, and its investment adviser (The Asset Management Group of Bank of
Hawaii) and administrator (BISYS Fund Services Ohio, Inc.) have been voluntarily
subsidizing the Fund's operations by reducing its management fees and paying
other Fund expenses, so that the Fund can provide a competitive yield to its
shareholders. The Asset Management Group of Bank of Hawaii does not foresee any
significant increases in the Fund's asset size in the near future, and has
informed that Board that it is not willing to continue subsidizing the Fund's
future operations.
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<PAGE> 6
Although the Diversified Fund has similar expenses, as a fund
with more assets ($258.1 million as of March 31, 2000) it can spread those
expenses over a substantially larger asset and income base. Because the
investment objectives, current portfolios, and policies of the Treasury Fund and
the Diversified Fund are similar, the Board of Trustees believes shareholders of
the Treasury Fund should be able to continue to meet their primary investment
goals of high current income as shareholders of the Diversified Fund.
The Board of Trustees believes that the only other alternative
to the proposed reorganization would be the taxable liquidation of the Treasury
Fund, which would not be as advantageous. The Board specifically determined, as
required by the Investment Company Act of 1940, that the proposed reorganization
is in the best interests of the shareholders of both Funds, and that the
interests of the Funds' shareholders will not be diluted as a result of the
reorganization.
HOW WE PLAN TO ACCOMPLISH THE REORGANIZATION
The Board of Trustees has approved a written reorganization
agreement between the Treasury Fund and the Diversified Fund. It spells out the
terms and conditions that will apply to the Treasury Fund's reorganization into
the Diversified Fund.
In essence, the reorganization will have two steps:
- First, if the shareholders approve the
reorganization, the Treasury Fund will transfer all
of its assets and liabilities to the Diversified
Fund. In exchange, the Treasury Fund will receive
shares of the Diversified Fund with a total value
equal to the value of the assets it is transferring
(net of the Treasury Fund's liabilities).
- Second, the Treasury Fund will dissolve. The
Diversified Fund will open an account for each
shareholder of the Treasury Fund, and will credit
each shareholder with shares of the Diversified Fund
of the same Class and with the same total value as
the Treasury Fund shares that he or she owned on the
date of the reorganization. New share certificates
will not be issued.
Reorganization expenses will be paid by The Asset Management Group of Bank of
Hawaii.
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<PAGE> 7
The following table shows the capitalization of the Funds as
of March 31, 2000, and their unaudited pro forma combined capitalization as of
that date after giving effect to the proposed reorganization.
<TABLE>
<CAPTION>
Treasury Fund Diversified Fund Pro Forma Combined
------------------------ ----------------------------------------- ------------------------------------------
Class A Class Y Class A Class B Class Y Class A Class B Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggregate net $ 1,516,826 $14,358,087 2,023,994 $2,327,332 $253,550,140 $ 3,540,820 $ 2,327,332 $267,908,227
assets
Shares 165,190.252 1,562,645.167 197,323.111 227,306.812 24,570,303.626 345,109.162 227,306.812 25,960,099.516
outstanding
Net asset $ 9.18 $9.19 $10.26 $10.24 $10.32 $10.26 $10.24 $10.32
value per
share
</TABLE>
If the reorganization is approved by the Treasury Fund
shareholders, it will take place as soon as feasible. We believe this should be
accomplished on or about July 10, 2000. However, at any time before the
reorganization the Board of Trustees may decide that it is not in the best
interest of the Treasury Fund, the Diversified Fund, or their respective
shareholders to go forward.
HOW THE REORGANIZATION WILL AFFECT TREASURY FUND SHAREHOLDERS
After the reorganization, you will own Class A or Y shares of
the Diversified Fund (the same Class as your shares of the Treasury Fund).
THE DIVERSIFIED FUND'S INVESTMENT OBJECTIVE, POLICIES AND
RESTRICTIONS ARE SIMILAR TO THE TREASURY FUND. The Treasury Fund's investment
objectives are high current income consistent with prudent capital risk, and
secondarily capital appreciation. The Diversified Fund's investment objective is
high current income. Both Funds focus on maximizing income consistent with
prudent investment risk, and vary the average of their investment portfolios
from time to time in response to actual and expected changes in interest rates
(and, in the case of the Diversified Fund, other market and economic changes).
The Treasury Fund invests primarily in bonds, notes and bills
issued by the U.S. Treasury, and in repurchase agreements for which those
securities are held as collateral. The Diversified Fund invests in those
securities as well as debt securities issued or guaranteed by agencies and
instrumentalities of the U.S. Government, and investment grade corporate debt
securities rated A or better by Standard & Poor's. In addition, it may invest up
to 20% of its total assets in investment grade debt securities rated BBB issued
by U.S. companies and state and local government issuers, and up to 25% of its
total assets in investment grade, dollar-denominated debt securities of foreign
companies and government issuers.
-6-
<PAGE> 8
For further information about the Funds' investment
objectives, policies and restrictions, see the "Risk/Return Summary and Fund
Expenses" and "Investment Objectives, Policies and Risks" sections of the
Prospectus accompanying this Proxy Statement.
YOUR INVESTMENT ADVISER AND SERVICE PROVIDERS WILL STAY THE
SAME. THE ASSET MANAGEMENT GROUP OF BANK OF HAWAII is the investment adviser to
both Funds and will continue to manage the Diversified Fund after the
reorganization. The day-to-day portfolio manager of the Diversified Fund is Jane
E. Katakura, Vice President, Team Leader and Manager of the Taxable Fixed Income
Investment Team for The Asset Management Group of Bank of Hawaii. She has been a
portfolio manager for The Asset Management Group of Bank of Hawaii since 1983,
and has managed the Diversified Fund since it began operation in 1994. BISYS
Fund Services Ohio, Inc. is the administrator of both Funds and will continue
after the reorganization. See the "Fund Management" section of the Prospectus
for further information.
YOUR FEES AND EXPENSES WILL DECREASE. The advisory fees for
both Funds are the same (0.60% of average daily net assets per year). However,
because of the Diversified Fund's larger size, its total operating expenses for
the fiscal year ended July 31, 1999 were less. For information about these
expenses, see the "Expenses Comparison" section of this Proxy Statement.
THE TOTAL VALUE OF YOUR SHARES WILL NOT BE AFFECTED. On or
before the reorganization date, the Treasury Fund will distribute all of its
then-remaining net investment income and realized capital gains in cash or by
reinvestment in Treasury Fund shares. On the day of the reorganization, you will
receive shares of the Diversified Fund, of the same Class as your shares of the
Treasury Fund and with the same total value as your shares of the Treasury Fund.
However, the number of shares you receive, and the price per share, will be
different, depending on the net asset values per share of the Funds on the
reorganization date.
THE REORGANIZATION WILL HAVE NO MATERIAL FEDERAL INCOME TAX
CONSEQUENCES. We expect the reorganization will have no material federal income
tax consequences to you or to either Fund. We will not proceed with the
reorganization unless this point is confirmed by an opinion of counsel.
Following the reorganization, the adjusted federal tax basis of your shares will
be the same as before. We do not expect shareholders to incur any personal state
or local taxes as a result of the reorganization, but you should consult your
own tax adviser to make sure.
The Treasury Fund had a capital loss carry-forward available
to offset future capital gains of approximately $3,200,000 as of December 31,
1999. The carry-forward period for capital losses is limited to eight years, and
various portions will expire through 2006 unless used to offset realized capital
gains. Under the Internal Revenue Code, the Diversified Fund will succeed to
only a portion of this capital loss carry-forward, limited generally to an
amount equal to the fair market value of the Treasury Fund on the closing date
of the reorganization multiplied by the long-term tax-exempt rate in effect at
that time (currently 5.84%). We do not believe that this will have a significant
adverse impact on Treasury Fund shareholders, as the Diversified Fund also has a
substantial capital loss carry-forward which will be available for future use,
as described below.
The Diversified Fund also has a capital loss carry-forward of
approximately $1,900,000 as of December 31, 1999, expiring in various increments
through 2007. The reorganization agreement does not provide for any adjustment
to the
-7-
<PAGE> 9
number of shares you will receive to reflect any potential income tax effect
that might occur from the differences in the proportionate amounts of the
capital loss carry-forwards of the Treasury Fund and the Diversified Fund,
because of the difficulty of predicting the potential use by the Diversified
Fund of the capital loss carry-forwards.
YOU WILL CONTINUE TO RECEIVE MONTHLY DIVIDENDS. Both Funds
currently declare dividends daily and pay them monthly. In addition, both Funds
currently distribute net capital gains to shareholders annually. We expect that
the dividend portion of the total dividend payments and capital gains
distributions you receive each year as a shareholder of the Diversified Fund
will not be significantly different than the portion you received as a
shareholder of the Treasury Fund. As was the case for the Treasury Fund, all
dividends and distributions paid by the Diversified Fund will continue to be
reinvested in shares of the same Class of the Fund unless you request otherwise
in writing to the Fund's transfer agent at least 15 days prior to the dividend
or distribution. If you have such a request on file for the Treasury Fund, it
will be applied to your Diversified Fund shares. The Fund's distributor does not
charge any fees or sales charges on reinvestments.
THE TRUST'S PURCHASE AND REDEMPTION PROCEDURES WILL NOT BE
AFFECTED. The Diversified Fund will have the same purchase, redemption and
exchange procedures as the Treasury Fund. In addition, as a shareholder of the
Diversified Fund you will have the option of purchasing Class B shares, which
are not available for the Treasury Fund. See the "Shareholder Information"
section of the Prospectus.
THE TRUST'S TRUSTEES AND ACCOUNTANTS WILL CONTINUE. The
current Board of Trustees will continue to oversee the operations of the Trust
after the reorganization. Ernst & Young LLP will continue as the Trust's
independent public accountants.
FINANCIAL AND LEGAL INFORMATION
See the "Financial Highlights" section of the Prospectus for
financial highlights tables for the Treasury Fund and the Diversified Fund for
the fiscal year ended July 31, 1999.
The audited financial statements of the Trust for the year
ended July 31, 1999 (which are included in the Trust's 1999 Annual Report to
Shareholders), and the unaudited financial statements of the Trust for the six
months ended January 31, 2000 (which are included in the Trust's 2000
Semi-Annual Report to Shareholders) are incorporated by reference in this Proxy
Statement. The financial statements included in the Trust's 1999 Annual Report
to Shareholders have been audited by Ernst & Young LLP, independent auditors, as
stated in their report included in the Annual Report, and are incorporated in
this Proxy Statement by reference in reliance upon that report given upon their
authority as experts in auditing and accounting.
Certain legal matters in connection with the issuance of the
Diversified Fund shares will be passed upon for the Trust by Paul, Hastings,
Janofsky & Walker LLP.
The Trust is subject to the informational requirements of the
Investment Company Act of 1940, and files reports, proxy statements and other
information with the Securities and Exchange Commission. These documents and
other information filed with respect to the Trust, the Treasury Fund and the
Diversified Fund can be reviewed and copied:
-8-
<PAGE> 10
- At the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549
- On the Commission's EDGAR data base on the Commission's Internet Web
site at http://www.sec.gov.
- By e-mail request to [email protected] (for a duplicating fee)
- By writing the Commission's Public Reference Section, Washington, D.C.
20549-0102 (for a duplicating fee)
PROXY VOTING AND MEETING PROCEDURES
WHO CAN VOTE
Anyone who is shown on the records of the Treasury Fund as
holding shares as of the close of business (Eastern Standard Time) on April 28,
2000, is entitled to vote at the Meeting. On that date, the Treasury Fund had
736,077.275 outstanding shares.
HOW TO VOTE
You can vote by mail, phone, internet or in person at the
meeting.
- To vote by mail, sign and send us the enclosed Proxy voting card in
the envelope provided.
- To vote by internet, go to the Website www.proxyvote.com.
- To vote by phone, call our proxy tabulator, Automatic Data Processing,
at 1-800-454-8683. They have procedures designed to confirm your
identity and voting instructions.
Even if you plan to attend the Meeting and vote in person,
please return the enclosed Proxy card. This will help us ensure that an adequate
number of shares are present at the Meeting.
QUORUM REQUIREMENTS
In order for the Meeting to go forward, a quorum of
shareholders must be present. This means that the reorganization must be
approved by a majority of the shares of the Treasury Fund represented at the
meeting in person or by proxy. All returned proxies count toward a quorum,
regardless of how they are voted. "Broker non-votes" will also be treated as
shares which are present but have not been voted. (Broker non-votes are shares
held by a broker for the owner, which the owner has not voted on a proposal
and the broker does not have the authority to vote on the proposal.) Broker
non-votes and abstentions will have the same
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<PAGE> 11
effect as a "No" vote for purposes of determining whether the reorganization has
been approved.
If sufficient votes in favor of the reorganization are not
received by the date of the Meeting, the persons named in the Proxy may propose
and vote for one or more adjournments of the Meeting to permit further
solicitations of proxies. Any such adjournment will require approval by the
holders of a majority of the shares who are present in person or by proxy.
WHAT VOTE IS REQUIRED?
The reorganization must be approved by a majority of the
shares of the Treasury Fund.
WHAT IF THE REORGANIZATION IS NOT APPROVED?
If the shareholders do not approve the reorganization, the
Board will decide whether to re-propose approval to the shareholders, to
terminate the Treasury Fund (which does not require shareholder approval), or to
take some other action.
PROXY SOLICITATION METHODS AND COSTS
Proxies will be solicited by mail, but trustees and officers
of the Trust and employees of The Asset Management Group of Bank of Hawaii or
BISYS Fund Services, the Company's administrator, may also solicit proxies by
personal meetings, telephone and facsimile. Banks, brokerage houses and other
custodians, nominees and fiduciaries may forward soliciting material to
beneficial owners of shares entitled to vote at the Meeting. The Asset
Management Group of Bank of Hawaii will pay or reimburse all solicitation costs.
PRINCIPAL SHAREHOLDERS
As of April 28, 2000, the following shareholders were known by
the Company to own of record 5% or more of the outstanding shares of the
Treasury Fund:
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARES (CLASS) % OWNERSHIP OF CLASS
<S> <C> <C>
Merrill Lynch Pierce Fenner & Smith 12,889 (Class A Shares) 7.6026%
4800 Deer Lake Dr East 3rd Fl
Jacksonville, FL 33246
BHC Securities, Inc. 143,485 (Class A Shares) 84.6350%
2005 Market St Suite 1200
Philadelphia, PA 19103
REINCO 348,841 (Class Y Shares) 61.5737%
Pacific Century Trust
PO Box 3170
Honolulu, HI 96802
STROBRO 66,467 (Class Y Shares) 11.7320%
Pacific Century Trust
PO Box 3170
Honolulu, HI 96802
CNA Trust Corporation Custodian 146,744 (Class Y Shares) 25.9018%
Pacific Century Trust Omnibus Parti
PO Box 5099
Costa Mesa, CA 92628
</TABLE>
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<PAGE> 12
As of April 28, 2000, the trustees and officers of the Trust
as a group beneficially owned less than 1% of the outstanding shares of the
Treasury Fund. However, Mr. Laskey, as Executive Vice President of Bank of
Hawaii, may be deemed the beneficial owner of any shares held by Pacific Century
Trust which it may vote.
GENERAL INFORMATION
NAMES AND ADDRESSES
The Fund's investment adviser is The Asset Management Group of
Bank of Hawaii, 111 S. King Street, Honolulu, Hawaii 96813. The Fund's principal
underwriter is BISYS Fund Services, and the Fund's administrator is BISYS Fund
Services Ohio, Inc. Their address is 3435 Stelzer Road, Columbus, Ohio 43219.
DEADLINE FOR SUBMITTING SHAREHOLDER PROPOSALS
The Trust does not intend to hold annual meetings of
shareholders of the Treasury Fund. If the reorganization is not approved, the
Trust will call meetings of shareholders of the Fund as may be required under
the Investment Company Act (such as to approve a new investment advisory
agreement for the Fund) or as the Board of Trustees may determine in its
discretion.
If a shareholder wishes to present a proposal to be included
in the proxy statement for the next meeting of shareholders of the Treasury Fund
or the Trust, the Secretary of the Trust must receive the proposal at the
Trust's principal office a reasonable time before the meeting is to be held. Any
such proposal must satisfy all applicable federal and state requirements.
OTHER MATTERS
Management knows of no other business to be presented at the
Meeting, but if other matters properly do come before the Meeting, the persons
named in the Proxy will vote on them in accordance with their best judgment.
Very truly yours,
WALTER J. LASKEY
Trustee and Chairperson
on behalf of the Board of Trustees of
Pacific Capital Funds
June 6, 2000
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<PAGE> 13
PROXY
PACIFIC CAPITAL U.S. TREASURY SECURITIES FUND
SPECIAL MEETING OF SHAREHOLDERS
JULY 7, 2000
The undersigned hereby appoints Greg Maddox and Jeff Laroche
his/her attorney and proxy with full power of substitution to vote and act with
respect to all shares of the Pacific Capital U.S. Treasury Securities (the
"Fund") held by the undersigned at the Special Meeting of Shareholders of the
Fund to be held at 3:00 p.m., Eastern Time, on July 7, 2000, at the offices of
BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio and at any adjournment
thereof (the "Meeting"), and instructs them to vote as indicated on the matter
referred to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of the reorganization of the Fund into the Pacific
Capital Diversified Fixed Income Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated __________, 2000
-------------------------------------------
Name of Shareholder(s) - Please print or type
-------------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
1
<PAGE> 14
STATEMENT OF ADDITIONAL INFORMATION
Relating to the Reorganization of
PACIFIC CAPITAL U.S. TREASURY SECURITIES FUND
3435 Stelzer Road
Columbus, Ohio 43219
Telephone: (800) 258-9232
This Statement of Additional Information, relating
specifically to the proposed reorganization of the U.S. Treasury Securities Fund
series of Pacific Capital Funds, consists of this cover page and the following
described documents, each of which is incorporated by reference herein:
(1) The Statement of Additional Information of Pacific Capital Funds filed
with the Securities and Exchange Commission as part of Post-Effective
Amendment No. 13 to Registrant's Form N-1A Registration Statement on
December 1, 1999;
(2) The Annual Report of Pacific Capital Funds for the year ended July 31,
1999, filed with the Securities and Exchange Commission; and
(3) The Semi-Annual Report of Pacific Capital Funds for the six months
ended January 31, 2000, filed with the Securities Exchange Commission.
This Statement of Additional Information is not a prospectus.
A Combined Proxy Statement and Prospectus dated June 5, 2000 relating to the
proposed reorganization may be obtained from Pacific Capital Funds at the
telephone number and address above. This Statement of Additional Information
relates to, and should be read in conjunction with, that Combined Proxy
Statement and Prospectus.
The date of this Statement of Additional Information is
June 6, 2000.
B-1
