<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant /X/ / / Filed by a Party other than the
Registrant
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement / / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
INVENTOR FUNDS, INC.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NOT APPLICABLE
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:________
(2) Aggregate number of securities to which transaction applies:___________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):_____________
_______________________________________________________________________
(4) Proposed maximum aggregate value of transaction:_______________________
(5) Total fee paid:________________________________________________________
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:________________________________________________
(2) Form, Schedule or Registration Statement No.:__________________________
(3) Filing Party:__________________________________________________________
(4) Date Filed:____________________________________________________________
================================================================================
<PAGE> 2
Dear Inventor Funds Shareholder:
I am writing you to inform you of A SPECIAL MEETING OF THE INVENTOR FUNDS
SHAREHOLDERS, WHICH WILL BE HELD ON MAY 2, 1996 TO VOTE ON SEVERAL IMPORTANT
PROPOSALS that effect the Inventor Funds. As a shareholder, you have the
opportunity to voice your opinion on these matters. This package contains
information about the proposals and the materials to use to vote by mail.
Please take a few minutes to read the enclosed materials and cast your vote
on the proxy ballot(s) enclosed. It is extremely important to vote promptly.
YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN. IF WE DO NOT RECEIVE
ENOUGH VOTES, WE MUST RESOLICIT SHAREHOLDERS AT AN ADDITIONAL COST. WE ENCOURAGE
YOU TO SUPPORT THE TRUSTEES' RECOMMENDATIONS.
On May 2, 1996, pending shareholder approval, it is anticipated that
Integra Financial Corporation ("Integra") will merge into National City
Corporation ("National City"). Since Integra Trust Company serves as investment
adviser to the Inventor Funds, the merger of Integra into National City requires
approval of a new investment advisory agreement between the Inventor Funds and
National City Bank. In addition, shareholders of certain Inventor Funds must
approve new sub-advisory agreements between National City Bank and Wellington
Management Company, STI Capital Management, N.A. (formerly known as SunBank
Capital Management, N.A.) and Weiss, Peck & Greer, L.L.C.
This special meeting of shareholders is being called to obtain your
approval of new investment advisory and sub-advisory agreements in order to
avoid interruption in the investment advisory services provided to the Inventor
Funds.
- - There will be no change in the Inventor Funds' investment objectives or
investment policies or in the responsibilities of the investment adviser and
sub-advisers as a result of the approval of the new investment advisory and
sub-advisory agreements;
- - There will be no increase in the contractual fees payable to the adviser or
sub-advisers as a result of the approval of the new investment advisory and
sub-advisory agreements;
PLEASE REVIEW THE FOLLOWING NOTICE TO SHAREHOLDERS CAREFULLY. IN IT, YOU
WILL FIND A BRIEF SUMMARY OF THE PROPOSALS THAT ARE INCLUDED IN THIS PROXY.
<PAGE> 3
YOUR VOTE IS IMPORTANT TO US. PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY
CARD AND RETURN IT AS SOON AS POSSIBLE. For your convenience, we have enclosed a
self-addressed stamped envelope. Please call 1-800-6INVENT (1-800-646-8368) if
you have any questions about the proposals. Thank you for taking the time to
consider these important proposals and for your investment in the Inventor
Funds.
Sincerely,
/s/ David G. Lee
DAVID G. LEE
President
<PAGE> 4
INVENTOR FUNDS, INC.
680 East Swedesford Road
Wayne, Pennsylvania 19087-1658
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 2, 1996
To the Shareholders of Inventor Funds, Inc.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders (the "Special
Meeting") of each portfolio of Inventor Funds, Inc. (the "Company") will be held
on May 2, 1996, at 10:00 a.m. (Eastern Time), at the offices of SEI Financial
Management Corporation, 680 East Swedesford Road, Wayne, Pennsylvania
19087-1658, for the following purposes:
(1) To approve a new investment advisory agreement with National City
Bank with respect to each portfolio of the Company (voted on by
shareholders of each portfolio).
(2) To approve new investment sub-advisory agreements with:
(a) Wellington Management Company for the Prime Obligations Money
Market Fund, Treasury Securities Money Market Fund, GNMA Securities Fund
and Intermediate Government Securities Fund
- VOTED ON BY SHAREHOLDERS OF THE PRIME OBLIGATIONS MONEY
MARKET FUND, TREASURY SECURITIES MONEY MARKET FUND, GNMA
SECURITIES FUND AND INTERMEDIATE GOVERNMENT SECURITIES FUND.
(b) STI Capital Management, N.A. (formerly known as SunBank Capital
Management, N.A.) for the Equity Growth Fund
- VOTED ON BY SHAREHOLDERS OF THE EQUITY GROWTH FUND.
(c) Weiss, Peck & Greer, L.L.C. for the Pennsylvania Municipal Bond
Fund and Pennsylvania Tax-Exempt Money Market Fund
- VOTED ON BY SHAREHOLDERS OF THE PENNSYLVANIA MUNICIPAL
BOND FUND AND PENNSYLVANIA TAX-EXEMPT MONEY MARKET FUND.
(3) To transact such other business as may properly come before the
Special Meeting or any adjournment or postponement thereof.
The proposals referred to above are discussed in the Proxy Statement
attached to this Notice. Each shareholder is invited to attend the Special
<PAGE> 5
Meeting in person. Shareholders of record at the close of business on February
29, 1996, have the right to vote at the Special Meeting. IF YOU CANNOT BE
PRESENT AT THE SPECIAL MEETING, WE URGE YOU TO FILL IN, SIGN, DATE AND PROMPTLY
RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. IF YOU SIGN,
DATE AND RETURN YOUR PROXY CARD BUT GIVE NO VOTING INSTRUCTIONS, YOUR SHARES
WILL BE VOTED "FOR" THE PROPOSALS NOTICED ABOVE. IN ORDER TO AVOID THE
ADDITIONAL EXPENSE TO THE FUNDS OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION
IN COMPLETING AND RETURNING YOUR PROXY PROMPTLY.
By Order of the Board of Directors
RICHARD W. GRANT, Secretary
March 15, 1996
<PAGE> 6
INVENTOR FUNDS, INC.
680 EAST SWEDESFORD ROAD
WAYNE, PENNSYLVANIA 19087-1658
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Inventor Funds, Inc. (the "Company") for
use at a Special Meeting (the "Special Meeting") of shareholders of the
Company's Prime Obligations Money Market Fund, Treasury Securities Money Market
Fund, Equity Growth Fund, GNMA Securities Fund, Intermediate Government
Securities Fund, Pennsylvania Municipal Bond Fund and Pennsylvania Tax-Exempt
Money Market Fund (the "Funds") to be held at 680 East Swedesford Road, Wayne,
Pennsylvania 19087-1658 on May 2, 1996 at 10:00 a.m. (Eastern Time). It is
expected that the solicitation of proxies will be primarily by mail. The
Company's officers and service contractors may also solicit proxies by
telephone, telegraph, or personal interview, and will tabulate proxies. Proxy
solicitation costs will be borne by National City Bank. It is anticipated that
banks, brokerage houses, and other custodians will be requested on behalf of the
Funds to forward solicitation material to their principals to obtain
authorizations for the execution of proxies. Any shareholder giving a proxy may
revoke it at any time before it is exercised by submitting to the Company a
written notice of revocation, a subsequently executed proxy or by attending the
Special Meeting and electing to vote in person. This Proxy Statement and the
enclosed proxy are expected to be distributed to shareholders on or about March
15, 1996.
The following table identifies the proposals to be voted on at the Special
Meeting and the shareholders who are being solicited with respect to each
proposal:
<TABLE>
<CAPTION>
PROPOSAL SHAREHOLDERS SOLICITED
- --------------------------------------- -------------------------------
<S> <C>
Approval of a new investment advisory Each Fund, voting separately on
agreement with National City Bank a Fund-by-Fund basis
Approval of a new investment Prime Obligations Money Market
sub-advisory agreement with Fund, Treasury Securities Money
Wellington Management Company Market Fund, GNMA Securities
Fund and Intermediate
Government Securities Fund,
voting separately on a Fund-by-
Fund basis
Approval of a new investment Equity Growth Fund
sub-advisory agreement with STI
Capital Management, N.A.
</TABLE>
1
<PAGE> 7
<TABLE>
<CAPTION>
PROPOSAL SHAREHOLDERS SOLICITED
- --------------------------------------- -------------------------------
<S> <C>
Approval of a new investment Pennsylvania Municipal Bond
sub-advisory agreement with Weiss, Fund and Pennsylvania Tax-
Peck & Greer, L.L.C. Exempt Money Market Fund,
voting separately on a Fund-by-
Fund basis
</TABLE>
Only shareholders of record at the close of business on February 29, 1996
will be entitled to vote at the Special Meeting. On that date, there were
300,614,275.950 shares of the Prime Obligations Money Market Fund,
140,880,329.440 shares of the Treasury Securities Money Market Fund,
4,741,087.791 shares of the Equity Growth Fund, 5,999,456.422 shares of the GNMA
Securities Fund, 8,726,309.975 shares of the Intermediate Government Securities
Fund, 3,816,629.883 shares of the Pennsylvania Municipal Bond Fund and
77,360,297.400 shares of the Pennsylvania Tax-Exempt Money Market Fund
outstanding and entitled to be voted at the Special Meeting. Each share or
fraction thereof is entitled to one vote or a fraction thereof. Shareholders of
each Fund will vote separately as a Fund with respect to the proposals described
herein.
If you do not expect to be present at the Special Meeting, please date and
sign the enclosed proxy and mail it in the enclosed reply envelope addressed to
Proxy Tabulator, P.O. Box 9133, Hingham, Massachusetts 02043-9133.
The Company will furnish to shareholders upon request, without charge,
copies of its most recent Annual Report to Shareholders and its most recent
Semi-Annual Report. Requests for such reports should be directed to Inventor
Funds, Inc., c/o SEI Financial Services Company, 680 East Swedesford Road,
Wayne, Pennsylvania 19087-1658, or by calling 1-800-6INVENT (1-800-646-8368).
Such reports are not to be regarded as proxy soliciting material.
APPROVAL OR DISAPPROVAL OF
NEW INVESTMENT ADVISORY AGREEMENT AND
NEW INVESTMENT SUB-ADVISORY AGREEMENTS
INTRODUCTION
Integra Financial Corporation, the parent of the Company's investment
adviser, Integra Trust Company ("Integra"), has agreed to merge with National
City Corporation. Consummation of this merger (the "Bank Holding Company
Merger") will result in the automatic termination of (i) the investment advisory
agreement under which Integra provides investment advisory services to the
Company and (ii) investment sub-advisory agree-
2
<PAGE> 8
ments under which Wellington Management Company ("Wellington"), STI Capital
Management, N.A., formerly SunBank Capital Management, N.A. ("STI") and Weiss,
Peck & Greer, L.L.C. ("WPG") provide investment sub-advisory services to the
Funds. In anticipation of the completion of the Bank Holding Company Merger and
to provide continuity in investment advisory services to the Funds, shareholders
of the Funds will be asked to approve a new investment advisory agreement
between the Company and National City Bank (the "New National City Bank Advisory
Agreement"). A copy of this agreement is attached as Exhibit A. The New National
City Bank Advisory Agreement is being submitted to shareholders of each Fund for
the first time. In addition, shareholders of the Prime Obligations Money Market
Fund, Treasury Securities Money Market Fund, GNMA Securities Fund and
Intermediate Government Securities Fund will be asked to approve a new
investment sub-advisory agreement with Wellington; shareholders of the Equity
Growth Fund will be asked to approve a new investment sub-advisory agreement
with STI; and shareholders of the Pennsylvania Municipal Bond Fund and
Pennsylvania Tax-Exempt Money Market Fund will be asked to approve a new
investment sub-advisory agreement with WPG. Copies of these investment
sub-advisory agreements (collectively, the "New Sub-Advisory Agreements") are
attached as Exhibits B through D, respectively. The New Sub-Advisory Agreements
are also being submitted to the shareholders of the Funds to which they relate
for the first time. The New National City Bank Advisory Agreement and the New
Sub-Advisory Agreements are collectively referred to herein as the "New Advisory
Agreements."
All of the Funds are currently advised by Integra pursuant to an advisory
agreement (the "Integra Advisory Agreement") between the Company and Integra
dated August 1, 1994. Wellington provides investment sub-advisory services to
the Prime Obligations Money Market Fund, Treasury Securities Money Market Fund,
GNMA Securities Fund and Intermediate Government Securities Fund pursuant to an
investment sub-advisory agreement (the "Existing Wellington Sub-Advisory
Agreement") among Integra, Wellington and the Company, dated August 1, 1994. STI
provides investment sub-advisory services to the Equity Growth Fund pursuant to
an investment sub-advisory agreement (the "Existing STI Sub-Advisory Agreement")
between Integra and STI, dated as of August 1, 1994. WPG provides investment
sub-advisory services to the Pennsylvania Municipal Bond Fund and Pennsylvania
Tax-Exempt Money Market Fund pursuant to an investment sub-advisory agreement
(the "Existing WPG Sub-Advisory Agreement") between Integra and WPG, dated as of
August 1, 1994. These three investment sub-advisory agreements are collectively
referred to herein as the "Existing Sub-Advisory Agreements." The Integra
Advisory Agreement and the Existing Sub-Advi-
3
<PAGE> 9
sory Agreements are collectively referred to herein as the "Current Advisory
Agreements."
Under the New Advisory Agreements, National City Bank, rather than Integra,
would be responsible for providing advisory services to the Funds, while the
same sub-advisers would continue to provide sub-advisory services as described
above under the supervision of National City Bank, rather than Integra. The New
Advisory Agreements are expected to remain in effect from the Bank Holding
Company Merger until the consummation of a proposed combination of the Company
with Armada Funds. Armada Funds is advised principally by National City Bank.
This combination is expected to occur later in 1996.
BACKGROUND
Integra Financial Corporation and National City Corporation, both bank
holding companies, entered into an Agreement and Plan of Merger dated as of
August 27, 1995, providing for the merger of Integra Financial Corporation with
and into National City Corporation. National City Corporation will be the
surviving corporation and will continue under the name "National City
Corporation." The board of directors of each bank holding company has approved
the Bank Holding Company Merger, which is expected to occur on May 2, 1996.
National City Corporation is a publicly owned multi-bank holding company
incorporated under Delaware law and registered under the Bank Holding Company
Act of 1956, as amended. Through its subsidiaries, National City Corporation
managed more than $29.8 billion in assets, including approximately $3.4 billion
in mutual fund assets, as of December 31, 1995.
As required by the Investment Company Act of 1940, as amended (the "1940
Act"), the Current Advisory Agreements for the Funds provide for their automatic
termination upon their assignment. The Bank Holding Company Merger and the
resulting change in control of Integra will result in an assignment. Therefore,
the Current Advisory Agreements will automatically terminate upon the
consummation of the Bank Holding Company Merger. The 1940 Act also requires that
shareholders vote on all investment advisory agreements. As described below, the
terms and conditions of the New Advisory Agreements, including advisory fees
charged thereunder, are the same in all material respects as those under the
Current Advisory Agreements. Should the Bank Holding Company Merger not be
consummated, Integra will continue to serve as the investment adviser and
Wellington, STI and WPG will continue to serve as sub-advisers pursuant to the
terms of the Current Advisory Agreements.
On February 12, 1996, the Board of Directors of the Company, including a
majority of those directors who were not "interested persons" (as defined in
4
<PAGE> 10
the 1940 Act) of any party to the agreements, unanimously approved and
recommended that the shareholders of each of the Funds approve the New Advisory
Agreements applicable to that Fund. If approved by shareholders at the Special
Meeting, the New Advisory Agreements will take effect on the consummation of the
Bank Holding Company Merger which is scheduled to occur on May 2, 1996.
The Current Advisory Agreements were approved by the Board of Directors of
the Company on May 17, 1994, and by the Funds' initial shareholder on August 1,
1994.
The Integra Advisory Agreement provides that Integra shall render
investment management services to the Funds, subject to the control of the Board
of Directors of the Company. Each of the Existing Sub-Advisory Agreements
provides that the sub-adviser will provide investment sub-advisory services to
the Fund or Funds to which that sub-advisory agreement relates, subject to
supervision by Integra and the Company's Board of Directors.
Under the Integra Advisory Agreement, Integra is entitled to receive
advisory fees from the Funds, computed daily and paid monthly, at the annual
rates of .45% of the average daily net assets of the Prime Obligations Money
Market Fund, Treasury Securities Money Market Fund and Pennsylvania Tax-Exempt
Money Market Fund, .85% of the average daily net assets of the Equity Growth
Fund, and .70% of the average daily net assets of the GNMA Securities Fund,
Intermediate Government Securities Fund and Pennsylvania Municipal Bond Fund.
Under the Existing Wellington Sub-Advisory Agreement, Wellington is
entitled to receive a fee from Integra, computed daily and paid monthly, at an
annual rate of .075% on the first $500 million of the Prime Obligations Money
Market Fund's and Treasury Securities Money Market Fund's aggregate net assets
and .020% on such Funds' aggregate net assets in excess of $500 million, pro
rated between each Fund based on their respective average daily net assets; and
at an annual rate of .20% on the first $50 million of the GNMA Securities Fund's
and Intermediate Government Securities Fund's aggregate net assets, .15% on the
next $50 million, .10% on the next $400 million and .075% on such Funds'
aggregate net assets in excess of $500 million, prorated between each Fund based
on their respective average daily net assets.
Under the Existing STI Sub-Advisory Agreement, STI is entitled to receive a
fee from Integra, accrued daily and paid quarterly, at an annual rate of .30% of
the average daily net assets of the Equity Growth Fund.
Under the Existing WPG Sub-Advisory Agreement, WPG is entitled to receive a
fee from Integra, accrued daily and payable quarterly, at the annual
5
<PAGE> 11
rate of .18% of the average daily net assets of the Pennsylvania Municipal Bond
Fund and .05% of the average daily net assets of the Pennsylvania Tax-Exempt
Money Market Fund.
The table below sets forth (i) net assets for each Fund as of the six month
period ended October 31, 1995 of each Fund; (ii) the rates of advisory fees,
computed daily and payable monthly, to which Integra is entitled for the
services provided and expenses assumed pursuant to the Integra Advisory
Agreement; (iii) advisory fees (net of waivers) paid by each Fund for the fiscal
year ended April 30, 1995; and (iv) the effective rates of each of the advisory
fees (net of waivers) expressed as a percentage of average net assets for the
fiscal year ended April 30, 1995:
ADVISORY FEES
<TABLE>
<CAPTION>
ADVISORY
ANNUAL FEES PAID EFFECTIVE RATE OF
ADVISORY FOR ADVISORY FEES AS A
FEE (BASED FISCAL PERCENTAGE OF
NET ASSETS ON AVERAGE YEAR AVERAGE NET ASSETS
AS OF NET ENDED FOR FISCAL YEAR
INVENTOR FUNDS 10/31/95 ASSETS) 4/30/95 ENDED 4/30/95
- ---------------------------------- ------------ ---------- --------- ------------------
<S> <C> <C> <C> <C>
Prime Obligations Money Market
Fund1,2......................... $279,696,000 .45% $396,000 .24%
Treasury Securities Money Market
Fund1,2......................... $132,343,000 .45% $ 86,000 .20%
Equity Growth Fund1,2............. $ 55,421,000 .85% $193,000 .59%
GNMA Securities Fund1,2........... $ 54,130,000 .70% $133,000 .45%
Intermediate Government Securities
Fund1,2......................... $ 91,429,000 .70% $178,000 .49%
Pennsylvania Municipal Bond
Fund1,2......................... $ 38,556,000 .70% $128,000 .53%
Pennsylvania Tax-Exempt
Money Market Fund1,2............ $ 62,157,000 .45% $ 77,000 .22%
</TABLE>
1 All net assets and fees are rounded to the nearest $1,000. All funds are
advised by Integra. Integra has agreed to pay investment sub-advisory fees to
a sub-adviser with respect to each of the Funds as described above. The
sub-advisory fees have no effect on the advisory fees paid by the Funds.
During the fiscal year ended April 30, 1995, Integra paid sub-advisory fees in
the following amounts (net of waivers): Prime Obligations Money Market Fund,
$125,000; Treasury Securities Money Market Fund, $32,000; Equity Growth Fund,
$98,000; GNMA Securities Fund, $44,000; Intermediate Government Securities
Fund, $55,000; Pennsylvania Municipal Bond Fund, $43,000; and Pennsylvania
Tax-Exempt Money Market Fund, $18,000.
6
<PAGE> 12
2 The Company has been informed that Integra currently intends to continue to
waive fees during the current fiscal year ending April 30, 1996 so that total
operating expenses for the Prime Obligations Money Market Fund, Treasury
Securities Money Market Fund, Equity Growth Fund, GNMA Securities Fund,
Intermediate Government Securities Fund, Pennsylvania Municipal Bond Fund and
Pennsylvania Tax-Exempt Money Market Fund will not exceed .55%, .55%, .95%,
.85%, .85%, .85% and .55%, of their respective average net assets. These
waivers are voluntary, and Integra may modify or terminate them at any time
without a Fund's consent.
For the fiscal year ended April 30, 1995, the Equity Growth Fund paid
$143,000, $2,557, and $57,200 in total dollar amount of brokerage commissions,
total brokerage commissions paid to SEI Financial Services Corporation in
connection with repurchase agreement transactions, and total dollar amount of
brokerage commissions paid for research, respectively. No other brokerage
transactions or commissions were paid by this or any other Fund for the fiscal
year ended April 30, 1995. The Funds, however, engage in transactions with
dealers acting as principal and the costs of such transactions involve dealer
spreads rather than brokerage commissions.
DESCRIPTION OF THE NEW ADVISORY AGREEMENTS
The New Advisory Agreements are expected to remain in effect from the Bank
Holding Company Merger until the consummation of a proposed combination of the
Company with Armada Funds. Armada Funds is advised principally by National City
Bank. If approved by the Company's Board of Directors and shareholders, this
proposed combination is expected to occur later in 1996. The terms and
conditions of the New Advisory Agreements, including advisory fees charged
thereunder, are the same in all material respects as those of the Current
Advisory Agreements.
The New Advisory Agreements provide that they will continue in effect as to
each Fund for specified initial terms from the date of execution, unless sooner
terminated, and thereafter from year to year, provided that such continuance is
specifically approved at least annually (i) by the vote of a majority of those
members of the Board of Directors of the Company who are not "interested
persons" (as defined in the 1940 Act) of any party to the agreements, and (ii)
by the Board of Directors of the Company or by a vote of a majority of the
outstanding shares of such Fund. The initial terms of the New National City Bank
Advisory Agreement, the Integra Advisory Agreement, and the existing and
proposed sub-advisory agreements with Wellington are two years, whereas the
initial terms of the existing and proposed sub-advisory agreements with STI and
WPG are one year. Each of the New Advisory Agreements may be terminated with
respect to a Fund at any time,
7
<PAGE> 13
without the payment of any penalty, by any party thereto on 60 days' written
notice, and automatically terminates upon its "assignment" (as defined in the
1940 Act).
Both the New Advisory Agreements and the Current Advisory Agreements
provide that neither the investment adviser nor any of the sub-advisers shall be
liable for any error of judgment or mistake of law or for any loss suffered by
the Company, except a loss resulting from willful misfeasance, bad faith or
gross negligence by the investment adviser or sub-adviser in the performance of
its duties or, except in the case of sub-advisory agreements with STI and WPG,
from reckless disregard by it of its obligations and duties under the agreement.
Under the New Advisory Agreements and the Current Advisory Agreements, the
investment adviser and sub-advisers pay all expenses incurred by them in
connection with their activities under the agreements, other than the cost of
securities, commodities and other investments (including brokerage commissions
and other transaction costs, if any) purchased or sold for a Fund.
Like the Current Advisory Agreements, the New Advisory Agreements provide
that in executing portfolio transactions and selecting brokers or dealers, the
investment adviser and sub-advisers will use best efforts to seek on behalf of a
Fund the best overall terms available. Certain of the Current Advisory
Agreements and the New Advisory Agreements specify that in assessing the best
overall terms available for any transaction, the investment advisers and
sub-advisers will consider all factors they deem relevant, such as the breadth
of the market in the security, the price of the security, the financial
condition and execution capability of the broker or dealer, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis.
Additionally, the Current Advisory Agreements and the New Advisory
Agreements provide that in evaluating the best overall terms available and in
selecting a broker-dealer to execute a particular transaction, the investment
advisers and sub-advisers may also consider the brokerage and research services
provided to each fund and/or other accounts over which they exercise investment
discretion. Certain of the Current Advisory Agreements and the New Advisory
Agreements provide, subject to actions of the Board of Directors of the Company,
that the investment advisers and sub-advisers are authorized to pay to a broker
or dealer which provides such services a commission for executing a transaction
which is in excess of the amount another broker or dealer would have charged if
the investment adviser or sub-adviser determined in good faith that the
commission was reasonable in relation to the value of the brokerage and research
services provided viewed in
8
<PAGE> 14
terms of the particular transaction or in terms of the overall responsibilities
of the investment adviser and sub-adviser to the Funds.
Under both the Current Advisory Agreements and New Advisory Agreements,
investment decisions for a Fund are made independently from those for other
investment companies and accounts advised by the investment adviser and
sub-advisers. Such other investment companies and accounts may invest in the
same securities as a Fund. Under both the Existing and New Sub-Advisory
Agreements, to the extent permitted by law, the sub-advisers may, but are not
obligated to, aggregate the securities to be sold or purchased for a Fund with
those to be sold or purchased for such other investment companies or accounts.
The New National City Bank Advisory Agreement and the Integra Advisory
Agreement provide that in allocating purchase and sale orders for portfolio
securities (involving the payment of brokerage commissions or dealer
concessions), the investment adviser may take into account the sale of Fund
shares by broker-dealers and other financial institutions (including affiliates
of the adviser and the distributor), provided it believes that the quality of
the transaction and the amount of the commission are comparable to what they
would be with other qualified firms.
Under both the Current Advisory Agreements and New Advisory Agreements,
portfolio securities will not be purchased from or sold to the investment
adviser, any sub-adviser, or any affiliated person of any of the Company, the
adviser or any sub-adviser in principal transactions, except to the extent
permitted by law.
INFORMATION ABOUT INTEGRA TRUST COMPANY ("INTEGRA")
Integra has its principal place of business at 300 Fourth Avenue,
Pittsburgh, Pennsylvania 15278. Integra is a wholly-owned subsidiary of Integra
Holding Company which in turn is a wholly owned subsidiary of Integra Financial
Corporation. Both parents are located at the same address listed above for
Integra. As of December 31, 1995, the following owned beneficially or of record
10% or more of any class of issued and outstanding voting securities of Integra
Financial Corporation:
<TABLE>
<CAPTION>
PERCENTAGE OF
OUTSTANDING NUMBER OF
VOTING SECURITIES SHARES
----------------- ---------
<S> <C> <C>
Integra Trust Company........................ 12.61% 4,164,138
</TABLE>
9
<PAGE> 15
The name and principal occupation of the principal executive officer and
each director of Integra as of February 22, 1996 were as follows:
<TABLE>
<CAPTION>
CONNECTION
NAME AND POSITION NAME OF WITH OTHER
WITH INTEGRA OTHER COMPANY COMPANY
- ---------------------------------- ---------------------------- -------------------
<S> <C> <C>
John R. Echement, Chairman and Integra Financial Vice Chairman
Chief Executive Officer Corporation
Stephen G. Hartle, President and None
Chief Operating Officer
Anthony J. Molinero, None
Executive Vice President
Douglas W. Sherratt, None
Executive Vice President
Dr. Joanne W. Boyle, Seton Hall College President
Director
Dr. Karen Wolk Feinstein, Jewish Healthcare Foundation President
Director
Dr. Peter Gabriel, Union Town Hospital Radiologist
Director
Dr. Thomas A. Gardner, Private Investor
Director
Richard E. Knapp, Landmark Savings Association Chairman (Retired)
Director
Arvid R. Nelson, Jr., Burns & Burns Insurance Agent
Director Associates, Inc.
Evans Rose, Jr., Cohen & Grigsby Attorney at Law
Director
Eugene L. Strosser, The Washington Hospital President (Retired)
Director
Richard L. Werner, The Werner Company President
Director
Alfred W. Wishart, Jr., The Pittsburgh Foundation Executive Director
Director
</TABLE>
All of the above persons may be reached c/o Integra Trust Company, 300
Fourth Avenue, Pittsburgh, Pennsylvania 15278.
INFORMATION ABOUT NATIONAL CITY BANK
National City Bank has its principal place of business at 1900 East Ninth
Street, Cleveland, Ohio 44114. National City Bank is a wholly-owned subsidiary
of National City Corporation which is located at the same address listed above
for National City Bank. As of December 31, 1995, no person, to the Company's
knowledge, owned beneficially or of record 10% or more of any class of issued
and outstanding voting securities of National City Corporation. National City
Bank would advise the Funds pursuant to the New National City Bank Advisory
Agreement.
10
<PAGE> 16
The name and principal occupation of the principal executive officer and
each director of National City Bank as of February 22, 1996 were as follows:
<TABLE>
<CAPTION>
POSITION OTHER
WITH NATIONAL BUSINESS TYPE OF
NAME CITY BANK CONNECTIONS BUSINESS
- ------------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C>
James M. Biggar Director Chairman and Chief Consulting firm
Executive Officer,
Glencairn Corp.
Edward B. Brandon Director Retired Chairman, Bank holding
National City company
Corporation
Director, The Automobile parts
Standard Products and supplies
Company
Director, RPM, Inc. Manufacturer of
protective
coatings, roofing
materials and paint
Director, Premier Electronics
Industrial Corp. distribution
John G. Breen Director Chairman and Chief Manufacturer of
Executive Officer, paints, coatings,
The Sherwin- and containers
Williams Company
Steve D. Bullock Director Chief Executive Non-profit
Officer and Chapter organization
Manager, American
Red Cross
Werner F. Bush Director Executive Vice Manufacturer of
President and Chief specialty chemicals
Operating Officer,
Ferro Corp.
Duane E. Collins Director President and Chief Manufacturer of
Executive Officer, hydraulic and
Parker Hannifin automotive
Corp. equipment
</TABLE>
11
<PAGE> 17
<TABLE>
<CAPTION>
POSITION OTHER
WITH NATIONAL BUSINESS TYPE OF
NAME CITY BANK CONNECTIONS BUSINESS
- ------------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C>
David A. Daberko Director Chairman and Chief Bank holding
Executive Officer, company
National City
Corporation
Director, National Bank
City Bank, Columbus
Director, National Bank
City Bank,
Northeast
Director, National Bank
City Bank, Dayton
Director, National Bank
City Bank,
Northwest
Director, National Bank
City Bank, Indiana
Officer and Tractor sales
Director, Hudson
Tractor Sales, Inc.
Director, Student
Loan Marketing
Association
Robert J. Farling Director Chairman, President Electric utility
and Chief Executive
Officer, Centerior
Energy Corporation
Russell R. Gifford Director President, CNG Natural gas
Energy Services
Corporation
Henry J. Goodman Director Chairman and Chief Furniture company
Executive Officer,
H. Goodman, Inc.
Gordon D. Harnett Director President, Chairman Manufacturer of
and Chief Executive engineered material
Officer, Brush
Wellman, Inc.
Leon J. Hendrix, Jr. Director Partner, Clayton, Private investment
Dubilier & Rice, firm
Inc.
Preston B. Heller, Jr. Director Chairman and Chief Electronic
Executive Officer, component
Pioneer-Standard distributor
Electronics, Inc.
J. Peter Kelly Director President and Chief Manufacturer of
Operating Officer, steel
LTV Steel Company
William E. MacDonald III Chairman, Director and Bank holding
President, Chief Executive Vice company
Executive Officer President, National
and Director City Corporation
</TABLE>
12
<PAGE> 18
<TABLE>
<CAPTION>
POSITION OTHER
WITH NATIONAL BUSINESS TYPE OF
NAME CITY BANK CONNECTIONS BUSINESS
- ------------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C>
William P. Madar Director President and Chief Manufacturer of
Executive Officer, machinery
Nordson Corporation
H. Gene Nau Director President and Chief Travel agency
Executive Officer,
Premier Travel
Partners
William F. Patient Director Chairman, President PVC manufacturer
and Chief Executive
Officer, The Geon
Company
Dr. Jerry Sue Thornton Director President, Cuyahoga Education
Community College
William R. Robertson Director, Chairman President, National Bank holding
of Compensation City Corporation company
Committee, Member
of Executive
Committee
Shelley B. Roth Director President, Pierre's Ice cream
French Ice Cream
Donald S. Schofield Director Retired Chairman Real estate
and Chief Executive investment trust
Officer, First
Union Real Estate
Equity and Mortgage
Investment
Thomas C. Sullivan Director Chairman of the Manufacturer of
Board and Chief protective
Executive Officer, coatings, roofing
RPM, Inc. material and paint
Morry Weiss Director Chairman and Chief Greeting cards
Executive Officer,
American Greetings
Corporation
Theodore K. Zampetis Director President and Chief Manufacturer of
Operating Officer, rubber and plastic
The Standard parts for
Products Co. automotive original
equipment industry
W. Douglas Bannerman Executive Vice Senior Vice Bank holding
President, President, National company
Corporate Banking City Corporation
Jeffrey M. Biggar Executive Vice Senior Vice Bank holding
President, President, National company
Personal Trust and City Corporation
Private Banking
</TABLE>
13
<PAGE> 19
<TABLE>
<CAPTION>
POSITION OTHER
WITH NATIONAL BUSINESS TYPE OF
NAME CITY BANK CONNECTIONS BUSINESS
- ------------------------- ------------------ ------------------- -------------------
<S> <C> <C> <C>
Paul G. Clark Executive Vice None
President,
Corporate Banking
Jane Grebenc Executive Vice None
President, Retail
Banking
Jeffrey D. Kelly Executive Vice Executive Vice Bank holding
President, President, National company
Investments City Corporation
Bruce T. Muddell Executive Vice None
President, Credit
Administration
Harold B. Todd, Jr. Executive Vice Executive Vice Bank holding
President, President, National company
Institutional City Corporation
Trust & Asset
Management
</TABLE>
All of the above persons may be reached c/o National City Bank, 1900 East
Ninth Street, Cleveland, Ohio 44114.
National City Bank serves as an investment adviser to the following
portfolios with investment objectives similar to those of certain of the Funds:
<TABLE>
<CAPTION>
SIZE OF ADVISORY
PORTFOLIO PORTFOLIO FEE*
- ----------------------------- ------------ --------
<S> <C> <C>
Armada Money Market Fund $1.6 billion .35%
Armada Government Fund $695 million .35%
Armada Treasury Fund $250 million .30%
Armada Equity Fund $161 million .75%
</TABLE>
- ---------------
* Annual rate per average daily net assets; National City Bank may from time to
time waive its advisory fees.
INFORMATION ABOUT WELLINGTON MANAGEMENT COMPANY ("WELLINGTON")
Wellington has its principal place of business at 75 State Street, Boston,
Massachusetts 02109. Wellington was founded in 1933 and is a Massachusetts
general partnership. Information about the general partners of Wellington, each
of whom is a full-time employee of Wellington, together with information as to
any other business, profession, vocation or employment of a substantial nature
engaged in by such general partners during the last two fiscal years, is
incorporated by reference to Schedules A and D of Form ADV,
14
<PAGE> 20
filed by Wellington pursuant to the 1940 Act (SEC file No. 801-15908).
Wellington is registered as an investment adviser under the 1940 Act.
Wellington currently serves as an investment adviser to the following
portfolios with investment objectives similar to those of the Prime Obligations
Money Market Fund, Treasury Securities Money Market Fund, GNMA Securities Fund
and Intermediate Government Securities Fund:
<TABLE>
<CAPTION>
SIZE OF
PORTFOLIO PORTFOLIO ADVISORY FEE
----------------------- --------- ---------------------------
<S> <C> <C> <C>
Arbor Funds: Golden Oak
Prime Obligation Money
Market Portfolio 180,158 First $500 Million 0.075%
Over $500 Million 0.020%
Arbor Funds: OVB Prime 94,019 First $500 Million 0.075%
Obligations Portfolio Over $500 Million 0.020%
SEI Liquid Asset Trust 2,274,234 First $500 Million 0.075%
Prime Obligation
Portfolio Over $500 Million 0.020%
SEI Daily Income Trust 110,755 First $500 Million 0.075%
Money Market Portfolio* Over $500 Million 0.020%
Anchor Series Trust 94,765 First $500 Million 0.075%
Money Market Portfolio Over $500 Million 0.020%
NASL Series Trust 261,513 First $500 Million 0.075%
Money Market Portfolio Over $500 Million 0.020%
North American Funds 18,722 First $500 Million 0.075%
Money Market Portfolio Over $500 Million 0.020%
Prudential: Target US 18,870 All Asset Levels 0.125%
Government Money
Market Portfolio
SEI Daily Income Trust
Portfolio* 378,168 First $500 Million 0.100%
Short-Term Government Next $500 Million 0.075%
Portfolio Over $1 Billion 0.050%
Intermediate-Term
Government
Portfolio
GNMA Portfolio
Short-Term Mortgage
Portfolio
Vanguard Fixed Income 13,031,469 First $2.5 Billion 0.125%
Securities Portfolio* Next $2.5 Billion 0.100%
GNMA Portfolio Next $2.5 Billion 0.075%
High Yield Corporate
Portfolio Over $7.5 Billion 0.050%
Investment Grade
Corporate
</TABLE>
- ---------------
* Fee waivers may be in effect.
15
<PAGE> 21
INFORMATION ABOUT STI CAPITAL MANAGEMENT, N.A. ("STI")
STI has its principal place of business at 200 S. Orange Avenue, Orlando,
Florida 32802. STI is a wholly-owned subsidiary of SunTrust Banks, Inc. which is
located at One Park Place, N.E., Atlanta, Georgia 30303. Information about the
principal officers and directors of STI, together with information as to any
other business, profession, vocation or employment of a substantial nature
engaged in by such officers and directors during the last two fiscal years, is
set forth below. STI is registered as an investment adviser under the 1940 Act.
<TABLE>
<CAPTION>
CONNECTION
NAME OF OTHER WITH
NAME AND POSITION WITH STI COMPANY OTHER COMPANY
- ------------------------------------------ ------------------ -------------
<S> <C> <C>
Anthony R. Gray, Chairman, President and
Chief Investment Officer................ -- --
Elliott A. Perny, Executive Vice President
and Chief Portfolio Manager............. -- --
Stuart F. Van Arsdale, Senior Vice
President............................... -- --
Hunting Deutch, Director.................. -- --
Jonathan D. Rich, Director................ -- --
Jenner Wood, Director..................... -- --
Robert Buhrmann, Senior Vice President.... -- --
Larry M. Cole, Senior Vice President...... -- --
L. Earl Denney, Senior Vice President..... -- --
Thomas A. Edgar, Senior Vice President.... -- --
Daniel G. Shannon, Senior Vice
President............................... -- --
Ronald Schwartz, Vice President........... -- --
Director/25%
Ryan R. Burrow, Vice President............ Catalina Lighting owner
Mills A. Riddick, Senior Vice President... -- --
Christopher A. Jones, Vice President...... -- --
Michael R. Scoffone, Vice President....... -- --
David E. West, Vice President............. -- --
</TABLE>
All of the above persons may be reached c/o STI Capital Management, N.A.,
200 S. Orange Avenue, Orlando, Florida 32802.
16
<PAGE> 22
STI currently serves as an investment adviser to the following portfolios
with investment objectives similar to those of the Equity Growth Fund:
<TABLE>
<CAPTION>
SIZE OF
PORTFOLIO PORTFOLIO ADVISORY FEE*
----------------------------------- --------------- -------------
<S> <C> <C>
STI Classic Capital $1.2 billion 1.15%
Growth Fund
SEI Capital Appreciation Fund $270 million .25%
</TABLE>
- ---------------
* STI has reduced the advisory fees for the STI Classic Capital Growth Fund,
however any fee reductions are voluntary and may be terminated at any time;
STI does not intend to waive or otherwise reduce its advisory fees with
respect to the SEI Capital Appreciation Fund.
INFORMATION ABOUT WEISS, PECK & GREER, L.L.C. ("WPG")
WPG has its principal place of business at One New York Plaza, New York,
New York, 10004. WPG is a limited liability company. Information about the
principals of WPG, together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by such
principals during the last two fiscal years, is incorporated by reference to
Schedules A and D of Form ADV, filed by WPG pursuant to the 1940 Act (SEC file
No. 801-6604). WPG is registered as an investment adviser under the 1940 Act.
WPG currently serves as an investment adviser to the following portfolio
with an investment objective similar to those of the Pennsylvania Municipal Bond
Fund and Pennsylvania Tax-Exempt Money Market Fund:
<TABLE>
<CAPTION>
PORTFOLIO SIZE OF PORTFOLIO ADVISORY FEE*
-------------------------------- ------------------ --------------
<S> <C> <C>
SEI Pennsylvania Tax-Free $28 million See below
Money Market Fund
</TABLE>
- ---------------
* WPG does not intend to waive or otherwise reduce its advisory fee.
WPG advises several other portfolios within this fund complex. WPG receives
a blended fee within the SEI Tax-Exempt Trust (which includes the SEI
Pennsylvania Tax-Free Money Market Fund) at an annual rate of .05% of the first
$500 million, .04% on the next $500 million; and .03% on the Funds' aggregate
net assets in excess of $1 billion.
AUTHORITY TO ACT AS INVESTMENT ADVISER AND SUB-ADVISER
Banking laws and regulations currently prohibit a bank holding company
registered under the federal Bank Holding Company Act of 1956 or any
17
<PAGE> 23
affiliate thereof from sponsoring, organizing or controlling a registered open-
end investment company continuously engaged in the issuance of its shares, and
prohibit banks generally from underwriting, selling or distributing securities,
but in general do not prohibit such a holding company or affiliate banks
generally from acting as investment adviser, transfer agent or custodian to such
an investment company or from purchasing shares of such a company as agent for
and upon the order of customers. National City Bank is subject to such laws and
regulations, but believes that it may perform the services contemplated by the
agreements discussed above without violating the Glass-Steagall Act or other
applicable banking laws or regulations. Future changes in legal requirements
relating to the permissible activities of banks and their affiliates, as well as
future interpretations of current requirements, could prevent National City Bank
from continuing to perform such services for the Company. If National City Bank
were prohibited from acting as investment adviser to the Company, it is expected
that the Board of Directors of the Company would recommend that Shareholders
approve new investment advisory arrangements.
BOARD OF DIRECTORS' CONSIDERATIONS AND RECOMMENDATIONS
As stated above, because the Bank Holding Company Merger will result in a
change in control of Integra, the Current Advisory Agreements will automatically
terminate upon consummation of the merger. The Board of Directors of the Company
approved the New Advisory Agreements at a meeting on February 12, 1996. Integra
and National City Bank recommended that each of the Funds be provided investment
advisory services as described in this Proxy Statement following the proposed
merger of the bank holding companies. The Board of Directors of the Company
considered the effect of the proposed merger of the bank holding companies on
the Company and the recommendations of Integra and National City Bank.
The Board of Directors' approval of the New Advisory Agreements was granted
after consideration and review of such information as the Board of Directors
deemed relevant. The Board considered the structure and organization of National
City Bank and the quality of the investment advisory services that have been
provided to Armada Funds by National City Bank. The Board considered the quality
of the investment sub-advisory services that have been provided to the Funds in
the past by Wellington, STI and WPG, and which are expected to continue to be
provided after the Bank Holding Company Merger. They also considered the
investment performance of the Funds. The Board of Directors further noted that
the terms and conditions of the New Advisory Agreements were the same in all
material respects as those in the Current Advisory Agreements, including the
advisory fees. The Board of
18
<PAGE> 24
Directors reaffirmed their previous determination that such terms and fees were
fair.
After consideration of the foregoing factors, together with certain other
information considered to be relevant, the Board of Directors of the Company
unanimously approved the New Advisory Agreements and directed that they be
submitted to shareholders for approval. THE BOARD OF DIRECTORS OF THE COMPANY
UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS OF EACH FUND VOTE "FOR" APPROVAL OF THE
NEW ADVISORY AGREEMENTS.
VOTES REQUIRED FOR APPROVAL OF MATTERS AT THE SPECIAL MEETING
Under the 1940 Act, the New Advisory Agreements must be approved by the
holders of a majority of the outstanding shares of each Fund to which the
agreements relate, with each Fund's shareholders voting separately. As used in
this Proxy Statement, a majority of the outstanding shares of a Fund means the
lesser of (i) 67% of the shares of the Fund present at the Special Meeting if
the holders of more than 50% of the outstanding shares of the Fund are present
in person or by proxy, or (ii) more than 50% of the outstanding shares of the
Fund.
A quorum is constituted with respect to a Fund by the presence in person or
by proxy of the holders of one-third of the outstanding shares of the Fund
entitled to vote at the Special Meeting. In tallying shareholder votes,
abstentions and broker non-votes (i.e., proxies sent in by brokers and other
nominees that cannot be voted on a proposal because instructions have not been
received from the beneficial owners) will be counted for purposes of determining
whether a quorum is present for purposes of convening the Special Meeting.
However, abstentions and broker non-votes will have the same effect as a vote
against the proposal.
If approved by the holders of a majority of the outstanding shares of each
Fund, it is anticipated that the New Advisory Agreements will become effective
as soon as practicable following the Special Meeting. If the holders of a
majority of the outstanding shares of a Fund do not approve the New Advisory
Agreements, the Board of Directors will consider what action to take in the best
interests of the shareholders of that Fund.
In the event that a quorum is not present at the Special Meeting, or in the
event that a quorum is present at the Special Meeting but sufficient votes to
approve the New Advisory Agreements or any of them are not received, the persons
named as proxies may propose one or more adjournments of the Special Meeting to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares affected by the adjournment that
are represented at the Special Meeting in person or by
19
<PAGE> 25
proxy. If a quorum is present, the persons named as proxies will vote those
proxies which they are entitled to vote for the New Advisory Agreements in favor
of such adjournments, and will vote those proxies required to be voted against
such proposals against any adjournment. A shareholder vote may be taken with
respect to one or more Funds prior to any such adjournment if sufficient votes
have been received for approval with respect to any such Fund.
The Company has been advised by Integra that shares of each Fund over which
Integra has voting power will, except as to accounts established for employee
benefit plans of Integra and its affiliates, be voted in accordance with
instructions received from beneficial owners or fiduciaries of such accounts who
are not related to Integra or its affiliates. As to employee benefit plans of
Integra and its affiliates, and as to accounts for which no instructions are
received from beneficial owners or fiduciaries, Integra will cast such votes (i)
in the same proportion as shares owned by other fiduciary accounts maintained by
Integra, (ii) to the extent permitted or required by law, in the exercise of
Integra's own discretion, or (iii) in accordance with the recommendation of a
fiduciary that is independent of Integra.
If the accompanying proxy is executed and returned in time for the Special
Meeting, the shares covered thereby will be voted in accordance with the proxy
on all matters that may properly come before the Special Meeting or any
adjournment thereof.
THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY RECOMMENDS THAT THE
SHAREHOLDERS OF EACH FUND VOTE "FOR" APPROVAL OF THE NEW ADVISORY AGREEMENTS.
ADDITIONAL INFORMATION
BENEFICIAL OWNERS
As of December 31, 1995, the Company's directors and officers, as a group,
beneficially owned less than 1% of the shares of the Company.
20
<PAGE> 26
As of February 29, 1996, the following persons beneficially owned of record
5% or more of the shares of any Fund of the Company.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF OUTSTANDING
SHARES SHARES
----------------- -------------
<S> <C> <C>
PRIME OBLIGATIONS MONEY MARKET FUND --
CLASS A SHARES
Integra Trust Co., N.A. 232,616,231.0900 77.38%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
Integra Financial Corporation 58,634,368.7800 19.50%
Omnibus Account for
Integra Bank Pittsburgh
300 Fourth Avenue 2-191
Pittsburgh, PA 15278
TREASURY SECURITIES MONEY MARKET FUND --
CLASS A SHARES
Integra Financial Corporation 89,636,927.8700 63.63%
Omnibus Account for
Integra Bank Pittsburgh
300 Fourth Avenue 2-191
Pittsburgh, PA 15278
Integra Trust Co., N.A. 45,433,724.2100 32.25%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
GNMA SECURITIES FUND --
CLASS A SHARES
Integra Trust Co., N.A. 5,855,276.0000 97.60%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
INTERMEDIATE GOVERNMENT SECURITIES FUND --
CLASS A SHARES
Integra Trust Co., N.A. 8,591,543.0000 98.46%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
</TABLE>
21
<PAGE> 27
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF OUTSTANDING
SHARES SHARES
----------------- -------------
<S> <C> <C>
EQUITY GROWTH FUND --
CLASS A SHARES
Integra Trust Co., N.A. 4,483,096.0000 94.56%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
PENNSYLVANIA MUNICIPAL BOND FUND --
CLASS A SHARES
Integra Trust Co., N.A. 3,804,979.0000 99.69%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
PENNSYLVANIA TAX-EXEMPT MONEY MARKET FUND --
CLASS A SHARES
Integra Trust Co., N.A. 68,082,598.4100 88.01%
300 Fourth Avenue
Pittsburgh, PA 15278-2232
Integra Financial Corporation 7,661,016.6200 9.90%
Omnibus Account for
Integra Bank Pittsburgh
300 Fourth Avenue 2-191
Pittsburgh, PA 15278
</TABLE>
All of these shares were beneficially owned by the record owners named
above because they possessed or shared investment or voting power with respect
to them while owning the shares or while acting in a fiduciary, advisory,
custodial, or other similar capacity on behalf of their customers.
For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25 percent of the voting securities of a
company is presumed to "control" such company. Under this definition, Integra
and its affiliates may be deemed to be controlling persons of the Company.
INCORPORATION BY REFERENCE
This Proxy Statement incorporates by reference Schedules A and D of Form
ADV, filed by Wellington pursuant to the 1940 Act (SEC File No. 801-15908) and
Schedules A and D of Form ADV, filed by WPG pursuant to the 1940 Act (SEC File
No. 801-6604). These schedules will be provided, without charge, upon written
request to Inventor Funds, Inc., c/o SEI Financial Services Company, 680 East
Swedesford Road, Wayne, Penn-
22
<PAGE> 28
sylvania 19087-1658 or upon oral request by calling 1-800-6INVENT(1-800-
646-8368).
ANNUAL MEETINGS
As a Maryland corporation, the Company is not required to hold annual
meetings of shareholders, nor does it presently intend to hold annual meetings
of shareholders for the election of directors and other business unless and
until such time as less than a majority of the directors holding office have
been elected by the shareholders, at which time the directors then in office
will call a shareholders' meeting for the election of directors. Shareholders
have the right to call a meeting of shareholders to consider the removal of one
or more directors or for other matters and such meetings will be called when
requested in writing by the holders of record of 10% or more of the Funds'
outstanding shares of common stock. To the extent required by law, the Company
will assist in shareholder communications on such matters.
DISTRIBUTOR AND ADMINISTRATOR
Shares are distributed on a continuous basis by the Company's sponsor and
distributor, SEI Financial Services Company, which is located at 680 East
Swedesford Road, Wayne, Pennsylvania 19087-1658. SEI Financial Management
Company, which is located at the same address listed above, serves as the
Administrator to the Company.
OTHER BUSINESS
No business other than the matters described above is expected to come
before the Special Meeting, but should any other matter requiring a vote of
shareholders arise, the persons named in the enclosed proxy will vote thereon
according to their best judgment in the interests of the Company.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE SPECIAL MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND SIGN THE ENCLOSED
PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED
IN THE UNITED STATES.
23
<PAGE> 29
EXHIBIT A
PROPOSED
INVENTOR FUNDS, INC.
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this th day of , 1996, by and between INVENTOR
FUNDS, INC., a Maryland corporation (the "Company") and NATIONAL CITY BANK (the
"Adviser").
WHEREAS, the Company is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), consisting of several series of shares, each having its own
investment policies; and
WHEREAS, the Company has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Company's operations, subject
to the control of the Board of Directors;
WHEREAS, the Company desires to retain the Adviser to render investment
management services with respect to its Prime Obligations Money Market Fund,
Treasury Securities Money Market Fund, Pennsylvania Tax-Exempt Money Market,
Equity Growth, Intermediate Government Securities, GNMA Securities and
Pennsylvania Municipal Bond Funds and such other funds as the Company and the
adviser may agree upon (the "Funds"), and the Adviser is willing to render such
services;
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Company employs the Adviser to manage the
investment and reinvestment of the assets, to supervise and monitor the
investment activities of any sub-advisers appointed for the Funds by the
Directors of the Company, and to continuously review, supervise, and administer
the investment program of the Funds, to determine in its discretion the
securities to be purchased or sold, to provide the Administrator and the Company
with records concerning the Adviser's activities which the Company is required
to maintain, and to render regular reports to the Administrator and to the
Company's Officers and Directors concerning the Adviser's discharge of the
foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the Board of Directors of the Company and in compliance with such
policies as the Directors may from time to time establish, and in compliance
with the objectives, policies, and limitations for each such Fund set forth in
the Company's prospectus and statement of additional information as
A-1
<PAGE> 30
amended from time to time (referred to collectively as the "Prospectus"), and
applicable laws and regulations. The Company will furnish the Adviser from time
to time with copies of all amendments or supplements to the Prospectus, if any.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and equipment
and the personnel required by it to perform the services on the terms and for
the compensation provided herein. The Adviser will not, however, pay for the
cost of securities, commodities, and other investments (including brokerage
commissions and other transaction charges, if any), purchased or sold for the
Company.
2. DELIVERY OF DOCUMENTS. The Company has furnished the Adviser with
copies properly certified or authenticated of each of the following:
a. The Company's Articles of Incorporation, as filed with the State
Secretary of the State of Maryland on April 22, 1994 and all amendments thereto
(such Articles of Incorporation, as presently in effect and as it shall from
time to time be amended, is herein called the "Articles of Incorporation");
b. The Company's By-Laws, and amendments thereto;
c. The most recent Prospectuses of the Fund.
3. OTHER COVENANTS. The Investment Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the Securities
and Exchange Commission and will in addition conduct its activities under this
Agreement in accordance with other applicable law;
(b) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In executing
portfolio transactions and selecting brokers or dealers, the Investment Adviser
will use its best efforts to seek on behalf of the Fund the best overall terms
available. In assessing the best overall terms available for any transaction,
the Investment Adviser shall consider all factors that it deems relevant,
including the breadth of the market in the security, the price of the security,
the financial condition and execution capability of the broker or dealer, and
the reasonableness of the commission, if any, both for the specific transaction
and on a continuing basis. In evaluating the best overall terms available, and
in selecting the broker-dealer to execute a particular transaction the
Investment Adviser may also consider the brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of 1934)
provided to the Fund and/or other accounts over which the Investment
A-2
<PAGE> 31
Adviser or an affiliate of the Investment Adviser may exercise investment
discretion. The Investment Adviser is authorized, subject to the prior approval
of the Company's Board of Directors, to pay to a broker or dealer who provides
such brokerage and research services a commission for executing a portfolio
transaction for any of the Funds which is in excess of the amount of commission
another broker or dealer would have charged for effecting that transaction if,
but only if, the Investment Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer -- viewed in terms of that particular
transaction or terms of the overall responsibilities of the Investment Adviser
to the Fund. In addition, the Investment Adviser is authorized to allocate
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Investment Adviser
or the Company's principal underwriter) to take into account the sale of shares
of the Company if the Investment Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with other
qualified firms. In no instance, however, will portfolio securities be purchased
from or sold to the Investment Adviser, the Company's principal underwriter, or
any affiliated person of either the Company, the Investment Adviser, or the
principal underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission and the 1940 Act; and
(c) will maintain a policy and practice of conducting its investment
advisory services hereunder independently of its commercial banking operations.
When the Investment Adviser makes investment recommendations for the Fund, its
investment advisory personnel will not inquire or take into consideration
whether the issuer of securities proposed for purchase or sale for the Fund's
accounts are customers of its commercial department. In dealing with commercial
customers, the Investment Adviser's commercial department will not inquire or
take into consideration whether securities of those customers are held by the
Fund.
4. COMPENSATION OF THE ADVISER. For the services to be rendered by the
Adviser as provided in Sections 1 and 2 of this Agreement, the Company shall pay
to the Adviser compensation at the rate specified in the Schedule(s) which are
attached hereto and made a part of this Agreement. Such compensation shall be
paid to the Adviser at the end of each month, and calculated by applying a daily
rate, based on the annual percentage rates as specified in the attached
Schedule(s), to the assets. The fee shall be based on the average daily net
assets for the month involved.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
A-3
<PAGE> 32
5. EXCESS EXPENSES. If the expenses for any Fund for any fiscal year
(including fees and other amounts payable to the Adviser, but excluding
interest, taxes, brokerage costs, litigation, and other extraordinary costs) as
calculated every business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory authority of any
jurisdiction in which shares are qualified for offer and sale, the Adviser shall
bear such excess cost.
However, the Adviser will not bear expenses of the Company or any Fund
which would result in the Company's inability to qualify as a regulated
investment company under provisions of the Internal Revenue Code. Payment of
expenses by the Adviser pursuant to this Section 5 shall be settled on a monthly
basis (subject to fiscal year-end reconciliation) by a reduction in the fee
payable to the Adviser for such month pursuant to Section 4 and, if such
reduction shall be insufficient to offset such expenses, by reimbursing the
Company.
6. REPORTS. The Company and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information with
regard to their affairs as each may reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the Company are
not to be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Company are not impaired
thereby. The Adviser shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no authority to act for
or represent the Company in any way or otherwise be deemed an agent of the
Company. To the extent that the purchase or sale of securities or other
investments of the issuer may be deemed by the Investment Adviser to be suitable
for two or more accounts managed by the Investment Adviser, the available
securities or investments may be allocated in a manner believed by the
Investment Adviser to be equitable to each account. It is recognized that in
some cases this may adversely affect the price paid or received by the Company
or the size or position obtainable for or disposed by the Company or any Fund.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and 31a2 promulgated under the 1940 Act
which are prepared or maintained by the Adviser on behalf of the Company are the
property of the Company and will be surrendered promptly to the Company on
request. The Investment Adviser further agrees
A-4
<PAGE> 33
to preserve for the periods prescribed in Rule 31a-2 under the 1940 Act the
records required to be maintained under Rule 31a-1 under the 1940 Act.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall
be confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Adviser hereunder. The Adviser shall
not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in carrying out its
duties hereunder, except a loss resulting from willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable state law which cannot be waived or
modified hereby. (As used in this Section 9, the term "Adviser" shall include
directors, officers, employees and other corporate agents of the Adviser as well
as that corporation itself.)
10. PERMISSIBLE INTERESTS. Directors, agents, and shareholders of the
Company are or may be interested in the Adviser (or any successor thereof) as
directors, partners, officers, or shareholders, or otherwise; directors,
partners, officers, agents, and shareholders of the Adviser are or may be
interested in the Company as Directors, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Company as a
shareholder or otherwise subject to the provisions of applicable law. Provided
further that all such interests shall be fully disclosed between the parties on
an ongoing basis and in the Company's Prospectus as required by law. In
addition, brokerage transactions for the Company may be effected through
affiliates of the Adviser if approved by the Board of Directors, subject to the
rules and regulations of the Securities and Exchange Commission.
11. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of execution,
and thereafter, for periods of one year so long as such continuance thereafter
is specifically approved at least annually (a) by the vote of a majority of
those Directors of the Company who are not parties to this Agreement or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval, and (b) by the Directors of the Company or
by vote of a majority of the outstanding voting securities of each Fund;
provided, however, that if the shareholders of any Fund fail to approve the
Agreement as provided herein, the Adviser may continue to serve hereunder in the
manner and to the extent permitted by the 1940 Act and rules and regulations
thereunder. The foregoing requirement that continuance of this Agreement be
"specifically approved at least annually" shall be
A-5
<PAGE> 34
construed in a manner consistent with the 1940 Act and the rules and regulations
thereunder.
This Agreement may be terminated as to any Fund at any time, without the
payment of any penalty by vote of a majority of the Directors of the Company or
by vote of a majority of the outstanding voting securities of the Funds on not
less than 30 days nor more than 60 days written notice to the Adviser, or by the
Adviser at any time without the payment of any penalty, on 90 days written
notice to the Company. This Agreement will automatically and immediately
terminate in the event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed postpaid, to the other
party at any office of such party.
As used in this Section 11, the terms "assignment," "interested persons,"
and a "vote of a majority of the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the rules and regulations
thereunder; subject to such exemptions as may be granted by the Securities and
Exchange Commission under said Act.
12. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Company, at 680 East Swedesford Road, Wayne, PA 19087, Attention: Legal
Department and if to the Adviser at: 300 Fourth Avenue, Pittsburgh, PA 15222,
Attention: President.
13. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of this
Agreement shall not be affected thereby.
A copy of the Agreement and Articles of Incorporation of the Company is on file
with the Secretary of the State of Maryland, and notice is hereby given that
this instrument is executed on behalf of the Directors of the Company as
Directors, and are not binding upon any of the Directors, officers, or
shareholders of the Company individually but binding only upon the assets and
property of the Company.
A-6
<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
NATIONAL CITY BANK
By:____________________________
Title:_________________________
INVENTOR FUNDS, INC.
By:____________________________
Title:_________________________
A-7
<PAGE> 36
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
INVENTOR FUNDS, INC.
AND
NATIONAL CITY BANK
Pursuant to Article 4, the Company shall pay the Adviser compensation at an
annual rate as follows:
<TABLE>
<S> <C>
Treasury Securities Money Market Fund..... 0.45%
Pennsylvania Tax-Exempt Money Market
Fund.................................... 0.45%
Prime Obligations Money Market Fund....... 0.45%
Equity Growth Fund........................ 0.85%
Intermediate Government Securities Fund... 0.70%
GNMA Securities Fund...................... 0.70%
Pennsylvania Municipal Bond Fund.......... 0.70%
</TABLE>
A-8
<PAGE> 37
EXHIBIT B
PROPOSED
INVENTOR FUNDS, INC.
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made this th day of , 1996, by and among National
City Bank, a national banking association (the "Adviser"), Wellington Management
Company, a Massachusetts general partnership (the "Sub-Adviser") and the
Inventor Funds, Inc., a Maryland corporation (the "Company").
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated , 1996 (the "Advisory Agreement") with the Company, pursuant to
which the Adviser will act as investment adviser to the Prime Obligations Money
Market Fund, Treasury Securities Money Market Fund, Intermediate Government
Securities Fund and GNMA Securities Fund (the "Funds"); and
WHEREAS, the Adviser and the Company each desire to retain the Sub-Adviser
to provide investment advisory services to the Company in connection with the
management of the Funds, and the Sub-Adviser is willing to render such
investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
<TABLE>
<C> <S>
1. (a) Subject to supervision by the Adviser and the Company's
Board of Directors, the Sub-Adviser shall manage the
investment operations of the Funds and the composition
of the Funds' portfolios, including the purchase,
retention and disposition thereof, in accordance with
the Funds' investment objectives, policies and restric-
tions as stated in the Funds' Prospectus (such
Prospectus and the Statement of Additional Information,
as currently in effect and as amended or supplemented
from time to time, being herein called the
"Prospectus"), and subject to the following:
(1) The Sub-Adviser shall provide supervision of the
Funds' investments and determine from time to time what
investments and securities will be purchased,
retained or sold by the Funds, and what portion of
the costs will be invested or held uninvested in
cash.
</TABLE>
B-1
<PAGE> 38
<TABLE>
<C> <S>
(2) In the performance of its duties and obligations
under this Agreement, the Sub-Adviser shall act in
conformity with the Company's Articles of
Incorporation and the Prospectus and with the
instructions and directions of the Adviser and of
the Board of Directors of the Company and will
conform to and comply with the requirements of the
1940 Act, the Internal Revenue Code of 1986, and
all other applicable federal and state laws and
regulations, as each is amended from time to time.
(3) The Sub-Adviser shall determine the securities to
be purchased or sold by the Funds and will place orders
with or through such persons, brokers or dealers to
carry out the policy with respect to brokerage set
forth in the Funds' Registration Statement (as
defined herein) and Prospectus or as the Board of
Directors or the Adviser may direct from time to
time, in conformity with federal securities laws.
In providing the Fund with investment supervision,
the SubAdviser will give primary consideration to
securing the most favorable price and efficient
execution. Within the framework of this policy, the
Sub-Adviser may consider the financial
responsibility, research and investment information
and other services provided by brokers or dealers
who may effect or be a party to any such
transaction or other transactions to which the
Sub-Adviser's other clients may be a party. It is
understood that it is desirable for the Funds that
the Sub-Adviser have access to supplemental
investment and market research and security and
economic analysis provided by brokers who may
execute brokerage transactions at higher cost to
the Funds than may result when allocating brokerage
to other brokers on the basis of seeking the most
favorable price and efficient execution. Therefore,
the Sub-Adviser is authorized to place orders for
the purchase and sale of securities for the Funds
with such brokers, subject to review by the
Company's Board of Directors from time to time with
respect to the extent and continuation of this
practice. It is understood that the services
provided by such brokers may be useful to the
SubAdviser in connection with the Sub-Adviser's
services to other clients. On occasions when the
Sub-Adviser deems the purchase or sale of a
security to be in the best interest of the Funds as
well as other clients of the Sub-Adviser, the
Sub-Adviser, to the extent permitted by applicable
laws and regulations, may, but shall be under no
obliga-
</TABLE>
B-2
<PAGE> 39
<TABLE>
<C> <S>
tion to, aggregate the securities to be so purchased
or sold in order to obtain the most favorable price
or lower brokerage commissions and efficient
execution. In such event, allocation of the
securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made
by the Sub-Adviser in the manner it considers to be
the most equitable and consistent with its
fiduciary obligation to the Funds and to such other
clients.
(4) The Sub-Adviser shall maintain all books and
records with respect to the Funds' portfolio
transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act and shall render to the
Company's Board of Directors such periodic and
special reports as the Company's Board of Directors
may reasonably request.
(5) The Sub-Adviser shall provide the Funds' Custodian
on each business day with information relating to all
transactions concerning the Funds' assets and shall
provide the Adviser with such information upon
request of the Adviser.
(6) The investment management services provided by the
Sub-Adviser under this Agreement are not to be deemed
exclusive and the Sub-Adviser shall be free to
render similar services to others, as long as such
services do not impair the services rendered to the
Adviser or the Company.
(b) Services to be furnished by the Sub-Adviser under this
Agreement may be furnished through the medium of any of
the Sub-Adviser's partners, officers or employees.
(c) The Sub-Adviser shall keep the Funds' books and records
required to be maintained by the Sub-Adviser pursuant
to paragraph 1(a) of this Agreement and shall timely
furnish to the Adviser all information relating to the
Sub-Adviser's services under this Agreement needed by
the Adviser to keep the other books and records of the
Funds required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser agrees that all records that it maintains
on behalf of the Funds are property of the Funds and
the Sub-Adviser will surrender promptly to the Funds
any of such records upon the Funds' request; provided,
however, that the Sub-Adviser may retain a copy of such
records. The Sub-Adviser further agrees to preserve for
the periods prescribed by Rule 31a-2 under the 1940 Act
any such records as are required to be maintained by it
pursuant to paragraph 1(a) of this Agreement.
</TABLE>
B-3
<PAGE> 40
<TABLE>
<C> <S>
2. The Adviser shall continue to have responsibility for
all services to be provided to the Funds pursuant to
the Advisory Agreement and shall oversee and review the
Sub-Adviser's performance of its duties under this
Agreement.
3. The Adviser has delivered to the Sub-Adviser copies of
each of the following documents and will deliver to it
all future amendments and supplements, if any:
(a) The Company's Articles of Incorporation, as filed with
the Secretary of State of the State of Maryland (such
Articles of Incorporation, as in effect on the date of
this Agreement and as amended from time to time, herein
called the "Articles of Incorporation");
(b) By-Laws of the Company (such By-Laws, as in effect on
the date of this Agreement and as amended from time to
time, are herein called the "By-Laws");
(c) Certified resolutions of the Company's Board of
Directors authorizing the appointment of the Adviser
and the Sub-Adviser with respect to the Funds, and
approving the form of this Agreement;
(d) Registration Statement under the 1940 Act and the
Securities Act of 1933, as amended, on Form N-1A (the
"Registration Statement"), as filed with the Securities
and Exchange Commission (the "Commission") relating to
the Funds and shares of the Funds' beneficial shares,
and all amendments thereto;
(e) Notification of Registration of the Company under the
1940 Act on Form N-8A as filed with the Commission, and
all amendments thereto; and
(f) Prospectus of the Funds.
4. For the services to be provided by the Sub-Adviser
pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as
full compensation therefor a sub-advisory fee at an
annual rate of 0.075% on the first $500 million of the
Prime Obligations Money Market and Treasury Securities
Money Market Funds aggregate net assets and 0.020% on
such Funds' aggregate net assets in excess of $500
million, pro rated between each Fund based on their
respective average daily net assets. The Adviser will
pay to the Sub-Adviser as full compensation therefor a
fee at an annual rate of .20% on the first $50 million
for each of the Intermediate Government Securities and
GNMA Securities Funds, .15% on the next $50 million,
.10% on the next $400 million and .075% on the excess
of $500 million of the average daily net assets of each
Fund. These fees will be computed daily and paid to the
Sub-Adviser monthly.
</TABLE>
B-4
<PAGE> 41
<TABLE>
<C> <S>
5. The Sub-Adviser shall not be liable for any error of
judgment or for any loss suffered by the Funds or the
Adviser in connection with performance of its
obligations under this Agreement, except a loss
resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services (in which
case any award of damages shall be limited to the
period and the amount set forth in Section 36(b)(3) of
the 1940 Act), or a loss resulting from willful
misfeasance, bad faith or gross negligence on the
Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties
under this Agreement, except as may otherwise be
provided under provisions of applicable state law which
cannot be waived or modified hereby.
6. This Agreement shall continue in effect for a period of
more than two years from the date hereof only so long
as continuance is specifically approved at least
annually in conformance with the 1940 Act; provided,
however, that this Agreement may be terminated (a) by
the Funds at any time, without the payment of any
penalty, by the vote of a majority of Directors of the
Company or by the vote of a majority of the outstanding
voting securities of such Funds, (b) by the Adviser at
any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written
notice to the other parties, or (c) by the Sub-Adviser
at any time, without the payment of any penalty, on 90
days' written notice to the other parties. This
Agreement shall terminate automatically and immediately
in the event of its assignment. As used in this Section
6, the terms "assignment" and "vote of a majority of
the outstanding voting securities" shall have the
respective meanings set forth in the 1940 Act and the
rules and regulations thereunder, subject to such
exceptions as may be granted by the Commission under
the 1940 Act.
7. Nothing in this Agreement shall limit or restrict the
right of any of the Sub-Adviser's partners, officers,
or employees to engage in any other business or to
devote his or her time and attention in part to the
management or other aspects of any business, whether of
a similar or dissimilar nature, nor limit or restrict
the Sub-Adviser's right to engage in any other business
or to render services of any kind to any other
corporation, firm, individual or association.
8. During the term of this Agreement, the Adviser agrees
to furnish the Sub-Adviser at its principal office all
prospectuses, proxy statements, reports to
stockholders, sales literature or other materials
prepared for distribution to stockholders of the Funds,
</TABLE>
B-5
<PAGE> 42
<TABLE>
<C> <S>
the Company or the public that refer to the Sub-Adviser
or its clients in any way prior to use thereof and not
to use material if the Sub-Adviser reasonably objects
in writing within five business days (or such other
period as may be mutually agreed) after receipt
thereof. The Sub-Adviser's right to object to such
materials is limited to the portions of such materials
that expressly relate to the Sub-Adviser, its services
and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials
prepared by its employees or agents or its affiliates
that refer to the Sub-Adviser or its clients in any way
are consistent with those materials previously approved
by the Sub-Adviser as referenced in the first sentence
of this paragraph. Sales literature may be furnished to
the Sub-Adviser by first class or overnight mail,
facsimile transmission equipment or hand delivery.
9. No provisions of this Agreement may be changed, waived,
discharged or terminated orally, but only by an
instrument in writing signed by the party against which
enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this
Agreement shall be effective until approved by the vote
of the majority of the outstanding voting securities of
the Funds.
10. This Agreement shall be governed by the laws of the
State of Maryland; provided, however, that nothing
herein shall be construed as being inconsistent with
the 1940 Act.
11. This Agreement embodies the entire agreement and
understanding among the parties hereto, and supersedes
all prior agreements and understandings relating to
this Agreement's subject matter. This Agreement may be
executed in any number of counterparts, each of which
shall be deemed to be an original, but such
counterparts shall, together, constitute only one
instrument.
12. Should any part of this Agreement be held invalid by a
court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected
thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their
respective successors.
13. Any notice, advice or report to be given pursuant to
this Agreement shall be delivered or mailed:
To the Adviser at:
National City Bank
1900 East Ninth Street
Cleveland, OH 44114
</TABLE>
B-6
<PAGE> 43
<TABLE>
<C> <S>
To the Sub-Adviser at:
Wellington Management Company
75 State Street
Boston, MA 02109
To the Company or the Funds at:
Inventor Funds, Inc.
680 E. Swedesford Road
Wayne, PA 19087
Attention: President
14. Where the effect of a requirement of the 1940 Act
reflected in any provision of this Agreement is altered
by a rule, regulation or order of the Commission,
whether of special or general application, such
provision shall be deemed to incorporate the effect of
such rule, regulation or order.
</TABLE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
NATIONAL CITY BANK
By:__________________________
Title:_______________________
INVENTOR FUNDS, INC.
By:__________________________
Title:_______________________
WELLINGTON MANAGEMENT
COMPANY
By:__________________________
Title:_______________________
B-7
<PAGE> 44
EXHIBIT C
PROPOSED
INVENTOR FUNDS, INC.
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of , 1996 by and between National
City Bank, a national banking association (the "Adviser") and STI Capital
Management, N.A. (formerly SunBank Capital Management, N.A.), a Florida based
company and registered investment advisor (the "Sub-Adviser").
WHEREAS, the Adviser is the investment manager (the "Adviser") for Inventor
Funds, Inc. (the "Company"), an open-end management investment company
registered under the Investment Company Act of 1940, as amended the ("1940
Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for the Equity Growth Fund, a diversified
investment portfolio of the Company (the "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to provide
certain investment sub-advisory services to the Fund for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies of each of the following:
(a) the Company's Articles of Incorporation, as filed with the Secretary
of State of the State of Maryland on April 22, 1994, and all amendments thereto
or restatements thereof (such Articles of Incorporation, as presently in effect
and as it shall from time to time be amended or restated, is herein called the
"Articles of Incorporation");
(b) the Company's By-Laws and all amendments thereto;
(c) the resolutions of the Company's Board of Directors authorizing the
appointment of the Sub-Adviser and approving this Agreement;
(d) the Company's Notification of Registration on Form N-8A under the
1940 Act, as filed with the Securities and Exchange Commission (the "SEC") on
April 22, 1994 and all amendments thereto;
C-1
<PAGE> 45
(e) the Company's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") and under the 1940 Act as
filed with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Fund;
(f) the Company's most recent prospectuses and Statement of Additional
Information for the Fund (such prospectuses and Statement of Additional
Information, as presently in effect, and all amendments and supplements thereto
are herein collectively called the "Prospectuses"); and
(g) any other information reasonably needed by the Sub-Adviser to
satisfy its obligations under this Agreement.
The Adviser will furnish the Sub-Adviser from time to time with copies
of all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject always to the supervision of the Company's Board of
Directors and the Adviser, the Sub-Adviser will furnish an investment program in
respect of, and make investment decisions for, all assets of the Fund and place
all orders for the purchase and sale of securities, all on behalf of the Fund.
In the performance of its duties the Sub-Adviser will satisfy its fiduciary
duties to the Fund (as set forth in Section 8 below), and will monitor the
Fund's investments, and will comply with the provisions of the Company's
Articles of Incorporation and By-Laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the Fund as set forth
in the prospectus of the Fund, as amended from time to time. The Sub-Adviser and
the Adviser will each make its officers and employees available to the other
from time to time at reasonable times to review investment policies of the Fund
and to consult with each other regarding the investment affairs of the Fund and
the Sub-Adviser will at all times act consistently with the instructions and
directions given to it by the Adviser. The Sub-Adviser shall also make itself
reasonably available to the Board of Directors of the Company at such times as
the Board of Directors shall request.
The Sub-Adviser represents and warrants that it is in compliance with all
applicable rules and regulations of the SEC pertaining to its investment
advisory activities and agrees that it:
(a) will conform with all applicable rules and regulations of the SEC
pertaining to its investment advisory activities;
(b) will place orders pursuant to its investment determinations for the
Fund either directly with the issuer or with any broker or dealer. In placing
orders with brokers or dealers, the Sub-Adviser will attempt to obtain the best
combination of prompt execution of orders in an effective manner and at the
C-2
<PAGE> 46
most favorable price. On occasions when the Sub-Adviser deems the purchase or
sale of a security to be in the best interest of the Funds as well as other
clients of the Sub-Adviser, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may, but shall be under no obligation to,
aggregate the securities to be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and efficient execution.
Consistent with this obligation, when the execution and price offered by two or
more brokers or dealers are comparable, the Sub-Adviser may, in its discretion,
purchase and sell portfolio securities to and from brokers and dealers who
provide the Sub-Adviser with research advice and other services. In no instance
will portfolio securities be purchased from or sold to the Adviser, the
Sub-Adviser, SEI Financial Services Company or any affiliated person of either
the Company, the Adviser, SEI Financial Services Company or the Sub-Adviser,
except as may be permitted under the 1940 Act;
(c) will report regularly to the Adviser and will make appropriate persons
available for the purpose of reviewing at reasonable times with representatives
of the Adviser and the Board of Directors of the Company the management of the
Fund, including, without limitation, review of the general investment strategy
of the Fund, the performance of the Fund in relation to standard industry
indices, interest rate considerations and general conditions affecting the
marketplace and will provide various other reports from time to time as
reasonably requested by the Adviser;
(d) will maintain books and records with respect to the Company's
securities transactions which it has effected and will furnish the Adviser and
the Board of Directors of the Company such periodic and special reports as the
Board of Directors or the Adviser may request;
(e) will act upon instructions from the Adviser not inconsistent with the
fiduciary duties hereunder; and
(f) will treat confidentially and as proprietary information of the Company
all such records and other information relative to the Company maintained by the
Sub-Adviser, and will not use such records and information for any purpose other
than performance of its responsibilities and duties hereunder, except after
prior notification to and approval in writing by the Company, which approval
shall not be unreasonably withheld and may not be withheld where the Sub-Adviser
may be exposed to civil or criminal contempt proceeding for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by the Company.
The Sub-Adviser shall have the right to execute and deliver, or cause its
nominee to execute and deliver, all proxies and notices of meetings and other
notices affecting or relating to the securities of the Fund.
C-3
<PAGE> 47
The Sub-Adviser hereby warrants that it is not presently, nor has it been
in the past three years, nor has it been advised that it may be in the future,
the subject of a Securities and Exchange Commission investigative proceeding or
a proceeding by any state securities commission, nor the subject of any
disciplinary hearing by a self-regulatory organization or other governmental or
quasi-governmental body.
4. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any of such records upon the Company's
request. The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Company.
6. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee,
accrued daily and payable quarterly, in accordance with Schedule A hereto. If
the Adviser is required, under its Advisory Agreement with the Company, to
reduce its fees for the Fund because of excess expenses, the Sub-Adviser shall
reduce its fees by an amount equal to one-half of the amount by which the
Adviser reduced its fees. In addition, from time to time, the Sub-Adviser may
voluntarily agree to waive or reduce some or all of the compensation to which it
is entitled under this Agreement.
7. SERVICES TO OTHERS. The Adviser understands, and has advised the
Company's Board of Directors, that the Sub-Adviser now acts, and may in the
future act, as an investment adviser to fiduciary and other managed accounts,
and as investment adviser, investment sub-adviser, and/or administrator to other
investment companies, provided, however, that the Sub-Adviser shall not provide
advisory or sub-advisory services to any investment company advised by Mellon
Bank Corp. or any of its affiliates or PNC Bank Corp. or any of its affiliates
without the express written consent of the Adviser, which will not be
unreasonably withheld. With the exception previously noted, the Adviser has no
objection to the Sub-Adviser's acts in such capacities, provided that the
services to the Fund are not impaired thereby and that whenever the Fund and one
or more other investment companies advised by the Sub-Adviser have available
funds for investment, investments suitable and appropriate for each will be
allocated in accordance with a formula believed by the
C-4
<PAGE> 48
Sub-Adviser to be equitable to each company. The Adviser recognizes, and has
advised the Company's Board of Directors, that in some cases this procedure may
adversely affect the size of the position that the Fund may obtain in a
particular security. In addition, the Adviser understands, and has advised the
Company's Board of Directors, that the persons employed by the Sub-Adviser to
assist in the Sub-Adviser's duties under this Agreement will not devote their
full time to such service and nothing contained in this Agreement will be deemed
to limit or restrict the right of the Sub-Adviser or any of its affiliates to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature. Provided, that notwithstanding the above,
the Sub-Adviser shall provide its services reasonably, and make itself available
to the Adviser or the Board of Directors at reasonable times, in accordance with
the provisions of paragraph 3.
8. LIMITATION OF LIABILITY. The Adviser will not take any action against
the Sub-Adviser to hold the Sub-Adviser liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
performance of the Sub-Adviser's duties under this Agreement, except a loss
resulting from the Sub-Adviser's willful misfeasance, bad faith, or gross
negligence in the performance of its duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective as to
the Fund on the date first above written, and, unless sooner terminated as
provided herein, will continue in effect for one year.
Thereafter, if not terminated, this Agreement will continue in effect for
the Fund for successive periods of 12 months, each ending on the day preceding
the anniversary of the Agreement's effective date of each year, provided that
such continuation is specifically approved at least annually (a) by the vote of
a majority of those members of the Company's Board of Directors who are not
interested persons of the Company, the Sub-Adviser, or the Adviser, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the vote of a majority of the Company's Board of Directors or by the vote of
a majority of all votes attributable to the outstanding shares of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, on sixty (60) days' written
notice by the Adviser or by the Sub-Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstanding voting securities," "interested persons" and
"assignment" have the same meaning of such terms in the 1940 Act.)
This Agreement will terminate automatically if the advisory agreement
between the Company and the Adviser is terminated.
C-5
<PAGE> 49
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party giving notice: if to the Adviser, at
1900 East Ninth Street, Cleveland, Ohio 44114 and if to the Sub-Adviser at: 200
S. Orange Avenue, Orlando, Florida 32802.
12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and will be governed by the
laws of the state of Maryland.
The name "Inventor Funds, Inc." and "Directors of Inventor Funds, Inc."
refers respectively to the Company created by, and the Directors, as trustees
but not individually or personally, acting from time to time under, the Articles
of Incorporation, to which reference is hereby made and a copy of which is on
file at the office of the Secretary of State of Maryland and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Inventor Funds, Inc." entered in the name or on
behalf thereof by any of the Directors, representatives or agents are made not
individually but only in such capacities and are not binding upon any of the
Directors, shareholders or representatives of the Company personally, but bind
only the assets of the Company, and persons dealing with the Fund must look
solely to the assets of the Company belonging to such Fund for the enforcement
of any claims against the Company.
C-6
<PAGE> 50
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONAL CITY BANK
By:__________________________
Name:________________________
Title:_______________________
STI CAPITAL
MANAGEMENT, N.A.
By:__________________________
Name:________________________
Title:_______________________
C-7
<PAGE> 51
SCHEDULE A
TO
INVESTMENT SUB-ADVISORY AGREEMENT
DATED
, 1996
The Adviser shall pay to the Sub-Adviser compensation at an annual rate as
follows:
Equity Growth Fund .25% (first six months of the Fund's operation)
.30% (thereafter)
NATIONAL CITY BANK
By:__________________________
Name:________________________
Title:_______________________
STI CAPITAL
MANAGEMENT, N.A.
By:__________________________
Name:________________________
Title:_______________________
C-8
<PAGE> 52
EXHIBIT D
PROPOSED
INVENTOR FUNDS, INC.
INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT executed as of , 1996 by and between National City
Bank, a national banking association (the "Adviser") and Weiss, Peck & Greer,
L.L.C., a New York based company and registered investment adviser (the
"Sub-Adviser").
WHEREAS, the Adviser is the investment manager (the "Adviser") for Inventor
Funds, Inc. (the "Company"), an open-end management company registered under the
Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for the Pennsylvania Tax-Exempt Money
Market Fund and Pennsylvania Municipal Bond Fund, diversified investment
portfolios of the Company (the "Funds").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:
1. APPOINTMENT. The Adviser hereby appoints the Sub-Adviser to provide
certain investment sub-advisory services to the Funds for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies of each of the following:
(a) the Company's Articles of Incorporation, as filed with the Secretary
of State of the State of Maryland on April 22, 1994, and all amendments thereto
or restatements thereof (such Articles of Incorporation, as presently in effect
and as it shall from time to time be amended or restated, is herein called the
"Articles of Incorporation");
(b) the Company's By-Laws and all amendments thereto;
(c) the resolutions of the Company's Board of Directors authorizing the
appointment of the Sub-Adviser and approving this Agreement;
(d) the Company's Notification of Registration on Form N-8A under the
1940 Act, as filed with the Securities and Exchange Commission (the "SEC") on
April 22, 1994 and all amendments thereto;
D-1
<PAGE> 53
(e) the Company's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") and under the 1940 Act as
filed with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Fund;
(f) the Company's most recent prospectuses and Statement of Additional
Information for the Funds (such prospectuses and Statement of Additional
Information, as presently in effect, and all amendments and supplements thereto
are herein collectively called the "Prospectuses"); and
(g) any other information reasonably needed by the Sub-Adviser to
satisfy its obligations under this Agreement.
The Adviser will furnish the Sub-Adviser from time to time with copies of
all amendments of or supplements to the foregoing.
3. MANAGEMENT. Subject always to the supervision of the Company's Board of
Directors and the Adviser, the Sub-Adviser will furnish an investment program in
respect of, and make investment decisions for, all assets of the Funds and place
all orders for the purchase and sale of securities, all on behalf of the Funds.
In the performance of its duties the Sub-Adviser will satisfy its fiduciary
duties to the Funds (as set forth in Section 8 below), and will monitor the
Funds' investments, and will comply with the provisions of the Company's
Articles of Incorporation and By-Laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the Funds as set
forth in the prospectus of the Funds, as amended from time to time. The
Sub-Adviser and the Adviser will each make its officers and employees available
to the other from time to time at reasonable times to review investment policies
of the Funds and to consult with each other regarding the investment affairs of
the Funds and the Sub-Adviser will at all times act consistently with the
instructions and directions given to it by the Adviser. The Sub-Adviser shall
also make itself reasonably available to the Board of Directors of the Company
at such times as the Board of Directors shall request.
The Sub-Adviser represents and warrants that it is in compliance with all
applicable rules and regulations of the SEC pertaining to its investment
advisory activities and agrees that it:
(a) will conform with all applicable rules and regulations of the SEC
pertaining to its investment advisory activities;
(b) will place orders pursuant to its investment determinations for each
of the Funds either directly with the issuer or with any broker or dealer. In
placing orders with brokers or dealers, the Sub-Adviser will attempt to obtain
the best combination of prompt execution of orders in an effective
D-2
<PAGE> 54
manner and at the most favorable price. On occasions when the Sub-Adviser deems
the purchase or sale of a security to be in the best interest of the Funds as
well as the other clients of the Sub-Adviser, the Sub-Adviser, to the extent
permitted by applicable laws and regulations, may, but shall be under no
obligation to, aggregate the securities to be so purchased or sold in order to
obtain the most favorable price or lower brokerage commissions and efficient
execution. Consistent with this obligation, when the execution and price offered
by two or more brokers or dealers are comparable, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities to and from brokers and
dealers who provide the Sub-Adviser with research advice and other services. In
no instance will portfolio securities be purchased from or sold to the Adviser,
the Sub-Adviser, SEI Financial Services Company or any affiliated person of
either the Company, the Adviser, SEI Financial Services Company or the
Sub-Adviser, except as may be permitted under the 1940 Act;
(c) will report regularly to the Adviser and will make appropriate
persons available for the purpose of reviewing at reasonable times with
representatives of the Adviser and the Board of Directors of the Company the
management of each of the Funds, including, without limitation, review of the
general investment strategy of each of the Funds, the performance of each of the
Funds in relation to standard industry indices, interest rate considerations and
general conditions affecting the marketplace and will provide various other
reports from time to time as reasonably requested by the Adviser;
(d) will maintain books and records with respect to the Company's
securities transactions which it has effected and will furnish the Adviser and
the Board of Directors of the Company such periodic and special reports as the
Board of Directors or the Adviser may request;
(e) will act upon instructions from the Adviser not inconsistent with
the fiduciary duties hereunder; and
(f) will treat confidentially and as proprietary information of the
Company all such records and other information relative to the Company
maintained by the Sub-Adviser, and will not use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be withheld where the
Sub-Adviser may be exposed to civil or criminal contempt proceeding for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company.
D-3
<PAGE> 55
The Sub-Adviser shall have the right to execute and deliver, or cause its
nominee to execute and deliver, all proxies and notices of meetings and other
notices affecting or relating to the securities of each of the Funds.
The Sub-Adviser hereby warrants that it is not presently, nor has it been
in the past three years, nor has it been advised that it may be in the future,
the subject of a Securities and Exchange Commission investigative proceeding or
a proceeding by any state securities commission, nor the subject of any
disciplinary hearing by a self-regulatory organization or other governmental or
quasi-governmental body.
4. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Company are the property of the Company and further agrees to
surrender promptly to the Company any of such records upon the Company's
request. The Sub-Adviser further agrees to preserve for the periods prescribed
by Rule 31a-2 under the 1940 Act the records required to be maintained by Rule
31a-1 under the 1940 Act.
5. EXPENSES. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions, if
any) purchased for the Company.
6. COMPENSATION. For the services provided and the expenses assumed
pursuant to this Agreement, the Adviser will pay the Sub-Adviser, and the
Sub-Adviser agrees to accept as full compensation therefor, a sub-advisory fee,
accrued daily and payable quarterly, in accordance with Schedule A hereto. If
the Adviser is required, under its Advisory Agreement with the Company, to
reduce its fees for any of the Funds because of excess expenses, the Sub-Adviser
shall reduce its fees by an amount equal to one-half of the amount by which the
Adviser reduced its fees. In addition, from time to time, the Sub-Adviser may
voluntarily agree to waive or reduce some or all of the compensation to which it
is entitled under this Agreement.
7. SERVICES TO OTHERS. The Adviser understands, and has advised the
Company's Board of Directors, that the Sub-Adviser now acts, and may in the
future act, as an investment adviser to fiduciary and other managed accounts,
and as investment adviser, sub-investment adviser, and/or administrator to other
investment companies, provided, however, that the Sub-Adviser shall not provide
advisory or sub-advisory services to any investment company advised by Mellon
Bank Corp. or any of its affiliates or PNC Bank Corp. or any of its affiliates
without the express written consent of the Advisor, which will not be
unreasonably withheld. With the exception previously noted, the Adviser has no
objection to the Sub-Adviser's acts in such capacities, provided
D-4
<PAGE> 56
that the services to the Funds are not impaired thereby and that whenever the
Fund and one or more other investment companies advised by the Sub-Adviser have
available funds for investment, investments suitable and appropriate for each
will be allocated in accordance with a formula believed by the Sub-Adviser to be
equitable to each company. The Adviser recognizes, and has advised the Company's
Board of Directors, that in some cases this procedure may adversely affect the
size of the position that the Fund may obtain in a particular security. In
addition, the Adviser understands, and has advised the Company's Board of
Directors, that the persons employed by the Sub-Adviser to assist in the
Sub-Adviser's duties under this Agreement will not devote their full time to
such service and nothing contained in this Agreement will be deemed to limit or
restrict the right of the Sub-Adviser or any of its affiliates to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature. Provided, that notwithstanding the above, the Sub-Adviser shall
provide its services reasonably, and make itself available to the Adviser or the
Board of Directors at reasonable times, in accordance with the provisions of
paragraph 3.
8. LIMITATION OF LIABILITY. The Adviser will not take any action against
the Sub-Adviser to hold the Sub-Adviser liable for any error of judgment or
mistake of law or for any loss suffered by the Fund in connection with the
performance of the Sub-Adviser's duties under this Agreement, except a loss
resulting from the Sub-Adviser's willful misfeasance, bad faith, or gross
negligence in the performance of its duties under this Agreement.
9. DURATION AND TERMINATION. This Agreement will become effective as to
each of the Funds on the date first above written and, unless sooner terminated
as provided herein, will continue in effect for one year.
Thereafter, if not terminated, this Agreement will continue in effect for
the Fund for successive periods of 12 months, each ending on the day preceding
the anniversary of the Agreement's effective date of each year, provided that
such continuation is specifically approved at least annually (a) by the vote of
a majority of those members of the Company's Board of Directors who are not
interested persons of the Company, the Sub-Adviser, or the Adviser, cast in
person at a meeting called for the purpose of voting on such approval, and (b)
by the vote of a majority of the Company's Board of Directors or by the vote of
a majority of all votes attributable to the outstanding shares of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated as to the Fund
at any time, without the payment of any penalty, on sixty (60) days' written
notice by the Adviser or by the Sub-Adviser. This Agreement will immediately
terminate in the event of its assignment. (As used in this Agreement, the terms
"majority of the outstand-
D-5
<PAGE> 57
ing voting securities," "interested persons" and "assignment" have the same
meaning of such terms in the 1940 Act.)
This Agreement will terminate automatically if the advisory agreement
between the Company and the Adviser is terminated.
10. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
11. NOTICE. Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
last address furnished by the other party to the party giving notice: if to the
Adviser, at 1900 East Ninth Street, Cleveland, OH 44114 and if to the Sub-
Adviser at: One New York Plaza, New York, NY 10004.
12. MISCELLANEOUS. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and will be governed by the
laws of the state of Maryland.
The name "Inventor Funds, Inc." and "Directors of Inventor Funds, Inc."
refers respectively to the Company created by, and the Directors, as trustees
but not individually or personally, acting from time to time under, the Articles
of Incorporation, to which reference is hereby made and a copy of which is on
file at the office of the Secretary of State of Maryland and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Inventor Funds, Inc." entered in the name or on
behalf thereof by any of the Directors, representatives or agents are made not
individually but only in such capacities and are not binding upon any of the
Directors, shareholders or representatives of the Company personally, but bind
only the assets of the Company, and persons dealing with the Fund must look
solely to the assets of the Company belonging to such Fund for the enforcement
of any claims against the Company.
D-6
<PAGE> 58
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONAL CITY BANK
By:__________________________
Name:________________________
Title:_______________________
WEISS, PECK & GREER, L.L.C.
By:__________________________
Name:________________________
Title:_______________________
D-7
<PAGE> 59
SCHEDULE A
TO
INVESTMENT SUB-ADVISORY AGREEMENT
DATED
, 1996
The Adviser shall pay to the Sub-Adviser compensation at an annual rate as
follows:
Pennsylvania Municipal Bond Fund .18%
Pennsylvania Tax-Exempt Money Market Fund .05%
NATIONAL CITY BANK
By:__________________________
Name:________________________
Title:_______________________
WEISS, PECK & GREER, L.L.C.
By:__________________________
Name:________________________
Title:_______________________
D-8
<PAGE> 60
APPENDIX A
VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND
THE EXPENSE OF ADDITIONAL MAILINGS
INVENTOR FUNDS
ALL FUNDS VOTING IN THE AGGREGATE
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF INVENTOR FUNDS,
INC. (THE "COMPANY") FOR USE AT A SPECIAL MEETING OF SHAREHOLDERS (THE "SPECIAL
MEETING") TO BE HELD AT 680 EAST SWEDESFORD ROAD, WAYNE, PENNSYLVANIA
19087-1658 ON MAY 2, 1996 AT 10:00 A.M. (EASTERN TIME).
The undersigned hereby appoints Kevin R. Robins and Sandra Oechslin,
and either of them, with full power of substitution, as proxies of the
undersigned to vote at the above-stated Special Meeting and at all adjournments
or postponements thereof, all shares of beneficial interest of the Company that
are held of record by the undersigned on the record date for the Special
Meeting, upon the following matters, and upon any other matter which may come
before the Special Meeting, in their discretion (see reverse side):
PLEASE SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
Please sign exactly as name appears
hereon. When shares are held by joint
tenants, both should sign. When signing
as attorney or as executor,
administrator, trustee or guardian,
please give full title as such. If a
corporation, please sign in full
corporate name by president or other
authorized officer. If a partnership,
please sign in partnership name by
authorized person.
Date:____________________, 1996
X
--------------------------------
Signature
X
--------------------------------
Signature (if held jointly)
<PAGE> 61
VOTE THIS PROXY CARD TODAY!
-----
YOUR PROMPT RESPONSE WILL SAVE YOUR FUND THE EXPENSE OF ADDITIONAL MAILINGS
ITEM 1. Approval of an Investment Advisory Agreement between the Company and
National City Bank with respect to each portfolio of the Company (ALL
PORTFOLIOS).
/ / FOR / / AGAINST / / ABSTAIN
ITEM 2. Approval of Investment Sub-Advisory Agreements:
A. Among National City Bank, the Company and Wellington
Management Company for the Prime Obligations Money Market
Fund, Treasury Securities Money Market Fund, GNMA Securities
Fund and Intermediate Government Securities Fund (THESE
PORTFOLIOS ONLY):
/ / FOR / / AGAINST / / ABSTAIN
B. Between National City Bank and STI Capital Management, N.A.
for the Equity Growth Fund (THIS PORTFOLIO ONLY):
/ / FOR / / AGAINST / / ABSTAIN
C. Between National City Bank and Weiss, Peck & Greer, L.L.C. for
the Pennsylvania Municipal Bond Fund and Pennsylvania
Tax-Exempt Money Market Fund (THESE PORTFOLIOS ONLY):
/ / FOR / / AGAINST / / ABSTAIN
ITEM 3. In their discretion, the proxies are authorized to vote upon such
other business as may properly come before the Special Meeting or any
adjournment thereof.
Every properly signed Proxy will be voted in the manner specified
hereon and, IN THE ABSENCE OF SPECIFICATION, WILL BE TREATED AS GRANTING
AUTHORITY TO VOTE FOR THE APPROVAL OF THE INVESTMENT ADVISORY AGREEMENT AND
INVESTMENT SUB-ADVISORY AGREEMENTS.
