As filed with the Securities and Exchange Commission on October 10, 1997
Registration No. 33-80784
File No. 811-8484
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 10 /X/
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/
Amendment No. 13 /X/
(Check appropriate box or boxes)
MENTOR INSTITUTIONAL TRUST
(Exact name of registrant as specified in charter)
P.O. Box 1357
Richmond, Virginia 23286
(Address of principal executive offices)
Registrant's Telephone Number, including Area Code (804) 782-3647
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PAUL F. COSTELLO, President
901 East Byrd Street
Richmond, Virginia 23219
(Name and address of agent for service)
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Copy to:
TIMOTHY W. DIGGINS, Esquire
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
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It is proposed that this filing will become effective (check appropriate box):
[X] immediately upon filing pursuant to paragraph (b)
[ ] on [date] pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
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If appropriate, check the following box:
[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Mentor Institutional Trust registered an indefinite amount of securities
under the Securities Act of 1933 pursuant to Rule 24f-2 of the Investment
Company Act of 1940. A Rule 24f-2 notice in respect of the most recently
completed fiscal year of the SNAP Fund (the portfolio to which this amendment
relates) was filed on August 26, 1997.
THIS POST-EFFECTIVE AMENDMENT RELATES SOLELY TO THE SNAP FUND. NO
INFORMATION RELATING TO ANY OTHER SERIES OF THE REGISTRANT IS AMENDED
OR SUPERSEDED HEREBY.
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MENTOR INSTITUTIONAL TRUST
SNAP FUND
CROSS REFERENCE SHEET
(as required by Rule 404(c))
Part A
N-1A Item No.
<TABLE>
<CAPTION>
Location
<S> <C>
1. Cover Page..................................................... Cover Page
2. Synopsis....................................................... Cover Page; Expense summary
3. Condensed Financial Information................................ Financial highlights
4. General Description of Registrant.............................. Cover Page; Investment objectives
and policies; How the Fund values
its shares; How distributions are
made; Mentor Institutional Trust;
Custodian and Transfer and
Dividend Agent
5. Management of the Fund......................................... Investment objectives and
policies; Management of the Fund
5A. Management's Discussion
of Fund Performance.......................................... Not Applicable
6. Capital Stock and Other
Securities................................................... How the Fund values its shares;
How distributions are made; How
to participate in the Fund; How to
redeem shares
7. Purchase of Securities Being
Offered...................................................... How to participate in the Fund;
How to redeem shares
8. Redemption or Repurchase....................................... How to participate in the Fund;
How to redeem shares
9. Pending Legal Proceedings...................................... Not Applicable
</TABLE>
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Part B
<TABLE>
<CAPTION>
N-1A Item No. Location
<S> <C>
10. Cover Page.................................................... Cover Page
11. Table of Contents............................................. Cover Page
12. General Information and History............................... Cover Page
13. Investment Objectives and
Policies.................................................... Investment Restrictions; Ratings
14. Management of the Fund........................................ Management of the Trust
15. Control Persons and Principal
Holders of Securities....................................... Management of the Trust;
Principal Holders of Securities
16. Investment Advisory and Other
Services.................................................... Management of the Trust;
Investment Advisory and other
Securities; Investment
Professionals of Mentor
Investment Advisors, LLC;
Independent Accountants;
Custodian
17. Brokerage Allocation.......................................... Management of the Trust;
Brokerage
18. Capital Stock and Other
Securities.................................................. Determination of Net Asset Value;
Tax Status
19. Purchase, Redemption and Pricing
of Securities Being Offered................................. Management of the Trust;
Determination of Net Asset Value
20. Tax Status.................................................... Tax Status
21. Underwriters.................................................. Not applicable
22. Calculations of Yield Quotations
of Money Market Funds....................................... Performance Information
23. Financial Statements.......................................... Financial Statements
</TABLE>
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of the Registration Statement.
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P R O S P E C T U S October 10,1997
SNAP FUND
SNAP Fund is a diversified, open-end "money-market" fund, seeking as high a
rate of current income as Mentor Investment Advisors, LLC, its investment
adviser ("Mentor Advisors"), believes is consistent with preservation of capital
and maintenance of liquidity. The Fund currently offers its shares only to
participants in the Commonwealth of Virginia State Non-Arbitrage Program (the
"SNAP Program"). The Fund is a series of shares of Mentor Institutional Trust.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government. There can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share.
This Prospectus sets forth concisely the information about the Fund and
Mentor Institutional Trust that a prospective investor should know before
investing. Please read this Prospectus and retain it for future reference.
Investors can find more detailed information in the October 10, 1997 Statement
of Additional Information (the "Statement"), as amended from time to time. For a
free copy of the Statement, call 1-800-570-SNAP. The Statement has been filed
with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference. The Fund's address is P.O.
Box 1357, Richmond, Virginia 23286-0109.
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SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE
BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESEN-
TATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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Expense summary
Expenses are one of several factors to consider when investing in
the Fund. The following table summarizes an investor's maximum transaction
costs from investing in the Fund and expenses incurred by the Fund based on its
most recent fiscal year. The Example shows the cumulative expenses attributable
to a hypothetical $1,000 investment in the Fund over specified periods. Shares
of the Fund are currently being offered to investors through the Commonwealth of
Virginia State Non-Arbitrage Program (the "SNAP Program"). Only expenses
incurred by the Fund are reflected in the table and Example below; other
expenses incurred by the SNAP Program, or by participants in the SNAP Program,
are not reflected.
<TABLE>
<S> <C>
Shareholder Transaction Expenses:
Maximum Sales Load Imposed on Purchases None
Maximum Sales Load Imposed on Reinvested Dividends None
Deferred Sales Load None
Redemption Fees None
Exchange Fee None
Annual Fund Operating Expenses:
(as a percentage of average net assets)
Management Fees 0.08%
12b-1 Fees 0.00%
Other Expenses 0.03%
-----
Total Fund Operating Expenses 0.11%
=====
</TABLE>
Example
An investment of $1,000 in the Fund would incur the following
expenses, assuming 5% annual return and redemption at the end of each period:
1 year 3 years 5 years 10 years
------ ------- ------- --------
$1 $4 $6 $14
This information is provided to help investors understand the operating
expenses of the Fund. The Example should not be considered a representation of
future performance; actual expenses may be more or less than those shown.
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Financial highlights
The financial highlights presented below for the Fund have been audited
by KPMG Peat Marwick LLP, independent auditors. The report of KPMG Peat Marwick
LLP is contained in the Fund's financial statements which are incorporated by
reference into the Statement, and may be obtained by calling 1-800-570-SNAP. The
Fund commenced operations as a registered investment company on July 24, 1995.
<TABLE>
<CAPTION>
Year Period from
ended 7/24/95 to
6/30/97 6/30/96
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<S> <C>
Net asset value, beginning of period $1.00 $1.00
Income from investment operations
Net investment income 0.05* 0.05*
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Total from investment operations 0.05 0.05
Distributions from net investment income (0.05)* (0.05)*
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Net asset value, end of period $1.00 $1.00
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Total Return 5.51% 5.29%
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Ratios/Supplemental Data
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Net assets, end of period (in thousands) $1,045,583 $954,777
Ratio of expenses to average net assets 0.11% 0.12%(a)
Ratio of net investment income to average
net assets 5.38% 5.53%(a)
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</TABLE>
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(a) Annualized.
*Includes net realized capital gains which were under $0.01 per share.
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Investment objective and policies
SNAP Fund's investment objective is to seek as high a rate of current
income as Mentor Advisors believes is consistent with preservation of capital
and maintenance of liquidity. There can, of course, be no assurance that the
Fund will achieve its investment objective. As a matter of policy, the Trustees
will not change the Fund's investment objective without shareholder approval.
The Fund will invest in a portfolio of high-quality short-term instruments
consisting of any or all of the following:
o U.S. Government securities: U.S. Treasury bills, notes, and bonds, and
securities unconditionally guaranteed as to payment of principal and
interest by the United States or any agency of the United States.
o Obligations of the Commonwealth of Virginia and of its local governments
and of other states: high-quality evidences of indebtedness of the
Commonwealth of Virginia, and obligations of any county, city, town,
district, authority, or other public body of the Commonwealth. The Fund may
also invest in high-quality obligations of any other state or of any
county, city, town, or district located in any other state.
o Bankers' acceptances: negotiable drafts or bills of exchange, which have
been "accepted" by a bank, meaning, in effect, that the bank has
unconditionally agreed to pay the face value of the instrument on maturity.
The Fund will only purchase bankers' acceptances issued by a bank organized
in the U.S. or by a foreign bank with an agency domiciled in the U.S.
o Certificates of deposit and interest-bearing time deposits: of national
banks or of banks chartered by the Commonwealth of Virginia or of banks
chartered by other states and authorized to operate branches in the
Commonwealth of Virginia (if such banks chartered by the Commonwealth or
other states are under the supervision of the Commonwealth of Virginia and
the deposits are secured as provided by the Virginia Security for Public
Deposits Act). The amount of any deposit must be insured in its entirety
by the Federal Deposit Insurance Corporation, except to the extent any such
amount is collateralized by eligible collateral as prescribed by law. Any
time deposits made by the Fund must mature in seven days or less.
o Prime commercial paper: high-quality, short-term obligations issued by
banks, corporations, and other issuers organized under the laws of the
United States or of any state.
o Other short-term obligations: high-quality, short-term obligations of
corporate issuers.
o Repurchase agreements: with respect to U.S. Government or agency
securities. Under a repurchase agreement, the Fund purchases a U.S.
Government security for a relatively short period (usually not more than
one week) which the seller agrees to repurchase at a fixed time and price,
representing the Fund's cost plus interest. The Fund will enter into
repurchase agreements only with commercial banks having assets of more than
$1 billion and with "primary dealers" in U.S. Government securities.
Although Mentor Advisors will monitor repurchase agreement transactions to
ensure that they will be fully collateralized at all times, the Fund bears
a risk of loss if the other party defaults on its obligation and the Fund
is delayed or prevented from exercising its rights to dispose of the
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collateral. If the other party should become involved in bankruptcy or
insolvency proceedings, it is possible that the Fund may be treated as an
unsecured creditor and be required to return the underlying collateral to
the other party's estate. The Fund requires any U.S. Government securities
serving as collateral for a repurchase agreement to be delivered to the
Fund's custodian (or any approved subcustodian).
The Fund will invest only in U.S. dollar-denominated high-quality
securities and other U.S. dollar-denominated money market instruments meeting
credit criteria which the Trustees believe present minimal credit risk.
"High-quality securities" are (i) commercial paper or other short-term
obligations rated A-1 by Standard & Poor's Corporation and P-1 by Moody's
Investors Service, Inc., and (ii) other obligations rated AAA or AA by Standard
& Poor's and Aaa or Aa by Moody's at the time of investment. The Fund will not
purchase securities of any issuer (other than U.S. Government securities) if,
immediately thereafter, more than 5% of the Fund's total assets would be
invested in securities of that issuer (or 1% of the Fund's total assets, or $1
million, whichever is greater, if the securities of such issuer owned by the
Fund are not rated in the highest rating category by a nationally recognized
statistical rating organization), nor will the Fund make an investment in
commercial paper if, immediately thereafter, more than 35% of its total assets
would be invested in commercial paper.
The Fund follows investment and valuation policies designed to maintain a
stable net asset value of $1.00 per share, although there is no assurance that
these policies will be successful. The Fund will maintain a dollar-weighted
average maturity of 90 days or less and will not invest in securities with
remaining maturities of more than one year. The Fund may invest in variable or
floating-rate securities which bear interest at rates subject to periodic
adjustment or which provide for periodic recovery of principal on demand. Under
certain conditions, these securities may be deemed to have remaining maturities
equal to the time remaining until the next interest adjustment date or the date
on which principal can be recovered on demand.
Considerations of liquidity and preservation of capital mean that the Fund
may not necessarily invest in money market instruments paying the highest
available yield at a particular time. Consistent with its investment objective,
the Fund will attempt to maximize yields by portfolio trading and by buying and
selling portfolio investments in anticipation of or in response to changing
economic and money market conditions and trends. The Fund may also invest to
take advantage of what Mentor Advisors believes to be temporary disparities in
yields of different segments of the high-quality money market or among
particular instruments within the same segment of the market. These policies, as
well as the relatively short maturity of obligations purchased by the Fund, may
result in frequent changes in the Fund's portfolio. The Fund will not usually
pay brokerage commissions in connection with the purchase or sale of portfolio
securities.
The Fund's portfolio will be affected by general changes in interest rates
resulting in increases or decreases in the values of the obligations held by the
Fund. The value of the securities in the Fund's portfolio can be expected to
vary inversely to the changes in prevailing interest rates. Withdrawals by
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shareholders could require the sale of portfolio investments at a time when such
a sale might not otherwise be desirable.
The Fund will not lend money, other than by investment in the instruments
described above and through entry into repurchase agreements, nor will it borrow
money or pledge, hypothecate, or mortgage its assets. The Fund will not invest
in securities of an issuer if any employee of the Fund or Mentor Advisors (or,
to the knowledge of the Fund or Mentor Advisors, any affiliated person of the
Fund or Mentor Advisors) is an officer or director of that issuer or holds 10%
of the outstanding voting securities of that issuer, unless the investment is
approved or ratified by the Trustees.
The Fund will not be responsible for determining whether income or gains
from any investment by the Fund will be excludable from the income of
participants in the SNAP Program for tax purposes, or will otherwise be subject
to or exempt from taxation under federal or state law or be subject to rebate by
participants under federal law.
-------------------
All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment.
Management of the Fund
The Trustees of Mentor Institutional Trust are responsible for generally
overseeing the conduct of the Trust's business. Mentor Investment Advisors, LLC,
located at 901 East Byrd Street, Richmond, Virginia 23219, acts as investment
adviser to the Fund pursuant to a Management Contract between the Fund and
Mentor Advisors. Subject to the general oversight of the Trustees, Mentor
Advisors, as investment adviser, manages the Fund's portfolio in accordance with
the stated policies of the Fund. Mentor Advisors makes investment decisions for
the Fund and places the purchase and sale orders for the Fund's portfolio
transactions. A team of investment professionals manages the Fund for Mentor
Advisors. As compensation for Mentor Advisors' services under the Management
Contract, the Fund pays a fee, accrued daily and paid monthly, at the following
annual rate: .09% of the first $500 million of average net assets; .08% of the
next $250 million; .07% of the next $250 million; .06% of the next $250 million;
and .05% of any amount over $1.25 billion. Mentor Advisors is a wholly owned
subsidiary of Mentor Investment Group, LLC ("Mentor"), which is in turn a
subsidiary of Wheat First Butcher Singer, Inc. ("Wheat First Butcher Singer").
Wheat First Butcher Singer, through other subsidiaries, also engages in
securities brokerage, investment banking, and related businesses. Mentor
Advisors, along with its affiliates, currently has assets under management of
approximately $10 billion, and serves as investment adviser to 22 separate
portfolios in the Mentor Family of Funds, including the Fund. The Fund pays all
of its own expenses, including, among other things, Trustees' fees, and
auditing, legal, and custodial expenses.
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<PAGE>
EVEREN Capital Corporation has a 20% ownership interest in Mentor and may
acquire additional ownership based principally on the amount of Mentor's
revenues derived from assets attributable to clients of EVEREN and its
affiliates.
Mentor has informed the Trust that Wheat First Butcher Singer, Mentor's
parent company, will be acquired by First Union Corp. ("First Union"), in a
transaction expected to occur as early as December of this year. First Union is
a global financial services company with approximately $140 billion in assets
and $10 billion in total stockholders' equity. The proposed arrangement does not
contemplate any changes in the management or operations of Mentor or any of its
subsidiaries, including Mentor Advisors. Consummation of the acquisition, which
is subject to a number of conditions, including regulatory approvals, will
result in the termination of the investment advisory agreement between the Fund
and Mentor Advisors. It is expected that the Trustees of the Trust will meet to
consider a new investment advisory agreement between the Fund and Mentor
Advisors, to become effective upon consummation of the acquisition.
Implementation of the new agreement, which would be substantially identical to
the current investment advisory agreement, would be subject to approval of
shareholders at a meeting expected to be held prior to the consummation of the
acquisition.
How the Fund values its shares
The Fund values its shares twice each day, once at 12:00 noon and again at
the close of regular trading on the New York Stock Exchange. The Fund's
investments are valued at amortized cost according to Securities and Exchange
Commission Rule 2a-7. The Fund will not normally have unrealized gains or losses
so long as it values its investments by the amortized cost method.
How distributions are made
The Fund declares all of its net interest income as a distribution on each
day the New York Stock Exchange is open for business, as a dividend to
shareholders of record immediately prior to the close of regular trading on the
Exchange. Shareholders who purchase shares of the Fund as of 12:00 noon on any
day will receive the dividend declared by the Fund for that day; shareholders
who purchase shares after 12:00 noon will begin earning dividends on the day
after the Fund accepts their order. The Fund's net income for Saturdays,
Sundays, and holidays is declared as a dividend on the preceding business day.
Dividends for any month will be paid on the last day of that month (or, if that
day is not a business day, on the preceding business day), except that the
Fund's schedule for payment of dividends during the month of December may be
adjusted to assist in the Fund's tax reporting and distribution requirements.
All distributions will be reinvested automatically in Fund shares as of the
payment date, unless the shareholder instructs the Fund to pay distributions to
it in cash. Since the net income of the Fund is declared as dividend each time
it is determined, the net asset value per share of the Fund normally remains at
$1 per share immediately after each determination and dividend declaration.
The Fund intends to qualify as a "regulated investment company" for federal
income tax purposes to be relieved of federal taxes on income and gains it
distributes to shareholders. The Fund will distribute substantially all of its
net investment income and capital gain net income on a current basis.
Distributions from the Fund will be taxable to a shareholder whether received in
cash or additional shares. Such distributions that are designated as capital
gains distributions will be taxable as such, regardless of how long Funds shares
are held, while other taxable distributions will be taxed as ordinary income.
Loss on the sale of Fund shares held for less than six months will be treated as
a long term capital loss to the extent of any capital gain distribution received
with respect to such shares.
Early in each year, the Fund will notify shareholders of the amount and
tax status of distributions paid to the shareholders by the Fund for the
preceding year.
The foreging is a summary of certain federal income tax consequences of
investing in the Fund. Shareholders should consult with their tax advisers for
more information concerning the federal, state, and local tax consequences of
investing in, redeeming or exchanging Fund shares.
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How to participate in the Fund
Shares of the Fund are currently being offered only to participants in the
Commonwealth of Virginia State Non-Arbitrage Program (the "SNAP Program").
Participants in the SNAP Program wishing to purchase shares of the Fund should
consult the Information Statement of the SNAP Program, as it may be amended from
time to time (the "Information Statement"), or should contact the SNAP Program
directly, for information as to the procedures they should follow in order to
purchase shares of the Fund through the Program.
All Fund shares owned beneficially by participants in the SNAP Program are
owned of record by the Treasury Board, an agency of the Commonwealth of
Virginia, for the benefit of participants. Because the Treasury Board will be
the record owner of all shares of the Fund owned beneficially by SNAP Program
participants, a Program participant should follow the procedures described in
the Information Statement of the SNAP Program to ensure that all instructions as
to any investment by it in the Fund -- including instructions as to the purchase
or sale of shares of the Fund -- are timely carried out by the SNAP Program.
Purchase orders; purchase price. The Fund offers its shares continuously at
a price of $1.00 per share. Shares of the Fund are sold at the net asset value
next determined after a purchase order is received by the Fund from the SNAP
Program. The Fund determines its net asset value each day the New York Stock
Exchange is open at 12:00 noon and as of the close of the Exchange. Purchase
orders that are received prior to 12:00 noon on a particular day are priced
according to the net asset value determined at that time, and the shares
purchased at that time will earn the dividend declared for that day. Purchase
orders that are received after 12:00 noon are priced based on the net asset
value determined as of the close of the Exchange on that day, and begin to earn
dividends on the next day.
Because the Fund seeks to be fully invested at all times, investments must
be in Same Day Funds to be accepted. "Same Day Funds" are funds credited by the
applicable regional Federal Reserve Bank to the account of the Fund at Central
Fidelity National Bank. A participant in the SNAP Program wishing to invest in
the Fund must ensure that Central Fidelity National Bank, as Depository for the
SNAP Program, receives Same Day Funds at or prior to the time the participant
wishes to invest in the Fund. Consult the Information Statement or contact the
investment manager for the SNAP Program directly for information.
How to redeem shares
Shares of the Fund may be redeemed on any day when the New York Stock
Exchange is open. Redemptions will be effected at the net asset value per share
of the Fund next determined after receipt of the redemption request in good
order. Shares redeemed at the Fund's 12:00 noon price do not earn the income
dividend declared on the day of redemption. Participants should consult the
Information Statement or contact the SNAP Program directly to ensure that all
necessary steps are taken to effect the timely redemption of their shares. Under
unusual circumstances, the Fund may suspend repurchases, or postpone payment for
more than seven days, as permitted by federal securities laws.
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<PAGE>
Redemptions by check. SNAP Program participants may elect to have a special
checking account with Central Fidelity National Bank. Checks may be drawn on the
account for any amount. Upon receipt of a completed signature card, Central
Fidelity National Bank will provide the participant with a supply of checks
drawn on the account. Additional supplies of checks are available, upon request.
When a check is presented to Central Fidelity National Bank, a number of shares
in the Fund owned beneficially by the checkwriter will be redeemed in order to
pay the full amount of the check.
Redemption by check is not appropriate for a complete liquidation of an
account. If the amount of a redemption check is greater than the value of the
shares owned beneficially by the checkwriter, the check will be returned to the
depositor due to an insufficient account balance. The checkwriting privilege may
be suspended at any time. Consult the Information Statement or contact the SNAP
Program for additional information.
---------------
The Fund will normally redeem shares for cash; however, the Fund reserves
the right to pay the redemption price wholly or partly in kind if the Trustees
determine it to be advisable in the interest of the remaining shareholders. If
portfolio securities are distributed in lieu of cash, the shareholder will
normally incur brokerage commissions upon subsequent disposition of any such
securities.
If shares of the Fund to be redeemed represent an investment made by check,
the Fund reserves the right not to transmit the redemption proceeds to the
shareholder until the check has been collected which may take up to 15 days
after the purchase date.
Mentor Institutional Trust
Mentor Institutional Trust is a Massachusetts business trust organized on
February 8, 1994. A copy of the Agreement and Declaration of Trust, which is
governed by Massachusetts law, is on file with the Secretary of State of The
Commonwealth of Massachusetts.
The Trust is a series management investment company with an unlimited
number of authorized shares of beneficial interest. Shares of the Trust may,
without shareholder approval, be divided into two or more series of shares
representing separate investment portfolios. Any such series of shares may be
further divided without shareholder approval into two or more classes of shares
having such preferences and special or relative rights and privileges as the
Trustees determine. The Trust's shares are currently divided into five series,
one representing the Fund, the others representing other funds with varying
investment objectives and policies. Each share has one vote, with fractional
shares voting proportionally. Shares of each class will vote together as a
single class except when required by law or determined by the Trustees. Shares
of the Fund are freely transferable, are entitled to dividends as declared by
the Trustees, and, if the Fund were liquidated, would receive the net assets of
the Fund. The Trust may suspend the sale of shares at any time and may refuse
any order to purchase shares. Although the Trust
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<PAGE>
is not required to hold annual meetings of its shareholders, shareholders have
the right to call a meeting to elect or remove Trustees, or to take other
actions as provided in the Agreement and Declaration of Trust.
In the interest of economy and convenience, the Fund will not issue
certificates for its shares except at the shareholder's request.
Custodian and Transfer and Dividend Agent
Central Fidelity National Bank serves as the Fund's custodian and transfer
and dividend agent. The address of Central Fidelity National Bank is 1021 East
Cary Street, P.O. Box 27602, Richmond, Virginia 23261.
Performance Information
The Fund's "yield" is computed by determining the percentage net change,
excluding capital changes, in the value of an investment in one share of the
Fund over the base period, and multiplying the net change by 365/7 (or
approximately 52 weeks). The Fund's "effective yield" represents a compounding
of the yield by adding 1 to the number representing the percentage change in
value of the investment during the base period, raising that sum to a power
equal to 365/7, and subtracting 1 from the result.
Past performance does not predict future results. Investment performance,
which will vary, is based on many factors, including market conditions, the
composition of the Fund's portfolio, and the Fund's operating expenses.
Investment performance also often reflects the risks associated with the Fund's
investment objective and policies. These factors should be considered when
comparing the Fund's investment results to those of other mutual funds and other
investment vehicles. The Fund's yield does not reflect any expenses incurred by
the SNAP Program or by participants in the SNAP Program.
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SNAP Fund
Prospectus
An Open-End Management
Investment Company
October 10, 1997
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<PAGE>
SNAP FUND
FORM N-1A
PART B
STATEMENT OF ADDITIONAL INFORMATION
October 10, 1997
SNAP Fund (the "Fund") is a series of shares of beneficial interest of
Mentor Institutional Trust (the "Trust"), a series investment company. This
Statement of Additional Information is not a prospectus and should be read in
conjunction with the prospectus of the Fund dated October 10, 1997. A copy of
the prospectus can be obtained upon request made to Mentor Investment Group, LLC
("Mentor") at P.O. Box 1357, Richmond, Virginia 23286-0109, or by calling Mentor
at 1-800-570-SNAP.
TABLE OF CONTENTS
CAPTION PAGE
INVESTMENT RESTRICTIONS............................................2
MANAGEMENT OF THE TRUST............................................4
PRINCIPAL HOLDERS OF SECURITIES....................................7
INVESTMENT ADVISORY AND OTHER SERVICES.............................7
BROKERAGE..........................................................9
DETERMINATION OF NET ASSET VALUE..................................11
TAX STATUS........................................................12
INDEPENDENT ACCOUNTANTS...........................................14
CUSTODIAN.........................................................14
PERFORMANCE INFORMATION...........................................14
SHAREHOLDER LIABILITY.............................................15
INVESTMENT PROFESSIONALS OF MENTOR INVESTMENT ADVISORS, LLC.......15
RATINGS .........................................................15
FINANCIAL STATEMENTS..............................................17
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<PAGE>
INVESTMENT RESTRICTIONS
As fundamental investment restrictions, which may not be changed with
respect to the Fund without approval by the holders of a majority of the
outstanding shares of the Fund, the Fund may not:
1. Purchase any security (other than U.S. Government securities)
if as a result: (i) as to 75% of the Fund's total assets, more
than 5% of the Fund's total assets (taken at current value)
would then be invested in securities of a single issuer, or
(ii) more than 25% of the Fund's total assets would be
invested in a single industry, except that the Fund may invest
up to 100% of its assets in securities of issuers in the
banking industry.
2. Acquire more than 10% of the voting securities of any issuer.
3. Act as underwriter of securities of other issuers except to
the extent that, in connection with the disposition of
portfolio securities, it may be deemed to be an underwriter
under certain federal securities laws.
4. Issue any class of securities which is senior to the Fund's
shares of beneficial interest.
5. Purchase or sell securities on margin (but the Fund may obtain
such short-term credits as may be necessary for the clearance
of transactions). (Margin payments in connection with
transactions in futures contracts, options, and other
financial instruments are not considered to constitute the
purchase of securities on margin for this purpose.)
6. Purchase or sell real estate or interests in real estate,
including real estate mortgage loans, although it may purchase
and sell securities which are secured by real estate and
securities of companies that invest or deal in real estate or
real estate limited partnership interests. (For purposes of
this restriction, investments by the Fund in mortgage-backed
securities and other securities representing interests in
mortgage pools shall not constitute the purchase or sale of
real estate or interests in real estate or real estate
mortgage loans.)
7. Borrow money in excess of 5% of the value (taken at the lower
of cost or current value) of its total assets (not including
the amount borrowed) at the time the borrowing is made, and
then only from banks as a temporary measure to facilitate the
meeting of redemption requests (not for leverage) which might
otherwise require the untimely disposition of portfolio
investments or for extraordinary or emergency purposes.
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<PAGE>
8. Pledge, hypothecate, mortgage, or otherwise encumber its
assets in excess of 15% of its total assets (taken at the
lower of current value) and then only to secure borrowings
permitted by these investment restrictions.
9. Purchase or sell commodities or commodity contracts, except
that the Fund may purchase or sell financial futures
contracts, options on futures contracts, and futures
contracts, forward contracts, and options with respect to
foreign currencies, and may enter into swap transactions.
10. Make loans, except by purchase of debt obligations or other
instruments in which the Fund may invest consistent with its
investment policies or by entering into repurchase agreements.
In addition, it is contrary to the current policy of the Fund, which
policy may be changed without shareholder approval, to:
1. Invest in (a) securities which at the time of such investment
are not readily marketable, (b) securities restricted as to
resale, and (c) repurchase agreements maturing in more than
seven days, if, as a result, more than 10% of the Fund's net
assets (taken at current value) would then be invested in
securities described in (a), (b), and (c).
2. Invest in securities of other registered investment companies,
except by purchases in the open market involving only
customary brokerage commissions and as a result of which not
more than 5% of its total assets (taken at current value)
would be invested in such securities, or except as part of a
merger, consolidation, or other acquisition.
All percentage limitations on investments will apply at the time of
investment and shall not be considered violated unless an excess or deficiency
occurs or exists immediately after and as a result of such investment. Except
for the investment restrictions listed above as fundamental or to the extent
designated as such in a prospectus with respect to the Fund, the other
investment policies described in this Statement or in a prospectus are not
fundamental and may be changed by approval of the Trustees. As a matter of
policy, the Trustees would not materially change the Fund's investment objective
without shareholder approval.
The Investment Company Act of 1940, as amended (the "1940 Act"),
provides that a "vote of a majority of the outstanding voting securities" of the
Fund means the affirmative vote of the lesser of (1) more than 50% of the
outstanding shares of the Fund, and (2) 67% or more of the shares present at a
meeting if more than 50% of the outstanding shares are represented at the
meeting in person or by proxy.
MANAGEMENT OF THE TRUST
The following table provides biographical information with respect to
each Trustee and officer of the Trust. Each Trustee who is an "interested
person" of the Trust, as defined in the 1940 Act, is indicated by an asterisk.
<TABLE>
<CAPTION>
Position Held Principal Occupation
Name and Address with Fund During Past 5 Years
- ---------------- --------- -------------------
<S> <C>
Stanley F. Pauley Trustee Chairman and Chief
Carpenter Company Executive Officer,
5016 Monument Avenue Carpenter Company; Trustee,
Richmond, Virginia 23261 Mentor Funds and Cash Resource Trust.
Louis W. Moelchert, Jr. Trustee Vice President of Business and
University of Richmond Finance, University of
Richmond, VA 23173 Richmond; Trustee, Mentor
Funds and Cash Resource Trust;
Director, America's Utility
Fund, Inc.
Thomas F. Keller Trustee Retired; formerly Dean, Fuqua
Fuqua School of Business School of
Duke University Business, Duke University;
Trustee, Mentor Funds and Cash
Resource Trust.
Arnold H. Dreyfuss Trustee Trustee, Mentor Funds and Cash
P.O. Box 18156 Resource Trust; formerly,
Richmond, Virginia 23226 Chairman and Chief Executive
Officer, Hamilton
Beach/Proctor-Silex, Inc.
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<PAGE>
*Daniel J. Ludeman Chairman; Chairman and Chief Executive
901 E. Byrd Street Trustee Officer since July 1991, Mentor
Richmond, VA 23219 Investment Group, LLC;
Managing Director of Wheat,
First Securities, Inc. since
August 1989; Managing Director
of Wheat First Butcher Singer,
Inc. since June 1991; Director,
Wheat, First Securities, Inc.,
Mentor Income Fund, Inc. and
America's Utility Fund, Inc.;
Chairman and Trustee, Mentor
Funds and Cash Resource Trust.
Troy A. Peery, Jr. Trustee President, Heilig-
Heilig-Meyers Company Meyers Company;
2235 Staples Mill Road Trustee, Mentor Funds and Cash
Richmond, Virginia 23230 Resource Trust.
Paul F. Costello President Managing Director, Wheat First
901 E. Byrd Street Butcher Singer, Inc. and Mentor Investment
Richmond, VA 23219 Group, LLC; President, Mentor Funds,
Mentor Income Fund, Inc., and Cash
Resource Trust; Executive Vice President
and Chief Administrative Officer,
America's Utility Fund, Inc.; Director,
Mentor Perpetual Advisors, Inc. and
Mentor Trust Company; formerly,
President, Mentor Series Trust.
Terry L. Perkins Treasurer Senior Vice President, Mentor Investment
901 E. Byrd Street Group, LLC; Treasurer, Cash Resource
Richmond, VA 23219 Trust, Mentor Funds, America's
Utility Fund, Inc., and Mentor
Income Fund, Inc.; formerly, Treasurer
and Comptroller, Ryland Capital
Management, Inc.
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<PAGE>
Michael Wade Assistant Vice President, Mentor Investment Group,
901 E. Byrd Street Treasurer LLC since April 1994; Assistant
Richmond, VA 23219 Treasurer, Mentor Income Fund, Inc.,
Mentor Funds, Cash Resource Trust, and
America's Utility Fund, Inc.; formerly, Senior
Accountant, Wheat First Butcher Singer,
Inc., April 1993 through March 1994;
Audit Senior, BDO Seidman, July 1989
through March 1993.
John M. Ivan Secretary Managing Director and
901 E. Byrd Street Director of Compliance
Richmond, VA 23219 since October 1992, and
Assistant General Counsel,
Wheat, First Securities, Inc.;
Managing Director and Assistant
Secretary, Wheat First Butcher
Singer, Inc.; Clerk, Cash Resource Trust; Secretary,
Mentor Income Fund, Inc. and
Mentor Funds.
</TABLE>
The table below shows the fees paid to each Trustee by the Trust for
the current fiscal year and the fees paid to each Trustee by all funds in the
Mentor family (including the Trust) during the 1996 calendar year.
<TABLE>
<CAPTION>
Total compensation
Aggregate compensation from all
Trustees from the Trust complex funds
- -------- -------------- -------------
<S> <C>
Daniel J. Ludeman -- --
Arnold H. Dreyfuss $200 $12,200
Thomas F. Keller $175 $11,175
Louis W. Moelchert, Jr. $200 $12,200
Stanley F. Pauley $200 $12,200
Troy A. Peery, Jr. $175 $11,175
- -------------
</TABLE>
The Trustees do not receive pension or retirement benefits from the
Trust.
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<PAGE>
The Agreement and Declaration of Trust of the Trust provides that the
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 Trust, except if it is determined in the manner specified
in the Agreement and Declaration of Trust that they have not acted in good faith
in the reasonable belief that their actions were in the best interests of the
Trust or that such indemnification would relieve any officer or Trustee of any
liability to the Trust or its Shareholders by reason of willful misfeasance, bad
faith, gross negligence, or reckless disregard of his or her duties. The Trust,
at its expense, provides liability insurance for the benefit of its Trustees and
officers.
PRINCIPAL HOLDERS OF SECURITIES
As of August 31, 1997, the officers and Trustees of the Trust owned as
a group less than one percent of the outstanding shares of the Fund. To the
knowledge of the Fund, no person owns beneficially more than 5% of the
outstanding shares of the Fund as of that date, except as follows:
Arlington County Total Number of Shares: 74,280,000
2100 Clarendon Blvd., Suite 201 Percentage of Ownership: 7.10%
Arlington, VA 22216-0530
City of Chesapeake Total Number of Shares: 160,014,000
P.O. Box 15245 Percentage of Ownership: 15.30%
Chesapeake, VA 23328-5245
Commonwealth of Virginia Total Number of Shares: 208,232,000
P.O. Box 1879 Percentage of Ownership: 19.92%
Richmond, VA 23215-1879
INVESTMENT ADVISORY AND OTHER SERVICES
Mentor Investment Advisors, LLC ("Mentor Advisors") acts as investment
adviser to the Fund pursuant to a Management Contract with the Trust. Subject to
the supervision and direction of the Trustees, Mentor Advisors, as investment
adviser, manages the Fund's portfolio in accordance with the stated policies of
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<PAGE>
the Fund and of the Trust. Mentor Advisors makes investment decisions for the
Fund and places the purchase and sale orders for portfolio transactions. Mentor
Advisors bears all expenses in connection with the performance of its services.
In addition, Mentor Advisors pays the salaries of all officers and employees who
are employed by it and the Trust.
Until November 1, 1996, Commonwealth Investment Counsel, Inc. served as
investment advisor to the Fund. On that date, Commonwealth Investment Counsel,
Inc. was reorganized as Mentor Investment Advisors, LLC, which thereupon became
investment advisor to the Fund.
For the fiscal year ended June 30, 1997 and for the period ended June
30, 1996, the Fund paid Mentor Advisors (or, for periods before November 1,
1996, Commonwealth Advisors) $784,372 and $667,271, respectively, pursuant to
the Management Contract.
Mentor Advisors provides the Trust on behalf of the Fund with
investment officers who are authorized to execute purchases and sales of
securities. Investment decisions for the Fund and for the other investment
advisory clients of Mentor Advisors and its 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 Mentor Advisors's opinion 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. In the case of short-term investments, the
Treasury area of Wheat First Butcher Singer, Inc. handles purchases and sales
under guidelines approved by investment officers of the Trust. Mentor Advisors
employs professional staffs of portfolio managers who draw upon a variety of
resources for research information for the Fund.
The proceeds received by the Fund for each issue or sale of its shares,
and all income, earnings, profits, and proceeds thereof, subject only to the
rights of creditors, will be specifically allocated to the Fund, and constitute
the underlying assets of the Fund. The underlying assets of the Fund will be
segregated on the Trust's books of account, and will be charged with the
liabilities in respect of the Fund and with a share of the general liabilities
of the Trust. Expenses with respect to any two or more series of the Trust,
including the Fund, may be allocated in proportion to the net asset values of
the respective series except where allocations of direct expenses can otherwise
be fairly made.
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<PAGE>
Expenses incurred in the operation of the Fund or otherwise allocated
to the Fund, including but not limited to taxes, interest, brokerage fees and
commissions, fees to Trustees who are not officers, directors, stockholders, or
employees of Wheat First Butcher Singer, Inc. and subsidiaries, SEC fees and
related expenses, state Blue Sky notification and filing fees, charges of the
custodian and transfer and dividend disbursing agents, outside auditing,
accounting, and legal services, investor servicing fees and expenses, 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, are borne by the Fund.
The Management Contract entered into by the Trust in respect of the
Fund is subject to annual approval commencing in 1997 by (i) the Trustees or
(ii) vote of a majority (as defined in the 1940 Act) of the outstanding voting
securities of the Fund, provided that in either event the continuance is also
approved by a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) of the Trust or Mentor Advisors, by vote cast in person
at a meeting called for the purpose of voting on such approval. The Management
Contract is terminable without penalty, on not more than sixty days' notice and
not less than thirty days' notice, by the Trustees, by vote of the holders of a
majority of the Fund's shares, or by Mentor Advisors, as applicable.
BROKERAGE
Transactions on U.S. stock exchanges, commodities markets, and futures
markets and other agency transactions involve the payment by the Fund of
negotiated brokerage commissions. Such commissions vary among different brokers.
A particular broker may charge different commissions according to such factors
as the difficulty and size of the transaction. Transactions in foreign
investments often involve the payment of fixed brokerage commissions, which may
be higher than those in the United States. There is generally no stated
commission in the case of securities traded in the over-the-counter markets, but
the price paid by the Fund usually includes an undisclosed dealer commission or
mark-up. In underwritten offerings, the price paid by the Fund includes a
disclosed, fixed commission or discount retained by the underwriter or dealer.
It is anticipated that most purchases and sales of securities by the Fund
investing primarily in certain fixed-income securities will be with the issuer
or with underwriters of or dealers in those securities, acting as principal.
Accordingly, the Fund would not ordinarily pay significant brokerage commissions
with respect to securities transactions.
Mentor Advisors places all orders for the purchase and sale of portfolio
investments for the Fund and buys and sells investments for the Fund through a
substantial number of brokers and dealers. Mentor Advisors seeks the best
overall terms available for the Fund, except to the extent Mentor Advisors may
be permitted to pay higher brokerage commissions as described below. In doing
so, Mentor Advisors, having in mind the Fund's best interests, considers all
factors it deems 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.
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<PAGE>
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 receives brokerage and research services and other
similar services from many broker-dealers with which it places the 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's managers and analysts. Where the
services referred to above are not used exclusively by Mentor Advisors for
research purposes, Mentor Advisors, based upon its own allocations of expected
use, bears 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
its affiliates in advising various of its clients (including the Fund), although
not all of these services are necessarily useful and of value in managing the
Fund.
As permitted by Section 28(e) of the 1934 Act, and by the Management
Contract, Mentor Advisors may cause the Fund to pay a broker-dealer which
provides "brokerage and research services" (as defined in the 1934 Act) to
Mentor Advisors 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's authority to cause the Fund to
pay any such greater commissions is also subject to such policies as the
Trustees may adopt from time to time. Mentor Advisors does not currently intend
to cause the Fund to make such payments. It is the position of the staff of the
Securities and Exchange Commission that Section 28(e) does not apply to the
payment of such greater commissions in "principal" transactions. Accordingly,
Mentor Advisors will use its best efforts to obtain the best overall terms
available with respect to such transactions, as described above.
Consistent with the Rules of Fair Practice of the National Association
of Securities Dealers, Inc. and subject to such other policies as the Trustees
may determine, Mentor Advisors may consider sales of shares of the Fund (and, if
permitted by law, of other Mentor funds) as a factor in the selection of
broker-dealers to execute portfolio transactions for the Fund.
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<PAGE>
DETERMINATION OF NET ASSET VALUE
The Trust determines net asset value per share of the Fund twice each
day the New York Stock Exchange (the "Exchange") is open, once at 12:00 noon and
again at the close of regular trading on the New York Stock Exchange. Currently,
the Exchange is closed Saturdays, Sundays, and the following holidays: New
Year's Day, Presidents' Day, Good Friday, Memorial Day, the Fourth of July,
Labor Day, Thanksgiving, and Christmas.
The valuation of the Fund's portfolio securities is based upon its
amortized cost, which does not take into account unrealized securities gains or
losses. This method involves initially valuing an instrument at its cost and
thereafter assuming a constant amortization to maturity of any discount or
premium, regardless of the impact of fluctuating interest rates on the market
value of the instrument. By using amortized cost valuation, the Fund seeks to
maintain a constant net asset value of $1.00 per share, despite minor shifts in
the market value of its portfolio securities. While this method provides
certainty in valuation, it may result in periods during which value, as
determined by amortized cost, is higher or lower than the price the Fund would
receive if it sold the instrument. During periods of declining interest rates,
the quoted yield on shares of the Fund may tend to be higher than a like
computation made by a fund with identical investments utilizing a method of
valuation based on market prices and estimates of market prices for all of its
portfolio instruments. Thus, if the use of amortized cost by the Fund resulted
in a lower aggregate portfolio value on a particular day, a prospective investor
in the Fund would be able to obtain a somewhat higher yield if he purchased
shares of the Fund on that day, than would result from investment in a fund
utilizing solely market values, and existing investors in the Fund would receive
less investment income. The converse would apply on a day when the use of
amortized cost by the Fund resulted in a higher aggregate portfolio value.
However, as a result of certain procedures adopted by the Trust, the Trust
believes any difference will normally be minimal.
The valuation of the Fund's portfolio instruments at amortized cost is
permitted in accordance with Securities and Exchange Commission Rule 2a-7 and
certain procedures adopted by the Trustees. Under these procedures, the Fund
must maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of 397 days or less, and
invest in securities determined by the Trustees to be of high quality with
minimal credit risks. The Trustees have also established procedures designed to
stabilize, to the extent reasonably possible, the Fund's price per share as
computed for the purpose of distribution, redemption and repurchase at $1.00.
These procedures include review of the Fund's portfolio holdings by the
Trustees, at such intervals as they may deem appropriate, to determine whether
the Fund's net asset value calculated by using readily available market
quotations deviates from $1.00 per share, and, if so, whether such deviation may
result in material dilution or is otherwise unfair to existing shareholders. In
the event the Trustees determine that such a deviation may result in material
dilution or is otherwise unfair to existing shareholders, they will take such
corrective action as they regard as necessary and appropriate, including the
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<PAGE>
sale of portfolio instruments prior to maturity to realize capital gains or
losses or to shorten the average portfolio maturity; withholding dividends;
redemption of shares in kind; or establishing a net asset value per share by
using readily available market quotations.
Since the net income of the Fund is declared as a dividend each time it
is determined, the net asset value per share of the Fund remains at $1.00 per
share immediately after such determination and dividend declaration. Any
increase in the value of a shareholder's investment in the Fund representing the
reinvestment of dividend income is reflected by an increase in the number of
shares of the Fund in the shareholder's account on the last day of each month
(or, if that day is not a business day, on the next business day). It is
expected that the Fund's net income will be positive each time it is determined.
However, if because of realized losses on sales of portfolio investments, a
sudden rise in interest rates, or for any other reason the net income of the
Fund determined at any time is a negative amount, the Fund will offset such
amount allocable to each then shareholder's account from dividends accrued
during the month with respect to such account. If at the time of payment of a
dividend by the Fund (either at the regular monthly dividend payment date, or,
in the case of a shareholder who is withdrawing all or substantially all of the
shares in an account, at the time of withdrawal), such negative amount exceeds a
shareholder's accrued dividends, the Fund will reduce the number of outstanding
shares by treating the shareholder as having contributed to the capital of the
Fund that number of full and fractional shares which represent the amount of the
excess. Each shareholder is deemed to have agreed to such contribution in these
circumstances by its investment in the Fund.
Should the Fund incur or anticipate any unusual or unexpected
significant expense or loss which would affect disproportionately the Fund's
income for a particular period, the Trustees would at that time consider whether
to adhere to the dividend policy described above or to revise it in light of the
then prevailing circumstances in order to ameliorate to the extent possible the
disproportionate effect of such expense or loss on then existing shareholders.
Such expenses or losses may nevertheless result in a shareholder's receiving no
dividends for the period during which the shares are held and receiving upon
redemption a price per share lower than that which was paid.
TAX STATUS
The Fund intends to qualify each year and elect to be taxed as a
regulated investment company under Subchapter M of the United States Internal
Revenue Code of 1986, as amended (the "Code").
As a regulated investment company qualifying to have its tax liability
determined under Subchapter M, the Fund will not be subject to federal income
tax on any of its net investment income or net capital gains that are
distributed to shareholders. As a series of Massachusetts business trust, the
Fund will not under present law be subject to any excise or income taxes in
Massachusetts.
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<PAGE>
In order to qualify as a "regulated investment company," the Fund must,
among other things, (a) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, gains from the sale or
other dispositions of stock, securities, or foreign currencies, and other income
(including but not limited to gains from options, futures, or forward contracts)
derived with respect to its business of investing in such stock, securities, or
currencies; and (b) diversify its holdings so that, at the close of each quarter
of its taxable year, (i) at least 50% of the value of its total assets consists
of cash, cash items, U.S. Government securities, securities of other regulated
investment companies, and other securities limited generally with respect to any
one issuer to not more than 5% of the value of the total assets of the Fund and
not more than 10% of the outstanding voting securities of such issuer, and (ii)
not more than 25% of the value of its total assets is invested in the securities
of any issuer (other than U.S. Government securities). In addition, until the
start of the Fund's first tax year beginning after August 5, 1997, the Fund must
derive less than 30% of its gross income from the sale or other disposition of
certain assets (including stock or securities and certain options, futures
contracts, forward contracts and foreign currencies) held for less than three
months in order to qualify as a regulated investment company. In order to
receive the favorable tax treatment accorded regulated investment companies and
their shareholders, moreover, the Fund must in general distribute annually at
least 90% of the sum of its taxable net investment income, its net tax-exempt
income, and the excess, if any, of net short-term capital gains over net
long-term capital losses for such year. To satisfy these requirements, the Fund
may engage in investment techniques that affect the amount, timing, and
character of its income and distributions.
An excise tax at the rate of 4% will be imposed on the excess, if any,
of the Fund's "required distribution" over its actual distributions in any
calendar year. Generally, the "required distribution" is 98% of the Fund's
ordinary income for the calendar year plus 98% of its capital gain net income
recognized during the one-year period ending on October 31 plus undistributed
amounts from prior years. The Fund intends to make distributions sufficient to
avoid imposition of the excise tax. Distributions declared by the Fund during
October, November, or December to shareholders of record on a date in any such
month and paid by the Fund during the following January will be treated for
federal tax purposes as paid by the Fund and received by shareholders on
December 31 of the year in which declared.
The Fund is required to withhold 31% of all income dividends and
capital gain distributions, and 31% of the gross proceeds of all redemptions of
Fund shares, in the case of any shareholder who does not provide a correct
taxpayer identification number, about whom the Fund is notified that the
shareholder has under reported income in the past, or who fails to certify to
the Fund that the shareholder is not subject to such withholding. Tax-exempt
shareholders are not subject to these back-up withholding rules so long as they
furnish the Fund with a proper certification.
As stated above, it is a policy of the Fund to meet the requirements of
the code to qualify as a regulated investment company that is taxed pursuant to
Subchapter M of the Code. Until the start of the Fund's first tax year beginning
after August 5, 1997, one of these requirements is that less than 30% of the
Fund's gross income must be derived from gains from sale or other disposition of
securities held for less than three months. Accordingly, the Fund will be
restricted in selling securities held or considered under Code rules to have
been held less than three months.
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<PAGE>
The foregoing is a general and abbreviated summary of the applicable
provisions of the Code and related regulations currently in effect. For the
complete provisions, reference should be made to the pertinent Code sections and
regulations. The Code and regulations are subject to change by legislative or
administrative actions. Dividends and distributions also may be subject to
state, local, foreign, and other taxes. Shareholders are urged to consult their
tax advisers regarding specific questions as to federal, state, local, or
foreign taxes. The foregoing discussion relates solely to U.S. federal income
tax law. Non-U.S. investors should consult their tax advisers concerning the tax
consequences of ownership of shares of the Fund, including the possibility that
distributions may be subject to a 30% United States withholding tax (or a
reduced rate of withholding provided by treaty).
INDEPENDENT ACCOUNTANTS
KPMG Peat Marwick LLP, located at 99 High Street, Boston, Massachusetts
02110, are the Trust's independent auditors, providing audit services, tax
return review, and other tax consulting services. The audited financial
statements incorporated by reference into or included in the Fund's prospectus
and Statement of Additional Information have been so included and incorporated
in reliance upon the report of KPMG Peat Marwick LLP, the independent auditors,
given on the authority of said firm as experts in auditing and accounting.
CUSTODIAN
The custodian of the Fund, Central Fidelity National Bank, is located
at 1021 East Cary Street, P.O. Box 27602, Richmond, Virginia 23261. Its
responsibilities include generally safeguarding and controlling the Fund's cash
and securities, handling the receipt and delivery of securities, and collecting
interest and dividends on the Fund's investments.
PERFORMANCE INFORMATION
The yield of the Fund is computed by determining the percentage net
change, excluding capital changes, in the value of an investment in one share of
the Fund over the base period, and multiplying the net change by 365/7 (or
approximately 52 weeks). The Fund's effective yield represents a compounding of
the yield by adding 1 to the number representing the percentage change in value
of the investment during the base period, raising that sum to a power equal to
365/7, and subtracting 1 from the result. Based on the seven-day period ended
June 30, 1997, the Fund's yield was 5.54 its effective yield was 5.69%.
All data for the Fund is based on past performance and does not predict
future results.
-14
<PAGE>
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder liability
for acts or obligations of the Trust and requires that notice of such disclaimer
be given in each agreement, obligation, or instrument entered into or executed
by the Trust or the Trustees. The Agreement and Declaration of Trust provides
for indemnification out of the Fund's property for all loss and expense of any
shareholder held personally liable for the obligations of the Fund. Thus the
risk of a shareholder's incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund would be unable to meet
its obligations.
INVESTMENT PROFESSIONALS OF MENTOR INVESTMENT ADVISORS, LLC
R. Preston Nuttall, CFA
Mr. Nuttall has more than thirty years of investment management experience.
Prior to his involvement with the Mentor organization, he led short-term
fixed-income management for fifteen years at Capitoline Investment Services,
Inc. He has his undergraduate degree in economics from the University of
Richmond and his graduate degree in finance from the Wharton School at the
University of Pennsylvania.
Hubert R. White III
Mr. White has thirteen years of investment management experience. Prior to
joining the Mentor organization, he served for five years as portfolio manager
with Capitoline Investment Services. He has his undergraduate degree in business
from the University of Richmond.
Kathryn T. Allen
Ms. Allen has sixteen years of investment management experience and specializes
in tax-free trades. Prior to joining the Mentor organization, Ms. Allen was
portfolio group manager at PNC Institutional Management Corporation. She has her
undergraduate degree in commerce and business administration from the University
of Alabama.
RATINGS
A-1 and Prime-1 Commercial Paper Ratings
The rating A-1 (including A-1+) is the highest commercial paper rating assigned
by S&P. Commercial paper rated A-1 by S&P has the following characteristics:
o liquidity ratios are adequate to meet cash requirements;
o long-term senior debt is rated "A" or better;
o the issuer has access to at least two additional channels of
borrowing;
o basic earnings and cash flow have an upward trend with allowance
made for unusual circumstances;
-15-
<PAGE>
o typically, the issuer's industry is well established and the issuer
has a strong position within the industry; and
o the reliability and quality of management are unquestioned.
Relative strength or weakness of the above factors determines whether the
issuer's commercial paper is rated A-1, A-2 or A-3. Issues rated A-1 that are
determined by S&P to have overwhelming safety characteristics are designated
A-1+.
The rating Prime-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
o evaluation of the management of the issuer;
o economic evaluation of the issuer's industry or industries and an
appraisal of speculative- type risks which may be inherent in
certain areas;
o evaluation of the issuer's products in relation to competition and
customer acceptance;
o liquidity;
o amount and quality of long-term debt;
o trend of earnings over a period of ten years;
o financial strength of parent company and the relationships which
exist with the issuer; and
o recognition by the management of obligations which may be
present or may arise as a result of public interest questions
and preparations to meet such obligations.
-16-
<PAGE>
FINANCIAL STATEMENTS
The Report of Independent Auditors, financial highlights, and financial
statements in respect of the Fund included in the Annual Report of the Fund for
the fiscal year ended June 30, 1997 and filed electronically on Form N-30D under
the Investment Company Act of 1940, as amended, on September 17, 1997 (File No.
811-8484), are incorporated herein by reference.
-17-
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
<TABLE>
<CAPTION>
<S> <C>
(a) Financial Statements and Supporting Schedules
(1) SNAP Fund
Statement of Assets and Liabilities -- June 30, 1997 -
Included in Part B.
Statement of Operations -- period ended June 30, 1997 -
Included in Part B.
Statement of Changes in Net Assets -- year ended June 30, 1997
and period from July 24, 1995 to June 30, 1996 -
Included in Part B.
Financial Highlights - Included in Part A. Notes to Financial
Statements - Included in Part B.
Portfolio of Investments -- June 30, 1997 - Included in Part B.
Independent Auditors' Report - Included in Part B.
</TABLE>
<TABLE>
<CAPTION>
(b) Exhibits
<S> <C>
(1) (A) - Agreement and Declaration of Trust.1
(B) - Amendment to Agreement and Declaration of Trust.4
(2) - Bylaws.1
(3) - Inapplicable.
(4) (A) - Form of certificate representing shares of beneficial
interest for each of the Portfolios.1
(B) - Portions of Agreement and Declaration of Trust Relating to Shareholders' Rights.1
(C) - Portions of Bylaws Relating to Shareholders' Rights.1
(5) (A) - Form of Management Contract (Mentor Intermediate Duration and Mentor
Fixed-Income Portfolios).1
(B) - Form of Management Contract (SNAP Fund).5
(C) - Form of Management Contract (Mentor Perpetual International
Portfolio). 8
(D) - Instrument of Transfer of Management Contract (Fixed Income,
Intermediate Duration, and U.S. Government Cash Management
Portfolios).11
(E) - Instrument of Letter of Transfer of Management Contract dated
November 1, 1996 (SNAP Fund). 12
(6) (A) - Form of Distribution Agreement.2
(B) - Form of Assignment of Distribution Agreement.5
(C) - Instrument of Transfer of Distribution Agreement. 11
(7) - Inapplicable.
<PAGE>
(8) (A) - Form of Custody Agreement.1
(B) - Form of Custody Agreement (SNAP Fund). 5
(C) - Form of Transfer Agency and Services Agreement. 3
(D) - Form of Transfer Agency and Services Agreement (SNAP Fund). 5
(9) (A) - Form of Administration Agreement.1
(B) - Form of Shareholder Service Plan. 9
(C) - Instrument of Transfer of Administration Agreement.11
(10) - Opinion of counsel, including consent. 3
(11) - Consent of Independent Accountants. 12
(12) - Inapplicable.
(13) - Inapplicable.
(14) - Inapplicable.
(15) - Form of Plan of Distribution Pursuant to Rule 12b-1. 9
(16) - Schedule of Computation of Performance Information (SNAP
Fund). 12
(17) - Financial Data Schedules.
(A) - Mentor U.S. Government Cash Management Portfolio (Class D). 8
(B) - Mentor Intermediate Duration Portfolio (Class D). 8
(C) - Mentor Fixed Income Portfolio (Class D). 8
(D) - Mentor Perpetual International Portfolio (Class D). 8
(E) - SNAP Fund. 12
(18) - Form of Rule 18f-3 Plan. 9
</TABLE>
1 Incorporated herein by reference to the Registrant's initial
Registration Statement on Form N-1A under the investment Company Act of
1940 filed on April 15, 1994.
2 Incorporated herein by reference to Amendment No. 1 to the Registrant's
Registration Statement on Form N-1A filed on June 28,1994.
3 Incorporated herein by reference to Pre-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form N-1A filed on November
18, 1994.
4 Incorporated herein by reference to Post-Effective Amendment No. 1 to
the Registrant's Registration Statement on Form N-1A filed on July 3,
1995.
5 Incorporated herein by reference to Post-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form N-1A filed
on July 24, 1995.
6 Incorporated herein by reference to Post-Effective Amendment No. 3 to
the Registrant's Registration Statement on Form N-1A filed on September
5, 1995.
7 Incorporated herein by reference to Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form N-1A filed on March
11, 1994.
8 Incorporated herein by reference to Post-Effective Amendment No. 6 to
the Registrant's Registration Statement on Form N-1A filed on May 24,
1996.
9 Incorporated herein by reference to Post-Effective Amendment No. 7 to
the Registrant's Registration Statement on Form N-1A filed on July 3,
1996.
10 Incorporated herein by reference to Post-Effective Amendment No. 8 to
the Registrant's Registration Statement on Form N-1A filed on November
1, 1996.
11 Incorporated herein by reference to Post-Effective Amendment No. 9 to
the Registrant's Registration Statement on Form N-1A filed on January
2, 1997.
12 Filed herewith.
-2-
<PAGE>
Item 25. Persons Controlled by or Under Common Control with Registrant
None.
Item 26. Number of Record Holders of Securities
As of August 31, 1997, there were 536 holders of record of shares of
beneficial interest of the SNAP Fund.
Item 27. Indemnification
The information required by this item is incorporated herein by
reference from the Registrant's initial Registration Statement on Form N-1A
under the Investment Company Act of 1940 (File No. 811-8484).
Item 28. Business and Other Connections of Investment Adviser
(a) Mentor Investment Advisors, LLC serves as the investment adviser to
22 separate open-end investment portfolios in the Mentor Family of Funds.
The following is additional information with respect to the directors
and officers of Mentor Investment Advisors, LLC:
<TABLE>
<CAPTION> Other Substantial
Business, Profession,
Position with Vocation or Employment
Name Investment Adviser during the past two fiscal years
------ ------------------ ----------------------------------
<S> <C>
John G. Davenport Managing Director Managing Director, Mentor
Investment Group, LLC.
R. Preston Nuttall Managing Director Managing Director, Mentor
-3-
<PAGE>
Investment Group, LLC.
Paul F. Costello Managing Director Managing Director, Mentor
Investment Group,
LLC and Mentor Perpetual
Advisors, LLC; Senior Vice President,
Mentor Distributors, LLC,
Executive Vice President and Chief
Administrative Officer,
America's Utility Fund, Inc.;
President, Cash Resource
Trust, Mentor Institutional Trust,
Mentor Funds and Mentor Income Fund.
Theodore W. Price Managing Director Managing Director, Mentor
Investment Group, LLC
P. Michael Jones Managing Director Managing Director, Mentor Investment Group, LLC.
Thomas Lee Souders Treasurer Managing Director and Chief Financial Officer,
Wheat, First Securities, Inc.; Treasurer,
Mentor Distributors, LLC.
Robert P. Wilson Assistant Treasurer Managing Director and Treasurer, Wheat, First
Securities, Inc.; Assistant Treasurer,
Mentor Distributors, LLC.
John M. Ivan Secretary Managing Director, Assistant
General Counsel, and Director
of Compliance, Wheat, First
Securities, Inc.; Clerk, Cash
Resource Trust and Mentor
Institutional Trust;
Secretary, Mentor Funds and
Mentor Distributors, LLC.
</TABLE>
(b) The following is additional information with respect to the
directors and officers of Mentor Perpetual Advisors, LLC:
-4-
<PAGE>
<TABLE>
<CAPTION>
Other Substantial
Business, Profession,
Position with the Vocation or Employment
Name Investment Adviser during the past two fiscal years
- ----- ------------------ ---------------------------------
<S> <C>
Scott A. McGlashan President Director, Perpetual
Portfolio Management Limited.
Martyn Arbib Managing Director Chairman, Perpetual
Portfolio Management Limited.
Roger C. Cormick Managing Director Deputy Chairman -
Marketing, Perpetual
Portfolio Management Limited.
Paul F. Costello Managing Director Managing Director, Mentor
Investment Group, LLC and
Mentor Perpetual Advisors,
LLC; Senior Vice President,
Mentor Distributors, LLC,
Executive Vice President
and Chief Administrative
Officer, America's Utility
Fund, Inc.; President, Cash
Resource Trust, Mentor
Institutional Trust, Mentor
Funds and Mentor Income
Fund.
Daniel J. Ludeman Managing Director Chairman and Chief
Executive Officer,
Mentor Investment Group; Director,
Wheat, First Securities,
Inc.; Managing Director,
Wheat First Butcher Singer,
Inc.
David S. Mossop Managing Director Director, Perpetual
Portfolio Management Limited.
Peter J. Quinn Managing Director Managing Director, Mentor
Investment Group, LLC; President,
Mentor Distributors, LLC.
Rod Smyth Managing Director Managing Director, Mentor
Investment Group, LLC.
</TABLE>
-5-
<PAGE>
The address of each of the above-named entities is 901 East Byrd
Street, Richmond, VA 23219, except that the address of Perpetual Portfolio
Management Limited is 48 Hart Street, Henley-on-Thames, Oxfordshire RG92A2,
England.
Item 29. Principal Underwriters
(a) Mentor Distributors, LLC currently is acting as principal
underwriter for Mentor Funds and Cash Resource Trust.
(b) The following is information concerning officers and directors of
Mentor Distributors, LLC
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
- ------------------ --------------------- ----------------------
<S> <C>
Peter J. Quinn, Jr. President --
901 East Byrd Street
Richmond, VA 23219
Paul F. Costello Senior Vice President President
901 East Byrd Street
Richmond, VA 23219
David J. Kowach Vice President None
901 East Byrd Street
Richmond, VA 23219
John M. Ivan Secretary Clerk
901 East Byrd Street
Richmond, VA 23219
Howard T. Macrae, Jr. Assistant Secretary None
901 East Byrd Street
Richmond, VA 23219
Thomas L. Souders Treasurer None
901 East Byrd Street
Richmond, VA 23219
Robert P. Wilson Assistant Treasurer None
901 East Byrd Street
Richmond, VA 23219
</TABLE>
-6-
<PAGE>
(c) Registrant has no principal underwriter who is not an affiliate of
the Registrant.
Item 30. Location of Accounts and Records
Persons maintaining physical possession of accounts, books and other
documents required to be maintained by Section 31(a) of the Investment Company
Act of 1940 and the Rules promulgated thereunder are Registrant's Secretary,
John M. Ivan, Registrant's custodians, Investors Fiduciary Trust Company
("IFTC") (all Portfolios other than SNAP Fund), and Central Fidelity National
Bank (SNAP Fund only), and Registrant's transfer agents, State Street Bank and
Trust Company (through Boston Financial Data Services, Inc. ("BFDS")) (all
Portfolios other than SNAP Fund), and Central Fidelity National Bank (SNAP Fund
only). The address of the Secretary is 901 East Byrd Street, Richmond, Virginia,
23219. The address of BFDS is 2 Heritage Drive, North Quincy, Massachusetts
02171. The address of IFTC is 127 West 10th Street, Kansas City, Missouri,
64105. The address of Central Fidelity National Bank is 1021 East Cary Street,
P.O. Box 27602, Richmond, Virginia 23261.
Item 31. Management Services
None.
Item 32. Undertakings
(a) The Registrant undertakes to furnish to each person to whom a
prospectus of the Registrant is delivered a copy of the Registrant's
latest annual report to shareholders, upon request and without charge.
(b) Inapplicable.
(c) Inapplicable.
(d) The undersigned Registrant hereby undertakes to call a meeting of
shareholders for the purpose of voting on the removal of a trustee or
trustees when requested in writing to do so by the holders of at least
10% of the Registrant's outstanding voting securities and in connection
with such meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder communications.
-7-
<PAGE>
NOTICE
A copy of the Agreement and Declaration of Trust of Mentor
Institutional 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 Registrant by an officer of the Registrant as an officer and not
individually and that the obligations of or arising out of this instrument are
not binding upon any of the Trustees, officers, or shareholders individually but
are binding only upon the assets and property of the Registrant.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and
the Investment Company Act of 1940, the Registrant certifies that it meets all
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment
to the Registration Statement to be signed on behalf of the undersigned,
thereunto duly authorized, in the City of Richmond, and the Commonwealth of
Virginia on this 10th day of October, 1997.
MENTOR INSTITUTIONAL TRUST
By: /s/ Paul F. Costello
-------------------------
Paul F. Costello
Title: President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities indicated on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
----------- ------- -----
<S> <C>
/s/ ARNOLD H. DREYFUSS Trustee October 10, 1997
- ---------------------------------
Arnold H. Dreyfuss
/s/ THOMAS F. KELLER Trustee October 10, 1997
- --------------------------------
Thomas F. Keller
* Trustee October 10, 1997
- --------------------------------
Daniel J. Ludeman
* Trustee October 10, 1997
- --------------------------------
Louis W. Moelchert, Jr.
-9-
<PAGE>
* Trustee October 10, 1997
- --------------------------------
Stanley F. Pauley
* Trustee October 10, 1997
- --------------------------------
Troy A. Peery, Jr.
/s/ Paul F. Costello President October 10, 1997
- -------------------------------- (Principal Executive
Officer)
Paul F. Costello
/s/ Terry L. Perkins Treasurer October 10, 1997
- ------------------------------- (Principal Financial
and Accounting Officer)
Terry L. Perkins
*By /s/ Paul F. Costello October 10, 1997
----------------------------
Paul F. Costello
Attorney-in-Fact
</TABLE>
-10-
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit Page No.
- ----------- ------- --------
(5)(E) Instrument of Transfer of
Management Contract dated November 1, 1996 15
(11) Consent of Independent Accountants 16
(16) Schedules of Computation of
Performance 17
(17)(E) Financial Data Schedule 18
-11-
EXHIBIT (5)(E)
November 1, 1996
Mentor Investment Advisors, LLC
901 East Byrd Street
Richmond, Virginia 23219
Ladies and Gentlemen:
Effective today, we hereby transfer to you all of our rights and
obligations under the Management Contract dated July 24, 1995 in respect of the
SNAP Fund of Mentor Institutional Trust, and you hereby accept and assume any
and all of such rights and obligations. If this letter is consistent with your
understanding of the agreement between us, please acknowledge your acceptance by
signing in the space indicated below.
Very truly yours,
Commonwealth Investment Counsel, Inc.
By: /s/ Paul F. Costello
----------------------------------
Name: Paul F. Costello
Title: Managing Director
Acknowledged and accepted:
Mentor Investment Advisors, LLC
By: /s/ Paul F. Costello
- -----------------------------------
Name: Paul F. Costello
Title: Managing Director
-15-
EXHIBIT 11
CONSENT OF INDEPENDENT ACCOUNTANTS
The Trustees
Mentor Institutional Trust
We consent to the use of our report dated July 25, 1997 incorporated herein
by reference and to the references to our firm under the captions "FINANCIAL
HIGHLIGHTS" in the prospectus and "INDEPENDENT ACCOUNTANTS" in the statement of
additional information.
KPMG Peat Marwick LLP
Boston, Massachusetts
October 10, 1997
-16-
EXHIBIT 16
SNAP, N-1A
Performance Schedule
FYE 6/30/97
Yield Computation Schedule
==========================
Account Balance (1 share @ $1.00) 1.000000000
Dividend Declaration
June 30, 1997 0.000155043
June 29, 1997 0.000151243
June 28, 1997 0.000151243
June 27, 1997 0.000151243
June 26, 1997 0.000151162
June 25, 1997 0.000151049
June 24, 1997 0.000151311
-----------------------
0.001062294
Ending Account Balance 1.001062294
Less: Beginning Account Balance 1.000000000
-----------------------
Difference 0.001062294
Base Period Return
(Difference/Beginning Account Balance) 0.001062294
Yield Quotation
(Base Period Return *365/7) 5.54%
Effective Yield Quotation
[(Base Period Return +1)^365/7)] 5.69%
Performance Calculation
=======================
Initial Investment 1,000.00
Initial NAV 1.00
Initial Shares 1,000.00
Shares from Distribution 55.10
End of Period NAV 1.00
Total Return 5.51%
Page 1 of 1
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> SNAP FUND
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> JUN-30-1997
<INVESTMENTS-AT-COST> 1,041,953
<INVESTMENTS-AT-VALUE> 1,041,953
<RECEIVABLES> 3,405
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 282
<TOTAL-ASSETS> 1,045,640
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 57
<TOTAL-LIABILITIES> 57
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,045,583
<SHARES-COMMON-STOCK> 1,045,583
<SHARES-COMMON-PRIOR> 954,777
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,045,583
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 51,869
<OTHER-INCOME> 0
<EXPENSES-NET> 1,080
<NET-INVESTMENT-INCOME> 50,789
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 50,789
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 50,789
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,457,944
<NUMBER-OF-SHARES-REDEEMED> 1,417,927
<SHARES-REINVESTED> 50,788
<NET-CHANGE-IN-ASSETS> 90,805
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 784
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,080
<AVERAGE-NET-ASSETS> 944,675
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> 0.05
<PER-SHARE-GAIN-APPREC> 0.00
<PER-SHARE-DIVIDEND> 0.05
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> 0.11
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
