MENTOR INSTITUTIONAL TRUST, 485BPOS, 1998-10-30

MENTOR INSTITUTIONAL TRUST
485BPOS, 1998-10-30

Previous: NUMED SURGICAL INC, 10QSB, 1998-10-30

Next: MATTHEWS INTERNATIONAL FUNDS, NSAR-B, 1998-10-30

As filed with the Securities and Exchange Commission on October 30, 1998

Registration No. 33-80784
File No. 811-08484
- --------------------------------------------------------------------------------

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. 11 /X/

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 /X/

Amendment No. 14 /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
---------------

PAUL F. COSTELLO, President
901 East Byrd Street
Richmond, Virginia 23219
(Name and address of agent for service)
-----------------

Copy to:
TIMOTHY W. DIGGINS, Esquire
ROPES & GRAY
One International Place
Boston, Massachusetts 02110
--------------

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

-1-

<PAGE>

If appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

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OR SUPERSEDED HEREBY.

-2-

<PAGE>

MENTOR INSTITUTIONAL TRUST
SNAP FUND
CROSS REFERENCE SHEET

(as required by Rule 404(c))

Part A

N-1A Item No.

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>

-3-

<PAGE>

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 Incorporated in Part C is set forth under the
appropriate Item, so numbered, in Part C of the Registration Statement.

-4-

<PAGE>

P R O S P E C T U S October 30, 1998

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 30, 1998 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.

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 REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Expense Summary .................................... 3
Financial Highlights ............................... 4
Investment Objective and Policies .................. 4
Management of the Fund ............................. 6
How the Fund Values Its Shares ..................... 7
How Distributions Are Made ......................... 7
How To Participate in the Fund ..................... 8
How To Redeem Shares ............................... 9
Mentor Institutional Trust ......................... 9
Custodian and Transfer and Dividend Agent .......... 10
Performance Information ............................ 10
</TABLE>

<PAGE>

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 ................................................. None
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:

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------- --------- --------- ---------
<S> <C> <C> <C>
$ 1 $4 $6 $14
</TABLE>

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.

<PAGE>

FINANCIAL HIGHLIGHTS

The financial highlights presented below for the Fund have been derived
from the Fund's Financial Statements which were 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 YEAR PERIOD FROM
ENDED ENDED 7/24/95 TO
6/30/98 6/30/97 6/30/96
-------------- -------------- ----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD ......................... $ 1.00 $ 1.00 $ 1.00
INCOME FROM INVESTMENT OPERATIONS
Net investment income ........................................ 0.06 0.05 0.05
--------- --------- --------
Distributions from net investment income ..................... (0.06) (0.05) (0.05)
---------- ---------- --------
NET ASSET VALUE, END OF PERIOD ............................... $ 1.00 $ 1.00 $ 1.00
========== ========== ========
Total Return ................................................. 5.71% 5.51% 5.29%(b)
========== ========== ========
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (in thousands) ..................... $1,083,364 $1,045,583 $954,777
Ratio of expenses to average net assets ...................... 0.11% 0.11% 0.12%(a)
Ratio of net investment income to average net assets ......... 5.56% 5.38% 5.53%(a)
========== ========== ========
</TABLE>

- ----------
(a) Annualized

(b) Not Annualized

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.

<PAGE>

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: The Fund may
invest in certificates of deposit and time deposits of U.S. banks or of
U.S. branches of foreign banks, if the issuer has outstanding short-term
debt obligations rated not lower than P-1 by Moody's Investors Service,
Inc. and A-1 by Standard & Poor's Ratings Service.

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
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 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 Ratings Service 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. Some of these securities may be
supported by the right of the holders under certain circumstances to demand
that a specified bank, broker-dealer,

<PAGE>

or other financial institution purchase the securities from the holders at par,
or otherwise to demand on short notice, payment of unpaid principal and
interest on the securities. Such securities are subject to the risk that the
financial institution in question may for any reason be unwilling or unable to
meet its obligation in respect of the securities, which would likely have an
adverse effect on the value of the securities.

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 values of the securities in the Fund's portfolio can be expected
to vary inversely to the changes in prevailing interest rates. Withdrawals by
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%

<PAGE>

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 has over $13 billion in assets under management and is a
wholly owned subsidiary of Mentor Investment Group, LLC ("Mentor Investment
Group") and its affiliates. Mentor Investment Group is a subsidiary of Wheat
First Butcher Singer, Inc., which is in turn a wholly owned subsidiary of First
Union Corp. ("First Union"). First Union is a leading financial services
company with approximately $172 billion in assets and $12 billion in total
stockholders' equity as of March 31, 1998. EVEREN Capital Corporation has a 20%
ownership in Mentor Investment Group and may acquire additional ownership based
principally on the amount of Mentor Investment Group's revenues derived from
assets attributable to clients of EVEREN Securities, Inc. and its affiliates.

Mentor Distributors, LLC, 3435 Stelzer Road, Columbus, Ohio 43219, is the
distributor for the Fund. Mentor Distributors is a wholly owned subsidiary of
BISYS Fund Services, Inc.

The Fund receives services from a number of providers which rely on the
smooth functioning of their respective systems and the systems of others to
perform those services. It is generally recognized that certain systems in use
today may not perform their intended functions adequately after the Year 1999
because of the inability of the software to distinguish the Year 2000 from the
Year 1900. Mentor Advisors is taking steps that it believes are reasonably
designed to address this potential "Year 2000" problem and to obtain
satisfactory assurances that comparable steps are being taken by the Fund's
other major service providers. There can be no assurance, however, that these
steps will be sufficient to avoid any adverse impact on the Fund from this
problem.

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 income
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.

<PAGE>

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 Fund 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 foregoing 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.

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 Wachovia
Bank. A participant in the SNAP Program wishing to invest in the Fund must
ensure that Wachovia 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.

<PAGE>

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.

REDEMPTIONS BY CHECK. SNAP Program participants may elect to have a
special checking account with Wachovia Bank. Checks may be drawn on the account
for any amount. Upon receipt of a completed signature card, Wachovia 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 Wachovia 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

<PAGE>

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 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

Wachovia Bank serves as the Fund's custodian and transfer and dividend
agent. The address of Wachovia 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.

<PAGE>

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE PORTFOLIO. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT
LAWFULLY BE MADE. THIS PROSPECTUS OMITS CERTAIN INFORMATION CONTAINED IN THE
REGISTRATION STATEMENT, TO WHICH REFERENCE IS MADE, FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION. ITEMS WHICH ARE THUS OMITTED, INCLUDING CONTRACTS AND
OTHER DOCUMENTS REFERRED TO OR SUMMARIZED HEREIN, MAY BE OBTAINED FROM THE
COMMISSION UPON PAYMENT OF THE PRESCRIBED FEES.

ADDITIONAL INFORMATION CONCERNING THE SECURITIES OFFERED HEREBY AND THE
PORTFOLIO IS TO BE FOUND IN THE REGISTRATION STATEMENT, INCLUDING VARIOUS
EXHIBITS THERETO AND FINANCIAL STATEMENTS INCLUDED OR INCORPORATED THEREIN,
WHICH MAY BE INSPECTED AT THE OFFICE OF THE COMMISSION.

MENTOR DISTRIBUTORS, LLC
DISTRIBUTOR

SNAP FUND
-------------------------
PROSPECTUS
-------------------------
AN OPEN-END MANAGEMENT
INVESTMENT COMPANY

OCTOBER 30, 1998

[LOGO]

<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.

8. Pledge, hypothecate, mortgage, or otherwise encumber its assets in
excess of 15% of its total assets (taken at the lower of cost or 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.

<PAGE>

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.

<PAGE>

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
NAME AND ADDRESS WITH PORTFOLIO PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- -------------------------------- ------------------- --------------------------------------------------------
<S> <C> <C>
*Daniel J. Ludeman Chairman; Trustee Chairman and Chief Executive Officer, Mentor
c/o Mentor Institutional Trust Investment Group, LLC; Director, Wheat, First
901 E. Byrd Street Securities, Inc.; Managing Director, Wheat First
Richmond, VA Butcher Singer, Inc.; Chairman and Director, Mentor
Income Fund, Inc. and America's Utility Fund, Inc.;
Chairman and Trustee, Mentor Variable Investment
Portfolios, Mentor Funds, and Cash Resource Trust.
Louis W. Moelchert, Jr. Trustee Vice President for Investments, University of
University of Richmond Richmond; Trustee, Mentor Funds, Mentor Variable
Richmond, VA 23173 Investment Portfolios, and Cash Resource Trust;
Director, America's Utility Fund, Inc. and Mentor
Income Fund, Inc.
Thomas F. Keller Trustee R.J. Reynolds Industries Professor of Business
c/o Mentor Institutional Trust Administration and Former Dean of Fuqua School of
901 E. Byrd Street Business, Duke University; Director of LADD
Richmond, VA 23219 Furniture, Inc., Wendy's International, Inc., American
Business Products, Inc., Dimon, Inc., and Biogen, Inc.;
Director of Nations Balanced Target Maturity Fund,
Inc., Nations Government Income Term Trust 2003,
Inc., Nations Government Income Term Trust 2004,
Inc., Hatteras Income Securities, Inc., Nations
Institutional Reserves, Nations Fund Trust, Nations
Fund, Inc., Nations Fund Portfolios, Inc., and Nations
LifeGoal Funds, Inc. Trustee, Mentor Funds, Mentor
Variable Investment Portfolios, and Cash Resource
Trust; Director, Mentor Income Fund, Inc. and
America's Utility Fund, Inc.
Arnold H. Dreyfuss Trustee Chairman, Eskimo Pie Corp.; formerly, Chairman and
P.O. Box 18156 Chief Executive Officer, Hamilton Beach/Proctor-Silex,
Richmond, VA 23226 Inc.; Trustee, Mentor Funds, and Cash Resource Trust,
and Mentor Variable Investment Portfolios; Director,
America's Utility Fund, Inc. and Mentor Income Fund,
Inc.
Troy A. Peery, Jr. Trustee President, Heilig-Meyers Company; Trustee, Mentor
Heilig-Meyers Company Funds, Cash Resource Trust, and Mentor Variable
2235 Staples Mill Road Investment Portfolios; Director, America's Utility
Richmond, VA 23230 Fund, Inc. and Mentor Income Fund, Inc.
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
POSITION HELD
NAME AND ADDRESS WITH PORTFOLIO PRINCIPAL OCCUPATION DURING PAST 5 YEARS
- -------------------------------- ---------------- -------------------------------------------------------
<S> <C> <C>
*Peter J. Quinn, Jr. Trustee Formerly, President, Mentor Distributors, LLC;
c/o Mentor Institutional Trust Managing Director, Mentor Investment Group, LLC
901 E. Byrd Street and Wheat First Butcher Singer, Inc.; formerly, Senior
Richmond, VA 23219 Vice President/Director of Mutual Funds, Wheat First
Butcher Singer, Inc.; Trustee, Mentor Funds and Cash
Resource Trust; Director, America's Utility Fund, Inc.
and Mentor Income Fund, Inc.
Arch T. Allen, III Trustee Attorney at law, Raleigh, North Carolina; Trustee,
c/o Mentor Institutional Trust Mentor Funds, Cash Resource Trust, and Mentor
901 E. Byrd Street Variable Investment Portfolios; Director, Mentor
Richmond, VA 23219 Income Fund, Inc. and America's Utility Fund, Inc.;
formerly, Vice Chancellor for Development and
University Relations, University of North Carolina at
Chapel Hill.
Weston E. Edwards Trustee President, Weston Edwards & Associates; Trustee,
c/o Mentor Institutional Trust Mentor Funds, Cash Resource Trust, and Mentor
901 E. Byrd Street Variable Investment Portfolios; Director, Mentor
Richmond, VA 23219 Income Fund, Inc. and America's Utility Fund, Inc.;
Founder and Chairman, The Housing Roundtable;
formerly, President, Smart Mortgage Access, Inc.
Jerry R. Barrentine Trustee President, J.R. Barrentine & Associates; Trustee,
c/o Mentor Institutional Trust Mentor Funds, Cash Resource Trust, and Mentor
901 E. Byrd Street Variable Investment Portfolios; Director, Mentor
Richmond, VA 23219 Income Fund, Inc. and America's Utility Fund, Inc.;
formerly, Executive Vice President and Chief Financial
Officer, Barclays/American Mortgage Director
Corporation; Managing Partner, Barrentine Lott &
Associates.
J. Garnett Nelson Trustee Consultant, Mid-Atlantic Holdings, LLC; Trustee,
c/o Mentor Institutional Trust Mentor Funds, Cash Resource Trust, and Mentor
901 E. Byrd Street Variable Investment Portfolios; Director, Mentor
Richmond, VA 23219 Income Fund, Inc., America's Utility Fund, Inc., GE
Investment Funds, Inc., and Lawyers Title Corporation;
Member, Investment Advisory Committee, Virginia
Retirement System; formerly, Senior Vice President,
The Life Insurance Company of Virginia.
Paul F. Costello President Managing Director, Mentor Investment Group, LLC,
c/o Mentor Institutional Trust Wheat First Butcher Singer, Inc., and Mentor
901 E. Byrd Street Investment Advisors, LLC; President, Mentor Income
Richmond, VA 23219 Fund, Inc., America's Utility Fund, Inc., Mentor
Funds, Cash Resource Trust, and Mentor Variable
Investment Portfolios; Director, Mentor Perpetual
Advisors, LLC and Mentor Trust Company.
</TABLE>

<PAGE>

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 1997 calendar year.

<TABLE>
<CAPTION>
AGGREGATE COMPENSATION TOTAL COMPENSATION
TRUSTEES FROM THE TRUST FROM ALL COMPLEX FUNDS
- --------------------------------- ------------------------ -----------------------
<S> <C> <C>
Daniel J. Ludeman ............... 0 $ 0
Arnold H. Dreyfuss .............. $720 $15,200
Thomas F. Keller ................ $720 $15,200
Louis W. Moelchert, Jr. ......... $720 $26,200
Troy A. Peery, Jr. .............. $720 $14,175
Peter Quinn+ .................... $ 0 $ 0
Arch Allen III+ ................. $ 0 $11,000
Weston E. Edwards+ .............. $ 0 $28,000
Jerry R. Barrentine+ ............ $ 0 $20,000
J. Garnett Nelson+ .............. $ 0 $20,000
</TABLE>

- ----------
+ Elected Trustee December 22, 1997

The Trustees do not receive pension or retirement benefits from the Trust.

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.

<PAGE>

PRINCIPAL HOLDERS OF SECURITIES

As of October 28, 1998, 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 owned beneficially more than 5% of the
outstanding shares of the Fund as of that date, except as follows:

<TABLE>
<S> <C>
Commonwealth of Virginia Percentage of Ownership: 14.90%
Department of Treasury
P.O. Box 1879
Richmond, VA 23218-1879
City of Chesapeake Percentage of Ownership: 10.09%
P.O. Box 15245
Chesapeake, VA 23328-5245
County of Chesterfield Percentage of Ownership: 6.48%
P.O. Box 70
Chesterfield, VA 23832
County of Arlington Percentage of Ownership: 7.08%
Office of the Treasurer
31 Court House Plaza
Arlington, VA 22216-0530
Medical College of Virginia Hospital Authority Percentage of Ownership: 5.68%
P.O. Box 980152
Richmond, VA 23298-0152
Virginia Port Authority Percentage of Ownership: 5.54%
600 World Trade
Norfolk, VA 23510-1617
</TABLE>

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 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 years ended June 30, 1998 and 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) $837,768, $784,372, and
$667,270, respectively, pursuant to the Management Contract.

<PAGE>

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' 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. 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.

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 2000 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

<PAGE>

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 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.

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' 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' 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.

<PAGE>

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.

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, Dr. Martin Luther King, Jr. 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 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 sale of portfolio instruments prior to maturity to
realize capital gains or losses or to shorten the average portfolio maturity;

<PAGE>

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 preceding 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.

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

<PAGE>

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 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.

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.

<PAGE>

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 the Statement of Additional
Information have been so 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, Wachovia 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.

<PAGE>

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, 1998, the Fund's yield was 5.57% its effective yield was 5.73%.

All data for the Fund is based on past performance and does not predict
future results.

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.

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;

<PAGE>

o basic earnings and cash flow have an upward trend with allowance made for
unusual circumstances;

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 inter est questions and preparations to meet such
obligations.

FINANCIAL STATEMENTS

The Independent Auditors' Report, 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, 1998 and filed electronically on Form N-30D
under the Investment Company Act of 1940, as amended, on September 8, 1998
(File No. 811-08484, Accession No. 0000916641-98-001001), are incorporated
herein by reference.

<PAGE>

PART C

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

<S> <C>
(a)
(1) Mentor U.S. Government Cash Management
Portfolio (formerly Mentor Cash Management Portfolio), and
Mentor Fixed-Income Portfolio; and Mentor Perpetual
International Portfolio:

Statements of Assets and Liabilities -- October 31, 1997.*
Statements of Operations -- fiscal year ended October 31, 1997.*
Statements of Changes in Net Assets -- for the years or periods
ended October 31, 1996 and 1997.*
Financial Highlights.*+
Mentor U.S. Government Cash Management Portfolio and Mentor
Fixed-Income Portfolio -- for the years or periods ended
October 31, 1995, 1996, and 1997
Notes to Financial Statements.*
Independent Auditors' Report.*

*Incorporated by reference into Part B of this Registration
Statement filed January 30, 1998

+Included in Part A of this Registration Statement filed
January 30, 1998

(2) SNAP Fund

Statement of Assets and Liabilities -- June 30, 1998 -
Incorporated by Reference in Part B.
Statement of Operations -- period ended June 30, 1998 -
Incorporated by Reference in Part B.
Statement of Changes in Net Assets -- years ended June 30, 1997
and June 30, 1998 - Incorporated by Reference in Part B.
Financial Highlights - Included in Part A.
Notes to Financial Statements - Incorporated by Reference in Part B.
Portfolio of Investments -- June 30, 1998 - Incorporated by Reference in Part B.
Independent Auditors' Report - Incorporated by Reference 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).13
(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.12
(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.11
(B) - Form of Shareholder Service Plan. 19
(10) - Opinion of counsel, including consent. 3
(11) - Consent of Independent Accountants. 13
(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). 13
(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. 13
(18) - Revised Form of Rule 18f-3 Plan. 13

</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 Incorporated herein by reference to Post-Effective Amendment No 10
to the Registrant's Registration Statement on Form N-1A filed on
October 10, 1997.

13 Filed herewith.

-2-

Item 25. Persons Controlled by or Under Common Control with Registrant

None.

Item 26. Number of Record Holders of Securities

As of October 29, 1998, there were 923 holders of record of shares
of beneficial interest of the Trust.

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
28 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:

-3-

<PAGE>

Business, Profession,
Vocation or Employment
Position with during the past
Name Investment Adviser two fiscal years
<S> <C>
John G. Davenport Managing Director Managing Director,
Mentor Investment
Group, LLC.

R. Preston Nuttall Managing Director Managing Director,
Mentor Investment
Group, LLC.

Paul F. Costello Managing Director Managing Director,
Mentor Investment Group,
LLC; President, Mentor
Funds, Mentor
Institutional Trust, Cash
Resource Trust, Mentor
Income Fund, Inc.; and
America's Utility Fund,
Inc.; Senior Vice
President, Mentor
Distributors, LLC;
Managing Director, Mentor
Perpetual Advisors, LLC.

Theodore W. Price Managing Director Managing Director,
Mentor Investment
Group, LLC.

P. Michael Jones Managing Director Managing Director,
Mentor Investment
Group, LLC.

Peter J. Quinn, Jr. Managing Director Managing Director,
Mentor Investment
Group, LLC.

-4-

<PAGE>

Daniel J. Ludeman Chairman Chairman and Chief
Executive Officer,
Mentor Investment
Group, LLC.

Karen H. Wimbish Managing Director Managing Director,
Mentor Investment
Group, LLC.

Terry L. Perkins Treasurer Senior Vice President,
Mentor Investment Group,
L.L.C.

Michael A. Wade Controller Vice President, Mentor
Investment Group, L.L.C.

Geoffrey B. Sale Secretary Associate Vice President
Mentor Investment Group,
LLC; Clerk, Mentor
Institutional Trust;
Secretary, Cash Resource
Trust, Mentor Income Fund,
Inc., Mentor Funds and
Mentor Variable Investment
Portfolios.

(b) The following is additional information with respect to the directors and
officers of Mentor Perpetual Advisors, LLC ("Mentor Perpetual"):

Other Substantial
Position with the Business, Profession,
Name Investment Advisor Vocation or Employment
<S> <C> <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 Investment
Advisors, LLC; President,
Mentor Funds, Mentor Institutional
Trust, Cash Resource
Trust, Mentor Income Fund, Inc.,
and America's Utility Fund, Inc.;
Senior Vice President, Mentor
Distributors, LLC.

Daniel J. Ludeman Managing Director Chairman and Chief
Executive Officer,
Mentor Investment
Group, LLC; 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, Jr. Managing Director Managing Director,
Mentor Investment
Group, LLC.

Roderick A. 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, the Trust's principal underwriter, acts as
principal underwriter for the following investment companies:

The Mentor Funds
o Mentor Growth Portfolio
o Mentor Strategy Portolio
o Mentor Short-Duration Income Portfolio
o Mentor Balanced Portfolio
o Mentor Capital Growth Portfolio
o Mentor Perpetual Global Portfolio
o Mentor High Income Portfolio
o Mentor Income and Growth Portfolio
o Mentor Quality Income Portfolio
o Mentor Municipal Income Portfolio
o Mentor Institutional U.S. Government Money Market Portfolio
o Mentor Institutional Money Market Portfolio

Cash Resource Trust
o Cash Resource Money Market Fund
o Cash Resource U.S. Government Money Market Fund
o Cash Resource Tax-Exempt Money Market Fund
o Cash Resource California Tax-Exempt Money Market Fund
o Cash Resource New York Tax-Exempt Money Market Fund

Mentor Institutional Trust
o Mentor U.S. Government Cash Management Portfolio
o Mentor Fixed-Income Portfolio
o Mentor Perpetual International Portfolio

Mentor Investment Group
o Mentor Income Fund
o America's Utility Fund

Mentor Variable Investment Portfolios
o Mentor VIP Growth Portfolio
o Mentor VIP Strategy Portfolio
o Mentor VIP Balanced Portfolio
o Mentor VIP Capital Growth Portfolio
o Mentor VIP Perpetual International Portfolio

(b) Information concerning officers of Mentor Distributors, LLC:

-6-

Name And Principal Positions And Offices Positions And Offices
Business Address* With Underwriter With Registrant
- ----------------- -------------------- ---------------------
Lynn Mangum Chairman Inapplicable
D'Ray Moore President Inapplicable
Dennis Sheehan Executive Vice President Inapplicable
William J. Tomko Senior Vice President Inapplicable
Mark J. Rybarczyk Senior Vice President Inapplicable
Kevin J. Dell Vice President and Inapplicable
Secretary
Michael D. Burns Vice President Inapplicable
David Blackmore Vice President Inapplicable
Robert L. Tuch Assistant Secretary Inapplicable
Steven Ludwig Compliance Officer Inapplicable

*Principal Address for all Officers:
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, Ohio 43219-8000

<PAGE>

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.

(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 30th day of October, 1998.

MENTOR INSTITUTIONAL TRUST

By: /s/ Paul F. Costello
-------------------------
Paul F. Costello
Title: President

-10-

Pursuant to the requirements of the Securities Act of 1933, this Amendment
has been signed below by the following persons in the capacity and on this 30th
day of October, 1998.

<TABLE>
<CAPTION>
Name Title
<S> <C>

*
- -----------------------
Daniel J. Ludeman Chairman and Trustee
(Chief Executive
Officer)

* Trustee
- -----------------------
Peter J. Quinn, Jr.

*
- -----------------------
Arnold H. Dreyfuss Trustee

*
- -----------------------
Thomas F. Keller Trustee

*
- -----------------------
Louis W. Moelchert, Jr. Trustee

*
- -----------------------
Troy A. Peery, Jr. Trustee

- -----------------------
Arch T. Allen, III Trustee

- -----------------------
Weston E. Edwards Trustee

- -----------------------
Jerry R. Barrentine Trustee

- -----------------------
J. Garnett Nelson Trustee

/s/ Paul F. Costello
- ------------------------
Paul F. Costello President

/s/ Terry L. Perkins
- ------------------------
Terry L. Perkins Treasurer (Principal Financial
and Accounting Officer)

*/s/ Paul F. Costello Attorney-in-fact
- ------------------------
Paul F. Costello
</TABLE>

<PAGE>

EXHIBIT INDEX

Exhibit No. Exhibit
- ----------- -------
(5)(B) Form of Management Contract (SNAP Fund)
(11) Consent of Independent Accountants
(16) Schedules of Computation of
Performance
(17)(E) Financial Data Schedule

-11-

MENTOR INSTITUTIONAL TRUST

MANAGEMENT CONTRACT

This Management Contract dated as of February 1, 1998 between MENTOR
INSTITUTIONAL TRUST, a Massachusetts business trust (the "Trust"), on behalf of
SNAP Fund (the "Fund"), a series of shares of beneficial interest of Trust, and
MENTOR INVESTMENT ADVISORS, LLC, a Virginia limited liability company (the
"Manager")

WITNESSETH:

That in consideration of the mutual covenants herein contained, it is
agreed as follows:

1. SERVICES TO BE RENDERED BY THE MANAGER TO FUND.

(a) The Manager, at its expense, will furnish continuously an investment
program for the Fund, will determine what investments shall be purchased, held,
sold, or exchanged by the Fund and what portion, if any, of the assets of the
Fund shall be held uninvested and shall, on behalf of the Fund, make changes in
the Fund's investments. In the performance of its duties, the Manager will
comply with the provisions of the Agreement and Declaration of Trust and Bylaws
of the Trust and the Fund's stated investment objectives, policies, and
restrictions, and will use its best efforts to safeguard and promote the welfare
of the Trust and to comply with other policies which the Trustees may from time
to time determine and shall exercise the same care and diligence expected of the
Trustees.

(b) The Manager, at its expense, will furnish (i) all necessary investment
and related management facilities, including, salaries of personnel, required
for it to execute its duties faithfully, (ii) suitable office space for the
Trust, and (iii) administrative facilities, including bookkeeping, clerical
personnel, and equipment necessary for the efficient performance of its
obligations. The Manager will pay the compensation, if any, of certain officers
of the Trust.

<PAGE>

(c) The Manager, at its expense, shall place all orders for the purchase
and sale of portfolio investments for the Fund's account with brokers or dealers
selected by the Manager. In the selection of such brokers or dealers and the
placing of such orders, the Manager shall give primary consideration to securing
for the Fund the most favorable price and execution available, except to the
extent it may be permitted to pay higher brokerage commissions for brokerage and
research services as described below. In doing so, the Manager, bearing in mind
the Trust's best interests at all times, shall consider all factors it deems
relevant, including, by way of illustration, price, the size of the transaction,
the nature of the market for the security, the amount of the commission, the
timing of the transaction taking into account market prices and trends, the
reputation, experience, and financial stability of the broker or dealer
involved, and the quality of service rendered by the broker or dealer in other
transactions. Subject to such policies as the Trustees of the Trust may
determine, the Manager shall not be deemed to have acted unlawfully or to have
breached any duty created by this Contract or otherwise solely by reason of its
having caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Manager an amount of commission for effecting a
portfolio investment transaction in excess of the amount of commission that
another broker or dealer would have charged for effecting that transaction, if
the Manager determines in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the Manager's overall responsibilities with respect to the Fund
and to other clients of the Manager as to which the Manager exercises investment
discretion.

(d) The Trust, on behalf of the Fund, hereby authorizes any entity or
person associated with the Manager which is a member of a national securities
exchange to effect any transaction on the exchange for the account of the Fund
which is permitted by Section 11(a) of the Securities Exchange Act of 1934 and
Rule 11a2-2(T) thereunder, and the Fund hereby consents to the retention of
compensation for such transactions in accordance with Rule 11a2-2(T)(2)(iv).

2. OTHER AGREEMENTS, ETC.

It is understood that any of the shareholders, Trustees, officers, and
employees of the Trust may be a shareholder, director, officer, or employee of,
or be otherwise interested in, the Manager, and in any person controlled by or
under common control with the Manager, and that the Manager and any person
controlled by or under common control with the Manager may have an interest in
the Trust. It is also understood that the Manager and any person controlled by
or under common control with the Manager have and may have advisory, management,
service, or other contracts with other organizations and persons, and may have
other interests and business.

3. COMPENSATION TO BE PAID BY THE FUND TO THE MANAGER.

As compensation for the services performed and the facilities furnished
and expenses assumed by the Manager, including the services of any consultants
retained by the Manager, the Fund shall pay the Manager, promptly (but in any
event within three business days) after the last day of each calendar month, a
fee, calculated daily, at an annual rate as follows: for the first $500 million
of assets under management, .09% of the average daily net assets in the Fund;
for the next $250 million under management, .08% of the average daily net assets
in the Fund; for the next $250 million under management, .07% of the average
daily net assets in the Fund; for the next $250 million under management, .06%
of the average daily net assets in the Fund; and for any amounts over $1.25
billion under management, .05% of the average daily net assets in the Fund.

<PAGE>

If this Contract is terminated as of any date not the last day of a
calendar month, the fee payable to the Manager shall be paid promptly (but in
any event within three business days) after such date of termination.

The average daily net assets of the Fund shall in all cases be based only
on business days and be computed as of the time of the regular close of business
of the New York Stock Exchange, or such other time as may be determined by the
Board of Directors. Each such payment shall be accompanied by a report of the
Fund prepared either by the Fund or by a reputable firm of independent
accountants which shall show the amount properly payable to the Manager under
this Contract and the detailed computation thereof.

4. ASSIGNMENT TERMINATES THIS CONTRACT; AMENDMENTS OF THIS CONTRACT.

This Contract shall automatically terminate, without the payment of any
penalty, in the event of its assignment; and this Contract shall not be amended
unless such amendment be approved at a meeting by the affirmative vote of a
majority of the outstanding shares of the Fund, and by the vote, cast in person
at a meeting called for the purpose of voting on such approval, of a majority of
the Trustees of the Trust who are not interested persons of the Trust or of the
Manager.

5. EFFECTIVE PERIOD AND TERMINATION OF THIS CONTRACT.

This Contract shall become effective upon its execution and shall remain
in full force and effect continuously thereafter until the close of business on
February 1, 2000 (unless terminated automatically as set forth in Section 4),
and shall continue for successive one-year periods thereafter, if approved in
accordance with Section 6, until terminated by either party hereto at any time
by not more than sixty days nor less than thirty days written notice delivered
or mailed by registered mail, postage prepaid, to the other party. Such action
by the Trust with respect to termination may be taken either (i) by vote of a
majority of its Trustees, or (ii) by the affirmative vote of a majority of the
outstanding shares of the Fund.

Termination of this Contract pursuant to this Section 5 will be without
the payment of any penalty.

6. ANNUAL APPROVAL.

For additional terms after the initial term of this Contract, this
Contract shall be submitted for approval to the Trustees annually and shall
continue in effect only so long as specifically approved annually by vote of a
majority of the Trustees of the Trust who are not interested persons of the
Trust or of the Manager, by vote cast in person at a meeting called for the
purpose of voting on such approval.

<PAGE>

7. CERTAIN DEFINITIONS.

For the purposes of this Contract, the "affirmative vote of a majority of
the outstanding shares" of the Fund means the affirmative vote, at a duly called
and held meeting of such shareholders, (a) of the holders of 67% or more of the
shares of the Fund present (in person or by proxy) and entitled to vote at such
meeting, if the holders of more than 50% of the outstanding shares of the Fund
entitled to vote at such meeting are present in person or by proxy, or (b) of
the holders of more than 50% of the outstanding shares of the Fund entitled to
vote at such meeting, whichever is less.

For the purposes of this Contract, the terms "affiliated person",
"control", "interested person," and "assignment" shall have their respective
meanings defined in the Investment Company Act of 1940, as amended, and the
Rules and Regulations thereunder, subject, however, to such exemptions as may be
granted by the Securities and Exchange Commission under said Act; the term
"specifically approve at least annually" shall be construed in a manner
consistent with the Investment Company Act of 1940, as amended, and the Rules
and Regulations thereunder; and the term "brokerage and research services" shall
have the meaning given in the Securities Exchange Act of 1934, as amended, and
the Rules and Regulations thereunder.

8. NON-LIABILITY OF MANAGER.

In the absence of willful misfeasance, bad faith, or gross negligence on
the part of the Manager, or reckless disregard of its obligations and duties
hereunder, the Manager shall not be subject to any liability to the Trust or to
any shareholder of the Trust for any act or omission in the course of, or
connected with, rendering services hereunder.

9. LIMITATION OF LIABILITY OF THE TRUSTEES AND SHAREHOLDERS.

A copy of the Agreement and Declaration of Trust of the Trust is on file
with the Secretary of State of The Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually and that the obligations of this
instrument are not binding upon any of the Trustees, officers, or shareholders
of the Trust but are binding only upon the assets and property of the Trust.

<PAGE>

IN WITNESS WHEREOF, MENTOR INSTITUTIONAL TRUST and MENTOR INVESTMENT
ADVISORS, LLC, have each caused this instrument to be signed in duplicate in its
behalf by its President or Vice President thereunto duly authorized, all as of
the day and year first above written. This document is executed by each of the
parties hereto under seal. This Agreement shall be governed and construed in
accordance with the laws (other than conflict of laws rules) of The Commonwealth
of Massachusetts.

MENTOR INSTITUTIONAL TRUST
On behalf of SNAP Fund

By:___________________________________

MENTOR INVESTMENT ADVISORS, LLC

By:___________________________________

EXHIBIT 11

CONSENT OF INDEPENDENT ACCOUNTANTS

The Trustees
Mentor Institutional Trust

We consent to the use of our report dated July 31, 1998 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 28, 1998

-12-

Yield Computation Schedule

Account Balance (1 share @ $1.00) 1.000000000

Dividend Declaration
June 30, 1998 0.000155595
June 29, 1998 0.000154084
June 28, 1998 0.000152264
June 27, 1998 0.000152264
June 26, 1998 0.000152265
June 25, 1998 0.000151583
June 24, 1998 0.000150898
-----------
0.001068953

Ending Account Balance 1.001068953
Less: Beginning Account Balance 1.000000000
-----------
Difference 0.001068953

Base Period Return
(Difference/Beginning Account Balance) 0.001068953

Yield Quotation
(Base Period Return *365/7 5.57%

Effective Yield Quotation
[(Base Period Return +1)^365/7)] 5.73%

Performance Calculation

Initial Investment 1,000.00
Initial NAV 1.00
Initial Shares 1,000.00
Shares from Distribution 57.10
End of Period NAV 1.00
Total Return 5.71%

<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> SNAP FUND
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> JUN-30-1998
<INVESTMENTS-AT-COST> 1,077,868
<INVESTMENTS-AT-VALUE> 1,077,868
<RECEIVABLES> 5,382
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 181
<TOTAL-ASSETS> 1,083,431
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 67
<TOTAL-LIABILITIES> 67
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,083,364
<SHARES-COMMON-STOCK> 1,083,364
<SHARES-COMMON-PRIOR> 1,045,583
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 1,083,364
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 57,965
<OTHER-INCOME> 0
<EXPENSES-NET> 1,153
<NET-INVESTMENT-INCOME> 56,812
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 56,812
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 56,812
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,468,606
<NUMBER-OF-SHARES-REDEEMED> 1,487,637
<SHARES-REINVESTED> 56,812
<NET-CHANGE-IN-ASSETS> 37,781
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 838
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,153
<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>