As filed with the Securities and Exchange Commission on
May 14, 2001
------------
Registration No. 333-
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO.____
POST-EFFECTIVE AMENDMENT NO.___
(Check appropriate box or boxes)
Fifth Third Funds
(Exact Name of Registrant as Specified in Charter)
1-888-799-5353
(Area Code and Telephone Number)
3435 Stelzer Road
Columbus, OH 43219
(Address of Principal Executive Offices)
_______________
ALAN G. PRIEST, ESQUIRE
Ropes & Gray
One Franklin Square
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
(Name and address of Agent for Service)
_______________
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective.
It is proposed that this filing will become effective on June 13, 2001 pursuant
to Rule 488.
Title of securities being offered: Units of beneficial interest.
An indefinite amount of the Registrant's securities has been registered under
the Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company
Act of 1940. In reliance upon such Rule, no filing fee is being paid at this
time.
IMPORTANT SHAREHOLDER INFORMATION
Kent Funds
The document you hold in your hands contains your Combined Prospectus/Proxy
Statement and proxy card. A proxy card is, in essence, a ballot. When you vote
your proxy, you tell us how to vote on your behalf on important issues relating
to your Kent Funds. If you simply sign the proxy without specifying a vote,
your shares will be voted in accordance with the recommendations of the Board of
Trustees of Kent Funds.
We urge you to spend a few minutes with the Combined Prospectus/Proxy
Statement, fill out your proxy card, and return it to us (or vote by telephone
or the Internet). By voting your proxy, and doing so promptly, you help us to
avoid having to make additional mailings.
Please take a few moments to exercise your right to vote. Thank you.
The Combined Prospectus/Proxy Statement constitutes the Proxy Statement of
the Kent Funds for the meeting of their shareholders. It also constitutes the
Prospectus of Fifth Third Funds for 15 of its Funds which are to issue units of
beneficial interest ("Shares") to be distributed in connection with the proposed
reorganization of the Kent Funds with and into the Fifth Third Funds described
in the enclosed materials. The Board of Trustees of the Kent Funds recommends
that shareholders approve the reorganization in which each Kent Fund will
transfer all of its assets to the corresponding Fifth Third Fund in return for
Investment A (Service Shares in the case of the Fifth Third Institutional Money
Market Funds) or Institutional Shares of such corresponding Fifth Third Fund.
At the same time, each Fifth Third Fund will assume all of the liabilities of
the corresponding Kent Fund. After the transfer, Shares of each Fifth Third
Fund will be distributed to the corresponding Kent Fund's shareholders tax-free
in liquidation of such corresponding Kent Fund. As a result of this
transaction, your units of beneficial interest ("Shares") of the applicable Kent
Fund will, in effect, be exchanged at net asset value for Shares of the
corresponding Fifth Third Fund. The transaction will not result in recognition
of any gain or loss for federal income tax purposes. Kent Fund shareholders
holding Investment or Institutional Shares will receive Investment A (Service
Shares in the case of the Fifth Third Institutional Money Market Funds) or
Institutional Shares, respectively, of the corresponding Fifth Third Fund.
-2-
Kent Funds
P.O. Box 182201,
Columbus, Ohio 43218-2201
June 8, 2001
To the Shareholders:
Enclosed you will find several documents being provided to you in
connection with a special meeting of the shareholders ("Meeting") of the Kent
Funds to be held on July 27, 2001 at 10:00 a.m., Eastern Time, at 3435 Stelzer
Road, Columbus, Ohio 43219. We hope you will give this material your immediate
attention and that, if you cannot attend the Meeting in person, you will vote
your proxy promptly.
On April 2, 2001, Old Kent Financial Corporation merged with and into Fifth
Third Bancorp (the "Parent/Advisor Merger"). Consummation of the Parent/Advisor
Merger constituted an "assignment," as that term is defined in the Investment
Company Act of 1940 (the "1940 Act"), of the Kent Funds' investment advisory
agreements with Lyon Street Asset Management Company ("Lyon Street"). As
required by the 1940 Act, the investment advisory agreements provided for their
automatic termination in the event of their assignment. As a result, the Board
of Trustees of the Kent Funds approved an interim investment advisory agreement
-------
in which the investment advisor to the Fifth Third Funds -- Fifth Third Bank --
would advise the Kent Funds effective from the date of the Parent/Advisor Merger
(April 2, 2001) through the date of the Meeting (July 27, 2001). /1/ Investment
advisory personnel of Lyon Street who provided investment management services to
the Kent Funds have continued and will continue to do so as the personnel of the
advisor to the Fifth Third Funds. Because a new investment advisory contract
was required, and with an intent to consolidate the mutual fund investment
advisory activities of the Kent Fund and the Fifth Third Funds, the Board of
Trustees of the Kent Funds also approved a new investment advisory agreement in
---
which the investment advisor to the Fifth Third Funds - now named Fifth Third
Asset Management Inc. -- would continue to advise the Kent Funds effective upon
shareholder approval at the Meeting and until the earlier of the date of the
Kent Funds' reorganization with and into the Fifth Third Funds (on or about
October 29, 2001) or July 27, 2003. We are now asking you to approve the new
---
investment advisory agreement.
____________________________
/1/ On April 30,2001, Fifth Third Bank reorganized its investment advisory
division into Fifth Third Asset Management Inc., a separate, wholly-owned
subsidiary of Fifth Third Bank. Fifth Third Asset Management Inc. has replaced
Fifth Third Bank as the investment advisor to the Fifth Third Funds and the Kent
Funds. Management and advisory personnel of Fifth third Bank that provided
investment management services to Fifth Third Funds now do so as the personnel
of Fifth Third Asset Management Inc. Because Fifth Third Asset Management Inc.
is wholly owned and otherwise controlled by Fifth Third Bank, this transaction
was not an "assignment" of the investment advisory contract for purposes of the
Investment Company Act of 1940 and, therefore, a shareholder vote was not
required.
-3-
As the next step in the consolidation process, we are now also asking you
to consider and approve a proposed Agreement and Plan of Reorganization
("Reorganization Agreement") for your Kent Fund. The Reorganization Agreement
provides that each Kent Fund will transfer all of its assets to the
corresponding Fifth Third Fund, as listed in the chart below, in return for
Investment A (Service Shares in the case of the Fifth Third Institutional Money
Market Funds) or Institutional Shares of such Fifth Third Fund and the
assumption by such Fifth Third Fund of all of the liabilities of such Kent Fund.
After the transfer, Shares of the corresponding Fifth Third Fund will be
distributed to each Kent Fund shareholder tax-free in liquidation of such Kent
Fund. As a result of this transaction, your Kent Shares, in effect, would be
exchanged at their respective net asset value for corresponding Shares of such
Fifth Third Fund. The Transaction would not result in any gain or lass for
federal income tax purposes. All Kent Fund shareholders will receive Shares of
the Fifth Third class (Investment A -- Service Shares in the case of the Fifth
Third Institutional Money Market Funds, or Institutional) that corresponds to
the class of Kent Fund Shares they hold (Investment or Institutional,
respectively). Each Fifth Third Fund listed below as a "New Fifth Third Fund"
recently has been organized for the purpose of continuing the investment
operations of the corresponding Kent Fund, and has no assets or prior history of
investment operations.
Kent Funds New Fifth Third Funds
- ---------- ---------------------
Kent Government Money Market Fund Fifth Third Institutional Government Money Market Fund
Lyon Street Institutional Money Market Fund Fifth Third Institutional Money Market Fund
Kent Michigan Municipal Money Market Fund Fifth Third Michigan Municipal Money Market Fund
Kent International Growth Fund Fifth Third International GDP Fund
Kent Small Company Growth Fund Fifth Third Small Cap Growth Fund
Kent Large Company Growth Fund Fifth Third Large Cap Growth Fund
Kent Index Equity Fund Fifth Third Equity Index Fund
Kent Growth and Income Fund Fifth Third Large Cap Value Fund
Kent Short Term Bond Fund Fifth Third Short Term Bond Fund
Kent Michigan Municipal Bond Fund Fifth Third Michigan Municipal Bond Fund
Kent Tax-Free Income Fund Fifth Third Municipal Bond Fund
Kent Funds Pre-Existing Fifth Third Funds
- ---------- ------------------------------
Kent Intermediate Bond Fund Fifth Third Intermediate Bond Fund*
Kent Income Fund Fifth Third Bond Fund**
Kent Intermediate Tax-Free Fund Fifth Third Intermediate Municipal Bond Fund***
Kent Money Market Fund Fifth Third Prime Money Market Fund
*Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
**Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
***Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
The advisor to the Fifth Third Funds has advised the Kent Fund's Trustees
that it believes that the above-described transaction regarding the Kent Funds
and the Fifth Third Funds offers the shareholders of the Kent Funds the
opportunity to pursue similar investment objectives more effectively and with
possible economies of scale and potentially lower expense ratios over time.
-4-
The reorganization of each Kent Fund will not result in any recognition of a
gain or loss for federal tax purposes and will not involve any sales loads,
commissions, or transaction charges.
Your Kent Fund's Trustees believe that the proposed combinations of the
Kent Funds with the Fifth Third Funds and approval of the investment advisory
agreement are in the best interests of the Kent Funds and their shareholders and
recommend that you vote in favor of such proposals. Specifically, the board
believes that the reorganization is expected to benefit the Kent Funds'
shareholders by, among other things:
(i) offering a larger and more diverse group of mutual funds to all
shareholders;
(ii) actually or potentially reducing overall expenses by the achievement
of economies of scale associated with a larger asset base;
(iii) offering an opportunity for better investment performance due to an
expanded equity and fixed income research staff that can focus on the
core products available;
(iv) offering distribution channels that will have a better understanding
of the proprietary products offered by Fifth Third Funds and will be
better able to communicate Fifth Third Asset Management Inc.'s
investment style to existing and prospective shareholders, thereby
increasing assets in the complex; and
(v) allowing Fifth Third Asset Management Inc. potentially to effect
portfolio transactions on more favorable terms.
The Notice of Special Meeting of Shareholders, the accompanying Combined
Prospectus/Proxy Statement, and the form of proxy are enclosed. Please read
them carefully. If you are unable to attend the meeting in person, we urge you
to sign, date, and return the proxy card (or vote by telephone or the Internet)
so that your Shares may be voted in accordance with your instructions.
Since the Meeting is only seven weeks away, we urge you to give the
enclosed material your prompt attention so as to avoid the expense of additional
mailings.
Your vote is important to us. Thank you for taking the time to consider
this important proposal.
Sincerely yours,
James F. Duca, II
President
Kent Funds
-5-
KENT FUNDS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the Shareholders of:
Kent Government Money Market Fund Kent Short Term Bond Fund
Lyon Street Institutional Money Market Fund Kent Michigan Municipal Bond Fund
Kent Michigan Municipal Money Market Fund Kent Tax-Free Income Fund
Kent International Growth Fund Kent Intermediate Bond Fund
Kent Small Company Growth Fund Kent Income Fund
Kent Large Company Growth Fund Kent Intermediate Tax-Free Fund
Kent Index Equity Fund Kent Money Market Fund
Kent Growth and Income Fund
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders ("Meeting")
of the above-referenced Funds (collectively, the "Kent Funds") will be held on
July 27, 2001 at 10:00 a.m., Eastern Time, at 3435 Stelzer Road, Columbus, Ohio
43219, for the following purposes:
EACH KENT FUND WILL VOTE SEPARATELY ON PROPOSALS ONE AND TWO
1. To consider and act upon an Agreement and Plan of Reorganization
("Reorganization Agreement") pursuant to which each Kent Fund will transfer
of all of its assets to the corresponding Fifth Third Fund, as listed
below, in exchange for Investment A, Institutional, and Service shares
(collectively, "Shares") of such Fifth Third Fund and the assumption by
such Fifth Third Fund of all of the liabilities of such Kent Fund, followed
by the liquidation of such Kent Fund, and the distribution of Shares of
such Fifth Third Fund to the shareholders of such Kent Fund, and by the
deregistration of the Kent Funds as an investment company under the
Investment Company Act of 1940 and the termination of the Kent Funds as a
business trust under Massachusetts law;
Kent Funds Fifth Third Funds
- ---------- -----------------
Kent Government Money Market Fund Fifth Third Institutional Government Money Market Fund
Lyon Street Institutional Money Market Fund Fifth Third Institutional Money Market Fund
Kent Michigan Municipal Money Market Fund Fifth Third Michigan Municipal Money Market Fund
Kent International Growth Fund Fifth Third International GDP Fund
Kent Small Company Growth Fund Fifth Third Small Cap Growth Fund
Kent Large Company Growth Fund Fifth Third Large Cap Growth Fund
Kent Index Equity Fund Fifth Third Equity Index Fund
Kent Growth and Income Fund Fifth Third Large Cap Value Fund
Kent Short Term Bond Fund Fifth Third Short Term Bond Fund
Kent Michigan Municipal Bond Fund Fifth Third Michigan Municipal Bond Fund
Kent Tax-Free Income Fund Fifth Third Municipal Bond Fund
Kent Intermediate Bond Fund Fifth Third Intermediate Bond Fund*
Kent Income Fund Fifth Third Bond Fund**
Kent Intermediate Tax-Free Fund Fifth Third Intermediate Municipal Bond Fund***
Kent Money Market Fund Fifth Third Prime Money Market Fund
-6-
*Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
**Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
***Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
2. To consider and act upon a new investment advisory agreement ("New
Investment Advisory Agreement") between the Kent Funds and Fifth Third
Asset Management Inc., the terms of which are identical in all material
respects (with the exception of the investment advisor name) to the
investment advisory agreement previously in effect between the Kent Funds
and Lyon Street Asset Management Company. The New Investment Advisory
Agreement was approved by the Board of Trustees of the Kent Funds on April
12, 2001.
3. To transact such other business as may properly come before the Meeting or
any adjournment or adjournments thereof.
The proposed transaction is described in the attached Combined
Prospectus/Proxy Statement. Copies of the Reorganization Agreement and the New
Investment Advisory Agreement are appended as Appendices A and B, respectively.
Pursuant to instructions of the Board of Trustees of the Kent Funds, the
close of business on May 18, 2001, has been designated as the record date for
determination of shareholders entitled to notice of, and to vote at, the
Meeting.
Shareholders are requested to promptly vote by telephone or the Internet or
to execute and return promptly in the enclosed envelope the accompanying proxy
card which is being solicited by the Board of Trustees of the Kent Funds. This
is important to ensure a quorum at the Meeting. Proxies may be revoked at any
time before they are exercised by submitting to Kent Funds, Attn: Secretary,
3435 Stelzer Road, Columbus, Ohio 43219-8001, a written notice of revocation or
a subsequently executed proxy or by attending the Meeting and voting in person.
By Order of the Trustees
Amy D. Eisenbeis
Secretary
Kent Funds
Columbus, Ohio
June 8, 2001
-7-
Prospectus/Proxy Statement
June 8, 2001
FIFTH THIRD FUNDS KENT FUNDS
3435 Stelzer Road P.O. Box 182201
Columbus, Ohio 43219 Columbus, Ohio 43218
1-888-799-5353 1-800-633-KENT
COMBINED PROSPECTUS/PROXY STATEMENT
This Combined Prospectus/Proxy Statement is furnished in connection with
the solicitation of proxies from the holders of units of beneficial interest
("Shares") of the Kent Funds for use at a Special Meeting of Shareholders
("Meeting") to approve the reorganization of each Kent Fund described below (the
"Kent Funds") with and into the corresponding Fifth Third Fund listed below (the
"Fifth Third Funds"). Kent Fund shareholders of record on May 18, 2001 are
entitled to receive notice of and to vote at the Meeting. The reorganization
contemplates the transfer of all the assets and liabilities of each Kent Fund to
the corresponding Fifth Third Fund, as indicated below, in exchange for units of
beneficial interest ("Shares") of such Fifth Third Fund, followed by the
liquidation of each Kent Fund, and the distribution of Fifth Third Fund Shares
to shareholders of each Kent Fund, and by the deregistration of the Kent Funds
as an investment company under the Investment Company Act of 1940 and the
termination of the Kent Funds as a business trust under Massachusetts law (the
"Transaction"). As a result of the proposed Transaction, each Kent Fund
shareholder will receive a number of full and fractional Shares of the
corresponding Fifth Third Fund equal in value at the date of the exchange to the
net asset value of the Kent Fund Shares transferred by each shareholder to the
corresponding Fifth Third Fund. The Transaction will not result in a
recognition of any gain or loss for federal income tax purposes. All Kent Fund
shareholders will receive Shares of the Fifth Third class (Investment A --
Service Shares in the case of the Fifth Third Institutional Money Market Funds,
or Institutional) that correspond to the class of Kent Fund Shares that they
hold (Investment or Institutional, respectively). Each Fifth Third Fund listed
below as a "New Fifth Third Fund" recently has been organized for the purpose of
continuing the investment operations of the corresponding Kent Fund, and has no
assets or prior history of investment operations.
Kent Funds New Fifth Third Funds
- ---------- ---------------------
Kent Government Money Market Fund Fifth Third Institutional Government Money Market Fund
Lyon Street Institutional Money Market Fund Fifth Third Institutional Money Market Fund
Kent Michigan Municipal Money Market Fund Fifth Third Michigan Municipal Money Market Fund
Kent International Growth Fund Fifth Third International GDP Fund
Kent Small Company Growth Fund Fifth Third Small Cap Growth Fund
Kent Large Company Growth Fund Fifth Third Large Cap Growth Fund
Kent Index Equity Fund Fifth Third Equity Index Fund
Kent Growth and Income Fund Fifth Third Large Cap Value Fund
Kent Short Term Bond Fund Fifth Third Short Term Bond Fund
Kent Michigan Municipal Bond Fund Fifth Third Michigan Municipal Bond Fund
Kent Tax-Free Income Fund Fifth Third Municipal Bond Fund
-8-
Kent Funds Pre-Existing Fifth Third Funds
- ---------- ------------------------------
Kent Intermediate Bond Fund Fifth Third Intermediate Bond Fund*
Kent Income Fund Fifth Third Bond Fund**
Kent Intermediate Tax-Free Fund Fifth Third Intermediate Municipal Bond Fund***
Kent Money Market Fund Fifth Third Prime Money Market Fund
*Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
**Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
***Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
The Meeting also is being called to permit shareholders of each Kent Fund
to consider and act upon a new investment advisory agreement (the "New
Investment Advisory Agreement") with Fifth Third Asset Management Inc.
Consideration of the New Investment Advisory Agreement has been made necessary
by the merger on April 2, 2001, of Old Kent Financial Corporation with and into
Fifth Third Bancorp ("Parent/Advisor Merger"). If approved by shareholders, the
New Investment Advisory Agreement will take effect on the date of the Meeting
and will continue until the relevant Kent Fund's reorganization.
If a proposal is approved by one or more Kent Funds, and disapproved by the
other Kent Funds, the proposal will be implemented only for each Kent Fund that
approved such proposal.
The Fifth Third Funds are separate series of Fifth Third Funds ("Fifth
Third"), an open-end management investment company. The Kent Funds are separate
series of Kent Funds ("Kent"), an open-end management investment company.
This Combined Prospectus/Proxy Statement explains concisely what you should
know before investing in the Fifth Third Funds. Please read it carefully and
keep it for future reference. This Combined Prospectus/Proxy Statement is
accompanied by the prospectus relating to the Fifth Third Funds dated June 8,
2001 (the "Fifth Third Prospectus"), which contains information about the Fifth
Third Funds and is incorporated by reference into this Combined Prospectus/Proxy
Statement. The current prospectuses relating to the Kent Funds dated May 1, 2001
(the "Kent Prospectuses"), contain information about the Kent Funds and also are
incorporated by reference into this Combined Prospectus/Proxy Statement. The
current Statements of Additional Information of the Fifth Third Funds, dated
June 8, 2001 and November 30, 2000, and of the Kent Funds, dated May 1, 2001,
have been filed with the Securities and Exchange Commission and are incorporated
by reference into this Combined Prospectus/Proxy Statement. The Kent
Prospectuses and Statements of Additional Information may be obtained, without
charge, by writing to Kent Funds, P.O. Box 182201, Columbus, Ohio 43218 or to
Fifth Third Funds, 3435 Stelzer Road, Columbus, Ohio 43219, or by calling 1-800-
633-KENT or 1-888-799-5353. In addition, a Statement of Additional Information
dated June 8, 2001, relating to the Transaction described in this
-9-
Combined Prospectus/Proxy Statement has been filed with the Securities and
Exchange Commission and is also incorporated by reference into this Combined
Prospectus/Proxy Statement. Such Statement of Additional Information may be
obtained, without charge, by writing to Fifth Third Funds at the above-listed
address or by calling 1-888-799-5353. Each of these documents is also available
on the SEC's website at www.sec.gov.
Kent Funds will furnish, without charge, a copy of the Annual Report dated
December 31, 2000 to a Shareholder upon written request to Kent Funds, P.O. Box
182201, Columbus, Ohio 43218 or by calling 1-800-633-KENT.
Investment Advisor - Kent Funds and Fifth Third Funds: Fifth Third Asset
Management Inc., 38 Fountain Square Plaza, Cincinnati, Ohio 45263
Administrator - Kent Funds: Fifth Third Asset Management Inc., 38 Fountain
Square Plaza, Cincinnati, Ohio 45263
Distributor - Kent Funds: Kent Funds Distributors Inc., 3435 Stelzer Road,
Columbus, Ohio 43219
Administrator and Distributor - Fifth Third Funds: BISYS Fund Services Limited
Partnership, 3435 Stelzer Road, Columbus, Ohio 43219
As with all mutual funds, neither the Securities and Exchange Commission nor any
state securities commission has approved or disapproved these Fund shares or
determined whether this Prospectus is truthful or complete. Anyone who tells
you otherwise is committing a crime.
Like other investments, you could lose money on your investment in a Fund. Your
investment in a Fund is not a deposit or an obligation of Fifth Third Bank, its
affiliates, or any bank. It is not insured by the FDIC or any government
agency. Although the Fifth Third Money Market Funds seek to preserve the value
of your investment at $1.00 per share, it is possible to lose money by investing
in such Funds.
No person has been authorized to give any information or to make any
representations not contained in this Combined Prospectus/Proxy Statement in
connection with the offering made by this Combined Prospectus/Proxy Statement
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Kent Funds or by Fifth Third Funds. This
Combined Prospectus/Proxy Statement does not constitute an offering by Fifth
Third Funds in any jurisdiction in which such offering may not lawfully be made.
June 8, 2001
-10-
TABLE OF CONTENTS - to be revised
---------------------------------
PROPOSAL (1) APPROVAL OF AGREEMENT AND PLAN OF REORGANIZATION.......... 12
FEE TABLES............................................................. 14
SYNOPSIS OF PROSPECTUS................................................. 5
PRINCIPAL RISK FACTORS................................................. 69
PROPOSAL (2) APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT............. 83
VOTING INFORMATION..................................................... 92
INTEREST OF CERTAIN PERSONS IN THE TRANSACTION......................... 94
-11-
PROPOSAL (1)
APPROVAL OF AGREEMENT AND
PLAN OF REORGANIZATION
At a meeting held on April 12, 2001, the Trustees of the Kent Funds
unanimously approved an Agreement and Plan of Reorganization ("Reorganization
Agreement") pursuant to which each Kent Fund would be merged with and into the
corresponding Fifth Third Funds on or about October 29, 2001 (the "Exchange
Date"). On the Exchange Date, each Kent Fund will transfer all of its assets
and liabilities to the corresponding Fifth Third Fund in exchange for Shares of
such Fifth Third Fund having an aggregate net asset value equal to the aggregate
value of the net assets acquired from the Kent Fund. The assets and liabilities
of the Kent Fund and the corresponding Fifth Third Fund will be valued at 4:00
p.m. Cincinnati Time on the business day next preceding the Exchange Date.
Following the transfer, the Shares of the corresponding Fifth Third Fund
received by the Kent Fund will be distributed to Kent Fund shareholders in
liquidation of the Kent Fund. Kent Funds will then deregister as an investment
company under the Investment Company Act of 1940 (the "1940 Act") and terminate
as a Massachusetts business trust under Massachusetts law. As a result of the
Transaction, shareholders of the Kent Fund will receive a number of full and
fractional Shares equal in value on the Exchange Date to the value of the net
assets of the Kent Fund transferred to the corresponding Fifth Third Fund
attributable to the shareholder (based on the proportion of the outstanding
Shares of the Kent Fund owned at the time by the shareholder). The Transaction
will not result in any gain or loss for federal income tax purposes. All Kent
Fund shareholders will receive shares of the Fifth Third class (Investment A -
Service Shares in the case of the Fifth Third Institutional Money Market Funds -
- - or Institutional) that corresponds to the class of Kent Fund Shares that they
hold (Investment or Institutional, respectively).
For the reasons set forth below under "Reasons for the Proposed
Reorganization," the Trustees of the Kent Funds and Fifth Third Funds (the
"Boards"), including Trustees of the Kent Funds and Fifth Third Funds who are
not "interested persons" of the Kent Funds or Fifth Third Funds as defined in
the 1940 Act (the "Independent Trustees"), each unanimously concluded that
participation in the proposed Transaction is in the best interests of their
respective Funds and their respective existing shareholders. In reaching this
conclusion, the Boards considered, among other things: (1) the services to be
provided to shareholders of the Fifth Third Funds, including the availability of
a Fund with objectives, policies, and services similar to each Kent Fund; (2)
the projected expense ratios of each Kent Fund compared to the corresponding
Fifth Third Fund; (3) the investment management efficiencies that may be gained;
(4) the potential economies of scale which could be realized as a result of the
increase in size of each Fifth Third Fund; (5) the qualifications and experience
of Fifth Third Asset Management Inc.; (6) the recommendation of the investment
advisor of the Kent Funds in favor of the Transaction; (7) the fact that the
Transaction will not result in a recognition of any gain or loss for federal
income tax purposes; and (8) that the economic interests of shareholders of the
Kent Funds and the Fifth Third Funds will not be diluted as a result of the
proposed Transaction.
-12-
Kent Fund shareholders who do not wish to be reorganized into the Fifth
Third Funds and have their Kent Fund shares exchanged for shares of a
corresponding Fifth Third Fund should redeem their shares prior to the
consummation of the reorganization. If you redeem your shares you will
recognize a taxable gain or loss based on the difference between your tax basis
in the shares and the amount you receive for them.
-13-
FEE TABLES
Fee tables showing the current fees as of April 30, 2001 for the Kent Funds
and November 30, 2000 for the Fifth Third Funds (with the exception of the Fifth
Third Prime Money Market Fund which shows current fees as of April 30, 2001), as
well as the pro forma fees annualized after the reorganization and after fee
waivers and/or expense reimbursement, are below. Fifth Third Asset Management
Inc., the investment advisor to the Fifth Third Funds, has agreed to maintain
for each Fifth Third Fund below investment advisory fees that are equal to those
of its corresponding Kent Fund as of the date of the Parent/Advisor Merger
(April 2, 2001) (with the exception of the Fifth Third Intermediate Municipal
Bond Fund which will be 0.05% higher). Fifth Third Asset Management Inc. also
has agreed that until April 2, 2003, it will maintain for each Fifth Third Fund
below, total fund operating expenses (as a percentage of total assets) that are
less than or equal to those of its corresponding Kent Fund as of the date of the
Parent/Advisor Merger (April 2, 2001). Thereafter, total fund operating expenses
(as a percentage of total assets) for each Fifth Third Fund may be higher.
-14-
Fifth Third Institutional
Kent Government -------------------------
Money Market Government Money Market
------------ -----------------------
Fund Fund
---- ----
Institutional Investment Institutional Service
------------- ---------- ------------- -------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None None
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.40%/1/ 0.40%/1/ 0.40% 0.40%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.23% 0.23% 0.25%/2/ 0.25%/2/
Total Annual Fund Operating Expenses 0.63% 0.88% 0.65% 0.90%
Fee Waiver and/or 0.23%/1/ 0.23%/1/ 0.25%/3/ 0.25%/3/
Expense Reimbursement
Net Expenses 0.40% 0.65% 0.40% 0.65%
/1/ The Investment Advisor has contractually agreed to waive a portion of its
management fees and the Fund's administrator and fund accountant have
contractually agreed to waive a portion of the administration and fund
accounting fees payable by the Fund at least until December 31, 2001.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Institutional Government Money Market Fund to: Institutional, 0.40% and Service,
0.65%. These waivers and/or expense reimbursements will remain in effect until
4/2/03.
-15-
Kent Government Money Market Fund
Fifth Third Institutional Government Money Market Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Government Money Market Fund
Institutional Shares................................... $41 $179
Investment Shares...................................... $66 $258
Fifth Third Institutional Government Money Market Fund
Institutional Shares................................... $41 $183
Service Shares......................................... $66 $262
-16-
Fifth Third
-----------
Lyon Street Institutional
----------- -------------
Institutional Money Market Fund
------------- -----------------
Money Market Fund Institutional
----------------- -------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None
Maximum Sales Charge on
Reinvested Dividends None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None
Redemption Fee None None
Exchange Fee None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.40% 0.40%
Distribution/Service (12b-1) Fees None None
Other Expenses 0.34% 0.36%/1/
Total Annual Fund Operating Expenses 0.74% 0.76%
Fee Waiver and/or 0.52% 0.54%/2/
Expense Reimbursement
Net Expenses 0.22%/3/ 0.22%
/1/ Other expenses are based on estimated amounts for the current fiscal year.
/2/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Fifth Third Institutional Money Market Fund to: Institutional, 0.22%. These
waivers and/or expense reimbursements will remain in effect until 4/2/03.
/3/ This is the actual total fund operating expense you will pay as an investor
in the Lyon Street Institutional Money Market Fund. That's because the Advisor
has contractually agreed to waive a portion of the annual management fees, and
the Administrator has contractually agreed to waive a portion of the
administration fee, payable by the Fund.
-17-
Lyon Street Institutional Money Market Fund
Fifth Third Institutional Money Market Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Lyon Street Institutional Money Market Fund.... $23 $184
Fifth Third Institutional Money Market Fund
Institutional Shares.......................... $23 $189
-18-
Kent Michigan Municipal Fifth Third Michigan Municipal Money
----------------------- ------------------------------------
Money Market Fund Market Fund
----------------- -----------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None None
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.40% 0.40% 0.40% 0.40%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.22% 0.22% 0.25%/1/ 0.25%/1/
Total Annual Fund Operating Expenses 0.62% 0.87% 0.65% 0.90%
Fee Waiver and/or 0.08% 0.08% 0.11%/2/ 0.11%/2/
Expense Reimbursement
Net Expenses 0.54% 0.79% 0.54% 0.79%
/1/ Other expenses are based on estimated amounts for the current fiscal year.
/2/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Michigan Municipal Money Market Fund to: Institutional, 0.54% and Investment A,
0.79% . These waivers and/or expense reimbursements will remain in effect until
4/2/03.
-19-
Kent Michigan Municipal Money Market Fund
Fifth Third Michigan Municipal Money Market Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Michigan Municipal Money Market Fund
Institutional Shares..................................... $55 $190
Investment Shares........................................ $81 $270
Fifth Third Michigan Municipal Money Market Fund
Institutional Shares..................................... $55 $197
Investment A Shares...................................... $81 $276
-20-
Kent International Growth Fund Fifth Third International GDP Fund
------------------------------ ----------------------------------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.75% 0.75% 0.75% 0.75%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.26% 0.26% 0.32%/2/ 0.32%/2/
Total Annual Fund Operating Expenses 1.01% 1.26% 1.07% 1.32%
Fee Waiver and/or 0.00% 0.00% 0.06%/3/ 0.06%/3/
Expense Reimbursement
Net Expenses 1.01% 1.26% 1.01% 1.26%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
International GDP Fund to: Institutional, 1.01% and Investment A, 1.26%. These
waivers and/or expense reimbursements will remain in effect until 4/2/03.
-21-
Kent International Growth Fund
Fifth Third International GDP Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent International Growth Fund
Institutional Shares........................ $103 $322
Investment Shares........................... $128 $400
Fifth Third International GDP Fund
Institutional Shares........................ $103 $334
Investment A Shares, without load........... $128 $412
Investment A Shares, with load.............. $573 $844
-22-
Kent Small Company Growth Fund Fifth Third Small Cap Growth Fund
------------------------------ ---------------------------------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.70% 0.70% 0.70% 0.70%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.22% 0.22% 0.24%/2/ 0.24%/2/
Total Annual Fund Operating Expenses 0.92% 1.17% 0.94% 1.19%
Fee Waiver and/or 0.00% 0.00% 0.02%/3/ 0.02%/3/
Expense Reimbursement
Net Expenses 0.92% 1.17% 0.92% 1.17%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive
fees and/or reimburse expenses to limit total annual fund operating expenses for
the Small Cap Growth Fund to: Institutional, 0.92% and Investment A, 1.17%.
These waivers and/or expense reimbursements will remain in effect until 4/2/03.
-23-
Kent Small Company Growth Fund
Fifth Third Small Cap Growth Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Small Company Growth Fund
Institutional Shares............... $ 94 $293
Investment Shares.................. $119 $372
Fifth Third Small Cap Growth Fund
Institutional Shares............... $ 94 $298
Investment A Shares, without load.. $119 $376
Investment A Shares, with load..... $564 $809
-24-
Kent Large Company Growth Fund Fifth Third Large Cap Growth Fund
------------------------------ ---------------------------------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.70% 0.70% 0.70% 0.70%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.24% 0.24% 0.27%/2/ 0.27%/2/
Total Annual Fund Operating Expenses 0.94% 1.19% 0.97% 1.22%
Fee Waiver and/or 0.00% 0.00% 0.03%/3/ 0.03%/3/
Expense Reimbursement
Net Expenses 0.94% 1.19% 0.94% 1.19%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive
fees and/or reimburse expenses to limit total annual fund operating expenses for
the Large Cap Growth Fund to: Institutional, 0.94% and Investment A, 1.19%.
These waivers and/or expense reimbursements will remain in effect until 4/2/03.
-25-
Kent Large Company Growth Fund
Fifth Third Large Cap Growth Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Large Company Growth Fund
Institutional Shares................ $ 96 $300
Investment Shares................... $121 $378
Fifth Third Large Cap Growth Fund
Institutional Shares................ $ 96 $306
Investment A Shares, without load... $121 $384
Investment A Shares, with load...... $566 $817
-26-
Kent Index Equity Fund Fifth Third Equity Index Fund
--------------------------- -------------------------------
Institutional Investment Institutional Investment A
-------------- ----------- --------------- --------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.30%/2/ 0.30%/2/ 0.30% 0.30%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.23% 0.23% 0.25%/3/ 0.25%/3/
Total Annual Fund Operating Expenses 0.53% 0.78% 0.55% 0.80%
Fee Waiver and/or 0.13%/2/ 0.13%/2/ 0.15%/4/ 0.15%/4/
Expense Reimbursement
Net Expenses 0.40% 0.65% 0.40% 0.65%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ The Investment Advisor has contractually agreed to waive a portion of the
annual management fees and the Fund's administrator and fund accountant have
contractually agreed to waive a portion of the administration and fund
accounting fees payable by the Fund at least until December 31, 2001.
/3/ Other expenses are based on estimated amounts for the current fiscal year.
/4/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Equity Index Fund to: Institutional, 0.40% and Investment A, 0.65%. These
waivers and/or expense reimbursements will remain in effect until 4/2/03.
-27-
Kent Index Equity Fund
Fifth Third Equity Index Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Index Equity Fund
Institutional Shares............... $ 41 $157
Investment Shares.................. $ 66 $236
Fifth Third Equity Index Fund
Institutional Shares............... $ 41 $161
Investment A Shares, without load.. $ 66 $240
Investment A Shares, with load..... $513 $680
-28-
Kent Growth and Income Fund Fifth Third Large Cap Value Fund
--------------------------- --------------------------------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.70% 0.70% 0.70% 0.70%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.22% 0.22% 0.24%/2/ 0.24%/2/
Total Annual Fund Operating Expenses 0.92% 1.17% 0.94% 1.19%
Fee Waiver and/or 0.00% 0.00% 0.02%/3/ 0.02%/3/
Expense Reimbursement
Net Expenses 0.92% 1.17% 0.92% 1.17%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Large Cap Value Fund to: Institutional, 0.92% and Investment A, 1.17%. These
waivers and/or expense reimbursements will remain in effect until 4/2/03.
-29-
Kent Growth and Income Fund
Fifth Third Large Cap Value Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Growth and Income Fund
Institutional Shares............... $ 94 $293
Investment Shares.................. $119 $372
Fifth Third Large Cap Value Fund
Institutional Shares............... $ 94 $298
Investment A Shares, without load.. $119 $376
Investment A Shares, with load..... $564 $809
-30-
Kent Short Term Bond Fund Fifth Third Short Term Bond Fund
------------------------- --------------------------------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price None None None None
or redemption proceeds, as applicable)
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.50% 0.50% 0.50% 0.50%
Distribution/Service (12b-1) Fees None 0.25%/2/ None 0.25%/4/
Other Expenses 0.24% 0.24% 0.27%/3/ 0.27%/3/
Total Annual Fund Operating Expenses 0.74% 0.99% 0.77% 1.02%
Fee Waiver and/or 0.00% 0.10% 0.03%/4/ 0.13%/4/
Expense Reimbursement
Net Expenses 0.74% 0.89% 0.74% 0.89%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ The Fund's Distributor has contractually agreed to waive 0.10% of the Fund's
12b-1 fees for Investment Shares at least until December 31, 2001.
/3/ Other expenses are based on estimated amounts for the current fiscal year.
/4/ The Funds' Advisor, Distributor and Administrator have contractually agreed
to waive fees and/or reimburse expenses to limit total annual fund operating
expenses for the Short Term Bond Fund to: Institutional, 0.74% and Investment A,
0.89%. These waivers and/or expense reimbursements will remain in effect until
4/2/03.
-31-
Kent Short Term Bond Fund
Fifth Third Short Term Bond Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Short Term Bond Fund
Institutional Shares...................... $ 76 $237
Investment Shares......................... $ 91 $305
Fifth Third Short Term Bond Fund
Institutional Shares...................... $ 76 $243
Investment A Shares, without load......... $ 91 $312
Investment A Shares, with load............ $537 $748
-32-
Kent Michigan Municipal Fifth Third Michigan Municipal
----------------------- ------------------------------
Bond Fund Bond Fund
--------- ---------
Institutional Investment Institutional Investment A
------------- ---------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.45% 0.45% 0.45% 0.45%
Distribution/Service (12b-1) Fees None 0.25%/2/ None 0.25%/4/
Other Expenses 0.24% 0.24% 0.26%/3/ 0.26%/3/
Total Annual Fund Operating Expenses 0.69% 0.94% 0.71% 0.96%
Fee Waiver and/or 0.00% 0.10% 0.02%/4/ 0.12%/4/
Expense Reimbursement
Net Expenses 0.69% 0.84% 0.69% 0.84%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ The Fund's Distributor has contractually agreed to waive 0.10% of the Fund's
12b-1 fees for Investment Shares at least until December 31, 2001.
/3/ Other expenses are based on estimated amounts for the current fiscal year.
/4/ The Funds' Advisor, Distributor and Administrator have contractually agreed
to waive fees and/or reimburse expenses to limit total annual fund operating
expenses for the Michigan Municipal Bond Fund to: Institutional, 0.69% and
Investment A, 0.84%. These waivers and/or expense reimbursements will remain in
effect until 4/2/03.
-33-
Kent Michigan Municipal Bond Fund
Fifth Third Michigan Municipal Bond Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Michigan Municipal Bond Fund
Institutional Shares........................... . $ 70 $221
Investment Shares............................... $ 86 $290
Fifth Third Michigan Municipal Bond Fund
Institutional Shares............................ $ 70 $225
Investment A Shares, without load............... $ 86 $294
Investment A Shares, with load.................. $532 $732
-34-
Kent Tax-Free Income Fund Fifth Third Municipal Bond Fund
------------------------- -------------------------------
Institutional Investment Institutional Investment A
------------- ---------- ------------- -----------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load) None None None 4.50%/1/
Imposed on Purchases (as a percentage
of offering price)
Maximum Sales Charge on
Reinvested Dividends None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price None None None None
or redemption proceeds, as applicable)
Redemption Fee None None None None
Exchange Fee None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.55% 0.55% 0.55% 0.55%
Distribution/Service (12b-1) Fees None 0.25% None 0.25%
Other Expenses 0.24% 0.24% 0.27%/2/ 0.27%/2/
Total Annual Fund Operating Expenses 0.79% 1.04% 0.82% 1.07%
Fee Waiver and/or 0.00% 0.00% 0.03%/3/ 0.03%/3/
Expense Reimbursement
Net Expenses 0.79% 1.04% 0.79% 1.04%
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Municipal Bond Fund to: Institutional, 0.79% and Investment A, 1.04%. These
waivers and/or expense reimbursements will remain in effect until 4/2/03.
-35-
Kent Tax-Free Income Fund
Fifth Third Municipal Bond Fund
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years
------ -------
Kent Tax-Free Income Fund
Institutional Shares.................... $ 81 $252
Investment Shares....................... $106 $331
Fifth Third Municipal Bond Fund
Institutional Shares.................... $ 81 $259
Investment A Shares, without load....... $106 $337
Investment A Shares, with load.......... $551 $772
-36-
Pro Forma
---------
Kent Intermediate Bond Fifth Third Intermediate Bond Fifth Third Intermediate Bond
---------------------- ----------------------------- -----------------------------
Fund Fund* Fund
---- ---- ----
Institutional Investment Institutional Investment A Institutional Investment A
------------- ---------- ------------- ------------- ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50% None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None None None
Redemption Fee None None None None None None
Exchange Fee None None None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.55% 0.55% 0.55% 0.55% 0.55% 0.55%
Distribution/Service (12b-1) Fees None 0.25% None 0.25% None 0.25%
Other Expenses 0.22% 0.22% 0.25% 0.25% 0.24%/2/ 0.24%/2/
Total Annual Fund Operating Expenses 0.77% 1.02% 0.80% 1.05% 0.79% 1.04%
Fee Waiver and/or 0.00% 0.00% 0.04%/3/ 0.04%/3/ 0.03%/4/ 0.03%/4/
Expense Reimbursement
Net Expenses 0.77% 1.02% 0.76% 1.01% 0.76% 1.01%
*Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ BISYS waived the following Distribution (12b-1) Fees and/or Administration
Fees for the Bond Fund for Income: Institutional shares, 0.04% and Investment A
shares, 0.04% . Therefore, Total Annual Fund Operating Expenses for the Bond
Fund for Income after fee waivers were: Institutional shares, 0.76% and
Investment A shares, 1.01%. These waivers may be discontinued at any time.
/4/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Intermediate Bond Fund to: Institutional, 0.76% and Investment A, 1.01%. These
waivers and/or expense reimbursements will remain in effect until 4/2/03.
-37-
Kent Intermediate Bond Fund
Fifth Third Intermediate Bond Fund *
Fifth Third Intermediate Bond Fund Pro Forma
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Kent Intermediate Bond Fund
Institutional Shares......................... $ 79 $246 $ 428 $ 954
Investment Shares............................ $104 $325 $ 563 $1,248
Fifth Third Intermediate Bond Fund *
Institutional Shares......................... $ 82 $255 $ 444 $ 990
Investment A Shares.......................... $552 $769 $1,003 $1,675
Fifth Third Intermediate Bond Fund Pro Forma
Institutional Shares......................... $ 78 $249 $ 436 $ 975
Investment A Shares, without load............ $103 $328 $ 571 $1,268
Investment A Shares, with load............... $548 $763 $ 995 $1,661
*Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
-38-
Kent Fifth Third Pro Forma
----- ----------- ---------
Income Fund Bond Fund * Fifth Third
----------- ----------- -----------
Bond Fund
---------
Institutional Investment Institutional Investment A Institutional Investment A
------------- ----------- ------------- ------------ ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50% None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None None None
Redemption Fee None None None None None None
Exchange Fee None None None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.60% 0.60% 0.55% 0.55% 0.60%/2/ 0.60%/2/
Distribution/Service (12b-1) Fees None 0.25% None 0.25% None 0.25%
Other Expenses 0.22% 0.22% 0.29% 0.29% 0.28%/3/ 0.28%/3/
Total Annual Fund Operating Expenses 0.82% 1.07% 0.84% 1.09% 0.88% 1.13%
Fee Waiver and/or 0.00% 0.00% 0.09%/4/ 0.09%/4/ 0.08%/5/ 0.08%/5/
Expense Reimbursement
Net Expenses 0.82% 1.07% 0.75% 1.00% 0.80% 1.05%
* Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Subject to Fifth Third shareholder approval.
/3/ Other expenses are based on estimated amounts for the current fiscal year.
/4/ BISYS waived the following Distribution (12b-1) Fees and/or Administration
Fees for the Quality Bond Fund: Institutional shares, 0.09%, and Investment A
shares, 0.09%. Therefore, Total Annual Fund Operating Expenses for the Quality
Bond Fund after fee waivers were: Institutional shares, 0.75% and Investment A
shares, 1.00%. These waivers may be discontinued at any time.
/5/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Bond Fund to: Institutional, 0.80% and Investment A, 1.05%. These waivers
and/or expense reimbursements will remain in effect until 4/2/03.
-39-
Kent Income Fund
Fifth Third Bond Fund *
Fifth Third Bond Fund Pro Forma
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Kent Income Fund
Institutional Shares............... $ 84 $262 $ 455 $1,014
Investment Shares.................. $109 $340 $ 590 $1,306
Fifth Third Bond Fund *
Institutional Shares............... $ 86 $268 $ 466 $1,037
Investment A Shares................ $556 $781 $1,024 $1,719
Fifth Third Bond Fund Pro Forma
Institutional Shares............... $ 82 $273 $ 480 $1,077
Investment A Shares, without load.. $107 $351 $ 615 $1,367
Investment A Shares, with load..... $552 $785 $1,037 $1,756
* Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
-40-
Kent Intermediate Fifth Third Intermediate Pro Forma
----------------- ------------------------ ---------
Tax-Free Fund Municipal Bond Fund * Fifth Third Intermediate
------------- --------------------- ------------------------
Municipal Bond Fund
-------------------
Institutional Investment Institutional Investment A Institutional Investment A
------------- ---------- ------------- ------------ ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None 4.50% None 4.50%/1/
Maximum Sales Charge on
Reinvested Dividends None None None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price
or redemption proceeds, as applicable) None None None None None None
Redemption Fee None None None None None None
Exchange Fee None None None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.50% 0.50% 0.55% 0.55% 0.55% 0.55%
Distribution/Service (12b-1) Fees None 0.25% None 0.25% None 0.25%
Other Expenses 0.23% 0.23% 0.30% 0.31% 0.29%/2/ 0.29%/2/
Total Annual Fund Operating Expenses 0.73% 0.98% 0.85% 1.11% 0.84% 1.09%
Fee Waiver and/or 0.00% 0.00% 0.10%/3/ 0.11%/3/ 0.11%/4/ 0.11%/4/
Expense Reimbursement
Net Expenses 0.73% 0.98% 0.75% 1.00% 0.73% 0.98%
*Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
/1/ Fifth Third has agreed to waive the sales load for Kent shareholders.
/2/ Other expenses are based on estimated amounts for the current fiscal year.
/3/ BISYS waived the following Distribution (12b-1) Fees and/or Administration
Fees for the Municipal Bond Fund: Institutional shares, 0.10% and Investment A
shares: 0.11% Therefore, Total Annual Fund Operating Expenses for the Municipal
Bond Fund after fee waivers were: Institutional shares: 0.75% and Investment A
shares 1.00%. These waivers may be discontinued at any time.
/4/ The Funds' Advisor and Administrator have contractually agreed to waive fees
and/or reimburse expenses to limit total annual fund operating expenses for the
Imtermediate Municipal Bond Fund to: Institutional, 0.73% and Investment A,
0.98%. These waivers and/or expense reimbursements will remian in effect until
4/2/03.
-41-
Kent Intermediate Tax-Free Fund
Fifth Third Intermediate Municipal Bond Fund *
Fifth Third Intermediate Municipal Bond Fund Pro Forma
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Kent Intermediate Tax-Free Fund
Institutional Shares................................... $ 75 $233 $ 406 $ 906
Investment Shares...................................... $100 $312 $ 542 $1,201
Fifth Third Intermediate Municipal Bond Fund *
Institutional Shares................................... $ 87 $271 $ 471 $1,049
Investment A Shares.................................... $558 $787 $1,034 $1,741
Fifth Third Intermediate Municipal Bond Fund Pro Forma
Institutional Shares................................... $ 75 $257 $ 455 $1,027
Investment A Shares, without load...................... $100 $336 $ 590 $1,319
Investment A Shares, with load......................... $545 $771 $1,014 $1,709
*Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
-42-
Kent Money Market Fund Fifth Third Prime Pro Forma
--------------------------- ----------------------------- ---------
Money Market Fund Fifth Third Prime
----------------------------- -----------------
Money Market Fund
-----------------
Institutional Investment Institutional Investment A Institutional Investment A
------------- ---------- ------------- ------------ ------------- ------------
Shareholder Fees
(fees paid directly from your investment)
Maximum Sales Charge (Load)
Imposed on Purchases (as a percentage
of offering price) None None None None None None
Maximum Sales Charge on
Reinvested Dividends None None None None None None
Maximum Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, as applicable) None None None None None None
Redemption Fee None None None None None None
Exchange Fee None None None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
Fund assets)
Management Fees 0.40% 0.40% 0.40% 0.40% 0.40% 0.40%
Distribution/Service (12b-1) Fees None 0.25% None 0.25% None 0.25%
Other Expenses 0.22% 0.22% 0.22% 0.22% 0.21%/1/ 0.21%/1/
Total Annual Fund Operating Expenses 0.62% 0.87% 0.62% 0.87% 0.61% 0.86%
Fee Waiver and/or 0.08% 0.08% 0.08%/2/ 0.08%/2/ 0.07%/3/ 0.07%/3/
Expense Reimbursement
Net Expenses 0.54% 0.79% 0.54% 0.79% 0.54% 0.79%
/1/ Other expenses are based on estimated amounts for the current fiscal year.
/2/ BISYS waived the following Distribution (12b-1) Fees and/or Administration
Fees for the Prime Money Market Fund: Institutional shares, 0.08% and Investment
A shares, 0.08% . Therefore, Total Annual Fund Operating Expenses for the Prime
Money Market after fee waivers were: Institutional shares, 0.54%. and Investment
A shares, 0.79%. These waivers may be discontinued at any time.
/3/ The Funds' Advisor and Administrator have contractually agreed to waive
fees and/or reimburse expenses to limit total annual fund operating expenses
for the Prime Money Market Fund to: Institutional, 0.54% and Investment A,
0.79%. These waivers and/or expenses reimbursements will remain in effect until
4/2/03.
-43-
Kent Money Market Fund
Fifth Third Prime Money Market Fund
Fifth Third Prime Money Market Fund Pro Forma
Example: Use the tables below to compare fees and expenses with the fees and
expenses of other mutual funds. The tables illustrate the amount of fees and
expenses you and the Fund would pay, assuming a $10,000 initial investment, 5%
annual return, payment of maximum sales charges, and no changes in the Fund's
operating expenses. Because these examples are hypothetical and for comparison
only, your actual costs may be different.
1 Year 3 Years 5 Years 10
------ ------- ------- --
Years
- -----
Kent Money Market Fund
Institutional Shares.......................... $55 $190 $338 $ 767
Investment Shares............................. $81 $270 $474 $1,065
Fifth Third Prime Money Market Fund
Institutional Shares.......................... $55 $190 $338 $ 767
Investment A Shares........................... $81 $270 $474 $1,065
Fifth Third Prime Money Market Fund Pro Forma
Institutional Shares.......................... $55 $188 $333 $ 755
Investment A Shares........................... $81 $267 $470 $1,054
-44-
SYNOPSIS OF PROSPECTUS
Summary. The following is a synopsis of certain information relating to the
- -------
Transaction and is qualified in its entirety by the disclosure on such subjects
contained elsewhere in this Proxy/Prospectus, in the Fifth Third Prospectus, the
Kent Prospectuses, the Statements of Additional Information, and the Appendices
attached hereto.
Key Features of Transaction. The shareholders of each Kent Fund are being asked
- ----------------------------
to approve or disapprove the Agreement and Plan of Reorganization by and between
Kent Funds on behalf of each Kent Fund and Fifth Third Funds on behalf of the
corresponding Fifth Third Fund dated as of April __, 2001 (the "Reorganization
Agreement"), a copy of which is attached to this Combined Prospectus/Proxy
Statement as Appendix A. The Reorganization Agreement provides, among other
things, for the transfer of all of the assets of each Kent Fund to the
corresponding Fifth Third Fund in exchange for the assumption by such Fifth
Third Fund of all of the liabilities of such Kent Fund and for a number of
Shares of the designated classes calculated based on the value of the net assets
of such Kent Fund acquired by such Fifth Third Fund and the net asset value per
share of such Fifth Third Fund, all as more fully described below under
"Information about the Reorganization." After receipt of Shares, each Kent Fund
will liquidate, distributing the Shares to its shareholders in complete
liquidation. Once the liquidations are completed, Kent Funds will deregister as
an investment company and terminate as a business trust under Massachusetts law.
At a meeting held on April 12, 2001, the Trustees of the Kent Funds,
including the independent Trustees, voted unanimously to approve the Transaction
and to recommend that shareholders of each Kent Fund also approve the
Transaction. Approval of the reorganization of each Kent Fund requires the
affirmative vote of a majority of all votes attributable to the voting
securities of that Kent Fund voting separately as a fund, defined as the lesser
of (a) 67% or more of the votes attributable to all voting securities of each
Kent Fund present at such meeting, if holders of more than 50% of the votes
attributable to the outstanding voting securities of the Kent Fund are present
or represented by proxy, or (b) more than 50% of the votes attributable to the
outstanding voting securities of each Kent Fund.
Shareholders of each Kent Fund objecting to the proposed Transaction are
not entitled under either Massachusetts law or the Kent Funds' Declaration of
Trust to demand payment for or an appraisal of his or her particular Kent Fund
shares if the Transaction is consummated over his or her objection. However,
shares of each Kent Fund are redeemable for cash at their net asset value on
days on which the New York Stock Exchange is open for business. If you redeem
your Shares, you may recognize a taxable gain or loss based on the difference
between your tax basis in the Shares and the amount you receive for them.
The shareholders of each Kent Fund also are being asked to consider and act
upon a new investment advisory agreement (the "New Investment Advisory
Agreement") with Fifth Third Asset Management Inc. Consideration of the New
Investment Advisory Agreement has been made necessary by the Parent/Advisor
Merger. If approved by shareholders, the New
-45-
Investment Advisory Agreement will take effect on the date of the Meeting and
will continue, until the earlier of the relevant Kent Fund's reorganization or
July 27, 2003.
In the event that the proposals pertaining to any Kent Fund are not
approved by the shareholders of any Kent Fund, such Kent Fund will continue to
be managed as a separate fund in accordance with its current investment
objectives and policies, and the Trustees of such Kent Fund may consider
alternatives in the best interests of the shareholders. However, if approval of
any of the proposals pertaining to any Kent Fund is obtained, the reorganization
of such Kent Fund will be consummated. If the New Investment Advisory Agreement
is not approved by any of the Kent Funds, the Board of the Kent Funds will
promptly seek to enter into a new investment advisory arrangement for such Fund.
Principal Investment Objectives and Policies. Below is a brief discussion of
- --------------------------------------------
the principal investment objectives and policies of each Kent Fund which are
substantially similar to the corresponding Fifth Third Fund. The following
discussion is qualified in its entirety by the disclosure on such subjects
contained in the Fifth Third Prospectus, the Kent Prospectuses, and the
Statements of Additional Information. For a full and detailed description of
permitted investments, see the applicable Fifth Third Prospectus, Kent
Prospectuses, and the Statements of Additional Information.
The securities currently held by each Kent Fund are substantially similar
to those securities which the corresponding Fifth Third Fund may hold.
Consequently, the proposed reorganization of the Kent Funds should not result in
higher than normal portfolio turnover due to the corresponding Fifth Third
Fund's disposal of investment securities.
Kent Government Money Market Fund and Fifth Third Institutional Government Money
Market Fund
Fundamental Objective As its investment objective, the Kent Government
---------------------
Money Market Fund seeks current income. Similarly, the Fifth Third Institutional
Government Money Market Fund seeks current income consistent with the stability
of principal.
Investment Policies Under normal market conditions, each Fund invests in a
-------------------
broad range of U.S. Treasury bills and notes and other obligations issued by the
U.S. Government and its agencies, repurchase agreements collateralized by these
securities, and shares of registered money market investment companies that
invest exclusively in these securities.
Each Fund manages its portfolio subject to strict SEC guidelines, which are
designed so that each Fund may maintain a stable $1.00 per share price, although
there is no guarantee that it will do so. All of each Fund's investments are
expected to mature in the short-term (397 days or less) and the dollar-weighted
average portfolio maturity of each Fund may not exceed 90 days.
-46-
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may hold up to 100% of its assets in cash. The
taking of such a temporary defensive posture may adversely impact the ability of
each Fund to achieve its investment objective.
Lyon Street Institutional Money Market Fund and Fifth Third Institutional Money
Market Fund
Fundamental Objective As its investment objective, the Lyon Street
---------------------
Institutional Money Market Fund seeks current income from short-term securities
while preserving capital and maintaining liquidity. Similarly, the Fifth Third
Institutional Money Market Fund seeks current income from short-term securities
consistent with the stability of principal.
Investment Policies Under normal market conditions, each Fund invests in a
-------------------
broad range of short-term instruments including commercial paper, short-term
corporate obligations and short-term obligations issued or guaranteed by the
United States Government, its agencies or instrumentalities. The securities will
have short-term debt ratings in the two highest rating categories of at least
two Rating Agencies or will be unrated securities of comparable quality.
Each Fund manages its portfolio subject to strict SEC guidelines, which are
designed so that each Fund may maintain a stable $1.00 per share price, although
there is no guarantee that it will do so. All of each Fund's investments are
expected to mature in the short-term (397 days or less) and the dollar-weighted
average portfolio maturity of the Fund may not exceed 90 days.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may hold up to 100% of its assets in cash. The
taking of such a temporary defensive posture may adversely impact the ability of
each Fund to achieve its investment objective.
Kent Michigan Municipal Money Market Fund and Fifth Michigan Municipal Money
Market Fund
Fundamental Objective As their investment objectives, the Kent Michigan
---------------------
Municipal Money Market Fund and the Fifth Third Michigan Municipal Money Market
Fund seek current income that is exempt from federal income tax and Michigan
personal income tax.
Investment Policies Under normal market conditions, each Fund invests at
-------------------
least 80% of its net assets in federally tax-exempt obligations, which consist
of municipal bonds, notes and commercial paper issued by states and local
governments that are exempt from federal taxes. The securities will have short
term debt ratings in the two highest rating categories of at least two
Nationally Recognized Statistical Rating Organizations ("Rating Agencies") or
will be unrated securities of comparable quality. Normally, each Fund will
invest at least 65% of its total assets in municipal obligations issued by the
State of Michigan and its localities.
-47-
Each Fund manages its portfolio subject to strict SEC guidelines, which are
designed so that each Fund may maintain a stable $1.00 per share price, although
there is no guarantee that it will do so. All of each Fund's investments are
expected to mature in the short-term (397 days or less) and the dollar-weighted
average portfolio maturity of the Fund may not exceed 90 days.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in municipal
bonds, the income on which is exempt from federal income tax but not exempt from
Michigan personal income taxes. Each Fund may also hold uninvested cash
reserves or invest in short-term taxable money market obligations. The taking
of such a temporary defensive posture may adversely impact the ability of each
Fund to achieve its investment objective.
Kent International Growth Fund and Fifth Third International GDP Fund
Fundamental Objective As their investment objectives, the Kent
---------------------
International Growth Fund and the Fifth Third International GDP Fund seek long-
term capital appreciation.
Investment Policies Under normal market conditions, each Fund invests at
-------------------
least 65% of its total assets in the common and preferred stocks of companies
located in at least three countries in Europe, Australia and the Pacific Rim
(Far East with respect to the Kent International Growth Fund).
The Advisor considers a country's Gross Domestic Product ("GDP") and (to a
lesser extent) market capitalization relative to other countries when
determining region and country allocations among Europe, Australia and the
Pacific Rim (Far East with respect to the Kent International Growth Fund).
Allocation among companies is determined based on a stock's market
capitalization and industry attractiveness. In using GDP as the primary
consideration in determining country weightings, the Advisor focuses more on the
size of a country's economy and less on the aggregate value of a country's stock
market. Individual stock are selected from the countries represented in the
Morgan Stanley Capital International GDP Europe, Australasia, and Far East
Equity Index(R)/1/ (the "EAFE-GDP Index"). The allocation of Fund assets may
shift from time to time from countries that each Fund considers overvalued to
countries that it considers undervalued. Although each Fund seeks to equal or
exceed the return of the EAFE-GDP Index, each Fund may invest its assets in
proportions that differ from this index. Each Fund is not, therefore, an "index"
fund, which typically holds securities in the index it attempts to replicate.
Each Fund may at times invest more than 25% of its total assets in a particular
country.
Each Fund may lend its portfolio securities to broker-dealers and other
institutional investors. When a Fund lends its securities, it continues to
receive dividends and interest on the securities loaned and may simultaneously
earn interest on the investment of cash collateral.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments. The
/1/ "EAFE-GDP" is a registered service mark of Morgan Stanley Capital
International, which does not sponsor and is in no way affiliated with the Fund.
-48-
taking of such a temporary defensive posture may adversely impact the ability of
each Fund to achieve its investment objective.
Kent Small Company Growth Fund and Fifth Third Small Cap Growth Fund
Fundamental Objective As their investment objectives, the Kent Small
---------------------
Company Growth Fund and the Fifth Third Small Cap Growth Fund seek long-term
capital appreciation.
Investment Policies Under normal market conditions, each Fund invests at
-------------------
least 65% of its total assets in the equity securities of a diverse group of
companies whose market capitalizations are less than $2 billion at the time of
purchase. Market capitalization, a common measure of the size of a company, is
the market price of a share of the company's stock multiplied by the number of
shares that are outstanding. Each Fund intends to invest at least 65% of its
total assets in equity securities of companies that the Advisor believes have
above-average potential for growth in revenues, earnings, or assets.
Quantitative analysis is used to identify stocks the Advisor believes have
growth potential. Factors considered include return on assets, price to earnings
per share, price to cash flow, and earnings per share growth.
The advisor will consider selling shares if the issuer's market capitalization
increases to the point that it is ranked in the top half of all New York Stock
Exchange Companies.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments. The taking of such a temporary defensive posture may adversely
impact the ability of each Fund to achieve its investment objective.
Kent Large Company Growth Fund and Fifth Third Large Cap Growth Fund
Fundamental Objective As their investment objective, the Kent Large
---------------------
Company Growth Fund and the Fifth Third Large Cap Growth Fund seek long-term
capital appreciation.
Similarly, under normal market conditions, the Fifth Third Large Cap Growth
Fund invests at least 65% of its total assets in equity securities of companies
that the Advisor believes have potential for above-average growth as measured
by projected earnings per share and growth in sales.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments. The
-49-
taking of such a temporary defensive posture may adversely impact the ability of
each Fund to achieve its investment objective.
Kent Index Equity Fund and Fifth Third Equity Index Fund
Fundamental Objective As their investment objective, the Kent Index Equity
---------------------
Fund and the Fifth Third Equity Index Fund seek long-term capital appreciation
with current income as a secondary objective.
Investment Policies Under normal market conditions, each Fund invests
-------------------
substantially all of its assets in common stock of companies that make up the
Standard & Poor's 500 Composite Stock Price Index(R) ("S&P 500")*. The Advisor
attempts to track the performance of the S&P 500(R) to achieve a correlation of
0.95 between the performance of each Fund and that of the S&P 500(R) without
taking into account each Fund's expenses. Several factors may affect each Fund's
ability to exactly track the S&P 500's performance, including the timing of
purchases and redemptions, changes in securities markets, and in the size of
each Fund.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments. The taking of such a temporary defensive posture may adversely
impact the ability of each Fund to achieve its investment objective.
* "S&P 500" is a registered service mark of Standard & Poor's Corporation,
which does not sponsor and is in no way affiliated with the Fund.
Kent Growth and Income Fund and Fifth Third Large Cap Value Fund
Fundamental Objective As its investment objective, the Kent Growth and
---------------------
Income Fund seeks long-term capital growth with current income as a secondary
objective. Similarly, the Fifth Third Large Cap Value Fund seeks long-term
capital appreciation with current income as a secondary objective.
Investment Policies Under normal market conditions, the Kent Growth and
-------------------
Income Fund invests at least 65% of its total assets in equity securities of
U.S. companies each having $100 million or more in market capitalization. The
Fund intends to invest at least 65% of its total assets in equity securities
that the Advisor believes have potential primarily for capital growth and
secondarily for income. A portion of the Fund's assets may be invested in
preferred stock or bonds convertible into common stock. The Fund expects to
earn current income mainly from stock dividends and from interest on convertible
bonds. The average market capitalization of the Fund's portfolio securities was
$37.6 billion as of December 31, 2000.
-50-
Under normal market conditions, the Fifth Third Large Cap Value Fund
invests at least 65% of its total assets in equity securities of U.S. companies
with at least $5 billion in market capitalization. The Fund intends to invest in
equity securities of companies that the Advisor believes are undervalued and
have potential for capital appreciation and income. When selecting equity
securities, the Advisor considers an issuer's balance sheet stability, cash
flow, and potential earnings growth. While some stocks may be purchased
primarily for income, most stocks will be purchased for capital appreciation.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments. The taking of such a temporary defensive posture may adversely
affect the ability of each Fund to achieve its investment objective.
Kent Short Term Bond Fund and Fifth Third Short Term Bond Fund
Fundamental Objective As their investment objective, the Kent Short Term
---------------------
Bond Fund and the Fifth Third Short Term Bond Fund seek current income.
Investment Policies Under normal market conditions, each Fund invests at
-------------------
least 65% of its total assets in corporate and government debt securities. Each
Fund is permitted to purchase U.S. Government obligations (those that are issued
or guaranteed by the U.S. Government or its agencies or instrumentalities) and
investment-grade corporate debt obligations (those that are rated in one of the
four highest categories by a Rating Agency), or unrated securities of comparable
quality. Each Fund will maintain a dollar-weighted average portfolio maturity
of between one and three years.
While maturity and credit quality are the most important investment
factors, each Fund also considers current yield and yield to maturity and
potential for capital gain. Each Fund may consider selling a security if it
falls below the minimum credit quality required for purchase.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments and may shorten its dollar-weighted average maturity below its
normal range. The taking of such a temporary defensive posture may adversely
affect the ability of each Fund to achieve its investment objective.
Kent Michigan Municipal Bond Fund and Fifth Third Michigan Municipal Bond Fund
Fundamental Objective As their investment objective, the Kent Michigan
---------------------
Municipal Bond Fund and the Fifth Third Michigan Municipal Bond Fund seek
current income that is exempt from federal income tax and Michigan personal
income tax.
-51-
Investment Policies Under normal market conditions, each Fund invests at
-------------------
least 80% of its net assets in federally tax-exempt obligations. Federally tax-
exempt obligations consist of municipal bonds, notes and commercial paper issued
by states and other local governments that are exempt from federal taxes. In
addition, under normal market conditions, at least 65% of each Fund's total
assets will be invested in municipal obligations issued by the State of Michigan
or its political subdivisions. Each Fund maintains a dollar-weighted average
portfolio maturity of between three and five years. No security in each Fund
will have a remaining maturity of more than ten years.
Each Fund will purchase securities rated in one of the four highest rating
categories by a Rating Agency or unrated securities of comparable quality.
While maturity and credit quality are the most important investment factors,
each Fund also considers current yield and yield to maturity and potential for
capital gain when making investment decisions. Each Fund may consider selling a
security if it falls below the minimum credit quality required for purchase.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments and may shorten its dollar-weighted average maturity below its
normal range. In addition, each Fund may invest up to 100% of its assets in
municipal bonds, the income on which is exempt from federal income tax but not
exempt from Michigan personal income taxes. The taking of such a temporary
defensive posture may adversely affect the ability of each Fund to achieve its
investment objective.
Kent Tax-Free Income Fund and Fifth Third Municipal Bond Fund
Fundamental Objective As their investment objective, the Kent Tax-Free
---------------------
Income Fund and the Fifth Third Municipal Bond Fund seek current income that is
exempt from federal income tax.
Investment Policies Under normal market conditions, each Fund invests at
-------------------
least 80% of its net assets in federally tax-exempt obligations. Federally tax-
exempt obligations consist of municipal bonds, notes and commercial paper issued
by states and other local governments that are exempt from federal taxes.
Securities whose interest is considered a tax preference item under the federal
alternative minimum tax will be considered taxable for purposes of this policy.
Each Fund maintains a dollar-weighted average portfolio maturity of between ten
and twenty-five years. Each Fund will purchase securities rated in one of the
four highest rating categories by a Rating Agency or unrated securities of
comparable quality.
While maturity and credit quality are the most important investment
factors, each Fund also considers current yield and yield to maturity and
potential for capital gain.
While each Fund will not normally engage in frequent trading of portfolio
securities, it will make changes in its investment portfolio from time to time
as economic conditions and
-52-
market prices dictate based on each Fund's investment objective. Each Fund may
consider selling a security if it falls below the minimum credit quality
required for purchase. If each Fund does buy and sell securities frequently,
there will be increased transaction costs, which can negatively impact Fund
performance, and cause additional taxable gains to shareholders.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments and may shorten its dollar-weighted average maturity below its
normal range. The taking of such a temporary defensive posture may adversely
impact the ability of each Fund to achieve its investment objective.
Kent Intermediate Bond Fund and Fifth Third Intermediate Bond Fund*
*Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
Fundamental Objective As its investment objective, the Kent Intermediate
---------------------
Bond Fund seeks current income. Similarly, as its investment objective, the
Fifth Third Intermediate Bond Fund seeks a high level of current income.
Investment Policies Under normal market conditions, the Kent Intermediate
-------------------
Bond Fund normally invests at least 65% of its total assets in corporate and
government debt securities. The Fund is permitted to purchase U.S. Government
obligations (those that are issued or guaranteed by the U.S. Government or its
agencies or instrumentalities) and investment-grade corporate debt obligations
(those that are rated in one of the four highest categories by a Rating Agency),
or unrated securities of comparable quality. The Fund will maintain a dollar-
weighted average portfolio maturity of between three and ten years.
While maturity and credit quality are the most important investment
factors, the Fund also considers the following when making investment decisions:
- Current yield and yield to maturity; and
- Potential for capital gain.
The Fund will actively buy and sell securities or types of securities based
on changing economic and market conditions. The Fund may consider selling a
security if it falls below the minimum credit quality required for purchase. If
the Fund buys and sells securities frequently, there will be increased
transaction costs, which can negatively impact Fund performance, and cause
additional taxable gains to shareholders.
Each Fund may lend its portfolio securities to broker-dealers and other
institutional investors. When a Fund lends it securities, it continues to
receive dividends and interest on the securities loaned and may simultaneously
earn interest on the investment of the cash collateral.
-53-
Similarly, under normal market conditions, the Fifth Third Intermediate
Bond Fund invests at least 65% of total assets in the following types of
investment grade securities: corporate securities, mortgage-backed securities,
and securities of the U.S. Treasury and U.S. Government agencies and
instrumentalities. Investment grade securities are securities rated in the BBB
major rating category or higher by Standard & Poor's, or in the Baa major rating
category or higher by Moody's, or their unrated equivalents. The Fund will
maintain a dollar-weighted average portfolio maturity of between three and ten
years.
From time to time, the Fund will invest in mortgage-backed securities,
which generally offer higher interest rates than many types of debt securities.
Mortgage-backed securities represent interests in the
revenue generated from pools of mortgages.
The Fund strives to manage its portfolio so that it receives a fairly
consistent level of income regardless of fluctuations in interest rates.
Additionally, the Fund may seek some capital appreciation, especially when bond
prices are rising, if the Advisor believes that the Fund can realize such
appreciation without foregoing its objective of high current income.
The Fund reserves the right to invest up to 35% of total assets in other
securities, such as money market instruments.
Kent Income Fund and Fifth Third Bond Fund*
*Currently named Fifth Third Quality Bond Fund, to be named Fifth Third
Bond Fund effective October 29, 2001
Fundamental Objective As its investment objective, the Kent Income Fund
---------------------
seeks current income. Similarly, the Fifth Third Bond Fund seeks high current
income. Capital growth is a secondary objective.
Investment Policies Under normal market conditions, the Kent Income Fund
-------------------
invests at least 65% of its total assets in corporate and government debt
securities. The Fund is permitted to purchase U.S. Government obligations
(those that are issued or guaranteed by the U.S. Government or its agencies or
instrumentalities) and investment-grade corporate debt obligations (those that
are rated in one of the four categories by a Rating Agency), or unrated
securities of comparable quality. However, the Fund intends to invest at least
65% of its total assets in U.S. Government obligations and corporate debt
obligations that are rated in one of the three highest categories by a Rating
Agency (or unrated securities of comparable quality). The Fund will maintain a
dollar-weighted average portfolio maturity of between seven and twenty years.
While maturity and credit quality are the most important investment
factors, the Fund also considers the following when making investment decisions:
- Current yield and yield to maturity; and
- Potential for capital gain.
-54-
While the Fund will not normally engage in frequent trading of portfolio
securities, it will make changes in its investment portfolio from time to time
as economic conditions and market prices dictate based on the Fund's investment
objective. The Fund may consider selling a security if it falls below the
minimum credit quality required for purchase. If the
Fund does buy and sell securities frequently, there will be increased
transaction costs, which can negatively impact Fund performance, and cause
additional taxable gains to shareholders.
Each Fund may lend its portfolio securities to broker-dealers and other
institutional investors. When a Fund lends its securities, it continues to
receive dividends and interest on the securities loaned and may simultaneously
earn interest on the investment of cash collateral.
Similarly, under normal market conditions, the Fifth Third Bond Fund
invests at least 65% of total assets in U.S. Treasury bills, notes and bonds,
securities of U.S. Government agencies and instrumentalities and corporate debt
securities, including mortgage-backed securities. Mortgage-backed securities
generally offer higher interest rates than many types of debt securities. At the
time of investment, the Fund will maintain a dollar-weighted average portfolio
maturity of between seven and twenty years; and each corporate bond is rated as
investment grade. Investment grade securities are securities rated in the BBB
major rating category or higher by Standard & Poor's, or in the Baa major rating
category by Moody's, or their unrated equivalents as determined by the Advisor.
The Fund is managed for growth of capital but with less volatility than a
bond fund investing in lower quality securities. In selecting portfolio
securities, the Fund generally considers, among other things, remaining
maturity, stated interest rates, the price of the security, as well as the
financial condition of the issuer and its prospects for long-term growth of
earnings and revenues.
The Fund reserves the right to invest up to 35% of total assets in other
securities, such as money market instruments.
Each Fund may lend its portfolio securities to broker-dealers and other
institutional investors. When a Fund lends it securities, it continues to
receive dividends and interest on the securities loaned and may simultaneously
earn interest on the investment of the cash collateral.
Kent Intermediate Tax-Free Fund and Fifth Third Intermediate Municipal Bond
Fund**
**Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
-55-
Fundamental Objective As its investment objective, the Kent Intermediate
---------------------
Tax-Free Fund seeks current income that is exempt from federal income tax.
Similarly, the Fifth Third Intermediate Municipal Bond Fund seeks a high level
of current income that is exempt from federal regular income taxes.
Investment Policies Under normal market conditions, the Kent Intermediate
-------------------
Tax-Free Fund invests at least 80% of its net assets in federally tax-exempt
obligations. Federally tax-exempt obligations consist of municipal bonds, notes
and commercial paper issued by states and other local governments that are
exempt from federal taxes. Securities whose interest is considered a tax
preference item under the federal alternative minimum tax will be considered
taxable for purposes of this policy. The Fund maintains a dollar-weighted
average portfolio maturity of between three and ten years.
The Fund will purchase securities rated in one of the four highest rating
categories by a Rating Agency or unrated securities of comparable quality.
While maturity and credit quality are the most important investment
factors, the Fund also considers the following when making investment decisions:
- Current yield and yield to maturity; and
- Potential for capital gain.
The Fund may consider selling a security if it falls below the minimum
credit quality required for purchase.
The Fund may lend its portfolio securities to broker-dealers and other
institutional investors. When a Fund lends its securities, it continues to
receive dividends and interest on the securities loaned and may simultaneously
earn interest on the investment of cash collateral.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments and may shorten its dollar-weighted average maturity below its
normal range. The taking of such a temporary defensive posture may adversely
impact the ability of each Fund to achieve its investment objective.
Similarly, under normal market conditions, the Fifth Third Intermediate
Municipal Bond Fund invests at least 80% of net assets in municipal securities,
which pay interest that is exempt from federal income tax. The securities
generally are issued by U.S. states, counties, cities, towns, territories and
public authorities. At the time of investment, they are rated as investment
grade. Investment grade securities are securities rated in the BBB major rating
category or higher by Standard & Poor's or in the Baa major rating category by
Moody's, or their unrated equivalents as determined by the Advisor.
-56-
Among the securities in which the Fund may invest are participation
agreements, that is, interests in loans made to municipalities, and general
obligation and revenue bonds of tax-exempt municipalities. The Fund also may
invest in limited obligation securities, from which interest and principal
payments are dependent on payments from specific sources rather than the general
obligations of the government issuer. Limited obligation securities include:
lease obligations and installment contracts (issued by government entities to
obtain funds to lease or acquire equipment and other property), project finance
obligations (issued in connection with the financing of infrastructure projects)
and industrial revenue bonds (issued in the name of a public authority to
finance infrastructure used by a private entity).
In selecting portfolio securities the Fund generally considers, among other
things, remaining maturity or average life, stated interest rates and the price
of a security. At the time of investment, the Fund will maintain a
dollar-weighted average portfolio maturity of between three and ten years.
The Fund reserves the right to invest up to 20% of total assets in other
securities, such as money market instruments.
When the Advisor believes that market conditions warrant a temporary
defensive posture, each Fund may invest up to 100% of its assets in money market
instruments and may shorten its dollar-weighted average maturity below its
normal range. In addition, each Fund may invest in municipal bonds, the income
on which is exempt from federal income tax but not exempt from Michigan personal
income taxes. The taking of such a temporary defensive posture may adversely
affect the ability of each Fund to achieve its investment objective.
Kent Money Market Fund and Fifth Third Prime Money Market Fund
Fundamental Objective As its investment objective, the Kent Money Market
---------------------
Fund seeks current income. Similarly, the Fifth Third Prime Money Market Fund
seeks current income consistent with stability of principal.
Investment Policies Under normal market conditions, the Kent Money Market
-------------------
Fund invests in a broad range of U.S. Government, bank and commercial
obligations which are considered to be of high credit quality and easily sold in
the secondary market. These securities will have short term debt ratings in the
two highest rating categories of at least two Rating Agencies or will be unrated
securities of comparable quality. The Fund's dollar-weighted average portfolio
maturity will not exceed 90 days. The Fund will not purchase any security that
matures in more than 397 days. The Fund seeks to maintain a stable net asset
value of $1.00 per share, although there is no guarantee that the net asset
value will not vary. The Fund is permitted to invest in excess of 25% of its
total assets in obligations of U.S. banks and domestic branches of foreign banks
that are subject to the same regulation as U.S. banks.
The Fund may lend its portfolio securities to broker-dealers and other
institutional investors. When a Fund lends its securities, it continues to
receive dividends and interest on
-57-
the securities loaned and may simultaneously earn interest on the investment of
cash collateral.
Similarly, under normal market conditions, the Fifth Third Prime Money
Market Fund manages its portfolio subject to strict SEC guidelines, which are
designed so that the Fund may maintain a stable $1.00 per share price, although
there is no guarantee that it will do so. All of the Fund's investments are
expected to mature in the short-term (397 days or less), and the dollar-weighted
average portfolio maturity of the Fund may not exceed 90 days.
The Fund invests at least 95% of its total assets in high-quality securities
called "first tier" securities or unrated securities that are considered
equivalent by the Fund's Advisor. These generally will be corporate securities,
including commercial paper, that at the time of purchase are rated by such firms
as Standard & Poor's and Moody's in their highest short-term major rating
categories, or are unrated securities that are considered equivalent by the
Fund's investment manager. They also may include securities issued or
guaranteed as to principal or interest by the U.S. Treasury or any U.S.
government agency or instrumentality. The Fund will not invest more than 25%
of the value of its total assets in any one industry except commercial paper of
finance companies. However, the Fund reserves the right to invest more than 25%
of its net assets in domestic bank instruments (such as time and demand deposits
and certificates of deposit), U.S. government obligations or instruments secured
by these money market instruments, such as repurchase agreements. The Fund will
not invest more than 25% of its net assets in instruments of foreign banks.
The Fund reserves the right to invest up to 5% of its portfolio in "second
tier" securities, which generally are corporate securities that, at the time of
purchase, are rated by such firms as Standard & Poor's and Moody's in their
second highest short-term major rating categories, unrated securities that are
considered equivalent by the Fund's advisor. Some corporate securities
purchased by the Fund may be restricted securities, that is, they may be subject
to limited resale rights.
The Fund may also invest in repurchase agreements collateralized by the
securities mentioned above.
Distributions.
- -------------
Dividends
---------
Kent Funds - Income dividends, if any, are as follows:
. declared daily and paid monthly by Lyon Street Institutional Money Market
Fund, Kent Money Market Fund, Kent Government Money Market Fund, and Kent
Michigan Municipal Money Market Fund;
. declared and paid annually by Kent International Growth Fund; and
. declared and paid monthly by Kent Small Company Growth Fund, Kent Large
Company Growth Fund, Kent Index Equity Fund, Kent Growth and Income Fund,
Kent Short Term Bond Fund, Kent Michigan Municipal Bond Fund, Kent Tax-Free
-58-
Income Fund, Kent Intermediate Bond Fund, Kent Income Fund, Kent
Intermediate Tax-Free Fund, Kent Money Market Fund.
Fifth Third Funds - Dividends, if any, are as follows:
. declared daily and paid monthly by Fifth Third Institutional Government
Money Market Fund, Fifth Third Institutional Money Market Fund, Fifth Third
Michigan Municipal Money Market Fund, and Fifth Third Prime Money Market
Fund;
. declared and paid monthly by Fifth Third Small Cap Growth Fund, Fifth
Third Large Cap Growth Fund, Fifth Third Equity Index Fund, Fifth Third
Large Cap Value Fund, Fifth Third Short Term Bond Fund, Fifth Third
Michigan Municipal Bond Fund, Fifth Third Intermediate Municipal Bond Fund,
Fifth Third Intermediate Bond Fund, Fifth Third Bond Fund, and Fifth Third
Municipal Bond Fund; and
. declared and paid annually by Fifth Third International GDP Fund.
Capital Gains
-------------
Capital gains, if any, of each Kent Fund and Fifth Third Fund, are
distributed at least annually.
Reinvested Dividends and Capital Gains
--------------------------------------
Regarding both Kent Funds and Fifth Third Funds, dividends and
distributions will be automatically reinvested unless the shareholder requests
otherwise. Shareholders can receive dividends in cash or by electronic funds
transfer to their bank account if they are not a participant in an IRA account
or in a tax-qualified plan. Dividends are higher for Institutional Shares than
for Investment Shares (Kent Funds) and Investment A Shares (Fifth Third Funds)
because Institutional Shares have lower distribution expenses.
Purchase Procedures.
- -------------------
Kent Fund and Fifth Third Fund shareholders may purchase shares on days
when the New York Stock Exchange is open for regular trading (and when the
Federal Reserve Bank of Cleveland is open for business with respect to Fifth
Third shareholders).
The price of Kent Funds and Fifth Third Funds shares is based on each
Fund's net asset value ("NAV"). The NAV of each Kent non-Money Market Fund is
calculated at the close of regular trading on the New York Stock Exchange,
normally 4:00 p.m., New York time, each day the New York Stock Exchange is open
for trading. The NAV of the Kent Michigan Municipal Money Market Fund is
determined at 12 noon Eastern time. The NAV of the Kent Money Market Fund, the
Kent Government Money Market Fund, and the Lyon Street Institutional Money
Market Fund is determined at 2:00 p.m. Eastern time on each day the New York
Stock Exchange is open. The NAV of each Fifth Third non-Money Market Fund is
calculated at 4:00 p.m., Cincinnati time, each day the New York Stock Exchange
is open for regular trading and the Federal Reserve Bank of Cleveland is open
for business. The Fifth Third Michigan Municipal Money Market Fund calculates
its NAV at 12 noon, Cincinnati time. The
-59-
Fifth Third Institutional Government Money Market Fund and Fifth Third
Institutional Money Market Fund calculate their NAV at 2 p.m., Cincinnati time.
The Fifth Third Prime Money Market Fund calculates its NAV at 1:00 p.m.
Cincinnati time. All orders must be received by the Fifth Third Fund or its
transfer agent prior to 4:00 p.m., Cincinnati time, in order to receive that
day's NAV.
The Kent Funds' securities, other than short-term debt obligations, are
generally valued based on the last available quoted bid on the exchange or in
the market where they are principally traded or as provided by approved
independent pricing services unless market quotations are not available, in
which case securities will be valued by a method that the Board of Trustees
believes accurately reflects fair value. Debt obligations with remaining
maturities of 60 days or less are valued at amortized cost or based on their
acquisition cost. If a Kent Fund invests in securities primarily listed on a
foreign exchange, the securities may trade on days when the Kent Fund does not
price its shares. As a result, the Kent Fund's net asset value may change on
days when shareholders are not able to purchase or redeem the Kent Fund's
shares.
The value of each portfolio instrument, other than short-term debt
obligations, held by the Fifth Third Funds is determined by using closing market
prices or as provided by approved independent pricing services. Under special
circumstances, such as when an event occurs after the close of the exchange on
which a Fifth Third Fund's portfolio securities are principally traded, which,
in the investment manager's opinion has materially affected the price of those
securities, the Fifth Third Fund may use fair value pricing. Fifth Third Funds
will be closed on those days that Fifth Third Bank is closed, on those days that
the New York Stock Exchange is closed, and on Columbus Day and Veteran's Day.
The Kent Funds and Fifth Third Funds determine the value of money market
funds by using amortized cost.
Kent Fund shares may be purchased through the Funds' distributor or through
banks, brokers and other investment representatives, which may charge additional
fees and may require higher minimum investments or impose other limitations on
buying and selling shares. The minimum initial investment in the Lyon Street
Institutional Money Market Fund is $500,000 (though this requirement may be
waived). Subsequent investments may be in any amount. The Fund has no automatic
investment plan. The minimum initial investment for non-retirement accounts is
$1,000 with no minimum subsequent investment and the minimum initial investment
for retirement accounts is $100 with no minimum subsequent investment. The
minimum initial investment for automatic investment plans is $1,000 with a $50
minimum subsequent investment. Minimum initial investments may be waived for
Fifth Third employees, investors in tax-sheltered plans, and investors in
certain qualified retirement accounts and/or in other circumstances. If you
purchase shares through an investment representative or other intermediary, the
party is responsible for transmitting orders by the close of business and may
have an earlier cut-off time for purchase and sale requests.
Fifth Third Institutional shares may only be purchased through the Trust
and Investment Department of Fifth Third Bank, Fifth Third Securities, Inc.--
Institutional Investment Division, qualified employee retirement plans subject
to minimum requirements
-60-
that may be established by the distributor of Fund shares, or broker-dealers,
investment advisors, financial planners or other financial institutions which
have an agreement with Fifth Third Bank to place trades for themselves or their
clients for a fee. In order to purchase Institutional shares through one of
those entities, a shareholder must have an account with it. Shares in the Funds
may be held in an omnibus account in the name of that institution. The minimum
initial investment in Fifth Third Institutional shares is $1,000. Subsequent
investments must be in amounts of at least $50.
Fifth Third Investment A shares (Service shares with respect to the
Institutional Money Market Funds) may be purchased through broker-dealers and
financial institutions which have a sales agreement with the distributor of
Fifth Third Funds. In order to purchase Investment A shares through Fifth Third
Securities, Inc. or another financial institution, you must open an account with
that institution. Shares of the Funds may be held in an omnibus account in the
name of that institution. The minimum initial investment in Investment A shares
is $1,000. Subsequent investments must be in amounts of at least $50. (Special
rules apply for former Investment shareholders of the Kent Funds. See below.)
The entity through which shareholders purchase Fifth Third shares is
responsible for transmitting orders to the Funds by 4:00 p.m. Cincinnati time
and it may have an earlier cut-off time for purchase requests. Consult that
entity for specific information.
Sales Charge Waivers on Fifth Third Investment A Shares
-------------------------------------------------------
The following transactions qualify for waivers of sales charges that apply to
Investment A shares:
. Shares purchased by investment representatives through fee-based investment
products or accounts.
. Reinvestment of distributions from a deferred compensation plan, agency,
trust, or custody account that was maintained by the advisor or its
affiliates or invested in any Fifth Third Fund.
. Shares purchased for trust or other advisory accounts established with the
Advisor or its affiliates.
. Shares purchased by directors, trustees, employees, and family members of the
Advisor and its affiliates and any organization that provides services to the
Funds; retired Fund trustees; dealers who have an agreement with the
Distributor; and any trade organization to which the Advisor or the
Administrator belongs.
. Shares purchased in connection with 401(k) plans, 403(b) plans and other
employer-sponsored qualified retirement plans, "wrap" type programs non-
transactional fee fund
-61-
programs, and programs offered by fee-based financial planners and other
types of financial institutions (including omnibus service providers).
. Distributions from Qualified Retirement Plans. There also is no sales charge
for Fund shares purchased with distributions from qualified retirement plans
or other trusts administered by Fifth Third Bank.
. Shares purchased by former Kent shareholders.
Fifth Third Funds - Instructions for Purchases by Former Kent Funds Investment
Shareholders
Former Kent Fund shareholders who held Investment shares of the Kent Fund
and who continue to hold in their name shares of a Fifth Third Fund that they
received in the reorganization or by way of a subsequent exchange may purchase
additional shares of that Fifth Third Fund directly from Fifth Third Funds
rather than through Fifth Third Securities, Inc. or another financial
institution. Fifth Third Funds reserve the right to change or eliminate these
privileges at any time.
BY MAIL
For Subsequent Investments:
1. Use the investment slip attached to your account statement. Or, if
unavailable, provide the following information: Fund name, Share
class, Amount invested, Account name and account number.
2. Make check, bank draft or money order payable to "Fifth Third
Funds" and include your account number on the check.
3. Mail or deliver investment slip and full payment to the following
address:
By Regular Mail: Fifth Third Funds, P.O. Box 182706, Columbus,
OH 43218-2706;
By Express Mail: Fifth Third Funds, c/o BISYS Fund Services,
3435 Stelzer Road, Columbus, OH 43219-3035.
BY WIRE TRANSFER
For Subsequent Investments:
Instruct your bank to wire transfer your investment to: Fifth Third
Bank, Cincinnati, OH, A/C #99944318, ABA #042000314, Reference: Fifth
Third Funds, FFC: Shareholder name, Fund name, and Account number.
Note: Your bank may charge a wire transfer fee.
SYSTEMATIC INVESTMENT PROGRAM
-62-
To begin making systematic investment or to increase the amounts you
already are investing:
1. Write a letter of instruction indicating:
-Your bank name, address, account number, and ABA routing
number
-The amount you wish to invest automatically
2. Attach a voided personal check
3. Mail to: Fifth Third Funds, P.O. Box 182706, Columbus, OH 43218-
2706
OTHER INFORMATION CONCERNING PURCHASE OF SHARES
Fifth Third Funds and the Kent Funds reserve the right to reject a purchase
order for any reason.
SYSTEMATIC INVESTMENT PROGRAM
Kent Funds - A systematic investment program is not available to Kent
----------
shareholders of Institutional shares. Kent shareholders of Investment shares can
make automatic investments in the Kent Funds from their bank accounts. Automatic
investments can be as little as $50, once the shareholder has invested the
$1,000 minimum required to open the account.
Fifth Third Funds - Shareholders may make monthly systematic investments in
-----------------
Investment A shares of the Funds from their bank accounts. There is no minimum
amount required for initial amounts invested into the Funds. Shareholders may
elect to make systematic investments on the 1st or the 15th of each month, or
both. If the 1st or the 15th of the month is not a day on which the Funds are
open for business, the purchase will be made on the previous day the Funds are
open for business.
Exchange privilege.
- ------------------
Kent Funds
----------
Exchanges may be made by sending a written request to Kent Funds. Shares of
the Lyon Street Institutional Money Market Fund may be exchanged for
Institutional Shares of any other Kent Fund. With respect to the other Kent
Funds, Shares can be exchanged from one Kent Fund for shares of the same class
of another Kent Fund. No transaction fees are charged for exchanges.
Shareholders must meet the minimum investment requirements for the Fund which
they are exchanging into. Exchanges from one Fund to another are taxable. To
prevent disruption in the management of the Funds due to market timing
strategies, exchange activity may be limited to five exchanges within a year, or
no more than three exchanges in a calendar quarter. The Kent Funds may reject
exchanges, or change or terminate rights to exchange shares. The exchange
privilege is available only in states where shares of the new Fund may be sold.
If shares of a Fund are purchased by check, those shares cannot be exchanged
until your check has cleared. This could take 10 days or more. All exchanges are
based on the relative net asset value next determined after the exchange order
is
-63-
received by the Funds. If it becomes necessary to distribute shares directly to
beneficial owners of trust accounts, 401(k) plans, fiduciary or agency accounts,
because of a termination of the account or otherwise they can be in the form of
Investment Shares. The exchange privilege may be changed or eliminated at any
time.
Fifth Third Funds
-----------------
Shares can be exchanged from one Fifth Third Fund for shares of the same
class of another Fifth Third Fund (Special rules apply for former Investment
shareholders of the Kent Funds. See below.) No transaction fees are charged for
exchanges.
Shareholders must meet the minimum investment requirements for the Fund
into which the exchange is being made. Exchanges from one Fund to another are
taxable for investors subject to federal or state income taxation. These
procedures apply only to exchanges between existing accounts.
To exchange Institutional shares, call the Trust and Investment Department
at Fifth Third Bank, 1-800-654-5372; Fifth Third Securities, Inc. -Institutional
Investment Division, 1-888-799-5353, the sponsor of your qualified employee
retirement plan or the broker-dealer, investment advisor, financial planner or
other institution through which you purchased your shares for exchange
procedures or call 1-800-252-7806.
To exchange Investment A shares through your broker/dealer or financial
institution, ask it for exchange procedures or call 1-800-252-7806. (Special
rules will apply for former holders of Investment shares of the Kent Funds. See
below.)
Fifth Third Funds - Instructions for Exchanges by Former Kent Funds Investment
Shareholders
Former Kent Fund shareholders who held Investment shares of the Kent Fund and
who continue to hold in their name shares of a Fifth Third Fund that they
received in the reorganization or by way of a subsequent exchange may exchange
shares of that Fifth Third Fund for Investment A shares of any other Fifth Third
Fund directly by contacting the Funds rather than through Fifth Third
Securities, Inc. or another financial institution.
To make an exchange, send a written request to Fifth Third Funds, P.O. Box
182706, Columbus, OH 43218-2706, or call 1-800-282-5706. Please provide the
following information:
-Your name and telephone number
-The exact name on your account and account number
-Taxpayer identification number (usually your Social Security number)
-Dollar value or number of shares to be exchanged
-The name of the Fund from which the exchange is to be made
-The name of the Fund into which the exchange is being made
-64-
Automatic Exchanges (Investment A shares only)
Shareholders can use the Funds' Automatic Exchange feature to purchase
shares of the Funds at regular intervals through regular, automatic redemptions
from a Fund. To participate in the Automatic Exchange Program or to change the
Automatic Exchange instructions on an existing account or to discontinue the
feature, write to: Fifth Third Funds, P.O. Box 182706, Columbus, OH 43218-2706.
If shares of a Fund are purchased by check, those shares cannot be
exchanged until your check has been collected. This could take 15 days or more.
Notes on exchanges
To prevent disruption in the management of the Funds, market timing strategies
and frequent exchange activity may be limited by the Funds. Although not
anticipated, the Funds may reject exchanges, or change or terminate rights to
exchange shares at any time. Shareholders will receive 60 day's notice on
changes in exchange policy for all Funds with a sales load.
When exchanging from a Fund that has no sales charge or a lower sales charge to
a Fund with a higher sales charge, you will pay the difference (Former Kent Fund
shareholders are not subject to this provision).
Shares of the new Fund must be held in the same account name, with the same
registration and tax identification numbers, as the shares of the old Fund.
The Exchange Privilege may be changed or eliminated at any time.
The Exchange Privilege is available only in states where shares of the Funds may
be sold.
All exchanges are based on the relative net asset value next determined after
the exchange order is received by the Funds.
Redemption Procedures.
- ---------------------
Fifth Third Funds and Kent Funds Shares may be sold on days when the New
York Stock Exchange is open for regular trading (and when the Federal Reserve
Bank of Cleveland is open for business with respect to Fifth Third Funds). The
sales price will be the next NAV after the sell order is received by the Funds,
its transfer agent, or the shareholder's investment representative (unless the
investment representative has an early cut-off time, in which case shareholders
making redemption requests after the cut-off time will receive the next day's
NAV).
In order to sell Fifth Third Fund Institutional shares, shareholders must
call the Trust and Investment Department at Fifth Third Bank, Fifth Third
Securities, Inc.--Institutional Investment Division, the sponsor of the
shareholder's qualified employee retirement plan or
-65-
the broker-dealer, investment advisor, financial planner or other institution
through which shares were purchased.
Fifth Third Fund Investment A shares may be sold through the financial
institution through which the shareholder purchased them. (Special rules apply
for former Investment shareholders of the Kent Funds. See below.)
Fifth Third Funds - Instructions for Sales by Former Kent Funds Investment
Shareholders
Former Kent Fund shareholders who held Investment shares of the Kent Fund
and who continue to hold in their name shares of a Fifth Third Fund that they
received in the reorganization or by way of a subsequent exchange may sell
shares of that Fifth Third Fund directly by contacting the Fifth Third Funds
rather than through Fifth Third Securities, Inc. or another financial
institution.
By telephone
Call 1-800-282-5706 with instructions as to how you wish to receive your
funds (mail, wire). The Funds make every effort to insure that telephone
redemptions are only made by authorized traders. All telephone calls are
recorded for your protection and you will be asked for information to verify
your identity.
By mail
1. Write a letter of instruction indicating:
-your Fund and account number
-amount you wish to redeem
-address where your check should be sent
-account owner(s) signature
2. Mail to: Fifth Third Funds, P.O. Box 182706, Columbus, OH 43218-2706
By overnight service
1. Write a letter of instruction indicating:
-your Fund and account number
-amount you wish to redeem
-address where your check should be sent
-account owner(s) signature
2. Send to: Fifth Third Funds, c/o BISYS Fund Services, 3435 Stelzer Road,
Columbus, OH 43219-3035
By wire transfer
(Option available only if previously set up on account.)
Call 1-800-282-5706 to request a wire transfer.
If you call by the time designated by the Funds, your payment will normally
be wired to your bank on the next business day.
-66-
The Fund may charge a wire transfer fee of $8. Note: Your financial
institution may also charge a separate fee.
Systematic Withdrawal Program
To activate this feature call 1-800-282-5706.
When Written Redemption Requests are Required
You must request redemptions in writing in the following situations:
1. Redemptions from Individual Retirement Accounts ("IRAs").
2. Redemption requests requiring a signature guarantee, which include each of
the following.
. Your account address has changed within the last 10 business days
. The check is not being mailed to the address on your account
. The check is not being made payable to the owner(s) of the account
. The redemption proceeds are being transferred to another Fund account
with a different registration
. The redemption proceeds are being wired to instructions currently not on
your account
Signature guarantees may be obtained from a U.S. stock exchange member, a U.S.
commercial bank or trust company, or any other financial institution that is a
member of the STAMP (Securities Transfer Agents Medallion Program), MSP (New
York Stock Exchange Medallion Signature Program) or SEMP (Stock Exchanges
Medallion Program). Members are subject to dollar limitations, which must be
considered when requesting their guarantee. The Transfer Agent may reject any
signature guarantee if it believes the transaction would otherwise be improper.
Fifth Third Funds does not accept signatures guaranteed by a notary public.
Closing of Small Accounts
If a Fifth Third Fund or a Kent Fund shareholder's account falls below $1,000
because of redemptions ($100 for Kent Fund IRA accounts), a Fund may ask the
shareholder to increase his/her balance. If it is still below the minimum after
30 days, with respect to Fifth Third Funds, or 60 days, with respect to Kent
Funds, the Fund may close the shareholder's account and send him/her the
proceeds at the current NAV.
AUTOMATIC/SYSTEMATIC WITHDRAWAL PLAN
Kent Funds - Shareholders who own shares of a Fund (other than the Lyon
----------
Street Institutional Money Market Fund) valued at $10,000 or more may elect to
receive a monthly, quarterly, semi-annual, or annual check in a stated amount
(minimum check amount is $100 per month and no more than 1.5% per month when
your Automatic Withdrawal Plan was started). If the value of the account falls
below $1,000 due to redemptions, a shareholder may
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be asked to add sufficient funds to bring the account back to $1,000, or Kent
Funds may close the account and mail the proceeds to the shareholder.
Fifth Third Funds - Shareholders may make automatic withdrawals with
-----------------
respect to Investment A shares on a monthly, quarterly, or annual basis on the
first day of that period that the Fifth Third Funds are open for business.
Please contact Fifth Third Securities, Inc. or your financial institution for
more information. After consummation of the Transaction, any plan previously in
effect for Kent Fund shareholders will be terminated.
Redemptions Within a Period of the Investment
When making an investment by check, Kent Fund and Fifth Third Fund
shareholders cannot redeem any portion of it until the transfer agent is
satisfied that the check has cleared. This may take up to 10 business days for
Kent Funds and 15 calendar days for Fifth Third Funds.
Redemption in Kind
Fifth Third Funds (the "Trust") has elected to be governed by Rule 18f-1 of
the Investment Company Act of 1940 under which the Trust is obligated to redeem
Shares for any one shareholder in cash only up to the lesser of $250,000 or 1%
of a Fund's net asset value during any 90-day period.
Any redemption beyond this amount will also be in cash unless the Trustees
determine that payments should be in kind. In such a case, the Trust will pay
all or a portion of the remainder of the redemption in portfolio instruments,
valued in the same way as the Fund determines net asset value. The portfolio
instruments will be selected in a manner that the Trustees deem fair and
equitable.
Kent Funds reserves the right to make payment in securities rather than
cash, known as a "redemption in kind." This could occur under extraordinary
circumstances, such as a very large redemption that could affect Fund operations
(for example, more than 1% of a Fund's net assets). If Kent Funds deems it
advisable for the benefit of all shareholders, a redemption in kind will consist
of securities equal in market value to your shares. When you convert these
securities to cash, you will pay brokerage charges.
Federal Tax Considerations. Consummation of the Transaction is subject to the
--------------------------
condition that the Kent Funds and the Fifth Third Funds receive an opinion of
Ropes & Gray, counsel to Fifth Third Funds, to the effect that, based upon
certain representations and assumptions and subject to certain qualifications,
the Transaction will not result in the recognition of gain or loss for federal
income tax purposes to any of the Kent Funds, Fifth Third Funds, or their
shareholders.
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PRINCIPAL RISK FACTORS
Below is a brief discussion of the risk factors of each Kent Fund which are
substantially similar to each corresponding Fifth Third Fund. The following
discussion is qualified in its entirety by the disclosure on such subjects
contained in the Fifth Third Prospectus, the Kent Prospectuses, and the
Statements of Additional Information.
Kent Government Money Market Fund and Fifth Third Institutional Government
--------------------------------------------------------------------------
Money Market Fund. The principal risks of investing in each Fund include
- -----------------
interest rate risk, net asset value risk, credit risk, and management risk.
Interest rate risk involves the possibility that each Fund's yield will decrease
due to a decrease in interest rates or that the value of each Fund's investments
will decline due to an increase in interest rates. Net asset value risk involves
the possibility that each Fund will be unable to meet its goal of a constant
$1.00 per share. Credit risk involves the risk that an issuer cannot make timely
interest and principal payments on its debt securities. Management risk involves
the possibility that the Advisor's investment technique and risk analysis may
not produce the intended result.
An investment in each Fund is not a deposit of Fifth Third Bank or any
other bank and is not insured or guaranteed by the FDIC or any other government
agency. Although each fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in each Fund.
Lyon Street Institutional Money Market Fund and Fifth Third Institutional
-------------------------------------------------------------------------
Money Market Fund. The principal risks of investing in each Fund include
- -----------------
interest rate risk, net asset value risk, foreign investment risk, credit risk,
and management risk. Interest rate risk involves the possibility that each
Fund's yield will decrease due to a decrease in interest rates or that the value
of each Fund's investments will decline due to an increase in interest rates.
Net asset value risk involves the possibility that each Fund will be unable to
meet its goal of a constant $1.00 per share. Foreign investment risk involves
the possibility that foreign issues may be riskier than U.S. investments because
of unstable international political and economic conditions, foreign controls on
investment and currency exchange, withholding taxes, a lack of adequate company
information, and lack of government regulation. Credit risk involves the risk
that an issuer cannot make timely interest and principal payments on its debt
securities. Management risk involves the possibility that the Advisor's
investment technique and risk analysis may not produce the intended result.
An investment in each Fund is not a deposit of Fifth Third Bank or any
other bank and is not insured or guaranteed by the FDIC or any other government
agency. Although each fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in each Fund.
Kent Michigan Municipal Money Market Fund and Fifth Third Michigan
------------------------------------------------------------------
Municipal Money Market Fund. The principal risks of investing in each Fund
- ----------------------------
include interest rate risk, net asset value risk, credit risk, and management
risk. Interest rate risk involves the possibility that each Fund's yield will
decrease due to a decrease in interest rates or that the value of each
-69-
Fund's investments will decline due to an increase in interest rates. Net asset
value risk involves the possibility that each Fund will be unable to meet its
goal of a constant $1.00 per share. Credit risk involves the risk that an issuer
cannot make timely interest and principal payments on its debt securities.
Management risk involves the possibility that the Advisor's investment technique
and risk analysis may not produce the intended result.
An investment in each Fund is not a deposit of Fifth Third Bank or any
other bank and is not insured or guaranteed by the FDIC or any other government
agency. Although each fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in each Fund.
Due to the level of investment in municipal obligations issued by the State
of Michigan and its local governments, the performance of each Fund will be
closely tied to the economic and political conditions in the State of Michigan,
and, therefore, an investment in each Fund may be riskier than an investment in
other types of money market funds. The State's economy is principally dependent
upon manufacturing (particularly automobiles, office equipment and other durable
goods), tourism and agriculture and historically has been highly cyclical. Each
Fund may also be subject to credit risks of municipal issuers which may have
historically experienced periods of financial difficulties. When each Fund's
assets are concentrated in obligations from revenues of similar projects issued
by issuers located in the same state or in industrial development bonds, each
Fund will be subject to the particular risks (including legal and economic
conditions) related to such securities to a greater extent than if its assets
were not so concentrated.
Kent International Growth Fund and Fifth Third International GDP Fund. The
---------------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in
equity securities, such as the risk of sudden and unpredictable drops in value
or periods of lackluster performance.
Stocks of foreign companies present additional risks for U.S. investors.
Stocks of foreign companies tend to be less liquid and more volatile than their
U.S. counterparts, in part because accounting standards and market regulations
tend to be less standardized, there is generally less publicly available
information about foreign companies, there may be less government oversight of
foreign exchanges and the companies traded on them, and economic and political
climates less stable. Fluctuations in exchange rates also may reduce or
eliminate gains or create losses. These risks usually are higher in emerging
markets, such as most countries in Africa, Asia, Latin America and the Middle
East. Furthermore, transaction fees may be higher for foreign investmnets, due
to higher brokergae commissions, fees on currency exchanges and possible
imposition of dividend or interest withholding by foreign governments. These
factors may cause higher transaction costs, which can result in lower returns or
decreased liquidity. To the extent that each Fund invests in those kinds of
stocks or in those areas, it will be exposed to the risks associated with those
kinds of investments.
-70-
Each Fund may invest more than 25% of its assets in a particular foreign
country. A concentration of investments in any one country could expose the Fund
to increased risk due to changes in the economic or political environment within
that country.
Regarding securities lending, there may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a loss of
rights in the collateral should the borrower of the securities fail financially.
Kent Small Company Growth Fund and Fifth Third Small Cap Growth Fund. The
---------------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in
equity securities, such as the risk of sudden and unpredictable drops in value
or periods of lackluster performance. Smaller companies may be more sensitive to
changes in the economy overall. The smaller companies in which each Fund invests
therefore may be subject to greater share price fluctuations than other
companies. Also, securities of these smaller companies are often less liquid,
thus possibly limiting the ability of each Fund to dispose of such securities
when the Advisor deems it desirable to do so. As a result of these factors,
securities of these smaller companies may expose shareholders of each Fund to
above-average risk.
Each Fund also invests in growth oriented stocks, which may be sensitive to
market movements. The prices of growth stocks tend to reflect future
expectations, and when those expectations are not met, share prices generally
fall.
Kent Large Company Growth Fund and Fifth Third Large Cap Growth Fund. The
--------------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in
equity securities, such as the risk of sudden and unpredictable drops in value
or periods of lackluster performance.
Each Fund invests in growth oriented stocks, which may be sensitive to
market movements. The prices of growth stocks tend to reflect future
expectations, and when those expectations are not met, share prices generally
fall.
Significant investment in large companies also creates various risks for
each Fund. For instance, larger, more established companies tend to operate in
mature markets, which often are very competitive. Larger companies also do not
tend to respond quickly to competitive challenges, especially to changes caused
by technology or consumer preference.
Kent Index Equity Fund and Fifth Third Equity Index Fund. The principal
----------------------------------------------------------
risks of investing in each Fund include the risks of investing in equity
securities, such as the risk of sudden and unpredictable drops in value and the
potential for extended periods of lackluster performance.
Indexing is a strategy whereby each Fund attempts to weight its securities
to match those of a broad-based securities index (the S&P 500) in an attempt to
approximate the index's performance. Securities may be purchased, retained and
sold by each Fund at times when an actively managed fund would not do so. If the
value of securities that are heavily
-71-
weighted in the index changes, you can expect a greater risk of loss than would
be the case if the Fund were not fully invested in such securities. There is
also a risk that the Fund will not accurately track the S&P 500(R). Should this
occur, the Board of Trustees will act as necessary to bring the Fund's accuracy
back to 0.95.
There is the risk that the Fund's investment results may fail to match
those of the S&P 500. There is also the risk that if the S&P 500 does not
perform well, the investment results of each Fund may not be as favorable as
other funds.
Kent Growth and Income Fund and Fifth Third Large Cap Value Fund. The
-----------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in
equity securities, such as the risk of sudden and unpredictable drops in value
and the potential for extended periods of lackluster performance.
The Kent Growth and Income Fund invests in growth stocks which offer strong
revenue and earnings potential and accompanying capital growth, with less
dividend income than value stocks. Growth stocks present the risk that they may
not perform as well as other types of stocks, such as value stocks.
The Fifth Third Large Cap Value Fund invests in value stocks. Value stocks
are those that appear to be underpriced based upon valuation measures, such as
lower price-to-earnings ratios and price-to-book ratios. Value stocks present
the risk that they may not perform as well as other types of stocks, such as
growth stocks.
Significant investment in large companies also creates various risks for
the Fifth Third Large Cap Value Fund. For instance, larger, more established
companies tend to operate in mature markets, which often are very competitive.
Larger companies also do not tend to respond quickly to competitive challenges,
especially to changes caused by technology or consumer preference.
Kent Short Term Bond Fund and Fifth Third Short Term Bond Fund. The
---------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in debt
securities, such as the tendency of bond prices to fall when interest rates rise
and the risk of an issuer defaulting on its obligations of paying principal and
interest. The prices of long-term bonds tend to be more volatile than the prices
of bonds with a shorter remaining maturity.
Generally, the price of a bond moves in the opposite direction from
interest rates. New bonds issued after a rise in rates offer higher yields to
investors. An existing bond with a lower yield can appear attractive to
investors by selling it at a lower price. This process works in reverse as well,
as interest rates fall, the price of a bond tends to increase.
Each Fund can acquire bonds that carry investment grade credit ratings,
which are bonds rated by a Rating Agency in one of the four highest rating
categories. Obligations rated in the fourth highest rating category are
considered to have speculative characteristics.
-72-
Kent Michigan Municipal Bond Fund and Fifth Third Michigan Municipal Bond
-------------------------------------------------------------------------
Fund. The principal risks of investing in each Fund include the risks of
- -----
investing in debt securities, such as the tendency of bond prices to fall when
interest rates rise and the risk of an issuer defaulting on its obligations of
paying principal and interest. The prices of long-term bonds tend to be more
volatile than the prices of bonds with a shorter remaining maturity.
Generally, the price of a bond moves in the opposite direction from
interest rates. New bonds issued after a rise in rates offer higher yields to
investors. An existing bond with a lower yield can appear attractive to
investors by selling it at a lower price. This process works in reverse as well;
as interest rates fall, the price of a bond tends to increase.
Each Fund can acquire bonds that carry investment grade credit ratings,
which are bonds rated by a Rating Agency in one of the four highest rating
categories. Obligations rated in the fourth highest rating category are
considered to have speculative characteristics.
Due to the level of investment in municipal obligations issued by the State
of Michigan and its local governments, the performance of each Fund will be
closely tied to the economic and political conditions in the State of Michigan,
and, therefore, an investment in each Fund may be riskier than an investment in
other types of municipal bond funds. The State's economy is principally
dependent upon manufacturing (particularly automobiles, office equipment and
other durable goods), tourism and agriculture and historically has been highly
cyclical. The Michigan Municipal Bond Fund may also be subject to credit risks
of municipal issuers which may have historically experienced periods of
financial difficulties. When a fund's assets are concentrated in obligations
from revenues of similar projects issued by issuers located in the same state or
in industrial development bonds, each Fund will be subject to the particular
risks (including legal and economic conditions) related to such securities to a
greater extent than if its assets were not so concentrated.
Kent Tax-Free Income Fund and Fifth Third Municipal Bond Fund. The
--------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in debt
securities, such as the tendency of bond prices to fall when interest rates rise
and the risk of an issuer defaulting on its obligations of paying principal and
interest. The prices of long-term bonds tend to be more volatile than the prices
of bonds with a shorter remaining maturity.
Generally, the price of a bond moves in the opposite direction from
interest rates. New bonds issued after a rise in rates offer higher yields to
investors. An existing bond with a lower yield can appear attractive to
investors by selling it at a lower price. This process works in reverse as well;
as interest rates fall, the price of a bond tends to increase.
Each Fund can acquire bonds that carry investment grade credit ratings,
which are bonds rated by a Rating Agency in one of the four highest rating
categories. Obligations rated in the fourth highest rating category are
considered to have speculative characteristics. In addition, interest and
principal payments on these securities may not be insured or guaranteed.
-73-
An issuer of fixed-income securities could default on its obligation to pay
interest and repay principal. A bond's credit rating could be downgraded. Both
of these events could cause a Fund to lose money.
Kent Intermediate Bond Fund and Fifth Third Intermediate Bond Fund. The
-------------------------------------------------------------------
principal risks of investing in each Fund include the risks of investing in debt
securities, such as, the tendency of bond prices to fall when interest rates
rise and the risk of an issuer defaulting on its obligations of paying principal
and interest.
Generally, the price of a bond moves in the opposite direction from
interest rates. New bonds issued after a rise in rates offer higher yields to
investors. An existing bond with a lower yield can appear attractive to
investors by selling it at a lower price. This process works in reverse as
well; as interest rates fall, the price of a bond tends to increase.
The prices of mortgage-backed securities also are affected by changes in
interest rates. Although mortgage-backed securities tend to pay higher interest
rates, they also carry additional risk. For instance, their prices and yields
typically assume that the securities will be redeemed at a given time before
maturity. When interest rates fall substantially, they usually are redeemed
early because the underlying mortgages often are prepaid. Each Fund would then
have to reinvest the proceeds it receives because of those redemptions at a
lower rate. The price or yield of mortgage-backed securities also may fall if
they are redeemed after that date.
Regarding securities lending, there may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a loss of
rights in the collateral should the borrower of the securities fail financially.
Kent Income Fund and Fifth Third Bond Fund. The principal risks of
-------------------------------------------
investing in each Fund include the risks of investing in debt securities, such
as the tendency of bond prices to fall when interest rates rise and the risk of
an issuer defaulting on its obligations of paying principal and interest. The
prices of long-term bonds (bonds with a remaining maturity of at least 10 years)
tend to be more volatile than the prices of bonds with a shorter remaining
maturity.
Each Fund can acquire corporate bonds that carry investment grade credit
ratings, which are bonds rated by a Rating Agency in the four highest rating
categories. Obligations rated in the fourth highest rating category are
considered to have speculative characteristics. In addition, interest and
principal payments on these securities may not be insured or guaranteed.
An issuer of fixed income securities could default on its obligations to
pay interest and repay principal. Each fund's credit rating could be
downgraded. Both of these events could cause each Fund to lose money.
-74-
Generally, the price of a bond moves in the opposite direction from
interest rates. New bonds issued after a rise in rates offer higher yields to
investors. An existing bond with a lower yield can appear attractive to
investors by selling it at a lower price. This process works in reverse as
well, as interest rates fall, the price of a bond tends to increase.
The prices of mortgage-backed securities also are affected by changes in
interest rates. Although mortgage-backed securities tend to pay higher interest
rates, they also carry additional risk. For instance, their prices and yields
typically assume that the securities will be redeemed at a given time before
maturity. When interest rates fall substantially, they usually are redeemed
early because the underlying mortgages often are prepaid. Each Fund would then
have to reinvest the proceeds it receives because of those redemptions at a
lower rate. The price or yield of mortgage-backed securities also may fall if
they are redeemed after that date.
From time to time, each Fund's portfolio could be significantly invested in
some of the highest quality debt securities, which tend not to provide the same
opportunity for current income or capital growth as lower grade securities, or
in BBB/Baa rated debt securities, which generally have more speculative
investment characteristics than higher grade debt securities.
Regarding securities lending, there may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a loss of
rights in the collateral should the borrower of the securities fail financially.
Kent Intermediate Tax-Free Fund and Fifth Third Intermediate Municipal Bond
---------------------------------------------------------------------------
Fund. The principal risks of investing in each Fund include the risks of
- -----
investing in debt securities, such as the tendency of bond prices to fall when
interest rates rise and the risk of an issuer defaulting on its obligations of
paying principal and interest.
Generally, the price of a bond moves in the opposite direction from
interest rates. New bonds issued after a rise in rates offer higher yields to
investors. An existing bond with a lower yield can appear attractive to
investors by selling it at a lower price. This process works in reverse as
well; as interest rates fall, the price of a bond tends to increase.
The Fifth Third Intermediate Municipal Bond Fund's performance may be
affected by political and economic factors at the state, regional or national
level. Those factors may include budgetary problems and declining tax bases.
Actual or proposed changes in tax rates also may affect your net return. Limited
obligation securities are not general obligations of the issuers. As a result,
in the event of a default or termination, the security holders may have limited
recourse.
Kent Money Market Fund and Fifth Third Prime Money Market Fund. Each
---------------------------------------------------------------
Fund's principal risks include interest rate risk, net asset value risk, credit
risk, and management risk. Interest rate risk involves the possibility that
each Fund's yield will decrease due to a decrease in interest rates or that the
value of each Fund's investments will decline due to an increase in
-75-
interest rates. Net asset value risk involves the possibility that each Fund
will be unable to meet its goal of a constant $1.00 per share. Credit risk
involves the risk that an issuer cannot make timely interest and principal
payments on its debt securities. Management risk involves the possibility that
the Advisor's investment technique and risk analysis may not produce the
intended result.
An investment in each Fund is not a deposit of Fifth Third Bank or any
other bank and is not insured or guaranteed by the FDIC or any other government
agency. Although each fund seeks to preserve the value of your investment at
$1.00 per share, it is possible to lose money by investing in each Fund.
Regarding securities lending, there may be risks of delay in receiving
additional collateral or in recovering the securities loaned or even a loss of
rights in the collateral should the borrower of the securities fail financially.
The above discussion is qualified in its entirety by the disclosure set
forth in the Fifth Third Prospectus, the Kent Prospectuses, and the Statements
of Additional Information.
INFORMATION ABOUT THE TRANSACTION
Agreement and Plan of Reorganization; Securities. The proposed Reorganization
- ------------------------------------------------
Agreement provides that each Fifth Third Fund will acquire all of the assets of
the corresponding Kent Fund in exchange for the assumption by such Fifth Third
Fund of all of the liabilities of such Kent Fund and the issuance of Shares of
the designated classes to that Kent Fund equal to the value of such Kent Fund's
net assets, such exchange to occur as of the Exchange Date (defined in the
Reorganization Agreement to be on or about October 29, 2001, or such other date
as mutually agreed upon by the Kent Funds and Fifth Third Funds.) The following
discussion of the Reorganization Agreement is qualified in its entirety by the
full text of the Reorganization Agreement, which is attached as Appendix A to
this Combined Prospectus/Proxy Statement.
As a result of the Transaction, each Kent Fund shareholder will receive
that number of full and fractional Shares equal in value at the Exchange Date to
the value of the portion of the net assets of the Kent Fund transferred to the
corresponding Fifth Third Fund attributable to the shareholder (based on the
proportion of the outstanding shares of the Kent Fund owned by the shareholder
as of the Exchange Date (the "Valuation Time")). The portfolio securities of
each Kent Fund will be valued in accordance with the generally employed
valuation procedures of Kent Funds which are substantially similar to those of
Fifth Third Funds. Each reorganization is being accounted for as a tax-free
business combination. At separate meetings held on April 12, 2001 for the Board
of Trustees of the Kent Funds and April 5, 2001 for the Board of Trustees of
Fifth Third Funds (together, the "Boards"), the Boards, including the
Independent Trustees of each Board, unanimously determined that the
reorganization would be in the best interests of their registered investment
companies and
-76-
existing shareholders and that the economic interests of their respective
existing shareholders would not be diluted as a result of effecting the
reorganization.
Immediately following the Exchange Date, each Kent Fund will distribute pro
rata to its respective shareholders of record as of the close of business on the
Exchange Date the full and fractional Shares received by it, and such Kent Fund
will be liquidated. Such liquidation and distribution will be accomplished by
the establishment of accounts on the share records of each Fifth Third Fund in
the name of such Kent Fund's shareholders, each account representing the
respective number of full and fractional Shares due such shareholder. All Kent
Fund shareholders will receive Shares of the Fifth Third class (Investment A --
Service Shares in the case of the Fifth Third Institutional Money Market Funds,
or Institutional) that corresponds to the class of Kent Fund shares that they
hold (Investment or Institutional, respectively). Once the reorganizations and
liquidations are completed, the Kent Funds will wind up its affairs and apply to
be deregistered as an investment company under the 1940 Act and thereafter
terminate as a business trust under Massachusetts law.
The consummation of the reorganization is subject to the conditions set
forth in the Reorganization Agreement. The Reorganization Agreement may be
terminated and the reorganization abandoned at any time, before or after
approval by the shareholders, prior to the Exchange Date by mutual consent of
the Kent Funds and Fifth Third Funds or, if any condition set forth in the
Reorganization Agreement has not been fulfilled and has not been waived by the
party entitled to its benefits, by such party. If the reorganization is
approved, Kent Fund shareholders who do not wish to have their Kent Fund shares
exchanged for shares of the corresponding Fifth Third Fund should redeem their
shares prior to consummation of the reorganization. If you redeem your shares
you may recognize a taxable gain or loss based on the difference between your
tax basis in the shares and the amount you received for them.
All fees and expenses, including accounting and legal expenses, portfolio
transfer taxes (if any) or other similar expenses incurred directly in
connection with the consummation of the Transaction contemplated by the
Reorganization Agreement will be borne by Fifth Third Bank, including the costs
of the proxy materials, proxy solicitation, and legal expenses. Fees and
expenses not incurred directly in connection with the consummation of the
Transaction will be borne by the party incurring such fees and expenses. The
Boards have determined that the interests of the existing shareholders of the
Kent Funds and the Fifth Third Funds will not be diluted as a result of the
Transaction. Full and fractional Shares will be issued to each Kent Fund
shareholder in accordance with the procedure under the Reorganization Agreement
as described above. Each Fifth Third Fund Share will be fully paid and
nonassessable when issued, will be transferable without restriction, and will
have no preemptive or conversion rights.
Fifth Third Funds' Declaration of Trust permits it to divide its shares of
any series, without shareholder approval, into one or more classes of shares
having such variations as to dividend, redemption, and voting rights, net asset
values, expenses borne by the classes, and other matters as the Trustees have
authorized, provided that each Share of a class shall
-77-
represent an equal proportionate interest in the assets and liabilities of the
class with each other Share of the same class, none having priority or
preference over another. Shares of certain of the Fifth Third Funds are
currently divided into five classes : Investment A/Service, Investment B,
Investment C, Advisor, and Institutional Shares. The Fifth Third Institutional
Government Money Market Fund and the Fifth Third Institutional Money Market Fund
currently do not offer Investment A, Investment B, Investment C, or Advisor
Shares. The Fifth Third Michigan Money Market Fund currently does not offer
Investment B, Investment C, or Service shares. Institutional, Investment A, and
Service shares will be distributed as applicable by Fifth Third Funds in
connection with the Transaction. The Kent Funds' Declaration of Trust also
permits multiple classes of shares, and shares of certain Kent Funds are
currently divided into three classes: Investment, Institutional, and Advisor
shares. There are currently no Advisor shares outstanding. Upon consummation of
the Transaction, all Kent Fund shareholders will receive shares of the
corresponding Fifth Third Fund class (Investment A - Service Shares in the case
of the Fifth Third Institutional Money Market Funds, or Institutional) that
corresponds to the class of the Kent Fund Shares that they hold (Investment or
Institutional, respectively).
Under Massachusetts law, Fifth Third Funds' shareholders (like Kent Funds'
shareholders), could, under certain circumstances, be held personally liable for
the obligations of Fifth Third Funds (the "Trust"). However, the Declaration of
Trust disclaims shareholder liability for acts or obligations of the Trust. The
Declaration of Trust provides for indemnification out of the Trust's property
for all loss and expense of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is limited to circumstances in which
the Trust would be unable to meet its obligations. The likelihood of such
circumstances is remote.
Reasons For The Proposed Reorganization. The primary reason for the Transaction
- ----------------------------------------
is the recently completed Parent/Advisor Merger of Old Kent Financial
Corporation with and into Fifth Third Bancorp. The Transaction presents the
opportunity to combine the separate Kent Funds and Fifth Third Funds into a
single, larger consolidated group. The Advisor to the Fifth Third Funds has
recommended that each Kent Fund be reorganized into the corresponding Fifth
Third Fund as described in this Prospectus/Proxy Statement. A meeting of the
Kent Trustees was held on April 12, 2001 at which meeting the Kent Trustees,
including the Independent Trustees, unanimously determined that the
reorganization would be in the best interests of each Kent Fund and existing
Kent Fund shareholders and that the economic interests of such shareholders
would not be diluted as a result of effecting the reorganization. At this same
meeting, all of the Kent Trustees, including the Independent Trustees,
unanimously approved the proposed reorganization and recommended approval of the
Reorganization Agreement.
At the meeting, the Kent Funds' Board of Trustees received comparative
information about the Kent Funds and the corresponding Fifth Third Funds,
including without limitation,
-78-
the following matters: (1) investment objectives and policies; (2) advisory,
distribution, and servicing agreements; (3) fund expenses (with and without
giving effect to current expense limitations), including pro forma expenses
relative to peer groups or comparable indices; and (4) performance information,
including performance relative to peer groups for the Fifth Third Funds.
In electing to approve the Reorganization Agreement and recommend them to
shareholders of the Kent Funds, the Kent Trustees acted upon information
provided to them, indicating that the proposed Transaction would operate in the
best interests of the Kent Funds' shareholders. In particular, the Kent
Trustees determined that the proposed Transaction offered the following
benefits:
. Participation in the Larger Fund Complex: The Kent Trustees were
----------------------------------------
informed that the proposed Transaction would, if effected, result in a
mutual fund complex consisting of thirty-two portfolios and total
anticipated assets in excess of $12 billion. Kent Fund shareholders
who would, as part of the proposed Transaction, become part of the
Fifth Third Funds complex, would be able to exchange their shares for
shares of a significantly larger number of funds than is currently the
case within the Kent Funds and would find compatibility of the Kent
Funds' and Fifth Third Funds' investment objectives, policies and
shareholder services. In addition, the Kent Trustees received
information to the effect that a larger, more diverse complex can
appeal to a broader class of institutional and retail investors, may
be able to achieve economies of scale more quickly or efficiently, and
may be able to reduce costs by taking advantage of its relatively
larger size.
. Continuity and Efficiency of Management: The Kent Trustees were
---------------------------------------
provided with information detailing the consolidation efforts
involving Lyon Street, the former advisor to the Kent Funds. It was
represented to the Kent Trustees that the post-reorganization
portfolios of Fifth Third Funds would be managed on a day-to-day basis
by the same persons who had previously been responsible for managing
each Kent Fund with the exception of the Fifth Third Institutional
Government Money Market Fund, the Fifth Third Institutional Money
Market Fund, and the Fifth Third Prime Money Market Fund.
. No Recognition of Gain or Loss on Transaction; Lack of Dilution: The
---------------------------------------------------------------
Kent Trustees were informed that the proposed Transaction involving
the Kent Funds and the Fifth Third Funds would occur only if it could
be accomplished without resulting in the imposition of federal income
taxes on any Kent Fund or its shareholders. In addition, the Kent
Trustees received representations from Fifth Third Bank to the effect
that Fifth Third Bank would defray the Kent Funds' costs directly
associated with participation in the proposed Transaction. Finally,
the Kent Trustees were informed that the interests of the Kent Fund
shareholders would not be materially diluted as a result of the
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proposed Transaction, and that the Kent Fund shareholders would
receive shares of the corresponding Fifth Third Fund equal in value to
the market value (or, where relevant, amortized cost value) of the
Kent Funds' assets.
. Fees and Expenses: The Kent Trustees received information relating to
-----------------
the fees and expenses charged or to be charged to Fifth Third
shareholders. Sales charges on Investment A shares of the Fifth Third
Funds will be waived for Kent Fund shareholders as of the date of the
Parent/Advisor Merger (April 2, 2001). Fifth Third Asset Management
Inc., the investment advisor to the Fifth Third Funds, has agreed to
maintain for each Fifth Third Fund investment advisory fees that are
equal to those of its corresponding Kent Fund as of the date of the
Parent/Advisor Merger (with the exception of the Fifth Third
Intermediate Municipal Bond Fund which will be 0.05% higher). Fifth
Third Asset Management Inc. also has agreed that until April 2, 2003,
it will maintain for each Fifth Third Fund, total fund operating
expenses (as a percentage of total assets) that are less than or equal
to those of its corresponding Kent Fund as of the date of the
Parent/Advisor Merger. Thereafter, total fund operating expenses (as a
percentage of total assets) for each Fifth Third Fund may be higher.
The Kent Trustees determined that in light of the above-mentioned
potential benefits to be gained from the proposed Transaction, such
benefits outweigh the possible increase in total expenses of each Kent
Fund subsequent to the expiration of the two-year waiver period on the
fees and expenses of each Kent Fund. While this is presently the case,
there was no guarantee that this would remain the case in the future.
Federal Income Tax Consequences. As a condition to each Kent Fund's
-------------------------------
obligation to consummate the reorganization, each Kent Fund will receive an
opinion from Ropes & Gray, counsel to Fifth Third Funds, to the effect that, on
the basis of the existing provisions of the Code, current administrative rules,
court decisions, and certain representations by Fifth Third Funds, for federal
income tax purposes: (i) the Transaction will constitute a reorganization
within the meaning of Section 368(a) of the Code, and the Fifth Third Fund and
the Kent Fund each will be a "party to a reorganization" within the meaning of
Section 368(b) of the Code; (ii) under Section 1032 of the Code no gain or loss
will be recognized by the Fifth Third Fund upon the receipt of the assets of the
Kent Fund in exchange for Fifth Third Shares and the assumption by the Fifth
Third Fund of the liabilities of the Kent Fund; (iii) under Section 362(b) of
the Code the basis in the hands of the Fifth Third Fund of the assets of the
Kent Fund transferred to the Fifth Third Fund in the transaction will be the
same as the basis of such assets in the hands of the Kent Fund immediately prior
to the transfer; (iv) under Section 1223(2) of the Code the holding periods of
the assets of the Kent Fund in the hands of the Fifth Third Fund will include
the periods during which such assets were held by the Kent Fund; (v) under
Section 361 of the Code no gain or loss will be recognized by the Kent Fund upon
the transfer of the Kent Fund's assets to the Fifth Third Fund in exchange for
Fifth Third Shares and the assumption by the Fifth Third Fund of the liabilities
of the Kent Fund, or upon the distribution of Fifth Third Shares by the Kent
Fund to its shareholders in liquidation; (vi) under Section 354 of the Code no
gain or loss will be recognized by the Kent
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Fund's shareholders upon the exchange of their Kent Shares for Fifth Third
Shares; (vii) under Section 358 of the Code the aggregate basis of Fifth Third
Shares each Kent shareholder receives in connection with the transaction will be
the same as the aggregate basis of his or her Kent Shares exchanged therefor;
(viii) under Section 1223(1) of the Code each Kent shareholder's holding period
for his or her Fifth Third Shares will be determined by including the period for
which he or she held the Kent Shares exchanged therefor, provided that he or she
held such Kent Shares as capital assets; and (ix) the Fifth Third Fund will
succeed to and take into account the items of the Kent Fund described in Section
381(c) of the Code. The Fifth Third Fund will take these items into account
subject to the conditions and limitations specified in Sections 381, 382, 383
and 384 of the Code and the Regulations thereunder.
Shareholders should note, however, that the sale of securities by the Kent
funds prior to the effective time of the Transaction, whether in the ordinary
course of business or in anticipation of the Transaction, could increase the
amount of taxable gains distributions made prior to the Transaction.
Kent Funds and Fifth Third Funds have not sought, and will not seek, a
private ruling from the Internal Revenue Service ("IRS") with respect to the
federal income tax consequences of the Transaction. The opinion of Ropes & Gray
with respect to federal income tax consequences of the Transaction is not
binding on the IRS and does not preclude the IRS from adopting a contrary
position. Shareholders should consult their own advisers concerning the
potential tax consequences of the Transaction to them including any applicable
foreign, state or local income tax consequences.
Voting Rights. Each shareholder of a Kent Fund and a Fifth Third Fund is
-------------
entitled to one vote per Share and a proportionate fractional vote for any
fractional Share. The former shareholders of each Kent Fund, as holders of
Investment or Institutional Shares of the corresponding Fifth Third Fund, will
vote separately as a fund or a class on matters relating solely to that fund or
class. On all other matters, they will vote in the aggregate with shareholders
of the corresponding Fifth Third Fund. As shareholders of each considerably
larger Fifth Third Fund following the Transaction, the former shareholders of
each Kent Fund will possess less proportional voting power when they vote as
Fifth Third Fund shareholders, or shareholders of the classes thereof, than they
had when they voted separately as shareholders of the smaller Kent Fund.
Capitalization. The following tables (UNAUDITED) set forth as of March 31,
--------------
2001 (i) the capitalization of each Kent Fund, (ii) the capitalization of each
corresponding Fifth Third Fund, and (iii) the pro forma capitalization of the
post-reorganization Fifth Third Fund, as adjusted, giving effect to the proposed
acquisition of assets at net asset value/2/. The
_________________________
/2/ Prior to consummation of the Transaction, eleven of the
post-reorganization Fifth Third Funds (the "New Funds") will have no assets or
prior history of operations. Because capitalization information for the New
Funds will be identical to the Kent Funds, no tables are provided for the New
Funds.
-81-
adjusted balances are presented as if the Transaction were effective as of April
12, 2001 for information purposes only. The actual effective time of the
Transaction is expected to be October 29, 2001, at which time the results would
be reflective of the actual composition of the shareholders' equity at that
date. The New Fifth Third Funds have not yet commenced operations, but will do
so at the time the Transaction occurs.
- --------------------------------------------------------------------------------------------------------------------------------
Fifth Third
Kent Intermediate Bond Fifth Third Intermediate Bond Fund
Fund Intermediate Bond Fund Pro Forma Combined
- --------------------------------------------------------------------------------------------------------------------------------
Investment Institutional Investment A Institutional Investment A Institutional
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) $ 8,661,473.12 $665,263,490.69 $24,755,980.04 $183,779,403.00 $33,417,453.16 $849,042,893.69
- --------------------------------------------------------------------------------------------------------------------------------
Shares 879,565.81 67,727,500.84 2,084,988.04 15,464,772.03 3,392,634.84 86,460,579.81
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value $ 9.85 $ 9.82 $ 11.87 $ 11.88 $ 9.85 $ 9.82
per Share ($)
- --------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
Fifth Third
Fifth Third Bond Fund
Kent Income Fund Bond Fund Pro Forma Combined
- -------------------------------------------------------------------------------------------------------------------------------
Investment Institutional Investment A Institutional Investment A Institutional
- -------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) $6,324,481.83 $278,761,705.49 $10,274,643.81 $207,743,187.56 $16,599,125.64 $486,504,893.05
- -------------------------------------------------------------------------------------------------------------------------------
Shares 640,696.56 28,195,763.97 1,055,029.25 21,338,082.13 1,681,775.65 49,191,596.87
- -------------------------------------------------------------------------------------------------------------------------------
Net Asset Value $ 9.87 $ 9.89 $ 9.74 $ 9.74 $ 9.87 $ 9.89
per Share ($)
- -------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fifth Third
Fifth Third Intermediate Municipal
Kent Intermediate Intermediate Municipal Bond Bond Fund
Tax-Free Fund Fund Pro Forma Combined
- --------------------------------------------------------------------------------------------------------------------------------
Investment Institutional Investment A Institutional Investment A Institutional
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) $2,626,464.76 $244,459,107.17 $706,341.60 $140,372,893.14 $3,332,806.36 $384,832,000.31
- --------------------------------------------------------------------------------------------------------------------------------
Shares 244,588.21 22,773,273.41 59,477.81 11,835,758.41 310,317.17 35,865,051.29
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value $ 10.74 $ 10.73 $ 11.88 $ 11.86 $ 10.74 $ 10.73
per Share ($)
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Fifth Third
Fifth Third Prime Money Market Fund
Kent Money Market Fund Prime Money Market Fund Pro Forma Combined
- --------------------------------------------------------------------------------------------------------------------------------
Investment Institutional Investment A Institutional Investment A Institutional
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets ($) $16,281,230.74 $791,481,012.12 $330,774,820.88 $726,876,395.15 $347,056,051.62 $1,518,357,407.27
- --------------------------------------------------------------------------------------------------------------------------------
Shares 16,281,484.73 791,481,691.25 330,771,394.30 726,885,592.11 347,056,051.62 1,518,357,407.27
- --------------------------------------------------------------------------------------------------------------------------------
Net Asset Value $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
per Share ($)
- --------------------------------------------------------------------------------------------------------------------------------
-82-
INFORMATION ABOUT THE FIFTH THIRD FUNDS
Management Discussion.
---------------------
A discussion of the management and performance of the Fifth Third Bond
Fund, the Fifth Third Intermediate Bond Fund, the Fifth Third Intermediate
Municipal Bond Fund, and the Fifth Third Prime Money Market Fund, and an
analysis of their performance can be found at Appendix B.
PROPOSAL (2)
APPROVAL OF NEW INVESTMENT ADVISORY AGREEMENT
At the Meeting, Shareholders of each Kent Fund will be asked to approve the
New Investment Advisory Agreement which is being submitted in connection with
the Parent/Advisor Merger of Old Kent Financial Corporation with and into Fifth
Third Bancorp. Consummation of the Parent/Advisor Merger on April 2, 2001,
constituted an "assignment," as that term is defined in the 1940 Act, of the
Kent Funds' investment advisory agreement, as amended, with Lyon Street (the
"Former Investment Advisory Agreement"). As required by the 1940 Act, the
investment advisory agreement provided for its automatic termination in the
event of its assignment. Because a new investment advisory contract was
required, and with an intent to consolidate the mutual fund investment advisory
activities of the Kent Funds and the Fifth Third Funds, the Board of Trustees of
the Kent Funds approved an interim investment advisory agreement ("Interim
-------
Agreement") in which the investment advisor to the Fifth Third Funds would
advise the Kent Funds (effective from the date of the Parent/Advisor Merger -
April 2, 2001 through the earlier of the expiration of 150 days from the
commencement of the Interim Agreement and the date of shareholder approval of
the New Investment Advisory Agreement (the "Interim Period")). The Board of
Trustees of the Kent Funds also approved, subject to shareholder approval, a new
---
investment advisory agreement in which the investment advisor to the Fifth Third
Funds would continue to advise the Kent Funds (effective upon shareholder
approval rendered at the Meeting and until the earlier of the date of the Kent
Funds' reorganization with and into the Fifth Third Funds (on or about October
29, 2001) or July 27, 2003)./3/ The Board of Trustees of the Kent Funds
unanimously recommends that you approve the New Investment Advisory Agreement.
Investment advisory personnel of Lyon Street who provided investment
management services to the Kent Funds have continued and will continue to do so
as the personnel of the advisor to the Fifth Third Funds. Thus, the
Parent/Advisor Merger will not affect the Kent Funds' investment management
services, day-to-day operations, the investment process or the
____________________________
/3/ Should the reorganization be approved, the Kent Funds will merge with
and into the Fifth Third Funds on or about October 29, 2001. At that time, the
New Investment Advisory Agreement will terminate, and an investment advisory
agreement between Fifth Third Asset Management Inc. and Fifth Third Funds will
take effect.
-83-
portfolio management. The investment objectives of the Kent Funds will remain
the same. Under the New Investment Advisory Agreement, the advisory fees and
expenses paid by the Kent Funds will not increase as a result of the
Parent/Advisor Merger.
The fees payable to the Advisor under the Interim Agreement are deposited
into an interest-bearing escrow account maintained by an independent escrow
agent J.P. Morgan [Confirm Name]. The escrow agent will release the amount held
in the escrow account(including any interest earned) to the Advisor only upon
approval of the New Investment Advisory Agreement by the shareholders of the
Kent Funds. If the New Investment Advisory Agreement is not approved by a vote
of a majority of each Kent Fund's outstanding voting securities within 150 days
of the Parent/Advisor Merger, the Advisor shall receive from the escrow account
as full compensation for its services the lesser of: (i) the sum of the amount
of any costs incurred by the Advisor in performing its duties under the interim
investment advisory agreement prior to such termination plus any interest earned
on that amount, or (ii) the sum of the amount deposited in the escrow account
plus any interest earned on that amount. In no event shall compensation paid to
the Advisor under the interim investment advisory agreement exceed the amount
permitted by Rule 15a-4 under the 1940 Act.
The terms of the New Investment Advisory Agreement are identical in all
material respects (with the exception of the name of the investment advisor) to
the Former Investment Advisory Agreement previously in effect between the Kent
Funds and Lyon Street. Shareholders should consider the following factors in
determining whether it is fair to compensate Fifth Third Asset Management Inc.
for services rendered during the Interim Period and thus to ratify and approve
the New Investment Advisory Agreement:
. The Board of Trustees of the Kent Fund has unanimously approved the New
Investment Advisory Agreement for all of the Kent Funds;
. No change in any Kent Fund's investment objective or investment policies
and restrictions has taken or will take place during the Interim Period and
through the date of the Transaction;
. Under the terms of the New Investment Advisory Agreement, there has been
and will be no change in the fees payable by a Kent Fund to Fifth Third
Asset Management Inc. for advisory services; and
. Investment personnel formerly employed by Lyon Street, who are experienced
in managing the Kent Funds, have managed and are expected to continue to
manage the Kent Funds' investment programs under the New Investment
Advisory Agreement.
A copy of the New Investment Advisory Agreement is attached as Appendix C.
Information About the Former Investment Advisory Agreement
-84-
The Former Investment Advisory Agreement, dated October 12, 1990, as
revised on May 2, 1991, was most recently approved by the Kent Funds' Board of
Trustees, including a majority of the independent Trustees, on May____, 2000 and
by the Kent Funds' shareholders on DATE.
----
The Former Investment Advisory Agreement provided that Lyon Street provide
investment management services to the Kent Funds subject to the supervision of
the Board of Trustees. Regarding payment of expenses, Lyon Street was subject to
the following provisions: the Advisor shall assume and pay all expenses incurred
by it incurred in the management of the investment and reinvestment of the
assets of each Kent Fund; all other costs and expenses incurred in the operation
of each Kent Fund will be borne by each Kent Fund, except to the extent
specifically assumed by others. The expenses to be borne by each Kent Fund
includes, without limitation, the following: all charges and expenses of a
manager; all charges and expenses of any custodian or depository appointed by
each Kent Fund for the safekeeping of its cash, securities and other property;
all charges and expenses for bookkeeping and auditors; all charges and expenses
of any transfer agents and registrars appointed by each Kent Fund; all fees of
all Trustees of each Kent Fund; the cost of all securities and other property
purchased by each Kent Fund and all brokers' fees, expenses and commissions,
issue and transfer taxes and other expenses chargeable to each Kent Fund in
connection with transactions involving securities and other property to which
each Kent Fund is a party; all taxes and corporate fees payable by each Kent
Fund to federal, state or other governmental agencies; all fees and expenses
involved in registering and maintaining registrations of each Kent Fund and of
its shares with the Securities and Exchange Commission ("Commission") and
registering or qualifying its shares under state or other securities laws,
including the preparation and printing of prospectuses for filing with the
Commission and other authorities; the costs of sales literature and advertising,
including expenses of preparing, printing and mailing prospectuses and reports
to shareholders of each Kent Fund; all expenses of shareholders' and Trustees'
meetings and of preparing, printing and mailing notices, reports and proxy
materials to shareholders of each Kent Fund; all charges and expenses of legal
counsel for each Kent Fund, its officers and Trustees in connection with legal
matters relating to each Kent Fund, including, without limitation, legal
services rendered in connection with each Kent Fund's existence, trust and
financial structure and relations with its shareholders, registrations and
qualifications of securities under federal, state and other laws, issues of
securities, expenses which each Kent Fund has assumed and extraordinary matters;
all charges and expenses of filing annual and other reports with the Commission;
and all extraordinary expenses and charges of each Kent Fund.
The Former Investment Advisory Agreement could be terminated at any time
with respect to any Kent Fund, without the payment of any penalty, by the Kent
Board of Trustees or by a vote of the holders of a majority of the outstanding
voting securities of that Kent Fund on sixty (60) days' written notice to the
Advisor. The Advisor also could terminate the Former Investment Advisory
Agreement on 60 days' written notice without the payment of any penalty. The
Former Investment Advisory Agreement could not be assigned by the Advisor and
automatically terminated in the event of any assignment. The Advisor could
-85-
employ or contract with such other person, persons, corporation or corporations
at its own cost and expense as it determined in order to assist it in carrying
out the Former Investment Advisory Agreement, provided that no delegation of
advisory responsibilities occurred which would require approval under the
Investment Company Act of 1940.
The table below sets forth: (i) the net assets for each Kent Fund as of
December 31, 2000; (ii) the rates of advisory fees, computed daily and payable
daily, to which Lyon Street was entitled for the services provided and expenses
assessed pursuant to the Former Advisory Agreements; (iii) 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 December 31, 2000; and (iv)
advisory fees (net of waivers) paid by each Kent Fund for the fiscal year ended
December 31, 2000:
ASSETS OF KENT FUND AND ADVISORY FEES PAID TO LYON STREET
---------------------------------------------------------
Annual Actual
Advisory Advisory
Fee Rate Fee Rate
(Based on Paid (Net
Net Assets as of Average of Advisory Fee
December 31, Net Assets Waiver) Paid (Net of
Kent Fund 2000 ($) (%) (%) Waivers) ($)
--------- -------- --- --- ------------
Kent Government Money Market Fund 311,595,654 0.40% 0.24% 672,082
Lyon Street Institutional Money Market Fund 47,943,896 0.40% 0.08% 27,845
Kent Michigan Municipal Money Market Fund 295,379,371 0.40% 0.40% 1,133,525
Kent International Growth Fund 602,268,722 0.75% 0.75% 4,447,866
Kent Small Company Growth Fund 829,989,513 0.70% 0.70% 5,732,035
Kent Large Company Growth Fund 274,587,407 0.70% 0.70% 1,691,698
Kent Index Equity Fund 899,577,210 0.30% 0.25% 2,322,558
Kent Growth and Income Fund 672,706,942 0.70% 0.70% 5,448,225
Kent Short Term Bond Fund 173,295,525 0.50% 0.50% 815,729
Kent Michigan Municipal Bond Fund 91,555,121 0.45% 0.45% 440,639
Kent Tax-Free Income Fund 134,662,855 0.55% 0.55% 741,919
Kent Intermediate Bond Fund 723,575,431 0.55% 0.55% 4,416,302
Kent Income Fund 301,755,503 0.60% 0.60% 1,876,243
Kent Intermediate Tax-Free Fund 259,914,932 0.50% 0.50% 1,422,796
Kent Money Market Fund 730,383,701 0.40% 0.40% 2,718,142
TOTAL
For the fiscal year ended December 31, 2000, the following Kent Funds paid
commissions in the amounts indicated; $226,174 for the Growth and Income Fund;
$149,717 for the Index Equity Fund; $631,455 for the Small Company Growth Fund;
$390,352 for the International Growth Fund; and $107,373 for the Large Company
Growth Fund. No other Kent Fund paid brokerage commissions during the last
fiscal year. No Kent Fund paid any brokerage commissions to an affiliated broker
of the Trust.
Lyon Street was not liable for any error of judgment or mistake of law or
for any loss suffered by each Kent fund in connection with the performance of
the Former Investment Advisory Agreement, except a loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services or a
loss resulting from willful misfeasance, bad faith, gross negligence on the part
of Lyon Street in the performance of its duties, or from
-86-
reckless disregard by it of its obligations and duties under the Former
Investment Advisory Agreement.
The Former Investment Advisory Agreement was last approved by the Board of
Trustees of the Kent Funds on May______, 2000.
On April 2, 2001, Old Kent Financial Corporation merged with and into Fifth
Third Bancorp (the "Parent/Advisor Merger"). Consummation of the Parent/Advisor
Merger constituted an "assignment," as that term is defined in the Investment
Company Act of 1940 (the "1940 Act"), of the Kent Funds' investment advisory
agreements with Lyon Street Asset Management Company ("Lyon Street"). As
required by the 1940 Act, the investment advisory agreements provided for their
automatic termination in the event of their assignment. As a result, the Board
of Trustees of the Kent Funds approved the Interim Agreement in which the
investment advisor to the Fifth Third Funds would advise the Kent Funds
effective from the date of the Parent/Advisor Merger (April 2, 2001) through the
date of the Meeting (July 27, 2001). The Interim Agreement is identical to the
Former Investment Advisory Agreement in all material respects with the following
exceptions: the name of the investment advisor; the portion of the termination
provision which allows for automatic termination within 150 days of the date of
the Interim Agreement, or 10 calendar days' written notice by Kent Funds to Lyon
Street provided that Kent Funds' Board of Trustees or a majority of the
outstanding voting securities of a Kent Fund approved the termination, or upon
the effective date of the New Investment Advisory Agreement; and the escrow
provisions required to be added by Rule 15a-4 of the 1940 Act.
Because a new investment advisory contract was required, and with an intent
to consolidate the mutual fund investment advisory activities of the Kent Funds
and the Fifth Third Funds, the Board of Trustees of the Kent Funds also approved
the New Investment Advisory Agreement in which the investment advisor to the
Fifth Third Funds would continue to advise the Kent Funds effective upon
shareholder approval at the Meeting and until the earlier of the date of the
Kent Funds' reorganization with and into the Fifth Third Funds (on or about
October 29, 2001) or July 27, 2003. Investment advisory personnel of Lyon Street
who provided investment management services to the Kent Funds have continued and
will continue to do so as the personnel of the advisor to the Fifth Third Funds.
We are now asking you to approve the new investment advisory agreement.
---
Information About the Proposed Investment Advisor
Officers and Directors of Fifth Third Asset Management Inc. are listed with
their addresses, principal occupations, and present positions.
Name and Address Principal Occupation
---------------- --------------------
Michael Keating Employee of Fifth Third Bancorp or its
Director subsidiaries
38 Fountain Square Plaza, Cincinnati, Ohio 45263
James D. Berghausen Employee of Fifth Third Bancorp or its
Director, President and Chief Investment Officer subsidiaries
38 Fountain Square Plaza, Cincinnati, Ohio 45263
Paul L. Reynolds Employee of Fifth Third Bancorp or its
Secretary subsidiaries
38 Fountain Square Plaza, Cincinnati, Ohio 45263
Robert Curtin Employee of Fifth Third Bancorp or its
Treasurer and Assistant Secretary subsidiaries
38 Fountain Square Plaza, Cincinnati, Ohio 45263
Kevin S. Woodard Employee of Fifth Third Bancorp or its
Assistant Secretary subsidiaries
38 Fountain Square Plaza, Cincinnati, Ohio 45263
Any Eisenbeis Employee of Fifth Third Bancorp or its
Assistant Secretary subsidiaries
38 Fountain Square Plaza, Cincinnati, Ohio 45263
Fifth Third Asset Management Inc. is a wholly-owned subsidiary of Fifth Third
Bank, which is a wholly-owned subsidiary of Fifth Third Financial Corporation,
which is a wholly-owned subsidiary of Fifth Third Bancorp.
-87-
Information About the New Investment Advisory Agreement
Investment advisory personnel of Lyon Street who provided investment
management services to the Kent Funds have continued and will continue to do so
as the personnel of the advisor to the Fifth Third Funds -- Fifth Third Asset
Management Inc. Subject to the direction of the Kent Funds' Board of Trustees,
the Advisor provides investment research and supervision of investments of each
Kent Fund and conducts a continuous program of investment evaluation and of
appropriate sale or other disposition and reinvestment of each Kent Fund's
assets. Like the Former Investment Advisory Agreement and the Interim
Agreement/4/, the New Investment Advisory Agreement is subject to the following
provisions. The Advisor shall continue to determine from time to time what
securities or other
________________________________
/4/ On April 30, 2001, Fifth Third Bank reorganized its advisory division
as Fifth Third Asset Management Inc., a separate, wholly-owned subsidiary of
Fifth Third Bank. Fifth Third Asset Management Inc. has replaced Fifth Third
Bank as the investment advisor to the Fifth Third Funds. Management and
investment advisory personnel of Fifth Third Bank that provided investment
management services to Fifth Third Funds now do so as the personnel of Fifth
Third Asset Management Inc. Because Fifth Third Asset Management Inc. is wholly
owned and otherwise fully controlled by Fifth Third Bank, this transaction was
not an "assignment" of the investment advisory contract for purposes of the
Investment Company Act of 1940 and, therefore, a shareholder vote was not
required.
-88-
instruments will be purchased, retained or sold by each Kent Fund. The Advisor,
in its supervision of the assets of each Kent Fund, is guided by each Kent
Fund's investment objective and policies, and the provisions and restrictions
contained in Kent Funds' Declaration of Trust and Bylaws and as set forth in the
Kent Fund's prospectuses and statement of additional information that are on
file with the Securities and Exchange Commission.
The New Investment Advisory Agreement is identical to the Former Investment
Advisory Agreement in all material respects with the exception of the name of
the investment advisor.
The rate of advisory fees payable to Fifth Third Asset Management Inc. by
the Kent Funds under the New Investment Advisory Agreement is identical to that
payable to Lyon Street under the Former Investment Advisory Agreement and to
that payable to the Advisor under the Interim Agreement. From time to time,
Fifth Third Asset Management Inc. may waive its fee or reimburse a Kent Fund for
certain expenses in order to reduce the Kent Fund's expense ratio. As a result,
the Kent Fund's return and yield would be higher than it would be if the fees
and such expenses had been paid by the Kent Fund. Fifth Third Asset Management
Inc. has agreed to waive and/or reimburse expenses of certain of the Kent Funds
such that the net expenses currently paid by shareholders of these Funds will be
the same when the New Investment Advisory Agreement goes into effect as such
shareholders paid under both the Interim Agreement and the Former Investment
Advisory Agreement.
The ratios of operating expenses (excluding interest, taxes, brokerage
commissions, litigation expense and extraordinary expenses) to average net
assets will not exceed the percentages set forth below:
Fund Name Institutional A
Fifth Third Large Cap Value 0.92% 1.17%
Fifth Third Equity Index 0.40% 0.65%
Fifth Third Large Cap Growth 0.94% 1.19%
Fifth Third Small Cap Growth 0.92% 1.17%
Fifth Third International GDP 1.01% 1.26%
Fifth Third Bond= 0.80% 1.05%
Fifth Third Intermediate Bond* 0.76% 1.01%
Fifth Third Short Term Bond 0.74% 0.89%
Fifth Third Municipal Bond 0.79% 1.04%
Fifth Third Intermediate Municipal Bond+ 0.73% 0.98%
Fifth Third Michigan Municipal Bond 0.69% 0.84%
Fifth Third Prime Money Market 0.54% 0.79%
Fifth Third Institutional Government
Money Market 0.40% 0.65%
Fifth Third Michigan Municipal Money
Market 0.54% 0.79%
Fifth Third Institutional Money Market 0.22%
= Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
* Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
+ Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
As in the Former Investment Advisory Agreement and the Interim Agreement,
the New Investment Advisory Agreement provides that the Advisor shall not be
liable for any error of judgment or mistake of law of for any loss suffered by
each Kent Fund in connection with the performance of the agreement, except a
loss resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith, gross negligence on the part of the Advisor in the performance of its
duties or from reckless disregard by it of its obligations and duties under the
agreement.
If approved by shareholders of the Kent Funds at the Meeting, the New
Investment Advisory Agreement will continue until the earlier of the date of the
Kent Funds' reorganization with and into the Fifth Third Funds (on or about
October 29, 2001) or July 27, 2003.
Trustees' Considerations
The New Investment Advisory Agreement was unanimously approved on behalf of
each Kent Fund by the Board of Trustees, including the Independent Trustees, at
a meeting held on April 12, 2001. The Trustees considered information relating
to Fifth Third Bancorp,
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Fifth Third Asset Management Inc., and the consolidated entity that was formed
as a result of the consummation of the Parent/Advisor Merger, including
information provided by Fifth Third Asset Management Inc. concerning its
capabilities and expertise in serving as investment adviser to the Kent Funds.
The Trustees reviewed the terms of the New Investment Advisory Agreement and
noted that the New Investment Advisory Agreement is identical in all material
respects (with the exception of the name of the investment advisor) to the
Former Investment Advisory Agreement.
Specifically, in connection with approval of the New Investment Advisory
Agreement on behalf of each Kent Fund, the Board considered that the terms of
the Parent/Advisor Merger did not require or result in any material changes in
the Kent Funds' investment objectives or policies, the investment management or
operation of the Kent Funds, the investment personnel managing the Kent Funds,
or the shareholder services or other business activities of the Kent Funds.
In approving the New Investment Advisory Agreement, the Board noted Lyon
Street's record of service to the Kent Funds and the expectation that the
Parent/Advisor Merger should not have any material adverse effect on the Kent
Funds' ongoing operations or on the extent or quality of services provided to
the Kent Funds. In addition, the Trustees considered that the terms of the New
Investment Advisory Agreement would not result in an increase the cost to the
Kent Funds of investment advisory services.
Section 15(f) of the 1940 Act provides that in connection with the sale of any
interest in any investment adviser which results in the "assignment" of an
investment advisory agreement, an investment adviser of a registered investment
company, such as the Kent Funds, or an affiliated person of such investment
adviser, may receive any amount or benefit if (i) for a period of three years
after the sale, at least 75% of the members of the board of the investment
company are not interested persons of the investment adviser or the predecessor
adviser, and (ii) there is no "unfair burden" imposed on the investment company
as a result of such sale or any express or implied terms, conditions or
understanding applicable thereto. For this purpose, "unfair burden" is defined
to include any arrangement during the two-year period after the transaction,
whereby the investment adviser or its predecessor or successor investment
advisers, or any interested persons of any such adviser, receives or is entitled
to receive any compensation directly or indirectly (i) from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company other than bona fide ordinary compensation
as principal underwriter for such company, or (ii) from the investment company
or its security holders for other than bona fide investment advisory or other
services. This provision of the 1940 Act was enacted by Congress in 1975 to make
it clear that an investment adviser (or an affiliated person of the adviser) can
realize a profit on the sale of the adviser's business subject to the two
safeguards described above. The Board has requested and received a written
representation from Fifth Third Asset Management Inc. and assurances from Fifth
Third Bancorp that no "unfair burden" will be imposed on the Kent Funds as a
result of the Parent/Advisor Merger and the proposed transactions. In addition,
each of the Boards of Trustees of the Kent Funds
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and the Fifth Third Funds expects to comply with the 75% non-interested director
requirement of Section 15(f).
Based upon the considerations set forth above, the Trustees have determined
that the New Investment Advisory Agreement is in the best interest of each Kent
Fund and its shareholders. In addition, management expects that there will be no
diminution in the scope and quality of services provided to Kent Funds as a
result of these transactions. In fact, as described above, the New Investment
Advisory Agreement is identical in all material respects (with the exception of
the name of the investment advisor) to the Former Investment Advisory Agreement.
The Board believes that the Kent Funds will receive investment management
services under the New Investment Advisory Agreement at least equivalent to
those that they received under the Former Investment Advisory Agreement, and at
the same fee and expense levels. If the New Investment Advisory Agreement is not
approved by any of the Kent Funds, the Board of the Kent Funds will promptly
seek to enter into new investment advisory arrangements for such Fund.
Information Filed With The Securities And Exchange Commission. Each Kent
--------------------------------------------------------------
Fund and Fifth Third Fund is subject to the informational requirements of the
Securities Exchange Act of 1934 and in accordance therewith file reports and
other information with the SEC. Reports, proxy and information statements,
registration statements and other information filed by each Kent Fund and Fifth
Third Fund can be inspected and copied at the public reference facilities of the
SEC at 450 Fifth Street, N.W. Washington, D.C. 20549. Copies of such filings may
also be available at the following SEC regional offices: 7 Tremont Street, Suite
600, Boston, MA 02108; 500 West Madison Street, Suite 1400, Chicago, IL 60611;
and the Curtis Center, Suite 1005E, 601 Walnut Street, Suite 1005E,
Philadelphia, PA 19106. Copies of such materials can also be obtained by mail
from the Public Reference Branch, Office of Consumer Affairs and Information
Services, SEC, Washington, D.C. 20549 at prescribed rates.
VOTING INFORMATION
Proxies are being solicited from shareholders of each Kent Fund by the
Trustees of Fifth Third Funds with respect to Proposal One and by the Trustees
of the Kent Funds with respect to Proposal Two for the Meeting to be held on
July 27, 2001 at 10:00 a.m., Eastern Time, at 3435 Stelzer Road, Columbus, Ohio
43219, or at such later time made necessary by adjournment. This Combined
Prospectus/Proxy Statement and the enclosed form of proxy are being mailed to
shareholders on or about June 8, 2001. The costs of the proxy materials and
proxy solicitations will be borne by Fifth Third Bank. A proxy may be revoked at
any time at or before the meeting by submitting to Kent Funds a subsequently
dated proxy, delivering a written notice of revocation to Kent Funds, Attn:
Secretary, 3435 Stelzer Road, Columbus, Ohio 43219 or as otherwise described in
the "Notice of Special Meeting" above. All properly executed proxies received in
time for the Meeting will be voted as specified in the proxy, or, if no
specification is made, FOR the proposals (set forth in items (1) and (2) of the
Notice of Special Meeting to implement the reorganization of each Kent Fund by
the transfer of all of its assets to the corresponding Fifth Third Fund, in
exchange for Fifth Third
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Investment A (Service Shares in the case of the Fifth Third Institutional Money
Market Funds) and Institutional shares of such corresponding Fifth Third Fund
and the assumption by such corresponding Fifth Third Fund of all of the
liabilities of each Kent Fund followed by the liquidation of each Kent Fund and
the distribution of Shares to the shareholders of each Kent Fund. All Kent Fund
shareholders will receive shares of the corresponding Fifth Third Fund class
(Investment A - also known as Service Shares regarding the Fifth Third
Institutional Money Market Funds, or Institutional) that corresponds to the
class of the Kent Fund Shares that they hold (Investment or Institutional,
respectively). The Transaction contemplated by the Reorganization Agreement will
be consummated only if: (1) a quorum is present (except as otherwise provided by
law, to constitute a quorum for the transaction of business at a shareholders'
meeting, there must be present, in person or by proxy, holders of a majority of
the total number of shares of the Kent Funds then outstanding and entitled to
vote at the meeting); and (2) approved by the affirmative vote of a majority of
the voting securities of each Kent Fund voting separately, as described above.
In the event the shareholders do not approve the reorganization, the Trustees of
the Kent Funds will consider possible alternative arrangements in the best
interests of the Kent Funds and their shareholders.
Proxies are being solicited by mail. Shareholders of record of each Kent
Fund at the close of business on May 18, 2001 (the "Record Date") will be
entitled to vote at the Meeting or any adjournment thereof. Each Share is
entitled to one vote as of the close of business on May 18, 2001. Shareholders
are entitled to one vote per Share and a proportionate fractional vote for any
fractional Share. Approval of Proposal One concerning the reorganization of each
Kent Fund and Proposal Two concerning the New Investment Advisory Agreement
require the affirmative vote of a majority of all votes attributable to the
voting securities of that Kent Fund voting separately as a fund, defined as the
lesser of (a) 67% or more of the votes attributable to all voting securities of
each Kent Fund present at such meeting, if holders of more than 50% of the votes
attributable to the outstanding voting securities are present or represented by
proxy, or (b) more than 50% of the votes attributable to the outstanding voting
securities of each Kent Fund.
As of May 18, 2001, there were outstanding the following amount of Shares
of Investment and Institutional Shares of each Kent Fund:
Kent Government Money Market Fund
Lyon Street Institutional Money Market Fund
Kent Michigan Municipal Money Market Fund
Kent International Growth Fund
Kent Small Company Growth Fund
Kent Large Company Growth Fund
Kent Index Equity Fund
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Kent Growth and Income Fund
Kent Short Term Bond Fund
Kent Michigan Municipal Bond Fund
Kent Tax-Free Income Fund
Kent Intermediate Bond Fund
Kent Income Fund
Kent Intermediate Tax-Free Fund
Kent Money Market Fund
Votes cast by proxy, telephone, the Internet or in person at the meeting
will be counted by the inspector of election appointed by Fifth Third Funds or
Kent Funds. The inspector of election will count the total number of votes cast
"for" approval of the proposal for purposes of determining whether sufficient
affirmative votes have been cast. The inspector of election will count shares
represented by proxies that reflect abstentions as shares that are present and
entitled to vote on the matter for purposes of determining the presence of a
quorum; however, the inspector of election will not count "broker non-votes"
(i.e., shares held by brokers or nominees as to which (i) instructions have not
been received from the beneficial owners or the persons entitled to vote and
(ii) the broker or nominee does not have the discretionary voting power on a
particular matter) as shares that are present and entitled to vote on the matter
for purposes of determining the presence of a quorum. For purposes of
determining whether an issue has been approved, abstentions have the effect of a
negative vote on the proposal, and broker non-votes are treated as "against"
votes in those instances where approval of an issue requires a certain
percentage of all votes outstanding, but are given no effect in those instances
where approval of an issue requires a certain percentage of the votes
constituting the quorum for such issue.
The Kent Funds' Trustees know of no matters other than those set forth
herein to be brought before the meeting. If, however, any other matters properly
come before the meeting, it is the Trustees' intention that proxies will be
voted on such matters in accordance with the judgment of the persons named in
the enclosed form of proxy.
As of May 18, 2001, the officers and Trustees of Fifth Third Funds as a
group beneficially owned less than 1% of the outstanding shares of Investment A,
Institutional, and Service Shares of any of the Fifth Third Funds. As of May 18,
2001, the officers and Trustees of Kent Funds as a group beneficially owned less
than 1% of the outstanding shares of Investment and Institutional Shares of any
of the Kent Funds. The information in the following table shows, to the best of
the knowledge of each Kent Fund and Fifth Third Funds, the shareholders who
owned of record or beneficially 5% or more of the indicated Fund and Class. The
table also shows, as far as practicable, the percentage of record and beneficial
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ownership of these same shareholders upon consummation of the Transaction
calculated on the basis of holdings as of the May 18, 2001 record date. Those
shareholders who beneficially own 25% or more of the outstanding shares of a
Fund may be deemed to be controlling persons of that Fund under the 1940 Act. In
this context, "control" shall mean (1) the beneficial ownership, either directly
or through one or more controlled companies of more than 25% of the voting
securities of a company; (2) the acknowledgement or assertion by either the
controlled or controlling party of the existence of control; or (3) an
adjudication under (S)2(a)(9)of the 1940 Act which has become final, that
control exists.
Approximate Approximate
Percent of Percent of Percent of
Beneficial Record Beneficial
Percent of Record Ownership Ownership Ownership
Ownership as of Upon Upon
Name and Address as of 5/18/2001 5/18/2001 Consummation Consummation
- ---------------- --------------- --------- ------------ ------------
THE BOARD OF TRUSTEES OF THE KENT FUNDS, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMEND APPROVAL OF THE AGREEMENT AND THE NEW INVESTMENT ADVISORY
AGREEMENT.
INTEREST OF CERTAIN PERSONS IN THE TRANSACTION
Fifth Third Bank may be deemed to have an interest in the Parent/Advisor
Merger because its wholly-owned subsidiary, Fifth Third Asset Management Inc.,
provides investment advisory services to the Fifth Third Funds pursuant to an
advisory agreement with Fifth Third Funds. Future growth of assets of Fifth
Third Funds can be expected to increase the total amount of fees payable to
Fifth Third Asset Management Inc. and to reduce the amount of fees required to
be waived to maintain total fees of the Funds at agreed upon levels.
-94-
APPENDIX A
FORM OF PLAN OF REORGANIZATION
FORM OF
-------
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
This Agreement and Plan of Reorganization (the "Agreement") is made as of
April 4, 2001, by and between Fifth Third Funds ("Fifth Third"), a Massachusetts
business trust, on behalf of the Fifth Third Funds as identified herein and the
Kent Funds ("Kent"), a Massachusetts business trust on behalf of the Kent Funds
as identified herein. The capitalized terms used herein shall have the meaning
ascribed to them in this Agreement.
PLAN OF REORGANIZATION
- ----------------------
(a) Kent will sell, assign, convey, transfer and deliver to Fifth Third,
and Fifth Third will acquire, on the Exchange Date, all of the properties and
assets existing at the Valuation Time in the following funds:
Kent Growth and Income Fund ("Kent Growth and Income")
Kent Index Equity Fund ("Kent Index Equity")
Kent Large Company Growth Fund ("Kent Large Company Growth")
Kent Small Company Growth Fund ("Kent Small Company Growth")
Kent International Growth Fund ("Kent International Growth")
Kent Income Fund ("Kent Income")
Kent Intermediate Bond Fund ("Kent Intermediate Bond")
Kent Short Term Bond Fund ("Kent Short Term Bond")
Kent Tax-Free Income Fund ("Kent Tax-Free Income")
Kent Intermediate Tax-Free Fund ("Kent Intermediate Tax-Free")
Kent Michigan Municipal Bond Fund ("Kent Michigan Municipal Bond")
Kent Money Market Fund ("Kent Money Market")
Kent Government Money Market Fund ("Kent Government Money Market")
Kent Michigan Municipal Money Market Fund ("Kent Michigan Municipal Money
Market")
Lyon Street Institutional Money Market Fund ("Lyon Street Institutional
Money Market")
(such funds each are a "Kent Fund" and are collectively the "Kent Funds").
Such acquisition is to be made by the following funds:
Fifth Third Large Cap Value Fund ("Fifth Third Large Cap Value")
Fifth Third Equity Index Fund ("Fifth Third Equity Index")
Fifth Third Large Cap Growth Fund ("Fifth Third Large Cap Growth")
Fifth Third Small Cap Growth Fund ("Fifth Third Small Cap Growth")
Fifth Third International GDP Fund ("Fifth Third International GDP")
Fifth Third Bond Fund/*/ ("Fifth Third Bond")
Fifth Third Intermediate Bond Fund** ("Fifth Third Intermediate Bond")
A-1
Fifth Third Short Term Bond Fund ("Fifth Third Short Term Bond")
Fifth Third Municipal Bond Fund ("Fifth Third Municipal Bond")
Fifth Third Intermediate Municipal Bond Fund/***/ ("Fifth Third
Intermediate Municipal Bond")
Fifth Third Michigan Municipal Bond Fund ("Fifth Third Michigan Municipal
Bond")
Fifth Third Prime Money Market Fund ("Fifth Third Prime Money Market")
Fifth Third Institutional Government Money Market Fund ("Fifth Third
Institutional Government Money Market")
Fifth Third Michigan Municipal Money Market Fund ("Fifth Third Michigan
Municipal Money Market")
Fifth Third Institutional Money Market Fund ("Fifth Third Institutional
Money Market")
(such funds each are a "Fifth Third Fund" and are collectively the "Fifth
Third Funds").
/*/ Currently named Fifth Third Quality Bond Fund, to be named Fifth Third
Bond Fund effective October 29, 2001.
** Currently named Fifth Third Bond Fund for Income, to be named Fifth
Third Intermediate Bond Fund effective October 29, 2001.
/***/ Currently named Fifth Third Municipal Bond Fund, to be named Fifth
Third Intermediate Municipal Bond Fund effective October 29, 2001.
For purposes of this Agreement the respective Kent Funds correspond to the Fifth
Third Funds as follows:
- --------------------------------------------------------------------------------
Kent Growth and Income Fifth Third Large Cap Value
- --------------------------------------------------------------------------------
Kent Index Equity Fifth Third Equity Index
- --------------------------------------------------------------------------------
Kent Large Company Growth Fifth Third Large Cap Growth
- --------------------------------------------------------------------------------
Kent Small Company Growth Fifth Third Small Cap Growth
- --------------------------------------------------------------------------------
Kent International Growth Fifth Third International GDP
- --------------------------------------------------------------------------------
Kent Income Fund Fifth Third Bond/*/
- --------------------------------------------------------------------------------
Kent Intermediate Bond Fifth Third Intermediate Bond**
- --------------------------------------------------------------------------------
Kent Short Term Bond Fifth Third Short Term Bond
- --------------------------------------------------------------------------------
Kent Tax-Free Income Fifth Third Municipal Bond
- --------------------------------------------------------------------------------
Kent Intermediate Tax-Free Fifth Third Intermediate Municipal
Bond/***/
- --------------------------------------------------------------------------------
Kent Michigan Municipal Bond Fifth Third Michigan Municipal Bond
- --------------------------------------------------------------------------------
Kent Money Market Fifth Third Prime Money Market
- --------------------------------------------------------------------------------
A-2
- --------------------------------------------------------------------------------
Kent Government Money Market Fifth Third Institutional
Government Money Market
- --------------------------------------------------------------------------------
Kent Michigan Municipal Money Market Fifth Third Michigan Municipal
Money Market
- --------------------------------------------------------------------------------
Lyon Street Institutional Money Market Fifth Third Institutional Money
Market
- --------------------------------------------------------------------------------
/*/ Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
** Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
*** Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
In consideration therefor, each Fifth Third Fund shall, on the Exchange
Date, assume all of the liabilities of the corresponding Kent Fund and transfer
to the corresponding Kent Fund a number of full and fractional units of
beneficial interest ("Fifth Third Shares"), such Shares Fifth Third
Institutional or Investment A Shares of the corresponding Fifth Third Fund
(collectively, "Fifth Third Shares") having an aggregate net asset value equal
to the value of all of the assets of each Kent Fund transferred to the
corresponding Fifth Third Fund on such date less the value of all of the
liabilities of each Kent Fund assumed by the corresponding Fifth Third Fund on
that date. It is intended that each reorganization described in this Agreement
shall be a tax-free reorganization under the Internal Revenue Code of 1986, as
amended (the "Code").
(b) Upon consummation of the transactions described in paragraph (a) of
this Agreement, each Kent Fund in complete liquidation shall distribute to its
respective shareholders of record as of the Exchange Date the Fifth Third Shares
received by it, each shareholder being entitled to receive that number of Fifth
Third Shares equal to the proportion which the number of units of beneficial
interest ("Kent Shares") of the Kent Fund held by such shareholder bears to the
number of such Kent Shares of the Kent Fund outstanding on such date. Kent Fund
shareholders of record holding Kent Institutional Shares will receive Fifth
Third Institutional Shares; Kent Fund shareholders of record holding Kent
Investment Shares will receive Fifth Third Class A Shares.
AGREEMENT
- ---------
Fifth Third and Kent represent, warrant and agree as follows:
1. Representations and Warranties of Kent. Each of Kent and each Kent
--------------------------------------
Fund represent and warrant to and agree with Fifth Third and each Fifth Third
Fund that:
(a) Kent is a business trust validly existing under the laws of The
Commonwealth of Massachusetts and has power to own all of its properties and
assets and to carry out its obligations under this Agreement. Each of Kent and
each Kent Fund is not required to qualify as a foreign association in any
jurisdiction where the failure to so qualify would have a material adverse
effect on Kent or the Kent Funds. Kent and each Kent Fund has all necessary
federal,
A-3
state and local authorizations to carry on its business as now being conducted
and to fulfill the terms of this Agreement, except for shareholder approval and
as otherwise described in Section 1(l).
(b) Kent is registered under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end management investment company, and such
registration has not been revoked or rescinded and is in full force and effect.
Each Kent Fund has elected to qualify and has qualified as a regulated
investment company under Part I of Subchapter M of the Code, as of and since its
first taxable year, and qualifies and intends to continue to qualify as a
regulated investment company through the Exchange Date. Each Kent Fund has been
a regulated investment company under such sections of the Code at all times
since its inception.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of portfolio investments
(indicating their market values) for each Kent Fund at and for the year ended
December 31, 2000, such statements and schedules having been audited by KPMG
LLP, independent accountants to Kent, have been furnished to Fifth Third. Such
statements of assets and liabilities and schedule fairly present the financial
position of each Kent Fund as of their respective dates and said statements of
operations and changes in net assets fairly reflect the results of operations
and changes in net assets for the periods covered thereby in conformity with
generally accepted accounting principles. The statements of assets and
liabilities, statements of operations, statements of changes in net assets and
schedules of investments (indicating their market values) for each Kent Fund for
the six-month period ended June 30, 2001, which are unaudited, have also been
furnished to Fifth Third. Such statements of assets and liabilities and
schedules fairly present the financial position of the Kent Funds as of their
respective dates, and said statements of operations and changes in net assets
fairly reflect the results of its operations and changes in financial position
for the periods covered thereby in conformity with generally accepted accounting
principles.
(d) The prospectus of the Kent Funds dated April 30, 2001 and the
prospectus of the Lyon Street Institutional Money Market Fund dated April 30,
2001 (collectively the "Kent Prospectuses") and the Statements of Additional
Information for the Kent Funds dated April 30, 2001 and for the Lyon Street
Institutional Money Market Fund dated April 30, 2001, both on file with the
Securities and Exchange Commission, which have been previously furnished to
Fifth Third, did not as of their dates and do not as of the date hereof contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Kent or any Kent Fund, overtly threatened
against Kent or any Kent Fund which assert liability on the part of Kent or any
Kent Fund.
(f) There are no material contracts outstanding to which Kent, with respect
to the Kent Funds, or any Kent Fund is a party, other than as disclosed in the
Kent Prospectuses and the
A-4
corresponding Statements of Additional Information or in the Registration
Statement and the Proxy Statement.
(g) Neither Kent, with respect to the Kent Funds, nor any Kent Fund has any
known liabilities of a material nature, contingent or otherwise, other than
those shown as belonging to it on its statement of assets and liabilities as of
December 31, 2000, and those incurred in the ordinary course of Kent's business
as an investment company since that date. Prior to the Exchange Date, Kent will
advise Fifth Third of all known material liabilities, contingent or otherwise,
incurred by it, with respect to the Kent Funds, and each Kent Fund subsequent to
December 31, 2000, whether or not incurred in the ordinary course of business.
(h) As used in this Agreement, the term "Investments" shall mean each Kent
Fund's investments shown on the schedule of its portfolio investments as of
December 31, 2000, referred to in Section 1(c) hereof, as supplemented with such
changes as Kent or each Kent Fund shall make after December 31, 2000, which
changes shall be disclosed to Fifth Third, and changes resulting from stock
dividends, stock split-ups, mergers and similar corporate actions.
(i) Each Kent Fund has filed or will file all federal and other tax returns
which, to the knowledge of Kent's officers, are required to be filed by each
Kent Fund and has paid or will pay all federal and other taxes shown to be due
on said returns or on any assessments received by each Kent Fund. To the best of
such officers' knowledge, all tax liabilities of each Kent Fund have been
adequately provided for on its books, and no tax deficiency or liability of any
Kent Fund has been asserted, and no question with respect thereto has been
raised, by the Internal Revenue Service or by any state or local tax authority
for taxes in excess of those already paid.
(j) As of both the Valuation Time and the Exchange Date and subject to
shareholder approval and otherwise as described in Section 1(l), Kent on behalf
of each Kent Fund will have full right, power and authority to sell, assign,
transfer and deliver the Investments and any other assets and liabilities of
each Kent Fund to be transferred to the corresponding Fifth Third Fund pursuant
to this Agreement. At the Exchange Date, subject only to the delivery of the
Investments and any such other assets and liabilities as contemplated by this
Agreement, Fifth Third will, on behalf of each Fifth Third Fund, acquire the
Investments and any such other assets subject to no encumbrances, liens or
security interests in favor of any third party creditor of Kent or a Kent Fund
and, except as imposed by federal or state securities law, without any
restrictions upon the transfer thereof.
(k) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by Kent on behalf of the
Kent Funds or any Kent Fund of the transactions contemplated by this Agreement,
except such as may be required under the 1933 Act, the Securities Exchange Act
of 1934, as amended (the "1934 Act"), the 1940 Act, state securities or blue sky
laws (which term as used herein shall include the laws of the District of
Columbia and of Puerto Rico) or the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 (the "H-S-R Act").
A-5
(l) The registration statement (the "Registration Statement") filed with
the Securities and Exchange Commission (the "Commission") by Fifth Third on Form
N-14 relating to the Fifth Third Shares issuable hereunder, and the proxy
statement of Kent included therein (the "Proxy Statement"), on the effective
date of the Registration Statement and insofar as they relate to Kent and the
Kent Funds, (i) will comply in all material respects with the provisions of the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder
and (ii) will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not misleading; and at the time of the shareholders' meeting referred
to in Section 8(a) below and on the Exchange Date, the prospectus contained in
the Registration Statement of which the Proxy Statement is a part (the
"Prospectus"), as amended or supplemented by any amendments or supplements filed
with the Commission by Fifth Third, insofar as it relates to Kent and the Kent
Funds, will not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not misleading; provided, however, that none of the representations
and warranties in this subsection shall apply to statements in or omissions from
the Registration Statement, the Prospectus or the Proxy Statement, or any
amendments or supplements thereto made in reliance upon or in conformity with
information furnished by Fifth Third, or any Fifth Third Fund, for use in the
Registration Statement, Prospectus, or Proxy Statement or furnished on or behalf
of Fifth Third Asset Management Inc. ("Fifth Third Asset Management") for use
therein. For these purposes, information shall be provided "on behalf" of Fifth
Third Asset Management if furnished by it or an affiliate or by another person
with the approval of Fifth Third Asset Management or the affiliate.
(m) All of the issued and outstanding Kent Shares of each Kent Fund have
been offered for sale and sold in conformity with all applicable federal and
state securities laws.
2. Representations and Warranties of Fifth Third. Each of Fifth Third
---------------------------------------------
and each Fifth Third Fund jointly and severally represent and warrant to and
agree with Kent and each Kent Fund that:
(a) Fifth Third is a business trust validly existing under the laws of The
Commonwealth of Massachusetts and has power to carry on its business as it is
now being conducted and to carry out this Agreement. Fifth Third and each Fifth
Third Fund is not required to qualify as a foreign association in any
jurisdiction. Fifth Third and each Fifth Third Fund has all necessary federal,
state and local authorizations to own all of its properties and assets and to
carry on its business as now being conducted and to fulfill the terms of this
Agreement, except as set forth in Section 2(i).
(b) Fifth Third is registered under the 1940 Act as an open-end management
investment company, and such registration has not been revoked or rescinded and
is in full force and effect. Each Fifth Third Fund that has had active
operations prior to the Exchange Date, has elected to qualify and has qualified
as a regulated investment company under Part I of Subchapter M of the Code, as
of and since its first taxable year, and qualifies and intends to continue to
qualify as a
A-6
regulated investment company for its current tax year. Each Fifth Third Fund
that has had actual operations prior to the Exchange Date has been a regulated
investment company under such sections of the Code at all times since its
inception. Fifth Third Large Cap Value, Fifth Third Equity Index, Fifth Third
Large Cap Growth, Fifth Third Small Cap Growth, Fifth Third International GDP,
Fifth Third Municipal Bond, Fifth Third Michigan Municipal Bond, Fifth Third
Institutional Government Money Market, Fifth Third Michigan Municipal Money
Market, Fifth Third Institutional Money Market and Fifth Third Short Term Bond
which have not had active operations prior to the Exchange Date, intend to
qualify as regulated investment companies under Part I of Subchapter M of the
Code.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of investments (indicating
their market values) for each Fifth Third Fund for the year ended July 31, 2000,
such statements and schedules having been audited by Arthur Andersen LLP,
independent accountants to Fifth Third, have been furnished to Kent. Such
financial statements present fairly the financial position of Fifth Third as of
the dates indicated and the results of their operations for the periods
indicated, in conformity with generally accepted accounting principles applied
on a consistent basis.
(d) The prospectuses of the Fifth Third Funds dated November 30, 2000 and
May 28, 2001, (collectively, the "Fifth Third Prospectuses"), and the Statements
of Additional Information for the Fifth Third Funds, dated December 1, 2000 and
May 28, 2001 and on file with the Securities and Exchange Commission, which have
been previously furnished to Kent, did not as of their dates and do not as of
the date hereof contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of Fifth Third or any Fifth Third Fund, overtly
threatened against Fifth Third or any Fifth Third Fund which assert liability on
the part of Fifth Third or any Fifth Third Fund.
(f) There are no material contracts outstanding to which Fifth Third or any
Fifth Third Fund is a party, other than as disclosed in the Fifth Third
Prospectus and the corresponding Statement of Additional Information or in the
Registration Statement.
(g) Neither Fifth Third nor any Fifth Third Fund has any known liabilities
of a material nature, contingent or otherwise, other than those shown on its
statement of assets and liabilities as of July 31, 2000, referred to above and
those incurred in the ordinary course of the business of Fifth Third as an
investment company or any Fifth Third Fund since such date. Prior to the
Exchange Date, Fifth Third will advise Kent of all known material liabilities,
contingent or otherwise, incurred by it and each Fifth Third Fund subsequent to
July 31, 2000, whether or not incurred in the ordinary course of business.
(h) Each Fifth Third Fund has filed or will file all federal and other tax
returns which, to the knowledge of Fifth Third's officers, are required to be
filed by each Fifth Third Fund and has paid or will pay all federal and other
taxes shown to be due on said returns or on any assessments received by each
Fifth Third Fund. To the best of such officers' knowledge, all tax liabilities
of
A-7
each Fifth Third Fund have been adequately provided for on its books, and no tax
deficiency or liability of any Fifth Third Fund has been asserted, and no
question with respect thereto has been raised, by the Internal Revenue Service
or by any state or local tax authority for taxes in excess of those already
paid.
(i) No consent, approval, authorization or order of any governmental
authority is required for the consummation by Fifth Third or any Fifth Third
Fund of the transactions contemplated by this Agreement, except such as may be
required under the 1933 Act, the 1934 Act, the 1940 Act, state securities or
Blue Sky laws or the H-S-R Act.
(j) As of both the Valuation Time and the Exchange Date and otherwise as
described in Section 2(i), Fifth Third on behalf of each Fifth Third Fund will
have full right, power and authority to purchase the Investments and any other
assets and assume the liabilities of each Kent Fund to be transferred to the
corresponding Fifth Third Fund pursuant to this Agreement.
(k) The Registration Statement, the Prospectus and the Proxy Statement, on
the effective date of the Registration Statement and insofar as they relate to
Fifth Third and the Fifth Third Funds: (i) will comply in all material respects
with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules
and regulations thereunder and (ii) will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; and at the time of the shareholders' meeting
referred to in Section 8(a) and at the Exchange Date, the Prospectus, as amended
or supplemented by any amendments or supplements filed with the Commission by
Fifth Third or any Fifth Third Fund, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading; provided, however, that none of the
representations and warranties in this subsection shall apply to statements in
or omissions from the Registration Statement, the Prospectus or the Proxy
Statement or any amendments or supplements thereto made in reliance upon or in
conformity with information furnished by Kent, or any Kent Fund, for use in the
Registration Statement, Prospectus, or Proxy Statement or furnished on or behalf
of Lyon Street Asset Management Company ("Lyon Street Asset Management") for use
therein. For these purposes, information shall be provided "on behalf" of Lyon
Street Asset Management if furnished by it or an affiliate or by another person
with the approval of Lyon Street Asset Management or the affiliate.
(l) Fifth Third Shares to be issued to each Kent Fund have been duly
authorized and, when issued and delivered pursuant to this Agreement and the
Prospectus, will be legally and validly issued and will be fully paid and
nonassessable by Fifth Third and no shareholder of Fifth Third will have any
preemptive right of subscription or purchase in respect thereof.
(m) The issuance of Fifth Third Shares pursuant to this Agreement will be
in compliance with all applicable federal and state securities laws.
A-8
(n) Each of Fifth Third Bond*, Fifth Third Intermediate Bond**, Fifth Third
Intermediate Municipal Bond***, and Fifth Third Prime Money Market is qualified
and will at all times through the Exchange Date qualify for taxation as a
"regulated investment company" under Sections 851 and 852 of the Code. Fifth
Third Large Cap Value, Fifth Third Equity Index, Fifth Third Large Cap Growth,
Fifth Third Small Cap Growth, Fifth Third International GDP, Fifth Third
Municipal Bond, Fifth Third Short Term Bond, Fifth Third Michigan Municipal
Bond, Fifth Third Institutional Government Money Market, Fifth Third
Institutional Money Market and Fifth Third Michigan Municipal Money Market, upon
filing of their first income tax returns at the completion of their first
taxable year will elect to be regulated investment companies and until such time
will take all steps necessary to ensure qualification as regulated investment
companies under Sections 851 and 852 of the Code.
(o) Fifth Third through its administrator, transfer agent, custodian or
otherwise, will cooperate fully and in a timely manner with Kent and each Kent
Fund in completing each of the actions required of it and its agents and
necessary for consummation of the transactions described in Sections 3 (a) and
(b) of this Agreement.
(p) Fifth Third has valued, and will continue to value, its portfolio
securities and other assets in accordance with applicable legal requirements.
(q) Fifth Third shall operate its business in the ordinary course between
the date hereof and the Exchange Date of the Reorganization. It is understood
that such ordinary course of business will include the declaration and payment
of customary dividends and distributions and any other dividends and any other
distributions deemed advisable.
3. Reorganization. (a) Subject to the requisite approval of the
--------------
shareholders of each Kent Fund and to the other terms and conditions contained
herein (including each Kent Fund's obligation to distribute to its respective
shareholders all of its investment company taxable income and net capital gain
as described in Section 9(k) hereof), Kent and each Kent Fund agree to sell,
assign, convey, transfer and deliver to the corresponding Fifth Third Fund, and
each Fifth Third Fund agrees to acquire from the corresponding Kent Fund, on the
Exchange Date all of the Investments and all of the cash and other assets of
each Kent Fund in exchange
* Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
** Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
*** Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
for that number of Fifth Third Shares of the corresponding Fifth Third Fund
provided for in Section 4 and the assumption by the corresponding Fifth Third
Fund of all of the liabilities of the Kent Fund, whether accrued, absolute,
contingent or otherwise, which liabilities shall include, without limitation,
all obligations of each Kent Fund to indemnify the Trustees of Kent acting in
their capacities with respect to any claim alleging any breach of fiduciary duty
with respect to the transactions contemplated by this Agreement to the fullest
extent permitted by law and Kent's Restated Declaration of Trust as in effect on
the date hereof. Pursuant to this Agreement, such Kent Fund will, as soon as
practicable after the Exchange Date, distribute in liquidation all of the
A-9
Fifth Third Shares received by it to its shareholders in exchange for their Kent
Shares of such Kent Fund.
(b) Kent, on behalf of each Kent Fund, will pay or cause to be paid to the
corresponding Fifth Third Fund any interest and cash dividends received by it on
or after the Exchange Date with respect to the Investments transferred to the
Fifth Third Funds hereunder. Kent, on behalf of each Kent Fund, will transfer to
the corresponding Fifth Third Fund any rights, stock dividends or other
securities received by Kent or any Kent Fund after the Exchange Date as stock
dividends or other distributions on or with respect to the Investments
transferred, which rights, stock dividends and other securities shall be deemed
included in the assets transferred to each Fifth Third Fund at the Exchange Date
and shall not be separately valued, in which case any such distribution that
remains unpaid as of the Exchange Date shall be included in the determination of
the value of the assets of the Kent Fund acquired by the corresponding Fifth
Third Fund.
(c) Fifth Third shall file a post-effective amendment (the "N-1A Post-
Effective Amendment") to its registration statement on Form N-1A (Files Nos. 33-
24848 and 811-5669) with the SEC, and with the appropriate state securities
commissions, as promptly as practicable so that all Fifth Third Funds and their
shares are registered under the Securities Act of 1933, as amended (the "1933
Act") and applicable state securities laws. In addition, Fifth Third shall file
the Registration Statement, and Kent shall file the Proxy, with the SEC, and
with the appropriate state securities commissions, relating to the matters
described in Section (a) of this Agreement as promptly as practicable. Fifth
Third and Kent have cooperated and shall continue to cooperate with each other,
and have furnished and shall continue to furnish each other with the information
relating to itself that is required by the 1933 Act, the 1940 Act, the 1934 Act,
as amended, the rules and regulations relating to these acts and state
securities laws, to be included in the N-1A Post-Effective Amendment, the
Registration Statement and the Proxy.
4. Exchange Date; Valuation Time. On the Exchange Date, Fifth Third will
-----------------------------
deliver to Kent a number of Fifth Third Shares having an aggregate net asset
value equal to the value of the assets attributable to each class of Kent Shares
of the corresponding Kent Fund acquired by each Fifth Third Fund, less the value
of the liabilities of such Kent Fund assumed, determined as hereafter provided
in this Section 4.
(a) Subject to Section 4(d) hereof, the value of each Kent Fund's net
assets will be computed as of the Valuation Time using the valuation procedures
set forth in the Kent Prospectuses and Statements of Additional Information. For
such purposes, price quotations and the security characteristics relating to
establishing such quotations shall be determined by Kent, provided that such
determinations shall be subject to the approval of Fifth Third. In no event
shall the same security held by both Kent and Fifth Third be valued at different
prices. It is understood and agreed that the value of the assets of the Kent
Money Market Fund, Kent Government Money Market Fund, Kent Michigan Municipal
Money Market Fund and the Lyon Street Institutional Money Market Fund (each a
"Reorganized Money Market Fund") and the value of the shares of the
corresponding Fifth Third Funds for purposes of sales and redemptions shall be
based on the amortized cost valuation procedures that have been adopted by the
Board of Trustees of Kent; provided that if the difference between the per share
net asset values of a
A-10
Reorganized Money Market Fund and its corresponding Fifth Third Fund exceeds
$.0025 at the Valuation Time, as computed by using such market values in
accordance with the policies and procedures established by Fifth Third (or as
otherwise mutually determined by the Board of Trustees of Kent and Fifth Third),
either the Board of Trustees of Kent or the Board of Trustees of Fifth Third
shall have the right to postpone the Valuation Time and Exchange Date with
respect to such Reorganized Money Market Fund until such time as the per share
difference is less than $.0025.
(b) Subject to Section 4(d) hereof, the net asset value of a share of each
Fifth Third Fund will be determined to the nearest full cent as of the Valuation
Time, using the valuation procedures set forth in the Fifth Third Prospectuses
for the particular Fifth Third Fund. All computations shall be made by Fifth
Third in cooperation with KPMG LLP and Arthur Andersen LLP.
(c) Subject to Section 4(d), the Valuation Time shall be 4:00 p.m. Eastern
Standard time on Friday, October 26, 2001 for all of the Kent Funds, or such
earlier or later days as may be mutually agreed upon in writing by the parties
hereto (the "Valuation Time").
(d) No formula will be used to adjust the net asset value of any Kent Fund
or Fifth Third Fund to take into account differences in realized and unrealized
gains and losses.
A-11
(e) Each Fifth Third Fund shall issue its Fifth Third Shares to the
corresponding Kent Fund on one share deposit receipt registered in the name of
the corresponding Kent Fund. Each Kent Fund shall distribute in liquidation the
Kent Shares received by it hereunder pro rata to its shareholders by
redelivering such share deposit receipt to Fifth Third's transfer agent which
will as soon as practicable set up open accounts for each Kent Fund shareholder
in accordance with written instructions furnished by Kent.
(f) Each Fifth Third Fund shall assume all liabilities of the
corresponding Kent Fund, whether accrued or contingent, in connection with the
acquisition of assets and subsequent dissolution of the corresponding Kent Fund
or otherwise, except that recourse for assumed liabilities relating to a
particular Kent Fund will be limited to the corresponding Fifth Third Fund.
5. Expenses, Fees, etc. (a) Subject to subsections 5(b) through 5(e), all
-------------------
fees and expenses, including accounting expenses, portfolio transfer taxes (if
any) or other similar expenses incurred directly in connection with the
consummation by Fifth Third and Kent of the transactions contemplated by this
Agreement will be borne by Fifth Third Bank, including the costs of proxy
materials, proxy solicitation, filing fees and accounting and legal expenses;
provided, however, that such expenses will in any event be paid by the party
- -------- -------
directly incurring such expenses if and to the extent that the payment by the
other party of such expenses would result in the disqualification of any Fifth
Third Fund or any Kent Fund, as the case may be, as a "regulated investment
company" within the meaning of Section 851 of the Code. Fees and expenses not
incurred directly in connection with the consummation of the Transaction will be
borne by the party incurring such fees and expenses.
(b) In the event the transactions contemplated by this Agreement are not
consummated by reason of Kent being either unwilling or unable to go forward
(other than by reason of the nonfulfillment or failure of any condition to
Kent's obligations referred to in Section 8(a) or Section 10), Kent shall pay
directly all reasonable fees and expenses incurred by Fifth Third in connection
with such transactions, including, without limitation, legal, accounting and
filing fees.
(c) In the event the transactions contemplated by this Agreement are not
consummated by reason of Fifth Third being either unwilling or unable to go
forward (other than by reason of the nonfulfillment or failure of any condition
to Fifth Third's obligations referred to in Section 8(a) or Section 9), Fifth
Third shall pay directly all reasonable fees and expenses incurred by Kent in
connection with such transactions, including without limitation legal,
accounting and filing fees.
(d) In the event the transactions contemplated by this Agreement are not
consummated for any reason other than (i) Fifth Third or Kent being either
unwilling or unable to go forward or (ii) the nonfulfillment or failure of any
condition to Kent's or Fifth Third's obligations referred to in Section 8(a),
Section 9 or Section 10 of this Agreement, then each of Kent and Fifth Third
shall bear the expenses it has actually incurred in connection with such
transactions.
A-12
(e) Notwithstanding any other provisions of this Agreement, if for any
reason the transactions contemplated by this Agreement are not consummated, no
party shall be liable to the other party for any damages resulting therefrom,
including without limitation consequential damages, except as specifically set
forth above.
6. Permitted Assets. Fifth Third and Kent agree to review the assets of
----------------
the Kent Funds to ensure that at any time prior to the Exchange Date the assets
of any Kent Fund do not include any assets that the corresponding Fifth Third
Fund is not permitted, or reasonably believes to be unsuitable for it, to
acquire, including without limitation any security that, prior to its
acquisition by any Kent Fund, is unsuitable for the corresponding Fifth Third
Fund to acquire.
7. Exchange Date. Delivery of the assets of the Kent Funds to be
-------------
transferred, assumption of the liabilities of the Kent Funds to be assumed, and
the delivery of Fifth Third Shares to be issued shall be made on Monday, October
29, 2001 at 10:00 a.m. or at such other times and dates agreed to by Kent and
Fifth Third, the date and time upon which such delivery is to take place being
referred to herein as the "Exchange Date."
8. Special Meeting of Shareholders; Dissolution. (a) Kent agrees to call
--------------------------------------------
a special meeting of the shareholders of each Kent Fund as soon as is
practicable after the effective date of the Registration Statement for the
purpose of considering the sale of all of the assets of each Kent Fund to and
the assumption of all of the liabilities of each Kent Fund by the corresponding
Fifth Third Fund as herein provided, approving this Agreement, and authorizing
the liquidation and dissolution of each Kent Fund, and, except as set forth in
Section 13, it shall be a condition to the obligations of each of the parties
hereto that the holders of the Kent Shares of each Kent Fund shall have approved
this Agreement and the transactions contemplated herein in the manner required
by law and Kent's Articles of Incorporation and Bylaws at such a meeting on or
before the Valuation Time.
(b) Kent and each Kent Fund agree that the liquidation of each Kent Fund
will be effected in the manner provided in Kent's Restatement of Declaration of
Trust and Bylaws in accordance with applicable law, that it will not make any
distributions of any Fifth Third Shares to the shareholders of a Kent Fund
without first paying or adequately providing for the payment of all of such Kent
Fund's known debts, obligations and liabilities.
(c) Each of Fifth Third and Kent will cooperate with the other, and each
will furnish to the other the information relating to itself required by the
1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder
to be set forth in the Registration Statement, including the Prospectus and the
Proxy Statement.
9. Conditions to Fifth Third's Obligations. The obligations of Fifth
---------------------------------------
Third and each Fifth Third Fund hereunder shall be subject to the following
conditions:
(a) That this Agreement shall have been approved and the transactions
contemplated hereby, including the liquidation of the Kent Funds, shall have
been approved by the shareholders of each Kent Fund in the manner required by
law.
A-13
(b) Kent shall have furnished to Fifth Third a statement of each Kent
Fund's assets and liabilities, with values determined as provided in Section 4
of this Agreement, together with a list of Investments with their respective tax
costs, all as of the Valuation Time, certified on Kent's behalf by its President
(or any Vice President) and Treasurer, and a certificate of both such officers,
dated the Exchange Date, to the effect that as of the Valuation Time and as of
the Exchange Date there has been no material adverse change in the financial
position of any Kent Fund since December 31, 2000, other than changes in the
Investments since that date or changes in the market value of the Investments,
or changes due to net redemptions of Kent Shares of the Kent Funds, dividends
paid or losses from operations.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of Kent and each Kent Fund made in this Agreement
are true and correct in all material respects as if made at and as of such
dates, Kent and each Kent Fund has complied with all the agreements and
satisfied all the conditions on its part to be performed or satisfied at or
prior to each of such dates, and Kent shall have furnished to Fifth Third a
statement, dated the Exchange Date, signed by Kent's President (or any Vice
President) and Treasurer certifying those facts as of such dates.
(d) Kent shall have delivered to Fifth Third a letter from KPMG LLP dated
the Exchange Date stating that such firm reviewed the federal and state income
tax returns of each Kent Fund for the year ended December 31, 2000 and that, in
the course of such review, nothing came to their attention which caused them to
believe that such returns did not properly reflect, in all material respects,
the federal and state income taxes of each Kent Fund for the periods covered
thereby, or that each Kent Fund would not qualify as a regulated investment
company for federal income tax purposes.
(e) There shall not be any material litigation pending with respect to the
matters contemplated by this Agreement.
(f) Fifth Third shall have received an opinion of Drinker Biddle & Reath
LLP, in form reasonably satisfactory to Fifth Third and dated the Exchange Date,
to the effect that (i) Kent is a business trust validly existing under the laws
of The Commonwealth of Massachusetts, (ii) this Agreement has been duly
authorized, executed, and delivered by Kent on behalf of the Kent Funds and,
assuming that the Registration Statement, the Prospectus and the Proxy Statement
comply with the 1933 Act, the 1934 Act and the 1940 Act and assuming due
authorization, execution and delivery of this Agreement by Fifth Third, is a
valid and binding obligation of Kent with respect to the Kent Funds, subject to
the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and
similar laws relating to or affecting creditors' rights generally and court
decisions with respect thereto, and such counsel shall not be required to
express an opinion with respect to the application of equitable principles in
any proceeding, whether at law or in equity, or with respect to the provisions
of this Agreement intended to limit liability for particular matters to a Kent
Fund and its assets, (iii) Kent has power to sell, assign, convey, transfer and
deliver the Investments and other assets contemplated hereby and, upon
consummation of the transactions contemplated hereby in accordance with the
terms of this Agreement, Kent and each Kent Fund will have duly sold, assigned,
conveyed, transferred and delivered such Investments and other assets to Fifth
Third, (iv) the execution and delivery of this
A-14
Agreement did not, and the consummation of the transactions contemplated hereby
will not, violate Kent's Restatement of Declaration of Trust and Bylaws or any
provision of any material agreement known to such counsel (without any
independent inquiry or investigation) to which Kent, with respect to the Kent
Funds, or any Kent Fund is a party or by which it is bound, it being understood
that with respect to investment restrictions as contained in Kent's Restatement
of Declaration of Trust and Bylaws, such counsel may rely upon a certificate of
an officer of Kent whose responsibility it is to advise Kent with respect to
such matters, and (v) to such counsel's knowledge, no consent, approval,
authorization or order of any court or governmental authority is required for
the consummation by Kent on behalf of the Kent Funds or any Kent Fund of the
transactions contemplated hereby, except such as have been obtained under the
1933 Act, the 1934 Act and the 1940 Act and such as may be required under state
securities or blue sky laws and the H-S-R Act, and it being understood that such
opinion shall not be deemed to apply to Fifth Third's compliance obligations
under the 1933 Act, 1934 Act, 1940 Act, state securities or blue sky laws and H-
S-R Act. Such opinion may rely on the opinion of other counsel to the extent set
forth in such opinion, provided such other counsel is reasonably acceptable to
Fifth Third.
(g) Fifth Third shall have received an opinion of Ropes & Gray, counsel to
Fifth Third, addressed to Fifth Third and each Fifth Third Fund, and to Kent and
each Kent Fund in form reasonably satisfactory to Fifth Third and dated the
Exchange Date (which opinion would be based upon certain factual representations
and subject to certain qualifications), to the effect that, on the basis of the
existing provisions of the Code, current administrative rules and court
decisions, for Federal income tax purposes: (i) the transaction will constitute
a reorganization within the meaning of Section 368(a) of the Code, and the Fifth
Third Fund and the Kent Fund each will be a "party to a reorganization" within
the meaning of Section 368(b) of the Code; (ii) no gain or loss will be
recognized by the Fifth Third Fund upon the receipt of the assets of the Kent
Fund in exchange for Fifth Third Shares and the assumption by the Fifth Third
Fund of the liabilities of the Kent Fund; (iii) the basis in the hands of the
Fifth Third Fund of the assets of the Kent Fund transferred to the Fifth Third
Fund in a transaction will be the same as the basis of such assets in the hands
of the Kent Fund immediately prior to the transfer; (iv) the holding periods of
the assets of the Kent Fund in the hands of the Fifth Third Fund will include
the periods during which such assets were held by the Kent Fund; (v) no gain or
loss will be recognized by the Kent Fund upon the transfer of the Kent Fund's
assets to the Fifth Third Fund in exchange for Fifth Third Shares and the
assumption by the Fifth Third Fund of the liabilities of the Kent Fund, or upon
the distribution of Fifth Third Shares by the Kent Fund to its shareholders in
liquidation; (vi) no gain or loss will be recognized by the Kent Fund's
shareholders upon the exchange of their Kent Shares for Fifth Third Shares;
(vii) the aggregate basis of Fifth Third Shares the Kent shareholder receives in
connection with the transaction will be the same as the aggregate basis of his
or her Kent Shares exchanged therefor; (viii) a Kent shareholder's holding
period for his or her Fifth Third Shares will be determined by including the
period for which he or she held the Kent Shares exchanged therefor, provided
that he or she held such Kent Shares as capital assets; and (ix) the Fifth Third
Fund will succeed to and take into account the items of the Kent Fund described
in Section 381(c) of the Code. The Fifth Third Fund will take these items into
account subject to the conditions and limitations specified in Sections 381,
382, 383 and 384 of the Code and the Regulations thereunder.
A-15
(h) Subject to the parties' compliance with Section 6 hereof, the assets
of each Kent Fund to be acquired by the corresponding Fifth Third Fund will
include no assets which the corresponding Fifth Third Fund, by reason of
limitations contained in its Declaration of Trust or of investment restrictions
disclosed in the Fifth Third Prospectuses in effect on the Exchange Date, may
not properly acquire. Fifth Third shall not change the Fifth Third Declaration
of Trust and the Fifth Third Prospectuses so as to restrict permitted
investments for each Fifth Third Fund except as required by the Commission or
any state regulatory authority.
(i) The Registration Statement and the N-1A Post-Effective Amendment shall
have become effective under the 1933 Act and applicable Blue Sky provisions, and
no stop order suspending such effectiveness shall have been instituted or, to
the knowledge of Fifth Third, contemplated by the Commission and or any state
regulatory authority.
(j) All proceedings taken by Kent in connection with the transactions
contemplated by this Agreement and all documents incidental thereto reasonably
shall be satisfactory in form and substance to Fifth Third.
(k) Prior to the Exchange Date, each Kent Fund (other than a Kent Fund
that will combine with a Fifth Third Fund in a manner qualifying for treatment
under Section 368(a)(1)(F) of the Code) shall have declared a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to its shareholders all of its investment company taxable
income for its taxable year ended December 31, 2000 and the short taxable year
beginning January 1, 2001 and ending on the Exchange Date (computed without
regard to any deduction for dividends paid), and all of the Kent Fund's net
capital gain realized in its taxable year ended December 31, 2000 and the short
taxable year beginning on January 1, 2001 and ending on the Exchange Date (after
reduction for any capital loss carryover).
(l) Kent shall have furnished to Fifth Third a certificate, signed by the
President (or any Vice President) and the Treasurer of Kent, as to the tax cost
to Kent of the securities delivered to Fifth Third pursuant to this Agreement,
together with any such other evidence as to such tax cost as Fifth Third may
reasonably request.
(m) Kent Funds' custodian shall have delivered to Fifth Third a
certificate identifying all of the assets and tax costs of each Kent Fund held
by such custodian as of the Valuation Time.
(n) Kent Funds' transfer agent shall have provided to Fifth Third's
transfer agent (i) the originals or true copies of all of the records of each
Kent Fund in the possession of such Kent transfer agent as of the Exchange Date,
(ii) a record specifying the number of Kent Shares of each Kent Fund outstanding
as of the Valuation Time and (iii) a record specifying the name and address of
each holder of record of any such Kent Shares of each Kent Fund and the number
of Kent Shares held of record by each such shareholder as of the Valuation Time.
Kent's transfer agent shall also have provided Fifth Third with a certificate
confirming that the acts specified in the preceding sentence have been taken and
that the information so supplied is complete and accurate to the best knowledge
of the transfer agent.
A-16
(o) All of the issued and outstanding Kent Shares of each Kent Fund shall
have been offered for sale and sold in conformity with all applicable federal or
state securities or blue sky laws and, to the extent that any audit of the
records of Kent or any Kent Fund or its transfer agent by Fifth Third or its
agents shall have revealed otherwise, either (i) Kent and each Kent Fund shall
have taken all actions that in the reasonable opinion of Fifth Third are
necessary to remedy any prior failure on the part of Kent to have offered for
sale and sold such Kent Shares in conformity with such laws or (ii) Kent shall
have furnished (or caused to be furnished) surety, or deposited (or caused to be
deposited) assets in escrow, for the benefit of Fifth Third in amounts
sufficient and upon terms satisfactory, in the opinion of Fifth Third or its
counsel, to indemnify Fifth Third against any expense, loss, claim, damage or
liability whatsoever that may be asserted or threatened by reason of such
failure on the part of Kent to have offered and sold such Kent Shares in
conformity with such laws.
(p) Fifth Third shall have received from Arthur Andersen LLP a letter
addressed to Fifth Third dated as of the Exchange Date reasonably satisfactory
in form and substance to Fifth Third and Kent to the effect that, on the basis
of limited procedures agreed upon by Fifth Third and Kent and described in such
letter (but not an examination in accordance with generally accepted auditing
standards), as of the Valuation Time the value of the assets of each Kent Fund
to be exchanged for the Fifth Third Shares have been determined in accordance
with the valuation procedures for the corresponding Fifth Third Fund as set
forth in the Fifth Third Prospectuses and Statements of Additional Information.
(q) Kent shall have duly executed and delivered to Fifth Third bills of
sale, assignments, certificates and other instruments of transfer ("Transfer
Documents") as Fifth Third may deem necessary or desirable to transfer all of
Kent's and each Kent Fund's entire right, title and interest in and to the
Investments and all other assets of each Kent Fund.
10. Conditions to Kent's Obligations. The obligations of Kent and
--------------------------------
each Kent Fund hereunder shall be subject to the following conditions:
(a) This Agreement shall have been adopted and the transactions
contemplated hereby, including the liquidation of the Kent Funds, shall have
been approved by the shareholders of each Kent Fund in the manner required by
law.
(b) Fifth Third shall have furnished to Kent a statement of each Fifth
Third Fund's net assets, together with a list of portfolio holdings with values
determined as provided in Section 4, all as of the Valuation Time, certified on
Fifth Third's behalf by its President (or any Vice President) and Treasurer (or
any Assistant Treasurer), and a certificate of both such officers, dated the
Exchange Date, to the effect that as of the Valuation Time and as of the
Exchange Date there has been no material adverse change in the financial
position of any Fifth Third Fund since July 31, 2000, other than changes in its
portfolio securities since that date, changes in the market value of its
portfolio securities, changes due to net redemptions, dividends paid or losses
from operations.
(c) Fifth Third shall have executed and delivered to Kent an Assumption of
Liabilities dated as of the Exchange Date pursuant to which each Fifth Third
Fund will assume all of the
A-17
liabilities of the corresponding Kent Fund existing at the Valuation Time in
connection with the transactions contemplated by this Agreement.
(d) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of Fifth Third and each Fifth Third Fund made in
this Agreement are true and correct in all material respects as if made at and
as of such dates, Fifth Third and each Fifth Third Fund has complied with all of
the agreements and satisfied all of the conditions on its part to be performed
or satisfied at or prior to each of such dates, and Fifth Third shall have
furnished to Kent a statement, dated the Exchange Date, signed by Fifth Third's
President (or any Vice President) and Treasurer certifying those facts as of
such dates and further certifying that, to their best knowledge, the assets of
each Kent Fund transferred to a Fifth Third Fund under this Agreement include
only assets which such Fifth Third Fund may properly acquire under its
investment policies, limitations and objectives and may otherwise be lawfully
acquired by such Fifth Third Fund.
(e) There shall not be any material litigation pending or threatened with
respect to the matters contemplated by this Agreement.
(f) Kent shall have received an opinion of Ropes & Gray, in form
reasonably satisfactory to Kent and dated the Exchange Date, to the effect that
(i) Fifth Third is a business trust validly existing in conformity with the laws
of The Commonwealth of Massachusetts, and, to the knowledge of such counsel,
neither Fifth Third nor any Fifth Third Fund is required to qualify to do
business as a foreign association in any jurisdiction, (ii) the Fifth Third
Shares to be delivered to Kent as provided for by this Agreement are duly
authorized and upon such delivery will be validly issued and will be fully paid
and nonassessable by Fifth Third and no shareholder of Fifth Third has any
preemptive right to subscription or purchase in respect thereof, (iii) this
Agreement has been duly authorized, executed and delivered by Fifth Third and,
assuming that the Prospectus, the Registration Statement and the Proxy Statement
comply with the 1933 Act, the 1934 Act and the 1940 Act and assuming due
authorization, execution and delivery of this Agreement by Kent, is a valid and
binding obligation of Fifth Third, (iv) the execution and delivery of this
Agreement did not, and the consummation of the transactions contemplated hereby
will not, violate Fifth Third's Declaration of Trust, as amended, or Bylaws, or
any provision of any agreement known to such counsel to which Fifth Third or any
Fifth Third Fund is a party or by which it is bound, it being understood that
with respect to investment restrictions as contained in Fifth Third's
Declaration of Trust, as amended, Bylaws or then-current prospectus or statement
of additional information of each Fifth Third Fund, such counsel may rely upon a
certificate of an officer of Fifth Third whose responsibility it is to advise
Fifth Third with respect to such matters, (v) no consent, approval,
authorization or order of any court or governmental authority is required for
the consummation by Fifth Third or any Fifth Third Fund of the transactions
contemplated herein, except such as have been obtained under the 1933 Act, the
1934 Act and the 1940 Act and such as may be required under state securities or
blue sky laws and the H-S-R Act and it being understood that such opinion shall
not be deemed to apply to Kent's compliance obligations under the 1933 Act, 1934
Act, 1940 Act, state securities or blue sky laws and the H-S-R Act; and (vi) the
Registration Statement has become effective under the 1933 Act, and to the best
of the knowledge of such counsel, no stop order suspending the
A-18
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
1933 Act.
(g) Kent shall have received an opinion of Ropes & Gray addressed to Kent
and each Kent Fund in a form reasonably satisfactory to Kent and dated the
Exchange Date (which opinion would be based upon certain factual representations
and subject to certain qualifications), with respect to the matters specified in
Section 9(g) of this Agreement.
(h) All proceedings taken by Fifth Third in connection with the
transactions contemplated by this Agreement and all documents incidental thereto
reasonably shall be satisfactory in form and substance to Kent.
(i) The Registration Statement and the N-1A Post-Effective Amendment shall
have become effective under the 1933 Act and applicable Blue Sky provisions, and
no stop order suspending such effectiveness shall have been instituted or, to
the knowledge of Fifth Third, contemplated by the Commission or any state
regulatory authority.
(j) At the Exchange Date, each of the Kent Funds will have sold such of
its assets, if any, if informed by Fifth Third in writing that such sale is
necessary to assure that, after giving effect to the acquisition of the assets
pursuant to this Agreement, each of the Fifth Third Funds designated as a
"diversified company" will remain a "diversified company" within the meaning of
Section 5(b)(1) of the 1940 Act and in compliance with such other mandatory
investment restrictions as are set forth in the Fifth Third Prospectuses
previously furnished to Kent.
(k) Kent shall have received from Fifth Third Asset Management Inc., a
written undertaking that during the first twenty-four months following the
merger of Old Kent Bank and Fifth Third Bank it will waive fees and reimburse
expenses to the extent necessary so that the ratios of operating expenses
(excluding interest, taxes, brokerage commissions, litigation expense and
extraordinary expenses) to average net assets do not exceed the percentages set
forth below:
Fund Name Institutional A
--------- ------------- -----
Fifth Third Large Cap Value 0.92% 1.17%
Fifth Third Equity Index 0.40% 0.65%
Fifth Third Large Cap Growth 0.94% 1.19%
Fifth Third Small Cap Growth 0.92% 1.17%
Fifth Third International GDP 1.01% 1.26%
Fifth Third Bond* 0.80% 1.05%
Fifth Third Intermediate Bond** 0.76% 1.01%
Fifth Third Short Term Bond 0.74% 0.89%
A-19
Fifth Third Municipal Bond 0.79% 1.04%
Fifth Third Intermediate Municipal Bond*** 0.73% 0.98%
Fifth Third Michigan Municipal Bond 0.69% 0.84%
Fifth Third Prime Money Market 0.54% 0.79%
Fifth Third Institutional Government
Money Market 0.40% 0.65%
Fifth Third Michigan Municipal Money
Market 0.54% 0.79%
Fifth Third Institutional Money Market 0.22% n/a
* Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
** Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
*** Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
11. Indemnification. (a) Kent will indemnify and hold harmless Fifth
---------------
Third, its trustees and its officers (for purposes of this subsection, the
"Indemnified Parties") against any and all expenses, losses, claims, damages and
liabilities at any time imposed upon or reasonably incurred by any one or more
of the Indemnified Parties in connection with, arising out of, or resulting from
any claim, action, suit or proceeding in which any one or more of the
Indemnified Parties may be involved or with which any one or more of the
Indemnified Parties may be threatened by reason of any untrue statement or
alleged untrue statement of a material fact relating to Kent or any Kent Fund
contained in the Registration Statement, the Prospectus or the Proxy Statement
or any amendment or supplement to any of the foregoing, or arising out of or
based upon the omission or alleged omission to state in any of the foregoing a
material fact relating to Kent or any Kent Fund required to be stated therein or
necessary to make the statements relating to Kent or any Kent Fund therein not
misleading, including, without limitation, any amounts paid by any one or more
of the Indemnified Parties in a reasonable compromise or settlement of any such
claim, action, suit or proceeding, or threatened claim, action, suit or
proceeding made with the prior consent of Kent. The Indemnified Parties will
notify Kent in writing within ten days after the receipt by any one or more of
the Indemnified Parties of any notice of legal process or any suit brought
against or claim made against such Indemnified Party as to any matters covered
by this Section 11(a). Kent shall be entitled to participate at its own expense
in the defense of any claim, action, suit or proceeding covered by this Section
11(a), or, if it so elects, to assume at its expense by counsel satisfactory to
the Indemnified Parties the defense of any such claim, action, suit or
proceeding, and if Kent elects to assume such defense, the Indemnified Parties
shall be entitled to participate in the defense of any such claim, action, suit
or proceeding at their expense. Kent's and the Kent Funds' obligation under this
Section 11(a) to indemnify and hold harmless the Indemnified Parties shall
constitute
A-20
a guarantee of payment so that the Kent Funds will pay in the first instance any
expenses, losses, claims, damages and liabilities required to be paid by them
under this Section 11(a) without the necessity of the Indemnified Parties' first
paying the same.
(b) Fifth Third will indemnify and hold harmless Kent, its directors and
its officers (for purposes of this subparagraph, the "Indemnified Parties")
against any and all expenses, losses, claims, damages and liabilities at any
time imposed upon or reasonably incurred by any one or more of the Indemnified
Parties in connection with, arising out of, or resulting from any claim, action,
suit or proceeding in which any one or more of the Indemnified Parties may be
involved or with which any one or more of the Indemnified Parties may be
threatened by reason of any untrue statement or alleged untrue statement of a
material fact relating to Fifth Third or any Fifth Third Fund contained in the
Registration Statement, the Prospectus, the N-1A Post-Effective Amendment or the
Proxy Statement, or any amendment or supplement to any of the foregoing, or
arising out of or based upon the omission or alleged omission to state in any of
the foregoing a material fact relating to Fifth Third or any Fifth Third Fund
required to be stated therein or necessary to make the statements relating to
Fifth Third or any Fifth Third Fund therein not misleading, including, without
limitation, any amounts paid by any one or more of the Indemnified Parties in a
reasonable compromise or settlement of any such claim, action, suit or
proceeding, or threatened claim, action, suit or proceeding made with the prior
consent of Fifth Third. The Indemnified Parties will notify Fifth Third in
writing within ten days after the receipt by any one or more of the Indemnified
Parties of any notice of legal process or any suit brought against or claim made
against such Indemnified Party as to any matters covered by this Section 11(b).
Fifth Third shall be entitled to participate at its own expense in the defense
of any claim, action, suit or proceeding covered by this Section 11(b), or, if
it so elects, to assume at its expense by counsel satisfactory to the
Indemnified Parties the defense of any such claim, action, suit or proceeding,
and, if Fifth Third elects to assume such defense, the Indemnified Parties shall
be entitled to participate in the defense of any such claim, action, suit or
proceeding at their own expense. The Fifth Third Funds' obligation under this
Section 11(b) to indemnify and hold harmless the Indemnified Parties shall
constitute a guarantee of payment so that the Fifth Third Funds will pay in the
first instance any expenses, losses, claims, damages and liabilities required to
be paid by them under this Section 11(b) without the necessity of the
Indemnified Parties' first paying the same.
12. No Broker, etc. Each of Fifth Third and Kent represents that there
--------------
is no person who has dealt with it who by reason of such dealings is entitled to
any broker's or finder's or other similar fee or commission arising out of the
transactions contemplated by this Agreement.
13. Termination. Fifth Third and Kent may, by mutual consent of their
-----------
respective trustees, terminate this Agreement, and Fifth Third or Kent, after
consultation with counsel and by consent of their respective trustees and
directors or an officer authorized by such trustees or directors, may waive any
condition to their respective obligations hereunder. If the transactions
contemplated by this Agreement have not been substantially completed by December
31, 2001, this Agreement shall automatically terminate on that date unless a
later date is agreed to by Fifth Third and Kent.
A-21
This Agreement may be terminated by Fifth Third if the conditions set forth
in Section 9 are not satisfied as specified in that Section. This Agreement may
be terminated by Kent if the conditions set forth in Section 10 are not
satisfied as specified in that Section.
Notwithstanding any other provision in this Agreement, in the event
shareholder approval of this Agreement and the transactions contemplated by this
Agreement is obtained with respect to only one or more Kent Funds but not all of
the Kent Funds, Fifth Third and Kent agree to consummate those transactions with
respect to those Kent Funds that have approved this Agreement and those
transactions.
14. Covenants, etc. Deemed Material. All covenants, agreements,
-------------------------------
representations and warranties made under this Agreement and any certificates
delivered pursuant to this Agreement shall be deemed to have been material and
relied upon by each of the parties, notwithstanding any investigation made by
them or on their behalf.
15. Sole Agreement; Amendments. This Agreement supersedes all previous
--------------------------
correspondence and oral communications between the parties regarding the subject
matter hereof, constitutes the only understanding with respect to such subject
matter, may not be changed except by a letter of agreement signed by each party
hereto, and shall be construed in accordance with and governed by the laws of
The Commonwealth of Massachusetts.
16. Fifth Third Agreement and Declaration of Trust Fifth Third is a
----------------------------------------------
business trust organized under Massachusetts law and under a Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of The Commonwealth of Massachusetts and elsewhere as
required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "Fifth Third Funds" entered into in the name or on
behalf thereof by any of the Trustees, officers, employees or agents are made
not individually, but in such capacities, and are not binding upon any of the
Trustees, officers, employees, agents or shareholders of Fifth Third personally,
but bind only the assets of Fifth Third and all persons dealing with any series
or funds of Fifth Third, such as the Fifth Third Funds, must look solely to the
assets of Fifth Third belonging to such series or funds for the enforcement of
any claims against Fifth Third.
17. Kent Agreement and Declaration of Trust Kent is a business trust
---------------------------------------
organized under Massachusetts law and under a Declaration of Trust, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of The Commonwealth of Massachusetts and elsewhere as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of "Kent Funds" entered into in the name or on behalf thereof by any
of the Trustees, officers, employees or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of Kent personally, but bind only the assets
of Kent and all persons dealing with any series or funds of Kent, such as the
Kent Funds, must look solely to the assets of Kent belonging to such series or
funds for the enforcement of any claims against Kent.
This Agreement may be executed in any number of counter-parts, each of
which, when executed and delivered, shall be deemed to be an original.
A-22
KENT FUNDS
On Behalf of its Kent Funds
By:___________________________
FIFTH THIRD FUNDS
On Behalf of its Fifth Third Funds
By:____________________________
A-23
APPENDIX B
MANAGEMENT DISCUSSION AND ANALYSIS
Fifth Third Bond Fund for Income
An interview with Roberta Tucker, portfolio manager.
Q. How did the Fund perform during the six-month period ended January 31, 2001?
A. The Fund generated a 6.02% total return on Investment A Shares (before the
deduction of sales charge).1 That return reflected an income distribution of
$0.35 per share and an increase in the Fund's net asset value from $11.50 on
August 1, 2000 to $11.81 as of January 31, 2001. The Fund's benchmarks, the
Lehman Brothers Intermediate Government/Credit Bond Index 2 and the Lipper
Short-Intermediate Investment Grade Bond Funds Average,3 returned 7.61% and
6.19%, respectively.
Q. What were the conditions in the bond market during the period?
A. Bond yields fell during the period. Slower-than- expected economic growth
caused investors to predict that the Fed would cut interest rates in an effort
to boost the economy and prevent a recession. In fact, the Fed did cut rates
twice in January by a total of one percentage point. Short-term bond yields,
which are greatly affected by Fed policy, fell more than yields on long-term
bonds. For example, the yield on a 2-year Treasury security fell 1.71%, versus
0.78% for a 30-year Treasury bond. The corporate bond market was volatile, as
investors worried that companies would have a hard time paying their debt as the
economy slowed. Investors favored high-quality issues backed by the U.S.
government as the credit quality of corporate bonds deteriorated.
Q. How did you position the Fund in that environment?
A. We increased the Fund's average maturity slightly during the period in order
to maintain a steady income level as interest rates fell. The Fund's average
maturity at the end of the period was 3.9 years, up from 3.8 years on August
31, 2000. The average maturity was shorter than that of its benchmark; that
strategy benefited the Fund as short-term bonds outperformed longer-term
securities.* We upgraded the Fund's credit quality due to uncertainty in the
corporate bond market. The Fund's portfolio at the beginning of the period had
an average credit rating of Aa2, and we raised that rating to Aa1 by the end of
January. That increase in credit quality benefited the Fund as investors favored
high-quality securities in the weakening economic environment. We also found
opportunities to capture additional yield by investing in high-quality corporate
issues.*
Q. What is your outlook for the bond market, and how will you manage the Fund in
that environment?
A. We expect the economy to continue to slow during the coming months. The Fed
will likely need to cut rates further, causing yields on short-term bonds to
fall. Yields could rise later in 2001 if the Fed successfully jump starts the
economy. We will continue to focus on Treasury and select high-quality corporate
bonds that offer investors attractive yields and stable income. Our focus on
high quality helps ensure that the fixed-income portion of shareholders'
portfolios will be relatively stable. We will continue to avoid risky bonds with
low credit ratings: We believe that investors who want to increase their total
return are better served by investing in the equity markets than by chasing
returns among low-quality bonds. As always, we will seek opportunities to help
capture yields and maintain a steady income level for shareholders, while
providing a competitive total return.
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than the original cost.
/1/ The six-month return, with the maximum sales charge of 4.50%, was 1.26%. *
The composition of the portfolio is subject to change. For the same period, the
total return set forth may reflect the waiver of a portion of the Fund's
advisory or administrative service fees. In such instances, and without waiver
of fees, total return would have been lower.
B-1
/2/ The Fund's performance is measured against the Lehman Brothers Intermediate
Government/Credit Bond Index, which represents the performance of the bond
market as a whole. The index is unmanaged and does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of Fifth Third Bond Fund for Income does
reflect the deduction of fees for these value-added services.
/3/ The Lipper Short-Intermediate Investment Grade Bond Funds Average is an
average of managed funds that seek to invest at least 65% of their assets in
investment-grade debt issues (rated in the top four grades) with dollar-weighted
average maturities of one to five years. Investors cannot invest directly in an
index, although they can invest in its underlying securities.
B-2
Growth of $10,000 Invested in the Fifth Third Bond Fund For Income
INSERT CHART
$ 5,000
$10,000
$15,000
$20,000
$25,000
$20,041
$17,017
$18,554
$18,344
$17,415
Lehman Brothers Intermediate Government/Credit Index
Lipper Short-Intermediate U.S. Government Bond Funds Average
Institutional Shares
Investment A Shares*
Investment C Shares**
7/00 7/99 7/98 7/97 7/96 7/95 7/94 7/93 7/92 7/91 7/90
Average Annual Tot al Return for the Period Ended July 31, 2000 1
Investment A* Investment C**
Institutional***
1 Year..................... -0.77% ................ 3.43% ................ 4.09%
5 Year..................... 4.01% ................ 4.21% ................ 5.08%
10 Year.................... 5.70% ................ 5.29% ................ 6.26%
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
The chart represents historical performance of a hypothetical investment of
$10,000 in the Bond Fund For Income from 7/31/90 to 7/31/00, and represents the
reinvestment of dividends and capital gains in the Fund.
/1/ The quoted performance of the Bond Fund For Income includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/90, and prior to the Bond Fund For Income's commencement of
operations on 1/27/97, as adjusted to reflect the expenses associated with the
Fund (without waivers or reimbursements).
These collectively managed accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If such accounts had
been registered, the performance may have been adversely affected. The
performance shown reflects the deduction of fees for value-added services
associated with a mutual fund, such as investment management and fund accounting
fees. The performance also reflects reinvestment of all dividends and capital-
gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 1/27/97. The performance figures
for Investment C Shares for periods prior to such date represent the performance
for Investment A Shares of the Fund adjusted to reflect fees charged by
Investment C Shares. Investment C shareholders that redeem within one year of
purchase are subject to a contingent deferred sales charge of 1.00%. Investment
C Shares are also subject to administrative service fees at a maximum rate of
0.25% and Rule 12b-1 fees of up to 0.75% of the average daily net asset value of
Investment C Shares. If these fees were reflected, performance would have been
lower. Investment A Shares are subject to Rule 12b-1 fees of up to 0.25% of the
average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares. The Fund's performance is measured
against the Lehman Brothers Intermediate Government/Credit Index, an unmanaged
index generally representative of the performance of the bond market as a whole.
The Fund's performance is also measured against the Lipper Short-Intermediate
Investment Grade Bond Funds Average, representative of the average of the total
returns reported by all of the mutual funds designated by Lipper, Inc. falling
into this category. The Lehman Brothers Intermediate Government/Credit Index
does not reflect the deduction of fees associated with a mutual fund such as
investment management and fund accounting fees. However, the Lipper Short-
Intermediate Investment Grade Bond Funds Aver age and the Fund's performance
reflect the deduction of fees for these value-added services. Investors cannot
invest directly in an index, although they can invest in the underlying
securities.
B-3
Fifth Third Quality Bond Fund
An interview with Roberta Tucker, portfolio manager.
Q. How did the Fund perform during the six-month period ended January 31, 2001?
A. The Fund generated a 6.46% total return on Investment A Shares (before the
deduction of sales charge).1 That return reflected an income distribution of
$0.28 per share and an increase in the Fund's net asset value from $9.40 on
August 1, 2000 to $9.70 as of January 31, 2001. The Fund's benchmarks, the
Lehman Brothers Aggregate Bond Index,2 and the Lipper Intermediate Investment
Grade Debt Funds Average,3 returned 8.12% and 7.40%, respectively.
Q. What was the environment like in the bond market during the period?
A. The U.S. economy experienced a significant slowdown due to factors such as
the Fed's restrictive monetary policy, high energy prices and eroding consumer
confidence brought on by stock market volatility. The slowdown hurt corporate
profit t growth and caused investors to fear that the economy would enter
recession. The Fed in January cut short-term interest rates twice, by a total of
one percentage point, in an effort to spark economic growth. Bond yields fell in
that environment, in anticipation of the Fed's rate cuts. Yields on short-term
Treasury bonds, which are closely linked to Fed policy, fell more than yields on
longer-term issues. For example, the yield on a 2-year Treasury security fell
1.71%, versus 0.78% for a 30-year Treasury bond. Corporate bonds experienced
considerable volatility, as investors worried that the weakening economy would
prevent some companies from paying back their debt. Investors favored government
agency issues as the credit quality of corporate bonds begin to deteriorate.
Q. How did you position the Fund in that environment?
A. We reduced the Fund's average maturity from 5.2 years at the beginning of the
period to 4.9 years by the end of January as yields fell. The Fund's neutral
average maturity relative to its peers helped the Fund post competitive returns
without having to make a large bet on the direction of interest rates.* We also
increased the Fund's credit quality during the period due to fears of a slowdown
in corporate earnings growth. The Fund's portfolio ended the period with an
average credit rating of AAA, up from Aa1. That approach helped the Fund, as
investors favored high-quality securities in the uncertain market. We
overweighted Treasury securities and underweighted corporate bonds, although we
were able to find opportunities to capture additional yield by purchasing select
corporate issues.*
Q. What is your outlook for the bond market, and how will you manage the Fund in
that environment?
A. The economy will likely continue to weaken somewhat during the first half of
2001, requiring the Fed to cut rates further to avoid a recession. Yields on
short-term bonds should continue to fall, while yields on long-term bonds will
remain relatively stable. We will continue to focus on Treasury and select high-
quality corporate bonds that offer attractive yields. The additional yield
available on lower-rated issues is not enough to justify their additional credit
risk, especially in a weak economic environment. We will underweight mortgage-
backed securities, which should be volatile during the first half of the year
due to falling interest rates and an increase in pre-payments. We see a very
choppy market ahead for government agency securities, because of potential
legislation that could remove the government-backed guarantee from agencies such
as Fannie Mae and Freddie Mac.
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than the original cost.
* The composition of the portfolio is subject to change.
/1/ The six-month return, with the maximum sales charge of 4.50%, was 1.69%. For
the same period, the total return set forth may reflect the waiver of a portion
of the Fund's advisory or administrative service fees. In such instances, and
without waiver of fees, total return would have been lower.
/2/ The Fund's performance is measured against the Lehman Brothers Aggregate
Bond Index, which is generally representative of the performance of the bond
market as a whole. The index is unmanaged and does not reflect the deduction of
fees associated with a mutual fund, such as investment management and fund
accounting fees. The performance of Fifth Third Quality Bond Fund does reflect
the deduction of fees for these value-added services.
/3/ The Lipper Intermediate Investment Grade Debt Funds Average is an average of
managed funds that seek to invest at least 65% of their assets in investment-
grade debt issues (rated in the top four grades) with dollar-weighted average
maturities of five to ten years. Investors cannot invest directly in an index,
although they can invest in its underlying securities.
B-4
Growth of $10,000 Invested in the Fifth Third Quality Bond Fund
$21,124
$20,129
$17,641
$18,662
$17,226
$ 5,000
$10,000
$15,000
$20,000
$25,000
Lipper Intermediate Investment Grade Debt Funds Average
Lehman Brothers Aggregate Bond Index
Institutional Shares
Investment A Shares*
Investment C Shares**
7/00 7/99 7/98 7/97 7/96 7/95 7/94 7/93 7/92 7/91 7/90
Average Annual Total Return for the Period Ended July 31, 2000 1
Investment A* Investment C**
Institutional***
1 Year..................... -0.30%................. 3.98% ................ 4.66%
5 Year..................... 4.17%................. 4.46% ................ 5.34%
10 Year..................... 5.84%................. 5.59% ................ 6.44%
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
The chart represents historical performance of a hypothetical investment of
$10,000 in the Quality Bond Fund from 7/31/90 to 7/31/00, and represents the
reinvestment of dividends and capital gains in the Fund.
/1/ The quoted performance of the Quality Bond Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/90, and prior to the Quality Bond Fund's commencement of
operations on 11/20/92, as adjusted to reflect the expenses associated with the
Fund (without waivers or reimbursements). These collectively managed accounts
were not registered with the Securities and Exchange Commission and, therefore,
were not subject to the investment restrictions imposed by law on registered
mutual funds. If such accounts had been registered, the performance may have
been adversely affected. The performance shown reflects the deduction of fees
for value-added services associated with a mutual fund, such as investment
management and fund accounting fees. The performance also reflects reinvestment
of all dividends and capital-gains distributions.
*Reflects the maximum sales charge of 4.50%.
**Investment C Shares were initially offered 4/25/96. The performance figures
for Investment C Shares for periods prior to such date represent the performance
for Investment A Shares of the Fund adjusted to reflect fees charged by
Investment C Shares. Investment C Shareholders that redeem within one year of
purchase are subject to a contingent deferred sales charge of 1.00%. Investment
C Shares are also subject to administrative service fees at a maximum rate of
0.25% and Rule 12b-1 fees of up to 0.75% of the average daily net asset value of
Investment C Shares. If these fees were reflected, performance would have been
lower. Investment A Shares are subject to Rule 12b-1 fees of up to 0.25% of the
average daily net asset value of Investment A Shares.
***The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
The Fund's performance is measured against the Lehman Brothers Aggregate Bond
Index, an unmanaged index generally representative of the performance of the
bond market as a whole, and the Lipper Intermediate Investment Grade Debt Funds
Aver age, representative of the average of the total returns reported by all of
the mutual funds designated by Lipper, Inc. falling into this category. The
Lehman Brothers Aggregate Bond Index does not reflect the deduction of fees
associated with a mutual fund such as investment management and fund accounting
fees. However, the Lipper Intermediate Investment Grade Debt Funds Average and
the Fund's performance reflect the deduction of fees for these value-added
services. Investors cannot invest directly in an index, although they can invest
in the underlying securities.
B-5
Fifth Third Municipal Bond Fund/+/
An interview with Roberta Tucker, portfolio manager.
Q. How did the Fund perform during the six months ended January 31, 2001?
A. The Fund delivered a total return of 5.27% on Investment A Shares (before the
deduction of sales charge).1 That return reflected an income distribution of
$0.23 per share, and an increase in the Fund's net asset value from $11.47 to
$11.83 per share. The Fund's benchmarks, the Lehman Brothers Municipal Bond
Index,2 and the Lipper Intermediate Municipal Debt Funds Average,3 returned
6.47% and 5.42%, respectively.
Q. What were conditions like in the municipal bond market during the period?
A. U.S. economic growth slowed considerably during the period, as the interest
rate cuts made by the Fed in 1999 and early 2000 took effect. In fact, the
economy slowed so much that corporate profits began to suffer and investors
expressed concerns about the possibility of recession. Municipal fixed-income
securities performed well in that environment, as investors expected the Fed to
cut rates in an attempt to boost economic growth. The Fed did indeed cut short-
term rates twice in January, by 50 basis points each time. That easing policy
helped yields on short-term securities fall. Furthermore, significant stock
market volatility increased demand for municipal securities. Short-and
intermediate-term munis outperformed long-term issues. A relatively low supply
of municipal issues also benefited performance during the period.
Strong economic growth in recent years has created surpluses for many
municipalities, allowing them to issue fewer new bonds.
Q. How did you position the Fund in that environment?
A. The Fund's average maturity typically is shorter than that of the benchmark.
That approach benefited the Fund during the period. We locked in gains as the
muni market rallied by reducing the Fund's average maturity from 7.1 years in
August to 5.9 years by the end of January.* We continued to focus on high-
quality municipal issues, improving the credit rating of the Fund's portfolio
from Aa2 to Aa1 during the period. We increased the Fund's position in high-
quality insured bonds, which offered attractive yields. That strategy benefited
the Fund, as insured bonds outperformed other sectors of the muni market. It
also enabled the Fund to maintain a stable level of income for shareholders.*
Q. What is your outlook for the municipal bond market, and how will you position
the Fund in that environment?
A. We expect the economy and corporate profits to further weaken during the
first half of 2001, and we anticipate more interest rate cuts by the Fed in
order to prevent recession. We believe the high-quality municipal issues in
which the Fund invests should perform well in that environment. Rates could rise
again during the second half of the year if the Fed is successful at jump-
starting the economy. We will continue to favor high-quality municipal issues,
looking to increase the Fund's exposure to insured securities. We also will
overweight short-term issues, which should post strong performance as the Fed
continues to cut rates. We will also look for opportunities among new issues,
which should increase in number as rates fall.
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than the original cost.
+ Some or all of the income may be subject to the federal alternative minimum
tax and to certain state and local taxes.
* The composition of the portfolio is subject to change.1 The six-month return,
with the maximum sales charge of 4.50%, was 0.53%. For the same period, the
total return set forth may reflect the waiver of a portion of the Fund's
advisory or administrative service fees. In such instances, and without waiver
of fees,total return would have been lower.
/2/ The Lehman Brothers Municipal Bond Index is generally representative of
municipal bonds with intermediate maturities. The index is unmanaged and does
not reflect the deduction of fees associated with a mutual fund, such as
investment management and fund accounting fees. The performance of Fifth Third
Municipal Bond Fund does reflect the deduction of fees for these value-added
services.
/3/ The Lipper Intermediate Municipal Debt Funds Average is an average of
managed funds that seek to invest primarily in municipal debt issues with
dollar-weighted average maturities of five to ten years. Investors cannot invest
directly in an index, although they can invest in its underlying securities.
B-6
Growth of $10,000 Invested in the Fifth Third Municipal Bond Fund
$16,096
$19,780
$17,917
$15,309
$ 7,500
$10,000
$12,500
$15,000
$17,500
$20,000
Lipper Intermediate Municipal Debt Funds Average
Lehman Brothers Municipal Bond Index
Institutional Shares
Investment A Shares*
7/00 7/99 7/98 7/97 7/96 7/95 7/94 7/93 7/92 7/91 7/90
Average Annual Total Return for the Period Ended July 31, 2000 1
Investment A*
Institutional**
1 Year............................................. -2.56% ............... 2.37%
5 Year............................................. 2.85% ............... 3.88%
10 Year............................................. 4.35% ............... 4.88%
Past performance is not indicative of future results. The investment return and
NAV will fluctuate, so that an investor's shares, when redeemed, may be worth
more or less than their original cost.
The chart represents historical performance of a hypothetical investment of
$10,000 in the Municipal Bond Fund from 7/31/90 to 7/31/00, and represents the
reinvestment of dividends and capital gains in the Fund.
/1/ The quoted performance of the Municipal Bond Fund includes performance of
certain collectively managed accounts advised by Fifth Third Bank, for periods
dating back to 7/31/90, and prior to the Municipal Bond Fund's commencement of
operations on 1/27/97, as adjusted to reflect the expenses associated with the
Fund (without waivers or reimbursements).
These collectively managed accounts were not registered with the Securities and
Exchange Commission and, therefore, were not subject to the investment
restrictions imposed by law on registered mutual funds. If such accounts had
been registered, the performance may have been adversely affected. The
performance shown reflects the deduction of fees for value-added services
associated with a mutual fund, such as investment management and fund accounting
fees. The performance also reflects reinvestment of all dividends and capital-
gains distributions.
*Reflects the maximum sales charge of 4.50%.
**The performance for the Institutional Shares prior to 8/11/98 is based on the
performance of the Investment A Shares.
As of July 31, 2000 the Fifth Third Municipal Bond Fund had no Investment C
shares outstanding.
The Fund's performance is measured against the Lehman Brothers Municipal Bond
Index, an unmanaged index that is generally representative of the municipal bond
market. The Fund's performance is also measured against the Lipper Intermediate
Municipal Debt Funds Average, which is representative of the average of the
total returns reported by all of the mutual funds designated by Lipper, Inc.
falling into this category. The Lehman Brothers Municipal Bond Index does not
reflect the deduction of fees associated with a mutual fund such as investment
management and fund accounting fees. However, the Lipper Intermediate Municipal
Debt Funds Average and the Fund's performance reflect the deduction of fees for
these value-added services. Investors cannot invest directly in an index,
although they can invest in the underlying securities.
7
Fifth Third Money Market Funds
An interview with John Hoeting, portfolio manager.
Q. What were the conditions in the money markets during the six-month period
ended January 31,2001?
A. The environment for money market securities changed dramatically during the
period. Investors at the beginning of the period expected the Fed to raise
interest rates in order to slow the economy and hold off inflation. Those
conditions pushed yields on short-term securities higher than yields on longer-
term issues--an unusual situation called an inverted yield curve. But the
economy in December showed signs of a dramatic slowdown, as manufacturing
decreased, energy prices rose, consumer confidence waned and the stock market
declined. Those factors led investors to believe that the Fed would cut rates in
order to prevent a recession. The Fed in January took action to boost economic
growth, lowering the Federal Funds rate twice for a total decrease of one
percentage point. Yields on short-term securities fell in that environment.
Q. How did you position the Funds in that environment?
A. We lengthened the Funds' average maturities when possible, to help lock in
high yields for shareholders. We adopted that strategy because of our belief
that the Fed would lower interest rates to prevent the economy from suffering a
severe slowdown (our approach was hampered somewhat by large inflows of assets).
The average maturity of the Fifth Third U.S. Treasury Money Market Fund ranged
between 19 and 31 days during the period. The Fifth Third Government Money
Market Fund's average maturity ranged between 39 days and 51 days. The average
maturity of the Fifth Third Prime Money Market Fund ranged from 42 days to 60
days. The Fifth Third Tax Exempt Money Market Fund's average maturity ranged
between 21 days and 37 days.
Q. What is your outlook going forward, and how will you manage the Funds in that
environment?
A. We believe the Fed is likely to cut interest rates further, in order to
stimulate economic growth. Meanwhile, we expect the economy in the short term to
continue to slow. The extent of the near-term slowdown depends largely on
consumer confidence and spending, since consumers comprise roughly three-
quarters of economic activity. The credit markets will continue to be difficult,
as the economic slowdown makes it harder for corporations to pay their debts.
That said, we expect the economy to rebound in the second half of the year as
the Fed's monetary easing takes effect. We will continue to look for yield
opportunities without sacrificing the safety of shareholders' principal. We will
maintain the Funds' sector weighting close to neutral with their benchmarks, and
will continue to hold very high-quality issues.
Fifth Third Prime Money Market Fund is a no-load money market mutual fund that
invests primarily in high-quality commercial paper. Commercial paper represents
very short-term borrowings made by banks and other corporations.
Fifth Third Government Money Market Fund is a no-load money market fund that
invests in short-term U.S. government securities. The Fund limits its
investments to U.S. government securities paying interest that generally would
be exempt from state personal income tax.
Fifth Third U.S. Treasury Money Market Fund is a no-load money market mutual
fund that invests in short-term U.S. Treasury obligations and repurchase
agreements fully collateralized by such Treasury securities.
Fifth Third Tax Exempt Money Market Fund 1 is a no-load money market mutual fund
that invests in a portfolio of high-grade short-term municipal bonds and notes,
and tax-exempt commercial paper.
An investment in the Fifth Third Money Market Funds is not insured or guaranteed
by the FDIC or any other government agency. Although the Fund seeks to preserve
the value of your investment at $1.00 per share, it is possible to lose money by
investing in the Fund.
/1/ The Fund's income may be subject to certain state and local taxes and,
depending on your tax status, the federal alternative minimum tax.
8
APPENDIX C
FORM OF NEW INVESTMENT ADVISORY AGREEMENT
FORM OF
NEW INVESTMENT ADVISORY AGREEMENT
This Agreement is made this ____ day of ______________, 2001, by and between
[NAME OF ADVISER] (the "Advisor") and Kent Funds, a Massachusetts business trust
(the "Trust").
WHEREAS, the Trust is an open-end management investment company as that term is
defined in the Investment Company Act of 1940 and is registered as such with the
Securities and Exchange Commission; and
WHEREAS, the Advisor is engaged in the business of rendering investment advisory
and management services.
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. The Trust hereby appoints Advisor as Investment Advisor for each of the
portfolios ("Funds") of the Trust listed on Schedule A of this Agreement, as may
be amended from time to time by mutual agreement of the parties, and Advisor
accepts the appointments. Subject to the direction of the Trustees of the Trust,
Advisor shall provide investment research and supervision of the investments of
each of the Funds and conduct a continuous program of investment evaluation and
of appropriate sale or other disposition and reinvestment of each Fund's assets.
2. Advisor, in its supervision of the investments of each of the Funds will be
guided by each of the Fund's fundamental investment policies and the provisions
and restrictions contained in the Declaration of Trust and By-Laws of the Trust
and as set forth in the Registration Statement and exhibits as may be on file
with the Securities and Exchange Commission.
3. The Trust shall pay or cause to be paid, on behalf of each Fund, all of the
Fund's expenses and the Fund's allocable share of Trust expenses, including
without limitation, the expenses of organizing the Trust and continuing its
existence; fees and expenses of officers and Trustees of the Trust; fees for
investment advisory services and administrative services; fees and expenses of
preparing and printing amendments to its Registration Statement under the
Securities Act of 1933 and the Investment Company Act of 1940; expenses of
registering and qualifying the Trust, the Funds and shares of the Funds
("Shares") under Federal and state laws and regulations; expenses of preparing,
printing and distributing prospectuses (and any amendments thereto) and sales
literature; expenses of registering, licensing, or other authorization of the
Trust as a broker-dealer and of its officers as agents and salesmen under
federal and state laws and regulations; interest expense, taxes, fees and
commissions of every kind; expenses of issue (including cost of Share
certificates), purchase, repurchase and redemption of Shares, including expenses
attributable to a program of periodic issue; charges and expenses of custodians,
transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars; printing and mailing costs, auditing, accounting and legal expenses;
reports to shareholders and governmental officers and commissions; expenses of
meetings of Trustees and shareholders and proxy solicitations therefor;
insurance expenses; association membership dues; and such nonrecurring
C-1
items as may arise, including all losses and liabilities incurred in
administering the Trust and the Funds. The Trust will also pay each Fund's
allocable share of such extraordinary expenses as may arise, including expenses
incurred in connection with litigation, proceedings, and claims and the legal
obligations of the Trust to indemnify its officers and Trustees and agents with
respect thereto.
4. The Trust, on behalf of each of the Funds shall pay to Advisor, for all
services rendered to such Fund by Advisor hereunder, the fees set forth in the
exhibits attached hereto.
5. The Advisor may from time to time and for such periods as it deems
appropriate reduce its compensation (and, if appropriate, assume expenses of one
or more of the Funds); (i) to the extent that any Fund's expenses exceed such
lower expense limitation; (ii) for any other reason, as the Advisor may, by
notice to the Fund, voluntarily declare to be effective.
6. This Agreement will become effective as to a particular Fund as of the date
first written above or, if a particular Fund is not in existence on that date,
the date a registration statement relating to that Fund becomes effective with
the SEC. This Agreement shall remain in effect for each Fund until the first
meeting of shareholders held after the effective date applicable to the
respective Fund, and if approved at such meeting by the shareholders of a
particular Fund, shall continue in effect for such Fund for two years from the
effective date and from year to year thereafter, subject to the provisions for
termination and all of the other terms and conditions hereof if: (a) such
continuation shall be specifically approved at least annually by the vote of a
majority of the Trustees of the Trust, including a majority of the Trustees who
are not parties to this Agreement or interested persons of any such party (other
than as Trustees of the Trust) cast in person at a meeting called for that
purpose; and (b) Advisor shall not have notified the Trust in writing at least
sixty (60) days prior to the anniversary date of this Agreement in any year
thereafter that it does not desire such continuation with respect to that Fund.
7. Notwithstanding any provision in this Agreement, it may be terminated at
any time with respect to any Fund, without the payment of any penalty, by the
Trustees of the Trust or by a vote of the shareholders of that Fund on sixty
(60) days' written notice to Advisor.
8. This Agreement may not be assigned by Advisor and shall automatically
terminate in the event of any assignment. Advisor may employ or contract with
such other person, persons, corporation or corporations at its own cost and
expense as it shall determine in order to assist it in carrying out this
Agreement, provided that no delegation of advisory responsibilities shall occur
which would require approval under the Investment Company Act of 1940.
9. In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties under this Agreement on the part of
Advisor, Advisor shall not be liable to the Trust or to any of the Funds or to
any shareholder for any act or omission in the course of or connected in any way
with rendering services or for any losses that may be sustained in the purchase,
holding or sale of any security.
10. (a) Subject to the conditions set forth below, the Trust agrees to
indemnify and hold harmless the Advisor and each person, if any, who
controls the Advisor within the
C-2
meaning of Section 15 of the 1933 Act and Section 20 of the Securities
Exchange Act of 1934, as amended, against any and all loss, liability,
claim, damage and expense whatsoever, (including but not limited to any and
all expense whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened, or any claim
whatsoever) arising out of or based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
or the Prospectus (as from time to time amended and supplemented) or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make statements therein not misleading,
unless such statement or omission was made in reliance upon and conformity
with written information furnished to the Trust with respect to the Advisor
by or on behalf of the Advisor expressly for use in the Registration
Statement or Prospectus, or any amendment or supplement thereof.
If any action is brought against the Advisor or any controlling person
thereof in respect of which indemnity may be sought against the Trust
pursuant to the foregoing paragraph, the Advisor shall promptly notify the
Trust in writing of the institution of such action and the Trust shall
assume the defense of such action, including the employment of counsel
selected by the Trust and payment of expenses. The Advisor or any such
controlling person thereof shall have the right to employ separate counsel
in any such case, but the fees and expenses of such counsel shall be at the
expense of the Advisor or such controlling person unless the employment of
such counsel shall have been authorized in writing by the Trust in
connection with the defense of such action or the Trust shall not have
employed counsel to have charge of the defense of such action, in any of
which events such fees and expenses shall be borne by the Trust. Anything
in this paragraph to the contrary notwithstanding, the Trust shall not be
liable for any settlement of any such claim or action effected without its
written consent. The Trust agrees promptly to notify the Advisor of the
commencement of any litigation or proceedings against the Trust or any of
its officers or Trustees or controlling persons in connection with the
issue and sale of shares or in connection with such Registration Statement
or Prospectus.
(b) The Advisor agrees to indemnify and hold harmless the Trust, each of
its Trustees, each of its officers who have signed the Registration
Statement and each other person, if any, who controls the Trust within the
meaning of Section 15 of the 1933 Act, to the same extent as the foregoing
indemnity from the Trust to the Advisor but only with respect to statements
or omissions, if any, made in the Registration Statement or Prospectus or
any amendment or supplement thereof in reliance upon, and in conformity
with, information furnished to the Trust with respect to the Advisor by or
on behalf of the Advisor expressly for use in the Registration Statement or
Prospectus or any amendment or supplement thereof. In case any action shall
be brought against the Trust or any other person so indemnified based on
the Registration Statement or Prospectus, or any amendment or supplement
thereof, and in respect of which indemnity may be sought against the
Advisor, the Advisor shall have the rights and duties given to the Trust,
and the Trust and each other person so indemnified shall have the rights
and duties given to the Advisor by the provisions of subsection (a) above.
C-3
(c) Nothing herein contained shall be deemed to protect any person against
liability to the Trust or its shareholders to which such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of the duties of such person or by reason of
the reckless disregard by such person of the obligations and duties of such
person under this Agreement.
11. This Agreement may be amended at any time by agreement of the parties
provided that any material amendment shall be approved both by the vote of a
majority of the Trustees of the Trust, including a majority of Trustees who are
not parties to this Agreement or interested persons of any such party to this
Agreement (other than as Trustees of the Trust), cast in person at a meeting
called for that purpose, and on behalf of a Fund by a majority of the
outstanding voting securities of such Fund.
12. The Advisor acknowledges that all sales literature for investment companies
(such as the Trust) are subject to strict regulatory oversight. The Advisor
agrees to submit any proposed sales literature for the Trust (or any Fund) or
for itself or its affiliates which mentions the Trust (or any Fund) to the
Trust's distributor for review and filing with the appropriate regulatory
authorities prior to the public release of any such sales literature. The Trust
agrees to cause its distributors to promptly review all such sales literature to
ensure compliance with relevant requirements, to promptly advise Advisor of any
deficiencies contained in such sales literature, to promptly file complying
sales literature with the relevant authorities, and to cause such sales
literature to be distributed to prospective investors in the Trust.
13. Advisor is hereby expressly put on notice of the limitation of liability as
set forth in Article XI of the Declaration of Trust and agrees that the
obligations pursuant to this Agreement of a particular Fund and of the Trust
with respect to that particular Fund be limited solely to the assets of that
particular Fund, and Advisor shall not seek satisfaction of any such obligation
from the assets of any other Fund, the shareholders of any Fund, the Trustees,
officers, employees or agents of the Trust, or any of them.
14. This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Massachusetts, without regard to its conflict of law
principles.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the
day and year first above written.
[NAME OF INVESTMENT ADVISER] KENT FUNDS
By: __________________________ By: ______________________________
Name: ________________________ Name: ____________________________
Title: _______________________ Title: ___________________________
C-4
SCHEDULE A
TO
INVESTMENT ADVISORY AGREEMENT
Dated __________________
SCHEDULE OF ANNUAL INVESTMENT ADVISORY FEES
-------------------------------------------
Fund Annual Advisory Fee
- ---- -------------------
Kent Growth & Income Fund 0.70% of the Portfolio's average daily net assets
Kent Index Equity Fund 0.30% of the Portfolio's average daily net assets
Kent Large Company Growth Fund 0.70% of the Portfolio's average daily net assets
Kent Small Company Growth Fund 0.70% of the Portfolio's average daily net assets
Kent International Growth Fund 0.75% of the Portfolio's average daily net assets
Kent Income Fund 0.60% of the Portfolio's average daily net assets
Kent Intermediate Bond Fund 0.55% of the Portfolio's average daily net assets
Kent Short Term Bond Fund 0.50% of the Portfolio's average daily net assets
Kent Tax-Free Income Fund 0.55% of the Portfolio's average daily net assets
Kent Intermediate Tax-Free Fund 0.50% of the Portfolio's average daily net assets
Kent Michigan Municipal Bond Fund 0.45% of the Portfolio's average daily net assets
Kent Money Market Fund 0.40% of the Portfolio's average daily net assets
Kent Government Money Market Fund 0.40% of the Portfolio's average daily net assets
Kent Michigan Municipal Money Market Fund 0.40% of the Portfolio's average daily net assets
Kent Science and Technology Fund 0.70% of the Portfolio average daily net assets
Kent Canterbury Fund 0.70% of the Portfolio's average daily net assets
Kent Cascade Fund 0.70% of the Portfolio's average daily net assets
Lyon Street Institutional Money Market Fund 0.40% of the Portfolio's average daily net assets
C-5
FIFTH THIRD FUNDS
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information contains information which may be
of interest to investors but which is not included in the Combined
Prospectus/Proxy Statement (the "Prospectus") of Fifth Third Funds dated June 8,
2001 [FIFTH THIRD CONFIRM] relating to the transfer of assets from each Kent
---------------------
Fund to the corresponding Fifth Third Fund as follows:
Kent Funds New Fifth Third Funds
- ---------- ---------------------
Kent Government Money Market Fund Fifth Third Institutional Government Money
Market Fund
Lyon Street Institutional Money Market Fund Fifth Third Institutional Money Market Fund
Kent Michigan Municipal Money Market Fund Fifth Third Michigan Municipal Money Market Fund
Kent International Growth Fund Fifth Third International GDP Fund
Kent Small Company Growth Fund Fifth Third Small Cap Growth Fund
Kent Large Company Growth Fund Fifth Third Large Cap Growth Fund
Kent Index Equity Fund Fifth Third Equity Index Fund
Kent Growth and Income Fund Fifth Third Large Cap Value Fund
Kent Short Term Bond Fund Fifth Third Short Term Bond Fund
Kent Michigan Municipal Bond Fund Fifth Third Michigan Municipal Bond Fund
Kent Tax-Free Income Fund Fifth Third Municipal Bond Fund
Kent Funds Pre-Existing Fifth Third Funds
- ---------- ------------------------------
Kent Intermediate Bond Fund Fifth Third Intermediate Bond Fund
Kent Income Fund Fifth Third Long Term Bond Fund
Kent Intermediate Tax-Free Fund Fifth Third Intermediate Municipal Bond Fund
Kent Money Market Fund Fifth Third Prime Money Market Fund
The Statement of Additional Information for each Kent Fund dated May 1,
2001, the Statement of Additional Information for the Fifth Third Funds dated
June 8, 2001, and the Annual Reports for each Kent Fund for the year ended
December 31, 2000 and for each Fifth Third Fund for the year ended July 31, 2000
(as well as the Semi-Annual Report for each Fifth Third Fund) have been filed
with the Securities and Exchange Commission and are incorporated herein by
reference. This Statement of Additional Information is not a prospectus and is
authorized for distribution only when it accompanies or follows delivery of the
Prospectus. This Statement of Additional Information should be read in
conjunction with the Prospectus. A copy of the June 8, 2001 Prospectus may be
obtained, without charge, by writing Fifth Third Funds, 3435 Stelzer Road,
Columbus, OH 43219 or by calling 1-800-799-5353.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement. The audited financial statements and related
independent accountants' report for the Existing Fifth Third Funds contained in
the Annual Report dated July 31, 2000, are hereby incorporated herein by
reference. No other parts of the Annual Reports are incorporated by reference
herein. The audited financial statements and related independent accountants'
report for the Kent Funds contained in the Annual Report dated December 31, 2000
are incorporated herein by reference. No other parts of the Annual Report are
incorporated by reference herein.
The date of this Statement of Additional Information is May 14, 2001.
TABLE OF CONTENTS
Financial Statements of the combined Reorganizing Kent
Funds and Existing Fifth Third Funds on a pro forma basis as of and for
the year ended December 31, 2000
(unaudited)......................................................... B-4
Kent Intermediate Bond Fund
Fifth Third Bond Fund For Income
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Bond
Intermediate Fund For Pro Forma Intermediate Fifth Third Bond Pro Forma
Bond Fund Income Combined Bond Fund Fund for Income Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Asset Backed Securities
- ------------------------------------------------------------------------------------------------------------------------------------
Finance - Consumer Loans
$ 5,000,000 $ - $ 5,000,000 MBNA Master Credit Card Trust, 6.73%, 1/15/01* $ 5,004,150 $ - $ 5,004,150
10,000,000 - 10,000,000 Mellon Residential Funding Corp., 6.92%, 3/25/30 10,150,226 - 10,150,226
5,000,000 - 5,000,000 Toyota Auto Receivables Owner Trust, 7.21%, 4/15/07 5,161,850 - 5,161,850
----------- ----------- -----------
20,316,226 - 20,316,226
- ------------------------------------------------------------------------------------------------------------------------------------
Financial
- 495,182 495,182 GE Capital Management, 6.940%, 3/25/27 - 493,256 493,256
----------- ----------- -----------
Total Asset Backed Securities 20,316,226 493,256 20,809,482
- ------------------------------------------------------------------------------------------------------------------------------------
Commercial Paper
- ------------------------------------------------------------------------------------------------------------------------------------
Financial Services - Diversified
10,000,000 - 10,000,000 Electric Capital Corp., 6.51%**, 1/16/01 9,972,833 - 9,972,833
----------- ----------- -----------
Total Commercial Paper 9,972,833 - 9,972,833
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate Notes & Bonds
- ------------------------------------------------------------------------------------------------------------------------------------
Auto/Truck - Original Equipment
8,000,000 - 8,000,000 TRW, Inc., 6.05%, 1/15/05 7,380,000 - 7,380,000
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive
5,000,000 - 5,000,000 Ford Motor Co., 7.45%, 7/16/31 4,700,000 - 4,700,000
- ------------------------------------------------------------------------------------------------------------------------------------
Banking
5,000,000 - 5,000,000 ABN-Amro Bank NV (Chicago), 7.25%, 5/31/05 5,156,250 - 5,156,250
6,000,000 - 6,000,000 Bank of Montreal-Chicago, 7.80%, 4/1/07 6,172,500 - 6,172,500
10,000,000 - 10,000,000 BB&T Corp., 7.25%, 6/15/07 10,125,000 - 10,125,000
10,000,000 - 10,000,000 Chase Manhattan Corp., 6.75%, 9/15/06 10,025,000 - 10,025,000
4,000,000 - 4,000,000 Chase Manhattan Corp., 7.88%, 6/15/10 4,220,000 - 4,220,000
6,000,000 - 6,000,000 First Union National Bank, 7.88%, 2/15/10 6,247,500 - 6,247,500
5,000,000 - 5,000,000 J.P. Morgan & Co., 7.63%, 9/15/04 5,200,000 - 5,200,000
6,700,000 - 6,700,000 Keycorp, 7.25%, 6/1/05 6,775,375 - 6,775,375
5,270,000 - 5,270,000 Keycorp, 6.75%, 3/15/06 5,263,413 - 5,263,413
5,000,000 - 5,000,000 MBNA American bank NA, 7.25%, 9/15/02 5,050,000 - 5,050,000
5,000,000 - 5,000,000 National City Bank, 6.25%, 3/15/11 4,681,250 - 4,681,250
5,000,000 - 5,000,000 NCNB Corp., 9.38%, 9/15/09 5,712,500 - 5,712,500
5,000,000 - 5,000,000 Northern Trust Corp., 7.10%, 8/1/09 5,093,750 - 5,093,750
8,000,000 - 8,000,000 PNC Funding Corp., 6.13%, 2/15/09 7,590,000 - 7,590,000
----------- ----------- -----------
87,312,538 - 87,312,538
- ------------------------------------------------------------------------------------------------------------------------------------
Brokers
8,500,000 - 8,500,000 Donaldson Lufkin Jenrette, 5.88%, 4/1/02 8,468,125 - 8,468,125
5,000,000 - 5,000,000 Salomon Smith Barney, 7.13%, 10/1/06 5,087,500 - 5,087,500
----------- ----------- -----------
13,555,625 - 13,555,625
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Intermediate Bond Fund
Fifth Third Bond Fund For Income
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Bond
Intermediate Fund For Pro Forma Intermediate Fifth Third Bond Pro Forma
Bond Fund Income Combined Bond Fund Fund for Income Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Electronic Components/Instruments
$ 10,000,000 $ - $10,000,000 Tandy Corp., 6/15%, 1/15/02 $ 9,950,000 $ - $ 9,950,000
- ------------------------------------------------------------------------------------------------------------------------------------
Finance
5,000,000 - 5,000,000 Associates Corp., N.A., 6.52%, 10/11/02 5,037,500 - 5,037,500
5,000,000 - 5,000,000 Citigroup Capital II, 7.75%, 12/1/36 4,681,250 - 4,681,250
5,000,000 - 5,000,000 Citigroup, Inc., 7.45%, 6/6/02 5,100,000 - 5,100,000
5,000,000 - 5,000,000 Fleet Financial Group, 7.38%, 12/1/09 5,156,250 - 5,156,250
10,000,000 - 10,000,000 Ford Capital Guaranteed Notes, 9.88%, 5/15/02 10,437,500 - 10,437,500
8,400,000 - 8,400,000 Ford Motor Credit Corp., 9.03%, 12/30/09, 9,061,500 - 9,061,500
Callable 12/30/04@100
5,000,000 - 5,000,000 General Electric Capital Corp., 7.50%, 5/15/05 MTN 5,281,250 - 5,281,250
5,000,000 - 5,000,000 General Motors Acceptance Corp., 5.35%, 12/7/01 4,968,750 - 4,968,750
5,000,000 - 5,000,000 General Motors Acceptance Corp., 7.13%, 5/1/03 5,037,500 - 5,037,500
10,000,000 - 10,000,000 General Motors Acceptance Corp., 7.75%, 1/19/10 10,300,000 - 10,300,000
5,000,000 - 5,000,000 Household Finance Corp., 8.00%, 8/1/04 5,212,500 - 5,212,500
5,000,000 - 5,000,000 Household Finance Corp., 6.50%, 11/15/08 4,800,000 - 4,800,000
4,000,000 - 4,000,000 Verizon Global Funding Corp., 7.25%, 12/1/10 (b) 4,060,000 - 4,060,000
5,000,000 - 5,000,000 Wells Fargo Co., 6.50%, 6/1/05 5,018,750 - 5,018,750
6,000,000 - 6,000,000 Wells Fargo Financial, Inc., 5.38%, 9/30/03 5,850,000 - 5,850,000
------------ ----------- -----------
90,002,750 - 90,002,750
- ------------------------------------------------------------------------------------------------------------------------------------
Financial
- 7,000,000 7,000,000 Lehman Brothers, 7.750%, 1/15/05 - 7,232,554 7,232,554
- 5,000,000 5,000,000 Mellon Bank Corp., 7.375%, 5/15/07 - 5,216,870 5,216,870
- 5,000,000 5,000,000 Respol Corp., 7.450%, 7/15/05 - 5,140,965 5,140,965
- 10,000,000 10,000,000 Transamerica Fin Corp., 7.250%, 8/15/02 - 10,128,910 10,128,910
------------ ----------- -----------
- 27,719,299 27,719,299
- ------------------------------------------------------------------------------------------------------------------------------------
Food - Diversified
5,000,000 - 5,000,000 Conagra Inc., 5.50%, 10/15/01 4,950,000 - 4,950,000
- ------------------------------------------------------------------------------------------------------------------------------------
Gas Transmission
5,000,000 - 5,000,000 Enron Corp., 6.40%, 7/15/06 4,962,500 - 4,962,500
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial
- 7,000,000 7,000,000 AT&T Canada Inc., 7.650%, 9/15/06 - 6,857,060 6,857,060
- 5,000,000 5,000,000 GTE California, 7.650%, 3/15/07 - 5,257,790 5,257,790
- 6,000,000 6,000,000 Hertz Co., 7.625%, 8/15/07 - 6,176,664 6,176,664
- 7,000,000 7,000,000 Jones Apparel Co., 7.875%, 6/15/06 - 6,669,026 6,669,026
- 6,000,000 6,000,000 Qwest Corp., 7.625%, 6/9/03 - 6,101,334 6,101,334
- 5,000,000 5,000,000 Southern National Corp., 7.050%, 5/23/03 - 5,060,650 5,060,650
- 5,000,000 5,000,000 U.S. West, 6.375%, 7/15/08 - 4,758,810 4,758,810
------------ ----------- -----------
- 40,881,334 40,881,334
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Goods & Services
5,500,000 - 5,500,000 Boston Scientific, 6.63%, 3/15/05 5,005,000 - 5,005,000
5,000,000 - 5,000,000 Tyco International Group SA, 6.13%, 6/15/01 4,981,250 - 4,981,250
------------ ----------- -----------
9,986,250 - 9,986,250
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance
5,000,000 - 5,000,000 St. Paul Companies, Inc., 7.19%, 8/2/07 5,125,000 - 5,125,000
5,100,000 - 5,100,000 Travelers Group, Inc., 6.88%, 12/15/03 5,163,750 - 5,163,750
------------ ----------- -----------
10,288,750 - 10,288,750
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Intermediate Bond Fund
Fifth Third Bond Fund For Income
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Bond Kent
Intermediate Fund For Pro Forma Intermediate Fifth Third Bond Pro Forma
Bond Fund Income Combined Bond Fund Fund For Income Combined
Principal Principal Principal Market Market Market
Amount/Shares Amount/Shares Amount/Shares Security Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------
International
$ - $ 10,000,000 $ 10,000,000 Quebec Province, $ -
7.000%, 1/30/07 $ 10,352,620 $ 10,352,620
- -----------------------------------------------------------------------------------------------------------------------
Machinery &
Equipment
6,000,000 - 6,000,000 Case Corp., 2,767,500 -
7.25%, 1/15/16 2,767,500
- -----------------------------------------------------------------------------------------------------------------------
Multimedia
3,500,000 - 3,500,000 Time Warner, Inc., 4,064,375 -
9.13%, 1/15/13 4,064,375
- -----------------------------------------------------------------------------------------------------------------------
Rental Auto/Equipment
5,000,000 - 5,000,000 Hertz Corp., 4,706,250 -
6.25%, 3/15/09 4,706,250
- -----------------------------------------------------------------------------------------------------------------------
Telecommunications
6,000,000 - 6,000,000 Bell Canada, 6,240,000 -
7.75%, 4/1/06 6,240,000
- -----------------------------------------------------------------------------------------------------------------------
Transportation - Railroad
7,000,000 - 7,000,000 Union Pacific Co., 6,938,750 -
6.34%, 11/25/03 6,938,750
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
-------------- ---------- -----------
Total Corporate Notes and Bonds 267,805,288 78,953,253 346,758,541
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Agency Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae
20,000,000 - 20,000,000 6.63%, 1/15/02 20,174,800 - 20.174,800
20,000,000 - 20,000,000 6.75%, 2/15/02 20,350,000 - 20,350,000
10,000,000 - 10,000,000 5.13%, 2/13/04 9,882,100 - 9,882,100
- 8,000,000 8,000,000 5.810%, 3/2/04 - 7,993,640 7,993,640
- 7,750,000 7,750,000 7.100%, 10/18/04 - 7,821,990 7,821,990
25,000,000 - 25,000,000 7.00%, 7/15/05 26,250,000 - 26,250,000
22,500,000 - 22,500,000 6.63%, 10/15/07 23,456,250 - 23,456,250
5,000,000 - 5,000,000 6.38%, 6/15/09 5,120,200 - 5,120,200
12,000,000 - 12,000,000 6.25%, 11/18/23 11,856,840 - 11,856,840
-------------- ------------ -----------
117,090,190 15,815,630 132,905,820
- -----------------------------------------------------------------------------------------------------------------------
Federal Farm Credit Bank
10,000,000 - 10,000,000 6.30%, 9/23/04 10,191,400 10,191,400
- -----------------------------------------------------------------------------------------------------------------------
Federal Home Loan Bank
7,500,000 - 7,500,000 6.75%, 5/1/02 7,604,025 - 7,604,025
5,000,000 - 5,000,000 6.49%, 1/8/04 5,118,750 - 5,118,750
- 8,000,000 8,000,000 6.905%, 10/18/04 - 8,145,256 8,145,256
-------------- ------------ -------------
12,722,775 8,145,256 20,868,031
- -----------------------------------------------------------------------------------------------------------------------
Freddie Mac
- 19 19 7.500%, 2/1/02 - 19 19
- 10,000,000 10,000,000 7.350%, 2/28/03 - 10,017,420 10,017,420
48,000,000 - 48,000,000 7.38%, 5/15/03 49,860,000 - 49,860,000
15,000,000 - 15,000,000 6.38%, 11/15/03 15,300,000 - 15,300,000
10,410,000 - 10,410,000 8.12%, 1/31/05 11,300,263 - 11,300,263
3,000,000 - 3,000,000 7.22%, 6/16/06 3,198,750 - 3,198,750
9,100,000 - 9,100,000 6.00%, 11/15/22 9,038,029 - 9,038,029
8,744,500 - 8,744,500 6.00%, 3/1/29 8,490,385 - 8,490,385
-------------- ------------ ------------
97,187,427 10,017,439 107,204,866
- -----------------------------------------------------------------------------------------------------------------------
Kent Intermediate Bond Fund
Fifth Third Bond Fund For Income
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Bond Kent
Intermediate Fund For Pro Forma Intermediate Fifth Third Bond Pro Forma
Bond Fund Income Combined Bond Fund Fund For Income Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Government National Mortgage Association
$ - $ 8,466,882 $ 8,466,882 9.500%, 12/15/09, Pool#780318 $ - $ 9,010,623 $ 9,010,623
- 913,621 913,621 10.500%, 7/15/14, Pool#321016 - 975,378 975,378
- 4,640,165 4,640,165 7.500%, 10/15/29 - 4,719,813 4,719,813
------------ ---------------- ------------
- 14,705,814 14,705,814
------------ ---------------- ------------
Total U.S. Government Agency Obligations 237,191,792 48,684,139 285,875,931
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Obligations
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds
24,500,000 - 24,500,000 9.13%, 5/15/09 27,256,250 - 27,256,250
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes
10,000,000 - 10,000,000 6.50%, 3/31/02 10,126,100 - 10,126,100
- 13,000,000 13,000,000 6.500%, 5/31/02 - 13,197,041 13,197,041
- 9,000,000 9,000,000 5.750%, 4/30/03 - 9,116,190 9,116,190
19,450,000 - 19,450,000 7.50%, 2/15/05 21,153,626 - 21,153,626
5,000,000 15,000,000 20,000,000 6.75%, 5/15/05 5,322,000 15,966,045 21,288,045
- 5,000,000 5,000,000 5.625%, 2/15/06 - 5,117,405 5,117,405
39,500,000 - 39,500,000 7.00%, 7/15/06 43,003,649 - 43,003,649
6,250,000 - 6,250,000 6.13%, 8/15/07 6,579,563 - 6,579,563
12,700,000 15,250,000 27,950,000 6.00%, 8/15/09 13,404,596 16,096,160 29,500,756
- 9,000,000 9,000,000 6.500%, 2/15/10 - 9,850,068 9,850,068
21,300,000 - 21,300,000 5.75%, 8/15/10 22,323,252 - 22,323,252
------------ ---------------- ------------
121,912,786 69,342,909 191,255,695
------------ ---------------- ------------
Total U.S. Government Obligations 149,169,036 69,342,909 218,511,945
- ------------------------------------------------------------------------------------------------------------------------------------
Yankee Certificates of Deposit
- ------------------------------------------------------------------------------------------------------------------------------------
10,000,000 - 10,000,000 Potash Corp. Saskatchewan, 7.13%,
6/15/07 9,562,500 - 9,562,500
------------ ---------------- ------------
Total Yankee Certificates of Deposit 9,562,500 - 9,562,500
- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreement
- ------------------------------------------------------------------------------------------------------------------------------------
- 5,908,000 5,908,000 Warburg/Dillon, 6.000%, 1/2/01 - 5,908,000 5,908,000
------------ ---------------- ------------
Total Repurchase Agreement - 5,908,000 5,908,000
- ------------------------------------------------------------------------------------------------------------------------------------
Investment Companies
- ------------------------------------------------------------------------------------------------------------------------------------
187,520 - 187,520 Dreyfus Cash Management Money
Market Fund 187,520 - 187,520
17,513,354 - 17,513,354 Federated Prime Value Obligations
Money Market Fund 17,513,354 - 17,513,354
------------ ---------------- ------------
Total Investment Companies 17,700,874 - 17,700,874
- ------------------------------------------------------------------------------------------------------------------------------------
------------ ---------------- ------------
Total (Cost $708,974,056, $198,255,054 and $907,229,110, respectively) (a) $711,718,549 $ 203,381,557 $915,100,106
------------ ---------------- ------------
Other assets in excess of liabilities $ 11,856,882 $ 3,442,507 $ 15,299,389
------------ ---------------- ------------
Net Assets $723,575,431 $ 206,824,064 $930,399,495
============ ================ ============
(a) Represents cost for financial reporting and Federal income tax purposes and
differs from market value by net unrealized appreciation.
(b) Rule 144A, Section 4(2) or other security which is restricted as to resale
to institutional investors. The Portfolio's advisor has determined this
security to be liquid based on procedures approved by the Board of Trustees.
* Variable rate security. Rate presented represents rate in effect at December
31, 2000. Maturity date reflects next rate change date.
** Effective yield at purchase.
MTN - Medium Term Note
NV - Naamloze Vennootschap (Dutch Corporation)
SA - Sociedad Anonima (Spanish Corporation)
Kent Intermediate Bond Fund
Fifth Third Bond Fund For Income
Pro Forma Combining Statements of Assets and Liabilities
As of 12/31/00
(Unaudited)
Kent Intermediate Fifth Third Bond
Assets: Bond Fund Fund For Income
--------- ---------------
Investment in securities, at value
(cost $708,974,056, $198,255,054 and $907,229,110, respectively) $ 711,718,549 $ 203,381,557
Collateral for securities loaned 133,979,036 -
Cash - 81,236
Interest and dividends receivable 12,229,983 3,416,872
Receivable for investments sold 10,119,531 2
Receivable for Fund shares sold 1,493 675
Other assets 17,416 67,963
----------- -----------
Total Assets 868,066,008 206,948,305
----------- -----------
Liabilities:
Payable for return of collateral received for securities loaned 133,979,036 -
Payable for investments purchased 10,081,250 -
Payable for Fund shares redeemed 1,656 20,918
Accrued expenses and other payables:
Investment advisory fees 339,841 97,174
Administration fees 21,484 -
Distribution services - Investment A Shares
(Investment - Kent) 2,115 5,408
Distribution services - Investment C Shares - -
Shareholder servicing - Investment C Shares - 741
Other 65,195 -
----------- -----------
Total Liabilities 144,490,577 124,241
----------- -----------
Net Assets:
Paid-in Capital 749,954,475 234,959,382
Undistributed net investment income 72,228 98,680
Accumulated net realized losses on investments,
futures and foreign currency transactions (29,195,765) (33,360,501)
Net unrealized appreciation on investments,
futures and foreign currency transactions 2,744,493 5,126,503
------------- -------------
Total Net Assets $ 723,575,431 $ 206,824,064
------------- -------------
Net Assets:
Institutional Shares $ 714,445,493 $ 181,006,692
Investment A Shares (a) 9,129,938 25,512,025
Investment C Shares NA 305,347
------------- -------------
Total $ 723,575,431 $ 206,824,064
============= =============
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized, no par value:)
Institutional Shares 73,984,399 15,442,554
Investment A Shares (a) 943,113 2,178,626
Investment C Shares NA 26,065
------------- -------------
Total 74,927,512 17,647,245
============= =============
Net Asset Value
Institutional Shares $ 9.66 $ 11.72
============= =============
Investment A Shares-redemption price per share (a) $ 9.68 $ 11.71
============= =============
Investment C Shares-offering price per share* NA $ 11.71
============= =============
Maximum sales charge- Investment A Shares NA 4.50%
Maximum Offering Price
(100%/(100%-Maximum sales charge) of net asset value
adjusted to nearest cent) per share (Investment A Shares) NA $ 12.26
============= =============
Pro Forma Pro Forma Combined
Assets: Adjustments (Note 1)
----------- ------------------
Investment in securities, at value
(cost $708,974,056, $198,255,054 and $907,229,110, respectively) $ - $ 915,100,106
Collateral for securities loaned - 133,979,036
Cash - 81,236
Interest and dividends receivable - 15,646,855
Receivable for investments sold - 10,119,533
Receivable for Fund shares sold - 2,168
Other assets - 85,379
------------ ------------------
Total Assets - 1,075,014,313
------------ ------------------
Liabilities:
Payable for return of collateral received for securities loaned - 133,979,036
Payable for investments purchased - 10,081,250
Payable for Fund shares redeemed - 22,574
Accrued expenses and other payables:
Investment advisory fees - 437,015
Administration fees - 21,484
Distribution services - Investment A Shares
(Investment - Kent) 7,523
Distribution services - Investment C Shares - -
Shareholder servicing - Investment C Shares - 741
Other - 65,195
------------ -------------
Total Liabilities - 144,614,818
------------ -------------
Net Assets:
Paid-in Capital - 984,913,857
Undistributed net investment income - 170,908
Accumulated net realized losses on investments,
futures and foreign currency transactions - (62,556,266)
Net unrealized appreciation on investments,
futures and foreign currency transactions - 7,870,996
------------ -------------
Total Net Assets $ - $ 930,399,495
============ =============
Net Assets:
Institutional Shares $ - $ 895,452,185
Investment A Shares (a) - 34,641,963
Investment C Shares - 305,347
------------ -------------
Total $ - $ 930,399,495
============ =============
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized, no par value:)
Institutional Shares 3,301,593 (b) 92,728,546
Investment A Shares (a) 456,739 (b) 3,578,478
Investment C Shares 5,477 (b) 31,542
------------ -------------
Total 3,763,809 96,338,566
============ =============
Net Asset Value
Institutional Shares $ 9.66
=============
Investment A Shares-redemption price per share (a) $ 9.68
=============
Investment C Shares-offering price per share* $ 9.68
=============
Maximum sales charge- Investment A Shares 4.50%
Maximum Offering Price
(100%/(100%-Maximum sales charge) of net asset value
adjusted to nearest cent) per share (Investment A Shares) 10.14
=============
_________________
* Redemption price per share varies by length of time shares are held.
(a) For Kent, represents Investment Shares.
(b) Adjustment to convert Fifth Third Shares Outstanding to Kent Shares
Outstanding based on Kent's NAV's
Kent Intermediate Bond Fund
Fifth Third Bond Fund For Income
Pro Forma Combining Statements of Operations
For the year ended 12/31/00
(Unaudited)
Kent Fifth Third Pro Forma
Intermediate Bond Fund for Pro Forma Combined
Bond Fund Income Adjustments (Note 1)
-------------- --------------- -------------- -------------
INVESTMENT INCOME:
Interest income $ 54,593,018 $ 15,036,243 $ - $ 69,629,261
Dividend income 1,609,789 - - 1,609,789
Securities lending income 347,224 - - 347,224
-------------- --------------- -------------- -------------
Total Income 56,550,031 15,036,243 - 71,586,274
-------------- --------------- -------------- -------------
EXPENSES:
Investment advisory fees 4,416,302 1,196,960 - 5,613,262
Administrative fees 1,446,306 386,292 (62,887) (a) 1,769,711
Distribution services - Investment A Shares
(Investment - Kent) 27,626 71,653 - 99,279
Distribution services - Investment C Shares - 3,002 - 3,002
Shareholder servicing - Investment C Shares - 1,001 - 1,001
Fund accounting fees 130,971 43,526 6,148 (b) 180,645
Custodian fees 20,074 14,581 45 (c) 34,700
Other fees 123,433 79,724 264,276 (d) 467,433
-------------- --------------- -------------- -------------
Total Expenses: 6,164,712 1,796,739 207,582 8,169,033
-------------- --------------- -------------- -------------
Less fees voluntarily reduced (42,528) (88,052) (277,658) (408,238)
-------------- --------------- -------------- -------------
Net Expenses 6,122,184 1,708,687 (70,076) 7,760,795
-------------- --------------- -------------- -------------
Net Investment Income 50,427,847 13,327,556 70,076 63,825,479
-------------- --------------- -------------- -------------
Realized and Unrealized Gains/(Losses) from
Investments, Futures and Foreign Currency
Transactions:
Net realized losses from investments, futures
and foreign currency transactions (10,280,492) (4,857,986) - (15,138,478)
Net change in unrealized appreciation (depreciation)
from investments, futures and translation of
assets and liabilities in foreign currencies 31,271,146 8,596,143 - 39,867,289
-------------- --------------- -------------- -------------
Net realized/unrealized gains/(losses) from investments,
futures and foreign currency transactions 20,990,654 3,738,157 - 24,728,811
-------------- --------------- -------------- -------------
Change in net assets resulting from operations $ 71,418,501 $ 17,065,713 $ 70,076 $ 88,554,290
============== =============== ============== =============
_____________________________________________
(a) Adjustment to reflect the Fifth Third contractual fee structure for
Administration fees (0.1734% of net assets).
(b) Adjustment to reflect the Fifth Third contractual fee structure for
Accounting fees (Tiered fee structure starting at 0.02%).
(c) Adjustment to reflect the Fifth Third contractual fee structure for
Custodian fees (Tiered fee structure starting at 0.01%).
(d) Adjustment to reflect the Fifth Third fee structure when the two funds
merge.
Kent Income Fund
Fifth Third Quality Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third Fifth Third
Kent Income Quality Bond Pro Forma Kent Income Quality Bond Pro Forma
Fund Fund Combined Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ----------------------------------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES
- ----------------------------------------------------------------------------------------------------------------------------------
Finance-Consumer Loans
$ 5,000,000 $ - $ 5,000,000 MBNA Master Credit Card Trust, 7.35%, 7/16/07 $ 5,247,950 $ - $ 5,247,950
9,500,000 - 9,500,000 Toyota Auto Receivables Owner Trust, 7.21%, 4/15/07 9,807,515 - 9,807,515
----------- ----------- -----------
Total Asset Backed Securities 15,055,465 - 15,055,465
- ----------------------------------------------------------------------------------------------------------------------------------
CORPORATE NOTES & BONDS
- ----------------------------------------------------------------------------------------------------------------------------------
Automotive
5,000,000 - 5,000,000 Ford Motor Co., 7.45%, 7/16/31 4,700,000 - 4,700,000
- ----------------------------------------------------------------------------------------------------------------------------------
Banking
2,700,000 - 2,700,000 Bank of Montreal-Chicago, 7.80%, 4/1/07 2,777,625 - 2,777,625
2,000,000 - 2,000,000 Bank of New York, 8.50%, 12/15/04 2,145,000 - 2,145,000
2,000,000 - 2,000,000 BankAmerica Corp., 7.20%, 4/15/06 2,055,000 - 2,055,000
2,000,000 - 2,000,000 Chase Manhattan Corp., 7.13%, 3/1/05 2,047,500 - 2,047,500
5,000,000 - 5,000,000 First Union Corp., 8.13%, 6/24/02 5,112,500 - 5,112,500
5,000,000 - 5,000,000 First Union National Bank, 7.88%, 2/15/10 5,206,250 - 5,206,250
2,000,000 - 2,000,000 Fleet/Norstar Group, 8.63%, 1/15/07 2,167,500 - 2,167,500
2,000,000 - 2,000,000 Midland Bank PLC, 7.63%, 6/15/06 2,082,500 - 2,082,500
3,000,000 - 3,000,000 National City Bank, 7.25%, 7/15/10 3,030,000 - 3,030,000
5,000,000 - 5,000,000 NCNB Corp., 10.20%, 7/15/15 6,006,249 - 6,006,249
5,000,000 - 5,000,000 Northern Trust Corp., 7.10%, 8/1/09 5,093,750 - 5,093,750
5,000,000 - 5,000,000 PNC Bank N.A., 7.88%, 4/15/05 5,212,500 - 5,212,500
2,000,000 - 2,000,000 HSBC New York Corp., 7.00%, 3/22/11 1,952,500 - 1,952,500
2,000,000 - 2,000,000 Swiss Bank Corp. - New York, 7.38%, 7/15/15 2,010,000 - 2,010,000
----------- ----------- -----------
46,898,874 - 46,898,874
- ----------------------------------------------------------------------------------------------------------------------------------
Brokers
5,000,000 - 5,000,000 Lehman Brothers Holdings, Inc., 8.75%, 3/15/05 5,343,750 - 5,343,750
2,000,000 - 2,000,000 Salomon, Inc., 6.75%, 2/15/03 2,017,500 - 2,017,500
----------- ----------- -----------
7,361,250 - 7,361,250
- ----------------------------------------------------------------------------------------------------------------------------------
Finance
3,500,000 - 3,500,000 British Gas Finance, 6.63%, 6/1/18 3,202,500 - 3,202,500
2,000,000 - 2,000,000 Discover Credit, 9.26%, 3/20/12 2,365,000 - 2,365,000
5,000,000 - 5,000,000 Ford Motor Credit Corp., 9.03%, 12/30/09,
Callable 12/30/09 @ 100 5,393,750 - 5,393,750
5,000,000 - 5,000,000 General Motors Acceptance Corp., 7.50%, 7/15/05 5,118,750 - 5,118,750
3,500,000 - 3,500,000 Great Western Financial Trust II, 8.21%, 2/1/27,
Callable 2/1/07 @ 104 3,220,000 - 3,220,000
3,000,000 - 3,000,000 Household Finance Corp., 6.50%, 11/15/08 2,880,000 - 2,880,000
4,000,000 - 4,000,000 St. Paul Cos., Inc., 7.25%, 8/9/07 4,115,000 - 4,115,000
----------- ----------- -----------
26,295,000 - 26,295,000
- ----------------------------------------------------------------------------------------------------------------------------------
Financial, Insurance, & Real Estate
- 7,000,000 7,000,000 Citibank Credit Card Series 2000-A3, 6.88%, 11/15/07 - 7,387,848 7,387,848
- 5,000,000 5,000,000 U.S. West Capital Funding Inc., 6.25%, 7/15/05 - 4,902,005 4,902,005
- 5,000,000 5,000,000 Wachovia Corp., 6.93%, 10/15/03 - 5,067,505 5,067,505
----------- ----------- -----------
- 17,357,358 17,357,358
- ----------------------------------------------------------------------------------------------------------------------------------
Gas Transmission
5,000,000 - 5,000,000 Enron Corp., 6.40%, 7/15/06 4,962,500 - 4,962,500
2,500,000 - 2,500,000 Enserch Corp., 7.13%, 6/15/05 2,562,500 - 2,562,500
----------- ----------- -----------
7,525,000 - 7,525,000
- ----------------------------------------------------------------------------------------------------------------------------------
Industrial Goods & Services
5,000,000 - 5,000,000 Cyprus Amax, 7.38%, 5/15/07 4,912,500 - 4,912,500
3,000,000 - 3,000,000 Engelhard Corp., 7.38%, 8/1/06 3,086,250 - 3,086,250
----------- ----------- -----------
7,998,750 - 7,998,750
- ----------------------------------------------------------------------------------------------------------------------------------
Industrials
- 10,000,000 10,000,000 AT&T Canada, 7.65%, 9/15/06 - 9,795,800 9,795,800
- 10,000,000 10,000,000 Jones Apparel, 7.88%, 6/15/06 - 9,527,180 9,527,180
----------- ----------- -----------
- 19,322,980 19,322,980
- ----------------------------------------------------------------------------------------------------------------------------------
Kent Income Fund
Fifth Third Quality Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third Fifth Third
Kent Income Quality Bond Pro Forma Kent Income Quality Bond Pro Forma
Fund Fund Combined Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Insurance
$ 2,000,000 $ - $ 2,000,000 Travelers Capital III, 7.63%, 12/1/36 $ 1,887,500 $ - $ 1,887,500
- ------------------------------------------------------------------------------------------------------------------------------------
Machinery & Equipment
2,000,000 - 2,000,000 Case Corp., 7.25%, 1/15/16 922,500 - 922,500
- ------------------------------------------------------------------------------------------------------------------------------------
Multimedia
5,000,000 - 5,000,000 Time Warner, Inc., 9.13%, 1/15/13 5,806,250 - 5,806,250
- ------------------------------------------------------------------------------------------------------------------------------------
Paper & Related Products
4,000,000 - 4,000,000 Westvaco Corp., 7.10%, 11/15/09 3,880,000 - 3,880,000
- ------------------------------------------------------------------------------------------------------------------------------------
Retail
4,391,923 - 4,391,923 Fred Meyer, Inc., Lease Trust, 8.50%,
7/15/17 (b) 4,501,722 - 4,501,722
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation
- 4,591,232 4,591,232 Fedex Corporation, 6.85%, 1/15/19 - 4,461,300 4,461,300
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities
3,833,000 - 3,833,000 Pacific Gas & Electric, 6.25%, 3/1/04 3,258,050 - 3,258,050
- 5,000,000 5,000,000 Sempra Energy, 7.95%, 3/1/10 - 4,866,755 4,866,755
------------- ---------- ------------
3,258,050 4,866,755 8,124,805
- ------------------------------------------------------------------------------------------------------------------------------------
Yankee
- 4,000,000 4,000,000 Ontario Province, 7.75%, 6/4/02 - 4,100,776 4,100,776
------------ ------------ -----------
- 4,100,776 4,100,776
------------ ------------ -----------
Total Corporate Notes & Bonds 121,034,896 50,109,169 171,144,065
- ------------------------------------------------------------------------------------------------------------------------------------
MUNICIPAL BOND--TAXABLE
- ------------------------------------------------------------------------------------------------------------------------------------
California
2,000,000 - 2,000,000 San Bernardino County, Financing
Authority Pension Obligation Revenue,
6.99%, 8/1/10 MBIA 2,065,000 - 2,065,000
------------ ------------ -----------
Total Municipal Bond--Taxable 2,065,000 - 2,065,000
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
Fannie Mae
10,000,000 - 10,000,000 7.40%, 7/1/04 10,538,500 - 10,538,500
2,941,009 - 2,941,009 6.05%, 12/1/08 2,905,628 - 2,905,628
5,000,000 - 5,000,000 6.38%, 6/15/09 5,120,200 - 5,120,200
10,400,000 - 10,400,000 6.63%, 9/15/09 10,816,000 - 10,816,000
19,000,000 - 19,000,000 7.25%, 1/15/10 20,624,311 - 20,624,311
3,500,000 - 3,500,000 6.25%, 11/18/23 3,458,245 - 3,458,245
------------ ------------ -----------
53,462,884 - 53,462,884
- ------------------------------------------------------------------------------------------------------------------------------------
Freddie Mac
5,000,000 - 5,000,000 7.38%, 5/15/03 5,193,750 - 5,193,750
2,500,000 - 2,500,000 7.22%, 6/14/06 2,665,625 - 2,665,625
6,138,209 - 6,138,209 6.00%, 4/1/29 5,955,536 - 5,955,536
------------ ------------ -----------
13,814,911 - 13,814,911
------------ ------------ -----------
Total U.S. Government Agency Obligations 67,277,795 - 67,277,795
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Income Fund
Fifth Third Quality Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third Fifth Third
Kent Income Quality Bond Pro Forma Kent Income Quality Bond Pro Forma
Fund Fund Combined Fund Fund Combined
Principal Principal Principal Market Market Market
Amount/Shares Amount/Shares Amount/Shares Security Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT OBLIGATIONS
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bonds
$ 6,150,000 $ - $ 6,150,000 7.50%, 11/15/16 $ 7,417,823 $ - $ 7,417,823
9,000,000 - 9,000,000 8.00%, 11/15/21 11,645,100 - 11,645,100
7,600,000 13,500,000 21,100,000 6.13%, 8/15/29 8,276,856 14,702,337 22,979,193
7,000,000 2,250,000 9,250,000 6.25%, 5/15/30 7,814,800 2,511,914 10,326,714
-------------- -------------- --------------
35,154,579 17,214,251 52,368,830
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Notes
- 12,000,000 12,000,000 6.38%, 1/31/02 - 12,108,924 12,108,924
- 11,000,000 11,000,000 5.38%, 6/30/03 - 11,063,415 11,063,415
- 6,000,000 6,000,000 6.75%, 5/15/05 - 6,386,418 6,386,418
27,800,000 - 27,800,000 7.00%, 7/15/06 30,265,860 - 30,265,860
11,450,000 - 11,450,000 5.75%, 8/15/10 12,000,058 - 12,000,058
-------------- -------------- --------------
42,265,918 29,558,757 71,824,675
-------------- -------------- --------------
Total U.S. Government Obligations 77,420,497 46,773,008 124,193,505
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT SECURITIES
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage Backed Securities
- 1,377 1,377 FHLMC, 9.50%, 11/15/07 Pool #38-0009 - 1,407 1,407
- 5,673 5,673 FHLMC, 8.00%, 8/1/08 Pool #27-2525 - 5,780 5,780
- 8,748,981 8,748,981 Fannie Mae, 7.00%, 9/1/30 Pool #551392 - 8,758,330 8,758,330
- 15,081,628 15,081,628 Fannie Mae, 7.00%, 9/1/30 Pool #551459 - 15,097,743 15,097,743
- 38,072,016 38,072,016 Fannie Mae, 7.00%, 10/1/30 Pool #253514 - 38,112,695 38,112,695
- 10,482,627 10,482,627 Fannie Mae, 7.00%, 10/1/30 Pool #549975 - 10,493,828 10,493,828
-------------- -------------- --------------
- 72,469,783 72,469,783
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Government Agencies
- 9,000,000 9,000,000 Fannie Mae, 5.75%, 2/15/08 - 8,928,756 8,928,756
- 7,250,000 7,250,000 FHLMC, 7.35%, 2/28/03 - 7,262,630 7,262,630
-------------- -------------- --------------
- 16,191,386 16,191,386
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Bills
- 16,500,000 16,500,000 6.50%, 2/15/2010 - 18,058,458 18,058,458
-------------- -------------- --------------
- 18,058,458 18,058,458
-------------- -------------- --------------
Total U.S. Government Securities - 106,719,627 106,719,627
- ------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT COMPANIES
- ------------------------------------------------------------------------------------------------------------------------------------
6,287,398 - 6,287,398 Dreyfus Cash Management Money Market Fund 6,287,398 - 6,287,398
6,940,553 - 6,940,553 Federated Prime Value Obligations Money Market
Fund 6,940,553 - 6,940,553
-------------- -------------- --------------
Total Investment Companies 13,227,951 - 13,227,951
- ------------------------------------------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENT
- ------------------------------------------------------------------------------------------------------------------------------------
- 11,958,000 11,958,000 Warburg/Dillon, 6.000%, 1/2/01 - 11,958,000 11,958,000
-------------- -------------- --------------
Total Repurchase Agreement - 11,958,000 11,958,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total (Cost $290,952,424, $210,657,222 and $501,609,646 respectively) (a) $ 296,081,604 $ 215,559,804 $ 511,641,408
Other assets in excess of liabilities $ 5,673,899 $ 3,228,837 $ 8,902,736
-------------- -------------- --------------
Net Assets $ 301,755,503 $ 218,788,641 $ 520,544,144
============== ============= ==============
(a) Represents cost for financial reporting and Federal
income tax purposes and differs from market value
by net unrealized appreciation.
(b) Rule 144A, Section 4(2) or other security which is
restricted as to resale to instituional investors.
The Portfolio's advisor has determined this
security to be liquid based on procedures approved
by the Board of Trustees
FHLMC -- Federal Home Loan Mortgage Corporation
MBIA -- Municipal Bond Insurance Association
PLC -- Public Limited Company (British)
Kent Income Fund
Fifth Third Quality Bond Fund
Pro Forma Combining Statements of Assets and Liabilities
As of 12/31/00
(Unaudited)
Fifth Third Quality
Kent Income Fund Bond Fund
---------------- -------------------
Assets:
Investment in securities, at value
(cost $290,952,424, $210,657,222 and $501,609,646, respectively) $ 296,081,604 $ 215,559,804
Collateral for securities loaned 74,679,698 -
Cash - 295,929
Interest and dividends receivable 5,852,880 2,986,001
Receivable for investments sold - 171
Receivable for Fund shares sold - 20,173
Other assets 18,472 44,061
---------------- -------------------
Total Assets 376,632,654 218,906,139
---------------- -------------------
Liabilities:
Payable for return of collateral received for securities loaned 74,679,698 -
Payable for Fund shares redeemed 3,398 13,471
Accrued expenses and other payables:
Investment advisory fees 155,027 101,173
Administration fees 8,982 -
Distribution services - Investment A Shares (Investment - Kent) 1,608 1,995
Distribution services - Investment B Shares - 107
Distribution services - Investment C Shares - 11
Shareholder servicing - Investment C Shares - 741
Other 28,438 -
---------------- -------------------
Total Liabilities 74,877,151 117,498
---------------- -------------------
Net Assets:
Paid-in Capital 307,546,224 222,231,657
Undistributed net investment income 36,237 183,549
Accumulated net realized losses on investments,
futures and foreign currency transactions (10,956,138) (8,529,147)
Net unrealized appreciation on investments,
futures and foreign currency transactions 5,129,180 4,902,582
---------------- -------------------
Total Net Assets $ 301,755,503 $ 218,788,641
================ ===================
Net Assets:
Institutional Shares $ 295,092,861 $ 208,385,259
Investment A Shares (a) 6,662,642 9,496,567
Investment B Shares NA 189,010
Investment C Shares NA 717,805
---------------- -------------------
Total $ 301,755,503 $ 218,788,641
================ ===================
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized, no par value:)
Institutional Shares 30,360,339 21,620,232
Investment A Shares (a) 686,516 985,299
Investment B Shares NA 19,607
Investment C Shares NA 74,500
---------------- -------------------
Total 31,046,855 22,699,638
================ ===================
Net Asset Value
Institutional Shares $ 9.72 $ 9.64
================ ===================
Investment A Shares-redemption price per share (a) $ 9.71 $ 9.64
================ ===================
Investment B Shares-offering price per share* NA $ 9.64
================ ===================
Investment C Shares-offering price per share* NA $ 9.63
================ ===================
Maximum sales charge- Investment A Shares NA 4.50%
Maximum Offering Price
(100%/(100%-Maximum sales charge) of net asset value
adjusted to nearest cent) per share (Investment A Shares) NA $ 10.09
================ ===================
Pro Forma Pro Forma Combined
Adjustments (Note 1)
---------------- -------------------
Assets:
Investment in securities, at value
(cost $290,952,424, $210,657,222 and $501,609,646, respectively) $ - $ 511,641,408
Collateral for securities loaned - 74,679,698
Cash - 295,929
Interest and dividends receivable - 8,838,881
Receivable for investments sold - 171
Receivable for Fund shares sold - 20,173
Other assets - 62,533
---------------- -------------------
Total Assets - 595,538,793
---------------- -------------------
Liabilities:
Payable for return of collateral received for securities loaned - 74,679,698
Payable for Fund shares redeemed - 16,869
Accrued expenses and other payables:
Investment advisory fees - 256,200
Administration fees - 8,982
Distribution services - Investment A Shares (Investment - Kent) - 3,603
Distribution services - Investment B Shares - 107
Distribution services - Investment C Shares - 11
Shareholder servicing - Investment C Shares - 741
Other - 28,438
---------------- -------------------
Total Liabilities - 74,994,649
---------------- -------------------
Net Assets:
Paid-in Capital - 529,777,881
Undistributed net investment income - 219,786
Accumulated net realized losses on investments,
futures and foreign currency transactions - (19,485,285)
Net unrealized appreciation on investments,
futures and foreign currency transactions - 10,031,762
---------------- -------------------
Total Net Assets $ - $ 520,544,144
================ ===================
Net Assets:
Institutional Shares $ - $ 503,478,120
Investment A Shares (a) - 16,159,209
Investment B Shares - 189,010
Investment C Shares - 717,805
---------------- -------------------
Total $ - $ 520,544,144
================ ===================
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized, no par value:)
Institutional Shares (180,719) (b) 51,799,852
Investment A Shares (a) (6,776) (b) 1,665,039
Investment B Shares (131) (b) 19,476
Investment C Shares (538) (b) 73,962
---------------- -------------------
Total (188,164) 53,558,329
================ ===================
Net Asset Value
Institutional Shares $ 9.72
===================
Investment A Shares-redemption price per share (a) $ 9.71
===================
Investment B Shares-offering price per share* $ 9.70
===================
Investment C Shares-offering price per share* $ 9.71
===================
Maximum sales charge- Investment A Shares 4.50%
Maximum Offering Price
(100%/(100%-Maximum sales charge) of net asset value
adjusted to nearest cent) per share (Investment A Shares) $ 10.17
===================
_______________________________________________________________________
* Redemption price per share varies by length of time shares are held.
(a) For Kent, represents Investment Shares.
(b) Adjustment to convert Fifth Third Shares Outstanding to Kent Shares
Outstanding based on Kent's NAV's.
Kent Income Fund
Fifth Third Quality Bond Fund
Pro Forma Combining Statements of Operations
For the year ended 12/31/00
(Unaudited)
Fifth Third
Quality Bond Pro Forma Pro Forma Combined
Kent Income Fund Fund Adjustments (Note 1)
---------------- -------------- ----------- ------------------
INVESTMENT INCOME:
Interest income $ 21,884,304 $ 13,779,230 $ - $ 35,663,534
Dividend income 929,573 - - 929,573
Securities lending income 99,315 - - 99,315
---------------- -------------- ----------- ------------------
Total Income 22,913,192 13,779,230 - 36,692,422
---------------- -------------- ----------- ------------------
EXPENSES:
Investment advisory fees 1,876,243 1,072,625 39,775 (a) 2,988,643
Administrative fees 563,317 346,166 (45,765) (b) 863,718
Distribution services - Investment A Shares (Investment - Kent) 24,060 23,637 - 47,697
Distribution services - Investment B Shares - 163 - 163
Distribution services - Investment C Shares - 5,319 - 5,319
Shareholder servicing - Investment C Shares - 1,773 - 1,773
Fund accounting fees 56,500 39,005 3,121 (c) 98,626
Custodian fees 7,577 12,676 667 (d) 20,920
Other fees 75,372 70,209 282,791 (e) 428,372
---------------- -------------- ----------- ------------------
Total Expenses: 2,603,069 1,571,573 280,589 4,455,231
---------------- -------------- ----------- ------------------
Less fees voluntarily reduced (26,415) (79,782) (93,045) (199,242)
---------------- -------------- ----------- ------------------
Net Expenses 2,576,654 1,491,791 187,544 4,255,989
---------------- -------------- ----------- ------------------
Net Investment Income 20,336,538 12,287,439 (187,544) 32,436,433
---------------- -------------- ----------- ------------------
Realized and Unrealized Gains/(Losses) from
Investments, Futures and Foreign Currency
Transactions:
Net realized losses from investments, futures
and foreign currency transactions (4,168,437) (2,714,577) - (6,883,014)
Net change in unrealized appreciation (depreciation)
from investments, futures and translation of
assets and liabilities in foreign currencies 18,889,406 7,820,238 - 26,709,644
---------------- -------------- ----------- ------------------
Net realized/unrealized gains/(losses) from investments,
futures and foreign currency transactions 14,720,969 5,105,661 - 19,826,630
---------------- -------------- ----------- ------------------
Change in net assets resulting from operations $ 35,057,507 $ 17,393,100 $ (187,544) $ 52,263,063
================ ============== =========== ==================
_________________________________________________
(a) Adjustment to reflect the Fifth Third contractual fee structure for
Advisory fees which is pending Shareholder approval (0.60% of net assets,
currently 0.55%).
(b) Adjustment to reflect the Fifth Third contractual fee structure for
Administration fees (0.1734% of net assets).
(c) Adjustment to reflect the Fifth Third contractual fee structure for
Accounting fees (Tiered fee structure starting at 0.02%).
(d) Adjustment to reflect the Fifth Third contractual fee structure for
Custodian fees (Tiered fee structure starting at 0.01%).
(e) Adjustment to reflect the Fifth Third fee structure when the two funds
merge.
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Kent Intermediate Municipal Bond Pro Forma
Free Fund Fund Combined Tax-Free Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds
- ------------------------------------------------------------------------------------------------------------------------------------
Alabama
$ - $ 2,050,000 $ 2,050,000 Alabama State, Public School
& College Authority, Revenue,
5.25%, 8/1/06 $ - $ 2,149,917 $ 2,149,917
- 1,620,000 1,620,000 University of Alabama
Birmingham, Revenue, 4.75%,
10/1/05 - 1,657,957 1,657,957
----------- ----------- ------------
- 3,807,874 3,807,874
- -----------------------------------------------------------------------------------------------------------------------------------
Alaska
1,000,000 - 1,000,000 Anchorage Electric Utility,
Revenue Bond, Senior Lien,
5.50%, 12/1/03, Callable 6/1/03
@ 102 (Insured by MBIA) 1,033,750 - 1,033,750
- -----------------------------------------------------------------------------------------------------------------------------------
Arizona
- 4,680,000 4,680,000 Arizona State Highway
Transportation Board,
Revenue, 5.00%, 7/1/10 - 4,888,822 4,888,822
1,790,000 - 1,790,000 Glendale Water and Sewer
Revenue, 5.00%, 7/1/06,
(Insured by FGIC) 1,854,888 - 1,854,888
2,040,000 - 2,040,000 Glendale Water and Sewer
Revenue, 5.00%, 7/1/07,
(Insured by FGIC) 2,119,050 - 2,119,050
855,000 - 855,000 Maricopa County School
District No. 79, Litchfield
Elementary, GO, 5.00%,
7/1/08, (Insured by FSA) 890,269 - 890,269
- 2,000,000 2,000,000 Pima County, Improvement,
GO, 5.00%, 7/1/06 - 2,078,920 2,078,920
1,050,000 - 1,050,000 Pima County University
School District, 5.75%,
7/1/12, Callable 7/1/09 @
100, (Insured by FGIC) 1,137,938 - 1,137,938
- 3,400,000 3,400,000 Pima County, School District
No. 1, Series D, GO, 6.10%,
7/1/11 (Callable 7/1/02@102) - 3,562,282 3,562,282
5,000,000 - 5,000,000 Salt River Agricultural
Improvement & Power District
Electric System, Series A,
5.63%, 1/1/06 5,306,249 - 5,306,249
2,000,000 - 2,000,000 Tucson Street and Highway
User Revenue, 5.50%, 7/1/09,
Callable 7/1/03 @ 102 2,385,000 - 2,385,000
----------- ----------- ------------
13,693,394 10,530,024 24,223,418
- -----------------------------------------------------------------------------------------------------------------------------------
California
3,000,000 - 3,000,000 Orange County, Series A,
6.00%, 6/1/10 (Insured by
MBIA) 3,408,750 - 3,408,750
3,400,000 - 3,400,000 State, GO, 6.60%, 2/1/10 4,003,500 - 4,003,500
----------- ----------- ------------
7,412,250 - 7,412,250
- -----------------------------------------------------------------------------------------------------------------------------------
Colorado
2,000,000 - 2,000,000 Denver City and County
Airport Facilities, (AMT),
5.00%, 1/1/04 (Insured by
MBIA) 2,045,000 - 2,045,000
2,000,000 - 2,000,000 Denver City and County
Airport Revenue, 7.75%,
11/15/21, Callable 11/15/01
@ 102 2,086,700 - 2,086,700
1,150,000 - 1,150,000 El Paso County School
District No. 38, GO, 6.38%,
12/1/16, Callable 12/1/10 @
100, (Insured by State Aid
Withholding) 1,295,188 - 1,295,188
1,005,000 - 1,005,000 El Paso County School
District No. 38, GO, 6.38%,
12/1/18, Callable 12/1/10 @
100, (Insured by State Aid
Withholding) 1,120,575 - 1,120,575
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Kent Fifth Third
Intermediate Municipal Pro Forma Intermediate Municipal Bond Pro Forma
Tax-Free Fund Bond Fund Combined Tax-Free Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
$ 110,000 $ - $ 110,000 Garfield County School District No. 16,
GO, 4.60%, 12/1/09,(Insured by MBIA) $ 111,513 $ - $ 111,513
385,000 - 385,000 Housing Finance Authority, 4.50%, 11/1/05 378,263 - 378,263
500,000 - 500,000 Housing Finance Authority, 5.40%, 10/1/06 504,375 - 504,375
900,000 - 900,000 Housing Finance Authority, 5.10%, 10/1/06 906,750 - 906,750
800,000 - 800,000 Housing Finance Authority, Single Family
Series 3, 4.70%,10/1/22, Callable 10/1/09
@ 102 798,000 - 798,000
----------- ----------- -----------
9,246,364 - 9,246,364
- -----------------------------------------------------------------------------------------------------------------------------------
Connecticut
- 2,000,000 2,000,000 New Haven, Series B, GO, 5.75%, 11/1/09 - 2,214,340 2,214,340
- -----------------------------------------------------------------------------------------------------------------------------------
District of Columbia
4,475,000 - 4,475,000 Metropolitan Airports, 5.50%, 10/1/05 4,681,969 - 4,681,969
- -----------------------------------------------------------------------------------------------------------------------------------
Florida
- 2,800,000 2,800,000 Dade County School District, GO, 6.50%,
8/1/03 - 2,961,924 2,961,924
- 2,455,000 2,455,000 Escambia County, Revenue, 4.60%, 1/1/07,
AMBAC - 2,494,918 2,494,918
- 5,000,000 5,000,000 Florida State Board of Education, Lottery
Revenue, 5.50%, 7/1/16 - 5,269,250 5,269,250
1,000,000 - 1,000,000 Hillsborough County Development Authority
Revenue, 6.38%, 12/1/12, Prerefunded
12/1/03 @ 100, (Insured by MBIA) 1,062,500 - 1,062,500
750,000 - 750,000 Jacksonville Electric Authority Revenue,
Electric Systems, Series 3-E, 5.00%,
10/1/13, Callable 10/1/05 @ 100 757,500 - 757,500
2,000,000 - 2,000,000 Lakeland Electric & Water Revenue, 5.90%,
10/1/07 2,190,000 - 2,190,000
1,575,000 - 1,575,000 Miami-Dade County Aviation Revenue, 5.40%,
10/1/11, (AMT), Callable 10/1/10 @ 101
(Insured by FGIC) 1,669,500 - 1,669,500
1,750,000 - 1,750,000 Miami-Dade County Aviation Revenue, 5.45%,
10/1/12, (AMT), Callable 10/1/10 @ 101
(Insured by FGIC) 1,850,625 - 1,850,625
- 1,000,000 1,000,000 Orlando, Capital Improvement, Revenue,
6.00%, 10/1/22 (Prerefunded 10/1/01 @ 102) - 1,034,230 1,034,230
----------- ----------- -----------
7,530,125 11,760,322 19,290,447
- -----------------------------------------------------------------------------------------------------------------------------------
Georgia
2,670,000 - 2,670,000 Atlanta Airport Facilities Revenue,
(AMT), Series B, 5.50%, 1/1/03
(Insured by AMBAC) 2,730,075 - 2,730,075
- 2,000,000 2,000,000 Fulton County, Hospital Authority,
Series B, Revenue, 6.38%, 9/1/22
(Prerefunded 9/1/02 @ 102) - 2,105,700 2,105,700
- 2,675,000 2,675,000 Georgia Private Colleges & Universities
Authority, Revenue, 5.50%, 11/1/25
(Callable 11/1/09 @ 101) - 2,750,515 2,750,515
1,500,000 - 1,500,000 State, Series B, GO, 5.95%, 3/1/08 1,651,875 - 1,651,875
----------- ----------- -----------
4,381,950 4,856,215 9,238,165
- -----------------------------------------------------------------------------------------------------------------------------------
Hawaii
855,000 - 855,000 Honolulu City & County, 5.60%, 1/1/05 896,681 - 896,681
170,000 - 170,000 Honolulu City & County, ETM, 5.60%,
1/1/05 178,713 - 178,713
765,000 - 765,000 State Highway Revenue, 5.50%, 7/1/10,
(Insured by FSA) 825,244 - 825,244
----------- ----------- -----------
1,900,638 - 1,900,638
- -----------------------------------------------------------------------------------------------------------------------------------
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Kent Intermediate Municipal Bond Pro Forma
Free Fund Fund Combined Tax-Free Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/SHares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
Idaho
$ 1,500,000 $ - $ 1,500,000 Ada & Canyon Counties,
Joint School District No.
2, Meridan, GO, 5.50%,
7/30/13 $ 1,608,750 $ - $ 1,608,750
1,915,000 - 1,915,000 Ada & Canyon Counties,
Joint School District No.
2, Meridan, GO, 5.50%,
7/30/14 2,049,050 - 2,049,050
----------- ------------ -----------
3,657,800 - 3,657,800
- -----------------------------------------------------------------------------------------------------------------------------------
Illinois
3,000,000 - 3,000,000 Chicago Metropolitan
Water Reclamation District,
Capital Improvement, GO,
5.50%, 12/1/10 3,228,750 - 3,228,750
1,000,000 - 1,000,000 Chicago Metropolitan Water
Reclamation District,
Working Cash Fund, 5.90%,
12/1/04 1,058,750 - 1,058,750
305,000 - 305,000 Chicago, GO, 6.00%, 1/1/09,
Callable 1/1/08 @ 102
(Insured by FGIC) 336,644 - 336,644
- 1,230,000 1,230,000 Cook County, Community
School District #097
Oak Park, Series A, GO,
5.50%, 12/1/12 (Callable
12/1/09 @ 100) - 1,294,575 1,294,575
1,300, 000 - 1,300,000 Development Finance
Authority Revenue, 6.38%,
1/1/15, (Insured by FSA) 1,480,375 - 1,480,375
4,000,000 - 4,000,000 Development Finance Authority,
Pollution Control Revenue,
Commonwealth Edison, 5.30%,
1/15/04 (Insured by MBIA) 4,125,000 - 4,125,000
1,470,000 - 1,470,000 Development Financial
Authority Revenue,
6.38%, 1/1/16, Callable
1/1/11 @ 100, (Insured by FSA) 1,668,450 - 1,668,450
- 1,055,000 1,055,000 Macon County & Decatur, Illinois
CP, 6.50%, 1/1/05, FGIC - 1,139,569 1,139,569
3,135,000 - 3,135,000 Northwest Suburban Municipal
Joint Action, Water Agency,
Water Supply System, Series
A, 5.25%, 5/1/04 (Insured by
MBIA) 3,236,888 - 3,236,888
1,530,000 - 1,530,000 Regional Transportation
Authority, 6.00%, 6/1/14,
(Insured by FGIC) 1,715,513 - 1,715,513
----------- ------------ -----------
16,850,370 2,434,144 19,284,514
- -----------------------------------------------------------------------------------------------------------------------------------
Indiana
- 4,000,000 4,000,000 Fort Wayne, Indiana Hospital
Authority, 5.00%, 11/15/13 - 4,015,240 4,015,240
550,000 - 550,000 Greenwood School Building
Corp., 4.75%, 7/15/07 562,375 - 562,375
2,000,000 - 2,000,000 Municipal Power Supply Agency,
System Revenue, Series B, 5.88%,
1/1/10 (Insured by MBIA) 2,220,000 - 2,220,000
3,000,000 - 3,000,000 Municipal Power Supply Agency,
System Revenue, Series B, 6.00%,
1/1/13 (Insured by MBIA) 3,360,000 - 3,360,000
- 1,275,000 1,275,000 Munster, School Building Corp.,
Revenue, 5.70%, 7/15/10
(Prerefunded 1/15/05 @ 101), MBIA - 1,357,187 1,357,187
- 2,000,000 2,000,000 South Bend, Indiana, Community
School Building Corp., Riley
School Building Corp.,
Refunding, Revenue, 5.25%,
7/1/12 (Callable 7/1/08 @ 101) - 2,081,720 2,081,720
----------- ------------ -----------
6,142,375 7,454,147 13,596,522
- -----------------------------------------------------------------------------------------------------------------------------------
Iowa
2,000,000 - 2,000,000 Chilicothe Pollution Control
Revenue Bond, 4.25%, 11/1/23,
Mandatory Put 11/1/03 @ 100 1,960,000 - 1,960,000
- -----------------------------------------------------------------------------------------------------------------------------------
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Kent Intermediate Municipal Bond Pro Forma
Free-Fund Fund Combined Tax-Free Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
Kansas
$ 1,000,000 $ - $ 1,000,000 Butler & Sedgwick Counties
School District No. 385, GO,
5.70%, 9/1/13, (Insured by FSA) $ 1,098,750 $ - $ 1,098,750
- 1,250,000 1,250,000 Douglas County, Unified School
District, GO, 6.00%, 9/1/09
(Prerefunded 9/1/03 @ 100) - 1,302,700 1,302,700
----------- ------------ -----------
1,098,750 1,302,700 2,401,450
- -----------------------------------------------------------------------------------------------------------------------------------
Lousiana
- 3,000,000 3,000,000 Louisiana Local Government
Environmental FACS Community
Development Authority, 6.55%,
09/01/25 - 3,160,440 3,160,440
4,000,000 - 4,000,000 State, Series A, GO, 5.30%,
8/1/04 (Insured by MBIA) 4,140,000 - 4,140,000
----------- ------------ -----------
4,140,000 3,160,440 7,300,440
- -----------------------------------------------------------------------------------------------------------------------------------
Maryland
1,125,000 - 1,125,000 Baltimore County GO, 6.00%,
6/1/05 1,207,969 - 1,207,969
50,000 - 50,000 State, Refunding Bond, GO,
4.20%, 8/1/01 50,086 - 50,086
----------- ------------ -----------
1,258,055 - 1,258,055
- -----------------------------------------------------------------------------------------------------------------------------------
Massachuset
2,150,000 - 2,150,000 State, Port Authority Revenue,
(AMT), Series B, 5.00%, 7/1/07
(Insured by FSA) 2,214,500 - 2,214,500
- -----------------------------------------------------------------------------------------------------------------------------------
Michigan
2,215,000 - 2,215,000 Battle Creek Downtown
Development Authority, 6.00%,
5/1/07 (Insured by MBIA) 2,419,888 - 2,419,888
4,000,000 - 4,000,000 Battle Creek Downtown
Development Authority, 7.30%,
5/1/10, Prerefunded 5/1/04 @ 102 4,450,000 - 4,450,000
300,000 - 300,000 Cadillac Public Schools, GO,
7.25%, 5/1/05 (Insured by FGIC) 334,875 - 334,875
1,195,000 - 1,195,000 Detroit, 5.50%, 4/1/08, UTGO,
(LOC:FSA) 1,265,206 - 1,265,206
1,525,000 - 1,525,000 Detroit GO, 4.10%, 4/1/03 1,504,031 - 1,504,031
- 1,000,000 1,000,000 Detoit, Michigan, Series A,
GO, 6.70%, 4/1/10 (Callable
4/1/05 @ 101) - 1,105,620 1,105,620
6,000,000 - 6,000,000 Detoit Water Supply System,
Permanent Linked Bonds,
5.25%, 7/1/13, Callable 7/1/04
@ 102 (Insured by FGIC) 6,172,499 - 6,172,499
2,785,000 - 2,785,000 Forest Hills Public Schools,
GO, 5.25%, 5/1/09 2,941,656 - 2,941,656
565,000 - 565,000 Grand Rapids & Kent County
Joint Building Authority, GO,
5.50%, 10/1/08 605,256 - 605,256
1,000,000 - 1,000,000 Grand Rapids Water Supply, 5.00%,
1/1/08, (Insured by FGIC) 1,036,250 - 1,036,250
1,700,000 - 1,700,000 Greater Detroit Resource Recovery
Authority, Series A, 5.50%,
12/13/04 (Insured by AMBAC) 1,776,500 - 1,776,500
250,000 - 250,000 Higher Education Facilities
Authority, 4.50%, 10/1/07 243,750 - 243,750
590,000 - 590,000 Higher Education Facilities
Authority, 4.80%, 10/1/10,
Callable 10/1/09 @ 100 576,725 - 576,725
1,000,000 - 1,000,000 Higher Education Facilities
Authority, 5.35%, 5/1/15,
Callable 5/1/08 @ 101
(LOC: First of America) 985,000 - 985,000
200,000 - 200,000 Higher Education Facilities
Authority, Hope College
Project, 4.70%, 10/1/09 196,750 - 196,750
590,000 - 590,000 Higher Education Facilities
Authority, Kalamazoo College
Project, 5.25%, 12/1/05 612,863 - 612,863
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Kent Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Intermediate Tax- Municipal Bond Pro Forma
Free Fund Fund Combined Free Fund Fund Combined
Principal Principal Principal Market Market Market
Amount/Shares Amount/Shares Amount/Shares Security Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ 725,000 $ - $ 725,000 Higher Education Facilities
Authority, Kalamazoo College
Project, 5.25%, 12/1/06 $ 756,719 $ - $ 756,719
765,000 - 765,000 Higher Education Facilities
Authority, Kalamazoo College
Project, 5.25%, 12/1/07 801,338 - 801,338
4,225,000 - 4,225,000 Higher Education Student Loan
Authority Revenue, 5.20%,
9/1/08 (Insured by AMBAC) 4,314,780 - 4,314,780
3,885,000 - 3,885,000 Higher Education Student Loan
Authority, (AMT), 5.05%,
9/1/08 (Insured by AMBAC) 3,914,138 - 3,914,138
2,000,000 - 2,000,000 Kalamazoo Hospital Finance
Authority, Refunding &
Improvement, Bronson Methodist
Hospital, 5.35%, 5/15/06 (Insured
by MBIA) 2,085,000 - 2,085,000
- 1,500,000 1,500,000 Michigan, Municipal Bond
Authority, Revenue, 7.00%,
11/1/03, AMBAC - 1,611,180 1,611,180
340,000 - 340,000 Muskegon Heights Water System,
5.25%, 11/1/09, (Insured by MBIA) 360,400 - 360,400
2,000,000 - 2,000,000 Northville Public Schools, Series
A, GO, 7.00%, 5/1/08, Callable
5/1/01 @ 102, (Insured by Q-SBLF) 2,057,820 - 2,057,820
1,450,000 - 1,450,000 State Hospital Finance Authority,
St. John Hospital & Medical Center,
5.00%, 5/15/06 (Insured by AMBAC) 1,504,375 - 1,504,375
700,000 - 700,000 State, Strategic Fund, Glastender,
Inc. Project, 5.20%*, 1/3/01,
(LOC: Bank One) 700,000 - 700,000
1,000,000 - 1,000,000 State, Strategic Fund, Hope Network
Project, Series B, 4.80%, 9/1/08,
(LOC: First of America) 993,750 - 993,750
1,580,000 - 1,580,000 State, Strategic Fund, Limited
Obligation Revenue, Environmental
Research Project, 4.75%, 10/1/15,
Callable 10/1/03 @ 100,
(LOC: Comerica) 1,580,000 - 1,580,000
2,300,000 - 2,300,000 State, Strategic Fund, Limited
Obligation Revenue, Ford Motor
Co. Project, Series A, 7.10%,
2/1/06 2,561,625 - 2,561,625
3,500,000 - 3,500,000 State, Underground Storage Tank
Financial Assurance Authority,
Series I, 6.00%, 5/1/05
(Insured by AMBAC) 3,736,250 - 3,736,250
-------------- ------------- -------------
50,487,444 2,716,800 53,204,244
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota
- 2,500,000 2,500,000 Dakota County, GO, 4.50%, 2/1/06 - 2,531,675 2,531,675
3,020,000 - 3,020,000 Minneapolis, GO, Series B, 4.75%,
12/1/09 3,110,600 - 3,110,600
- 1,900,000 1,900,000 Minneapolis, Minnesota, 4.75%,
12/1/10 - 1,952,801 1,952,801
-------------- ------------- -------------
3,110,600 4,484,476 7,595,076
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi
2,000,000 - 2,000,000 State, GO, 5.75%, 12/1/12 2,202,500 - 2,202,500
2,000,000 - 2,000,000 State, GO, 5.75%, 12/1/13 2,202,500 - 2,202,500
-------------- ------------- -------------
4,405,000 - 4,405,000
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri
2,000,000 - 2,000,000 Clay County Public School District,
GO, 6.25%, 3/1/17, Callable 3/1/10
@ 100, (Insured by FSA State Aid
Direct Deposit) 2,212,500 - 2,212,500
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Kent Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Intermediate Tax- Municipal Bond Pro Forma
Free Fund Fund Combined Free Fund Fund Combined
Principal Principal Principal Market Market Market
Amount/Shares Amount/Shares Amount/Shares Security Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
$ - $ 2,000,000 $ 2,000,000 Kansas City, Streetlight Project,
Series B, GO, 5.00%, 2/1/13
(Callable 2/1/07 @ 101) $ - $ 2,041,260 $ 2,041,260
650,000 - 650,000 St. Joseph School District, GO,
6.50%, 3/1/13, (Insured by FSA
State Aid Direct Deposit) 760,500 - 760,500
750,000 - 750,000 St. Joseph School District, GO,
6.50%, 3/1/14, (Insured by FSA
State Aid Direct Deposit) 879,375 - 879,375
-------------- ------------- -------------
3,852,375 2,041,260 5,893,635
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska
1,000,000 - 1,000,000 Omaha, Series A, GO, 5.00%, 12/1/09 1,047,500 - 1,047,500
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada
- 4,000,000 4,000,000 Clark County, Flood Control, GO,
5.25%, 11/1/10 (Callable 11/1/08
@ 101), FGIC - 4,216,560 4,216,560
3,700,000 - 3,700,000 Clark County School District,
Series B, GO, 5.50%, 6/15/08,
(Insured by FGIC) 3,958,999 - 3,958,999
-------------- ------------- -------------
3,958,999 4,216,560 8,175,559
- ------------------------------------------------------------------------------------------------------------------------------------
New Jersey
6,000,000 - 6,000,000 Economic Development Authority,
Market Transition Facility
Revenue, Senior Lien, 7.00%,
7/1/04, (Insured by MBIA) 6,539,999 - 6,539,999
- 3,000,000 3,000,000 New Jersey, State Transportation,
Series A, Revenue, 5.13%, 6/15/15
(Callable 6/15/09 @ 100) - 3,058,710 3,058,710
- 5,120,000 5,120,000 New Jersey, State Transportation,
Series A, Revenue, 5.63%, 6/15/13 - 5,623,654 5,623,654
2,500,000 - 2,500,000 Ocean County Facility Revenue,
Refunding, GO, 6.00%, 1/1/07 2,721,875 - 2,721,875
1,000,000 - 1,000,000 State, Transportation Corp.,
Federal Transportation
Administration Grants, Series B,
4.80%, 9/15/10, (Insured by AMBAC) 1,025,000 - 1,025,000
2,500,000 - 2,500,000 State, Turnpike Authority Revenue,
6.00%, 1/1/13, (Insured by MBIA) 2,809,374 - 2,809,374
-------------- ------------- -------------
13,096,248 8,682,364 21,778,612
- ------------------------------------------------------------------------------------------------------------------------------------
New York
1,030,000 - 1,030,000 Metropolitan Transportation
Authority, Series M, 5.50%, 7/1/08
(Insured by FGIC) 1,108,538 - 1,108,538
- 2,000,000 2,000,000 New York City, Series F, GO,
5.50%, 8/1/06 - 2,119,040 2,119,040
- 4,000,000 4,000,000 New York City, Series H, GO,
7.00%, 2/1/22 (Callable 2/1/02 @ 101.5) - 4,183,840 4,183,840
- 4,855,000 4,855,000 New York State, GO, 5.25%,
9/15/13 (Callable 9/15/08 @ 101) - 5,045,559 5,045,559
- 3,020,000 3,020,000 New York, State Transportation,
Series E, Revenue, 5.25%, 1/1/15
(Callable 1/1/08 @ 101) - 3,100,634 3,100,634
1,660,000 - 1,660,000 State, Urban Development Corp.,
Refunding, Syracuse University
Center, 5.50%, 1/1/15 1,763,750 - 1,763,750
3,000,000 - 3,000,000 Triborough Bridge & Tunnel
Authority, General Purpose, Series
Y, 5.50%, 1/1/17 3,225,000 - 3,225,000
-------------- ------------- -------------
6,097,288 14,449,073 20,546,361
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Kent Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Intermediate Tax- Municipal Bond Pro Forma
Free Fund Fund Combined Free Fund Fund Combined
Principal Principal Principal Market Market Market
Amount/Shares Amount/Shares Amount/Shares Security Description Value Value Value
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina
$ 2,000,000 $ 2,200,000 $ 4,200,000 Municipal Power Agency No. 1,
Catawba Electric Revenue, 5.90%,
1/1/03 $ 2,040,000 $ 2,273,260 $ 4,313,260
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio
500,000 - 500,000 Cleveland Airport System Revenue,
Series A, 5.50%, 1/1/04, (Insured
by FSA) 516,250 - 516,250
- 1,000,000 1,000,000 Columbus, Sewer Improvement Bonds,
GO, 6.50%, 9/15/01 - 1,017,420 1,017,420
3,465,000 - 3,465,000 Cuyahoga County Capital Improvement,
GO, 5.00%, 12/1/07 3,607,931 - 3,607,931
2,710,000 - 2,710,000 Cuyahoga County Capital Improvement,
GO, 5.00%, 12/1/08 2,828,563 - 2,828,563
1,000,000 - 1,000,000 Dublin, Series A, GO, 6.00%, 12/1/15,
Callable 12/1/10 @ 100 1,095,000 - 1,095,000
2,755,000 - 2,755,000 Housing Financial Agency Management
Revenue, 5.35%, 9/1/05, (AMT),
(Insured by GNMA) 2,841,094 - 2,841,094
- 1,000,000 1,000,000 Ohio State, Water Development
Authority, Revenue, 6.00%, 6/1/05 - 1,072,750 1,072,750
5,000,000 - 5,000,000 State, Turnpike Commission, Series
A, 5.50%, 2/15/16, (Insured by FGIC) 5,374,999 - 5,374,999
1,060,000 - 1,060,000 Summit County, GO, 5.75%, 12/1/07,
(Insured by FGIC) 1,152,750 - 1,152,750
400,000 - 400,000 Summit County, GO, 6.00%, 12/1/09,
(Insured by FGIC) 448,500 - 448,500
--------------- ------------- -------------
17,865,087 2,090,170 19,955,257
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma
4,500,000 - 4,500,000 Tulsa Industrial Authority,
University of Tulsa, Series A,
6.00%, 10/1/16, (Insured by MBIA) 5,079,374 - 5,079,374
- ------------------------------------------------------------------------------------------------------------------------------------
Oregon
1,030,000 - 1,030,000 Jackson County School District No.
009, Eagle Point, GO, 5.00%,
6/15/08, (Insured by School
Board Guaranty) 1,068,625 - 1,068,625
1,060,000 - 1,060,000 Jackson County School District No.
009, Eagle Point, GO, 5.00%,
6/15/09, (Insured by School
Board Guaranty) 1,099,750 - 1,099,750
1,370,000 - 1,370,000 Jackson County School District No.
009, Eagle Point, GO, 5.00%,
6/15/11, (Insured by School
Board Guaranty) 1,416,238 - 1,416,238
1,545,000 - 1,545,000 Jackson County School District No.
009, Eagle Point, GO, 5.00%,
6/15/12, Callable 6/15/11 @ 100,
(Insured by School Board Guaranty) 1,583,625 - 1,583,625
1,915,000 - 1,915,000 Multnomah County School District No.
007, Reynolds, GO, 5.00%, 6/15/10,
(Insured by School Board Guaranty) 1,986,813 - 1,986,813
1,000,000 - 1,000,000 Multnomah County School District No.
007, Reynolds, GO, 5.00%, 6/15/11,
(Insured by School Board Guaranty) 1,033,750 - 1,033,750
1,045,000 - 1,045,000 State, Department Transportation
Highway Usertax Revenue, 5.00%,
11/15/05 1,078,963 - 1,078,963
1,170,000 - 1,170,000 State, Department Transportation
Highway Usertax Revenue, 5.00%,
11/15/06 1,213,875 - 1,213,875
2,000,000 - 2,000,000 Washington County Sewer Agency,
Series A, 5.75%, 10/1/12,
(Insured by FGIC) 2,215,000 - 2,215,000
- 1,000,000 1,000,000 Yamhill County, School District No.
029J, GO, 6.10%, 6/1/11
(Prerefunded 6/1/04 @ 101), FSA - 1,069,940 1,069,940
--------------- ------------- -------------
12,696,639 1,069,940 13,766,579
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Kent Intermediate Municipal Bond Pro Forma
Free Fund Fund Combined Tax-Free Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
Pennsylvania
$ 2,000,000 $ - $ 2,000,000 Allegheny County Airport
Revenue, (AMT), 5.00%,
1/1/02 (Insured by MBIA) $ 2,017,500 $ - $ 2,017,500
4,190,000 - 4,190,000 Chartiers Valley Joint
School, ETM, 6.15%, 3/1/07 4,504,250 - 4,504,250
- 1,000,000 1,000,000 Pennsylvania, Convention
Center Authority, Series A,
Revenue, 6.70%, 9/1/16, FGIC - 1,184,430 1,184,430
- 3,000,000 3,000,000 Pennsylvania State, GO,
5.00%, 10/1/05 - 3,104,910 3,104,910
- 2,000,000 2,000,000 Pennsylvania State, Higher
Education Facilities Authority
Health Services, Revenue,
5.10%, 1/1/05 - 1,994,980 1,994,980
--------------- --------------- ---------------
6,521,750 6,284,320 12,806,070
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island
- 2,535,000 2,535,000 Rhode Island Depositors
Economic, Protection
Corporation, Special
Obligation, 5.88%, 8/1/11
State Depositors
1,000,000 - 1,000,000 Economic Protection
Corp., Series B,
Special Obligation, - 2,832,736 2,832,736
5.20%, 8/1/03 (Insured 1,025,000 - 1,025,000
by MBIA) --------------- --------------- ---------------
1,025,000 2,832,736 3,857,736
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina
890,000 - 890,000 Anderson County School
District No. 2, GO,
6.00%, 3/1/13,
Callable 3/1/10 @ 100,
(Insured by SCSDE) 990,125 - 990,125
- ------------------------------------------------------------------------------------------------------------------------------------
South Dakota
- 2,375,000 2,375,000 Heartland, Consumers
Power District,
Electric Revenue,
6.00%, 1/1/09, FSA - 2,591,173 2,591,173
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee
- 6,500,000 6,500,000 Memphis General - 6,701,305 6,701,305
Improvement, GO,
5.25%, 4/1/14
(Callable 4/1/08 @ 101)
600,000 - 600,000 Shelby County Health & 598,500 - 598,500
Education, St. Jude's
Children's Research, --------------- --------------- ---------------
4.65%, 7/1/04 598,500 6,701,305 7,299,805
- ------------------------------------------------------------------------------------------------------------------------------------
Texas
400,000 - 400,000 Brownsville Independent 440,500 - 440,500
School District, GO,
7.25%, 8/15/04
- 3,430,000 3,430,000 Dallas, Improvement, GO, - 3,418,064 3,418,064
5.00%, 2/15/18 (Callable
2/15/08 @ 100)
2,245,000 - 2,245,000 Dallas Independent 2,312,350 - 2,312,350
School District, GO,
5.40%, 8/15/03,
(Insured by PSF-GTD)
1,500,000 - 1,500,000 Houston Water & Sewage 1,561,875 - 1,561,875
System Revenue,
Junior Lien, Series C,
5.75%, 12/1/03 (Insured
by MBIA)
4,555,000 - 4,555,000 Plano Independent 4,725,812 - 4,725,812
School District, GO,
5.00%, 2/15/08,
(Insured by PSF-GTD)
1,050,000 - 1,050,000 Round Rock Independent 1,089,375 - 1,089,375
School District, GO,
5.25%, 2/15/08,
(Insured by PSF-GTD)
95,000 - 95,000 San Antonio Water 101,294 - 101,294
Revenue, 6.30%,
5/15/04, Callable
5/15/02 @ 102, (Insured
by FGIC)
5,595,000 - 5,595,000 State, Public Finance 6,028,612 - 6,028,612
Authority, Series A,
GO, 6.50%, 10/1/04
Kent Intermediate Tax-Free Bond Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Kent Fifth Third Fifth Third
Intermediate Tax- Municipal Bond Pro Forma Kent Intermediate Municipal Bond Pro Forma
Free Fund Fund Combined Tax-Free Fund Fund Combined
Principal Principal Principal Security Market Market Market
Amount/Shares Amount/Shares Amount/Shares Description Value Value Value
- -----------------------------------------------------------------------------------------------------------------------------------
$ 620,000 $ - $ 620,000 State, Public Financial $ 673,475 $ - $ 673,475
Authority Building Revenue,
State Preservation Project,
Series B, 6.00%, 8/1/16,
Callable 8/1/09 @ 100,
(Insured by FSA)$ 673,475
- 1,600,000 1,600,000 Texas State, GO, 6.00%, - 1,770,976 1,770,976
10/1/08
1,015,000 - 1,015,000 University of Texas, 1,050,221 - 1,050,221
University Revenue, Series
A, 6.60%, 8/15/02,
Callable 8/15/01 @ 102
----------- ------------ ------------
17,983,514 5,189,040 23,172,554
- -----------------------------------------------------------------------------------------------------------------------------------
Utah
- 1,530,000 1,530,000 St. George, Water Revenue, - 1,608,688 1,608,688
5.60%, 6/1/10 (Callable
6/1/05 @ 101)
- 1,000,000 1,000,000 Salt Lake City, Motor Fuel - 1,024,060 1,024,060
Excise Tax, Series A, Revenue,
5.40%, 2/1/03
- 1,000,000 1,000,000 Utah, State Building Ownership - 1,072,710 1,072,710
Authority, Revenue, 5.50%,
5/15/09, FSA
----------- ------------ ------------
- 3,705,458 3,705,458
- -----------------------------------------------------------------------------------------------------------------------------------
Washington
- 2,000,000 2,000,000 King County, School district - 2,088,520 2,088,520
No. 411, GO, 6.50%, 12/1/09
(Prerefunded 12/1/02 @ 100),
AMBAC
- 2,000,000 2,000,000 King County School District - 2,174,520 2,174,520
No. 415 Kent, GO, 5.55%,
12/1/11
1,010,000 - 1,010,000 Port Tacoma, (AMT), 4.90%, 1,027,675 - 1,027,675
12/1/07, (Insured by AMBAC)
1,915,000 - 1,915,000 State GO, Series S-4, 2,068,200 - 2,068,200
5.75%, 1/1/12, Callable
1/1/10 @ 100
1,000,000 - 1,000,000 State, Motor Vehicle Fuel 1,107,500 - 1,107,500
Tax, R-92D, GO, 6.25%,
9/1/07
- 1,000,000 1,000,000 State, Public Power Supply - 3,367,264 3,367,264
Systems Nuclear Project
No. 2, Revenue, 5.50%,
7/1/06
6,500,000 - 6,500,000 State, Series A, GO, 5.50%, 6,768,124 - 6,768,124
9/1/05, Callable 9/1/04
@ 100
850,000 - 850,000 State. Series III-H, Motor
Vehicle Fuel Tax, 5.75%,
9/1/12
1,125,000 - 1,125,000 Tacoma Electric Systems 929,688 - 929,688
Revenue, 6.00%, 1/1/06,
(Insured by AMBAC)
1,570,000 - 1,570,000 Tacoma Electric Systems 1,207,969 - 1,207,969
Revenue, Pre-Refunded, 6.00%,
1/1/06, (Insured by AMBAC)
1,693,638 - 1,693,638
----------- ------------ ------------
14,802,794 7,630,304 22,433,098
- -----------------------------------------------------------------------------------------------------------------------------------
Wisconsin
2,500,000 - 2,500,000 Milwaukee County Revenue, 2,500,000 - 2,500,000
Series B, 4.35%, 6/1/29,
Mandatory put 12/1/04
@ 100, (LOC: First National
Bank)
- 1,000,000 1,000,000 Milwaukee, Series C, GO, - 1,016,690 1,016,690
5.30%, 6/15/07 (Prerefunded
6/15/02 @ 100)
- 4,290,000 4,290,000 State, Transportation Revenue, - 4,393,561 4,393,561
Series B, 5.75%, 7/1/12
(Callable 7/1/02 @ 100)
----------- ------------ ------------
2,500,000 5,410,251 7,910,251
- -----------------------------------------------------------------------------------------------------------------------------------
Total Municipal Bonds 255,360,527 129,888,694 385,249,221
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Companies
- -----------------------------------------------------------------------------------------------------------------------------------
Investment Companies
8,141 - 8,141 Dreyfus Tax Exempt Money 8,141 - 8,141
Market Fund
554,050 - 554,050 Federated Tax Exempt Money 554,050 - 554,050
Market Fund
----------- ------------ ------------
Total Investment Companies 562,191 - 562,191
- -----------------------------------------------------------------------------------------------------------------------------------
Short-Term Investments
- -----------------------------------------------------------------------------------------------------------------------------------
Short-Term Investments
$ - $ 3,528,024 $3,528,024 Federated Tax Free Trust $ - $ 3,528,024 $ 3,528,024
- 3,455,608 3,455,608 SEI Institutional Tax Free
Fund - 3,455,608 3,455,608
Total Short-Term Investments ---------- -------------- ------------
- 6,983,632 6,983,632
- -----------------------------------------------------------------------------------------------------------------------------------
Total (cost $242,888,479, $133,933,552 and $376,822,031) (a) $ 255,922,718 $ 136,872,326 $392,795,044
Other Assets in excess of liabilities $ 3,992,214 $ 2,214,756 $ 6,206,970
Net assets $ 259,914,932 $ 139,087,082 $399,002,014
============= ============== ============
(a) Represents cost for financial reporting and Federal income tax purposes
and differs from market value by net unrealized appreciation.
* Variable rate security. Rate presented represents rate in effect at
December 31, 2000. Maturity date reflects next rate change date.
AMBAC - AMBAC Indemnity Corp.
AMT - Alternative Minimum Tax Paper
CP - Certificate of Participation
ETM - Escrowed to Maturity
FGIC - Financial Guaranty Insurance Corp.
FSA - Financial Security Assurance
GO - General Obligation
GNMA - Government National Mortgage Association
LOC - Letter of Credit
MBIA - Municipal Bond Insurance Association
PSF-GTD - Permanent School Fund Guarantee
SCSDE - South Carolina School District Enhancement
Q-SBLF - Qualified School Bond Loan Fund
UTGO - Unlimited Tax General Obligation
Kent Intermediate Tax-Free Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Statements of Assets and Liabilities
As of 12/31/00
(Unaudited)
Kent Intermediate Fifth Third Municipal
Tax-Free Fund Bond Fund
----------------- ---------------------
Assets:
Investment in securities, at value
(cost $242,888,479, $133,933,552 and $376,822,031, respectively) $ 255,922,718 $ 136,872,326
Cash 119 -
Interest and dividends receivable 4,124,231 2,258,924
Other assets 16,602 21,182
----------------- -----------------
Total Assets 260,063,670 139,152,432
----------------- -----------------
Liabilities:
Cash overdraft - 500
Payable for Fund shares redeemed 2,658 135
Accrued expenses and other payables:
Investment advisory fees 110,709 64,647
Administration fees 7,732 -
Distribution services - Investment A Shares (Investment - Kent) 623 65
Distribution services - Investment C Shares - -
Shareholder servicing - Investment C Shares - 3
Other 27,016 -
----------------- -----------------
Total Liabilities 148,738 65,350
----------------- -----------------
Net Assets:
Paid-in Capital 246,359,334 140,453,476
Undistributed net investment income/(loss) 18,391 (134,396)
Undistributed net realized gain/(loss) on investments,
futures and foreign currency transactions 502,968 (4,170,772)
Net unrealized appreciation on investments,
futures and foreign currency transactions 13,034,239 2,938,774
----------------- -----------------
Total Net Assets $ 259,914,932 $ 139,087,082
================= =================
Net Assets:
Institutional Shares $ 256,926,319 $ 138,729,598
Investment A Shares (a) 2,988,613 342,204
Investment C Shares NA 15,280
----------------- -----------------
Total $ 259,914,932 $ 139,087,082
================= =================
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized, no par value:)
Institutional Shares 24,176,104 11,837,645
Investment A Shares (a) 281,106 29,159
Investment C Shares NA 1,303
----------------- -----------------
Total 24,457,210 11,868,107
================= =================
Net Asset Value
Institutional Shares $ 10.63 $ 11.72
================= =================
Investment A Shares-redemption price per share (a) $ 10.63 $ 11.74
================= =================
Investment C Shares-offering price per share* NA $ 11.73
================= =================
Maximum sales charge- Investment A Shares NA 4.50%
Maximum Offering Price
(100%/(100%-Maximum sales charge) of net asset value
adjusted to nearest cent) per share (Investment A Shares) NA $ 12.29
================= =================
Pro Forma Pro Forma Combined
Adjustments (Note 1)
----------- ------------------
Assets:
Investment in securities, at value
(cost $242,888,479, $133,933,552 and $376,822,031, respectively) $ - $ 392,795,044
Cash - 119
Interest and dividends receivable - 6,383,155
Other assets - 37,784
-------------- -----------------
Total Assets - 399,216,102
-------------- -----------------
Liabilities:
Cash overdraft - 500
Payable for Fund shares redeemed - 2,793
Accrued expenses and other payables:
Investment advisory fees - 175,356
Administration fees - 7,732
Distribution services - Investment A Shares (Investment - Kent) - 688
Distribution services - Investment C Shares - -
Shareholder servicing - Investment C Shares - 3
Other - 27,016
-------------- -----------------
Total Liabilities - 214,088
-------------- -----------------
Net Assets:
Paid-in Capital - 386,812,810
Undistributed net investment income/(loss) - (116,005)
Undistributed net realized gain/(loss) on investments,
futures and foreign currency transactions - (3,667,804)
Net unrealized appreciation on investments,
futures and foreign currency transactions - 15,973,013
-------------- -----------------
Total Net Assets $ - $ 399,002,014
============== =================
Net Assets:
Institutional Shares $ - $ 395,655,917
Investment A Shares (a) - 3,330,817
Investment C Shares - 15,280
-------------- -----------------
Total $ - $ 399,002,014
============== =================
Shares of Beneficial Interest Outstanding
(Unlimited number of shares authorized, no par value:)
Institutional Shares 1,216,453 (b) 37,230,202
Investment A Shares (a) 3,028 (b) 313,293
Investment C Shares 134 (b) 1,437
-------------- -----------------
Total 1,219,615 37,544,932
============== =================
Net Asset Value
Institutional Shares $ 10.63
=================
Investment A Shares-redemption price per share (a) $ 10.63
=================
Investment C Shares-offering price per share* $ 10.63
=================
Maximum sales charge- Investment A Shares 4.50%
Maximum Offering Price
(100%/(100%-Maximum sales charge) of net asset value
adjusted to nearest cent) per share (Investment A Shares) $ 11.13
=================
- -----------------------------------------------------------------
* Redemption price per share varies by length of time shares are held.
(a) For Kent, represents Investment Shares.
(b) Adjustment to convert Fifth Third Shares Outstanding to Kent Shares
Outstanding based on Kent's NAV's.
Kent Intermediate Tax-Free Fund
Fifth Third Municipal Bond Fund
Pro Forma Combining Statements of Operations
For the year ended 12/31/00
(Unaudited)
Fifth Third Pro Forma
Kent Intermediate Municipal Bond Pro Forma Combined
Tax-Free Fund Fund Adjustments (Note 1)
------------------ -------------- ------------ -------------
INVESTMENT INCOME:
Interest income $ 14,511,413 $ 6,602,015 $ - $ 21,113,428
Dividend income 137,505 - - 137,505
Securities lending income - - - -
------------------ -------------- ------------ -------------
Total Income 14,648,918 6,602,015 - 21,250,933
------------------ -------------- ------------ -------------
EXPENSES:
Investment advisory fees 1,422,796 719,544 126,436 (a) 2,268,776
Administrative fees 512,640 232,217 (29,574) (b) 715,283
Distribution services - Investment A Shares
(Investment - Kent) 7,202 493 - 7,695
Distribution services - Investment C Shares - 42 - 42
Shareholder servicing - Investment C Shares - 14 - 14
Fund accounting fees 57,860 26,165 (1,524) (c) 82,501
Custodian fees 7,042 8,635 3,711 (d) 19,388
Other fees 80,978 94,224 220,390 (e) 395,592
------------------ -------------- ------------ -------------
Total Expenses: 2,088,518 1,081,334 319,439 3,489,291
------------------ -------------- ------------ -------------
Less fees voluntarily reduced (27,316) (98,133) (183,929) (309,378)
------------------ -------------- ------------ -------------
Net Expenses 2,061,202 983,201 135,510 3,179,913
------------------ -------------- ------------ -------------
Net Investment Income 12,587,716 5,618,814 (135,510) 18,071,020
------------------ -------------- ------------ -------------
Realized and Unrealized Gains/(Losses) from
Investments, Futures and Foreign Currency
Transactions:
Net realized gains/(losses) from investments, futures
and foreign currency transactions 2,030,431 (2,001,264) - 29,167
Net change in unrealized appreciation (depreciation)
from investments, futures and translation of
assets and liabilities in foreign currencies 9,034,600 6,896,013 - 15,930,613
------------------ -------------- ------------ -------------
Net realized/unrealized gains/(losses) from investments,
futures and foreign currency transactions 11,065,031 4,894,749 - 15,959,780
------------------ -------------- ------------ -------------
Change in net assets resulting from operations $ 23,652,747 $ 10,513,563 $ (135,510) $ 34,030,800
================== ============== ============ =============
______________________________________________
(a) Adjustment to reflect the Fifth Third contractual fee structure for Advisory
fees (0.55% of net assets).
(b) Adjustment to reflect the Fifth Third contractual fee structure for
Administration fees (0.1734% of net assets).
(c) Adjustment to reflect the Fifth Third contractual fee structure for
Accounting fees (Tiered fee structure starting at 0.02%).
(d) Adjustment to reflect the Fifth Third contractual fee structure for
Custodian fees (Tiered fee structure starting at 0.01%).
(e) Adjustment to reflect the Fifth Third fee structure when the two funds
merge.
Kent Money Market Fund
Fifth Third Prime Money Market
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third
Kent Money Fifth Third Pro Forma Kent Money Prime Money Pro Forma
Market Fund Prime Money Combined Market Fund Market Fund Combined
Principal Principal Principal Amortized Amortized Amortized
Amount Amount Amount Security Description Cost Cost Cost
- -----------------------------------------------------------------------------------------------------------------------------------
Commercial Paper
- -----------------------------------------------------------------------------------------------------------------------------------
Automotive
$ 5,000,000 $ - $ 5,000,000 Daimler Chrysler AG, 6.62%**, 1/24/01 $ 4,979,172 $ - $ 4,979,172
5,000,000 - 5,000,000 Daimler Chrysler AG, 6.72%**, 3/8/01 4,940,508 - 4,940,508
5,000,000 - 5,000,000 Ford Motor Credit Co., 6.62%**, 1/3/01 4,998,170 - 4,998,170
5,000,000 - 5,000,000 Ford Motor Credit Co., 6.61%**, 1/4/01 4,997,276 - 4,997,276
5,000,000 - 5,000,000 Ford Motor Credit Co., 6.61%**, 1/12/01 4,989,963 - 4,989,963
3,588,000 - 3,588,000 Ford Motor Credit Co., 6.66%**, 1/17/01 3,577,475 - 3,577,475
5,000,000 - 5,000,000 Ford Motor Credit Co., 6.15%**, 5/21/01 4,883,333 - 4,883,333
5,000,000 - 5,000,000 Ford Motor Credit Co., 5.84%**, 9/20/01 4,796,222 - 4,796,222
5,000,000 - 5,000,000 General Motors Acceptance Corp., 6.69%**, 1/11/01 4,990,944 - 4,990,944
5,000,000 - 5,000,000 General Motors Acceptance Corp., 6.63%**, 1/23/01 4,980,017 - 4,980,017
5,000,000 - 5,000,000 General Motors Acceptance Corp., 6.73%**, 1/31/01 4,972,833 - 4,972,833
5,000,000 - 5,000,000 General Motors Acceptance Corp., 6.62%**, 2/8/01 4,965,589 - 4,965,589
5,000,000 - 5,000,000 General Motors Acceptance Corp., 6.63%**, 2/12/01 4,962,025 - 4,962,025
5,000,000 - 5,000,000 Toyota Motors Credit Corp., 6.50%**, 2/9/01 (b) 4,965,225 - 4,965,225
5,000,000 - 5,000,000 Toyota Motors Credit Corp., 6.50%**, 2/15/01 (b) 4,959,813 - 4,959,813
----------- ------------ ------------
72,958,565 - 72,958,565
- -----------------------------------------------------------------------------------------------------------------------------------
Bank
5,000,000 - 5,000,000 Barclays U.S. Funding Corp., 6.67%**, 1/4/01 4,997,238 - 4,997,238
5,000,000 - 5,000,000 Dresdner Bank, 6.80%**, 1/9/01 4,992,689 - 4,992,689
5,000,000 - 5,000,000 Dresdner U.S. Bank, 6.71%**, 2/1/01 4,971,928 - 4,971,928
5,000,000 - 5,000,000 JP Morgan & Co. Inc., 6.61%**, 2/8/01 4,965,694 - 4,965,694
----------- ------------ ------------
19,927,549 - 19,927,549
- -----------------------------------------------------------------------------------------------------------------------------------
Bank
- 10,000,000 10,000,000 ABN Amro, 2/5/01 - 9,936,125 9,936,125
- 6,000,000 6,000,000 Banc One Corp., 2/28/01 - 5,936,780 5,936,780
- 10,000,000 10,000,000 BK MONTREAL DCP, 1/4/01 - 9,994,558 9,994,558
- 10,000,000 10,000,000 DEUT DCP @ 6.618%, 1/25/01 - 9,956,600 9,956,600
- 10,000,000 10,000,000 Deutsche Bank, 2/15/01 - 9,918,750 9,918,750
- 10,000,000 10,000,000 Deutsche Bank, 3/5/01 - 9,887,300 9,887,300
- 10,000,000 10,000,000 Dexia, 2/26/01 - 9,898,733 9,898,733
- 10,000,000 10,000,000 Dexia, 3/14/01 - 9,873,400 9,873,400
- 15,000,000 15,000,000 NAT CITY DCP @ 6.61%, 1/8/01 - 14,980,808 14,980,808
- 2,800,000 2,800,000 ONE DCP @ 6.63%, 1/10/01 - 2,795,422 2,795,422
- 10,000,000 10,000,000 Societe Generale, 2/21/01 - 9,907,917 9,907,917
- 10,000,000 10,000,000 Societe Generale, 3/20/01 - 9,863,500 9,863,500
- 10,000,000 10,000,000 Societe Generale, 4/12/01 - 9,820,024 9,820,024
- 10,000,000 10,000,000 WELLS FARGO DCP, 1/30/01 - 9,947,639 9,947,639
- 10,000,000 10,000,000 Wells Fargo & Co., 2/28/01 - 9,895,439 9,895,439
- 10,000,000 10,000,000 Wells Fargo & Co., 3/8/01 - 9,881,933 9,881,933
----------- ------------ ------------
- 152,494,928 152,494,928
- -----------------------------------------------------------------------------------------------------------------------------------
Beverages - Soft Drinks
5,000,000 - 5,000,000 Coca Cola Co., 6.58%**, 1/30/01 4,973,819 - 4,973,819
5,000,000 - 5,000,000 Coca Cola Co., 6.57%**, 3/6/01 4,942,667 - 4,942,667
- 10,000,000 10,000,000 COKE 6.591% DCP, 1/26/01 - 9,954,931 9,954,931
----------- ------------ ------------
9,916,486 9,954,931 19,871,417
- -----------------------------------------------------------------------------------------------------------------------------------
Fifth Third
Kent Money Fifth Third Pro Forma Kent Money Prime Money Pro Forma
Market Fund Prime Money Combined Market Fund Market Fund Combined
Principal Principal Principal Amortized Amortized Amortized
Amount Amount Amount Security Description Cost Cost Cost
- ------------------------------------------------------------------------------------------------------------------------------------
Brokerage
$ - $ 10,000,000 10,000,000 Credit Suisse First Boston, Inc., 2/12/01 $ - $ 9,924,167 $ 9,924,166
- 10,000,000 10,000,000 Credit Suisse First Boston, Inc., 2/12/01 - 9,873,806 9,873,806
- 10,000,000 10,000,000 Credit Suisse First Boston, Inc., 5/17/01 - 9,757,844 9,757,844
- 10,000,000 10,000,000 GOLDMAN DCP, 6.56, 1/18/01 - 9,969,022 9,969,022
- 10,000,000 10,000,000 Goldman Sachs Group, 2/14/01 - 9,920,556 9,920,556
- 10,000,000 10,000,000 Goldman Sachs Group, 4/11/01 - 9,821,667 9,821,667
- 5,000,000 5,000,000 Goldman Sachs Group, 5/11/01 - 4,889,861 4,889,861
- 10,000,000 10,000,000 Merrill Lynch & Co., 2/2/01 - 9,941,511 9,941,511
- 10,000,000 10,000,000 SALOMON DCP, 1/16/01 - 9,972,583 9,972,583
------------ -------------- --------------
- 84,071,017 84,071,017
- ------------------------------------------------------------------------------------------------------------------------------------
Energy
- 30,000,000 30,000,000 BP 6.585Z5 DCP, 1/2/01 - 29,994,517 29,994,517
- 10,000,000 10,000,000 CHEVRON 6.735% DCP, 1/23/01 - 9,960,094 9,960,094
- 10,000,000 10,000,000 Chevron Corp., 3/14/01 - 9,870,000 9,870,000
- 15,000,000 15,000,000 Chevron Corp., 3/22/01 - 14,788,667 14,788,667
------------ -------------- --------------
- 64,613,278 64,613,278
- ------------------------------------------------------------------------------------------------------------------------------------
Finance
5,000,000 - 5,000,000 General Electric Capital Corp., 6.61%**, 1/10/01 4,991,813 - 4,991,813
3,700,000 - 3,700,000 General Electric Capital Corp., 6.65%**, 1/10/01 3,693,941 - 3,693,941
1,807,000 - 1,807,000 General Electric Capital Corp., 6.71%**, 1/11/01 1,803,647 - 1,803,647
5,000,000 - 5,000,000 General Electric Capital Corp., 6.60%**, 1/18/01 4,984,653 - 4,984,653
4,500,000 - 4,500,000 General Electric Capital Corp., 6.66%**, 1/19/01 4,485,308 - 4,485,308
5,400,000 - 5,400,000 General Electric Capital Corp., 6.65%**, 1/24/01 5,377,229 - 5,377,229
5,000,000 - 5,000,000 General Electric Capital Corp., 6.61%**, 3/12/01 4,937,194 - 4,937,194
5,000,000 - 5,000,000 General Electric Capital Corp., 5.91%**, 8/14/01 4,821,875 - 4,821,875
5,000,000 - 5,000,000 SBC Finance, 6.63%**, 1/18/01 (b) 4,984,606 - 4,984,606
------------ -------------- --------------
40,080,266 - 40,080,266
- ------------------------------------------------------------------------------------------------------------------------------------
Financial
- 5,000,000 5,000,000 American Express Credit Corp., 5/18/01 - 4,884,882 4,884,882
- 12,000,000 12,000,000 ASSOC. DCP @6.602 1/31/01 - 11,934,500 11,934,500
- 15,000,000 15,000,000 BARCLAY DCP, 1/3/01 - 14,994,479 14,994,479
- 10,000,000 10,000,000 FORD 6.609% DCP, 1/5/01 - 9,992,722 9,992,722
- 10,000,000 10,000,000 FORD DCP @ 6.616, 1/12/01 - 9,979,925 9,979,925
- 10,000,000 10,000,000 GE 6.718% DCP, 1/23/01 - 9,960,094 9,960,094
- 10,000,000 10,000,000 General Electric Capital Corp., 4/4/01 - 9,840,092 9,840,092
- 10,000,000 10,000,000 General Motors Acceptance Corp., 2/9/01 - 9,929,475 9,929,475
- 10,000,000 10,000,000 IBM Credit Corp., 2/1/01 - 9,944,028 9,944,028
- 10,000,000 10,000,000 Metlife Funding, 2/16/01 - 9,917,200 9,917,200
- 10,000,000 10,000,000 Pitney Bowes, 2/20/01 - 9,912,083 9,912,083
- 10,000,000 10,000,000 PRUDENTIAL DCP, 1/10/01 - 9,983,625 9,983,625
- 10,000,000 10,000,000 Toyota Corp., 2/8/01 - 9,932,128 9,932,128
- 15,000,000 15,000,000 Toyota Corp., 2/23/01 - 14,859,329 14,859,329
- 9,800,000 9,800,000 UBS DCP, 6.72%, 1/18/01 - 9,769,225 9,769,225
------------ -------------- --------------
- 155,833,788 155,833,788
- ------------------------------------------------------------------------------------------------------------------------------------
Food - Canned
2,295,000 - 2,295,000 H.J. Heinz Co., 6.65%**, 1/22/01 2,286,271 - 2,286,271
5,000,000 - 5,000,000 H.J. Heinz Co., 6.64%**, 1/31/01 4,972,917 - 4,972,917
5,000,000 - 5,000,000 H.J. Heinz Co., 6.60%**, 2/2/01 4,971,244 - 4,971,244
------------ -------------- --------------
12,230,432 - 12,230,432
- ------------------------------------------------------------------------------------------------------------------------------------
Food - Confectiory
5,000,000 - 5,000,000 Nestle Capital Corp., 6.04%**, 9/14/01 4,794,489 - 4,794,489
- ------------------------------------------------------------------------------------------------------------------------------------
Foreign Banking
10,000,000 - 10,000,000 Bank of Nova Scotia, 6.69%**,1/5/01 9,992,734 - 9,992,734
10,000,000 - 10,000,000 Bank of Nova Scotia, 6.60%**,2/13/01 9,922,421 - 9,922,421
2,800,000 - 2,800,000 Banque National de Paris, 6.73%**, 1/10/01 2,795,401 - 2,795,401
5,000,000 - 5,000,000 Societe Generale North, 6.72%**, 1/9/01 4,992,733 - 4,992,733
5,000,000 - 5,000,000 Societe Generale North, 6.11%**, 9/17/01 4,789,922 - 4,789,922
2,700,000 - 2,700,000 UBS Financial Inc., 6.67%**, 1/16/01 2,692,575 - 2,692,575
2,200,000 - 2,200,000 UBS Financial Inc., 6.65%**, 1/18/01 2,193,143 - 2,193,143
5,000,000 - 5,000,000 UBS Financial Inc., 6.89%**, 8/22/01 5,000,743 - 5,000,743
------------ -------------- --------------
42,379,672 - 42,379,672
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Money Market Fund
Fifth Third Prime Money Market
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third Fifth Third
Kent Money Prime Money Pro Forma Kent Money Prime Money Pro Form
Market Fund Market Fund Combined Market Fund Market Fund Combined
Principal Principal Principal Security Amortize Amortized Amortized
Amount Amount Amount Description Cost Cost Cost
- ------------------------------------------------------------------------------------------------------------------------------------
Industrial Goods & Services
$ 5,000,000 $ - $ 5,000,000 EI DuPont De Nemours, 6.58%**, 1/10/01 $ 4,991,863 $ - $ 4,991,863
5,000,000 - 5,000,000 EI DuPont De Nemours, 6.58%**, 1/26/01 4,977,500 - 4,997,500
5,000,000 - 5,000,000 EI DuPont De Nemours, 6.60%**, 2/27/01 4,949,254 - 4,949,254
4,600,000 - 4,600,000 EI DuPont De Nemours, 6.44%**, 4/12/01 4,518,695 - 4,518,695
------------ ------------ ------------
19,437,312 - 19,437,312
- ----------------------------------------------------------------------------------------------------------------------------------
Insurance
- 10,000,000 10,000,000 AIG, 6.598%, DCP, 1/11/01 - 9,981,889 9,981,889
- 10,000,000 10,000,000 AIG DCP @6.609, 1/22/01 - 9,962,083 9,962,083
------------ ------------ ------------
- 19,943,972 19,943,972
- -----------------------------------------------------------------------------------------------------------------------------------
Medical - Drugs
5,000,000 - 5,000,000 Merck & Co. Inc., 6.58%**, 1/17/01 4,985,510 - 4,985,510
5,000,000 - 5,000,000 Merck & Co. Inc., 6.60%**, 1/19/01 4,983,650 - 4,983,650
5,000,000 - 5,000,000 Schering-Plough Corp., 6.39%**, 4/10/01 4,914,063 - 4,914,063
5,000,000 - 5,000,000 Schering-Plough Corp., 6.57%**, 4/17/01 4,905,631 - 4,905,631
------------ ------------ ------------
19,788,854 - 19,788,854
- -----------------------------------------------------------------------------------------------------------------------------------
Miscellaneous
- 10,050,000 10,050,000 Tribune Co., 2/14/01 - 9,970,036 9,970,036
- ------------------------------------------------------------------------------------------------------------------------------------
Multi-Media
5,000,000 - 5,000,000 McGraw Hill, 6.62%**, 1/25/01 4,978,334 - 4,978,334
5,000,000 - 5,000,000 McGraw Hill, 6.60%**, 2/21/01 4,954,100 - 4,954,100
5,000,000 - 5,000,000 McGraw Hill, 6.46%**, 3/8/01 4,941,700 - 4,941,700
5,000,000 - 5,000,000 McGraw Hill, 6.32%**, 4/17/01 4,908,869 - 4,908,869
5,000,000 - 5,000,000 McGraw Hill, 6.45%**, 6/4/01 4,866,319 - 4,866,319
4,600,000 - 4,600,000 McGraw Hill, 6.11%**, 6/8/01 4,479,876 - 4,479,876
5,000,000 - 5,000,000 McGraw Hill, 6.35%**, 6/11/01 4,862,479 - 4,862,479
------------ ------------ ------------
33,991,677 - 33,991,677
- ------------------------------------------------------------------------------------------------------------------------------------
Printing & Publishing
5,000,000 - 5,000,000 RR Donnelley & Sons, 6.59%**, 1/29/01 (b) 4,974,644 - 4,974,644
- ------------------------------------------------------------------------------------------------------------------------------------
Publishing - Newspapers
5,000,000 - 5,000,000 Gannett, Co., 6.60%**, 2/14/01 (b) 4,960,400 - 4,960,400
- ------------------------------------------------------------------------------------------------------------------------------------
Telecommunications
- 10,000,000 10,000,000 Bell South, 2/22/01 - 9,906,904 9,906,904
- 8,974,000 8,974,000 BLS DCP @ 6.569, 1/9/01 - 8,960,978 8,960,978
- 10,000,000 10,000,000 BLS TEL DCP, 1/29/01 - 9,949,289 9,949,289
- 10,000,000 10,000,000 BLS 6.59% DCP, 1/17/01 - 9,971,111 9,971,111
------------ ------------ ------------
- 38,788,282 38,788,282
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities
- 15,000,000 15,000,000 MEAG 6.58%, 3/6/01 - 15,000,000 15,000,000
- 10,000,000 10,000,000 MEAG 6.53%, 4/5/01 - 10,000,000 10,000,000
- 10,000,000 10,000,000 NRUC, 6.617, DCP, 1/19/01 - 9,967,400 9,967,400
- 10,000,000 10,000,000 National Rural, 3/26/01 - 9,849,500 9,849,500
- 8,000,000 8,000,000 National Rural, 4/17/01 - 7,848,538 7,848,538
- 5,000,000 5,000,000 National Rural, 8/23/01 - 4,804,350 4,804,350
------------ ------------ ------------
- 57,469,788 57,469,788
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - Telephone
5,000,000 - 5,000,000 BellSouth Corp., 6.56%**, 1/17/01 4,985,600 - 4,985,600
------------ ------------ ------------
Total Commercial Paper 290,425,946 593,140,019 883,565,965
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate Notes & Bonds
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive
4,500,000 - 4,500,000 Daimler Chrysler AG, 5.88%, 2/7/01 4,496,595 - 4,496,595
2,100,000 - 2,100,000 Ford Motor Credit Co., 6.19%*, 1/16/01 2,098,023 - 2,098,023
5,000,000 - 5,000,000 General Motors Acceptance Corp., 5.50%,
1/14/02 4,972,979 - 4,972,979
------------ ------------ ------------
11,567,597 - 11,567,597
- ------------------------------------------------------------------------------------------------------------------------------------
Banking
5,000,000 - 5,000,000 Firstar Corporation, 6.35%, 7/13/01 4,983,881 - 4,983,881
------------ ------------ ------------
4,983,881 - 4,983,881
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Money Market Fund
Fifth Third Prime Money Market
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third Fifth Third
Kent Money Prime Money Pro Forma Kent Money Prime Money Pro Forma
Market Fund Market Fund Combined Market Fund Market Fund Combined
Principal Principal Principal Amortized Amortized Amortized
Amount Amount Amount Security Description Cost Cost Cost
- ------------------------------------------------------------------------------------------------------------------------------------
Banks
$ - $ 2,000,000 $ 2,000,000 ABN Amro Bank, 6.63%,
10/31/01 - 1,997,554 1,997,554
- 4,350,000 4,350,000 Bank of America NA,
6.35%, 3/15/01 - 4,342,662 4,342,662
- 2,000,000 2,000,000 Bank of America NA,
Floating Rate Note,
6/11/01, (6.63%, 3/11/01) (b) - 2,000,594 2,000,594
- 4,600,000 4,600,000 Bayerishe Landesbank NY,
6.60%, 5/24/01 - 4,597,875 4,597,875
- 5,000,000 5,000,000 Chase Manhattan Corp.,
Floating Rate Note, 4/26/01,
(5.64%, 4/26/01) (b) - 5,000,486 5,000,486
- 5,750,000 5,750,000 Wells Fargo & Co., 6.25%,
3/15/01 - 5,743,663 5,743,663
- 1,570,000 1,570,000 Wells Fargo & Co., 6.88%,
5/10/01 - 1,568,779 1,568,779
- 4,000,000 4,000,000 West Deutsche Landesbk NY,
Floating Rate Note, 3/23/01,
(5.71%, 2/23/01) (b) - 3,999,421 3,999,421
------------- ---------------- --------------
- 29,251,036 29,251,036
- ------------------------------------------------------------------------------------------------------------------------------------
Brokerage
- 8,500,000 8,500,000 Merrill Lynch & Co.,
6.70%, 2/7/01 - 8,497,765 8,497,765
- 2,250,000 2,250,000 Merrill Lynch & Co.,
Floating Rate Note, 5/30/01,
(5.78%, 2/28/01) (b) - 2,250,506 2,250,506
- 5,000,000 5,000,000 Merrill Lynch & Co., 6.07%,
10/15/01 - 5,001,036 5,001,036
- 15,000,000 15,000,000 JP Morgan & Co., Floating
Rate Note, 3/16/01,
(5.87%, 2/15/01) (b) - 15,001,097 15,001,097
- 3,500,000 3,500,000 Salomon Smith Barney Inc.,
5.88%, 2/1/01 - 3,497,721 3,497,721
------------- ---------------- --------------
- 34,248,124 34,248,124
- ------------------------------------------------------------------------------------------------------------------------------------
Financial
- 5,000,000 5,000,000 American Express Credit Corp.,
6.13%, 11/15/01 - 5,014,930 5,014,930
- 2,550,000 2,550,000 Associates Corp. NA,
5.88%, 5/16/01 - 2,542,034 2,542,034
- 1,250,000 1,250,000 Associates Corp. NA,
6.70%, 5/29/01 - 1,249,758 1,249,758
- 5,500,000 5,500,000 Associates Corp. NA,
6.45%, 10/15/01 - 5,499,061 5,499,061
- 5,000,000 5,000,000 Associates Corp. NA,
6.73%, 10/22/01 - 4,998,942 4,998,942
- 3,200,000 3,200,000 AT&T Capital Corp.,
6.80%, 2/1/01 - 3,200,054 3,200,054
- 3,600,000 3,600,000 AT&T Capital Corp.,
6.25%, 5/15/01 - 3,585,694 3,585,694
- 5,000,000 5,000,000 AT&T FLTR 7/19/01 - 5,000,000 5,000,000
- 5,000,000 5,000,000 AT&T FLTR 7/13/01 - 5,000,000 5,000,000
- 8,200,000 8,200,000 Capital One Funding Corp.,
Floating Rate Note, 1/2/19,
(5.93%, 2/6/01) (b) - 8,200,000 8,200,000
- 6,800,000 6,800,000 Capital One Funding Corp.,
Floating Rate Note, 10/1/21,
(5.85%, 2/5/01) (b) - 6,800,000 6,800,000
- 5,900,000 5,900,000 Chrysler Financial Co.,
5.88%, 2/7/01 - 5,893,705 5,893,705
- 1,000,000 1,000,000 Chrysler Financial Co.,
6.08%, 3/6/01 - 998,807 998,807
- 1,250,000 1,250,000 Chrysler Financial Co.,
6.08%, 3/12/01 - 1,248,224 1,248,224
- 10,000,000 10,000,000 CIT Group Inc.,
Floating Rate Note,
2/14/01, (6.10%, 2/14/01) (b) - 9,998,700 9,998,700
- 1,390,000 1,390,000 CIT Group Inc.,
6.70%, 2/26/01 - 1,388,124 1,388,124
- 1,200,000 1,200,000 Ford Motor Credit Co.,
5.75%, 1/25/01 - 1,198,974 1,198,974
- 4,750,000 4,750,000 Ford Motor Credit Co.,
6.57%, 3/19/01 - 4,747,292 4,747,292
- 2,000,000 2,000,000 General Motors Acceptance Corp.,
7.88%, 3/7/01 - 2,002,692 2,002,692
- 6,500,000 6,500,000 General Motors Acceptance Corp.,
5.35%, 4/16/01 - 6,468,440 6,468,440
- 3,000,000 3,000,000 General Motors Acceptance Corp.,
6.65%, 4/25/01 - 2,999,063 2,999,063
- 1,500,000 1,500,000 General Motors Acceptance Corp.,
5.35%, 5/4/01 - 1,492,214 1,492,214
- 8,300,000 8,300,000 General Motors Acceptance Corp.,
6.10%, 6/1/01 - 8,276,782 8,276,782
- 3,700,000 3,700,000 General Electric Capital Corp.,
5.92%, 4/3/01 - 3,691,800 3,691,800
- 2,000,000 2,000,000 General Electric Capital Corp.,
6.55%, 5/7/01 - 1,995,242 1,995,242
------------- ---------------- --------------
- 103,490,532 103,490,532
- ------------------------------------------------------------------------------------------------------------------------------------
Healthcare
- 12,000,00 12,000,000 Landmark Medical, Floating Rate
Note, 1/1/21, (5.90%, 2/2/01) (b) - 12,000,000 12,000,000
------------- ---------------- --------------
Total Corporate Notes and Bonds 16,551,478 178,989,692 195,541,170
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
Automotive
10,000,000 - 10,000,000 Mubea Inc., 6.77%*, 1/3/01,
(LOC: Fifth Third Bank) 10,000,000 - 10,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Banking & Finance
5,000,000 - 5,000,000 Cornerstone Funding Corp., 6.61%*,
1/5/01, (LOC: Sun Trust) 5,000,000 - 5,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
Beverages - Alcoholic
5,960,000 - 5,960,000 New Belgium Brewing Co., Inc.,
6.65%*, 1/4/01, (LOC: Keybank) 5,960,000 - 5,960,000
- ------------------------------------------------------------------------------------------------------------------------------------
Building - Residential/Commercial
1,000,000 - 1,000,000 PZT Development, 6.65%*, 1/3/01,
(LOC: Fifth Third Bank) 1,000,000 - 1,000,000
4,040,000 - 4,040,000 Zanetos Partnership Project, 6.77%*,
1/3/01, (LOC: National City Bank) 4,040,000 - 4,040,000
------------- ---------------- --------------
5,040,000 - 5,040,000
- ------------------------------------------------------------------------------------------------------------------------------------
Electrical & Electronic
10,170,000 - 10,170,000 Aerovox Inc., 6.65%*, 1/3/01,
(LOC: Keybank) 10,170,000 - 10,170,000
- ------------------------------------------------------------------------------------------------------------------------------------
Kent Money Market Fund
Fifth Third Prime Money Market
Pro Forma Combining Schedule of Portfolio Investments
As of 12/31/00
(Unaudited)
Fifth Third Fifth Third
Kent Money Prime Money Pro Forma Kent Money Prime Money Pro Forma
Market Fund Market Fund Combined Market Fund Market Fund Combined
Principal Principal Principal Security Amortized Amortized Amortized
Amount Amount Amount Description Cost Cost Cost
- -------------------------------------------------------------------------------------------------------------------------------
Finance
$ 5,320,000 $ - $ 5,320,000 Capital One Funding Corp., 6.80%*,
1/4/01, (LOC: Bank One) $ 5,320,000 $ - $ 5,320,000
1,559,000 - 1,559,000 Capital One Funding Corp., 6.80%*,
1/4/01, (LOC: Bank One) 1,559,000 - 1,559,000
1,538,000 - 1,538,000 Capital One Funding Corp., 6.80%*,
1/4/01, (LOC: Bank One) 1,538,000 - 1,538,000
5,574,000 - 5,574,000 Capital One Funding Corp., 6.80%*,
1/4/01, (LOC: Bank One) 5,574,000 - 5,574,000
1,228,000 - 1,228,000 Capital One Funding Corp., 6.80%*,
1/4/01, (LOC: Bank One) 1,228,000 - 1,228,000
3,825,000 - 3,825,000 Labelle Capital Funding L.L.C.,
6.82%*, 1/4/01, (LOC: National
City Bank) 3,825,000 - 3,825,000
3,555,000 - 3,555,000 Macroe Properties, Inc., 6.85%*,
1/4/01, (LOC: Huntington Bank) 3,555,000 - 3,555,000
5,000,000 - 5,000,000 MBE Investment Co., 6.65%*, 1/3/01,
(LOC: National Australia Bank) 5,000,000 - 5,000,000
9,210,000 - 9,210,000 PRD Finance L.L.C., 6.74%*, 1/3/01,
(LOC: National City Bank) 9,210,000 - 9,210,000
5,000,000 - 5,000,000 Sheperd Capital L.L.C., 6.82%*,
1/4/01, (LOC: Comerica Bank) 5,000,000 - 5,000,000
------------ --------- ------------
41,809,000 - 41,809,000
- -------------------------------------------------------------------------------------------------------------------------------
Health Care
3,860,000 - 3,860,000 Adena Health System, 6.65%*, 1/3/01,
(LOC: Fifth Third Bank) 3,860,000 - 3,860,000
7,750,000 - 7,750,000 America Healthcare Funding L.L.C.,
6.75%*, 1/4/01, (LOC: ABN/AMRO) 7,750,000 - 7,750,000
6,625,000 - 6,625,000 Barton Healthcare L.L.C., 6.80%*,
1/3/01, (LOC: American National/
Bank One) 6,625,000 - 6,625,000
3,570,000 - 3,570,000 Excel Health Services, Inc., 6.65%*,
1/3/01, (LOC: Fifth Third Bank) 3,570,000 - 3,570,000
3,250,000 - 3,250,000 Idaho Associates L.L.C., 6.80%*,
1/3/01, (LOC: ABN/AMRO) 3,250,000 - 3,250,000
2,420,000 - 2,420,000 Reynolds Road Fitness Center, Inc.,
6.65%*, 1/4/01, (LOC: Fifth Third Bank) 2,420,000 - 2,420,000
5,025,000 - 5,025,000 Reynolds Road Fitness Center, Inc.,
6.65%*, 1/4/01, (LOC: Fifth Third Bank) 5,025,000 - 5,025,000
1,725,000 - 1,725,000 Riverview Medical Office Building,
6.77%*, 1/3/01, (LOC: National City
Bank) 1,725,000 - 1,725,000
------------ --------- ------------
34,225,000 - 34,225,000
- -------------------------------------------------------------------------------------------------------------------------------
Hotels & Lodging
2,250,000 - 2,250,000 Central Michigan Inns, 6.80%*, 1/3/01,
(LOC: Michigan National Bank) 2,250,000 - 2,250,000
- -------------------------------------------------------------------------------------------------------------------------------
Machinery - Construction/Mining
2,180,000 - 2,180,000 Concord Group Ltd., 6.77%*, 1/3/01,
(LOC: National City Bank) 2,180,000 - 2,180,000
- -------------------------------------------------------------------------------------------------------------------------------
Machinery - General Industrial
5,900,000 - 5,900,000 Atlas Industries, Inc., 6.77%*, 1/3/01,
(LOC: National City Bank) 5,900,000 - 5,900,000
6,500,000 - 6,500,000 Patrick Engineer/Dietzler Family,
6.85%*, 1/4/01, (LOC: American National
Bank/Bank One) 6,500,000 - 6,500,000
5,000,000 - 5,000,000 Precision Tool and Die, 6.77%*, 1/3/01,
(LOC: National City Bank) 5,000,000 - 5,000,000
------------ --------- ------------
17,400,000 - 17,400,000
- -------------------------------------------------------------------------------------------------------------------------------
Manufacturing - Capital Goods
8,545,000 - 8,545,000 Buckeye Corrugated, Inc., 6.65%*,
1/3/01, (LOC: Keybank) 8,545,000 - 8,545,000
2,200,000 - 2,200,000 City of Cloquet, Minnesota Taxable
Industrial Bond, 6.80%*, 1/3/01,
(LOC: Wachovia), Series 1996-B 2,200,000 - 2,200,000
3,455,000 - 3,455,000 Jackson Tube Service, Inc., 6.65%*,
1/3/01, (LOC: Fifth Third Bank) 3,455,000 - 3,455,000
1,425,000 - 1,425,000 Laird's Auto Glass & Trim, Inc.,
6.73%*, 1/3/01, (LOC: National
Australia Bank) 1,425,000 - 1,425,000
2,020,000 - 2,020,000 White Mountain Imaging, 6.65%*, 1/3/01,
(LOC: Keybank) 2,020,000 - 2,020,000
------------ --------- ------------
17,645,000 - 17,645,000
- -------------------------------------------------------------------------------------------------------------------------------
Manufacturing Industries, n.e.c.
1,520,000 - 1,520,000 FRW Ltd., 6.65%*, 1/3/01, (LOC:
Key bank) 1,520,000 - 1,520,000
10,095,000 - 10,095,000 Jackson 2000, 6.65%*, 1/3/01, (LOC:
Keybank) 10,095,000 - 10,095,000
2,705,000 - 2,705,000 Moose River Lumber, 6.65%*, 1/3/01,
(LOC: Keybank) 2,705,000 - 2,705,000
------------ --------- ------------
14,320,000 - 14,320,000
- -------------------------------------------------------------------------------------------------------------------------------
Paints & Related Products
3,865,000 - 3,865,000 PCI Paper Conversions Inc., 6.65%*,
1/3/01, (LOC: Keybank) 3,865,000 - 3,865,000
- -------------------------------------------------------------------------------------------------------------------------------
Publishing - Newspapers
1,675,000 - 1,675,000 Thompson Newspapers, Inc., 6.65%*,
1/5/01, (LOC: Keybank) 1,675,000 - 1,675,000
- -------------------------------------------------------------------------------------------------------------------------------
Real Estate
3,275,000 - 3,275,000 Bayloff Properties L.L.C., 6.77%*,
1/4/01, (LOC: National City Bank) 3,275,000 - 3,275,000
3,915,000 - 3,915,000 Chesterwood Village Realty, 6.65%*,
1/3/01, (LOC: Fifth Third Bank) 3,915,000 - 3,915,000
6,015,000 - 6,015,000 GTB Properties L.L.C., 6.75%*, 1/3/01,
(LOC: National Australia Bank) 6,015,000 - 6,015,000
6,060,000 - 6,060,000 Harry W. Albright, Jr., 6.85%*, 1/4/01,
(LOC: National Australia Bank/Bank One) 6,060,000 - 6,060,000
5,335,000 - 5,335,000 HWP Co., Ltd. Project, 6.77%*, 1/3/01,
(LOC: National City Bank) 5,335,000 - 5,335,000
1,980,000 - 1,980,000 JW Harris Co., Inc., 6.65%*, 1/4/01,
(LOC: Fifth Third Bank) 1,980,000 - 1,980,000
13,265,000 - 13,265,000 Pittsburgh Technical Institute, 6.77%*,
1/3/01, (LOC: National City Bank) 13,265,000 - 13,265,000
2,500,000 - 2,500,000 Rumpf Development Ltd., 6.65%*, 1/3/01,
(LOC: Keybank) 2,500,000 - 2,500,000
3,000,000 - 3,000,000 SF Tarns L.L.C. 6.86%*, 1/5/01, (LOC:
Standard Federal/ABN) 3,000,000 - 3,000,000
13,840,000 - 13,840,000 Sharonsville Realty Enterprises,
6.85%*, 1/3/01, (LOC: Bank One) 13,840,000 - 13,840,000
2,500,000 - 2,500,000 Town of Caledonia, Wisconsin, 6.85% *,
1/3/01, (LOC: Bank One) 2,500,000 - 2,500,000
4,450,000 - 4,450,000 Zeigler Realty L.L.C., 6.85%*, 1/4/01,
(LOC: National City Bank) 4,450,000 - 4,450,000
------------ --------- ----------
66,135,000 - 66,135,000
- -------------------------------------------------------------------------------------------------------------------------------
Retail - General Merchandise
4,500,000 - 4,500,000 Royal Town Center L.L.C. Project,
6.65%*, 1/3/01, (LOC: Comerica Bank) 4,500,000 - 4,500,000
- -------------------------------------------------------------------------------------------------------------------------------
Services
7,825,000 - 7,825,000 Mr. K Enterprises, 6.75%*, 1/3/01,
(LOC: National Australia Bank) 7,825,000 - 7,825,000
- -------------------------------------------------------------------------------------------------------------------------------
Fifth Third Fifth Third
Kent Money Prime Money Pro Forma Kent Money Prime Money Pro Forma
Market Fund Market Fund Combined Market Fund Market Fund Combined
Principal Principal Principal Security Amortized Amortized Amortized
Amount Amount Amount Description Cost Cost Cost
- ----------------------------------------------------------------------------------------------------------------------------------
Steel - Producers
$ 6,000,000 $ - $ 6,000,000 Bing Steel Mgmt., Inc., 6.75%*,
1/4/01, (LOC: Michigan National
Bank) $ 6,000,000 $ - $ 6,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Tools - Hand Held
7,400,000 - 7,400,000 SGS Tool Co., 6.77%*, 1/3/01,
(LOC: Bank One) 7,400,000 - 7,400,000
- -----------------------------------------------------------------------------------------------------------------------------------
Urban and Community Development
2,500,000 - 2,500,000 Beavercreek Enterprises, 6.77%*,
1/5/01, (LOC: National City Bank) 2,500,000 - 2,500,000
- -----------------------------------------------------------------------------------------------------------------------------------
Utilities - Waste Disposal
2,900,000 - 2,900,000 Texas Disposal Systems, 6.70%*,
1/3/01, (LOC: Bank of America) 2,900,000 - 2,900,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total Demand Notes 268,799,000 - 268,799,000
- -----------------------------------------------------------------------------------------------------------------------------------
Municipal Bond Taxable
- -----------------------------------------------------------------------------------------------------------------------------------
Health Care
8,070,000 - 8,070,000 Lee County FL Industrial
Development, Series B, 6.70%*,
1/4/01, (LOC: Fifth Third Bank) 8,070,000 - 8,070,000
- -----------------------------------------------------------------------------------------------------------------------------------
Manufacturing - Consumer Goods
4,000,000 - 4,000,000 Polk County FL, 6.70%*, 1/3/01,
(LOC: Bank of America) 4,000,000 - 4,000,000
Total Municipal Bond - Taxable 12,070,000 - 12,070,000
- -----------------------------------------------------------------------------------------------------------------------------------
Municipal Bonds
- ----------------------------------------------------------------------------------------------------------------------------------
Facilities Support Services
1,450,000 - 1,450,000 Approach Partnership NY, 6.65%*,
1/3/01, (LOC: Keybank) 1,450,000 - 1,450,000
- ----------------------------------------------------------------------------------------------------------------------------------
General
- 2,700,000 2,700,000 Alleghany County, PA, Municipal
Bond Floating Rate, 5/1/15, (5.79%,
2/1/01) (b) - 2,700,000 2,700,000
- 2,000,000 2,000,000 Washington County, PA, Floating Rate
Note, 11/1/20, (5.79%, 2/1/01) (b) - 2,000,000 2,000,000
- 2,700,000 2,700,000 Evanston, Illinois, Municipal Bond
Floating Rate, 12/1/21, (5.90%,
2/5/01) (b) - 2,700,000 2,700,000
- 6,600,000 6,600,000 Illinois Education Municipal Bond,
Floating Rate Note, 3/1/34, (5.90%,
2/5/01) (b) - 6,600,000 6,600,000
- 14,000,000 14,000,000
- ----------------------------------------------------------------------------------------------------------------------------------
Medical - Hospital
1,740,000 - 1,740,000 CFA Medical Center, 6.65%*, 1/3/01,
(LOC: Keybank) 1,740,000 - 1,740,000
1,880,000 - 1,880,000 Genesee Memorial Hospital, 6.65%*,
1/3/01 1,880,000 - 1,880,000
5,000,000 - 5,000,000 Michigan Hospital Association Corp.,
6.75%*, 1/4/01, (LOC: Michigan
National Bank) 5,000,000 - 5,000,000
8,620,000 - 8,620,000
- ------------------------------------------------------------------------------------------------------------------------------------
Urban and Community Development
2,925,000 - 2,925,000 City of Hornell Development Agency,
6.65%*, 1/4/01, (LOC: Keybank) 2,925,000 - 2,925,000
2,040,000 - 2,040,000 Indianapolis IN, Economic
Development, 6.65%*, 1/3/01,
(LOC: Keybank) 2,040,000 - 2,040,000
1,600,000 - 1,600,000 Michigan State Strategic Fund
Carpenter Ltd., 6.80%*, 1/4/01,
(LOC: ABN/AMRO) 1,600,000 - 1,600,000
6,665,000 - 6,665,000 Michigan State Strategic Fund
Environment, 6.65%*, 1/4/01,
(LOC: Comerica Bank) 6,665,000 - 6,665,000
1,650,000 - 1,650,000 Michigan State Strategic Fund
Waterland, 6.75%*, 1/3/01, (LOC:
Michigan National Bank) 1,650,000 - 1,650,000
4,135,000 - 4,135,000 Oswego County NY Development Agency,
6.65%*, 1/3/01, (LOC: Keybank) 4,135,000 - 4,135,000
19,015,000 - 19,015,000
------------ ------------ --------------
Total Municipal Bonds 29,085,000 14,000,000 43,085,000
- ----------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements
- ----------------------------------------------------------------------------------------------------------------------------------
- 86,329,000 86,329,000 Warburg/Dillon, 5.67%, dated 1/31/01,
due 2/1/01, collateralized by U.S.
Treasury Bonds, 6.25% due 5/15/30
with a value of $88,060,000 - 44,735,000 44,735,000
------------ ------------ -------------
Total Repurchase Agreements - 44,735,000 44,735,000
- ----------------------------------------------------------------------------------------------------------------------------------
U.S Government Agency Obligations .
- ----------------------------------------------------------------------------------------------------------------------------------
Fannie Mae
5,000,000 - 5,000,000 6.01%**, 6/28/01 4,855,869 - 4,855,869
- 1,020,000 1,020,000 Fed Farm Crd Discount Nt, 5.754%,
1/2/01 - 1,019,837 1,019,837
------------ ------------ --------------
Total U.S. Government Agency Obligations 4,855,869 1,019,837 5,875,706
- ----------------------------------------------------------------------------------------------------------------------------------
Yankee Certificates of Deposit
- ----------------------------------------------------------------------------------------------------------------------------------
Foreign Banking
5,000,000 - 5,000,000 Bank of Nova Scotia, 6.71%, 2/22/01 4,999,746 - 4,999,746
5,000,000 - 5,000,000 Bayerische Landesbank, 6.61%, 3/7/01 4,999,314 - 4,999,314
4,250,000 - 4,250,000 Bayerische Vereinsbank, 6.77%,
2/22/01 4,250,186 - 4,250,186
5,000,000 - 5,000,000 Bayerische Vereinsbank, 6.46%
3/15/01 5,000,499 - 5,000,499
5,000,000 - 5,000,000 Canadian Imperial Bank of Commerce,
6.38%, 4/2/01 5,000,483 - 5,000,483
5,000,000 - 5,000,000 Commerzbank AG, 6.76%, 3/27/01 4,998,796 - 4,998,796
5,000,000 - 5,000,000 Commerzbank AG, 7.08%, 7/23/01 5,004,021 - 5,004,021
5,000,000 - 5,000,000 Commerzbank AG, 6.87%, 8/13/01 5,004,710 - 5,004,710
5,000,000 - 5,000,000 Rabobank Nederland, 6.83%, 8/28/01 5,002,952 - 5,002,952
5,000,000 - 5,000,000 Rabobank Nederland, 7.12%, 6/26/01 5,000,000 - 5,000,000
5,000,000 - 5,000,000 Societe Generale, 6.56%, 1/16/01 4,998,894 - 4,998,894
5,000,000 - 5,000,000 Toronto Dominion, 6.68%, 2/8/01 4,998,820 - 4,998,820
------------ ------------ --------------
Total Yankee Certificates of Deposit 59,258,421 - 59,258,421
- ----------------------------------------------------------------------------------------------------------------------------------
Certificates of Deposit
- ----------------------------------------------------------------------------------------------------------------------------------
Banking
$ 5,000,000 $ - $ 5,000,000 Bank of New York, 7.22%, 5/1/01 $ 5,000,000 $ - $ 5,000,000
5,000,000 - 5,000,000 First Union Bank, 6.78%, 1/8/01 5,000,000 - 5,000,000
5,000,000 - 5,000,000 Mellon Bank, 6.60%, 5/15/01 5,000,000 - 5,000,000
5,000,000 - 5,000,000 Michigan National Corp., 6.73%,
2/26/01 5,000,376 - 5,000,376
5,000,000 - 5,000,000 Michigan National Corp., 6.88%,
4/6/01 5,000,892 - 5,000,892
5,000,000 - 5,000,000 National City Bank, 6.98%, 8/2/01 4,999,384 - 4,999,384
------------ ------------ -------------
Total Certificates of Deposit 30,000,652 - 30,000,652
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Companies
- ----------------------------------------------------------------------------------------------------------------------------------
Investment Companies
806,903 - 806,903 Dreyfus Cash Management Money
Market Fund 806,903 - 806,903
16,699,569 - 16,699,569 Federated Prime Value Obligations
Money Market Fund 16,699,569 - 16,699,569
------------ ------------ --------------
Total Investment Companies 17,506,472 - 17,506,472
------------ ------------ --------------
Total amortized cost ($728,552,838;
$831,884,548; and $1,560,437,386
respectively) (a) $728,552,838 $831,884,548 $1,560,437,386
------------ ------------ --------------
Other assets in excess of
liabilities $ 1,830,863 $ (1,820,223) $ 10,640
------------ ------------ --------------
Net Assets $730,383,701 $830,064,325 $1,560,448,026
============ ============ ==============
(a) Cost for federal income tax and financial reporting purposes is the
same.
(b) Rule 144A, Section 4(2) or other security which is restricted as to
resale to institutional investors. The Portfolio's advisor has determined
these securities to be liquid based on procedures approved by the Board of
Trustees.
* Variable rate security. Rate presented represents rate in effect at
December 31, 2000. Maturity date reflects next rate change date.
** Efective yield at purchase.
DCP - Discount Commercial Paper
FLTR - Floating Rate Note
LOC - Letter of Credit
Kent Money Market Fund
Fifth Third Prime Money Market Fund
Pro Forma Combining Statements of Assets and Liabilities
As of 12/31/00
(Unaudited)
Kent Money Fifth Third Prime Pro Forma Pro Forma Combined
Market Fund Money Market Fund Adjustments (Note 1)
------------- ----------------- ----------- ------------------
Assets:
Investment in securities, at amortized cost $ 728,552,838 $ 831,884,548 $ - $ 1,560,437,386
Cash - 463 - 463
Interest and dividends receivable 6,148,366 2,691,401 - 8,839,767
Receivable for Fund shares sold 30,890 262 - 31,152
Other assets 16,755 146,852 - 163,607
------------- ------------- -------- ---------------
Total Assets 734,748,849 834,723,526 - 1,569,472,375
------------- ------------- -------- ---------------
Liabilities:
Dividends payable 3,831,534 4,331,483 - 8,163,017
Payable for Fund shares redeemed 207,598 441 - 208,039
Accrued expenses and other payables:
Investment advisory fees 249,349 270,562 - 519,911
Administration fees 14,274 - - 14,274
Distribution services - Investment A Shares (Investment - Kent) 678 55,699 - 56,377
Distribution services - Investment B Shares - 1,016 - 1,016
Other 61,715 - - 61,715
------------- ------------- -------- ---------------
Total Liabilities 4,365,148 4,659,201 - 9,024,349
------------- ------------- -------- ---------------
Net Assets:
Paid-in Capital 730,375,410 830,071,162 - 1,560,446,572
Accumulated undistributed net investment income/(loss) 13,072 (1,000) - 12,072
Accumulated undistributed net realized gain/(loss) on
investments, futures and foreign currency transactions (4,781) (5,837) - (10,618)
------------- ------------- -------- ---------------
Total Net Assets $ 730,383,701 $ 830,064,325 $ - $ 1,560,448,026
============= ============= ======== ===============
Net Assets:
Institutional Shares $ 727,435,044 $ 567,258,324 $ - $ 1,294,693,368
Investment A Shares (a) 2,948,657 262,768,103 - 265,716,760
Investment B Shares NA 37,898 - 37,898
------------- ------------- -------- ---------------
Total $ 730,383,701 $ 830,064,325 $ - $ 1,560,448,026
============= ============= ======== ===============
Shares of Beneficial Interest Outstanding (Unlimited number of
shares authorized, no par value:)
Institutional Shares 727,435,768 567,274,157 (15,268) (b) 1,294,694,657
Investment A Shares (a) 2,948,911 262,769,153 (788) (b) 265,717,276
Investment B Shares NA 37,898 - (b) 37,898
------------- ------------- -------- ---------------
Total 730,384,679 830,081,208 (16,056) 1,560,449,831
============= ============= ======== ===============
Net Asset Value
Offering and redemption price per share -
Institutional Shares, Investment A Shares and
Investment B Shares $ 1.00 $ 1.00 $ 1.00
============= ============= ===============
____________________________
(a) For Kent, represents Investment Shares.
(b) Adjustment to convert Fifth Third Shares Outstanding to Kent Shares
Outstanding based on Kent's NAV's.
Kent Money Market Fund
Fifth Third Prime Money Market Fund
Pro Forma Combining Statements of Operations
For the year ended 12/31/00
(Unaudited)
Fifth Third
Kent Money Prime Money Pro Forma Pro Forma Combined
Market Fund Market Fund Adjustments (Note 1)
------------- ------------- ------------- -------------------
INVESTMENT INCOME:
Interest income $ 40,494,345 $ 43,706,817 $ - $ 84,201,162
Dividend income 3,144,939 - - 3,144,939
------------ ------------- ----------- ---------------
Total Income 43,639,284 43,706,817 - 87,346,101
------------ ------------- ----------- ---------------
EXPENSES:
Investment advisory fees 2,718,142 2,717,121 - 5,435,263
Administrative fees 1,222,825 1,206,552 (76,218) (a) 2,353,159
Distribution services - Investment A Shares (Investment - Kent) 853 503,888 - 504,741
Distribution services - Investment B Shares - 1,016 - 1,016
Fund accounting fees 107,963 122,355 (37,614) (b) 192,704
Custodian fees 16,945 23,791 (24) (c) 40,712
Other fees 137,540 142,096 5,448 (d) 285,084
------------ ------------- ----------- ---------------
Total Expenses: 4,204,268 4,716,819 (108,408) 8,812,679
------------ ------------- ----------- ---------------
Less fees voluntarily reduced (560,934) (679,644) (116,964) (1,357,542)
------------ ------------- ----------- ---------------
Net Expenses 3,643,334 4,037,175 (225,372) 7,455,137
------------ ------------- ----------- ---------------
Net Investment Income 39,995,950 39,669,642 225,372 79,890,964
------------ ------------- ----------- ---------------
Realized gains from investments 21 - - 21
------------ ------------- ----------- ---------------
Change in net assets resulting from operations $ 39,995,971 $ 39,669,642 $ 225,372 $ 79,890,985
============ ============= =========== ===============
__________________________________
(a) Adjustment to reflect the Fifth Third contractual fee structure for
Administration fees (0.1734% of net assets).
(b) Adjustment to reflect the Fifth Third contractual fee structure for
Accounting fees (Tiered fee structure starting at 0.02%).
(c) Adjustment to reflect the Fifth Third contractual fee structure for
Custodian fees (Tiered fee structure starting at 0.01%).
(d) Adjustment to reflect the Fifth Third fee structure when the two funds
merge.
KENT FUNDS
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
1. Basis of Combination:
---------------------
The unaudited Pro Forma Combining Statements of Assets and Liabilities,
Statements of Operations, and Schedules of Portfolio Investments reflect the
accounts of four investment portfolios offered by the Kent Funds: the Kent
Income Fund, the Kent Intermediate Bond Fund, the Kent Intermediate Tax-Free
Fund, and the Kent Money Market Fund (the "Kent Funds") and four investment
portfolios offered by the Fifth Third Funds: the Fifth Third Quality Bond Fund,
the Fifth Third Bond Fund For Income, the Fifth Third Municipal Bond Fund, and
the Fifth Third Prime Money Market Fund (the "Fifth Third Funds"),
(collectively the "Funds" and individually a "Fund") as if the proposed
Reorganization occurred as of and for the year ended December 31, 2000. These
statements have been derived from the books and records utilized in calculating
daily net asset value of the Funds at December 31, 2000.
The Reorganization Agreement provides that on the Closing Date of the
Reorganization, all of the assets and liabilities will be transferred as follows
such that at and after the Reorganization, the assets and liabilities of the
applicable Kent Funds will become the assets and liabilities of the
corresponding Fifth Third Fund (see table below):
Kent Income Fund Fifth Third Quality Bond Fund
Kent Intermediate Bond Fund Fifth Third Bond Fund For Income
Kent Intermediate Tax-Free Fund Fifth Third Municipal Bond Fund
Kent Money Market Fund Fifth Third Prime Money Market Fund
In exchange for the transfer of assets and liabilities, the Fifth Third
Funds will issue to the Kent Funds full and fractional shares of the
corresponding Fifth Third Funds, and the Kent Funds will make a liquidating
distribution of such shares to its shareholders. The number of shares of the
Fifth Third Funds so issued will be equal in value to the full and fractional
shares of the Kent Funds that are outstanding immediately prior to the
Reorganization. At and after the Reorganization, all debts, liabilities and
obligations of the Kent Funds will attach to the Fifth Third Funds and may
thereafter be enforced against the Fifth Third Funds to the same extent as if
the Fifth Third Funds had incurred them. The pro forma statements give effect to
the proposed transfer described above.
Under the purchase method of accounting for business combinations under
accounting principles generally accepted in the United States of America, the
basis on the part of the Fifth Third Funds, in the assets of the Kent Funds will
be the fair market value of such assets on the Closing Date of the
Reorganization. The Fifth Third Funds will recognize no gain or loss for federal
tax purposes on its issuance of shares in the Reorganization, and the basis to
the Fifth Third Funds of the assets of the Kent Funds received pursuant to the
Reorganization will equal the fair market value of the consideration furnished
by the Fifth Third Funds in the Reorganization -- i.e., the sum of the
liabilities assumed, the fair market value of the Fifth Third Funds shares
issued.
(Continued)
KENT FUNDS
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
For accounting purposes, the Kent Funds are the surviving portfolios of
this Reorganization, except in regards to the Money Market Funds, where the
Fifth Third Prime Money Market Fund will be the accounting survivor. As such,
the Fifth Third Quality Bond Fund, Fifth Third Bond Fund For Income and Fifth
Third Municipal Bond Fund, prior to the Closing Date, will declare a stock split
causing the Net Asset Value per share to match that of the corresponding Kent
Fund as of the Closing Date. The pro forma statements reflect the combined
results of operations of the Fifth Third Funds and the Kent Funds. However,
should such Reorganization be effected, the statements of operations of the Kent
Funds will not be restated for pre-combination period results of the
corresponding Fifth Third Funds.
The Pro Forma Combining Statements of Assets and Liabilities, Statements of
Operations, and Schedules of Portfolio Investments should be read in conjunction
with the historical financial statements of the Funds incorporated by reference
in the Statement of Additional Information.
The Kent Funds and the Fifth Third Funds are each separate portfolios of
the Kent Funds and the Fifth Third Funds, respectively, which are registered as
open-end management companies under the Investment Company Act of 1940. The
investment objectives of each fund are listed below.
Kent Income Fund seeks current income.
Fifth Third Quality Bond Fund seeks to achieve high current income. Capital
growth is a secondary objective.
Kent Intermediate Bond Fund seeks current income.
Fifth Third Bond Fund For Income seeks a high level of current income.
Kent Intermediate Tax-Fee Fund seeks current income that is exempt from
federal income tax.
Fifth Third Municipal Bond Fund seeks to provide a high level of current
income that is exempt from federal regular income taxes.
Kent Money Market Fund seeks current income.
Fifth Third Prime Money Market Fund seeks current income with stability of
principal.
Fifth Third Funds:
- ------------------
(Continued)
KENT FUNDS
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
The Fifth Third Quality Bond Fund issues four classes of shares:
Institutional, Investment A Shares, Investment B Shares and Investment C Shares.
The Fifth Third Bond Fund For Income and Fifth Third Municipal Bond Fund offer
three classes of shares: Institutional, Investment A Shares and Investment C
Shares. The Fifth Third Prime Money Market Fund issues three classes of shares:
Institutional, Investment A Shares and Investment B Shares. Each class of shares
for each Fund has identical rights and privileges except with respect to
Administrative Services fees paid by Investment C Shares, 12b-1 fees paid by
Investment A Shares and Investment C Shares, voting rights on matters affecting
a single class of shares, and the exchange privileges of each class of shares .
Under the terms of the investment advisory agreement between the Fifth
Third Funds and Fifth Third Bank, the Trust's investment advisor (the
"Advisor"), the Advisor receives for its services an annual investment advisory
fee based on a percentage of each Fund's average daily net assets (see table
below). Such fees are accrued daily and paid monthly. For the year ended
December 31, 2000, total investment advisory fees incurred by the Fifth Third
Funds were as follows:
Percentage Fee Total Fees Fees Waived
Quality Bond Fund 0.55% $1,072,625 $ -
Bond Fund For Income 0.55% 1,196,960 -
Municipal Bond Fund 0.55% 719,544 -
Prime Money Market Fund 0.40% 2,717,121 135,846
Kent Funds:
- -----------
The Kent Funds offer two classes of shares: Investment Shares and
Institutional Shares. Each class of shares has identical rights and privileges
except with respect to fees paid under shareholder servicing or distribution
plans, expenses allocable exclusively to each class of shares, voting rights on
matters affecting a single class of shares, and the exchange privilege of each
class of shares. The Institutional and Investment Shares have rights and
privileges analogous to those of the Fifth Third Funds' Institutional Shares and
Investment A Shares, respectively.
Lyon Street Asset Management Company ('Lyon Street") serves as the Kent
Funds' investment advisor. Under the terms of the investment advisory
agreement, Lyon Street is entitled to receive a fee, computed daily and paid
monthly, based on each Fund's average daily net assets (see table below). For
the year ended December 31, 2000, total investment advisory fees incurred by the
Kent Funds were as follows:
(Continued)
KENT FUNDS
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
Percentage Fee Total Fees Fees Waived
Income Fund 0.60% $1,876,243 $ -
Intermediate Bond Fund 0.55% 4,416,302 -
Intermediate Tax-Free Fund 0.50% 1,422,796 -
Money Market Fund 0.40% 2,718,142 -
Pro Forma Adjustments and Pro Forma Combined Columns
----------------------------------------------------
The pro forma adjustments and pro forma combined columns of the Statements
of Operations reflect the adjustments necessary to show expenses at the rates
which would have been in effect if the Kent Funds were included in the Fifth
Third Funds for the year ended December 31, 2000. Investment advisory,
administration, 12b-1, shareholder service, accounting and custodian fees in the
pro forma combined column are calculated at the projected rates for the Fifth
Third Funds based upon the combined net assets of the corresponding Fifth Third
Funds and the Kent Funds. Certain pro forma adjustments were made to estimate
the benefit of combining operations of separate funds into one survivor fund.
The pro forma Schedules of Portfolio Investments give effect to the
proposed transfer of such assets as if the Reorganization had occurred at
December 31, 2000.
2. Portfolio Valuation, Securities Transactions and Related Income:
----------------------------------------------------------------
Investments of the Prime Money Market Fund are valued at either amortized
cost, which approximates market value, or at original cost which, combined with
accrued interest, approximates market value. Under the amortized cost method,
discount or premium is amortized on a constant basis to the maturity of the
security.
(Continued)
KENT FUNDS
FIFTH THIRD FUNDS
Notes to Pro Forma Financial Statements
(Unaudited)
Investments in corporate bonds, municipal bonds, commercial paper and U.S.
Government securities of the remaining Funds are valued on the basis of
valuations provided by dealers or an independent pricing service approved by the
Board of Trustees. Investments in investment companies are valued at their net
asset values as reported by such companies. The differences between cost and
market values of such investments are reflected as unrealized appreciation or
depreciation.
Security transactions are recorded on trade date. Realized gains and losses
from sales of investments are calculated on the identified cost basis. Interest
income, including accretion of discount and amortization of premium on
investments, is accrued daily. Dividend income is recorded on the ex-dividend
date.
PART C. OTHER INFORMATION
Item 15. Indemnification
Response is incorporated by reference to Registrant's Post-Effective Amendment
No. 7 on Form N-1A filed September 27, 1991 (File Nos. 811-5669 and 33-24848).
Item 16. Exhibits
(1) Declaration of Trust of the Registrant including Amendments No. 1
through 7 (incorporated by reference to Registrant's Post-Effective
Amendment No. 15 on Form N-1A filed February 28, 1995).
(i) Amendment No. 8 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 19 on
Form N-lA filed on or about October 28, 1996).
(ii) Amendment No. 9 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 18 on
Form N-1A filed on or about October 1, 1996).
(iii) Amendment No. 10 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 22 on
Form N-1A filed on or about September 30, 1997).
(iv) Amendment No. 11 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 26 on
Form N-1A filed on or about January 21, 1998).
(v) Amendment No. 12 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 28 on
Form N-1A filed on or about October 30, 1998).
(vi) Amendment No. 13 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 28 on
Form N-1A filed on or about October 30, 1998).
(vii) Amendment No. 14 to the Declaration of Trust (incorporated by
reference to Registrants Post-Effective Amendment No. 29 on Form
N-1A filed on or about October 1, 1999).
(viii) Amendment No. 15 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 31 on
Form N-1A filed on or about March 15, 2000).
(ix) Amendment No. 16 to the Declaration of Trust (incorporated by
reference to Registrant's Post-Effective Amendment No. 33 on
Form N-1A filed on June 14, 2000).
(2) By-Laws of the Registrant (incorporated by reference to Registrant's
Post-Effective Amendment No. 15 on Form N-1A filed February 28, 1995).
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization between Kent Funds and
Fifth Third Funds is filed herewith.
(5) Rights of Shareholders. The following portions of the Registrant's
Declaration of Trust define the rights of Shareholders.
ARTICLE III
BENEFICIAL INTEREST
Section 1. Shares of Beneficial Interest.
The beneficial interest in the Trust shall at all times be divided into
transferable Shares, without par value. Subject to the provisions of
Section 5 of this Article III, each Share shall have voting rights as
provided in Article VIII hereof, and holders of the Shares of any Series
shall be entitled to receive dividends, when and as declared with
respect thereto in the manner provided in Article X, Section 1 hereof.
The Shares of any Series may be issued in two or more Classes, as the
Trustees may authorize pursuant to Article XII, Section 8 hereof. Unless
the Trustees have authorized the issuance of Shares of a Series in two
or more Classes,
-1-
each Share of a Series shall represent an equal proportionate interest
in the assets and liabilities of the Series with each other Share of the
same Series, none having priority or preference over another. If the
Trustees have authorized the issuance of Shares of a Series in two or
more Classes, then the Classes may have such variations as to dividend,
redemption, and voting rights, net asset values, expenses borne by the
Classes, and other matters as the Trustees have authorized provided that
each Share of a Class shall represent an equal proportionate interest in
the assets and liabilities of the class with each other Share of the
same Class, none having priority or preference over another. The number
of Shares authorized shall be unlimited. The Trustees may from time to
time divide or combine the Shares of any Series or Class into a greater
or lesser number without thereby changing the proportionate beneficial
interests in the Series or Class.
Section 4. No Pre-emptive Rights.
Shareholders shall have no pre-emptive or other right to subscribe to
any additional Shares or other securities issued by the Trust.
Fifth Third Government Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third Prime Money Market Fund;
Investment A Shares;
Investment B Shares;
Institutional Shares;
Fifth Third Tax Exempt Money Market Fund;
Investment A Shares;
Institutional Shares;
Fifth Third Quality Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Equity Income Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Pinnacle Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
-2-
Fifth Third Balanced Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Mid Cap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third International Equity Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Technology Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third Intermediate Bond Fund*;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Bond Fund**;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares
Fifth U. S. Government Securities Fund;
Investment A Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
* Currently named Fifth Third Bond Fund for Income, to be named Fifth Third
Intermediate Bond Fund effective October 29, 2001.
** Currently named Fifth Third Quality Bond Fund, to be named Fifth Third Bond
Fund effective October 29, 2001.
-3-
Fifth Third Intermediate Municipal Fund***;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Ohio Tax Free Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Fifth Third U.S. Treasury Money Market Fund;
Institutional Shares;
Fifth Third Strategic Income Fund;
Institutional Shares;
Advisor Shares;
Fifth Third Multicap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Worldwide Fund
Institutional Shares;
Advisor Shares;
Fifth Third Microcap Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Institutional Government Money Market Fund;
Institutional Shares;
Service Shares;
*** Currently named Fifth Third Municipal Bond Fund, to be named Fifth Third
Intermediate Municipal Bond Fund effective October 29, 2001.
-4-
Fifth Third Institutional Money Market Fund;
Institutional Shares;
Service Shares;
Fifth Third Michigan Municipal Money Market Fund;
Investment A Shares;
Institutional Shares;
Advisor Shares;
Fifth Third International GDP Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Small Cap Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Large Cap Growth Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Equity Index Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Large Cap Value Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Short Term Bond Fund;
-5-
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Michigan Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Municipal Bond Fund;
Investment A Shares;
Investment B Shares;
Investment C Shares;
Institutional Shares;
Advisor Shares;
Fifth Third Ohio Tax Exempt Money Market Fund;
Investment A Shares; and
Institutional Shares.
Shares of any Series or Class established in this Section 5 shall have the
following relative rights and preferences:
(a) Assets belonging to Series or Class. All consideration received by
the Trust for the issue or sale of Shares of a particular Series or
Class, together with all assets in which such consideration is invested
or reinvested, all income, earnings, profits, and proceeds thereof from
whatever source derived, including, without limitation, any proceeds
derived from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such proceeds in
whatever form the same may be, shall irrevocably belong to that Series
or Class for all purposes, subject only to the rights of creditors, and
shall be so recorded upon the books of account of the Trust. Such
consideration, assets, income, earnings, profits and proceeds thereof,
from whatever source derived, including, without limitation, any
proceeds derived from the sale, exchange or liquidation of such assets,
and any funds or payments derived from any reinvestment of such
proceeds, in whatever form the same may be, are herein referred to as
"assets belonging to" that Series or Class. In the event that there are
any assets, income, earnings, profits and proceeds thereof, funds or
payments which are not readily identifiable as belonging to any
particular Series or Class (collectively, "General Assets"), the
Trustees shall allocate such General Assets to, between or among any one
or more of the Series or Classes established and designated from time to
time in such manner and on such basis as they, in their sole discretion,
deem fair and equitable, and any General Assets so allocated to a
particular Series or Class shall belong to that Series or Class. Each
such allocation by the Trustees shall be conclusive and binding upon the
Shareholders of all Series or Classes for all purposes.
(b) Liabilities Belonging to Series or Class. The assets belonging to
each particular Series or Class shall be charged with the liabilities of
the Trust in respect to that Series or Class and all expenses, costs,
charges and reserves attributable to that Series or Class, and any
general liabilities of the Trust which are not readily identifiable as
belonging to any particular Series or Class shall be allocated and
charged by the Trustees to and among any one or more of the Series or
Classes established and designated from time to time in such manner and
on such basis as the Trustees in their sole discretion deem fair and
equitable. The liabilities,
-6-
expenses, costs, charges and reserves so charged to a Series or Class
are herein referred to as "liabilities belonging to" that Series or
Class. Each allocation of liabilities belonging to a Series or Class by
the Trustees shall be conclusive and binding upon the Shareholders of
all Series or Classes for all purposes.
(c) Dividends, Distributions, Redemptions, Repurchases and
Indemnification. Notwithstanding any other provisions of this
Declaration, including, without limitation, Article X, no dividend or
distribution (including, without limitation, any distribution paid upon
termination of the Trust or of any Series or Class) with respect to, nor
any redemption or repurchase of the Shares of any Series or Class shall
be effected by the Trust other than from the assets belonging to such
Series or Class, nor except as specifically provided in Section 1 of
Article XI hereof, shall any Shareholder of any particular Series or
Class otherwise have any right or claim against the assets belonging to
any other Series or Class except to the extent that such Shareholder has
such a right or claim hereunder as a Shareholder of such other Series or
Class.
(d) Voting. Notwithstanding any of the other provisions of this
Declaration, including, without limitation, Section 1 of Article VIII,
only Shareholders of a particular Series or Class shall be entitled to
vote on any matters affecting such Series or Class. Except with respect
to matters as to which any particular Series or Class is affected, all
of the Shares of each Series or Class shall, on matters as to which such
Series or Class is entitled to vote, vote with other Series or Classes
so entitled as a single class. Notwithstanding the foregoing, with
respect to matters which would otherwise be voted on by two or more
Series or Classes as a single class, the Trustees may, in their sole
discretion, submit such matters to the Shareholders of any or all such
Series or Classes, separately.
(e) Fraction. Any fractional Share of a Series or Class shall carry
proportionately all the rights and obligation of a whole Share of that
Series or Class, including rights with respect to voting, receipt of
dividends and distributions, redemption of Shares and termination of the
Trust or of any Series or Class.
(f) Exchange Privilege. The Trustees shall have the authority to provide
that the holders of Shares of any Series or Class shall have the right
to exchange said Shares for Shares of one or more other Series or
Classes in accordance with such requirements and procedures as may be
established by the Trustees.
(g) Combination of Series or Classes. The Trustees shall have the
authority, without the approval of the Shareholders of any Series or
Class, unless otherwise required by applicable law, to combine the
assets and liabilities belonging to a single Series or Class with the
assets and liabilities of one or more other Series or Classes.
(h) Elimination of Series or Classes. At any time that there are no
Shares outstanding of any particular Series or Class previously
established and designated, the Trustees may amend this Declaration of
Trust to abolish that Series or Class and to rescind the establishment
and designation thereof.
ARTICLE IV
THE TRUSTEES
Section 2. Election of Trustees at Meeting of Shareholders.
On a date fixed by the Trustees, which shall be subsequent to the
initial public offering of Shares, the Shareholders shall elect
Trustees. The number of Trustees shall be determined by the Trustees
pursuant to Article IV, Section 5.
Section 3. Term of Office of Trustees.
The Trustees shall hold office during the lifetime of this Trust, and
until its termination as hereinafter provided; except (a) that any
Trustee may resign his office at any time by written instrument signed
by him and delivered to the other Trustees, which shall take effect upon
such delivery or upon such later date as is
-7-
specified therein; (b) that any Trustee may be removed at any time by
written instrument signed by at least two-thirds of the number of
Trustees prior to such removal, specifying the date when such removal
shall become effective; (c) that any Trustee who requests in writing to
be retired or who has become mentally or physically incapacitated may be
retired by written instrument signed by a majority of the other
Trustees, specifying the date of his retirement; and (d) a Trustee may
be removed at any special meeting of Shareholders of the Trust by a vote
of two-thirds of the outstanding Shares.
Section 7. Ownership of Assets.
The assets belonging to each Series or Class shall be held separate and
apart from any assets now or hereafter held in any capacity other than
as Trustee hereunder by the Trustees or any successor Trustee. All of
the assets belonging to each Series or Class or owned by the Trust shall
at all times be considered as vested in the Trustees. No Shareholder
shall be deemed to have a severable ownership interest in any individual
asset belonging to any Series or Class or owned by the Trust or any
right of partition or possession thereof, but each Shareholder shall
have a proportionate undivided beneficial interest in a Series or Class.
ARTICLE VIII
SHAREHOLDERS' VOTING POWERS AND MEETINGS
Section 1. Voting Powers.
Subject to the provisions set forth in Article III, Section 5(d), the
Shareholders shall have the power to vote, (i) for the election of
Trustees as provided in Article IV, Section 2; (ii) for the removal of
Trustees as provided in Article IV, Section 3(d); (iii) with respect to
any investment adviser or sub-investment adviser as provided in Article
VII, Section 1; (iv) with respect to the amendment of this Declaration
of Trust as provided in Article XII, Section 7; (v) to the same extent
as the shareholders of a Massachusetts business corporation as to
whether or not a court action, proceeding or claim should be brought or
maintained derivatively or as a class action on behalf of the Trust or
the Shareholders; and (vi) with respect to such additional matters
relating to the Trust as may be required by law, by this Declaration of
Trust, or the By-Laws of the Trust or any regulation of the Trust or the
Commission or any State, or as the Trustees may consider desirable. Each
whole Share shall be entitled to one vote as to any matter on which it
is entitled to vote, and each fractional Share shall be entitled to a
proportionate fractional vote. There shall be no cumulative voting in
the election of Trustees. Shares may be voted in person or by proxy.
Until Shares of a Series or Class are issued, the Trustees may exercise
all rights of Shareholders of such Series or Class with respect to
matters affecting such Series or Class, and may take any action with
respect to the Trust or such Series or Class required or permitted by
law, this Declaration of Trust or any By-Laws of the Trust to be taken
by Shareholders.
Section 2. Meetings.
A Shareholders meeting shall be held as specified in Section 2 of
Article IV at the principal office of the Trust or such other place as
the Trustees may designate. Special meetings of the Shareholders may be
called by the Trustees or the Chief Executive Officer of the Trust and
shall be called by the Trustees upon the written request of Shareholders
owning at least one-tenth of the outstanding Shares of all Series and
Classes entitled to vote. Shareholders shall be entitled to at least
fifteen days' notice of any meeting.
Section 3. Quorum and Required Vote.
Except as otherwise provided by law, to constitute a quorum for the
transaction of any business at any meeting of Shareholders there must be
present, in person or by proxy, holders of more than fifty percent of
the total number of outstanding Shares of all Series and Classes
entitled to vote at such meeting. When any one or more Series or Classes
is entitled to vote as a single Series or Class, more than fifty percent
of the
-8-
shares of each such Series of Class entitled to vote shall constitute a
quorum at a Shareholder's meeting of that Series or Class. If a quorum
shall not be present for the purpose of any vote that may properly come
before the meeting, the Shares present in person or by proxy and
entitled to vote at such meeting on such matter may, by plurality vote,
adjourn the meeting from time to time to such place and time without
further notice than by announcement to be given at the meeting until a
quorum entitled to vote on such matter shall be present, whereupon any
such matter may be voted upon at the meeting as though held when
originally convened. Subject to any applicable requirement of law or of
this declaration of Trust or the By-Laws, a plurality of the votes cast
shall elect a Trustee, and all other matters shall be decided by a
majority of the votes cast and entitled to vote thereon.
ARTICLE X
DISTRIBUTIONS AND REDEMPTIONS
Section 1. Distributions.
(a) The Trustees may from time to time declare and pay dividends to the
Shareholders of any Series or Class, and the amount of such dividends
and the payment of them shall be wholly in the discretion of the
Trustees. Such dividends may be accrued and automatically reinvested in
additional Shares (or fractions thereof) of the relevant Series or Class
or paid in cash or additional Shares of such Series or class, all upon
such terms and conditions as the Trustees may prescribe.
(c) All dividends and distributions on Shares of a particular Series or
Class shall be distributed pro rata to the holders of that Series or
Class in proportion to the number of Shares of that Series or Class held
by such holders and recorded on the books of the Trust or its transfer
agent at the date and time of record established for that payment.
Section 2. Redemptions and Repurchases.
(a) In case any Shareholder of record of any Series or Class at any time
desires to dispose of Shares of such Series or Class recorded in his
name, he may deposit a written request (or such other form of request as
the Trustees may from time to time authorize) requesting that the Trust
purchase his Shares, together with such other instruments or
authorizations to effect the transfer as the Trustees may from time to
time require, at the office of the Transfer Agent, and the Trust shall
purchase his Shares out of assets belonging to such Series or Class. The
purchase price shall be the net asset value of his shares reduced by any
redemption charge as the Trustees from time to time may determine.
Payment for such Shares shall be made by the Trust to the Shareholder of
record within that time period required under the 1940 Act after the
request (and, if required, such other instruments or authorizations of
transfer) is deposited, subject to the right of the Trustees to postpone
the date of payment pursuant to Section 4 of this Article X. If the
redemption is postponed beyond the date on which it would normally occur
by reason of a declaration by the Trustees suspending the right of
redemption pursuant to Section 4 of this Article X, the right of the
Shareholder to have his Shares purchased by the Trust shall be similarly
suspended, and he may withdraw his request (or such other instruments or
authorizations of transfer) from deposit if he so elects; or, if he does
not so elect, the purchase price shall be the net asset value of his
Shares determined next after termination of such suspension (reduced by
any redemption charge), and payment therefor shall be made within the
time period required under the 1940 Act.
Section 5. Trust's Right to Redeem Shares.
The Trust shall have the right to cause the redemption of Shares of any
Series or Class in any Shareholder's account for their then current net
asset value and promptly make payment to the Shareholder (which payment
may be reduced by any applicable redemption charge), if at any time the
total investment in the
-9-
account does not have a minimum dollar value determined from time to
time by the Trustees in their sole discretion.
ARTICLE XI
LIMITATION OF LIABILITY AND INDEMNIFICATION
Section 1. Limitation of Personal Liability and Indemnification of Shareholders.
The Trustees, officers, employees or agents of the Trust shall have no
power to bind any Shareholder of any Series or Class personally or to
call upon such Shareholder for the payment of any sum of money or
assessment whatsoever, other than such as the Shareholder may at any
time agree to pay by way of subscription to any Shares or otherwise.
No Shareholder or former Shareholder of any Series or Class shall be
liable solely by reason of his being or having been a Shareholder for
any debt, claim, action, demand, suit, proceeding, judgement, decree,
liability or obligation of any kind, against, or with respect to the
Trust or any Series or Class arising out of any action taken or omitted
for or on behalf of the Trust or such Series or Class, and the Trust or
such Series or Class shall be solely liable therefor and resort shall be
had solely to the property of the relevant Series or Class of the Trust
for the payment or performance thereof.
Each Shareholder or former Shareholder of any Series or Class (or their
heirs, executors, administrators or other legal representatives or, in
case of a corporate entity, its corporate or general successor) shall be
entitled to be indemnified and reimbursed by the Trust to the full
extent of such liability and the costs of any litigation or other
proceedings in which such liability shall have been determined,
including, without limitation, the fees and disbursements of counsel if,
contrary to the provisions hereof, such Shareholder or former
Shareholder of such Series or Class shall be held to be personally
liable. Such indemnification and reimbursement shall come exclusively
from the assets of the relevant Series or Class.
The Trust shall, upon request by a Shareholder or former Shareholder,
assume the defense of any claim made against any Shareholder for any act
or obligation of the Trust or any Series or Class and satisfy any
judgment thereon.
Section 3. Express Exculpatory Clauses and Instruments.
The Trustees shall use every reasonable means to assure that all persons
having dealings with the Trust or any Series or Class shall be informed
that the property of the Shareholders and the Trustees, officers,
employees and agents of the Trust or any series or Class shall not be
subject to claims against or obligations of the Trust or any other
Series or Class to any extent whatsoever. The Trustees shall cause to be
inserted in any written agreement, undertaking or obligation made or
issued on behalf of the Trust or any Series or Class (including
certificates for Shares of any Series or Class) an appropriate reference
to the provisions of this Declaration, providing that neither the
Shareholders, the Trustees, the officers, the employees nor any agent of
the Trust or any Series or Class shall be liable thereunder, and that
the other parties to such instrument shall look solely to the assets
belonging to the relevant Series or class for the payment of any claim
thereunder or for the performance thereof; but the omission of such
provisions from any such instrument shall not render any Shareholder,
Trustee, officer, employee or agent liable, nor shall the Trustee, or
any officer, agent or employee of the Trust or any Series or Class be
liable to anyone for such omission. If, notwithstanding this provision,
any Shareholder, Trustee, officer, employee or agent shall be held
liable to any other person by reason of the omission of such provision
from any such agreement, undertaking or obligation, the Shareholder,
Trustee, officer, employee or agent shall be indemnified and reimbursed
by the Trust.
ARTICLE XII
-10-
MISCELLANEOUS
Section 3. Establishment of Record Dates.
The Trustees may close the Share transfer books of the Trust maintained
with respect to any Series or Class for a period not exceeding sixty
(60) days preceding the date of any meeting of Shareholders of the Trust
or any Series or Class, or the date for the payment of any dividend or
the making of any distribution to Shareholders, or the date for the
allotment of rights, or the date when any change or conversion or
exchange or Shares of any Series or Class shall go into effect; or in
lieu of closing the Share transfer books as aforesaid, the Trustees may
fix in advance a date, not exceeding sixty (60) days preceding the date
of any meeting of Shareholders of the Trust or any Series or Class, or
the date for the payment of any dividend or the making of any
distribution to Shareholders of any Series or Class, or the date for the
allotment of rights, or the date when any change or conversion or
exchange of Shares of any Series or Class shall go into effect, or the
last day on which the consent or dissent of Shareholders of any Series
or Class may be effectively expressed for any purpose, as a record date
for the determination of the Shareholders entitled to notice of, and, to
vote at, any such meeting and any adjournment thereof, or entitled to
receive payment of any such dividend or distribution, or to any such
allotment of rights, or to exercise the rights in respect of any such
change, conversion or exchange of shares, or to exercise the right to
give such consent or dissent, and in such case such Shareholders and
only such Shareholders as shall be Shareholders of record on the date so
fixed shall be entitled to such notice of, and to vote at, such meeting,
or to receive payment of such dividend or distribution, or to receive
such allotment or rights, or to exercise such rights, as the case may
be, notwithstanding, after such date fixed aforesaid, any transfer of
any Shares on the books of the Trust maintained with respect to any
Series or Class. Nothing in the foregoing sentence shall be construed as
precluding the Trustees from setting different record dates for
different Series or Classes.
Section 4. Termination of Trust.
(c) Subject to a Majority Shareholder Vote by such Series or Class, the
Trustees may at any time sell and convert into money all the assets of
the Trust or any Series of Class. Upon making provision for the payment
of all outstanding obligations, taxes and other liabilities, accrued or
contingent, belonging to each Series or Class, the Trustees shall
distribute the remaining assets belonging to each Series or Class
ratably among the holders of the outstanding Shares of that Series or
Class.
Section 5. Offices of the Trust, Filing of Copies, Headings, Counterparts.
The Trust shall maintain a usual place of business in Massachusetts,
which, initially, shall be 2 Oliver Street, c/o CT Corporate Systems,
Boston, Massachusetts, and shall continue to maintain an office at such
address unless changed by the Trustees to another location in
Massachusetts. The Trust may maintain other offices as the Trustees may
from time to time determine. The original or a copy of this instrument
and of each declaration of trust supplemental hereto shall be kept at
the office of the Trust where it may be inspected by any Shareholder. A
copy of this instrument and of each supplemental declaration of trust
shall be filed by the Trustees with the Massachusetts Secretary of State
and the Boston City Clerk, as well as any other governmental office
where such filing may from time to time be required. Headings are placed
herein for convenience of reference only and in case of any conflict,
the text of this instrument, rather than the headings shall control.
This instrument may be executed in any number of counterparts each of
which shall be deemed an original.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Section 1. Special Meetings.
-11-
A special meeting of the Shareholders of the Trust or of a particular
Series or Class shall be called by the Secretary whenever ordered by the
Trustees, the Chairman or requested in writing by the holder or holders
of at least one-tenth of the outstanding Shares of the Trust or of the
relevant Series or Class, entitled to vote. If the Secretary, when so
ordered or requested, refuses or neglects for more than two days to call
such special meeting, the Trustees, Chairman or the Shareholders so
requesting may, in the name of the Secretary, call the meeting by giving
notice thereof in the manner required when notice is given by the
Secretary.
ARTICLE IX
INDEMNIFICATION OF TRUSTEES AND OFFICERS
Section 2. No indemnification.
No indemnification shall be provided hereunder to a Trustee or officer
against any liability to the Trust or any Series or Class or the
Shareholders of any Series or Class by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties
involved in the conduct of his office.
ARTICLE XIV
REPORT TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of
each Series or Class a written financial report of the transactions of
that Series or Class including financial statements which shall at least
annually be certified by independent public accountants.
(6) (i) Form of Investment Advisory Contract between the Registrant and
Fifth Third Asset Management Inc. (incorporated by reference to
Registrant's Post-Effective Amendment No. 37 on Form N-1A filed
on or about January 30, 2001).
(A) Form of Schedule A to the Investment Advisory Contract
(incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(ii) Investment Advisory Contract of the Fifth Third Pinnacle Fund
(incorporated by reference to Registrant's Post-Effective
Amendment No. 28 on Form N-1A filed on or about October 30,
1998).
(iii) Form of Sub-Advisory Agreement for the Fifth Third International
Equity Fund between Fifth Third Asset Management Inc. and Morgan
Stanley Asset Management, Inc. (incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form N-1A filed
on or about March 14, 2001).
(A) Form of Schedule A to the Sub-Advisory Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(iv) Form of Sub-Advisory Agreement for the Fifth Third Ohio Tax
Exempt Money Market Fund between Fifth Third Asset Management
Inc. and Fort Washington Investment Advisors, Inc. (incorporated
by reference to Registrant's Post-Effective Amendment No. 38 on
Form N-1A filed on or about March 14, 2001).
-12-
(A) Form of Schedule A to the Sub-Advisory Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(7) (i) Distribution Agreement of the Registrant dated September 29,
2000 (incorporated by reference to Registrant's Post-Effective
Amendment No. 36 on Form N-1A filed on or about November 30,
2000).
(A) Form of Amended Schedules A, B and C to the Distribution
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(ii) Administrative Service Agreement of the Registrant (incorporated
by reference to Registrant's Post-Effective Amendment No. 19 on
Form N-1A filed on or about October 28, 1996).
(A) Form of Amended Exhibit A to the Administrative Service
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(8) Not applicable.
(9) (i) Custody Agreement of the Registrant (incorporated by reference
to Registrant's Post-Effective Amendment No. 25 on Form N-lA
filed on or about November 28, 1997).
(A) Amended Exhibit B to Custody Agreement (incorporated by
reference to Registrant's Post-Effective Amendment No.
22 on Form N-1A filed on or about September 30, 1997).
(B) Amendment dated May 18, 1999 to the Custody Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A filed on or
about October 1, 1999).
(ii) Foreign Custody Agreement dated May 25, 1999 between Fifth Third
Bank and The Bank of New York (incorporated by reference to
Registrant's Post-Effective Amendment No. 29 on Form N-1A filed
on or about October 1, 1999).
(A) Foreign Custody Manager Agreement dated May 25, 1999
between the Registrant and The Bank of New York
(incorporated by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A filed on or
about October 1, 1999).
(B) Foreign Custody Manager Letter Agreement dated May 25,
1999 between the Registrant and Fifth Third Bank
(incorporated by reference to Registrant's
Post-Effective Amendment No. 29 on Form N-1A filed on or
about October 1, 1999).
(10) (i) Transfer Agency and Accounting Services Agreement of the
Registrant (incorporated by reference to Registrant's Post-
Effective Amendment No. 15 on Form N-1A filed on or about
February 28, 1995).
(A) Form of Amended Schedule A to the Transfer Agency and
Accounting Services Agreement (incorporated by reference
to Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed on or about March 14, 2001).
(ii) Management and Administration Agreement of the Registrant
(incorporated by reference to Registrant's Post-Effective
Amendment No. 22 on Form N-1A filed on or about September 30,
1997).
-13-
(A) Amendment to the Management and Administration Agreement
dated January 1, 2000 (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form
N-1A filed on or about September 29, 2000).
(B) Form of Amended Schedule A to the Management and
Administration Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 38 on Form
N-1A filed on or about March 14, 2001).
(iii) Sub-Administration Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 22 on Form N-1A filed
on or about September 30, 1997).
(A) Amendment to the Sub-Administration Agreement dated
January 1, 2000 (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form
N-1A filed on or about September 29, 2000).
(B) Form of Amended Schedule A to the Sub-Administration
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(iv) Sub-Transfer Agency Agreement (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A filed
on or about September 29, 2000).
(A) Schedules A, B, and C to the Sub-Transfer Agency
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 35 on Form N-1A filed on or
about September 29, 2000).
(v) Amended Rule l2b-1 Plan dated December 1, 1995 (incorporated by
reference to Registrant's Post-Effective Amendment No. 35 on
Form N-1A filed on or about September 29, 2000).
(A) Form of Amended Exhibits A, B, C, and D to the Rule
12b-1 Plan (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(vi) Rule 12b-1 Agreement dated September 20, 2000 (incorporated by
reference to Registrant's Post-Effective Amendment No. 35 on
Form N-1A filed on or about September 29, 2000).
(A) Form of Amended Exhibit A to the Rule 12b-1 Agreement
(incorporated by reference to Registrant's
Post-Effective Amendment No._ on Form N-1A filed on or
about March 14, 2001).
(vii) Investment B Rule 12b-1 Plan dated April 1, 2000 (incorporated
by reference to Registrant's Post-Effective Amendment No. 35 on
Form N-1A filed on or about September 29, 2000).
(A) Form of Amended Exhibit A to the Investment B Rule 12b-1
Plan (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(viii) Investment B Rule 12b-1 Agreement including Exhibits A and B
dated September 20, 2000 (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A filed
on or about September 29, 2000).
-14-
(A) Form of Amended Exhibit A to the Investment B Rule 12b-1
Agreement (incorporated by reference to Registrant's
Post-Effective Amendment No. 38 on Form N-1A filed on or
about March 14, 2001).
(ix) Form of Amended Multiple Class Plan (incorporated by reference
to Registrant's Post-Effective Amendment No. 38 on Form N-1A
filed on or about March 14, 2001).
(11) Opinion and Consent of Ropes & Gray Regarding Securities is filed
herewith.
(12) Opinion and Consent of Ropes & Gray Regarding Tax Matters is filed
herewith.
(13) (i) Code of Ethics for Fifth Third Funds (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A filed on or
about September 29, 2000).
(ii) Code of Ethics for Fifth Third Bank (incorporated by reference to
Registrant's Post-Effective Amendment No. 35 on Form N-1A filed on or
about September 29, 2000).
(iii) Code of Ethics for BISYS Fund Services (incorporated by reference
to Registrant's Post-Effective Amendment No. 35 on Form N-1A filed on or
about September 29, 2000).
(iv) Code of Ethics for Morgan Stanley Dean Witter Investment Management
Inc. (incorporated by reference to Registrant's Post-Effective Amendment
No. 35 on Form N-1A filed on or about September 29, 2000).
(14) (a) Consent of Arthur Andersen is filed herewith.
(b) Consent of KPMG is filed herewith.
(15) Not applicable.
(16) Executed Powers of Attorney are filed herewith.
(17) (a) Fifth Third Funds Statement of Additional Information dated
December 1, 2000 is filed herewith.
(b) Fifth Third Funds Annual Report is filed herewith.
(c) Kent Funds Annual Report is filed herewith.
(d) Fifth Third Funds Semi-Annual Report is filed herewith.
Item 17. Undertakings
(1) The registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of
this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act,
the reoffering prospectus will contain the information called for by the
applicable registration form for reofferings by persons who may be
deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(2) The registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
-15-
SIGNATURES
As required by the Securities Act of 1933, this Registration Statement has been
signed on behalf of the Registrant in the City of Washington, District of
Columbia, on the 14th day of May , 2001
FIFTH THIRD FUNDS
BY: /s/ Stephen G. Mintos
-------------------------------------
Stephen G. Mintos, President
Signature Title Date
* /s/ Stephen G. Mintos President
- ----------------------- (Principal Executive Officer) May 14, 2001
Stephen G. Mintos
* /s/ Gary R. Tenkman Treasurer (Principal Financial
- --------------------- and Accounting Officer) May 14, 2001
Gary R. Tenkman
* /s/ Edward Burke Carey Trustee May 14, 2001
- ------------------------
Edward Burke Carey
* /s/ Albert E. Harris Chairman and Trustee May 14, 2001
- ----------------------
Albert E. Harris
*By: /s/ Alyssa Albertelli
---------------------------------------
Alyssa Albertelli, as Attorney-in-fact pursuant to Powers of Attorney filed
herewith
-16-
Kent ______________ Fund
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS, JULY 27, 2001
This proxy is solicited on behalf of the Trustees of Kent Funds,
which unanimously recommends that you vote in favor of Proposals 1 and 2.
The undersigned hereby appoints Jennifer J. Brooks, Jeffrey C. Cusick, and
Martin R. Dean, and each of them with full power of substitution and
resubstitution as attorneys and Proxies of the undersigned, and hereby
authorizes them to attend, to act, and to vote, as designated below, at the
Special Meeting of Shareholders of Kent Funds on behalf of the Kent ___________
Fund on July 27, 2001 at 10:00 a.m., Eastern time, and at any adjournments or
postponements thereof, all of the units of beneficial interest ("Shares") of the
_____ Funds, which the undersigned would be entitled to vote if personally
present.
1. To approve the Agreement and Plan of Reorganization by and between Kent
Funds and Fifth Third Funds providing for the transfer of all of the assets
of the Kent ____________ Fund to the Fifth Third _______________ Fund in
exchange for Shares of the Fifth Third _______________ Fund and the
assumption by the Fifth Third _______________ Fund of all of the
liabilities of the Kent _______________ Fund, followed by the liquidation
of the Kent ________________ Fund and the distribution of Shares of the
Fifth Third ________________ Fund to the shareholders of the Kent
_______________ Fund.
FOR AGAINST ABSTAIN
[_] [_] [_]
2. To approve a new investment advisory agreement between Kent Funds and Fifth
Third Asset Management Inc., the terms of which are substantially similar
to the investment advisory agreement previously in effect between the Kent
Funds and Lyon Street Asset Management Company.
FOR AGAINST ABSTAIN
[_] [_] [_]
3. The Proxies are authorized, in their discretion, to transact any other
business as may properly come before the meeting or any adjournment or
postponement thereof.
This Proxy when properly executed will be voted in the manner directed herein by
the undersigned shareholder. If no direction is made, this Proxy will be voted
FOR Proposals (1) and (2). The Proxies are authorized, in their discretion, to
vote upon such other matters as may properly come before the meeting. The
undersigned hereby revokes any prior proxy to vote at the Meeting, and hereby
ratifies and confirms all that said attorneys and Proxies, or either of them,
may lawfully do by virtue thereof.
NOTE: Please sign exactly as the name appears on this card. EACH joint owner
should sign. When signing as executor, administrator, attorney, trustee or
guardian, or as custodian for a minor, please give the full title as such. If
a corporation, please sign in full corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Please be sure to sign and date this Proxy.
________________________________________
Signature of Shareholder(s)
________________________________________
Signature of Shareholder(s)
Dated:______________, 2001
PLEASE EXECUTE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE
OR
Vote On-Line
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Go to the Web Site www.proxyvote.com.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
Vote By Toll-Free Phone Call
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Call the toll-free number found on your Proxy Card.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
*DO NOT MAIL THE PROXY CARD IF VOTING BY INTERNET OR TELEPHONE.
-2-
EXHIBIT INDEX
(4) Form of Agreement and Plan of Reorganization between Kent Funds and
Fifth Third Funds.
(11) Opinion and Consent of Ropes & Gray Regarding Securities.
(12) Opinion and Consent of Ropes & Gray Regarding Tax Matters.
(14)(a) Consent of Arthur Andersen
(14)(b) Consent of KPMG
(16) Powers of Attorney
(17)(a) Fifth Third Funds Statement of Additional Information
(17)(b) Fifth Third Funds Annual Report
(17)(c) Kent Funds Annual Report
(17)(d) Fifth Third Funds Semi-Annual Report