As Filed with the Securities and Exchange Commission on March 19, 2002
File No. 333-82294
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No.2
[ ] Post-Effective Amendment No. __
ABN AMRO FUNDS
(Exact Name of Registrant as Specified in Charter)
161 NORTH CLARK STREET
CHICAGO, ILLINOIS 60601
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (312) 223-2139
KENNETH C. ANDERSON
ABN AMRO FUNDS
161 NORTH CLARK STREET
CHICAGO, ILLINOIS 60601
(Name and Address of Agent for Service)
Copy to:
CATHY G. O'KELLY
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601
Approximate date of proposed public offering: As soon as practicable
after the effective date of this Registration Statement.
No filing fee is required because an indefinite number of shares have
previously been registered pursuant to Rule 24f-2 under the Investment Company
Act of 1940.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 10, 2002
Notice is hereby given that a Special Meeting of Shareholders of the
Independence One Mutual Funds, with respect to seven of its series, the
Independence One U.S. Treasury Money Market Fund, the Independence One
International Equity Fund, the Independence One Fixed Income Fund, the
Independence One U.S. Government Securities Fund, the Independence One Small Cap
Fund, the Independence One Equity Plus Fund and the Independence One Prime Money
Market Fund (each an "Independence One Fund" and collectively, the "Independence
One Funds"), will be held at the Independence One Funds' principal place of
business at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010, on
Friday, May 10, 2002 at 2:00 p.m., Eastern time, for the purposes of considering
the proposals set forth below. Collectively, the proposals, if approved, will
result in the transfer of the assets and stated liabilities of each Independence
One Fund to a corresponding series of the ABN AMRO Funds in return for shares of
the series of the corresponding ABN AMRO Fund (the "Reorganization"). Each
Independence One Fund will then be terminated.
Proposal 1: Approval of an Agreement and Plan of Reorganization providing for
the transfer of all of the assets and liabilities of: (a) the
Independence One U.S. Treasury Money Market Fund to the ABN AMRO
Treasury Money Market Fund; (b) the Independence One International
Equity Fund to the ABN AMRO International Equity Fund; (c) the
Independence One Fixed Income Fund to the ABN AMRO Investment Grade
Bond Fund; (d) the Independence One U.S. Government Securities Fund
to the ABN AMRO Investment Grade Bond Fund; (e) the Independence
One Small Cap Fund to the ABN AMRO Select Small Cap Fund; (f) the
Independence One Equity Plus Fund to the ABN AMRO Equity Plus Fund;
and (g) the Independence One Prime Money Market Fund to the ABN
AMRO Institutional Prime Money Market Fund; in exchange for ABN
AMRO Fund shares, and the distribution of shares so received to
shareholders of the applicable Independence One Fund.
Proposal 2: The transaction of such other business as may properly be brought
before the meeting.
Shareholders of record of the Independence One Funds as of the close of
business on March 18, 2002 are entitled to notice of, and to vote at this
meeting, or any adjournment of this meeting. Shareholders of each Independence
One Fund will vote separately, and the proposed Reorganization will be effected
as to a particular Independence One Fund only if that Fund's shareholders
approve the proposal.
Shareholders are requested to execute and return promptly the accompanying
proxy card, which is being solicited by the Board Of Trustees of Independence
One Funds. You may execute the proxy card using the methods described in the
proxy card. Executing the proxy card is important to ensure a quorum at the
meeting. Proxies may be revoked at any time before they are exercised by
submitting a written notice of revocation or a subsequently executed proxy or by
attending the meeting and voting in person.
By Order of the Board of Trustees
C. Grant Anderson
Secretary
Independence One Mutual Funds
April 1, 2002
PROXY STATEMENT/PROSPECTUS
DATED APRIL, 1, 2002
RELATING TO THE ACQUISITION OF THE ASSETS OF SERIES OF
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
1-888-898-0600
BY AND IN EXCHANGE FOR SHARES OF CERTAIN SERIES OF
ABN AMRO FUNDS
161 NORTH CLARK STREET
CHICAGO, ILLINOIS 60601
1-800-992-8151
This Proxy Statement/Prospectus is furnished in connection with the
solicitation of proxies by the Board of Trustees of the Independence One Mutual
Funds (the "Independence One Trust") in connection with the Special Meeting of
Shareholders (the "Meeting") of seven series of the Independence One Trust: the
Independence One U.S. Treasury Money Market Fund, the Independence One
International Equity Fund, the Independence One Fixed Income Fund, the
Independence One U.S. Government Securities Fund, the Independence One Small Cap
Fund, the Independence One Equity Plus Fund and the Independence One Prime Money
Market Fund (each an "Independence One Fund" and collectively, the "Independence
One Funds"), to be held on Friday, May 10, 2002 at 2:00 p.m. Eastern time, at
the Independence One Trust's principal place of business at 5800 Corporate
Drive, Pittsburgh, Pennsylvania 15237-7010. At the Meeting, shareholders of each
Independence One Fund, voting separately, will be asked to consider and approve
a proposed reorganization, as described in the Agreement and Plan of
Reorganization, a form of which is attached hereto as Exhibit A (the
"Reorganization Agreement"), by and between the Independence One Trust and ABN
AMRO Funds ("ABN AMRO Trust"), on behalf of ABN AMRO Treasury Money Market Fund,
ABN AMRO International Equity Fund, ABN AMRO Investment Grade Bond Fund, ABN
AMRO Select Small Cap Fund, ABN AMRO Equity Plus Fund and ABN AMRO Institutional
Prime Money Market Fund (each an "ABN AMRO Fund" and collectively, the "ABM AMRO
Funds"). The ABN AMRO Trust and the Independence One Trust are referred to
collectively as the "Trusts" and the participating series of the Trusts are
referred to collectively as the "Funds." Collectively, the proposals, if
approved, will result in the transfer of the assets and liabilities of each
Independence One Fund to the corresponding ABN AMRO Fund in return for shares of
the ABN AMRO Fund (the "Reorganization"). Each Independence One Fund will then
be terminated.
This Proxy Statement/Prospectus sets forth concisely the information that a
shareholder of each Independence One Fund should know before voting on the
Reorganization, and should be retained for future reference. Certain additional
relevant documents listed below, which have been filed with the Securities and
Exchange Commission ("SEC"), are incorporated in whole or in part by reference.
A Statement of Additional Information dated April 1, 2002, relating to this
Proxy Statement/Prospectus and the Reorganization and including certain
financial information about the Independence One Funds and the ABN AMRO Funds,
has been filed with the SEC and is incorporated in its entirety into this Proxy
Statement/Prospectus. A copy of such Statement of Additional Information is
available upon request and without charge by writing to the ABN AMRO Funds, P.O.
Box 9765, Providence, Rhode Island 02940, or by calling toll-free
1-800-992-8151.
THE SEC HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
i
The Reorganization Agreement provides that each Independence One Fund will
transfer all of its assets and liabilities to the corresponding ABN AMRO Fund
listed opposite its name in the following chart:
<Table>
<Caption>
INDEPENDENCE ONE FUND (SELLING FUND) ABN AMRO FUND (ACQUIRING FUND)
------------------------------------ ------------------------------------------------
Independence One U.S. Treasury Money Market Fund ABN AMRO Treasury Money Market Fund
Independence One International Equity Fund ABN AMRO International Equity Fund
Independence One Fixed Income Fund ABN AMRO Investment Grade Bond Fund
Independence One U.S. Government Securities Fund ABN AMRO Investment Grade Bond Fund
Independence One Small Cap Fund ABN AMRO Select Small Cap Fund
Independence One Equity Plus Fund ABN AMRO Equity Plus Fund
Independence One Prime Money Market Fund ABN AMRO Institutional Prime Money Market Fund
</Table>
In exchange for the transfer of these assets and liabilities, each ABN AMRO
Fund will issue shares to the corresponding Independence One Fund listed above,
in an amount equal in value to the aggregate net assets of the Independence One
Fund. These transfers are expected to occur in two steps at 8:00 a.m. Eastern
time (the "Effective Time") on or about June 1, 2002 and June 8, 2002 (the
"Closing Dates"). On the first Closing Date, each Independence One Fund that is
combining with the ABN AMRO Treasury Money Market Fund, the ABN AMRO
International Equity Fund or the ABN AMRO Institutional Prime Money Market Fund
(collectively, the "Existing ABN AMRO Funds"), will transfer all of the assets
and liabilities to such Existing ABN AMRO Fund in exchange for shares of the
Existing ABN AMRO Fund. On the second Closing Date, each Independence One Fund
that is combining with the ABN AMRO Investment Grade Bond Fund, the ABN AMRO
Select Small Cap Fund or the ABN AMRO Equity Plus Fund (collectively, the "New
ABN AMRO Funds"), will transfer all of its assets and liabilities to such New
ABN AMRO Fund in exchange for shares of the New ABN AMRO Fund.
The Independence One Funds offer up to five classes of shares: Class A
Shares, Class B Shares, Trust Class Shares, Class K Shares and Class Y Shares.
The ABN AMRO Funds also offer up to five classes of shares: Class N Shares,
Class I Shares, Class S Shares, Class Y Shares and Class YS Shares. However,
Class S Shares are not involved in the Reorganization. Shareholders of each
Independence One Fund will receive shares of the class of the Acquiring Fund
opposite their class:
<Table>
<Caption>
INDEPENDENCE ONE FUND (SELLING FUND) ABN AMRO FUND (ACQUIRING FUND)
------------------------------------ ------------------------------------------------
Independence One U.S. Treasury Money Market ABN AMRO Treasury Money Market Fund
- - Class K Shares - Class I Shares
Independence One International Equity Fund ABN AMRO International Equity Fund
- - Class A Shares - Class N Shares
Independence One Fixed Income Fund ABN AMRO Investment Grade Bond Fund
- - Trust Class Shares - Class I Shares
- - Class B Shares - Class I Shares
Independence One U.S. Government Securities Fund ABN AMRO Investment Grade Bond Fund
- - Class A Shares - Class I Shares
- - Class B Shares - Class I Shares
Independence One Small Cap Fund ABN AMRO Select Small Cap Fund
- - Class A Shares - Class N Shares
Independence One Equity Plus Fund ABN AMRO Equity Plus Fund
- - Trust Class Shares - Class I Shares
- - Class A Shares - Class I Shares
- - Class B Shares - Class I Shares
Independence One Prime Money Market Fund ABN AMRO Institutional Prime Money Market Fund
- - Class Y Shares - Class Y Shares
- - Class K Shares - Class YS Shares
</Table>
Immediately after the transfer of the Independence One Funds' assets and
liabilities, the Independence One Funds will make a liquidating distribution to
their shareholders of the ABN AMRO Funds' shares
ii
received, so that a holder of shares in an Independence One Fund at the
Effective Time of the Reorganization will receive a number of shares of the
corresponding ABN AMRO Fund with the same aggregate value as the shareholder had
in the Independence One Fund immediately before the Effective Time. At the
Effective Time, shareholders of each Independence One Fund will become
shareholders of the corresponding ABN AMRO Fund. Each Independence One Fund will
then be terminated.
Each Trust is an open-end, management investment company registered under
the Investment Company Act of 1940 (the "1940 Act"). Currently, each
Independence One Fund is advised by Independence One Capital Management
("Independence One Capital"). Independence One Capital is a direct, wholly-owned
subsidiary of ABN AMRO North America, Inc. (which is an indirect, wholly-owned
subsidiary of ABN AMRO Holding N.V.). Federated Securities Corp. ("Federated")
is the principal underwriter of the Independence One Funds. Federated
Administrative Services, a subsidiary of Federated, serves as administrator to
the Independence One Funds. Federated Services Company, through its registered
transfer agent subsidiary, Federated Shareholder Services Company, serves as
transfer agent for the Independence One Funds.
ABN AMRO Asset Management (USA) LLC ("AAAM") is the investment adviser to
the ABN AMRO Funds. AAAM is a direct, wholly-owned subsidiary of LaSalle
National Association, which is an indirect, wholly-owned subsidiary of ABN AMRO
Holding N.V. ABN AMRO Investment Services, Inc., an affiliate of AAAM, serves as
administrator to the ABN AMRO Funds and PFPC, Inc. serves as the sub-
administrator and transfer agent. ABN AMRO Distribution Services (USA) Inc.
serves as the ABN AMRO Funds' principal underwriter.
For a more detailed discussion of the investment objectives, policies,
risks and restrictions of the Independence One Funds, see the Independence One
Funds' prospectuses and statement of additional information dated June 30, 2001,
as amended and/or supplemented, which have been filed with the SEC and are
incorporated by reference into this Proxy Statement/Prospectus. Copies of the
prospectuses and statement of additional information for the Independence One
Funds are available upon request and without charge by calling 1-888-898-0600.
For a more detailed discussion of the investment objectives, policies,
risks and restrictions of the Existing ABN AMRO Funds, see the ABN AMRO Funds'
prospectuses dated March 1 and March , 2002 and statement of additional
information dated March , 2002, as amended and/or supplemented, which have
been filed with the SEC and are incorporated by reference into this Proxy
Statement/Prospectus insofar as they relate to the ABN AMRO Funds participating
in the Reorganization. No other parts of the prospectuses or statement of
additional information are incorporated herein. Copies of the prospectuses for
the ABN AMRO Funds accompany this Proxy Statement/Prospectus. Copies of the
statement of additional information for the ABN AMRO Funds are available upon
request and without charge by calling 1-800-922-8151.
This Proxy Statement/Prospectus is expected to be sent to shareholders on
or about April 1, 2002.
iii
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
Synopsis.................................................... 1
Information Relating to the Reorganization.................. 31
Federal Income Taxes........................................ 32
Capitalization.............................................. 33
Reasons for the Reorganization.............................. 34
Shareholder Rights.......................................... 35
Additional Information...................................... 37
Voting Matters.............................................. 38
Other Business.............................................. 40
Shareholder Inquiries....................................... 40
</Table>
Exhibit A -- Agreement and Plan of Reorganization
Exhibit B -- Management's Discussion of the Existing ABN AMRO Funds' Performance
iv
SYNOPSIS
This Synopsis is designed to allow you to compare the current fees,
investment objectives, policies and restrictions, investment risks, and
distribution, purchase, exchange and redemption procedures of each Independence
One Fund with those of its corresponding ABN AMRO Fund. It is a summary of
certain information contained elsewhere in this Proxy Statement/Prospectus, or
incorporated by reference into this Proxy Statement/Prospectus. Shareholders
should read this entire Proxy Statement/Prospectus carefully. For more complete
information, please read the prospectus attached hereto for each Fund.
THE REORGANIZATION
Background. Pursuant to the Reorganization Agreement (a form of which is
attached hereto as Exhibit A), each Independence One Fund will transfer all of
its assets and liabilities to its corresponding ABN AMRO Fund solely in exchange
for shares of that ABN AMRO Fund. Each Independence One Fund will distribute the
ABN AMRO Fund shares that it receives to its shareholders. Each Independence One
Fund will then be terminated. The result of the Reorganization is that
shareholders of each Independence One Fund will become shareholders of the
corresponding ABN AMRO Fund. No sales charges will be imposed in connection with
the Reorganization.
The Board of Trustees of the Independence One Trust, including the Trustees
who are not "interested persons" within the meaning of Section 2(a)(19) of the
1940 Act, has concluded that the Reorganization would be in the best interests
of each Independence One Fund and its existing shareholders, and that the
interests of existing shareholders would not be diluted as a result of the
transactions contemplated by the Reorganization. Management of the Independence
One Funds believes that the shareholders of the Independence One Funds would
benefit from the larger asset base, increased product array and anticipated
economies of scale that are expected to result from the Reorganization. THE
BOARD OF TRUSTEES OF THE INDEPENDENCE ONE TRUST UNANIMOUSLY RECOMMENDS THAT YOU
VOTE FOR APPROVAL OF THE REORGANIZATION.
Tax Consequences. The Reorganization is intended to qualify for U.S.
federal income tax purposes as a tax-free reorganization. If the Reorganization
so qualifies, neither the Independence One Funds nor their shareholders will
recognize gain or loss in the transactions contemplated by the Reorganization.
As a condition to the closing of the Reorganization, the Trusts will receive an
opinion from counsel to the ABN AMRO Trust to that effect. No tax ruling from
the Internal Revenue Service regarding the Reorganization has been requested.
The opinion of counsel is not binding on the Internal Revenue Service and does
not preclude the Internal Revenue Service from adopting a contrary position.
Distributions. Before the Reorganization, each Independence One Fund
expects to distribute ordinary income and capital gains, if any, to its
shareholders.
THE TRUSTS
Independence One Trust is an open-end, management investment company, which
offers redeemable shares in different series. It was organized as a
Massachusetts business trust on January 9, 1989. The Independence One Funds
offer multiple classes of shares. The Independence One equity and bond funds
offer one or more of the following Classes: Class A Shares, Class B Shares and
Trust Class Shares. The Independence One money market funds offer Class K Shares
and/or Class Y Shares. The Classes differ with respect to sales charges,
distribution fees and shareholder servicing costs, as set forth in the
Independence One Funds' prospectuses.
The ABN AMRO Trust is an open-end management investment company, which
offers redeemable shares in different series. It was organized as a Delaware
business trust on September 10, 1993. The ABN AMRO Funds offer up to five
classes of shares, Class N Shares, Class I Shares, Class S Shares, Class Y
Shares and Class YS Shares. The five Classes differ with respect to distribution
fees and shareholder servicing costs, as set forth in the ABN AMRO Funds'
prospectuses.
1
INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS
This section will help you compare the investment objectives and policies
of each ABN AMRO Fund with its corresponding Independence One Fund. Please be
aware that this is only a brief discussion. More complete information may be
found in the ABN AMRO Funds' and Independence One Funds' prospectuses.
ABN AMRO TREASURY MONEY MARKET FUND --
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
The investment objective of the ABN AMRO TREASURY MONEY MARKET FUND is to
preserve principal value and maintain a high degree of liquidity while providing
current income. The Fund pursues its investment objective by investing
substantially all of its assets in U.S. Treasury money market instruments and
repurchase agreements involving these instruments. The dollar-weighted average
maturity of the securities in the Fund is 90 days or less. The portfolio manager
monitors the Fund's investments and may adjust the Fund's average maturity in
anticipation of short-term interest rates.
The ABN AMRO Treasury Money Market Fund's portfolio manager structures the
Fund's portfolio based on interest rates, market conditions and liquidity needs.
The portfolio manager selects securities that are denominated in U.S. dollars,
have high credit quality and minimal credit risk, and mature or reset in 397
days or less.
The investment objective of the INDEPENDENCE ONE U.S. TREASURY MONEY MARKET
FUND is to provide current income consistent with stability of principal. The
Fund pursues its investment objective by investing only in a portfolio of
short-term U.S. Treasury obligations. U.S. Treasury obligations are issued by
the U.S. government, and are fully guaranteed as to payment of principal and
interest by the United States. In doing so, Independence One Capital assesses a
variety of factors, including the current and expected U.S. economic growth,
interest rates and inflation rates.
Significant Differences. The Independence One U.S. Treasury Money Market
Fund only invests directly in short-term U.S. Treasury obligations, whereas the
ABN AMRO Treasury Money Market Fund invests substantially all of its assets
directly in U.S. Treasury money market instruments and indirectly in such
instruments through repurchase agreements.
The ABN AMRO Treasury Money Market Fund has adopted a fundamental policy (a
policy that cannot be changed without prior shareholder approval) that prohibits
it from underwriting securities issued by others; the Independence One Treasury
Money Market Fund has not adopted such a policy. The Independence One U.S.
Treasury Money Market Fund has adopted a fundamental policy that prohibits it
from engaging in short sales or purchasing securities on margin. Although the
ABN AMRO Treasury Money Market Fund has not adopted such a policy, the Fund does
not engage in short sales or purchase securities on margin. The ABN AMRO
Treasury Money Market Fund has adopted a fundamental policy that prohibits it
from buying or selling real estate or physical commodities. Although the
Independence One U.S. Treasury Money Market Fund has not adopted such a policy,
the Fund does not buy or sell real estate or physical commodities.
ABN AMRO INTERNATIONAL EQUITY FUND --
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
The investment objective of the ABN AMRO INTERNATIONAL EQUITY FUND is to
provide a high level of total return through capital appreciation and current
income. The Fund pursues its investment objective by investing, under normal
conditions, at least 80% of its assets in common stocks and other equity
securities of foreign companies, focusing on developed countries in Europe,
Australia and the Far East, but may invest in emerging markets. The portfolio
management team seeks securities with above average growth potential and/or
consistent earnings. In selecting securities for the Fund, the portfolio
management team utilizes a bottom-up approach to identify attractive industries
and companies, and adjusts the Fund's portfolio in response to changing growth
scenarios for various industry sectors and regions.
2
The ABN AMRO International Equity Fund may use secondary investment
strategies in seeking to achieve its investment objective. These strategies
include investing in foreign securities in the form of depositary receipts and
investing in preferred stocks and Rule 144A securities.
The ABN AMRO International Equity Fund may take temporary positions that
may not achieve its investment objective or follow its principal investment
strategies for defensive reasons. This includes investing all or a portion of
its total assets in cash or cash equivalents, such as money market securities
and repurchase agreements.
The investment objective of the INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
is to provide total return. The Fund pursues its investment objective by
investing at least 80% of its assets in common stocks and other equity
securities of foreign companies. The Fund seeks to approximate or exceed the
Morgan Stanley Capital International Europe, Australia and Far East Accumulation
Index (the "MSCI-EAFE Index") (net) in U.S. dollars over a rolling three-year
period. The Fund focuses on developed countries in Europe, Australia and the Far
East. The Fund's sub-adviser, AAAM (who also serves as adviser to the ABM AMRO
International Equity Fund) diversifies the Fund's investments across a number of
foreign countries and seeks securities of companies with above average growth
potential and/or consistent earnings. In selecting these companies, AAAM
performs a fundamental analysis of the issuer, focusing on the issuer's
historical and projected future growth of revenue and earnings. AAAM adjusts the
Fund's portfolio in response to changing growth scenarios for various industry
sectors and regions. AAAM intends to diversify the Fund's investments among
various foreign countries (in any case, not less than three) in an effort to
reduce risks.
The Independence One International Equity Fund may use hedging as a
principal strategy to reduce specific risks. The Fund may also buy/sell stock
index futures contracts and currency forward contracts.
Significant Differences. Although the Funds' investment strategies are
substantially similar and both Funds are advised or sub-advised by AAAM, there
are some significant differences. The Independence One International Equity Fund
may use hedging as a principal strategy and may buy and sell stock index futures
contracts and currency forward contracts, whereas the ABN AMRO International
Equity Fund does not expect to hedge against the value of the U.S. dollar.
The Independence One International Equity Fund has adopted a fundamental
policy that prohibits it from engaging in short sales or purchasing securities
on margin. The ABN AMRO International Equity Fund has not adopted such a policy,
but normally does not sell securities short or purchase securities on margin.
ABN AMRO INVESTMENT GRADE BOND FUND --
INDEPENDENCE ONE FIXED INCOME FUND
The investment objective of each of the ABN AMRO INVESTMENT GRADE BOND FUND
and the INDEPENDENCE ONE FIXED INCOME FUND is to provide total return. Each Fund
pursues its investment objective by investing at least 80% of its assets in a
diversified portfolio of fixed income securities consisting of corporate
obligations rated A or higher by a nationally recognized statistical rating
organization, U.S. government securities, and mortgage- and asset-backed
securities.
Each Fund will attempt to deliver share price and/or income performance in
excess of the bond market in general as measured by such broad indices as the
Merrill Lynch 1-10 Year U.S. Corporate/Government Bond Index. Each Fund
currently expects to maintain an average dollar-weighted maturity of between
three and eight years, although securities of longer or shorter maturities may
be purchased.
In an effort to manage a Fund's total return, each Fund's investment
adviser attempts to anticipate the opportunities and risks of changes in market
interest rates. When the investment adviser expects that market interest rates
may decline, it may extend the weighted average maturity of the Fund's
portfolio, and when, market interest rates are expected to rise, it may shorten
the weighted average maturity of the Fund. Each Fund's investment adviser may
also attempt to improve the Fund's total return by weighing the relative value
of various types of fixed income securities having similar maturities in
selecting portfolio securities.
3
There may be times when the ABN AMRO Investment Grade Bond Fund takes
temporary positions that may not achieve its investment objective or follow its
principal investment strategy for defensive reasons. This includes investing all
or a portion of its total assets in cash or cash equivalents, such as money
market securities and repurchase agreements. The Independence One Fixed Income
Fund may temporarily depart from its principal investment strategy by investing
in cash, cash equivalents, shorter-term, higher-quality debt securities and
similar obligations. It may do this to minimize potential losses or to maintain
liquidity to meet shareholder redemptions during adverse market conditions.
Significant Differences. The Funds' investment objectives, investment
policies and investment strategies are substantially identical. There are no
significant differences between the Funds.
ABN AMRO INVESTMENT GRADE BOND FUND --
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
The investment objective and policies of the ABN AMRO INVESTMENT GRADE BOND
FUND are discussed above.
The investment objective of the INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES
FUND is to provide high current income. The Fund pursues its investment
objective by investing only in U.S. Treasury and government agency securities.
U.S. government securities are subject to varying levels of backing as to
payment of principal and interest by the United States. In addition to seeking
high current income relative to fixed income funds with shorter average
durations than that of the Fund, the Fund's portfolio will be managed in an
effort to seek total return which includes both changes in the principal value
of the Fund's portfolio and interest income earned. Accordingly, Independence
One Capital does not select securities purely to maximize the current yield of
the Fund.
In an effort to manage the Fund's current income and total performance,
Independence One Capital attempts to anticipate the opportunities and risks of
changes in market interest rates. When Independence One Capital expects that
market interest rates may decline, it may extend the average duration of the
Fund's portfolio, and when market interest rates are expected to rise, it may
shorten the average duration of the Fund. Duration measures the price
sensitivity of a fixed income security to changes in interest rates. Generally,
Independence One Capital will maintain an average weighted duration of four to
seven years.
Independence One Capital may also attempt to improve the Fund's total
return by weighing the relative value of different U.S. government securities
having similar maturities in selecting portfolio securities.
The Independence One U.S. Government Securities Fund may temporarily depart
from its principal investment strategy by investing in cash, cash equivalents,
shorter-term, higher-quality debt securities and similar obligations. It may do
this to minimize potential losses or to maintain liquidity to meet shareholder
redemptions during adverse market conditions.
Significant Differences. The ABN AMRO Investment Grade Bond Fund invests
at least 80% of its assets in a diversified portfolio of fixed income
securities, including U.S. government securities, whereas the Independence One
U.S. Government Securities Fund only invests in U.S. Treasury and government
agency securities. The Funds also differ with respect to maturity and duration.
The ABN AMRO Investment Grade Bond Fund expects to maintain an dollar-weighted
average maturity of between three and eight years, whereas the Independence One
U.S. Government Securities Fund generally maintains an average weighted duration
of four to seven years.
The ABN AMRO Investment Grade Bond Fund has adopted fundamental policies
that prohibit it from purchasing or selling real estate and certain commodities.
Although the Independence One U.S. Government Securities Fund has not adopted
such policies, the Fund does not purchase or sell real estate or commodities.
The ABN AMRO Investment Grade Bond has also adopted a fundamental policy
relating to diversification of investments. The Independence One U.S. Government
Securities Fund has not adopted such a policy since it only invests in U.S.
Treasury and government securities.
4
ABN AMRO SELECT SMALL CAP FUND --
INDEPENDENCE ONE SMALL CAP FUND
The investment objective and policies of each of the ABN AMRO SELECT SMALL
CAP FUND and the INDEPENDENCE ONE SMALL CAP FUND is to provide total return.
Each Fund pursues its investment objective by investing at least 80% of its
assets in a representative sample of common stocks comprising the S&P Small Cap
600 Index ("S&P Small Cap 600"), in an effort to provide investment results that
correspond to or exceed the aggregate price and dividend performance of the S&P
Small Cap 600. The S&P Small Cap 600 is a market capitalization-weighted index
of 600 common stocks from a variety of economic sectors and industrial groups.
Selection criteria include total market capitalization of an issuer's
outstanding shares (capitalization), market size, trading activity and liquidity
of the issuer's shares, the issuer's financial and operating soundness, industry
representation and public ownership.
Each Fund's investment adviser and sub-adviser, thinkorswim Advisors, Inc.,
invest each Fund's holdings in approximately 200 of the stocks that comprise the
S&P Small Cap 600. The stocks selected may generally meet one or more of the
following criteria: (i) a history of beta (price volatility) similar to the
average beta of all stocks in the index; (ii) a price that is equal to or
greater than that of the average index stock's price; and (iii) a total
capitalization equal to or greater than the average index stock's
capitalization. Each Fund's investment adviser believes that the stock selection
process will help focus the Fund's holdings in relatively more liquid stocks
that can be bought and sold with relatively lower transaction costs.
The ABN AMRO Select Small Cap Fund may use hedging as a secondary strategy
to limit risk or enhance investment return. The Independence One Small Cap Fund
may also use hedging as a principal strategy to reduce specific risks. In
addition, there are times when the ABN AMRO Select Small Cap Fund takes
temporary defensive positions that may not achieve the investment objective or
follow its principal investment strategies for defensive reasons. This includes
investing all or a portion of its total assets in cash or cash equivalents, such
as money market securities and repurchase agreements.
Significant Differences: The Funds have identical investment objectives
and investment policies. However, unlike the Independence One Small Cap Fund,
the ABN AMRO Select Small Cap Fund may take temporary defensive positions.
ABN AMRO EQUITY PLUS FUND --
INDEPENDENCE ONE EQUITY PLUS FUND
The investment objective of each of the ABN AMRO EQUITY PLUS FUND and the
INDEPENDENCE ONE EQUITY PLUS FUND is to provide total return. Each Fund pursues
its investment objective by investing in the common stocks that comprise the
Standard & Poor's Composite Stock Price Index ("S&P 100"), in an effort to
provide investment results that correspond to or exceed the aggregate price and
dividend performance of the S&P 100. The S&P 100 is a market
capitalization-weighted index of 100 common stocks from a broad range of
industries. The S&P 100 provides a measure of overall large company performance
because the stocks selected for inclusion tend to be companies in leading
industries in the U.S. economy. Selection criteria include total market value of
an issuer's outstanding shares (market capitalization), trading activity and
liquidity of the issuer's shares, and the issuer's financial and operating
soundness.
Normally at least 80% of each Fund's assets will be invested to correspond
as closely as possible to the relative weighting of the S&P 100 in order to
attempt to achieve a high degree of correlation between the performance of the
Fund's portfolio and that of the S&P 100. The remaining 20% of each Fund's
assets will normally also be invested in stocks that are included in the S&P
100, but the Fund's position in such stocks may be greater (overweighted)
compared to such stocks in the S&P 100. These weightings will be determined by
each Fund's investment adviser and sub-adviser, thinkorswim Advisors, Inc. in an
effort to exceed the total return performance of the S&P 100.
There may be times when the ABN AMRO Equity Plus Fund takes temporary
positions that may not achieve its investment objective or follow its principal
investment strategy for defensive reasons. This includes
5
investing all or a portion of its total assets in cash or cash equivalents, such
as money market securities and repurchase agreements.
Significant Differences. The Funds have identical investment objectives
and investment policies. However, the ABN AMRO Equity Plus Fund may take
temporary defensive positions, whereas the Independence One Equity Plus Fund may
not.
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND --
INDEPENDENCE ONE PRIME MONEY MARKET FUND
The investment objective of the ABN AMRO INSTITUTIONAL PRIME MONEY MARKET
FUND is to provide as high a level of current income as is consistent with
preservation of capital and liquidity. The Fund pursues its investment objective
by investing substantially all of its assets in high quality money market
instruments issued by corporations, banks and the U.S. government or its
agencies or instrumentalities (and repurchase agreements involving these
instruments). The Fund may also invest in U.S. dollar-denominated securities of
foreign issuers. The dollar-weighted average maturity of the securities in the
Fund is 90 days or less. The portfolio manager monitors the credit quality
ratings of the Fund's investments and may adjust the Fund's average maturity in
anticipation of changes in short-term interest rates.
The portfolio manager structures the Fund's portfolio based on interest
rates, market conditions and liquidity needs. The portfolio manager selects
securities that are denominated in U.S. dollars, have high credit quality and
minimal credit risk, and mature or reset in 397 days or less.
The investment objective of the INDEPENDENCE ONE PRIME MONEY MARKET FUND is
to provide current income consistent with stability of principal. The Fund
pursues its investment objective by investing exclusively in a portfolio of
corporate, municipal, U.S. government and other money market instruments (high
quality, short-term debt securities) maturing in 397 days or less. The
securities in which the Fund invests must be either rated in the highest
short-term category by at least one NRSRO or be of comparable quality.
Independence One Capital uses macroeconomic credit and market analysis to
select portfolio securities. In doing so, Independence One Capital assesses a
variety of factors, including the current and expected U.S. economic growth,
interest rates and inflation rates.
Significant Differences. Although both Funds invest in high quality,
short-term money market instruments issued by corporations and the U.S.
government, the Funds differ with respect to certain other investments. For
example, the Independence One Prime Money Market Fund may invest in municipal
money market instruments, whereas the ABN AMRO Institutional Prime Money Market
Fund does not.
INVESTMENT RISKS
Although the investment objectives and policies of the ABN AMRO Funds and
the corresponding Independence One Funds are generally similar, there are
certain differences. Therefore, an investment in an ABN AMRO Fund may involve
investment risks that are different in some respects from those of its
corresponding Independence One Fund. For a more complete discussion of the risks
associated with the respective Funds, see the ABN AMRO Funds' and Independence
One Funds' prospectuses.
ABN AMRO TREASURY MONEY MARKET FUND --
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
An investment in the ABN AMRO TREASURY MONEY MARKET FUND is subject to the
risk that as interest rates rise, bond prices will fall. A sharp rise in
interest rates could cause the Fund's share price to drop. An investment in the
Fund is also subject to the risk that the issuer of a security will not be able
to make principal and interest payments on a bond issue when due. In addition,
the credit ratings of issuers could change and affect the Fund's share price.
6
Although the ABN AMRO Treasury Money Market Fund seeks to preserve the
value of your investment at $1.00 per share and historically has been able to do
so, it is possible to lose money by investing in the Fund. The Fund's yield will
change as a result of movements in short-term interest rates and market
conditions.
An investment in the INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND is
subject to interest rate risks. The price of the U.S. Treasury obligations in
which the Fund invests rise and fall in response to interest rate changes. In
addition, although the Fund seeks to maintain the value of your investment at
$1.00 per share, it is possible to lose money.
Significant Risk Differences. The Independence One U.S. Treasury Money
Market Fund only invests in short-term U.S. Treasury obligations, which are
regarded as having the lowest credit risk since they are direct obligations of
the United States, whereas the ABN AMRO Treasury Money Market Fund also invests
in repurchase agreements and money market funds. The ABN AMRO Treasury Money
Market Fund, therefore, is subject to the additional risks associated with these
other investments.
ABN AMRO INTERNATIONAL EQUITY FUND --
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
An investment in the ABN AMRO INTERNATIONAL EQUITY FUND is subject to the
risk that the Fund's share price can move down over the short term in response
to stock market conditions, changes in the economy or a particular company's
stock price change. An individual stock may decline in value even when stocks in
general are rising. The Fund's investments in the securities of foreign issuers
involve special risks and considerations not typically associated with investing
in U.S. companies. The securities of foreign companies may be less liquid and
may fluctuate more widely than those traded in U.S. markets. There may be
difficulty in enforcing contractual obligations and little public information
about the companies. Trades typically take more time to settle and clear, and
the cost of buying and selling foreign securities is generally higher than U.S.
traded securities. In addition, the value of the securities held by the Fund may
be affected by changes in exchange rates or control regulations. Changes in
economic, tax or foreign investment policies, other political, governmental or
economic actions can also adversely affect the value of the securities in the
Fund.
To the extent that the ABN AMRO International Equity Fund takes a temporary
defensive position, it may not achieve its investment objective. In addition,
following a defensive strategy could reduce the benefit from any market
upswings.
An investment in the INDEPENDENCE ONE INTERNATIONAL EQUITY FUND is subject
to the risks involved in investing in equity securities, including the risk that
the value of equity securities rise and fall. In addition, to the extent the
Fund is invested in growth stocks that depend more on price changes for returns,
such stocks may be more adversely affected in a down market than value stocks.
On the contrary, to the extent that the Fund is invested in value stocks that
depend less on price changes for returns, such stocks may lag behind growth
stocks in an up market. An investment in the Fund also is subject to the risks
of foreign investing. The Fund's foreign securities are primarily denominated in
foreign currencies which fluctuate daily. The combination of currency risk and
market risk tends to make securities traded in foreign markets more volatile
than securities traded exclusively in the United States. Moreover, securities in
foreign markets may be subject to taxation policies that reduce returns for U.S.
investors. In addition, information concerning foreign companies may not be as
extensive and reliable as the information available concerning companies in the
United States.
The Independence One International Equity Fund's hedging strategies are
subject to the risk that, even if they work as intended, they may not eliminate
risk. In addition, hedging strategies are not always successful, and may result
in increased expenses and losses to the Fund. The Fund's use of derivative
contracts may increase the Fund's exposure to market and currency risks and may
also expose the Fund to liquidity and leverage risks.
Significant Risk Differences. The ABN AMRO International Equity Fund does
not hedge against the U.S. dollar, whereas the Independence One International
Fund does. While the Independence One International Fund has greater exposure to
the risks of using derivative contracts, the ABN AMRO Fund has
7
greater exposure to foreign currency movements. The ABN AMRO International
Equity Fund may take temporary defensive positions, whereas the Independence One
International Equity Fund may not. The ABN AMRO International Equity Fund,
therefore, may be subject to the additional risks associated with taking
temporary defensive positions.
ABN AMRO INVESTMENT GRADE BOND FUND --
INDEPENDENCE ONE FIXED INCOME FUND
An investment in the ABN AMRO INVESTMENT GRADE BOND FUND as well as the
INDEPENDENCE ONE FIXED INCOME FUND is subject to the risk that prices of fixed
income securities rise and fall in response to interest rate changes. Interest
rate changes have a greater effect on the price of fixed income securities with
longer durations. An investment in each Fund is also subject to the possibility
that an issuer will default on a security by failing to pay interest or
principal when due. If an issuer defaults, the Fund will lose money. In
addition, an issuer may redeem a fixed income security before maturity at a
price below its current market price. The relative volatility of each Fund's
investments in mortgage-backed securities is due to the likelihood of prepayment
increases in a declining interest rate environment and decreases in a rising
interest rate environment. To the extent a Fund temporarily departs from its
investment strategy, the Fund may not achieve its investment objective.
Significant Risk Differences. Because the Funds have substantially
identical investment objectives, investment policies and investment strategies,
there are no significant risk differences between the Funds.
ABN AMRO INVESTMENT GRADE BOND FUND --
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
An investment in the ABN AMRO INVESTMENT GRADE BOND FUND is subject to the
risks described above.
An investment in the INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND is
subject to the risk that prices of fixed income securities rise and fall in
response to interest rate changes. Interest rate changes have a greater effect
on the price of fixed income securities with longer durations. In addition, the
likelihood of prepayment increases in a declining interest rate environment and
decreases in a rising interest rate environment. To the extent the Fund
temporarily departs from its investment strategy, the Fund may not achieve its
investment objective.
Significant Risk Differences. The ABN AMRO Investment Grade Bond Fund
invests in corporate debt securities and mortgage- and asset-backed securities,
whereas the Independence One U.S. Government Securities Fund does not. The ABN
AMRO Investment Grade Bond Fund, therefore, is subject to the additional risks
associated with investing in corporate debt securities and mortgage- and
asset-backed securities, including the relative volatility of investing in
mortgage-backed securities.
ABN AMRO SELECT SMALL CAP FUND --
INDEPENDENCE ONE SMALL CAP FUND
An investment in the ABN AMRO SELECT SMALL CAP FUND as well as the
INDEPENDENCE ONE SMALL CAP FUND is subject to the risks involved in investing in
equity securities, including the risk that the value of equity securities rise
and fall. An investment in each Fund is also subject to small company risk.
Generally, the smaller the market capitalization of a company, the fewer the
number of shares traded daily, the less liquid its stock and the more volatile
its price. Companies with smaller market capitalizations also tend to have
unproven track records, a limited product or service base and limited access to
capital markets. These factors also increase risks and make these companies more
likely to fail than companies with larger market capitalizations.
Each Fund's hedging strategies are subject to the risk that, even if they
work as intended, they may not eliminate risk. In addition, hedging strategies
are not always successful, and may result in increased expenses
8
and losses to the Fund. To the extent the ABN AMRO Select Small Cap Fund departs
from its investment strategy, it may not achieve its investment objective.
Significant Risk Differences. Because the Funds' investment objectives and
investment policies are the same, the Funds are subject to the same risks,
including any risks associated with hedging strategies. The ABN AMRO Select
Small Cap Fund may take temporary defensive positions, whereas the Independence
One Small Cap Fund may not. The ABN AMRO Select Small Cap Fund, therefore, may
be subject to the additional risks associated with taking temporary defensive
positions.
ABN AMRO EQUITY PLUS FUND --
INDEPENDENCE ONE EQUITY PLUS FUND
An investment in the ABN AMRO EQUITY PLUS FUND as well as the INDEPENDENCE
ONE EQUITY PLUS FUND is subject to stock market risks. The value of equity
securities in a Fund's portfolio will rise and fall. These fluctuations can be a
sustained trend or a drastic movement. Each Fund's portfolio will reflect
changes in prices of individual stocks or general changes in stock valuation.
Consequently, the Fund's share price may decline. Each Fund's investment adviser
attempts to manage market risk by limiting the amount the Fund may invest in
each company's equity securities. However, diversification will not protect the
Fund against widespread or prolonged declines in the stock market. To the extent
the ABN AMRO Equity Plus Fund departs from its investment strategy, it may not
achieve its investment objective.
Significant Risk Differences. Because the Funds' investment objective and
investment policies are the same, the Funds are subject to the same risks. The
ABN AMRO Equity Plus Fund may take temporary defensive positions, whereas the
Independence One Equity Plus Fund may not. The ABN AMRO Equity Plus Fund,
therefore, may be subject to the additional risks associated with taking
temporary defensive positions.
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND --
INDEPENDENCE ONE PRIME MONEY MARKET FUND
An investment in the ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND is
subject to the risk that the issuer of a security will not be able to make
principal and interest payments on a bond issue. The credit ratings of issuers
could also change and affect the Fund's share price. The Fund's share price may
also drop if there is a sharp rise in interest rates. The Fund's investments in
U.S. government agency securities are subject to the risk that the U.S.
government may not always be able to provide financial support to the agency
issuer. The Fund's investments in foreign securities can be more volatile than
investments in U.S. securities. Diplomatic, political or economic developments
unique to a country or region, including nationalization or appropriation, could
affect foreign investments.
Although the ABN AMRO Institutional Prime seeks to preserve the value of
your investment at $1.00 per share, it is possible to lose money by investing in
the Fund. In addition, the Fund's yield will change as a result of movements in
short-term interest rates and market conditions.
An investment in the INDEPENDENCE ONE PRIME MONEY MARKET FUND is subject to
the risk that prices of fixed income securities rise and fall in response to
interest rate changes. An investment in the Fund is also subject to the risk
that an issuer will default on a security by failing to pay interest or
principal when due. If an issuer defaults, the Fund will lose money. In
addition, although the Fund seeks to maintain the value of your investment at
$1.00 per share, it is possible to lose money.
Significant Risk Differences. Because the Funds have substantially
identical investment objectives, investment policies and investment strategies,
there are no significant risk differences between the Funds.
FEES AND EXPENSES
The following comparative fee tables show the fees for each ABN AMRO Fund
and its corresponding Independence One Fund as of December 31, 2001. The pro
forma table shows the ABN AMRO Fund's fees assuming that the Reorganization is
approved.
9
ABN AMRO TREASURY MONEY MARKET FUND --
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
SHAREHOLDER FEES
There are no sales charges on purchases, exchanges or redemptions.
If you redeem shares of the ABN AMRO Treasury Money Market Fund by wire,
$20 will be deducted from the amount redeemed.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
INDEPENDENCE ONE PRO FORMA -- ABN AMRO
ABN AMRO TREASURY U.S. TREASURY MONEY TREASURY MONEY
MONEY MARKET FUND MARKET FUND MARKET FUND
(CLASS I SHARES) (CLASS K SHARES) (CLASS I SHARES)
----------------- ------------------- ---------------------
Management Fees............... 0.35% 0.40% 0.35%
Distribution (12b-1) Fees..... None 0.00%(2) None
Other Expenses................ 0.11% 0.24% 0.10%
Total Annual Operating
Expenses.................... 0.46% 0.64% 0.45%
Contractual Waivers and/or
Reimbursements.............. (0.10)% None (0.09)%
Net Operating Expenses........ 0.36%(1) None 0.36%(1)
</Table>
- ---------------
(1) This reflects a continuation of AAAM's contractual undertakings to waive
management fees and/or reimburse expenses exceeding the limit shown. AAAM is
contractually obligated to waive management fees and/or reimburse expenses
through September 30, 2003 at the rate shown in the table.
(2) The Independence One U.S. Treasury Money Market Fund did not pay or accrue
any distribution (12b-1) fees during the most recent fiscal year. The Fund's
distributor can pay up to 0.25% of the Fund's average daily net assets as a
12b-1 fee, which is reimbursed by the Fund.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for applicable periods. Although your actual costs
may be higher or lower, based on these assumptions you would pay the following
expenses if you redeem all of your shares at the end of the time periods
indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
ABN AMRO Treasury Money Market Fund (Class I Shares)........ $37 $138 $248 $569
Independence One U.S. Treasury Money Market (Class K
Shares)................................................... 65 205 357 798
Pro Forma -- ABN AMRO Treasury Money Market Fund (Class I
Shares)................................................... 37 135 243 558
</Table>
10
ABN AMRO INTERNATIONAL EQUITY FUND --
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
SHAREHOLDER FEES
This table describes the fees paid directly from your investment.
<Table>
<Caption>
PRO FORMA --
ABN AMRO INDEPENDENCE ONE ABN AMRO
INTERNATIONAL INTERNATIONAL INTERNATIONAL
EQUITY FUND EQUITY FUND EQUITY FUND
(CLASS N SHARES) (CLASS A SHARES) (CLASS N SHARES)
---------------- ---------------- ----------------
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of offering
price)................................. None 4.00% None
Redemption Fee........................... 2% within 90 days None 2% within 90 days
</Table>
If you redeem shares of the ABN AMRO International Equity Fund by wire, $20
will be deducted from the amount redeemed.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
PRO FORMA --
ABN AMRO INDEPENDENCE ONE ABN AMRO
INTERNATIONAL INTERNATIONAL INTERNATIONAL
EQUITY FUND EQUITY FUND EQUITY FUND
(CLASS N SHARES)* (CLASS A SHARES) (CLASS N SHARES)
----------------- ---------------- ----------------
Management Fees................................ 1.00% 1.00%(2) 1.00%
Distribution (12b-1) Fees...................... 0.25% None 0.25%
Other Expenses................................. 0.26% 1.30%(3) 0.26%
Total Annual Operating Expenses................ 1.51% 2.30%(4) 1.51%
Contractual Waivers and/or Reimbursements...... (0.10)% N/A (0.10)%
Net Operating Expenses......................... 1.41%(1) N/A 1.41%(1)
</Table>
- ---------------
* Calculated as of December 31, 2001 based on a pro forma budget.
(1) This reflects a continuation of AAAM's contractual undertakings to waive
management fees and/or reimburse expenses exceeding the limit shown. AAAM is
contractually obligated to waive management fees and/or reimburse expenses
through September 30, 2003 at the rate shown in the table.
(2) Independence One Capital voluntarily waived a portion of the Fund's
management fee. Independence One Capital can terminate this voluntary waiver
at any time. The management fee actually paid (after the voluntary waiver)
was 0.55%.
(3) The administrator for the Independence One International Equity Fund
voluntarily reduced certain operating expenses of the Fund. These voluntary
reductions can be terminated at any time. Total other expenses actually paid
by the Fund was 1.11%.
(4) Total annual operating expenses paid by the Fund (after the voluntary
waiver) were 1.66%.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for
11
applicable periods. Although your actual costs may be higher or lower, based on
these assumptions you would pay the following expenses if you redeem all of your
shares at the end of the time periods indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
ABN AMRO International Equity Fund
(Class N Shares)................................... $144 $467 $ 814 $1,793
Independence One International Equity Fund
(Class A Shares)................................... 233 718 1,230 2,636
Pro Forma ABN AMRO International Equity Fund
(Class N Shares)................................... 144 467 814 1,793
</Table>
ABN AMRO INVESTMENT GRADE BOND FUND --
INDEPENDENCE ONE FIXED INCOME FUND
SHAREHOLDER FEES
This table describes the fees paid directly from your investment.
<Table>
<Caption>
PRO FORMA -- ABN
ABN AMRO INVESTMENT INDEPENDENCE ONE INDEPENDENCE ONE AMRO INVESTMENT
GRADE BOND FUND FIXED INCOME FUND FIXED INCOME FUND GRADE BOND FUND
(CLASS I SHARES) (TRUST CLASS SHARES) (CLASS B SHARES) (CLASS I SHARES)
------------------- -------------------- ----------------- ----------------
Maximum Deferred Sales
Charge (Load) (as a
percentage of original
purchase price or
redemption proceeds, as
applicable)............ None None 5.00% None
</Table>
If you redeem shares of the ABN AMRO Investment Grade Bond Fund by wire,
$20 will be deducted from the amount redeemed.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
PRO FORMA -- ABN
ABN AMRO INVESTMENT INDEPENDENCE ONE INDEPENDENCE ONE AMRO INVESTMENT
GRADE BOND FUND FIXED INCOME FUND FIXED INCOME FUND GRADE BOND FUND
(CLASS I SHARES)* (TRUST CLASS SHARES) (CLASS B SHARES) (CLASS I SHARES)
------------------- -------------------- ----------------- ----------------
Management Fees.......... 0.70% 0.75%(1) 0.75%(1) 0.70%
Distribution (12b-1)
Fees................... None None 0.75%(1) None
Other Expenses........... 0.18% 0.30% 0.30% 0.18%
Shareholder Servicing
Fee.................... None None 0.25% None
Total Annual
Operating
Expenses....... 0.88% 1.05%(2) 2.05%(2) 0.88%
Contractual Waivers
and/or
Reimbursements......... (0.31)% N/A N/A (0.31)%
Net Operating Expenses... 0.57% N/A N/A 0.57%(3)
</Table>
- -------------------------
* Calculated as of December 31, 2001 based on a pro forma budget.
(1) Independence One Capital voluntarily waived a portion of the management fee.
Independence One Capital may terminate this voluntary waiver at any time.
The management fee paid by the Fund (after the voluntary waiver) was 0.30%.
(2) Total annual operating expenses paid by the Fund (after the voluntary
waivers) were 0.60% and 1.60%, respectively, for the Fund's Trust Class
shares and Class B shares.
12
(3) The Reorganization Agreement provides that the ABN AMRO Investment Grade
Bond Fund's net operating expenses will not exceed levels calculated as of
the date of the Reorganization for four full calendar quarters following the
Reorganization. Because the above expense information is calculated as of
December 31, 2001, the actual expense limit may be higher or lower than
shown.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for applicable periods. Although your actual costs
may be higher or lower, based on these assumptions you would pay the following
expenses if you redeem all of your shares at the end of the time periods
indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
ABN AMRO Investment Grade Bond
(Class I Shares)................................. $ 58 $250 $ 457 $1,056
Independence One Fixed Income Fund
(Trust Class Shares)............................. 107 334 579 1,283
(Class B Shares)................................. 208 643 1,103 2,379
Pro Forma -- ABN AMRO Investment Grade Bond (Class
I Shares)........................................ 58 250 457 1,056
</Table>
ABN AMRO INVESTMENT GRADE BOND FUND --
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
SHAREHOLDER FEES
This table describes the fees paid directly from your investment.
<Table>
<Caption>
PRO FORMA --
ABN AMRO INDEPENDENCE ONE INDEPENDENCE ONE ABN AMRO
INVESTMENT GRADE U.S. GOVERNMENT U.S. GOVERNMENT INVESTMENT GRADE
BOND FUND SECURITIES FUND SECURITIES FUND BOND FUND
(CLASS I SHARES) (CLASS A SHARES) (CLASS B SHARES) (CLASS I SHARES)
---------------- ---------------- ---------------- ----------------
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering
price)......................... None 4.00% None None
Maximum Deferred Sales Charge
(Load) (as a percentage of
original purchase price or
redemption proceeds, as
applicable).................... None None 5.00% None
</Table>
If you redeem shares of the ABN AMRO Investment Grade Bond Fund by wire,
$20 will be deducted from the amount redeemed.
13
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
PRO FORMA --
ABN AMRO INDEPENDENCE ONE INDEPENDENCE ONE ABN AMRO
INVESTMENT GRADE U.S. GOVERNMENT U.S. GOVERNMENT INVESTMENT GRADE
BOND FUND SECURITIES FUND SECURITIES FUND BOND FUND
(CLASS I SHARES)* (CLASS A SHARES) (CLASS B SHARES) (CLASS I SHARES)
----------------- ---------------- ---------------- ----------------
Management Fees.................. 0.70% 0.70%(1) 0.70%(1) 0.70%
Distribution (12b-1) Fees........ None None 0.75% None
Shareholder Servicing Fee........ None None 0.25% None
Other Expenses................... 0.18% 0.58% 0.58% 0.18%
Total Annual Operating
Expenses............... 0.88% 1.28%(2) 2.28%(2) 0.88%
Contractual Waivers and/or
Reimbursements................. (0.31)% N/A N/A (0.31)%
Net Operating Expenses........... 0.57% N/A N/A 0.57%(3)
</Table>
- ---------------
* Calculated as of December 31, 2001 based on a pro forma budget.
(1) Independence One Capital voluntarily waived a portion of the management fee.
Independence One Capital may terminate this voluntary waiver at any time.
The management fee paid by the Fund (after the voluntary waiver) was 0.20%.
(2) Total annual operating expenses paid by the Fund (after the voluntary
waivers) were 0.78% and 1.78%, respectively, for the Fund's Class A Shares
and Class B Shares.
(3) The Reorganization Agreement provides that the ABN AMRO Investment Grade
Bond Fund's net operating expenses will not exceed levels calculated as of
the date of the Reorganization for four full calendar quarters following the
Reorganization. Because the above expense information is calculated as of
December 31, 2001, the actual expense limit may be higher or lower than
shown.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for applicable periods. Although your actual costs
may be higher or lower, based on these assumptions you would pay the following
expenses if you redeem all of your shares at the end of the time periods
indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
ABN AMRO Investment Grade Bond Fund
(Class I
Shares).......................................... $ 58 $250 $ 457 $1,056
Independence One U.S. Government Securities Fund
(Class A Shares)................................. 130 406 702 1,545
(Class B Shares)................................. 231 712 1,220 2,615
Pro Forma -- ABN AMRO Investment Grade Bond Fund
(Class I Shares)................................. 58 250 457 1,056
</Table>
14
ABN AMRO SELECT SMALL CAP FUND
INDEPENDENCE ONE SMALL CAP FUND
SHAREHOLDER FEES
This table describes the fees paid directly from your investment.
<Table>
<Caption>
ABN AMRO SELECT INDEPENDENCE ONE PRO FORMA -- ABN AMRO
SMALL CAP FUND SMALL CAP FUND SELECT SMALL CAP
(CLASS N SHARES) (CLASS A SHARES) FUND (CLASS N SHARES)
---------------- ---------------- ---------------------
Maximum Sales Charge (Load) Imposed on
Purchases (as a percentage of
offering price)...................... None 4.00% None
</Table>
If you redeem shares of the ABN AMRO Select Small Cap Fund by wire, $20
will be deducted from the amount redeemed.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
ABN AMRO SELECT INDEPENDENCE ONE PRO FORMA -- ABN AMRO
SMALL CAP FUND SMALL CAP FUND SELECT SMALL CAP
(CLASS N SHARES)* (CLASS A SHARES) FUND (CLASS N SHARES)
----------------- ---------------- ---------------------
Management Fees........................ 0.50% 0.50% 0.50%
Distribution (12b-1) Fees.............. 0.25% None 0.25%
Other Expenses......................... 0.27% 0.54%(1) 0.27%
Total Annual Operating Expenses........ 1.02% 1.04%(2) 1.02%
Contractual Waivers and/or
Reimbursements....................... (0.09)% N/A (0.09)%
Net Operating Expenses................. 0.93% N/A 0.93%(3)
</Table>
- ---------------
* Calculated as of December 31, 2001 based on a pro forma budget.
(1) Independence One Capital voluntarily waived a portion of the management fee.
Independence One Capital may terminate this voluntary waiver at any time.
The management fee paid by the Fund (after the voluntary waiver) was 0.49%.
(2) Total annual operating expenses paid by the Fund (after the voluntary
waiver) were 1.03%.
(3) The Reorganization Agreement provides that the ABN AMRO Select Small Cap
Fund's net operating expenses will not exceed levels calculated as of the
date of the Reorganization for four full calendar quarters following the
Reorganization. Because the above expense information is calculated as of
December 31, 2001, the actual expense limit may be higher or lower than
shown.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for applicable periods. Although your actual costs
may be higher or lower, based on these assumptions you would pay the following
expenses if you redeem all of your shares at the end of the time periods
indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
ABN AMRO Select Small Cap Fund (Class N Shares)...... $ 95 $316 $554 $1,240
Independence One Small Cap Fund (Class A Shares)..... 106 331 574 1,271
Pro Forma -- ABN AMRO Select Small Cap Fund (Class N
Shares)............................................ 95 316 554 1,240
</Table>
15
ABN AMRO EQUITY PLUS FUND
INDEPENDENCE ONE EQUITY PLUS FUND
SHAREHOLDER FEES
This table describes the fees paid directly from your investment.
<Table>
<Caption>
ABN AMRO INDEPENDENCE INDEPENDENCE INDEPENDENCE PRO FORMA --
EQUITY ONE EQUITY ONE EQUITY ONE EQUITY ABN AMRO
PLUS FUND PLUS FUND PLUS FUND PLUS FUND EQUITY PLUS
(CLASS I (TRUST CLASS (CLASS A (CLASS B FUND (CLASS
SHARES) SHARES) SHARES) SHARES) I SHARES)
--------- ------------ ------------ ------------ ------------
Maximum Sales Charge (Load)
Imposed on Purchases (as a
percentage of offering price)... None None 4.00% None None
Maximum Deferred Sales Charge
(Load) (as a percentage of
original purchase price or
redemption proceeds, as
applicable)..................... None None None 5.00% None
</Table>
If you redeem shares of the ABN AMRO Equity Plus Fund by wire, $20 will be
deducted from the amount redeemed.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
ABN AMRO INDEPENDENCE INDEPENDENCE INDEPENDENCE PRO FORMA --
EQUITY ONE EQUITY ONE EQUITY ONE EQUITY ABN AMRO
PLUS FUND PLUS FUND PLUS FUND PLUS FUND EQUITY PLUS
(CLASS I (TRUST CLASS (CLASS A (CLASS B FUND (CLASS
SHARES)* SHARES) SHARES) SHARES) I SHARES)
--------- ------------ ------------ ------------ ------------
Management Fees................... 0.40% 0.40%(1) 0.40%(1) 0.40%(1) 0.40%
Distribution (12b-1) Fees......... None None 0.25% 0.75% None
Shareholder Servicing Fee......... None None None 0.25% None
Other Expenses.................... 0.12% 0.30% 0.30% 0.30% 0.12%
Total Annual Operating Expenses... 0.52% 0.70%(2) 0.95%(2) 1.70%(2) 0.52%(3)
</Table>
- ---------------
* Calculated as of December 31, 2001 based on a pro forma budget.
(1) Independence One Capital voluntarily waived a portion of the management fee.
The management fee actually paid (after the voluntary waiver) was 0.30%.
(2) Total annual operating expenses paid by the Fund (after the voluntary
waivers) were 0.60%, 0.85% and 1.60%, respectively, for the Fund's Trust
Class Shares, Class A and Class B Shares.
(3) The Reorganization Agreement provides that the ABN AMRO Equity Plus Fund's
net operating expenses will not exceed levels calculated as of the date of
the Reorganization for four full calendar quarters following the
Reorganization. Because the above expense information is calculated as of
December 31, 2001, the actual expense limit may be higher or lower than
shown.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for
16
applicable periods. Although your actual costs may be higher or lower, based on
these assumptions you would pay the following expenses if you redeem all of your
shares at the end of the time periods indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ---- ------ ------- ------- --------
ABN AMRO Equity Plus Fund (Class I Shares).................. $ 53 $167 $291 $ 653
Independence One Equity Plus Fund (Trust Class Shares)...... 72 224 390 871
(Class A Shares).......................................... 97 303 525 1,166
(Class B Shares).......................................... 173 536 923 2,009
Pro Forma -- ABN AMRO Equity Plus Fund (Class I Shares)..... 53 167 291 653
</Table>
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND --
INDEPENDENCE ONE PRIME MONEY MARKET FUND
SHAREHOLDER FEES
There are no sales charges imposed on purchases, redemptions or exchanges.
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
This table describes the expenses that you may pay indirectly if you hold
Fund shares.
<Table>
<Caption>
PRO FORMA -- PRO FORMA --
ABN AMRO ABN AMRO ABN AMRO ABN AMRO
INSTITUTIONAL INSTITUTIONAL INDEPENDENCE ONE INDEPENDENCE ONE INSTITUTIONAL INSTITUTIONAL
PRIME MONEY PRIME MONEY PRIME MONEY PRIME MONEY PRIME MONEY PRIME MONEY
MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND MARKET FUND
(CLASS Y (CLASS YS (CLASS Y (CLASS K (CLASS Y (CLASS YS
SHARES) SHARES) SHARES) SHARES) SHARES) SHARES)
------------- ------------- ---------------- ---------------- ------------- -------------
Management Fees....... 0.10% 0.10% 0.40%(1) 0.40%(1) 0.10% 0.10%
Distribution (12b-1)
Fees................ None None None None None None
Other Expenses........ 0.08% 0.33% 0.20% 0.45% 0.08% 0.33%
Total Annual Operating
Expenses............ 0.18% 0.43% 0.60%(2) 0.85% 0.18%(3) 0.43%(3)
</Table>
- ---------------
(1) Independence One Capital voluntarily waived a portion of the management fee.
Independence One Capital can terminate this voluntary waiver at any time.
The management fee paid by the Fund (after the voluntary waiver) was 0.15%.
(2) Total annual operating expenses paid by the Fund (after the voluntary
waivers) were 0.35% and 0.60%, respectively, for the Fund's Class Y Shares
and Class K Shares.
(3) AAAM is contractually obligated to waive management fees and/or reimburse
expenses at least through September 30, 2002 at the rate shown in the table.
EXAMPLE
The example below is intended to help you compare the cost of investing in
each Fund with the cost of investing in other mutual funds. The example assumes
that you invest $10,000 in each Fund for the time periods indicated, that your
investment has a 5% return each year and that each Fund's Annual Operating
Expenses remain the same as shown above. The example reflects contractual
waivers and reimbursements for
17
applicable periods. Although your actual costs may be higher or lower, based on
these assumptions you would pay the following expenses if you redeem all of your
shares at the end of the time periods indicated:
<Table>
<Caption>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
ABN AMRO Institutional Prime Money Market Fund
(Class Y Shares).......................................... $18 $ 58 $101 $ 230
(Class YS Shares)......................................... 44 138 241 542
Independence One Prime Money Market Fund
(Class Y Shares).......................................... 61 192 335 750
(Class K Shares).......................................... 87 271 471 1,049
Pro Forma -- ABN AMRO Institutional Prime Money Market
(Class Y Shares).......................................... 18 58 101 230
(Class YS Shares)......................................... 44 138 241 542
</Table>
INVESTMENT ADVISERS
AAAM is a direct, wholly-owned subsidiary of LaSalle National Association
(which is an indirect, wholly-owned subsidiary of ABN AMRO Holding N.V.) and the
investment adviser to the ABN AMRO Funds. AAAM is registered as an investment
adviser under the Investment Advisers Act of 1940 (the "Advisers Act"). AAAM,
located at 161 North Clark Street, Chicago, Illinois 60601 had approximately
$9.2 billion in assets under management as of December 31, 2001.
Independence One Capital is a direct, wholly-owned subsidiary of ABN AMRO
North America, Inc. (which is an indirect, wholly-owned subsidiary of ABN AMRO
Holding N.V.) and the investment adviser to the Independence One Funds.
Independence One Capital is registered as an investment adviser under the
Advisers Act. Independence One Capital had approximately $10.6 billion in
custodial assets under management as of December 31, 2001.
SUBADVISER
thinkorswim Advisors, Inc. (formerly known as Sosnoff-Sheridan Corp.),
serves as subadviser of the ABN AMRO Select Small Cap Fund and the ABN AMRO
Equity Plus Fund pursuant to sub-advisory agreements with AAAM. thinkorswim
Advisors, located at 440 South LaSalle Street, Chicago, Illinois 60605, has
managed mutual funds since 1995. thinkorswim Advisors is controlled by Tom
Sosnoff, its Director and President, and Scott Sheridan, its Director, Executive
Vice-President and Secretary.
PORTFOLIO MANAGERS
<Table>
<Caption>
FUND NAME PORTFOLIO MANAGER(S) INVESTMENT EXPERIENCE
--------- -------------------- ---------------------------------------------
ABN AMRO Treasury Money Market
Fund......................... Karen Van Cleave Portfolio Manager of the Fund since January
1994; Senior Vice President of AAAM. Ms. Van
Cleave earned her B.S. in Business
Administration from Boston University.
ABN AMRO International Equity
Fund......................... Maarten Bloemen Co-Portfolio Manager of the Fund since
October 2000. Mr. Bloemen has been associated
with AAAM and/or its affiliates since 1989 as
an analyst and portfolio manager. Mr. Bloemen
holds a Master's and a Bachelor degree in
Environmental Planning.
</Table>
18
<Table>
<Caption>
FUND NAME PORTFOLIO MANAGER(S) INVESTMENT EXPERIENCE
--------- -------------------- ---------------------------------------------
Theo Maas Co-Portfolio Manager of the Fund since April
1999. Mr. Maas has been associated with AAAM
and/or its affiliates since 1994. He holds a
Master's degree in Financial Economics from
the University of Groningen.
Jacco Maters Co-Portfolio Manager of the Fund since
November 1999. Mr. Maters has been associated
with AAAM and/or its affiliates since July
1996. Mr. Maters has a degree in Econometrics
from the Tilburg University, The Netherlands.
Edward Moolenburgh Co-Portfolio Manager of the Fund since April
1999. Mr. Moolenburgh has been associated
with AAAM and/or its affiliates since 1993.
Mr. Moolenburgh holds a Master's degree from
the Economics Faculty of the Erasmus
University in Rotterdam.
Edward Niehoff Co-Portfolio Manager of the Fund since April
1999. Mr. Niehoff has been associated with
AAAM and/or its affiliates since 1993. He
holds a Master's degree in Technical
Management Studies and is a Certified
European Financial Analyst.
Loes Pals-de Groot Co-Portfolio Manager of the Fund since April
1999. Mr. Pals-de Groot has been associated
with AAAM and/or its affiliates since 1971 in
various investment management positions. Mr.
Pals-de Groot holds a degree in Business
Economics from the Institut voor Sociale
Wetenschappen.
Wiepke Postma Co-Portfolio Manager since April 1999. Mr.
Postma served as portfolio manager for the
Fund from March 1997 to April 1999. In 1984,
he joined ABM AMRO Bank's Asset Management
Department and was appointed Vice President
in the same year. Mr. Postma holds a Master's
degree in Economics.
Jaap van der Geest Co-Portfolio Manager of the Fund since
October 2000; Vice President of AAAM. Mr. van
der Geest has been associated with AAAM
and/or its affiliates since 1990. Mr. van der
Geest has a Master's degree in Macro-
Economics and Business Administration from
the University of Groningen.
</Table>
19
<Table>
<Caption>
FUND NAME PORTFOLIO MANAGER(S) INVESTMENT EXPERIENCE
--------- -------------------- ---------------------------------------------
Wouter van der Veen Co-Portfolio Manager of the Fund since
October 2000; Senior Vice President of AAAM.
Mr. van der Veen has been associated with
AAAM and/or its affiliates since 1987, when
he began his career as an equity analyst
covering European banks. Since 2000, Mr. van
der Veen has worked for AAAM as a co-leader
of the Global Equities team. Mr. van der Veen
holds a Master's degree in economics from the
University of Groningen.
ABN AMRO Investment Grade Bond Thomas J. Marthaler,
Fund......................... CFA Portfolio Manager of the Fund since
inception; Senior Managing Director of
Chicago Capital Management, Inc., which is a
member of the ABN AMRO group of companies.
Mr. Marthaler has been associated with AAAM
and/or its affiliates since 1981. He has
managed fixed income investment portfolios
since 1984. Mr. Marthaler has an MBA from
Loyola University.
ABN AMRO Select Small Cap
Fund......................... Team Managed
ABN AMRO Equity Plus Fund...... Team Managed
ABN AMRO Institutional Prime
Money Market Fund............ Karen Van Cleave Portfolio Manager of the Fund since
inception. Ms. Van Cleave's investment
experience is discussed above.
</Table>
20
INVESTMENT ADVISORY FEES
The following table compares management fees paid to AAAM for each ABN AMRO
Fund and to Independence One Capital for each Independence One Fund. The table
shows fees before any waivers or reimbursements ("Total") and fees after any
waivers or reimbursements ("Net"). The fees listed are as of the dates stated in
the footnotes following the table.
<Table>
<Caption>
ABN AMRO FUNDS FEE INDEPENDENCE ONE FUNDS(3) FEE
-------------- --- ------------------------- ---
ABN AMRO Treasury Money Independence One U.S. Treasury Money
Market Fund Market Fund
Total................................ 0.35% Total................................ 0.40%
Net.................................. 0.25%(1) Net.................................. 0.40%
Independence One International Equity
ABN AMRO International Equity Fund Fund
Total................................ 1.00% Total................................ 1.00%
Net.................................. 0.90%(1) Net.................................. 0.55%
ABN AMRO Investment Grade Bond Fund Independence One Fixed Income Fund
Total................................ 0.70% Total................................ 0.75%
Net.................................. 0.39%(2) Net.................................. 0.30%
Independence One U.S. Government
ABN AMRO Investment Grade Bond Fund Securities Fund
Total................................ 0.70% Total................................ 0.70%
Net.................................. 0.39%(2) Net.................................. 0.20%
ABN AMRO Select Small Cap Fund Independence One Small Cap Fund
Total................................ 0.50% Total................................ 0.50%
Net.................................. 0.41%(2) Net.................................. 0.50%
ABN AMRO Equity Plus Fund Independence One Equity Plus Fund
Total................................ 0.40% Total................................ 0.40%
Net.................................. 0.40%(2) Net.................................. 0.30%
ABN AMRO Institutional Prime Money Independence One Prime Money Market
Market Fund Fund
Total................................ 0.10% Total................................ 0.40%
Net.................................. 0.10%(1) Net.................................. 0.15%
</Table>
- ---------------
(1) As of December 31, 2001. Net fees for the Existing ABN AMRO Funds are based
on AAAM's contractual agreement to limit its fees through September 30, 2002
or 2003, as the case may be.
(2) Based on a pro forma budget. Net fees for the New ABN AMRO Funds are
calculated as of December 31, 2001, and are based on total expense limits
provided for in the Reorganization Agreement for four full calendar quarters
following the Reorganization.
(3) As of April 30, 2001. Net fees for the Independence One Funds are based on
Independence One Capital's voluntary waiver of a portion of management fees.
Independence One Capital can terminate these voluntary waivers at any time.
RULE 12B-1 DISTRIBUTION PLAN
To pay for the cost of promoting the ABN AMRO Funds and servicing
shareholder accounts, the ABN AMRO Funds have adopted a Rule 12b-1 distribution
plan for their Class N Shares. Under the plan, an annual fee of not more than
0.25% may be paid out of each ABN AMRO Fund's average daily net assets
attributable to Class N Shares to reimburse the Fund's distributor for expenses
it incurs in connection with the distribution of Class N Shares and for
shareholder services. The other classes of the ABN AMRO Funds do not have any
Rule 12b-1 fees.
The ABN AMRO Funds' Rule 12b-1 distribution plan is somewhat different than
the Independence One Funds' Rule 12b-1 distribution plan for Class K Shares and
Class B Shares. The Independence One Funds'
21
plan provides for an annual fee of up to 0.25% and 0.75% of each Fund's average
daily net assets attributable to Class K Shares and Class B Shares,
respectively. Unlike the ABN AMRO Funds' plan, the plan is a compensation-type
plan and the fees are used to pay the distributor for certain
distribution-related expenses and shareholder services. Payments to the
distributor under the plan may be more or less than actual expenses incurred.
However, the Independence One Funds' Class K Shares have not historically paid
or accrued any Rule 12b-1 fees. Class A Shares, Trust Class Shares and Class Y
Shares of each Independence One Fund do not have any Rule 12b-1 fees.
SHAREHOLDER SERVICING PLAN
To pay for the cost of various shareholder services, the ABN AMRO Funds
have adopted a shareholder servicing plan for their Class YS Shares. Under the
plan, an annual fee of up to 0.25% is paid out of each ABN AMRO Fund's average
daily net assets attributable to Class YS Shares to pay the Fund's distributor
or other service providers for performing shareholder services. The ABN AMRO
Funds' distributor may waive all or a portion of the shareholder servicing fee
and may discontinue its waiver at any time. Class N Shares, Class I Shares and
Class Y Shares of each ABN AMRO Fund do not have any shareholder servicing fees.
The ABN AMRO Trust's shareholder servicing plan is similar to the
Independence One Trust's shareholder services plan for Class B shares and Class
K shares. The Independence One Trust's plan provides for an annual fee up to
0.25% of each Fund's average daily net assets attributable to Class B Shares and
Class K Shares to pay Independence One Capital or other service providers for
providing shareholder services and maintaining shareholder accounts. However,
the Independence One Funds' Class K Shares have not historically paid or accrued
shareholder services fees. Class A Shares, Trust Class Shares and Class Y Shares
of each Independence One Fund do not have any shareholder services fees.
PERFORMANCE
The following tables show the Funds' average annual total returns over
different periods and show how the Funds' performance compares with relevant
broad-based market indices, as applicable. The performance of the Funds and the
indices vary over time, and past performance is not necessarily indicative of
future results. The Funds' figures assume reinvestment of dividends and
distributions.
For a more complete discussion of how the Existing ABN AMRO Funds have
performed, please read management's discussion of the Existing ABN AMRO Funds'
performance attached hereto as Exhibit B and the ABN AMRO Funds' Annual Report,
which is incorporated by reference into this Proxy Statement/ Prospectus and is
available without charge by calling 1-800-992-8151.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR 5 YEARS 10 YEARS INCEPTION
- ---- ------ ------- -------- ---------
ABN AMRO Treasury Money Market Fund -- Class I(1)........... 3.69% 4.81% N/A 4.47%(2)
Independence One U.S. Treasury Money Market Fund -- Class
K......................................................... 3.39% 4.65% 4.31% 4.89%(3)
iMoneyNet U.S. Treasury Retail Average...................... 3.55% 4.52% N/A 4.30%(4)
</Table>
- -------------------------
(1) The common share class of the ABN AMRO Treasury Money Market Fund was
reorganized into the Class I shares of the Fund on September 27, 2001, and
the Fund adopted the name of the predecessor. All performance figures
through September 27, 2001 represent the performance of the common share
class of the predecessor fund.
(2) The ABN AMRO Treasury Money Market Fund's inception was January 4, 1993.
(3) The Independence One U.S. Treasury Money Market Fund's inception was June 1,
1989.
(4) iMoneyNet U.S. Treasury Retail Average data computed from December 31, 1992.
22
AVERAGE ANNUAL TOTAL RETURN
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR 5 YEARS INCEPTION
- ---- -------- ------- ---------
ABN AMRO International Equity Fund Class N(1).............. (27.78)% 0.72% 6.06% (2)
Independence One International Equity Fund -- Class A(3).... (23.06)% N/A (0.29)%(4)
MSCI EAFE Index............................................. (21.44)% 0.89% 6.49% (5)
Lipper International Fund Index............................. (19.33)% 2.76% 7.96% (5)
</Table>
- -------------------------
(1) The common share class and investor share class of the ABN AMRO
International Equity Fund were reorganized into the Class N shares of the
Fund on September 27, 2001, and the Fund adopted the name of the
predecessor. All performance figures through September 27, 2001 represent
the performance of the common share class of the predecessor fund.
(2) The ABN AMRO International Equity Fund's inception was January 4, 1993.
(3) The returns for the Independence One International Equity Fund reflect the
deduction of applicable sales charges.
(4) The Independence One International Equity Fund's inception was September 25,
1998.
(5) Morgan Stanley Capital International Europe, Australia and Far East
Accumulation Index (MSCI-EAFE Index) and Lipper International Fund Index
data computed from December 31, 1992.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR 5 YEARS INCEPTION
---- ------ ------- ---------
ABN AMRO Investment Grade Bond Fund -- Class I(1)........... N/A N/A N/A
Independence One Fixed Income Fund -- Trust Class........... 7.88% 6.20% 6.01%(2)
ML 1-10 USCG(3)............................................. 10.02% 7.23% 7.01%
</Table>
- ---------------
(1) The ABN AMRO Investment Grade Bond Fund has not commenced operations, and
thus, does not have any return figures to report.
(2) The Independence One Fixed Income Fund's Trust Class shares' inception was
October 23, 1995. Returns for the Fund's Class B shares are not disclosed
because the class has only been offered since August 7, 2001. Returns for
the Fund's Class A shares are not disclosed because the class has only been
offered since May 1, 2001 and the class has no current activity.
(3) The Merrill Lynch 1-10 Year U.S. Corporate/Government Bond Index (ML 1-10
USCG) is an unmanaged index that tracks government securities between 1 and
9.99 years. ML 1-10 USCG's inception is computed from October 31, 1995.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR 5 YEARS INCEPTION
---- ------ ------- ---------
ABN AMRO Investment Grade Bond Fund -- Class I(1)........... N/A N/A N/A
Independence One U.S. Government Securities Fund -- Class
A(2)...................................................... 5.91% 6.64% 6.45%(3)
MLUSTA(4)................................................... 6.74% 7.34% 7.09%
</Table>
- ---------------
(1) The ABN AMRO Investment Grade Bond Fund has not commenced operations, and
thus, does not have any return figures to report.
(2) The returns for the Independence One U.S. Government Securities
Fund -- Class A shares reflect the deduction of applicable sales charges.
(3) The Independence One U.S. Government Securities Fund -- Class A shares'
inception was January 11, 1993.
(4) The Merrill Lynch U.S. Treasury/Agency Master Index (MLUSTA) is an unmanaged
index that tracks U.S. government securities. MLUSTA's inception computed
from December 31, 1992.
23
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR INCEPTION
---- ------ ---------
ABN AMRO Select Small Cap Fund -- Class N(1)................ N/A N/A
Independence One Small Cap Fund -- Class A(2)............... 4.67% 6.22%(3)
S&P 600(4).................................................. 6.51% 6.46%
</Table>
- ---------------
(1) The ABN AMRO Select Small Cap Fund has not commenced operations, and thus,
does not have any return figures to report.
(2) The returns for the Independence One Small Cap Fund reflect the deduction of
applicable sales charges.
(3) The Independence One Small Cap Fund's inception was June 22, 1998.
(4) The Standard & Poor's Small Cap 600 Composite Stock Price Index (S&P 600) is
an unmanaged, market capitalization -- weighted index of 600 common stocks
from a variety of economic sectors and industrial groups. S&P 600's
inception computed from June 30, 1998.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR INCEPTION
- ---- -------- ---------
ABN AMRO Equity Plus Fund -- Class I(1)..................... N/A N/A
Independence One Equity Plus Fund -- Class B(2)............. (15.80)% (7.43)%(3)
S&P 100(4).................................................. (14.88)% (9.02)%
</Table>
- -------------------------
(1) The ABN AMRO Equity Plus Fund has not commenced operations, and thus, does
not have any return figures to report.
(2) The returns for the Independence One Equity Plus Fund -- Class B shares
reflect the deduction of applicable sales charges.
(3) The Independence One Equity Plus Fund's Class B shares' inception was
October 20, 1999.
(4) The Standard & Poor's 100 Composite Stock Price Index (S&P 100) is an
unmanaged, market capitalization -- weighted index of 100 common stocks from
a broad range of industries. S&P 100's inception computed from October 31,
1999.
AVERAGE ANNUAL TOTAL RETURNS
FOR THE PERIODS ENDED DECEMBER 31, 2001
<Table>
<Caption>
SINCE
FUND 1 YEAR 5 YEARS 10 YEARS INCEPTION
- ---- ------ ------- -------- ---------
ABN AMRO Institutional Prime Money Market Fund -- Class Y.. 4.12% N/A N/A 5.22%(1)
ABN AMRO Institutional Prime Money Market Fund -- Class
YS....................................................... 3.86% N/A N/A 4.72%(1)
Independence One Prime Money Market Fund -- Class Y........ 3.92% 5.18% N/A 5.25%(2)
Independence One Prime Money Market Fund -- Class K........ 3.67% 4.92% 4.48% 5.08%(2)
iMoneyNet Taxable Institutional Average.................... 3.79% 5.03% 4.77% 4.91%(3)
</Table>
- -------------------------
(1) The ABN AMRO Institutional Prime Money Market Fund's Class Y shares'
inception was December 28, 1999; the Fund's Class YS shares' inception was
June 29, 2000.
(2) The Independence One Prime Money Market Fund's Class Y shares and Class K
shares' inceptions were May 1, 1995 and June 1, 1989, respectively.
(3) iMoneyNet Taxable Institutional Average data computed from December 31,
1999.
24
THE FUNDS' PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
PURCHASE PROCEDURES
Independence One Funds. Shares may be purchased through an investment
professional, Standard Financial Services, a division of ABN AMRO Financial
Services, Inc. ("Standard Financial Services"), through brokers or dealers who
have a sales arrangement with Federated or by wire. Class A Shares are sold at
net asset value plus a front-end sales charge of up to 4.00% of the offering
price. The sales charge may be reduced or eliminated in certain circumstances.
Class B Shares are sold at net asset value and may be subject to a sales charge
("CDSC") of up to 5.00% of the original purchase price or redemption proceeds,
as applicable, upon redemption. Under certain circumstances, shareholders will
not be charged a CDSC when redeeming Class B Shares. In addition, Class B Shares
automatically convert to Class A Shares after six full years from the purchase
date. Trust Class Shares, Class K Shares and Class Y Shares are sold at net
asset value.
The minimum initial purchase requirement is $1,000 (with the exception of
the Independence One Prime Money Market Fund (Class Y Shares), which is
$1,000,000). Subsequent investments must be at least $100. Shares purchased
through regular deductions from a checking account (i.e., Systematic Investment
Program) may be purchased on a regular basis for a minimum investment of $100.
Shares of the Independence One Prime Money Market and U.S. Treasury Money Market
Funds may also be purchased through sweep accounts with participating depository
institutions.
Independence One Fund shares may be purchased on any business day at a
price per share equal to the net asset value ("NAV"), less any applicable sales
charge, next determined after the Independence One Trust receives a purchase
order in proper form. The NAV of each Independence One Fund is calculated once
each business day as of the close of regular trading on the New York Stock
Exchange ("NYSE") (normally, 4:00 p.m. Eastern time). The NAV per share is
calculated by dividing the total market value of each Fund's investments and
other assets, less any liabilities, by the total outstanding shares of that
Fund.
ABN AMRO Funds. Class N Shares and Class I Shares may be purchased
directly from the ABN AMRO Trust by mail, telephone, wire or Internet. Class N
Shares and Class I Shares may also be purchased through broker-dealers, banks
and trust departments. Class Y Shares and Class YS Shares may be purchased by
telephone or wire through an Institutional Fund Representative.
The minimum initial purchase requirement for Class N Shares is $2,500 for
regular accounts and $500 for individual retirement accounts and custodial
accounts for minors. Class N Shares purchased through regular deductions from a
checking account (i.e., Automatic Investment Plan) may be purchased for a
minimum investment of $50 per month. The minimum initial purchase requirement
for Class I Shares is from $1,000,000 to $5,000,000. The minimum initial
purchase requirement for Class Y Shares and Class YS Shares is $5,000,000. These
minimum initial purchase requirements will not apply in connection with the
Reorganization.
ABN AMRO Fund shares may be purchased on any business day at a price per
share equal to the NAV next determined after the ABN AMRO Trust receives a
purchase order and payment. The NAV of each ABN AMRO Fund is calculated once
each business day as of the close of regular trading on the NYSE (normally, 4:00
p.m. Eastern time). The NAV per share is calculated by dividing the total market
value of each Fund's investments and other assets, less any liabilities, by the
total outstanding shares of that Fund or class, as applicable.
EXCHANGE PRIVILEGES
Independence One Funds. Shareholders may exchange shares of one
Independence One Fund for the same class of shares of another Independence One
Fund. In addition, shareholders may exchange Class B Shares of the Independence
One Funds into the Independence One Treasury Money Market Fund and Class A
Shares into the Federated Michigan Intermediate Municipal Trust, and shares of
any of the
25
Independence One money market funds have access to these Funds through an
exchange program. Exchanges may be made by mail or through an investment
professional or Independence One Brokerage. The exchange price is the next NAV
determined after the Independence One Trust receives the exchange request.
Shareholders must meet the minimum initial investment requirements for
purchasing shares of another Independence One Fund. The Independence One Trust
requires a signature guarantee when exchanging into another Fund with a
different shareholder registration. The Independence One Funds reserve the right
to terminate or modify the exchange privilege at any time.
ABN AMRO Funds. Shareholders may exchange shares of one ABN AMRO Fund for
the same class of shares of another ABN AMRO Fund. Exchanges may be made by
mail, telephone (if the Class N or Class I shareholder has selected this option)
or Internet on any business day. The exchange price is the NAV next determined
after the ABN AMRO Trust receives the exchange request. Exchanges to open new
accounts must meet the minimum initial purchase requirements. The ABN AMRO Trust
may require a written exchange request with a medallion signature guarantee from
an eligible guarantor (a notarized signature is not sufficient) for any
exchanges of more than $50,000. The ABN AMRO Trust may limit, impose charges
upon, terminate or otherwise modify the exchange privilege by sending written
notice to shareholders.
REDEMPTION PROCEDURES
Independence One Funds. Shareholders may redeem shares on any business day
by mail, telephone or through an investment professional or Standard Financial
Services. The redemption price will be the NAV next determined after the
Independence One Trust receives the redemption request. Class B Shares are
subject to a CDSC, as discussed above. Redemptions may also be made through a
Systematic Withdrawal Program in amounts directed by the shareholder on a
regular basis, subject to required minimum distributions. The Systematic
Withdrawal Program requires that a shareholder's account have a value of $10,000
or more. If a shareholder's account balance drops below the minimum initial
investment amount due to redemptions or exchanges, including redemptions made
through a Systematic Withdrawal Program, the Independence One Trust may close
the shareholder's account. However, the shareholder will be given at least 30
days' notice to give him time to add to his account and avoid an involuntary
redemption.
If the shareholder's address of record has changed within the last 30 days,
or the shareholder requests that proceeds be sent to an address or an account
that is different from the address or account of record, the Independence One
Trust requires a written redemption request with a signature guarantee from an
eligible guarantor (a notarized signature is not sufficient).
ABN AMRO Funds. Class N and Class I shareholders may redeem shares on any
business day by mail, telephone, wire or Internet. Class Y and Class YS
shareholders may redeem shares on any business day by telephone or wire through
an Institutional Fund Representative. The redemption price will be the NAV next
determined after the ABN AMRO Trust receives the redemption request. Holders of
Class N shares of the ABN AMRO International Equity Fund will be assessed a 2%
fee on redemptions (including exchanges) of shares held for less than 90 days;
holders of Class N shares of the New ABN AMRO Funds will not be assessed a
redemption fee. Redemptions of Class N Shares also may be made through a
Systematic Withdrawal Plan in amounts of $50 or more from any Fund. The
Systematic Withdrawal Plan requires that a shareholder's account have a value of
$50,000 or more. If a Class N shareholder's account balance drops below $50 due
to redemptions, including redemptions made through a Systematic Withdrawal Plan,
the ABN AMRO Trust may redeem the shareholder's remaining shares and close the
account. If a Class I shareholder's account balance drops below the minimum
initial purchase requirement, the ABN AMRO Trust may transfer the shareholder's
account to a different class of shares. However, the shareholder will always be
given at least 30 days' notice to give him time to add to his account and avoid
an involuntary redemption or transfer, as the case may be. Pursuant to the
Reorganization Agreement, former shareholders of the Independence One Funds will
not be subject to involuntary redemptions for failing to maintain account
balances equal to the minimum initial purchase requirements established by the
ABN AMRO Funds.
If the shareholder's address of record has changed within the last 30 days,
the redemption request exceeds $50,000 or the shareholder requests that proceeds
be sent to an address or an account that is different from the
26
address of record, then ABN AMRO Trust may require a written redemption request
with a medallion signature guarantee from an eligible guarantor (a notarized
signature is not sufficient).
REDEMPTIONS IN KIND
Independence One Funds. The Independence One Trust has elected to pay
redemption proceeds in cash up to $250,000 or 1% of each Fund's total value
during any 90-day period for any one shareholder, whichever is less. Redemptions
in excess of this amount may be paid in marketable securities.
ABN AMRO Funds. The ABN AMRO Trust has also elected to pay redemption
proceeds in cash up to $250,000 or 1% of each Fund's total value during any
90-day period for any one shareholder, whichever is less. Because larger
redemptions may be detrimental to existing shareholders, the ABN AMRO Trust
reserves the right to make higher payments in the form of certain marketable
securities (a redemption in kind).
A redemption in kind will consist of securities equal in value to a
shareholder's shares. In the event that a redemption in kind were made,
shareholders would probably have to pay brokerage costs to sell the securities
distributed to them, as well as taxes on any gain from the sale.
DIVIDEND POLICIES
Independence One Funds. The Independence One Prime Money Market and U.S.
Treasury Money Market Funds declare dividends daily and pay them monthly. The
Independence One U.S. Government Securities and Fixed Income Funds declare and
pay dividends monthly. The Independence One Equity Plus Fund declares and pays
dividends quarterly. The Independence One Small Cap Fund declares and pays
dividends semi-annually. The Independence One International Equity Fund declares
and pays dividends annually. The Independence One Funds distribute capital gains
at least annually. Shareholders will receive dividends and distributions in the
form of additional shares unless they have elected to receive payment in cash.
ABN AMRO Funds. The ABN AMRO Treasury Money Market and Institutional Prime
Money Market Funds declare dividends daily and pay them monthly. The ABN AMRO
Investment Grade Bond Fund declares and pays dividends monthly. The ABN AMRO
Equity Plus and Select Small Cap Funds declare and pays dividends quarterly. The
ABN AMRO International Equity Fund declares and pays dividends annually. The ABN
AMRO Funds distribute capital gains, if any, at least annually in December.
Shareholders will receive dividends and distributions in the form of additional
shares unless they have elected to receive payment in cash.
INFORMATION RELATING TO THE REORGANIZATION
Description of the Reorganization. The following summary is qualified in
its entirety by reference to the Reorganization Agreement found in Exhibit A.
The Reorganization Agreement provides for the Reorganization to occur in two
steps. The first Closing Date, which is expected to be on or about June 1, 2002,
will involve each Independence One Fund that is combining with an Existing ABN
AMRO Fund. The second Closing Date, which is expected to be on or about June 8,
2002, will involve each Independence One Fund that is combining with a New ABN
AMRO Fund.
The Reorganization Agreement provides that all of the assets and
liabilities of each Independence One Fund will be transferred to the
corresponding ABN AMRO Fund at 8:00 a.m. Eastern time on the applicable Closing
Date of the Reorganization. In exchange for the transfer of these assets and
liabilities, ABN AMRO will simultaneously issue at the Effective Time of the
Reorganization a number of full and fractional Class N, Class I, Class S, Class
Y or Class YS shares, as applicable, of each ABN AMRO Fund to its corresponding
Independence One Fund equal in value to the aggregate net asset value of the
corresponding Independence One Fund calculated before the Effective Time of the
Reorganization.
27
Following the transfer of assets and liabilities in exchange for ABN AMRO
Fund shares, each Independence One Fund will distribute all the shares of the
corresponding ABN AMRO Funds pro rata to its shareholders of record in complete
liquidation. Shareholders of each Independence One Fund owning shares at the
Effective Time of the Reorganization will receive a number of shares of the
applicable class of the corresponding ABN AMRO Fund with the same aggregate
value as the shareholder had in the Independence One Fund immediately before the
Reorganization. Such distribution will be accomplished by the establishment of
accounts in the names of the Independence One Funds' shareholders on the share
records of the ABN AMRO Funds' transfer agent. Each account will receive the
respective pro rata number of full and fractional shares of the ABN AMRO Funds
due to the shareholders of the corresponding Independence One Funds. Each
Independence One Fund then will be terminated. The ABN AMRO Funds do not issue
share certificates to shareholders. Shares of the ABN AMRO Funds to be issued
will have no preemptive or conversion rights. No sales charges will be imposed
in connection with the receipt of such shares by the Independence One Funds'
shareholders.
The Reorganization Agreement contains customary representations, warranties
and conditions. The Reorganization Agreement provides that the consummation of
the Reorganization with respect to an Independence One Fund and its
corresponding ABN AMRO Fund is conditioned upon, among other things: (i)
approval of the Reorganization by the Independence One Fund's shareholders; (ii)
the receipt by the Independence One Trust and the ABN AMRO Trust of a tax
opinion to the effect that the Reorganization will be tax-free to the
Independence One Funds, their shareholders and the ABN AMRO Funds; and (iii)
receipt by the Independence One Trust and the ABN AMRO Trust of an order from
the SEC permitting the Reorganization. The Reorganization Agreement may be
terminated if, before the Closing Date, any of the required conditions have not
been met, the representations and warranties are not true or the Board of
Trustees of the Independence One Trust or the ABN AMRO Trust determines that the
Reorganization is not in the best interest of the shareholders of the
Independence One Funds or the ABN AMRO Funds, respectively.
Costs of Reorganization. The Funds' reorganization expenses will be paid
by AAAM and/or its affiliates. Reorganization expenses include, without
limitation: (a) expenses associated with the preparation and filing of this
Prospectus/Proxy Statement; (b) postage; (c) printing; (d) accounting fees; (e)
legal fees incurred by each Fund; (f) solicitation costs; and (g) other related
administrative or operational costs. AAAM and/or its affiliates will also pay
brokerage costs of any necessary rebalancing of the Funds' investment
portfolios.
FEDERAL INCOME TAXES
Each combination of an Independence One Fund and its corresponding ABN AMRO
Fund in the Reorganization is intended to qualify for U.S. federal income tax
purposes as a separate tax-free reorganization under Section 368(a) of the
Internal Revenue Code of 1986, as amended. If so, neither the Independence One
Funds nor their shareholders will recognize gain or loss as a result of the
Reorganization; the tax basis of the ABN AMRO Fund shares received by
shareholders will be the same as the basis of the Independence One Fund shares
exchanged; and the holding period of the ABN AMRO Fund shares received will
include the holding period of the Independence One Fund shares exchanged,
provided that the shares exchanged were held as capital assets at the time of
the Reorganization. As a condition to the closing of the Reorganization, the
Independence One Trust and the ABN AMRO Trust will receive an opinion from
counsel to the ABN AMRO Trust to that effect. No tax ruling from the Internal
Revenue Service regarding the Reorganization has been requested. The opinion of
counsel is not binding on the Internal Revenue Service and does not preclude the
Internal Revenue Service from adopting a contrary position.
THE SALE OF SECURITIES BY THE INDEPENDENCE ONE FUNDS BEFORE THE
REORGANIZATION, WHETHER IN THE ORDINARY COURSE OF BUSINESS OR IN ANTICIPATION OF
THE REORGANIZATION, COULD RESULT IN A TAXABLE CAPITAL GAINS DISTRIBUTION BEFORE
THE REORGANIZATION. SHAREHOLDERS SHOULD CONSULT THEIR OWN TAX
28
ADVISERS CONCERNING THE POTENTIAL TAX CONSEQUENCES OF THE REORGANIZATION TO
THEM, INCLUDING FOREIGN, STATE AND LOCAL TAX CONSEQUENCES.
CAPITALIZATION
The following table sets forth as of December 31, 2001: (i) the unaudited
capitalization of each ABN AMRO Fund; (ii) the unaudited capitalization of each
Independence One Fund; and (iii) the unaudited pro forma combined capitalization
of the ABN AMRO Funds assuming the Reorganization has taken place. The
capitalizations are likely to be different on the Closing Date as a result of
daily share purchase and redemption activity.
<Table>
<Caption>
NET ASSET VALUE SHARES
FUND NET ASSETS PER SHARE OUTSTANDING
---- -------------- --------------- -------------
ABN AMRO Treasury Money Market Fund -- Class I
Shares......................................... $ 266,027,369 $ 1.00 266,020,939
Independence One U.S. Treasury Money Market
Fund -- Class K Shares......................... $ 103,497,118 $ 1.00 103,504,479
Pro Forma -- ABN AMRO Treasury Money Market
Fund -- Class I Shares......................... $ 369,524,487 $ 1.00 369,525,418
- -------------------------------------------------------------------------------------------------------
ABN AMRO International Equity Fund -- Class N
Shares......................................... $ 73,042,734 $12.03 6,072,803
Independence One International Equity Fund --
Class A Shares................................. $ 16,428,341 $ 8.84 1,857,935
Pro Forma -- ABN AMRO International Equity
Fund -- Class N Shares......................... $ 89,471,074 $12.03 7,437,330
- -------------------------------------------------------------------------------------------------------
ABN AMRO Investment Grade Bond Fund -- Class I
Shares......................................... N/A N/A N/A
Independence One Fixed Income Fund
Trust Class Shares............................. $ 86,099,314 $10.01 8,604,626
Class B Shares................................. $ 5,277 $10.01 527
-------------- -------------
Total..................................... $ 87,104,591 N/A 8,605,153
Independence One U.S. Government Securities Fund
Class A Shares................................. $ 37,285,570 $10.33 3,610,081
Class B Shares................................. 479,520 $10.33 46,429
-------------- -------------
Total..................................... $ 37,765,090 N/A 3,656,510
Pro Forma -- ABN AMRO Investment Grade Bond
Fund -- Class I Shares......................... $ 123,869,681 $10.01 12,379,335
- -------------------------------------------------------------------------------------------------------
ABN AMRO Select Small Cap Fund -- Class N
Shares......................................... N/A N/A N/A
Independence One Small Cap Fund -- Class A
Shares......................................... $ 42,559,595 $ 9.94 4,283,529
Pro Forma -- ABN AMRO Select Small Cap Fund --
Class N Shares................................. $ 42,559,595 $ 9.94 4,283,529
ABN AMRO Equity Plus Fund Class I Shares......... N/A N/A N/A
Independence One Equity Plus Fund
Trust Class Shares............................. $ 1,141,774 $17.23 66,275
Class A Shares................................. 5,521,870 17.11 332,793
Class B Shares................................. 228,828,661 17.23 13,282,949
-------------- -------------
Total..................................... $ 235,492,305 N/A 13,672,017
Pro Forma -- ABN AMRO Equity Plus Fund Class I
Shares......................................... $ 235,492,305 $17.22 13,675,511
- -------------------------------------------------------------------------------------------------------
</Table>
29
<Table>
<Caption>
NET ASSET VALUE SHARES
FUND NET ASSETS PER SHARE OUTSTANDING
---- -------------- --------------- -------------
ABN AMRO Institutional Prime Money Market Fund
Class Y Shares................................. $1,486,922,805 $ 1.00 1,486,922,839
Class YS Shares................................ 91,957,817 $ 1.00 91,957,813
-------------- -------------
Total..................................... $1,578,880,622 N/A 1,578,880,652
Independence One Prime Money Market Fund
Class Y Shares................................. $ 147,136,468 $ 1.00 147,143,965
Class K Shares................................. 229,899,468 $ 1.00 229,924,399
-------------- -------------
Total..................................... $ 377,030,936 N/A 377,068,364
Pro Forma -- ABN AMRO Institutional Prime Money
Market Fund
Class Y Shares................................. $1,634,059,273 $ 1.00 1,634,066,804
Class YS Shares................................ 321,852,285 $ 1.00 321,882,213
-------------- -------------
Total..................................... $1,955,911,558 N/A 1,955,949,017
</Table>
REASONS FOR THE REORGANIZATION
On April 2, 2001, ABN AMRO Holding N.V. indirectly acquired Independence
One Capital. Following such acquisition, AAAM and the ABN AMRO Trust proposed to
Independence One Capital and the Board of Trustees of the Independence One Trust
that each of the portfolios of the Independence One Trust be acquired by
corresponding portfolios of the ABN AMRO Trust and that the Independence One
Trust be terminated. [The Reorganization was proposed by AAAM and the ABN AMRO
Trust to promote more efficient operations, eliminate certain duplicative costs
and enhance the distribution of Fund shares by eliminating redundant investment
products sponsored by the same organization].
The Board of Trustees of the Independence One Trust met on July 25, 2001 to
receive information concerning AAAM and the ABN AMRO Trust, to review this
information and to consider the terms of the proposed Reorganization. After
consultation with legal counsel, the Board of Trustees of the Independence One
Trust, including the trustees who are not "interested persons" (within the
meaning of the 1940 Act), unanimously approved the Reorganization Agreement and
recommended its approval by the shareholders of the Independence One Funds. In
approving the Reorganization, the Board determined that participation in the
Reorganization is in the best interests of each Independence One Fund and that
the interests of the shareholders of each Independence One Fund would not be
diluted as a result of the Reorganization. In approving the Reorganization
Agreement, the Board considered a number of factors, including the following:
- the terms and conditions of the Reorganization;
- the compatibility of the Funds' objectives, limitations and policies;
- performance history of the Independence One Funds and the ABN AMRO Funds;
- pro forma and/or estimated expense ratios for the ABN AMRO Funds;
- potential economies of scale to be gained from the Reorganization;
- potential new investment opportunities available to shareholders of the
Independence One Funds as a result of the Reorganization;
- the fact that the Reorganization is expected to be free from federal
taxes;
- the service features available to shareholders of the ABN AMRO Funds;
- the fact that the ABN AMRO Funds will assume all of the liabilities of
the Independence One Funds; and
30
- the agreement by AAAM and/or its affiliates to bear all expenses of the
Reorganization incurred by the Independence One Funds.
BASED ON THIS INFORMATION, THE BOARD RECOMMENDS THAT THE SHAREHOLDERS OF
EACH INDEPENDENCE ONE FUND APPROVE THE REORGANIZATION.
SHAREHOLDER RIGHTS
ABN AMRO FUNDS
General. ABN AMRO Trust is an open-end management investment company
established as a Delaware business trust pursuant to a Trust Instrument dated
September 8, 1993. ABN AMRO Trust is also governed by its By-Laws and applicable
Delaware law.
Shares. ABN AMRO Trust is authorized to issue an unlimited number of
shares of beneficial interest, without par value, from an unlimited number of
series of shares. Currently, ABN AMRO Trust consists of over 25 separate
investment series offering up to five classes of shares: Class N Shares, Class I
Shares, Class S Shares, Class Y Shares and Class YS Shares. The five classes
differ with respect to minimum investment requirements, distribution fees and
shareholder servicing costs, as set forth in the prospectuses. The shares of the
ABN AMRO Trust Funds have no preference as to conversion features, exchange
privileges or other attributes, and have no preemptive rights.
Voting Rights. On any matter submitted to a vote of shareholders, all
shares entitled to vote are voted on by individual series or class, except that:
(i) when so required by the 1940 Act, then shares are voted in the aggregate and
not by individual series or class; and (ii) when the trustees of the ABN AMRO
Trust have determined that the matter only affects the interest of one or more
series or class, then only shareholders of such series or class are entitled to
vote.
Shareholder Meetings. The ABN AMRO Trust is not required to hold annual
meetings of shareholders, but may hold special meetings of shareholders under
certain circumstances. A special meeting of shareholders may be called at any
time by the trustees or on the written request of shareholders owning at least
one-tenth of the outstanding shares entitled to vote.
Election and Term of Trustees. The ABN AMRO Trust's affairs are supervised
by the trustees under the laws governing business trusts in the State of
Delaware. Subject to 1940 Act requirements, trustees may be elected by
shareholders or appointed by the Board. Under the Trust's By-Laws, trustees hold
office until the end of the fiscal year in which the trustee attains 72 years of
age, until their successors are duly elected and qualified, or until their
death, removal or resignation. A 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 or by a vote of shareholders owning at least two-thirds of the
outstanding shares.
Shareholder Liability. Pursuant to Delaware law and the ABN AMRO Trust's
Trust Instrument, shareholders of the ABN AMRO Funds generally are not
personally liable for the acts, omissions or obligations of the trustees or the
ABN AMRO Trust.
Trustee Liability. Pursuant to Delaware law and the ABN AMRO Trust's Trust
Instrument, trustees are not personally liable to any person other than the ABN
AMRO Trust and the shareholders for any act, omission or obligation of the ABN
AMRO Trust or another trustee. Pursuant to the ABN AMRO Trust's Trust
Instrument, trustees are not personally liable for any act or omission he or she
takes while acting as a trustee or for any act or omission of any other person
or party, except that trustees are not protected against liability to the ABN
AMRO Trust or to shareholders resulting from his or her willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties involved as a
trustee. The ABN AMRO Trust generally indemnifies trustees against all
liabilities and expenses incurred by reason of being a trustee, except for
liabilities and expenses arising from the trustee's willful misfeasance, gross
negligence or reckless disregard of his or her duties as a trustee.
31
INDEPENDENCE ONE FUNDS
General. The Independence One Trust is an open-end management investment
company established as a Massachusetts business trust pursuant to a Declaration
of Trust dated January 9, 1989. The Independence One Trust is also governed by
its By-Laws and applicable Massachusetts law.
Shares. The Independence One Trust is authorized to issue an unlimited
number of shares of beneficial interest, without par value, from an unlimited
number of series of shares. Currently, the Independence One Trust consists of
eight separate investment series offering up to five classes of shares: Class A
Shares, Class B Shares, Trust Class Shares, Class K Shares and Class Y Shares.
The five classes differ with respect to sales charges, distribution fees and
shareholder servicing costs, as set forth in the prospectuses. Of the eight
series of the Independence One Trust currently offered, seven are participating
in the Reorganization. A reorganization of the remaining series, the
Independence One Michigan Municipal Cash Fund, is separately being proposed with
another investment company. The shares of each Fund have no preference as to
conversion features, exchange privileges or other attributes, and have no
preemptive rights.
Voting Rights. On any matter submitted to a vote of shareholders, all
shares entitled to vote are voted on by individual series or class, except that:
(i) when so required by the 1940 Act, then shares are voted in the aggregate and
not by individual series or class; and (ii) when the trustees of the
Independence One Trust have determined that the matter only affects the interest
of one or more series or class, then only shareholders of such series or class
are entitled to vote.
Shareholder Meetings. The Independence One Trust is not required to hold
annual meetings of shareholders, but may hold special meetings of shareholders
under certain circumstances. A special meeting of shareholders may be called at
any time by the trustees or by shareholders holding at least 10% of the shares
then outstanding.
Election and Term of Trustees. The Independence One Funds' affairs are
supervised by the trustees under the laws governing business trusts in the
Commonwealth of Massachusetts. Subject to 1940 Act requirements, trustees may be
elected by shareholders or appointed by the Board. Trustees hold office until
their successors are duly elected and qualified, or until their death,
resignation, retirement, removal or mental or physical incapacity. A trustee may
be removed at any time by written instrument signed by at least two-thirds of
the trustees then in office or by a vote of shareholders holding two-thirds of
the outstanding shares.
Shareholder Liability. Pursuant to the Independence One Trust's
Declaration of Trust, shareholders of the Independence One Funds are not
personally liable for the acts, omissions, liabilities or obligations of any
kind of the Independence One Trust.
Trustee Liability. The Trustees generally are not personally liable for
any obligation of the Independence One Trust. The Independence One Trust will
indemnify its trustees against all liabilities and expenses, except for those
arising from the trustee's willful misfeasance, bad faith, gross negligence or
reckless disregard of his or her duties.
THE FOREGOING IS ONLY A SUMMARY OF CERTAIN RIGHTS OF SHAREHOLDERS OF THE
ABN AMRO FUNDS AND THE INDEPENDENCE ONE FUNDS UNDER THEIR GOVERNING CHARTER
DOCUMENTS, BY-LAWS AND STATE LAW, AND IS NOT A COMPLETE DESCRIPTION OF
PROVISIONS CONTAINED IN THOSE SOURCES. SHAREHOLDERS SHOULD REFER TO THE
PROVISIONS OF THOSE DOCUMENTS AND STATE LAW DIRECTLY FOR A MORE THOROUGH
DESCRIPTION.
ADDITIONAL INFORMATION
Information concerning the operation and management of the ABN AMRO Funds
is included in the current prospectuses relating to those Funds, which are
incorporated herein by reference insofar as they relate to ABN AMRO Funds
participating in the Reorganization and copies of which accompany this Proxy
Statement/Prospectus. Additional information about the ABN AMRO Funds is
included in the Statement of
32
Additional Information for the ABN AMRO Funds dated March , 2002, which is
available upon request and without charge by calling 1-800-992-8151.
Information about the Independence One Funds is included in the current
prospectuses relating to those Funds dated June 30, 2001, which are incorporated
by reference herein. Additional information is included in the Statement of
Additional Information of the Independence One Funds dated June 30, 2001, which
are available upon request and without charge by calling 1-888-898-0600. The
Independence One Funds' current prospectuses and Statement of Additional
Information have been filed with the SEC.
The ABN AMRO Funds and Independence One Funds are each subject to the
informational requirements of the Securities Exchange Act of 1934 and the 1940
Act, and in accordance therewith file reports and other information, including
proxy material and charter documents, with the SEC. These items may be inspected
and copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the SEC's regional offices in New
York at 233 Broadway, New York, New York 10279 and in Chicago at 175 West
Jackson Boulevard, Suite 900, Chicago, Illinois 60604. Copies of such items can
be obtained from the Public Reference Branch, Office of Consumer Affairs, SEC,
Washington, D.C. 20549 at prescribed rates.
Interest of Certain Persons in the Reorganization. ABN AMRO Holding N.V.
may be deemed to have an interest in the Reorganization because certain of its
subsidiaries provide investment advisory services to the ABN AMRO Funds and the
Independence One Funds pursuant to advisory agreements with the Funds. Future
growth of the ABN AMRO Funds can be expected to increase the total amount of
fees payable to these subsidiaries and to reduce the number of fees required to
be waived to maintain total fees of the ABN AMRO Funds at agreed upon levels.
Fiscal Year End and Financial Statements. The fiscal year end of each ABN
AMRO Fund is October 31. The fiscal year end of each Independence One Fund is
April 30.
The financial statements of the Independence One Funds contained in
Independence One Trust's annual report to shareholders for the fiscal year ended
April 30, 2001 have been audited by KPMG LLP, their independent auditor. These
financial statements for the Independence One Funds are incorporated by
reference into this Proxy Statement/Prospectus.
The financial statements of the Existing ABN AMRO Funds contained in the
ABN AMRO Funds' Annual Report to shareholders for the fiscal year ended October
31, 2001 have been audited by Ernst & Young LLP, their independent auditor.
These financial statements for the ABN AMRO Funds are incorporated by reference
into this Proxy Statement/Prospectus insofar as such financial statements relate
to the ABN AMRO Funds participating in the Reorganization, and not to any other
Funds that are part of the ABN AMRO Trust and described therein.
The ABN AMRO Funds and Independence One Funds each will furnish, without
charge, a copy of their most recent Semi-Annual Report succeeding such Annual
Report, if any, on request. Requests should be directed to the ABN AMRO Funds at
P.O. Box 9765, Providence, Rhode Island 02940, or by calling 1-800-992-8151 and
to the Independence One Funds at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237, or by calling 1-800-334-2292.
THE BOARD OF TRUSTEES OF THE INDEPENDENCE ONE TRUST UNANIMOUSLY RECOMMENDS
THAT YOU VOTE FOR APPROVAL OF THE REORGANIZATION.
VOTING MATTERS
General Information. This Proxy Statement/Prospectus is being furnished in
connection with the solicitation of proxies by the Board of Trustees of the
Independence One Trust. It is expected that the solicitation of proxies will be
primarily by mail. Officers and service contractors of the ABN AMRO Trust and
the Independence One Trust may also solicit proxies by telephone, telegraph,
facsimile, Internet or in person. Any telephonic solicitations will follow
procedures designed to ensure accuracy and prevent fraud, including requiring
identifying shareholder information, recording the shareholder's instructions
and confirming to the
33
shareholder after the fact. Shareholders who communicate proxies by telephone or
by other electronic means have the same power and authority to issue, revoke or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The cost of solicitation will be borne by AAAM and/or its
affiliates.
Voting Rights and Required Vote. Shareholders of the Independence One
Funds are entitled to one vote for each full share held and fractional votes for
fractional shares. More than 50% of the total number of outstanding shares of
each Fund entitled to vote, present in person or by proxy, constitutes a quorum.
Approval of the Reorganization with respect to each Independence One Fund
requires the vote of more than 50% of the outstanding shares of each Fund
entitled to vote on the approval. Any shareholder giving a proxy may revoke it
at any time before it is exercised by submitting to the Independence One Trust a
written notice of revocation or a subsequently executed proxy or by attending
the Meeting and voting in person. The proposed Reorganization of the
Independence One Funds will be voted upon separately by the shareholders of each
Fund. The consummation of each Fund's Reorganization is not conditioned on the
approval of the Reorganization by any other Fund.
Shares represented by a properly executed proxy will be voted in accordance
with the instructions thereon, or if no box is checked and no written
instruction is provided, the shares will be voted "FOR" the approval of the
Reorganization. It is not anticipated that any matters other than the approval
of the Reorganization will be brought before the Meeting. Should other business
properly be brought before the Meeting, it is intended that the accompanying
proxies will be voted in accordance with the judgment of the persons named as
such proxies. For the purposes of determining the presence of a quorum for
transacting business at the Meeting, abstentions and broker "non-votes" (that
is, proxies from brokers or nominees indicating that such persons have not
received instructions from the beneficial owners or other persons entitled to
vote shares on a particular matter with respect to which the brokers or nominees
do not have discretionary power) will be treated as shares that are present but
which have not been voted. For this reason, abstentions and broker non-votes
will have the effect of a "no" vote for purposes of obtaining the requisite
approval of the Reorganization.
If sufficient votes in favor of the proposals set forth in the Notice of
the Special Meeting are not received by the time scheduled for the Meeting, the
holders of a plurality of shares present in person or by proxy at the Meeting
and entitled to vote at the Meeting, whether or not sufficient to constitute a
quorum, may adjourn the Meeting. Any business that might have been transacted at
the Meeting originally called may be transacted at any such adjourned session(s)
at which a quorum is present. The costs of any additional solicitation and of
any adjourned session(s) will be borne by Independence One Capital and/or its
affiliates.
Record Date and Outstanding Shares. Only shareholders of record of the
Independence One Funds at the close of business on March 18, 2002 (the "Record
Date") are entitled to notice of and to vote at the Meeting and any postponement
or adjournment thereof. At the close of business on the Record Date the
following number of shares were outstanding and entitled to vote:
<Table>
<Caption>
INDEPENDENCE ONE FUNDS FUND SHARES
---------------------- -----------
U.S. Treasury Money Market Fund -- Class K Shares...........
International Equity Fund -- Class A Shares.................
Fixed Income Fund...........................................
Trust Class Shares........................................
Class B Shares............................................
U.S. Government Securities Fund.............................
Class A Shares............................................
Class B Shares............................................
Small Cap Fund -- Class A Shares............................
Equity Plus Fund............................................
Trust Class Shares........................................
Class A Shares............................................
Class B Shares............................................
Prime Money Market Fund.....................................
Class Y Shares............................................
Class K Shares............................................
</Table>
34
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
ABN AMRO Funds. [AS OF THE RECORD DATE, THE OFFICERS AND TRUSTEES OF THE
ABN AMRO TRUST AS A GROUP, BENEFICIALLY OWNED LESS THAN 1% OF THE OUTSTANDING
CLASS N SHARES, CLASS I SHARES, CLASS S SHARES, CLASS Y SHARES AND CLASS YS
SHARES OF THE ABN AMRO FUNDS.] As of the Record Date, to the best of the
knowledge of the ABN AMRO Trust, the following persons owned of record or
beneficially 5% or more of the outstanding shares of Class N Shares, Class I
Shares, Class S Shares, Class Y Shares or Class YS Shares of the following ABN
AMRO Funds:
<Table>
<Caption>
PERCENTAGE TYPE OF
NAME AND ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
---------------- ---------- ---------- ---------
</Table>
Independence One Funds. [AS OF THE RECORD DATE, THE OFFICERS AND TRUSTEES
OF THE INDEPENDENCE ONE TRUST AS A GROUP, BENEFICIALLY OWNED LESS THAN 1% OF THE
OUTSTANDING CLASS A SHARES, CLASS B SHARES, TRUST CLASS SHARES, CLASS K SHARES
AND CLASS Y SHARES OF THE INDEPENDENCE ONE FUNDS.] As of the Record Date, to the
best of the knowledge of the Independence One Trust, the following persons owned
of record or beneficially 5% or more of the outstanding shares of Class A
Shares, Class B Shares, Trust Class Shares, Class K Shares or Class Y Shares of
the Independence One Funds:
<Table>
<Caption>
PERCENTAGE TYPE OF
NAME AND ADDRESS FUND/CLASS OWNERSHIP OWNERSHIP
- ---------------- ---------- ---------- ---------
</Table>
Expenses. In order to obtain the necessary quorum at the Meeting,
additional solicitations may be made by mail, telephone, telegraph, facsimile,
Internet or personal interview by representatives of the Independence One Trust,
ABN AMRO Trust, Independence One Capital, AAAM and/or their affiliates or, if
necessary, service providers retained for this purpose. All costs of
solicitation (including the printing and mailing of this proxy statement,
meeting notice and form of proxy, as well as any necessary supplementary
solicitations) will be paid by AAAM and/or its affiliates. Persons holding
shares as nominees will, upon request, be reimbursed for their reasonable
expenses in sending soliciting material to their principals.
OTHER BUSINESS
The Board of Trustees of the Independence One Trust knows of no other
business to be brought before the Meeting. However, if any other matters come
before the Meeting, it is the intention that proxies that do not contain
specific restrictions to the contrary will be voted on such matters in
accordance with the judgment of the persons named in the enclosed form of proxy.
SHAREHOLDER INQUIRIES
Independence One Funds. Shareholder inquiries may be addressed to the
Independence One Trust in writing at 5800 Corporate Drive, Pittsburgh,
Pennsylvania 15237, or by calling 1-888-898-0600.
ABN AMRO Funds. Shareholder inquiries may be addressed to the ABN AMRO
Trust in writing at P.O. Box 9765, Providence, Rhode Island 02940, or by calling
1-800-992-8151.
35
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED
TO VOTE USING THE METHODS DESCRIBED ON THE ENCLOSED PROXY CARDS.
By Order of the Board of Trustees,
C. Grant Anderson
Secretary
Independence One Mutual Funds
36
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this day of , 2002, by and between ABN AMRO Funds, a Delaware
business trust, with its principal place of business at 161 North Clark Street,
Chicago, Illinois 60601 (the "Trust"), with respect to its ABN AMRO Treasury
Money Market Fund, ABN AMRO Institutional Prime Money Market Fund, ABN AMRO
International Equity Fund, ABN AMRO Select Small Cap Fund, ABN AMRO Equity Plus
Fund and ABN AMRO Investment Grade Bond Fund, each a separate series of the
Trust (each an "Acquiring Fund" and, together, the "Acquiring Funds"), and
Independence One Mutual Funds, a Massachusetts business trust, with its
principal place of business at 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237 (the "Independence One Trust"), with respect to its Independence One U.S.
Treasury Money Market Fund, Independence One Prime Money Market Fund,
Independence One International Equity Fund, Independence One Small Cap Fund,
Independence One Equity Plus Fund, Independence One Fixed Income Fund and
Independence One U.S. Government Securities Fund, each a separate series of the
Independence One Trust (each a "Selling Fund" and, together the "Selling Funds"
and, collectively with the Acquiring Funds, the "Funds").
This Agreement is intended to be, and is adopted as, a Plan of
Reorganization within the meaning of Section 368 of the United States Internal
Revenue Code of 1986, as amended (the "Code") and the Treasury Regulations
promulgated thereunder. The reorganization will consist of: (i) the transfer of
all of the assets of each Selling Fund in exchange for, as applicable, Class N
Shares, Class I Shares, Class S Shares, Class Y Shares or Class YS Shares of
beneficial interest, no par value per share, of its corresponding Acquiring Fund
("Acquiring Fund Shares") as set forth on Schedule A attached hereto; (ii) the
assumption by each Acquiring Fund of the liabilities of each Selling Fund; and
(iii) the distribution, after the Closing Dates hereinafter referred to, of the
Acquiring Fund Shares to the shareholders of each Selling Fund and the
liquidation of each Selling Fund as provided herein, all upon the terms and
conditions set forth in this Agreement (the "Reorganization").
WHEREAS, each Acquiring Fund and each Selling Fund is a separate series of
the Trust and the Independence One Trust, respectively, and the Trust and the
Independence One Trust are open-end, registered management investment companies
and each Selling Fund owns securities that generally are assets of the character
in which its corresponding Acquiring Fund is permitted to invest;
WHEREAS, each Fund is authorized to issue its shares of beneficial
interest;
WHEREAS, the Trustees of the Trust have determined that the Reorganization,
with respect to each Acquiring Fund, is in the best interests of each Acquiring
Fund and that the interests of the existing shareholders of the Acquiring Fund
will not be diluted as a result of the Reorganization;
WHEREAS, the Trustees of the Independence One Trust have determined that
the Reorganization, with respect to each Selling Fund, is in the best interests
of the Selling Fund and that the interests of the existing shareholders of the
Selling Fund will not be diluted as a result of the Reorganization;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
ARTICLE I
TRANSFER OF ASSETS OF THE SELLING FUNDS IN EXCHANGE FOR ACQUIRING
FUND SHARES AND THE ASSUMPTION OF SELLING FUNDS' LIABILITIES AND LIQUIDATION
OF THE SELLING FUNDS
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein
and on the basis of the representations and warranties contained herein, each
Selling Fund agrees to transfer all of its assets, as set forth in paragraph
1.2, to its corresponding Acquiring Fund. In exchange, each Acquiring Fund
agrees: (i) to deliver to its corresponding Selling Fund the number of full and
fractional Acquiring Fund Shares, determined by (a) multiplying the shares
outstanding of each class of the Selling Fund by (b) the ratio computed by
A-1
dividing (x) the net asset value per share of each such class of the Selling
Fund by (y) the net asset value per share of the corresponding class of
Acquiring Fund Shares computed in the manner and as of the time and date set
forth in paragraph 2.2; and (ii) to assume all of the liabilities of the Selling
Fund, as set forth in paragraph 1.3. Such transactions shall take place at the
Closing Dates provided for in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. The assets of each Selling Fund to be acquired
by its corresponding Acquiring Fund shall consist of all property, including,
without limitation, all cash, securities, commodities, interests in futures and
dividends or interest receivables, owned by the Selling Fund and any deferred or
prepaid expenses shown as an asset on the books of such Selling Fund on its
respective Closing Date.
Each Selling Fund has provided its corresponding Acquiring Fund with its
most recent audited financial statements, which contain a list of all of the
Selling Fund's assets as of the date of such statements. Each Selling Fund
hereby represents that as of the date of the execution of this Agreement, there
have been no changes in its financial position as reflected in such financial
statements other than those occurring in the ordinary course of business in
connection with the purchase and sale of securities, the issuance and redemption
of Selling Fund shares and the payment of normal operating expenses, dividends
and capital gains distributions.
Each Selling Fund will, within a reasonable period of time before its
respective Closing Date, furnish each Acquiring Fund with a list of the Selling
Fund's portfolio securities and other investments. Each Acquiring Fund will,
within a reasonable time before its respective Closing Date, furnish its
corresponding Selling Fund with a list of the securities, if any, on the Selling
Fund's list referred to above that do not conform to the Acquiring Fund's
investment objectives, policies, and restrictions. A Selling Fund, if requested
by its corresponding Acquiring Funds, will dispose of securities on the
Acquiring Fund's list before its respective Closing Date. In addition, if it is
determined that the portfolios of a Selling Fund and its Acquiring Fund, when
aggregated, would contain investments exceeding certain percentage limitations
imposed upon the Acquiring Fund with respect to such investments, the Selling
Fund, if requested by the Acquiring Fund, will dispose of a sufficient amount of
such investments as may be necessary to avoid violating such limitations as of
its respective Closing Date. Notwithstanding the foregoing, nothing herein will
require a Selling Fund to dispose of any investments or securities if, in the
reasonable judgment of the Selling Fund's trustees or adviser, such disposition
would adversely affect the tax-free nature of the Reorganization or would
violate their fiduciary duties to the Selling Fund's shareholders.
1.3 LIABILITIES TO BE ASSUMED. Each Selling Fund will endeavor to
discharge all of its known liabilities and obligations to the extent possible
before its respective Closing Date. Notwithstanding the foregoing, any
liabilities not so discharged shall be assumed by the Acquiring Fund, which
assumed liabilities shall include all of the Selling Fund's liabilities, debts,
obligations, and duties of whatever kind or nature, whether absolute, accrued,
contingent, or otherwise, whether or not arising in the ordinary course of
business, whether or not determinable at the Closing Date, and whether or not
specifically referred to in this Agreement.
1.4 STATE FILINGS. Prior to each Closing Date, the Trust shall make any
filings with the State of Delaware that may be required under the laws of the
State of Delaware, effective as of each respective Closing Date.
1.5 LIQUIDATION AND DISTRIBUTION. On or as soon after its Closing Date as
is conveniently practicable (the "Liquidation Date"): (a) each Selling Fund will
distribute in complete liquidation of the Selling Fund, pro rata to its
shareholders of record, determined as of the close of business on the Valuation
Date (the "Selling Fund Shareholders"), all of the Acquiring Fund Shares
received by the Selling Fund pursuant to paragraph 1.1; and (b) the Selling Fund
will thereupon proceed to dissolve and terminate as set forth in paragraph 1.9
below. Such distribution will be accomplished by the transfer of Acquiring Fund
Shares credited to the account of the Selling Fund on the books of the Acquiring
Fund to open accounts on the share records of the Acquiring Fund in the name of
the Selling Fund Shareholders, and representing the respective pro rata number
of Acquiring Fund Shares due such shareholders. All issued and outstanding
shares of the Selling Fund will simultaneously be canceled on the books of the
Selling Fund. The Acquiring Fund shall not issue certificates representing
Acquiring Fund Shares in connection with such transfer.
A-2
1.6 OWNERSHIP OF SHARES. Ownership of Acquiring Fund Shares will be shown
on the books of each Acquiring Fund's transfer agent. Shares of each Acquiring
Fund will be issued simultaneously to its corresponding Selling Fund, in an
amount equal in value to the aggregate net asset value of each Selling Fund's
shares, to be distributed to Selling Fund shareholders.
1.7 TRANSFER TAXES. Any transfer taxes payable upon the issuance of
Acquiring Fund Shares in a name other than the registered holder of the Selling
Fund shares on the books of the Selling Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Acquiring Fund Shares are to be issued and transferred.
1.8 REPORTING RESPONSIBILITY. Any reporting responsibility of each
Selling Fund is and shall remain the responsibility of the Selling Fund.
1.9 TERMINATION. Each Selling Fund shall be terminated promptly following
its respective Closing Date and the making of all distributions pursuant to
paragraph 1.5.
1.10 BOOKS AND RECORDS. All books and records of each Selling Fund,
including all books and records required to be maintained under the Investment
Company Act of 1940 (the "1940 Act"), and the rules and regulations thereunder,
shall be available to the corresponding Acquiring Fund from and after its
respective Closing Date and shall be turned over to the Acquiring Fund as soon
as practicable following its respective Closing Date.
1.11 RELATIONSHIP OF TRANSACTIONS. Subject to the conditions set forth in
this Agreement, the failure of one of the Selling Funds to consummate the
transactions contemplated hereby shall not affect the consummation or validity
of the Reorganization with respect to any other Selling Fund, and the provisions
of this Agreement shall be construed to effect this intent, including, without
limitation, as the context requires, construing the terms "Acquiring Fund" and
"Selling Fund" as meaning only those series of the Trust and the Independence
One Trust, respectively, which are involved in the Reorganization as of the
Closing Dates.
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of a Selling Fund's assets to be
acquired by its corresponding Acquiring Fund hereunder shall be the value of
such assets on the business day immediately prior to each respective Closing
Date (such time and date being hereinafter called a "Valuation Date"), using the
valuation procedures set forth in the Trust Instrument and each Acquiring Fund's
then current prospectus and statement of additional information or such other
valuation procedures as shall be mutually agreed upon by the parties. Each
Acquiring Fund and Selling Fund agrees to use all commercially reasonable
efforts to resolve any material differences between the prices of portfolio
securities determined in accordance with the pricing policies and procedures of
an Acquiring Fund and those determined in accordance with the pricing policies
and procedures of its corresponding Selling Fund. Where a pricing difference
results from a difference in pricing methodology, the parties will eliminate
such difference by using the Acquiring Fund's methodology in valuing the Selling
Funds' assets.
2.2 VALUATION OF SHARES. The net asset value per share of Acquiring Fund
Shares shall be the net asset value per share computed on the Valuation Date,
using the valuation procedures set forth in the Trust's Trust Instrument and
each Acquiring Fund's then current prospectuses and statements of additional
information, or such other valuation procedures as shall be mutually agreed upon
by the parties.
2.3 SHARES TO BE ISSUED. The number of each Acquiring Fund's shares of
each class to be issued (including fractional shares, if any) in exchange for
its corresponding Selling Fund's assets, shall be determined by (a) multiplying
the shares outstanding of each class of the Selling Fund by (b) the ratio
computed by (x) dividing the net asset value per share of the Selling Fund of
each of its classes by (y) the net asset value per share of the corresponding
classes of the Acquiring Fund determined in accordance with paragraph 2.2.
Holders of Class Y Shares, Class K Shares, Class A Shares, Class B Shares and
Trust
A-3
Class Shares of the Selling Funds will receive Class N Shares, Class I Shares,
Class S Shares, Class Y Shares or Class YS Shares of the corresponding Acquiring
Funds, as set forth on Schedule A attached hereto.
2.4 DETERMINATION OF VALUE. All computations of value shall be made by
PFPC, Inc., on behalf of the Acquiring Funds, and Federated Administrative
Services, on behalf of the Selling Funds.
ARTICLE III
CLOSINGS AND CLOSING DATES
3.1 CLOSING DATES. The closing shall occur in two steps. There will be a
separate closing on or about June 1, 2002 for the Independence One Prime Money
Market Fund, Independence One Treasury Money Market Fund and Independence One
International Equity Fund and a separate closing on or about June 8, 2002 for
the Independence One Small Cap Fund, Independence One Equity Plus Fund,
Independence One Fixed Income Fund and Independence One U.S. Government
Securities Fund or such other date(s) as the parties may agree to in writing
(each a "Closing Date" and collectively, the "Closing Dates"). All acts taking
place at the Closings shall be deemed to take place immediately prior to the
Closing Dates unless otherwise provided. The Closings shall be held as of 8:00
a.m. Eastern time (the "Effective Time") at the offices of PFPC, Inc., 4400
Computer Drive, Westborough, Massachusetts 01581, or at such other time and/or
place as the parties may agree.
3.2 CUSTODIAN'S CERTIFICATE. State Street Bank and Trust Company, as
custodian for each Selling Fund (the "Custodian"), shall deliver at the Closings
a certificate of an authorized officer stating that: (a) each Selling Fund's
portfolio securities, cash, and any other assets shall have been delivered in
proper form to its corresponding Acquiring Fund on the Closing Dates; and (b)
all necessary taxes including all applicable federal and state stock transfer
stamps, if any, shall have been paid, or provision for payment shall have been
made, in conjunction with the delivery of portfolio securities by the Selling
Fund.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the Valuation
Date, either: (a) the NYSE or another primary exchange on which the portfolio
securities of an Acquiring Fund or a Selling Fund are purchased or sold, shall
be closed to trading or trading on such exchange shall be restricted; or (b)
trading or the reporting of trading on the NYSE or elsewhere shall be disrupted
so that accurate appraisal of the value of the net assets of an Acquiring Fund
or a Selling Fund is impracticable, the Valuation Date shall be postponed until
the first business day after the day when trading is fully resumed and reporting
is restored.
3.4 TRANSFER AGENT'S CERTIFICATE. Federated Services Company, as transfer
agent for each Selling Fund as of the Closing Dates, shall deliver at the
Closings a certificate of an authorized officer stating that its records contain
the names and addresses of Selling Fund Shareholders, and the number and
percentage ownership of outstanding shares owned by each such shareholder
immediately prior to the Closings. Each Acquiring Fund shall issue and deliver
or cause PFPC, Inc., its transfer agent, to issue and deliver a confirmation
evidencing Acquiring Fund Shares to be credited on the Closing Dates to the
Secretary of the Independence One Trust or provide evidence satisfactory to the
Selling Fund that such Acquiring Fund Shares have been credited to the Selling
Fund's account on the books of the Acquiring Fund. At the Closings, each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, receipts and other documents, if any, as such other party or its
counsel may reasonably request.
A-4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE SELLING FUNDS. The Independence One Trust, on
behalf of each Selling Fund, represents and warrants to the Trust, on behalf of
each corresponding Acquiring Fund, as follows:
(a) The Selling Fund is a legally designated, separate series of a
voluntary association duly organized, validly existing, and in good
standing under the laws of the Commonwealth of Massachusetts.
(b) The Independence One Trust is registered as an open-end management
investment company under the 1940 Act, and the Independence One Trust's
registration with the Securities and Exchange Commission (the "Commission")
as an investment company under the 1940 Act is in full force and effect.
(c) The current prospectuses and statements of additional information
of the Selling Fund conform in all material respects to the applicable
requirements of the Securities Act of 1933 (the "1933 Act") and the 1940
Act, and the rules and regulations thereunder, and do not include any
untrue statement of a material fact or omit to state any material fact
required to be stated or necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading.
(d) The Selling Fund is not, and the execution, delivery, and
performance of this Agreement (subject to shareholder approval) will not,
result in the violation of any provision of the Independence One Trust's
Declaration of Trust or By-Laws or of any material agreement, indenture,
instrument, contract, lease, or other undertaking to which the Selling Fund
is a party or by which it is bound.
(e) The Selling Fund has no material contracts or other commitments
(other than this Agreement) that will be terminated with liability to it
before its applicable Closing Date, except for liabilities, if any, to be
discharged or reflected in the Statement of Assets and Liabilities as
provided in paragraph 1.3 hereof.
(f) Except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, no litigation, administrative proceeding, or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against the Selling Fund or any of its properties or
assets, which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business, or the ability
of the Selling Fund to carry out the transactions contemplated by this
Agreement. The Selling Fund knows of no facts that might form the basis for
the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree, or judgment of any court or governmental
body that materially and adversely affects its business or its ability to
consummate the transactions contemplated herein.
(g) The financial statements of the Selling Fund as of April 30, 2001
and for the fiscal year then ended have been prepared in accordance with
generally accepted accounting principles, and such statements (copies of
which have been furnished to the Acquiring Funds) fairly reflect the
financial condition of the Selling Fund as of April 30, 2001 and there are
no known contingent liabilities of the Selling Fund as of such date that
are not disclosed in such statements.
(h) Since the date of the financial statements referred to in
paragraph (g) above, there have been no material adverse changes in the
Selling Fund's financial condition, assets, liabilities or business (other
than changes occurring in the ordinary course of business), or any
incurrence by the Selling Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred, except as otherwise disclosed
to and accepted by the Acquiring Fund. For the purposes of this
subparagraph (h), a decline in the net asset value of the Selling Fund
shall not constitute a material adverse change.
(i) All federal and other tax returns and reports of the Selling Fund
required by law to be filed, have been filed, and all federal and other
taxes shown due on such returns and reports have been paid, or
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provision shall have been made for the payment thereof. To the best of the
Selling Fund's knowledge, no such return is currently under audit, and no
assessment has been asserted with respect to such returns.
(j) All issued and outstanding shares of the Selling Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Selling Fund. All of the issued and outstanding shares of the Selling Fund
will, at the time of the Closing Date, be held by the persons and in the
amounts set forth in the records of the Selling Fund's transfer agent as
provided in paragraph 3.4. The Selling Fund has no outstanding options,
warrants, or other rights to subscribe for or purchase any of the Selling
Fund shares, and has no outstanding securities convertible into any of the
Selling Fund shares.
(k) At the Closing Date, the Selling Fund will have good and
marketable title to the Selling Fund's assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.2, and full right, power, and
authority to sell, assign, transfer, and deliver such assets hereunder,
free of any lien or other encumbrance, except those liens or encumbrances
to which the Acquiring Fund has received notice, and, upon delivery and
payment for such assets, and the filing of any articles, certificates or
other documents under the laws of the Commonwealth of Massachusetts, the
Acquiring Fund will acquire good and marketable title, subject to no
restrictions on the full transfer of such assets, other than such
restrictions as might arise under the 1933 Act, and other than as disclosed
to and accepted by the Acquiring Fund.
(l) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the Selling
Fund. Subject to approval by the Selling Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Selling Fund, enforceable
in accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, moratorium, and other laws relating to or
affecting creditors' rights and to general equity principles.
(m) The information to be furnished by the Selling Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials, and other documents that may be necessary in connection with the
transactions contemplated herein shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations.
(n) From the effective date of the Registration Statements (as defined
in paragraph 5.7), through the time of the meeting of the Selling Fund
Shareholders and on each Closing Date, any written information furnished by
the Independence One Trust with respect to the Selling Fund for use in the
Proxy Materials (as defined paragraph 5.7), or any other materials provided
in connection with the Reorganization, does not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to make the statements, in light of the
circumstances under which such statements were made, not misleading.
(o) The Selling Fund has elected to qualify and has qualified as a
"regulated investment company" under the Code (a "RIC"), as of and since
its first taxable year; has been a RIC under the Code at all times since
the end of its first taxable year when it so qualified; and qualifies and
will continue to qualify as a RIC under the Code for its taxable year
ending upon its liquidation.
(p) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the Securities Exchange Act of 1934 (the "1934
Act"), the 1940 Act or Massachusetts law for the execution of this
Agreement by the Independence One Trust, for itself and on behalf of each
Selling Fund, except for the effectiveness of the Registration Statements,
the necessary exemptive relief requested from the Commission or its staff
with respect to Sections 17(a) and 17(b) of the 1940 Act, and the filing of
any articles, certificates or other documents that may be required under
Massachusetts law, and except for such other consents, approvals,
authorizations and filings as have been made or received, and such
consents, approvals, authorizations and filings as may be required
subsequent to the Closing Date, it being understood, however, that this
Agreement and the transactions contemplated herein must be approved by the
shareholders of the Selling Fund as described in paragraph 5.2.
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4.2 REPRESENTATIONS OF THE ACQUIRING FUNDS. The Trust, on behalf of each
Acquiring Fund, represents and warrants to the Independence One Trust, on behalf
of each corresponding Selling Fund, as follows:
(a) The Acquiring Fund is a legally designated, separate series of a
voluntary association, duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) The Trust is registered as an open-end management investment
company under the 1940 Act, and the Trust's registration with the
Commission as an investment company under the 1940 Act is in full force and
effect.
(c) The current prospectuses and statements of additional information
of the Acquiring Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations
thereunder, and do not include any untrue statement of a material fact or
omit to state any material fact required to be stated or necessary to make
such statements therein, in light of the circumstances under which they
were made, not misleading.
(d) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not, result in a violation of the
Trust's Trust Instrument or By-Laws or of any material agreement,
indenture, instrument, contract, lease, or other undertaking to which the
Acquiring Fund is a party or by which it is bound.
(e) Except as otherwise disclosed in writing to and accepted by the
Selling Fund, no litigation, administrative proceeding or investigation of
or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquiring Fund or any of its properties or
assets, which, if adversely determined, would materially and adversely
affect its financial condition, the conduct of its business or the ability
of the Acquiring Fund to carry out the transactions contemplated by this
Agreement. The Acquiring Fund knows of no facts that might form the basis
for the institution of such proceedings and it is not a party to or subject
to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects its business or its
ability to consummate the transaction contemplated herein.
(f) The financial statements included in the Registration Statements
of the Acquiring Fund have been prepared in accordance with generally
accepted accounting principles, and such statements (copies of which have
been furnished to the Selling Funds) fairly reflect the financial condition
of the Acquiring Fund as of such dates, and in the case of Acquiring Funds
which commenced operations prior to the Closing for the fiscal period then
ended, and there are no known contingent liabilities of the Acquiring Fund
as of such date that are not disclosed in such statements.
(g) Since the date of the financial statements referred to in
paragraph (f) above, there have been no material adverse changes in the
Acquiring Fund's financial condition, assets, liabilities or business
(other than changes occurring in the ordinary course of business), or any
incurrence by the Acquiring Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Selling Fund. For the purposes of this
subparagraph (g), a decline in the net asset value of the Acquiring Fund
shall not constitute a material adverse change.
(h) All federal and other tax returns and reports of the Acquiring
Fund required by law to be filed, have been filed. All federal and other
taxes shown due on such returns and reports have been paid or provision
shall have been made for their payment. To the best of the Acquiring Fund's
knowledge, no such return is currently under audit, and no assessment has
been asserted with respect to such returns.
(i) All issued and outstanding Acquiring Fund Shares are duly and
validly issued and outstanding, fully paid and non-assessable by the
Acquiring Fund. The Acquiring Fund has no outstanding options, warrants, or
other rights to subscribe for or purchase any Acquiring Fund Shares, and
there are no outstanding securities convertible into any Acquiring Fund
Shares.
(j) The execution, delivery and performance of this Agreement have
been duly authorized by all necessary action on the part of the Acquiring
Fund, and this Agreement constitutes a valid and binding
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obligation of the Acquiring Fund, enforceable in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, reorganization,
moratorium, and other laws relating to or affecting creditors' rights and
to general equity principles.
(k) Acquiring Fund Shares to be issued and delivered to the Selling
Fund for the account of the Selling Fund Shareholders pursuant to the terms
of this Agreement will, at the Closing Date, have been duly authorized.
When so issued and delivered, such shares will be duly and validly issued
Acquiring Fund Shares, and will be fully paid and non-assessable.
(l) The information to be furnished by the Acquiring Fund for use in
no-action letters, applications for orders, registration statements, proxy
materials, and other documents that may be necessary in connection with the
transactions contemplated herein shall be accurate and complete in all
material respects and shall comply in all material respects with federal
securities and other laws and regulations.
(m) From the effective date of the Registration Statements (as defined
in paragraph 5.7), through the time of the meeting of the Selling Fund
Shareholders and on each Closing Date, any written information furnished by
the Trust with respect to the Acquiring Fund for use in the Proxy Materials
(as defined in paragraph 5.7), or any other materials provided in
connection with the Reorganization, does not and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated or necessary to make the statements, in light of the
circumstances under which such statements were made, not misleading.
(n) The Acquiring Fund intends to qualify as a RIC under the Code, and
with respect to each Acquiring Fund that has conducted material investment
operations before the Closing Date, the Acquiring Fund has elected to
qualify and has qualified as a RIC under the Code as of and since its first
taxable year; has been a RIC under the Code at all times since the end of
its first taxable year when it so qualified; and qualifies and shall
continue to qualify as a RIC under the Code for its current taxable year.
(o) No governmental consents, approvals, authorizations or filings are
required under the 1933 Act, the 1934 Act, the 1940 Act or Delaware law for
the execution of this Agreement by the Trust, for itself and on behalf of
the Acquiring Fund, or the performance of the Agreement by the Trust, for
itself and on behalf of the Acquiring Fund, except for the effectiveness of
the Registration Statements, the necessary exemptive relief requested from
the Commission or its staff with respect to Sections 17(a) and 17(b) of the
1940 Act, and the filing of any articles, certificates or other documents
that may be required under Delaware law, and such other consents,
approvals, authorizations and filings as have been made or received, and
except for such consents, approvals, authorizations and filings as may be
required subsequent to the Closing Date.
(p) The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state Blue Sky or securities laws as it may deem appropriate in
order to continue its operations after the Closing Date.
ARTICLE V
COVENANTS OF EACH ACQUIRING FUND AND EACH SELLING FUND
5.1 OPERATION IN ORDINARY COURSE. Subject to paragraph 8.5, each
Acquiring Fund and Selling Fund will operate its respective business in the
ordinary course between the date of this Agreement and the respective Closing
Date, it being understood that such ordinary course of business will include
customary dividends and shareholder purchases and redemptions.
5.2 APPROVAL OF SHAREHOLDERS. The Independence One Trust will call a
special meeting of Selling Fund Shareholders to consider and act upon this
Agreement (or transactions contemplated thereby) and to take all other
appropriate action necessary to obtain approval of the transactions contemplated
herein.
5.3 INVESTMENT REPRESENTATION. Each Selling Fund covenants that the
Acquiring Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any
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distribution, other than in connection with the Reorganization and in accordance
with the terms of this Agreement.
5.4 ADDITIONAL INFORMATION. Each Selling Fund will assist its
corresponding Acquiring Fund in obtaining such information as the Acquiring Fund
reasonably requests concerning the beneficial ownership of the Selling Fund's
shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, each
Acquiring Fund and its corresponding Selling Fund will each take or cause to be
taken, all action, and do or cause to be done, all things reasonably necessary,
proper or advisable to consummate and make effective the transactions
contemplated by this Agreement, including any actions required to be taken after
the applicable Closing Date.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in
any case within sixty days after the applicable Closing Date, each Selling Fund
shall furnish its corresponding Acquiring Fund, in such form as is reasonably
satisfactory to the Acquiring Fund, a statement of the earnings and profits of
the Selling Fund for federal income tax purposes that will be carried over by
the Acquiring Fund as a result of Section 381 of the Code, and which will be
certified by the Independence One Trust's Treasurer.
5.7 PREPARATION OF REGISTRATION STATEMENTS AND SCHEDULE 14A PROXY
STATEMENT. The Trust will prepare and file with the Commission a registration
statement on Form N-14 relating to the Acquiring Fund Shares to be issued to
shareholders of the Selling Funds and a registration statement on Form N-1A
relating to Acquiring Funds (the "Registration Statements"). The Registration
Statement on Form N-14 shall include a proxy statement and a prospectus of each
Acquiring Fund relating to the transaction contemplated by this Agreement. The
Registration Statements shall be in compliance with the 1933 Act, the 1934 Act
and the 1940 Act, as applicable. Each party will provide the other party with
the materials and information necessary to prepare the registration statement on
Form N-14 (the "Proxy Materials"), for inclusion therein, in connection with the
meeting(s) of the Selling Funds' Shareholders to consider the approval of this
Agreement and the transactions contemplated herein.
5.8 INDEMNIFICATION OF TRUSTEES. The Trust will assume certain
liabilities and obligations of the Independence One Trust relating to any
obligation of the Independence One Trust to indemnify its current and former
Trustees and officers, acting in their capacities as such, to the fullest extent
permitted by law and the Independence One Trust's Declaration of Trust, as in
effect as of the date of this Agreement. Without limiting the foregoing, the
Trust agrees that all rights to indemnification and all limitations of liability
existing in favor of the current and former Trustees and officers, acting in
their capacities as such, under the Independence One Trust's Declaration of
Trust as in effect as of the date of this Agreement shall survive the
Reorganization and shall continue in full force and effect, without any
amendment thereto, and shall constitute rights which may be asserted against the
Trust, its successors or assigns.
5.9 The Trust shall take all action necessary so that, immediately
following the Effective Time, the Acquiring Funds' total operating expenses
after waivers and reimbursements do not exceed the amounts set forth in Schedule
B hereto for the periods set forth in such Schedule.
5.10 INVOLUNTARY CONVERSIONS. Notwithstanding any reservation of rights
retained by an Acquiring Fund to involuntarily redeem shareholders for failure
to maintain account balances equal to the minimum initial investment prescribed
from time to time by an Acquiring Fund, the Trust agrees that it will not
exercise such rights with respect to any Selling Fund Shareholder.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH SELLING FUND
The obligations of each Selling Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by its
corresponding Acquiring Fund of all the obligations to be performed
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by the Acquiring Fund pursuant to this Agreement on or before the applicable
Closing Date, and, in addition, subject to the following conditions:
6.1 All representations, covenants, and warranties of the Acquiring Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of that Closing Date. Each Acquiring Fund shall have
delivered to its corresponding Selling Fund a certificate executed in the
Acquiring Fund's name by the Trust's President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Selling Fund and dated as of the Closing Date, to such effect and as to such
other matters as the Selling Fund shall reasonably request.
6.2 The Selling Fund shall have received on the Closing Date an opinion
from Vedder, Price, Kaufman & Kammholz, counsel to the Trust, dated as of such
Closing Date, in a form reasonably satisfactory to the Selling Fund, covering
the following points:
(a) Each Acquiring Fund is a legally designated, separate series of
the Trust, and the Trust is a business trust, duly organized and validly
existing under the laws of the State of Delaware, which, to such counsel's
knowledge, has the power to own all of its properties and assets and to
carry on its business as presently conducted.
(b) The Trust is registered as an open-end management investment
company under the 1940 Act, and, to such counsel's knowledge, the Trust's
registration with the Commission as an investment company under the 1940
Act is in full force and effect.
(c) This Agreement has been duly authorized, executed, and delivered
by the Trust on behalf of each Acquiring Fund and, assuming due
authorization, execution and delivery of this Agreement by the Independence
One Trust, is a valid and binding obligation of the Acquiring Funds
enforceable against each Acquiring Fund in accordance with its terms,
subject as to enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and other laws relating to or affecting
creditors' rights generally and to general equity principles.
(d) Assuming that the Acquiring Fund Shares have been issued in
accordance with the terms of this Agreement, Acquiring Fund Shares to be
issued and delivered to each Selling Fund on behalf of the Selling Fund
Shareholders, as provided by this Agreement, are duly authorized and upon
such delivery will be legally issued and outstanding and fully paid and
non-assessable, and no shareholder of an Acquiring Fund has any preemptive
rights with respect to Acquiring Fund Shares.
(e) The Registration Statements have been declared effective by the
Commission and to such counsel's knowledge, no stop order under the 1933
Act pertaining thereto has been issued, and to the knowledge of such
counsel, no consent, approval, authorization or order of any court or
governmental authority of the United States or the State of Delaware is
required for consummation by the Acquiring Funds of the transactions
contemplated herein, except as have been obtained under the 1933 Act, the
1934 Act and the 1940 Act.
(f) The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated herein will not, result in a
violation of the Trust's Trust Instrument or By-Laws or any provision of
any material agreement, indenture, instrument, contract, lease or other
undertaking (in each case known to such counsel) to which an Acquiring Fund
is a party or by which an Acquiring Fund or any of its properties may be
bound or, to the knowledge of such counsel, result in the acceleration of
any obligation or the imposition of any penalty, under any agreement,
judgment, or decree to which an Acquiring Fund is a party or by which it is
bound.
(g) In the ordinary course of such counsel's representation of the
Acquiring Funds, and without having made any investigation, such counsel
does not know of any legal or governmental proceedings (only insofar as
they relate to an Acquiring Fund) existing on or before the date(s) of
mailing of the Proxy Materials or the Closing Date, which are required to
be described in the Proxy Materials or to be filed as an exhibit thereto
that are not described or filed as required.
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(h) In the ordinary course of such counsel's representation of the
Acquiring Funds, and without having made any investigation, and except as
otherwise disclosed, such counsel is not aware of any litigation or
administrative proceeding or investigation of or before any court or
governmental body that is presently pending or threatened as to an
Acquiring Fund or any of its properties or assets. In the ordinary course
of such counsel's representation of the Acquiring Funds, and without having
made any investigation, to the knowledge of such counsel, the Acquiring
Funds are not a party to or subject to the provisions of any order, decree
or judgment of any court or governmental body, which materially and
adversely affects the Acquiring Funds' business, other than as previously
disclosed in the Proxy Materials.
6.3 As of the Closing Date, there shall have been no material change in
the investment objective, policies and restrictions nor any material change in
the investment management fees, fee levels payable pursuant to the Rule 12b-1
plan of distribution, other fees payable for services provided to each Acquiring
Fund, fee waiver or expense reimbursement undertakings, or sales loads of the
Acquiring Funds from those fee amounts, undertakings and sales load amounts of
the Acquiring Fund described in the Proxy Materials.
6.4 For the period beginning at the Closing Date and ending not less than
six years thereafter, the Trust, its successor or assigns shall provide, or
cause to be provided, such reasonable liability coverage in the amount of $5
million, covering the actions of both former and current Trustees and officers
of the Independence One Trust for the period they served as such.
6.5 As of each respective Closing Date, the Trust's fidelity bond for the
Acquiring Funds shall meet all applicable requirements under the 1940 Act based
on the level of the Acquiring Funds' assets immediately after the Effective
Time.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH ACQUIRING FUND
The obligations of each Acquiring Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by
each corresponding Selling Fund of all the obligations to be performed by the
Selling Fund pursuant to this Agreement, on or before the applicable Closing
Date and, in addition, shall be subject to the following conditions:
7.1 All representations, covenants, and warranties of a Selling Fund
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date, with the same force and effect
as if made on and as of such Closing Date. Each Selling Fund shall have
delivered to its corresponding Acquiring Funds on such Closing Date a
certificate executed in the Selling Fund's name by the Independence One Trust's
President or Vice President and the Treasurer or Assistant Treasurer, in form
and substance satisfactory to the Acquiring Fund and dated as of such Closing
Date, to such effect and as to such other matters as the Acquiring Fund shall
reasonably request.
7.2 The Selling Fund shall have delivered to its corresponding Acquiring
Fund a statement of the Selling Fund's assets and liabilities, together with a
list of the selling Fund's portfolio securities showing the tax costs of such
securities by lot and the holding periods of such securities, as of the Closing
Date, certified by the Treasurer of the Independence One Trust.
7.3 The Acquiring Fund shall have received on the applicable Closing Date
an opinion of Dickstein, Shapiro, Morin & Oshinsky LLP, counsel to each Selling
Fund, dated as of such Closing Date, in a form reasonably satisfactory to the
Acquiring Fund, covering the following points:
(a) Each Selling Fund is a legally designated, separate series of the
Independence One Trust, and that the Independence One Trust is a voluntary
association duly organized and validly existing under the laws of the
Commonwealth of Massachusetts, which, to such counsel's knowledge, has the
power to own all of its properties and assets and to carry on its business
as presently conducted.
(b) The Independence One Trust is registered as an investment company
under the 1940 Act, and, to such counsel's knowledge, such registration
with the Commission is in full force and effect.
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(c) This Agreement has been duly authorized, executed and delivered by
the Independence One Trust on behalf of each Selling Fund and, assuming due
authorization, execution and delivery of this Agreement by the Trust on
behalf of each Acquiring Fund, is a valid and binding obligation of the
Selling Fund enforceable against the Selling Fund in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and to general equity principles.
(d) Assuming that a consideration of not less than the net asset value
of Selling Fund Shares has been paid, and assuming that such shares were
issued in accordance with the terms of each Selling Fund's registration
statement, or any amendment thereto, in effect at the time of such
issuance, all issued and outstanding shares of the Selling Fund are legally
issued and fully paid and non-assessable, and no shareholder of a Selling
Fund has any preemptive rights with respect to the Selling Fund's shares.
(e) To the knowledge of such counsel, no consent, approval,
authorization or order of any court or governmental authority of the United
States or the Commonwealth of Massachusetts is required for consummation by
a Selling Fund of the transactions contemplated herein, except as have been
obtained under the 1933 Act, the 1934 Act and the 1940 Act.
(f) The execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated hereby will not, result in a
violation of the Independence One Trust's Declaration of Trust (assuming
shareholder approval has been obtained) or By-laws, or any provision of any
material agreement, indenture, instrument, contract, lease or other
undertaking (in each case known to such counsel) to which a Selling Fund is
a party or by which a Selling Fund or any of its properties may be bound
or, to the knowledge of such counsel, result in the acceleration of any
obligation or the imposition of any penalty, under any agreement, judgment,
or decree to which the Selling Fund is a party or by which it is bound.
(g) In the ordinary course of such counsel's representation of the
Selling Funds, and without having made any investigation, such counsel does
not know of any legal or governmental proceedings (insofar as they relate
to a Selling Fund) existing on or before the date of mailing of the Proxy
Materials or the Closing Date, which are required to be described in the
Proxy Materials or to be filed as an exhibit thereto that are not described
or filed as required.
(h) In the ordinary course of such counsel's representation of the
Selling Funds, and without having made any investigation, and except as
otherwise disclosed, such counsel is not aware of any litigation or
administrative proceeding or investigation of or before any court or
governmental body that is presently pending or threatened as to a Selling
Fund or any of its respective properties or assets. In the ordinary course
of such counsel's representation of the Selling Funds, and without having
made any investigation, to the knowledge of such counsel, no Selling Fund
is a party to or subject to the provisions of any order, decree or judgment
of any court or governmental body, which materially and adversely affects
the Selling Fund's business other than as previously disclosed in the Proxy
Materials.
ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF EACH
ACQUIRING FUND AND SELLING FUND
If any of the conditions set forth below do not exist on or before the
applicable Closing Date with respect to each Selling Fund or its corresponding
Acquiring Fund, the other party to this Agreement shall, at its option, not be
required to consummate the transactions contemplated by this Agreement:
8.1 This Agreement and the transactions contemplated herein, with respect
to each Selling Fund, shall have been approved by the requisite vote of the
holders of the outstanding shares of each Selling Fund in accordance with
applicable law and the provisions of the Independence One Trust's Declaration of
Trust and By-Laws. Certified copies of the resolutions evidencing such approval
shall have been delivered to the
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corresponding Acquiring Fund. Notwithstanding anything herein to the contrary,
neither an Acquiring Fund nor a Selling Fund may waive the conditions set forth
in this paragraph 8.1.
8.2 On each Closing Date, the Commission shall not have issued an
unfavorable report under Section 25(b) of the 1940 Act, or instituted any
proceeding seeking to enjoin the consummation of the transactions contemplated
by this Agreement under Section 25(c) of the 1940 Act. Furthermore, no action,
suit or other proceeding shall be threatened or pending before any court or
governmental agency in which it is sought to restrain or prohibit, or obtain
damages or other relief in connection with this Agreement or the transactions
contemplated herein.
8.3 All required consents of other parties and all other consents, orders,
and permits of federal, state and local regulatory authorities (including those
of the Commission and of State securities authorities, including any necessary
"no-action" positions and exemptive orders from such federal and state
authorities) to permit consummation of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent,
order, or permit would not involve a risk of a material adverse effect on the
assets or properties of an Acquiring Fund or a Selling Fund, provided that
either party hereto may waive any such conditions for itself.
8.4 The Registration Statements shall have become effective under the 1933
Act, and no stop orders suspending the effectiveness thereof shall have been
issued. To the best knowledge of the parties to this Agreement, no investigation
or proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act.
8.5 Each Selling Fund shall have declared and paid a dividend or dividends
which, together with all previous such dividends, shall have the effect of
distributing to its shareholders all of the Selling Fund's net investment
company taxable income for all taxable periods ending on or before the
applicable Closing Date (computed without regard to any deduction for dividends
paid), if any, plus the excess of its interest income, if any, excludible from
gross income under Section 103(a) of the Code over its deduction disallowed
under Sections 265 and 171(a)(2) of the Code for all taxable years ending on or
before such Closing Date and, with respect to the Selling Funds with a Closing
Date of May 24, 2002, all of its net capital gains realized in all taxable
periods ending on or before such Closing Date (after reduction for any capital
loss carry forward).
8.6 The parties shall have received an opinion of Vedder, Price, Kaufman &
Kammholz addressed to each Acquiring Fund and Selling Fund substantially to the
effect that for federal income tax purposes with respect to each Selling Fund:
(a) The transfer of all of the Selling Fund's assets in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
identified liabilities of the Selling Fund (followed by the distribution of
Acquiring Fund Shares to the Selling Fund Shareholders in dissolution and
liquidation of the Selling Fund) will constitute a "reorganization" within
the meaning of Section 368(a) of the Code and the Acquiring Fund and the
Selling Fund will each be a "party to a reorganization" within the meaning
of Section 368(b) of the Code.
(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Selling Fund solely in exchange for Acquiring
Funds Share and the assumption by the Acquiring Fund of the identified
liabilities of the Selling Fund.
(c) No gain or loss will be recognized by the Selling Fund upon the
transfer of the Selling Fund's assets to the Acquiring Fund in exchange for
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
identified liabilities of the Selling Fund or upon the distribution
(whether actual or constructive) of Acquiring Fund Shares to Selling Fund
Shareholders in exchange for such shareholders' shares of the Selling Fund.
(d) No gain or loss will be recognized by the Selling Fund
Shareholders upon the exchange of their Selling Fund shares for Acquiring
Fund Shares in the Reorganization.
(e) The aggregate tax basis for Acquiring Fund Shares received by
each Selling Fund Shareholder pursuant to the Reorganization will be the
same as the aggregate tax basis of the Selling Fund shares
A-13
exchanged therefor by such shareholder. The holding period of Acquiring
Fund Shares to be received by each Selling Fund Shareholder will include
the period during which the Selling Fund shares exchanged therefor were
held by such shareholder, provided the Selling Fund shares are held as
capital assets at the time of the Reorganization.
(f) The tax basis of the Selling Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the
Selling Fund immediately before the Reorganization. The holding period of
the assets of the Selling Fund in the hands of the Acquiring Fund will
include the period during which those assets were held by the Selling Fund.
Such opinion shall be based on customary assumptions and such
representations as Vedder, Price, Kaufman & Kammholz may reasonably request, and
each Selling Fund and Acquiring Fund will cooperate to make and certify the
accuracy of such representations. Notwithstanding anything herein to the
contrary, neither an Acquiring Fund nor a Selling Fund may waive the conditions
set forth in this paragraph 8.6.
ARTICLE IX
EXPENSES
9.1 ABN AMRO Asset Management (USA) LLC and/or affiliated persons thereof
will pay all expenses associated with Acquiring Funds' and Selling Funds'
participation in the Reorganization. Reorganization expenses include, without
limitation: (a) expenses associated with the preparation and filing of the Proxy
Materials; (b) postage; (c) printing; (d) accounting fees; (e) legal fees
incurred by each Fund; (f) solicitation costs of the transaction; and (g) other
related administrative or operational costs.
ARTICLE X
ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust, on behalf of each Acquiring Fund, and the Independence One
Trust, on behalf of each Selling Fund, agree that neither party has made to the
other party any representation, warranty and/or covenant not set forth herein,
and that this Agreement constitutes the entire agreement between the parties.
10.2 Except as specified in the next sentence set forth in this section
10.2, the representations, warranties, and covenants contained in this Agreement
or in any document delivered pursuant to or in connection with this Agreement,
shall not survive the consummation of the transactions contemplated hereunder.
The covenants to be performed after each Closing Date, and the obligations of
each of the Acquiring Funds in sections 5.8, 5.9 and 6.4, shall continue in
effect beyond the consummation of the transactions contemplated hereunder.
ARTICLE XI
TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Trust
and the Independence One Trust. In addition, either the Trust or the
Independence One Trust may at its option terminate this Agreement at or before
either Closing Date due to:
(a) a breach by the other of any representation, warranty, or
agreement contained herein to be performed at or before each Closing Date,
if not cured within 30 days;
(b) a condition herein expressed to be precedent to the obligations of
the terminating party that has not been met and it reasonably appears that
it will not or cannot be met; or
(c) a determination by a party's Board of Trustees, as appropriate,
determine that the consummation of the transactions contemplated herein is
not in the best interest of the Independence One Trust or the Trust,
respectively, and notice given to the other party hereto.
A-14
11.2 In the event of any such termination, in the absence of willful
default, there shall be no liability for damages on the part of either an
Acquiring Fund, a Selling Fund, the Trust, the Independence One Trust, or their
respective Trustees or officers, to the other party or its Trustees or officers,
but the Trust shall bear the expenses incurred in the preparation and carrying
out of this Agreement.
ARTICLE XII
AMENDMENTS
12.1 This Agreement may be amended, modified, or supplemented in such
manner as may be mutually agreed upon in writing by the officers of the Trust
and the Independence One Trust as specifically authorized by their respective
Board of Trustees; provided, however, that following the meeting of the Selling
Fund Shareholders called by a Selling Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund Shares to be issued to the Selling Fund
Shareholders under this Agreement to the detriment of such shareholders without
their further approval.
ARTICLE XIII
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
13.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, except paragraph 13.6 which shall be governed
by the laws of the Commonwealth of Massachusetts.
13.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but, except as provided in
this paragraph, no assignment or transfer hereof or of any rights or obligations
hereunder shall be made by any party without the written consent of the other
party. Nothing herein expressed or implied is intended or shall be construed to
confer upon or give any person, firm, or corporation, other than the parties
hereto and their respective successors and assigns, any rights or remedies under
or by reason of this Agreement.
13.5 It is expressly agreed that the obligations of each Acquiring Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Trust personally, but shall bind only the
trust property of the Acquiring Fund, as provided in the Trust Instrument of the
Trust. The execution and delivery of this Agreement have been authorized by the
Trustees of the Trust on behalf of each Acquiring Fund and signed by authorized
officers of the Trust, acting as such. Neither the authorization by such
Trustees nor the execution and delivery by such officers shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of each Acquiring Fund as
provided in the Trust's Trust Instrument.
13.6 It is expressly agreed that the obligations of each Selling Fund
hereunder shall not be binding upon any of the Trustees, shareholders, nominees,
officers, agents, or employees of the Independence One Trust personally, but
shall bind only the trust property of the Selling Fund, as provided in the
Declaration of Trust of the Independence One Trust. The execution and delivery
of this Agreement have been authorized by the Trustees of the Independence One
Trust on behalf of each Selling Fund and signed by authorized officers of the
Independence One Trust, acting as such. Neither the authorization by such
Trustees nor the execution and delivery by such officers shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, but shall bind only the trust property of each Selling Fund as
provided in the Independence One Trust's Declaration of Trust.
A-15
IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as of the
date first written above.
INDEPENDENCE ONE MUTUAL FUNDS
By:
------------------------------------
Name:
Title: President
ACKNOWLEDGED:
By:
-------------------------------------------------------
Name:
---------------------------------------------------
Title:
-----------------------------------------------------
ABN AMRO FUNDS
By:
------------------------------------
Name: Kenneth Anderson
Title: President
ACKNOWLEDGED:
By:
-------------------------------------------------------
Name:
---------------------------------------------------
Title:
-----------------------------------------------------
A-16
SCHEDULE A TO THE AGREEMENT AND PLAN OF REORGANIZATION
SUMMARY OF THE REORGANIZATION
(shareholders of each Selling Fund will receive shares
of the class of the Acquiring Fund opposite their class)
<Table>
<Caption>
INDEPENDENCE ONE FUND (SELLING FUND) ABN AMRO FUND (ACQUIRING FUND)
- ------------------------------------ ------------------------------
Independence One U.S. Treasury Money Market ABN AMRO Treasury Money Market Fund
-- Class K Shares -- Class I Shares
Independence One Prime Money Market Fund ABN AMRO Institutional Prime Money Market Fund
-- Class Y Shares -- Class Y Shares
-- Class K Shares -- Class YS Shares
Independence One Fixed Income Fund ABN AMRO Investment Grade Bond Fund
-- Trust Class Shares -- Class I Shares
-- Class B Shares -- Class I Shares
Independence One U.S. Government Securities Fund ABN AMRO Investment Grade Bond Fund
-- Class A Shares -- Class I Shares
-- Class B Shares -- Class I Shares
Independence One Small Cap Fund ABN AMRO Select Small Cap Fund
-- Class A Shares -- Class N Shares
Independence One Equity Plus Fund ABN AMRO Equity Plus Fund
-- Trust Class Shares -- Class I Shares
-- Class A Shares -- Class I Shares
-- Class B Shares -- Class I Shares
Independence One International Equity Fund ABN AMRO International Equity Fund
-- Class A Shares -- Class N Shares
</Table>
A-17
SCHEDULE B TO THE AGREEMENT AND PLAN OF REORGANIZATION
TOTAL NET FUND OPERATING EXPENSES FOR ACQUIRING FUNDS
(as a percentage of net assets)
<Table>
<Caption>
FUND CLASS EXPENSE LIMIT
- ---- --------------- -------------
ABN AMRO Treasury Money Market Fund......................... Class I Shares 0.36%(1)
ABN AMRO International Equity Fund.......................... Class N Shares 1.41%(1)
ABN AMRO Investment Grade Bond Fund......................... Class I Shares []%(2)
ABN AMRO Select Small Cap Fund.............................. Class N Shares []%(2)
ABN AMRO Equity Plus Fund................................... Class N Shares []%(2)
ABN AMRO Institutional Prime Money Market Fund.............. Class Y Shares 0.18%(3)
0.43%(3)
Class YS Shares
</Table>
- ---------------
(1) Reflects that the contractual expense limitations currently in place through
September 30, 2003 will remain in place after the Reorganization.
(2) Expenses will be limited to the amount shown (corresponding acquired Fund's
total net operating expenses immediately before the Reorganization) for four
full calendar quarters following the Reorganization.
(3) Reflects that the contractual expense limitations currently in place through
September 30, 2002 will remain in place after the Reorganization.
A-18
EXHIBIT B
ABN AMRO FUNDS
ABN AMRO TREASURY MONEY MARKET FUND
PORTFOLIO MANAGER COMMENTARY
KAREN VAN CLEAVE
Q How did the Fund perform during the fiscal year ended October 31, 2001?
A For the twelve-month period that ended October 31, 2001, ABN AMRO Treasury
Money Market Fund, Class I shares produced a 7-day average yield of 2.16%.
Q What was the investment environment like during the twelve-month period?
A At the beginning of the period, there were mounting expectations that the
Fed would lower interest rates to stimulate a flagging U.S. economy. In the
final months of 2000, it became increasingly apparent that economic growth
was slowing significantly in response to higher energy costs, a weak stock
market and uncertainty over the outcome of the 2000 presidential election.
By December, the Fed announced a shift in its bias from raising interest
rates -- as it had during much of the prior year -- toward cutting rates to
boost the sagging economy. The Fed surprised many observers by acting
quickly, lowering the targeted overnight Fed Funds benchmark by 0.50% on
January 3, 2001. Faced with continued economic weakness, the Fed lowered the
target rate six more times throughout the spring and summer. The tragic
events of September 11th prompted two more rate cuts designed to steady the
global financial markets and keep a much-expected recession from worsening.
From the beginning of the period through the end, short-term interest rates
had dropped from 6.5% to 2.5%, their lowest level in almost four decades.
Q What was your strategy?
A Through much of the period, maturities were lengthened in the Fund in
anticipation of further declines in the Fed Funds level and to lock in
higher yields, while remaining consistent with our investment approach of
focusing on high-quality securities. Over the course of the year, maturities
ranged from 8 days to 53 days. But as we approached the Fed's most recent
rate cut in October 2001, we've focused recent purchases in shorter
securities and moved toward a more neutral targeted average maturity of
between 40 to 45 days. This is in anticipation that the Fed may be at or
near the end of its cycle of cutting rates. In a rising interest-rate
environment, a shorter-maturity position can be advantageous because cash
can be reinvested more quickly.
Q What's your outlook?
A Many market participants are forecasting that the Fed may cut rates again at
its December 2001 meeting. Beyond that, it's more difficult to predict the
direction of the economy and interest rates. If we get a sense that rates
are headed higher and that the yield curve will steepen, we're likely to
place more investments out the curve where yield levels are consistent with
and reflect our Federal Funds outlook. Increased issuance of one-month
Treasury bills is likely to keep yields higher in that time frame, given the
greater supply.
B-1
OCTOBER 31, 2001
An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the Fund
seeks to preserve the value of your investment of $1.00 per share, it is
possible to lose money by investing in the Fund.
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
IMONEYNET
CLASS I U.S. TREASURY INDEX
------- -------------------
One Year.................................................... 4.46% 4.21%
Five Year................................................... 4.91% 4.62%
Since Inception 01/04/93.................................... 4.53% 4.34%
</Table>
B-2
ABN AMRO FUNDS
ABN AMRO INTERNATIONAL EQUITY FUND
PORTFOLIO MANAGER COMMENTARY
TEAM MANAGED
Q How did the Fund perform during the fiscal year ended October 31, 2001?
A For the twelve-month period that ended October 31, 2001, ABN AMRO
International Equity Fund, returned -32.41%. By comparison, the Fund's peer
group, the Lipper International Funds Index, returned -24.09% and its
benchmark, the MSCI EAFE Index, returned -24.93%
Q How would you describe the investment environment?
A From a global perspective, it was a very difficult period for growth
investors. As the technology bubble burst and economies around the world
slowed, investors increasingly turned their backs on growth stocks in favor
of more defensive, value stocks. Bad news on the earnings front certainly
didn't make matters better. Year-on-year earnings comparisons were
overwhelmingly negative, and global market volatility increased as a result.
Q What specific factors drove the European and Asian markets during the year?
A Europe's stock market was driven by many of the same forces that affected
the U.S. market. Like their U.S. counterparts, European technology stocks
suffered the most as the economy weakened. In contrast, financial stocks
performed reasonably well in response to the ongoing privatization of
pension plans in Germany and Italy. In Japan, the new Prime Minister Koizumi
took office with promises of changes for the country's economy. While the
Japanese markets were optimistic, not many of the expected changes came to
fruition within this time period. Toward the end of the period, however,
there were some hopeful signs for the Japanese economy, as an increased
number of businesses declared bankruptcy this year. While that may not seem
like good news, we viewed it as a sign that the Japanese government was
becoming more focused on economics than politics, and may take a more
"hands-off" approach to the economy. And, of course, the events of September
11th put additional pressure on economies across the world.
Q What factors affected the Fund's performance?
A Our underperformance was primarily the result of our ongoing commitment to
our growth style of investing, which fell decidedly out of favor during the
year. In Japan, we invested in large exporters of technology and autos, both
of which were hurt by slowing demand and the falling dollar. Similarly,
European stocks such as Ericsson (0.7%), the cellular phone and equipment
maker, suffered during the global slowdown. On the positive side, we were
aided by our overweight in energy stocks BP (2.1%) and Shell (3.6%). Many of
our health care stocks, which typically are in great demand during periods
of uncertainty, also turned in good returns. Over the course of the year, we
noticed a move away from global large-cap pharmaceutical stocks toward
mid-cap niche companies, a trend which benefited holdings such as Elan
(0.6%), an Irish company specializing in drug delivery systems.
Q What is your outlook?
A While we're currently maintaining a mixed outlook for the coming year, we
have been seeing some encouraging signs. First, year-over-year earnings
comparisons are likely to look much better next year than they did this
year. Second, many investors currently are holding a lot of cash. With
interest rates so low and market optimism growing, we expect much of that
cash will make its way back into the stock market next year. We're confident
in our current defensive positioning, although we remain ready to shift to a
more aggressive portfolio as soon as we see signs of a recovery.
B-3
OCTOBER 31, 2001
ABN AMRO INTERNATIONAL EQUITY FUND
GROWTH OF $10,000
[PERFORMANCE GRAPH]
<Table>
<Caption>
LIPPER INTERNATIONAL FUNDS
INTERNATIONAL EQUITY FUND MSCI EAFE INDEX INDEX
------------------------- --------------- --------------------------
1/93* 10000 10000 10000
12/93 12626 13256 13616
12/94 13045 14287 13542
12/95 14875 15888 14999
12/96 16375 16849 16930
12/97 17122 17149 17916
12/98 21476 20578 20266
12/99 30465 26127 27907
12/00 23499 22425 23554
10/01 16138 16890 17995
</Table>
*Inception Date
This chart compares a $10,000 investment made in Class N Shares of the Fund on
its inception date to $10,000 investment made in the indices (MSCI EAFE Index
and Lipper International Funds Average index) on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Prospectus
and elsewhere in this report. Past performance is not indicative of future
performance. Indices are unmanaged and investors cannot invest in them.
This chart compares a $10,000 investment made in Class N Shares of the Fund
on its inception date to $10,000 investments made in the indices (MSCI EAFE
Index and Lipper International Funds Index) on that date. All dividends and
capital gains are reinvested. Further information relating to the Fund's
performance, including expense reimbursements, is contained in the Fund's
Prospectus and in the Fund's Annual Report.
Investing in foreign securities may involve additional risks, social and
political instability, reduced market liquidity and currency volatility.
Past performance is not indicative of future performance. The principal
value and investment return of an investment will fluctuate so that an
investor's shares, when redeemed may be worth more or less than their original
cost. Indices are unmanaged and investors cannot invest in them.
<Table>
<Caption>
AVERAGE
ANNUAL TOTAL
RETURN
------------
One Year.................................................... (32.41)%
Five Year................................................... 0.49%
Since Inception............................................. 5.57%
</Table>
The International Equity Fund seeks a high level of total return through
capital appreciation and current income. The Fund invests primarily in common
stocks and other equity securities of foreign companies, focusing on developed
countries in Europe, Australia and the Far East. AAAM is the Adviser for the
Fund, which commenced operation on January 4, 1993.
B-4
ABN AMRO FUNDS
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND
PORTFOLIO MANAGER COMMENTARY
KAREN VAN CLEAVE
Q How did the Fund perform during the fiscal year ended October 31, 2001?
A For the twelve month period that ended October 31, 2001, ABN AMRO
Institutional Prime Money Market Fund, Class Y, produced a 7-day average
yield of 2.58%, while the Class YS shares produced a 7-day average yield of
2.33%.
Q What was the investment environment like during the twelve month period?
A At the beginning of the period, there were mounting expectations that the
Federal Reserve Board (the "Fed") would lower interest rates to stimulate a
flagging U.S. economy. In the final months of 2000, it became increasingly
apparent that economic growth was slowing significantly in response to
higher energy costs, a weak stock market and uncertainty over the outcome of
the 2000 presidential election. By December, the Fed announced a shift in
its bias from raising interest rates -- as it had during much of the prior
year -- toward cutting rates to boost the sagging economy. The Fed surprised
many observers by acting quickly, lowering the targeted overnight Fed Funds
benchmark by 0.50% on January 3, 2001. Faced with continued economic
weakness, the Fed lowered the target rate six more times throughout the
spring and summer. The tragic events of September 11, 2001 prompted two more
rate cuts designed to steady the global financial markets and keep a
much-expected recession from worsening. From the beginning of the period
through the end, short-term interest rates had dropped from 6.5% to 2.5%,
their lowest level in almost four decades.
Q What was your strategy?
A Throughout much of the period, maturities were lengthened in the Fund in
anticipation of further declines in the Fed Funds level and to lock in
higher yields, while remaining consistent with our investment approach of
focusing on high-quality securities. Over the course of the year, maturities
ranged from 15 days to 59 days. But as we approached the Fed's most recent
rate cut in October 2001, we've focused recent purchases in shorter
securities and moved toward a more neutral targeted average maturity of
between 40 to 45 days. This is in anticipation that the Fed may be at or
near the end of its cycle of cutting rates. In a rising interest-rate
environment, a shorter-maturity position can be advantageous because cash
can be reinvested more quickly.
Q What's your outlook?
A Many market participants are forecasting that the Fed may cut rates again at
its December 2001 meeting. Beyond that, it's more difficult to predict the
direction of the economy and interest rates. If we get a sense that rates
are headed higher and that the yield curve will steepen, we're likely to
place more investments out the curve where yield levels are consistent with
and reflect our Federal Funds outlook. Furthermore, the decline in the
supply of commercial paper has been offset by an increase in one month
Treasury bills, which is likely to keep yields higher in that time frame,
given the greater supply.
B-5
OCTOBER 31, 2001
An investment in the Fund is not insured or guaranteed by the Federal
Deposit Insurance Corporation or any other government agency. Although the Fund
seeks to preserve the value of your investment of $1.00 per share, it is
possible to lose money by investing in the Fund.
AVERAGE ANNUAL TOTAL RETURNS
<Table>
<Caption>
IMONEYNET
FIRST TIER
CLASS Y INSTITUTIONAL INDEX
------- -------------------
One Year................................................... 4.85% 4.52%
Five Year.................................................. N/A N/A
Since Inception 12/28/99................................... 5.48% 5.18%
</Table>
<Table>
<Caption>
IMONEYNET
FIRST TIER
CLASS YS INSTITUTIONAL INDEX
-------- -------------------
One Year.................................................. 4.59% 4.52%
Five Year................................................. N/A N/A
Since Inception 06/29/01.................................. 5.07% 4.98%
</Table>
B-6
STATEMENT OF ADDITIONAL INFORMATION
ABN AMRO FUNDS
161 NORTH CLARK STREET
CHICAGO, ILLINOIS 60601
1-800-992-8151
This Statement of Additional Information is not a prospectus, but
should be read in conjunction with the Proxy Statement/Prospectus dated April 1,
2002 for the Special Meeting of Shareholders of the Independence One Funds to be
held on Friday, May 10, 2002. Copies of the Proxy Statement/Prospectus may be
obtained at no charge by writing to the ABN AMRO Funds, P.O. Box 9765,
Providence, Rhode Island 02940, or by calling toll-free 1-800-992-8151. Unless
otherwise indicated, capitalized terms used herein and not otherwise defined
have the same meanings as are given to them in the Proxy Statement/Prospectus.
Further information about the ABN AMRO Funds is contained in and
incorporated by reference to the ABN AMRO Funds' Statement of Additional
Information ("SAI") dated March _____, 2002 insofar as such SAI relates to the
ABN AMRO Funds participating in the Reorganization. No other parts of the SAI
are incorporated by reference herein. The audited financial statements and
related independent accountant's report for the ABN AMRO Treasury Money Market
Fund, the ABN AMRO International Equity Fund and the ABN AMRO Institutional
Prime Money Market Fund (collectively, the "Existing ABN AMRO Funds") contained
in the Annual Report(s) for the fiscal year ended October 31, 2001 are hereby
incorporated herein by reference insofar as they relate to the ABN AMRO Funds
participating in the Reorganization. No other parts of the Annual Report are
incorporated by reference herein.
The unaudited pro forma financial statements, attached hereto, are
intended to present the financial condition and related results of operations of
certain of the participating ABN AMRO Funds as if the Reorganization had been
consummated on October 31, 2001. The unaudited interim pro forma financial
statements, attached hereto, are intended to present the financial condition and
related results of operations of certain of the participating ABN AMRO Funds as
if the Reorganization had been consummated on October 31, 2001. Pro forma
financial statements are attached for the ABN AMRO Treasury Money Market
Fund/Independence One U.S. Treasury Money Market Fund; the ABN AMRO
International Equity Fund/Independence One International Equity Fund, the ABN
AMRO Investment Grade Bond Fund/Independence One Fixed Income Fund/Independence
One U.S. Government Securities Fund and the ABN AMRO Institutional Prime Money
Market Fund/Independence One Prime Money Market Fund. Pro forma financial
statements are not attached for the ABN AMRO Select Small Cap Fund/Independence
One Small Cap Fund or the ABN AMRO Equity Plus Fund/Independence One Equity Plus
Fund, because the ABN AMRO Select Small Cap Fund and the ABN AMRO Equity Plus
Fund have no operating results.
Further information about the Independence One Funds is contained in
and incorporated by reference to the Independence One Funds' Statement of
Additional Information dated June 30, 2001. The audited financial statements and
related independent accountant's report for the Independence One Funds contained
in the 2001 Annual Report to Shareholders for the fiscal year ended April 30,
2001, are incorporated herein by reference. The unaudited financial statements
for the Independence One Funds contained in the Semi-Annual Report dated October
31, 2001 are incorporated by reference herein.
The date of this Statement of Additional Information is April 1, 2002.
S-1
ABN AMRO TREASURY MONEY MARKET FUND
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
October 31, 2001
ABN AMRO INDEPENDENCE ONE
TREASURY U.S. TREASURY PRO FORMA
MONEY MARKET MONEY MARKET PRO FORMA COMBINED
FUND FUND ADJUSTMENTS (NOTE 1)
-------------------------------------------------------------------------
ASSETS:
Investments:
Investments at cost $ 155,915,991 $ 60,059,969 $ -- $ 215,975,960
Repurchase agreements 116,800,745 56,671,000 -- 173,471,745
-------------------------------------------------------------------------
Total Investments at value 272,716,736 116,730,969 -- 389,447,705
Cash -- 227 -- 227
Receivables:
Dividends and interest 513,252 1,272,600 -- 1,785,852
Other assets 10,834 -- -- 10,834
-------------------------------------------------------------------------
Total assets 273,240,822 118,003,796 -- 391,244,618
-------------------------------------------------------------------------
LIABILITIES:
Payables:
Dividend distribution 456,704 222,632 -- 679,336
Fund shares redeemed 20 -- -- 20
Due to Adviser, net 53,244 53,551 -- 84,988
Administration fee 11,457 -- -- (426,294)
Distribution fee 1,200 -- -- 1,200
Trustees fees 3,861 -- -- (3,829)
Accrued expenses and other payables 48,599 118,687 -- 101,171
-------------------------------------------------------------------------
Total liabilities 575,085 394,870 -- 436,592
-------------------------------------------------------------------------
NET ASSETS $ 272,665,737 $ 117,608,926 $ -- $ 390,808,026
=========================================================================
NET ASSETS CONSISTS OF:
Paid in capital $ 272,657,522 $ 117,608,926 $ -- $ 390,266,448
Accumulated undistributed net investment income 8,983 -- -- 542,346
Accumulated net realized loss on investments sold (768) -- -- (768)
-------------------------------------------------------------------------
TOTAL NET ASSETS $ 272,665,737 $ 117,608,926 $ 533,363 $ 390,808,026
=========================================================================
ABN AMRO Class I:
Net Assets $ 246,473,070 N/A $ 117,608,926(a) $ 364,615,359
Shares of beneficial interest outstanding 246,466,663 N/A 117,608,926(a) 364,608,952
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) $ 1.00 N/A $ -- $ 1.00
=========================================================================
ABN AMRO Class S: $ 26,192,667 N/A $ -- $ 26,192,667
Net Assets 26,190,838 N/A -- 26,190,838
Shares of beneficial interest outstanding
NET ASSET VALUE
Offering and redemption price per share $ 1.00 N/A $ -- $ 1.00
=========================================================================
(Net Assets/Shares Outstanding)
Independence One Class K:
Net Assets N/A $ 117,608,926 $(117,608,926)(b) N/A
Shares of beneficial interest outstanding N/A 117,608,926 (117,608,926)(b) N/A
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) N/A $ 1.00 $ -- N/A
=========================================================================
(a) Reflects net effect of combining existing Independence One U.S. Treasury
Money Market Fund into the ABN AMRO Treasury Money Market Fund.
(b) Reflects exchange of Independence One U.S. Treasury Money Market Fund Class
K into ABN AMRO Treasury Money Market Fund I Share Class.
See Notes to Pro Forma Financial Statements
ABN AMRO TREASURY MONEY MARKET FUND
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED OCTOBER 31, 2001
INDEPENDENCE ONE
ABN AMRO U.S. TREASURY PRO FORMA
TREASURY MONEY MONEY MARKET FUND PRO FORMA COMBINED
MARKET FUND FUND ADJUSTMENTS (NOTE 1)
-----------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 11,539,014 $ 11,617,116 $ -- $ 23,156,130
-----------------------------------------------------------------------
Total investment income 11,539,014 11,617,116 -- 23,156,130
-----------------------------------------------------------------------
EXPENSES:
Investment advisory fees 865,477 981,653 (122,215)(a) 1,724,915
Distribution expenses 36,899 -- -- 36,899
Transfer agent fees 31,279 25,038 (22,187)(b) 34,130
Administration fees 380,647 313,377 (437,751)(a) 256,273
Registration fees 57,724 27,394 (55,358)(b) 29,760
Custodian fees 13,247 43,389 (23,333)(b) 33,303
Professional fees 20,118 20,480 (14,893)(b) 25,705
Reports to shareholder expense 11,933 12,189 5,509 (b) 29,631
Trustees fees 8,029 11,772 (7,690)(b) 12,111
Other expenses 1,631 2,253 44,147 (b) 48,031
Shareholder service fees 4,752 -- -- 4,752
-----------------------------------------------------------------------
Total expenses before waivers/reimbursements 1,431,736 1,437,545 (633,771) 2,235,510
Less: Fund level waivers/reimbursement (543,958) -- 100,408 (c) (443,550)
-----------------------------------------------------------------------
Net Expenses 887,778 1,437,545 (533,363) 1,791,960
-----------------------------------------------------------------------
NET INVESTMENT INCOME 10,651,236 10,179,571 533,363 21,364,170
-----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments -- -- -- --
Net change in unrealized appreciation on investments -- -- -- --
-----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS -- -- -- --
-----------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 10,651,236 $ 10,179,571 $ 533,363 $ 21,364,170
=======================================================================
(a) Reflects adjustment to the acquired fund contractual fee level.
(b) Reflects expected savings/increases based on current year budget.
(c) Reflects adjustment to the acquired fund's contractual expense limitation.
See Notes to Pro Forma Financial Statements
ABN AMRO TREASURY MONEY MARKET FUND
INDEPENDENCE ONE U,S, TREASURY MONEY MARKET FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS (UNAUDITED)
OCTOBER 31, 2001
PAR VALUE DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------------
INDEPENDENCE ONE
ABN AMRO Treasury U.S. Treasury Money Pro Forma
Market Fund Market Fund Combined
- -----------------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--55.26%
U.S. Treasury Bills (A)--34.50%
$ 30,000,000 $ - $ 30,000,000 3.050%, 11/01/01
25,000,000 - 25,000,000 2.848%, 11/08/01
30,000,000 - 30,000,000 2.752%, 11/15/01
- 15,000,000 15,000,000 2.480%, 11/23/01
10,000,000 - 10,000,000 2.059%, 11/29/01
10,000,000 - 10,000,000 2.095%, 12/06/01
15,000,000 - 15,000,000 2.014%, 01/24/02
Total U.S. Treasury Bills
U.S. Treasury Notes--20.76%
15,000,000 - 15,000,000 6.250%, 07/31/02
- 15,000,000 15,000,000 7.500%, 11/15/01
- 30,000,000 30,000,000 5.875%, 11/30/01
20,000,000 - 20,000,000 6.375%, 08/15/02
Total U.S. Treasury Notes
Total U.S. Treasury Obligations
(Cost $155,915,991 and $60,059,969)
Repurchase Agreements--44.39%
- 25,671,000 25,671,000 BA Securities, 2.500%, dated 10/31/01, matures 11/01/01 (B)
- 26,000,000 26,000,000 Banc One Capital Markets, 2.510%, dated 10/31/01, matures 11/01/01 (B)
- 5,000,000 5,000,000 Goldman Sachs, 2.480%, dated 10/31/01, matures 11/01/01 (B)
37,840,912 - 37,840,912 J.P. Morgan Chase, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $37,843,529 (collateralized by U.S. Treasury Instruments, total
market value: $38,600,405)
49,103,718 - 49,103,718 Morgan Stanley, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $49,107,114 (collateralized by U.S. Treasury Instruments, total
market value: $50,579,042)
29,856,115 - 29,856,115 UBS Warburg, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $29,858,180 (collateralized by U.S. Treasury Instruments, total
market value: $30,456,069)
Total Repurchase Agreements
(Cost $116,800,745 and $56,671,000)
Total Investments--99.65%
(Cost $272,716,736 and $116,730,969)
Net Other Assets and Liabilities--0.35%
Net Assets--100.00%
DESCRIPTION MARKET VALUE
- --------------------------------------------------------------------------------------------------------------------------
INDEPENDENCE
ABN AMRO Treasury ONE U.S. Treasury
Market Fund Money Market Fund
- --------------------------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--55.26%
U.S. Treasury Bills (A)--34.50%
3.050%, 11/01/01 $ 30,000,000 $ -
2.848%, 11/08/01 24,986,032 -
2.752%, 11/15/01 29,967,187 -
2.480%, 11/23/01 - 14,980,017
2.059%, 11/29/01 9,983,433 -
2.095%, 12/06/01 9,979,875 -
2.014%, 01/24/02 14,926,675 -
------------------------------------------
Total U.S. Treasury Bills 119,843,202 14,980,017
------------------------------------------
U.S. Treasury Notes--20.76%
6.250%, 07/31/02 15,436,532 -
7.500%, 11/15/01 - 15,028,027
5.875%, 11/30/01 - 30,051,925
6.375%, 08/15/02 20,636,257 -
------------------------------------------
Total U.S. Treasury Notes 36,072,789 45,079,952
------------------------------------------
Total U.S. Treasury Obligations 155,915,991 60,059,969
------------------------------------------
(Cost $155,915,991 and $60,059,969)
Repurchase Agreements--44.39%
BA Securities, 2.500%, dated 10/31/01, matures 11/01/01 (B) - 25,671,000
Banc One Capital Markets, 2.510%, dated 10/31/01, matures 11/01/01 (B) - 26,000,000
Goldman Sachs, 2.480%, dated 10/31/01, matures 11/01/01 (B) - 5,000,000
J.P. Morgan Chase, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $37,843,529 (collateralized by U.S. Treasury Instruments, total
market value: $38,600,405) 37,840,912 -
Morgan Stanley, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $49,107,114 (collateralized by U.S. Treasury Instruments, total
market value: $50,579,042) 49,103,718 -
UBS Warburg, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $29,858,180 (collateralized by U.S. Treasury Instruments, total
market value: $30,456,069) 29,856,115 -
------------------------------------------
Total Repurchase Agreements 116,800,745 56,671,000
------------------------------------------
(Cost $116,800,745 and $56,671,000)
Total Investments--99.65% 272,716,736 116,730,969
------------------------------------------
(Cost $272,716,736 and $116,730,969)
Net Other Assets and Liabilities--0.35% (50,999) 877,957
------------------------------------------
Net Assets--100.00% $ 272,665,737 $ 117,608,926
==========================================
DESCRIPTION MARKET VALUE
- --------------------------------------------------------------------------------------------------------------------
Pro Forma
Adjustment Pro Forma Combined
- --------------------------------------------------------------------------------------------------------------------
U.S. Treasury Obligations--55.26%
U.S. Treasury Bills (A)--34.50%
3.050%, 11/01/01 $ - $ 30,000,000
2.848%, 11/08/01 - 24,986,032
2.752%, 11/15/01 - 29,967,187
2.480%, 11/23/01 - 14,980,017
2.059%, 11/29/01 - 9,983,433
2.095%, 12/06/01 - 9,979,875
2.014%, 01/24/02 - 14,926,675
-------------------------------------
Total U.S. Treasury Bills - 134,823,219
-------------------------------------
U.S. Treasury Notes--20.76%
6.250%, 07/31/02 - 15,436,532
7.500%, 11/15/01 - 15,028,027
5.875%, 11/30/01 - 30,051,925
6.375%, 08/15/02 - 20,636,257
-------------------------------------
Total U.S. Treasury Notes - 81,152,741
-------------------------------------
Total U.S. Treasury Obligations - 215,975,960
-------------------------------------
(Cost $155,915,991 and $60,059,969)
Repurchase Agreements--44.39%
BA Securities, 2.500%, dated 10/31/01, matures 11/01/01 (B) - 25,671,000
Banc One Capital Markets, 2.510%, dated 10/31/01, matures 11/01/01 (B) - 26,000,000
Goldman Sachs, 2.480%, dated 10/31/01, matures 11/01/01 (B) - 5,000,000
J.P. Morgan Chase, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $37,843,529 (collateralized by U.S. Treasury Instruments, total
market value: $38,600,405) - 37,840,912
Morgan Stanley, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $49,107,114 (collateralized by U.S. Treasury Instruments, total
market value: $50,579,042) - 49,103,718
UBS Warburg, 2.490%, dated 10/31/01, matures 11/01/01, repurchase
price $29,858,180 (collateralized by U.S. Treasury Instruments, total
market value: $30,456,069) - 29,856,115
-------------------------------------
Total Repurchase Agreements - 173,471,745
-------------------------------------
(Cost $116,800,745 and $56,671,000)
Total Investments--99.65% - 389,447,705
-------------------------------------
(Cost $272,716,736 and $116,730,969)
Net Other Assets and Liabilities--0.35% 533,363 1,360,321
-------------------------------------
Net Assets--100.00% $ 533,363 $ 390,808,026
=====================================
* At October 31, 2001, cost is identical for book and Federal income tax
purposes.
(A) Annualized yield at the time of purchase.
(B) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
ABN AMRO TREASURY MONEY MARKET FUND
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The ABN AMRO Funds, a Delaware business trust (the "Trust"), is registered under
the Investment Company Act of 1940, as amended, (the "1940 Act") as an open-end
management investment company. As of October 31, 2001, the Trust offered twenty
eight managed investment portfolios. The unaudited Pro Forma Combining Portfolio
of Investments and the unaudited Pro Forma Statement of Assets and Liabilities
assumes the exchange described in the next paragraph occurred as of October 31,
2001 and the unaudited Pro Forma Combining Statement of Operations assumes the
exchange occurred as of November 1, 2000. These statements have been derived
from books and records utilized in calculating the net asset value of each fund
at October 31, 2001 and for the year then ended.
The pro forma statements give effect to the proposed transfer of substantially
all of the assets and stated liabilities of the Independence One U.S. Treasury
Money Market Fund in exchange for shares of the ABN AMRO Treasury Money Market
Fund. Under generally accepted accounting principles, the historical cost of
investment securities will be carried forward to the surviving entity and the
results of operations of the Independence One U.S. Treasury Money Market Fund
for pre-combination periods will not be restated. The pro forma statements do
not reflect the expenses of either fund in carrying out its obligations under
the proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma Combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
For the year ended October 31, 2001 the ABN AMRO Treasury Money Market Fund's
investment advisory fee was computed based on the annual rate of 0.35% of its
average daily net assets. The administration fee was computed based on the
annual rate of 0.060% of the first $2.0 billion of the Trust's combined average
daily net assets, 0.050% of the next $10.5 billion, and 0.045% of the combined
average daily net assets in excess of $12.5 billion, and was allocated to each
fund based on the relative net assets of the Trust.
Pursuant to a Rule 12b-1 distribution plan (the "Plan") adopted by the ABN AMRO
Treasury Money Market Fund with respect to Class S Shares, the Fund pays certain
expenses associated with the distribution of its shares. Under the Plan, the
Fund may pay actual expenses not exceeding, on an annual basis, 0.25% of the
Fund's average daily net assets.
In addition, the Fund has adopted a shareholder servicing plan for the Class S
Shares. The Fund pays certain expenses for its efforts in maintaining client
accounts, arranging bank wires, responding to inquiries concerning services
provided on investments and assisting clients in purchase, redemption and
exchange transactions, and changing their dividend options, account designations
and addresses. Under the Plan, the Fund may pay actual expenses not exceeding,
on an annual basis, 0.25% of the Fund's average daily net assets.
2. SECURITY VALUATION
The ABN AMRO Treasury Money Market Fund and Independence One U.S. Treasury Money
Market Fund securities are valued at amortized cost, which approximates market
value. Under amortized cost methods, discounts and premiums are accreted and
amortized ratably to maturity and are included as interest income.
ABN AMRO TREASURY MONEY MARKET FUND
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional
shares of the ABN AMRO Treasury Money Market Fund that would have been issued at
October 31, 2001 in connection with the proposed reorganization. The pro forma
number of shares outstanding of 390,266,427 consists of 117,608,926 shares
assumed issued in the reorganization plus 272,657,501 shares of the ABN AMRO
Treasury Money Market Fund at October 31, 2001.
4. PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS
The pro forma adjustments and pro forma combined columns of the statement of
operations reflect the adjustments necessary to show expenses at the rates which
would have been in effect if the Independence One U.S. Treasury Money Market
Fund was included in the ABN AMRO Treasury Money Market Fund for the period
November 1, 2000 to October 31, 2001. Investment Advisory, Administration and
12b-1 fees in the pro forma combined column are calculated at the rates in
effect for the ABN AMRO Treasury Money Market Fund based upon the combined net
assets of the Independence One U.S. Treasury Money Market Fund and ABN AMRO
Treasury Money Market Fund.
The pro forma Statement of Assets and Liabilities and Schedule of Investments
give effect to the proposed transfer of such assets as if the reorganization had
occurred at October 31, 2001.
5. COSTS OF REORGANIZATION
Reorganization expenses incurred by the ABN AMRO Funds will be paid by ABN AMRO
Asset Management (USA) and/or affiliates thereof. Reorganization expenses
include, without limitation: (a) expenses associated with the preparation and
filing of this Prospectus/Proxy Statement; (b) postage; (c) printing; (d)
accounting fees; (e) legal fees incurred by each Fund; (f) solicitation costs;
and (g) brokerage cost of any necessary rebalancing of the Funds' investment
portfolios.
6. FEDERAL INCOME TAXES
The Fund has elected to be treated as a "regulated investment company" under
Subchapter M of the Internal Revenue Code and to distribute substantially all of
their respective taxable income. Accordingly, no provisions for federal income
taxes have been made in the accompanying financial statements. The Fund intends
to utilize provisions for federal income tax laws which will allow them to carry
a realized capital loss forward eight years following the year of the loss and
offset such losses against any future realized capital gains. At October 31,
2001, there is no capital loss carry forward.
The Independence One U.S. Treasury Money Market Fund will distribute all of its
ordinary income and capital gains, if any, prior to the Fund merging.
ABN AMRO INTERNATIONAL EQUITY FUND
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
OCTOBER 31, 2001
INDEPENDENCE
ABN AMRO ONE PRO FORMA PRO FORMA
INTERNATIONAL INTERNATIONAL ADJUSTMENTS COMBINED
EQUITY FUND EQUITY (NOTE 1)
-----------------------------------------------------------------------
ASSETS:
Investments:
Investments at cost $ 90,446,391 $ 18,299,807 $ -- $ 108,746,198
Net unrealized appreciation (14,253,229) (2,780,459) -- (17,033,688)
----------------------------------------------------------------------
Total Investments at value 76,193,162 15,519,348 -- 91,712,510
Cash 1,967,191 250 -- 1,967,441
Foreign Currency (cost $119,270 and $159,942) 122,167 160,841 283,008
Receivables:
Dividends and interest 286,380 44,368 -- 330,748
Fund shares sold 131,924 -- -- 131,924
Other assets 780 14,248 -- 15,028
----------------------------------------------------------------------
Total assets 78,701,604 15,739,055 -- 94,440,659
----------------------------------------------------------------------
LIABILITIES:
Payables:
Investments and currency purchased 6,512 -- -- 6,512
Fund shares redeemed 333,650 -- -- 333,650
Due to Adviser, net 59,937 7,378 -- 131,448
Administration fee 3,939 -- -- (245,683)
Distribution fees 4,078 -- -- 319,952
Shareholder service fee 333 -- -- 333
Trustees fees 1,159 -- -- (1,349)
Accrued expenses and other payables 39,576 10,677 -- (62,258)
----------------------------------------------------------------------
Total liabilities 449,184 18,055 -- 482,605
----------------------------------------------------------------------
NET ASSETS $ 78,252,420 $ 15,721,000 $ -- $ 93,958,054
======================================================================
NET ASSETS CONSISTS OF:
Paid in capital $ 97,277,182 $ 23,196,791 $ -- $ 120,473,973
Accumulated undistributed
(distribution in excess of)
net investment income (216,408) 2,698 -- (229,076)
Accumulated net realized loss
on investments sold, foreign
currency transactions, futures
contracts and options (4,554,590) (4,698,874) -- (9,253,464)
Net unrealized depreciation on
investments and translation
of assets and liabilities in
foreign currency (14,253,764) (2,779,615) -- (17,033,379)
----------------------------------------------------------------------
TOTAL NET ASSETS $ 78,252,420 $ 15,721,000 $ -- $ 93,958,054
======================================================================
ABN AMRO CLASS N:
Net Assets $ 78,252,420 N/A $ 15,721,000(a) $ 93,958,054
Shares of beneficial interest outstanding 6,838,077 N/A 1,373,777(a) 8,210,512
NET ASSET VALUE
Net Asset Value
(Net Assets/Shares Outstanding) $ 11.44 N/A $ -- $ 11.44
======================================================================
INDEPENDENCE ONE CLASS A:
Net Assets N/A $ 15,721,000 $(15,721,000)(b) N/A
Shares of beneficial interest outstanding N/A 1,882,814 (1,882,814)(b) N/A
NET ASSET VALUE
Net Asset Value
(Net Assets/Shares Outstanding) N/A $ 8.35 $ -- N/A
======================================================================
Offering Price Per Share (100/96.00 of $8.35) N/A $ 8.70 N/A N/A
======================================================================
(a) Reflects net effect of combining existing Independence One International
Equity Fund into the ABN AMRO International Equity Fund.
(b) Reflects exchange of Independence One International Equity Fund Class A into
ABN AMRO International Equity Fund N Share Class.
See Notes to Pro Forma Financial Statements
ABN AMRO INTERNATIONAL EQUITY FUND
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED OCTOBER 31, 2001
INDEPENDENCE
ABN AMRO ONE PRO FORMA
INTERNATIONAL INTERNATIONAL PRO FORMA COMBINED
EQUITY FUND EQUITY ADJUSTMENTS (NOTE 1)
-----------------------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 1,711,637 $ 326,701 $ -- $ 2,038,338
Less: foreign taxes withheld (172,263) (36,070) -- (208,333)
Interest 2,582 33,861 -- 36,443
-----------------------------------------------------------------------
Total Investment Income 1,541,956 324,492 -- 1,866,448
-----------------------------------------------------------------------
EXPENSES:
Investment advisory fees 1,153,639 204,678 -- 1,358,317
Distribution expenses 23,906 -- 315,874 (a) 339,780
Transfer agent fees 25,313 20,590 (11,276)(b) 34,627
Administration fees 208,616 111,680 (249,622)(a) 70,674
Registration fees 19,852 12,983 (15,106)(b) 17,729
Custodian fees 86,450 36,959 (31,333)(b) 92,076
Professional fees 18,021 19,976 (18,194)(b) 19,803
Reports to shareholder expense 7,856 14,809 (13,598)(b) 9,067
Trustees fees 3,156 2,076 (2,508)(b) 2,724
Other expenses 26,055 3,668 (23,004)(b) 6,719
Shareholder service fees 5,180 -- -- 5,180
-----------------------------------------------------------------------
Total expenses before waivers/reimbursements 1,578,044 427,419 (48,767) 1,956,696
Less: Fund level waivers/reimbursement (7,574) (97,333) 64,133 (c) (40,774)
-----------------------------------------------------------------------
Net Expenses 1,570,470 330,086 15,366 1,915,922
-----------------------------------------------------------------------
NET INVESTMENT INCOME (LOSS) (28,514) (5,594) (15,366) (49,474)
-----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain/(loss) on investments 2,961,702 (4,745,139) -- (1,783,437)
Net change in unrealized depreciation on investments (46,931,788) (1,519,526) -- (48,451,314)
-----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (43,970,086) (6,264,665) -- (50,234,751)
-----------------------------------------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS $(43,998,600) $(6,270,259) $ (15,366) $(50,284,225)
=======================================================================
(a) Reflects adjustment to the acquired fund contractual fee level.
(b) Reflects expected savings/increases based on current year budget.
(c) Reflects adjustment to the acquired fund's contractual expense limitation.
See Notes to Pro Forma Financial Statements
ABN AMRO INTERNATIONAL EQUITY FUND
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS (UNAUDITED)
OCTOBER 31, 2001
SHARES DESCRIPTION
- ------------------------------------------------------------------------------------------------------
ABN AMRO INDEPENDENCE PRO FORMA
INTERNATIONAL ONE INTERNATIONAL COMBINED
EQUITY FUND EQUITY FUND
- ------------------------------------------------------------------------------------------------------
COMMON STOCKS - 95.77%
AUSTRALIA - 1.11%
57,279 11,950 69,229 Commonwealth Bank of Australia
CHINA - 3.03%
204,419 41,000 245,419 HSBC Holdings*
- 22,900 22,900 Hutchinson Whampoa
FRANCE - 13.13%
21,000 8,300 29,300 Adecco
19,000 3,850 22,850 Aventis
56,200 10,800 67,000 Axa
8,000 1,770 9,770 Cap Gemini
44,000 7,300 51,300 Equant*
11,000 2,100 13,100 L'Oreal
16,012 3,160 19,172 Sanofi-Synthelabo
12,000 2,300 14,300 Schneider Electric
21,100 4,310 25,410 STMicroelectronics
19,841 3,902 23,743 TotalFinaElf
GERMANY - 5.30%
3,500 692 4,192 Allianz
3,700 700 4,400 Beiersdorf
21,577 4,400 25,977 Deutsche Bank
9,000 1,800 10,800 SAP
16,550 2,770 19,320 Siemens
IRELAND - 3.63%
89,729 17,300 107,029 Allied Irish Banks
98,563 19,000 117,563 CRH
10,000 2,000 12,000 Elan*
ITALY - 2.12%
70,000 13,000 83,000 Mediolanum
107,000 21,000 128,000 Sanpaolo IMI
JAPAN - 14.23%
24,000 5,000 29,000 Canon
82,000 17,000 99,000 Fujitsu
60,000 11,000 71,000 Hitachi
48,000 9,000 57,000 Kao
4,300 800 5,100 Keyence
68,000 14,000 82,000 NEC
156 31 187 Nippon Telegraph & Telephone
120 24 144 NTT DoCoMo
6,800 1,300 8,100 Rohm
16,000 3,000 19,000 Secom
31,000 5,900 36,900 Sony
9,000 2,000 11,000 Takeda Chemical Industries
47,000 9,000 56,000 Toyota Motor
80 16 96 UMC Japan*
NETHERLANDS - 9.76%
17,600 4,020 21,620 Akzo Nobel
29,000 5,000 34,000 ASML Holding*
60,927 12,000 72,927 Fortis
6,900 1,300 8,200 Gucci Group
98,314 19,200 117,514 ING Groep
44,893 9,168 54,061 Koninklijke Ahold
26,013 5,166 31,179 VNU
NEW ZEALAND - 0.90%
357,161 85,000 442,161 Telecom of New Zealand
PORTUGAL - 1.40%
138,000 28,000 166,000 Portugal Telecom, Registered*
DESCRIPTION MARKET VALUE
- ---------------------------------------------------------------------------------------------------------------------------
ABN AMRO INDEPENDENCE PRO FORMA PRO FORMA
INTERNATIONAL ONE INTERNATIONAL ADJUSTMENT COMBINED
EQUITY FUND EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------
COMMON STOCKS - 95.77%
AUSTRALIA - 1.11%
Commonwealth Bank of Australia $ 861,307 $ 179,088 $ -- 1,040,395
----------- ----------- -------- ---------
CHINA - 3.03%
HSBC Holdings* 2,214,528 444,167 -- 2,658,695
Hutchinson Whampoa -- 184,962 -- 184,962
----------- ----------- -------- ---------
2,214,528 629,129 -- 2,843,657
----------- ----------- -------- ---------
FRANCE - 13.13%
Adecco 945,699 366,960 -- 1,312,659
Aventis 1,398,959 283,091 -- 1,682,050
Axa 1,230,003 236,052 -- 1,466,055
Cap Gemini 450,333 99,502 -- 549,835
Equant* 457,718 75,837 -- 533,555
L'Oreal 759,891 144,874 -- 904,765
Sanofi-Synthelabo 1,056,372 208,196 -- 1,264,568
Schneider Electric 480,739 92,017 -- 572,756
STMicroelectronics 596,727 121,726 -- 718,453
TotalFinaElf 2,787,736 547,506 -- 3,335,242
----------- ----------- -------- ---------
10,164,177 2,175,761 -- 12,339,938
----------- ----------- -------- ---------
GERMANY - 5.30%
Allianz 825,280 162,949 -- 988,229
Beiersdorf 416,391 78,670 -- 495,061
Deutsche Bank 1,200,806 244,539 -- 1,445,345
SAP 932,189 186,186 -- 1,118,375
Siemens 802,391 134,116 -- 936,507
----------- ----------- -------- ---------
4,177,057 806,460 -- 4,983,517
----------- ----------- -------- ---------
IRELAND - 3.63%
Allied Irish Banks 872,811 167,275 -- 1,040,086
CRH 1,526,883 293,940 -- 1,820,823
Elan* 459,339 91,744 -- 551,083
----------- ----------- -------- ---------
2,859,033 552,959 -- 3,411,992
----------- ----------- -------- ---------
ITALY - 2.12%
Mediolanum 542,831 100,675 -- 643,506
Sanpaolo IMI 1,124,652 220,428 -- 1,345,080
----------- ----------- -------- ---------
1,667,483 321,103 -- 1,988,586
----------- ----------- -------- ---------
JAPAN - 14.23%
Canon 698,011 145,253 -- 843,264
Fujitsu 606,936 125,684 -- 732,620
Hitachi 409,297 74,952 -- 484,249
Kao 1,137,208 212,983 -- 1,350,191
Keyence 655,161 121,751 -- 776,912
NEC 616,641 126,811 -- 743,452
Nippon Telegraph & Telephone 642,327 127,496 -- 769,823
NTT DoCoMo 1,627,384 325,105 -- 1,952,489
Rohm 723,859 138,227 -- 862,086
Secom 832,646 155,943 -- 988,589
Sony 1,172,583 222,914 -- 1,395,497
Takeda Chemical Industries 436,012 96,781 -- 532,793
Toyota Motor 1,140,395 218,124 -- 1,358,519
UMC Japan* 483,640 96,618 -- 580,258
----------- ----------- -------- ---------
11,182,100 2,188,642 -- 13,370,742
----------- ----------- -------- ---------
NETHERLANDS - 9.76%
Akzo Nobel 722,046 164,699 -- 886,745
ASML Holding* 417,909 71,956 -- 489,865
Fortis 1,443,209 283,866 -- 1,727,075
Gucci Group 588,833 110,790 -- 699,623
ING Groep 2,452,781 478,363 -- 2,931,144
Koninklijke Ahold 1,263,954 257,775 -- 1,521,729
VNU 759,100 150,555 -- 909,655
----------- ----------- -------- ---------
7,647,832 1,518,004 -- 9,165,836
----------- ----------- -------- ---------
NEW ZEALAND - 0.90%
Telecom of New Zealand 682,786 162,280 -- 845,066
----------- ----------- -------- ---------
PORTUGAL - 1.40%
Portugal Telecom, Registered* 1,093,768 221,624 -- 1,315,392
----------- ----------- -------- ---------
SHARES DESCRIPTION
- -------------------------------------------------------------------------------------------------------
ABN AMRO INDEPENDENCE PRO FORMA
INTERNATIONAL ONE INTERNATIONAL COMBINED
EQUITY FUND EQUITY FUND
- -------------------------------------------------------------------------------------------------------
SPAIN - 4.17%
166,000 33,000 199,000 Banco Bilbao Vizcaya
117,131 23,300 140,431 Telefonica*
SWEDEN - 0.67%
130,000 16,000 146,000 Ericsson LM, Class B
SWITZERLAND - 7.68%
54,600 10,960 65,560 Credit Suisse Group*
7,370 1,460 8,830 Nestle, Registered
55,360 11,040 66,400 Novartis, Registered
4,200 700 4,900 Swiss Reinsurance
4,200 700 4,900 Swiss Reinsurance, Rights* (A)
UNITED KINGDOM - 28.64%
113,000 23,000 136,000 ARM Holdings*
21,000 4,000 25,000 AstraZeneca
203,870 41,000 244,870 BP
82,942 18,621 101,563 Cable & Wireless
127,000 23,800 150,800 CGNU
169,821 33,000 202,821 Diageo
92,666 17,969 110,635 GlaxoSmithKline
58,300 11,980 70,280 Logica
127,305 23,952 151,257 Pearson
166,678 33,000 199,678 Prudential
152,500 29,000 181,500 Rentokil Initial
52,200 10,200 62,400 Reuters Group
378,318 74,893 453,211 Shell Transport & Trading
127,072 24,000 151,072 Standard Chartered
200,000 39,000 239,000 Tesco
99,000 20,000 119,000 Unilever
1,194,221 247,526 1,441,747 Vodafone Group
TOTAL COMMON STOCKS
(Cost $88,759,171 and $17,833,555)
PREFERRED STOCKS - 1.73%
GERMANY - 1.73%
8,600 2,644 11,244 Fresenius
2,180 430 2,610 Porsche
TOTAL PREFERRED STOCKS
(Cost $1,687,220 and $364,252)
INVESTMENT COMPANY - 0.11%
-- 102,000 102,000 Independence One Mutual Fund
TOTAL INVESTMENT COMPANY
(Cost $0 and $102,000)
TOTAL INVESTMENTS - 97.61%
(Cost $90,446,391 and $18,299, 807)**
NET OTHER ASSETS AND LIABILITES - 2.39%
NET ASSETS - 100.00%
DESCRIPTION MARKET VALUE
- ---------------------------------------------------------------------------------------------------------------------------
ABN AMRO INDEPENDENCE PRO FORMA PRO FORMA
INTERNATIONAL ONE INTERNATIONAL ADJUSTMENT COMBINED
EQUITY FUND EQUITY FUND
- ---------------------------------------------------------------------------------------------------------------------------
SPAIN - 4.17%
Banco Bilbao Vizcaya $ 1,858,415 $ 368,945 $ -- $ 2,227,360
Telefonica* 1,407,315 279,569 -- 1,686,884
----------- ----------- -------- -----------
3,265,730 648,514 -- 3,914,244
----------- ----------- -------- -----------
SWEDEN - 0.67%
Ericsson LM, Class B 564,750 69,298 -- 634,048
----------- ----------- -------- -----------
SWITZERLAND - 7.68%
Credit Suisse Group* 1,996,240 400,117 -- 2,396,357
Nestle, Registered 1,530,076 302,660 -- 1,832,736
Novartis, Registered 2,073,186 412,827 -- 2,486,013
Swiss Reinsurance 432,120 71,913 -- 504,033
Swiss Reinsurance, Rights* (A) -- -- -- --
----------- ----------- -------- -----------
6,031,622 1,187,517 -- 7,219,139
----------- ----------- -------- -----------
UNITED KINGDOM - 28.64%
ARM Holdings* 571,894 116,274 -- 688,168
AstraZeneca 947,062 180,193 -- 1,127,255
BP 1,645,523 330,562 -- 1,976,085
Cable & Wireless 375,139 84,127 -- 459,266
CGNU 1,523,755 285,238 -- 1,808,993
Diageo 1,695,468 329,102 -- 2,024,570
GlaxoSmithKline 2,493,158 482,927 -- 2,976,085
Logica 630,811 129,481 -- 760,292
Pearson 1,523,712 286,359 -- 1,810,071
Prudential 1,745,293 345,162 -- 2,090,455
Rentokil Initial 548,912 104,268 -- 653,180
Reuters Group 494,207 96,462 -- 590,669
Shell Transport & Trading 2,833,491 560,304 -- 3,393,795
Standard Chartered 1,269,592 239,521 -- 1,509,113
Tesco 705,341 137,389 -- 842,730
Unilever 719,165 145,125 -- 864,290
Vodafone Group 2,761,464 571,734 -- 3,333,198
----------- ----------- -------- -----------
22,483,987 4,424,228 -- 26,908,215
----------- ----------- -------- -----------
TOTAL COMMON STOCKS
(Cost $88,759,171 and $17,833,555) 74,896,160 15,084,607 -- 89,980,767
----------- ----------- -------- -----------
PREFERRED STOCKS - 1.73%
GERMANY - 1.73%
Fresenius 693,241 212,844 -- 906,085
Porsche 603,761 119,897 -- 723,658
----------- ----------- -------- -----------
TOTAL PREFERRED STOCKS
(Cost $1,687,220 and $364,252) 1,297,002 332,741 -- 1,629,743
----------- ----------- -------- -----------
INVESTMENT COMPANY - 0.11%
Independence One Mutual Fund -- 102,000 -- 102,000
----------- ----------- -------- -----------
TOTAL INVESTMENT COMPANY
(Cost $0 and $102,000) -- 102,000 -- 102,000
----------- ----------- -------- -----------
TOTAL INVESTMENTS - 97.61%
(Cost $90,446,391 and $18,299, 807)** 76,193,162 15,519,348 -- 91,712,510
----------- ----------- -------- -----------
NET OTHER ASSETS AND LIABILITIES - 2.39% 2,059,258 201,652 (15,366) 2,245,544
----------- ----------- -------- -----------
NET ASSETS - 100.00% $78,252,420 $15,721,000 $(15,366) $93,958,054
=========== =========== ======== ===========
* Non-income producing security.
** Aggregate cost for Federal income tax purposes is $109,115,462.
(A) Less than $1 in market value.
ABN AMRO INTERNATIONAL EQUITY FUND
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The ABN AMRO Funds, a Delaware business trust (the "Trust"), is registered under
the Investment Company Act of 1940, as amended, (the "1940 Act") as an open-end
management investment company. As of October 31, 2001, the Trust offered twenty
eight managed investment portfolios. The unaudited Pro Forma Combining Portfolio
of Investments and the unaudited Pro Forma Statement of Assets and Liabilities
assumes the exchange described in the next paragraph occurred as of October 31,
2001 and the unaudited Pro Forma Combining Statement of Operations assumes the
exchange occurred as of November 1, 2001. These statements have been derived
from books and records utilized in calculating the net asset value of each fund
at October 31, 2001 and for the year then ended.
The pro forma statements give effect to the proposed transfer of substantially
all of the assets and stated liabilities of the Independence One International
Equity Fund in exchange for shares of the ABN AMRO International Equity Fund.
Under generally accepted accounting principles, the historical cost of
investment securities will be carried forward to the surviving entity and the
results of operations of the Independence One International Equity Fund for
pre-combination periods will not be restated. The pro forma statements do not
reflect the expenses of either fund in carrying out its obligations under the
proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma Combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
For the year ended October 31, 2001 the ABN AMRO International Equity Fund's
investment advisory fee was computed based on the annual rate of 1.00% of its
average daily net assets. The administration fee was computed based on the
annual rate of 0.060% of the first $2.0 billion of the Trust's combined average
daily net assets, 0.050% of the next $10.5 billion, and 0.045% of the combined
average daily net assets in excess of $12.5 billion, and was allocated to each
fund based on the relative net assets of the Trust.
Pursuant to a Rule 12b-1 distribution plan (the "Plan") adopted by the ABN AMRO
International Equity Fund with respect to Class N Shares, the Fund pays certain
expenses associated with the distribution of its shares. Under the Plan, the
Fund may pay actual expenses not exceeding, on an annual basis, 0.25% of the
Fund's Class N Shares average daily net assets.
2. SECURITY VALUATION
The ABN AMRO International Equity Fund's and Independence One International
Equity Fund's equity securities and index options traded on a national exchange
and over-the-counter securities listed on the NASDAQ National Market System are
valued at the last reported sales price at the close of the respective exchange.
Securities for which there have been no sales on the valuation date are valued
at the mean of the last reported bid and asked prices on their principal
exchange. Over-the-counter securities not listed on the NASDAQ National Market
System are valued at the mean of the last quoted bid and asked prices. Fixed
income securities, except short-term investments, are valued on the basis of
prices provided by a pricing service when such prices are believed by the
Adviser to reflect the fair market value of such securities in accordance with
guidelines adopted. When fair market value quotations are not readily available,
securities and other assets are valued at fair value by or under the direction
of the Board of Trustees. Short-term investments, that is, those with a
remaining maturity of 60 days or less, are valued at amortized cost, which
approximates market value. Foreign securities are priced based upon the price on
the exchange or market on which they trade as of the close of business of such
exchange or market immediately preceding the time of valuation (normally at 4:00
p.m. Eastern time on each day the New York Stock Exchange is open for trading).
Foreign securities are converted to United States dollars using the exchange
rates as of the date the net asset value is computed.
ABN AMRO INTERNATIONAL EQUITY FUND
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional
shares of the ABN AMRO International Equity Fund that would have been issued at
October 31, 2001 in connection with the proposed reorganization. The pro forma
number of shares outstanding of 8,211,854 consists of 1,373,777 shares assumed
issued in the reorganization plus 6,838,077 shares of the ABN AMRO International
Equity Fund at October 31, 2001.
4. PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS
The pro forma adjustments and pro forma combined columns of the statement of
operations reflect the adjustments necessary to show expenses at the rates which
would have been in effect if the Independence One International Equity Fund was
included in the ABN AMRO International Equity Fund for the period November 1,
2000 to October 31, 2001. Investment Advisory, Administration and 12b-1 fees in
the pro forma combined column are calculated at the rates in effect for the ABN
AMRO International Equity Fund based upon the combined net assets of the
Independence One International Equity Fund and ABN AMRO International Equity
Fund.
The pro forma Statement of Assets and Liabilities and Schedule of Investments
give effect to the proposed transfer of such assets as if the reorganization had
occurred at October 31, 2001.
5. COSTS OF REORGANIZATION
Reorganization expenses incurred by the ABN AMRO Funds will be paid by ABN AMRO
Asset Management (USA) and/or affiliates thereof. Reorganization expenses
include, without limitation: (a) expenses associated with the preparation and
filing of this Prospectus/Proxy Statement; (b) postage; (c) printing; (d)
accounting fees; (e) legal fees incurred by each Fund; (f) solicitation costs;
and (g) brokerage cost of any necessary rebalancing of the Funds' investment
portfolios.
6. FEDERAL INCOME TAXES
The Fund has elected to be treated as a "regulated investment company" under
Subchapter M of the Internal Revenue Code and to distribute substantially all of
their respective taxable income. Accordingly, no provisions for federal income
taxes have been made in the accompanying financial statements. The Fund intends
to utilize provisions for federal income tax laws which will allow them to carry
a realized capital loss forward eight years following the year of the loss and
offset such losses against any future realized capital gains. At October 31,
2001, the combined capital loss carryforward amounted to $8,410,038 which will
expire between October 31, 2002 and October 31, 2009.
The Independence One International Equity Fund will distribute all of its
ordinary income and capital gains, if any, prior to the Fund merging.
ABN AMRO INVESTMENT GRADE BOND FUND
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
OCTOBER 31, 2001
ABN AMRO
INVESTMENT
INDEPENDENCE GRADE
ONE U.S. BOND FUND
INDEPENDENCE GOVERNMENT PRO FORMA
ONE FIXED SECURITIES PRO FORMA COMBINED
INCOME FUND FUND ADJUSTMENTS (NOTE 1)
---------------------------------------------------------------------
ASSETS:
Investments:
Investments at cost $ 83,501,144 $35,479,185 $ -- $ 118,980,329
Net unrealized appreciation 5,285,386 3,758,345 -- 9,043,731
---------------------------------------------------------------------
Total Investments at value 88,786,530 39,237,530 -- 128,024,060
Cash 331 727 -- 1,058
Receivables:
Dividends and interest 1,263,086 568,305 -- 1,831,391
---------------------------------------------------------------------
Total assets 90,049,947 39,806,562 -- 129,856,509
---------------------------------------------------------------------
LIABILITIES:
Payables:
Dividends Payable 400,974 169,091 -- 570,065
Due to Adviser, net 22,647 6,709 -- 49,568
Accrued expenses and other payables 32,907 3,629 -- (52,062)
---------------------------------------------------------------------
Total liabilities 456,528 179,429 -- 567,571
---------------------------------------------------------------------
NET ASSETS $ 89,593,419 $39,627,133 $ -- $ 129,288,938
=====================================================================
NET ASSETS CONSISTS OF:
Paid in capital $ 86,832,512 $35,323,686 -- $ 122,156,198
Accumulated undistributed (distribution in
excess of) net investment income (652,007) -- -- (583,621)
Accumulated net realized gain (loss)
on investments sold, foreign
currency transactions, futures
contracts and options (1,872,472) 545,102 -- (1,327,370)
Net unrealized appreciation on investments
and translation of assets and
liabilities in foreign currency 5,285,386 3,758,345 -- 9,043,731
---------------------------------------------------------------------
TOTAL NET ASSETS $ 89,593,419 $39,627,133 $ -- $ 129,288,938
=====================================================================
INDEPENDENCE ONE TRUST SHARES:
Net Assets $ 89,588,020 N/A $ (89,593,419)(a) N/A
Shares of beneficial interest outstanding 8,713,608 N/A (8,714,134)(a) N/A
NET ASSET VALUE
Net Asset Value
(Net Assets/Shares Outstanding) $ 10.28 N/A N/A N/A
=====================================================================
INDEPENDENCE ONE CLASS A
Net Assets N/A $39,108,733 $ (39,108,733)(a) N/A
Shares of beneficial interest outstanding N/A 3,573,962 (3,573,962)(a) N/A
NET ASSET VALUE
Net Asset Value
(Net Assets/Shares Outstanding) N/A $ 10.94 N/A N/A
=====================================================================
Offering Price Per Share (100/96.00 of $10.94) N/A $ 11.40 N/A N/A
=====================================================================
INDEPENDENCE ONE CLASS B:
Net Assets $ 5,388 $ 518,400 $ (518,400)(a) N/A
Shares of beneficial interest outstanding 525 47,374 (47,374)(a) N/A
NET ASSET VALUE
Net Asset Value
(Net Assets/Shares Outstanding) $ 10.26 $ 10.94 N/A N/A
=====================================================================
Offering Price Per Share (95/100 of $10.94) $ 9.77 $ 10.39 N/A N/A
=====================================================================
ABN AMRO CLASS I:
Net Assets N/A N/A $ 129,220,552(b) $ 129,288,938
Shares of beneficial interest outstanding N/A N/A 12,568,392(b) 12,575,043
NET ASSET VALUE
Net Asset Value
(Net Assets/Shares Outstanding) N/A N/A N/A $ 10.28
=====================================================================
(a) Reflects exchange of Independence One Fixed Income Fund and
Independence One U.S. Government Securities Fund Classes A and B into
ABN AMRO Investment Grade Bond Fund Class I.
(a) Reflects net effect of combining existing Independence One Fixed Income
Fund and Independence One U.S. Government Securities Fund into the ABN
AMRO Investment Grade Bond Fund Class I.
See Notes to Pro Forma Financial Statements
ABN AMRO INVESTMENT GRADE BOND FUND
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
PRO FORMA COMBINING STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED OCTOBER 31, 2001
ABN AMRO
INVESTMENT
INDEPENDENCE GRADE
ONE U.S. BOND FUND
INDEPENDENCE GOVERNMENT PRO FORMA
ONE FIXED SECURITIES PRO FORMA COMBINED
INCOME FUND FUND ADJUSTMENTS (NOTE 1)
-----------------------------------------------------------------------
INVESTMENT INCOME:
Interest $ 5,621,486 $ 2,602,302 $ -- $ 8,223,788
--------------------------------------------------------------------
Total investment income 5,621,486 2,602,302 -- 8,223,788
--------------------------------------------------------------------
EXPENSES:
Investment advisory fees 692,346 303,711 (46,117)(a) 949,940
Distribution expenses 9 2,025 (2,034)(a) --
Transfer agent fees 19,486 46,403 2,800 (b) 68,689
Administration fees 130,294 106,573 1,964 (a) 238,831
Registration fees 40,447 25,633 (49,056)(b) 17,024
Custodian fees 13,408 11,978 3,984 (b) 29,370
Professional fees 20,253 17,962 (18,642)(b) 19,573
Reports to shareholder expense 18,000 13,720 (22,087)(b) 9,633
Trustees fees 6,127 2,652 (5,008)(b) 3,771
Other expenses 4,057 4,023 159 (b) 8,239
Shareholder service fees 3 675 (678)(b) --
--------------------------------------------------------------------
Total expenses before waivers/reimbursements 944,430 535,355 (134,715) 1,345,070
Less: Fund level waivers/reimbursement (415,415) (222,462) 66,329 (c) (571,548)
--------------------------------------------------------------------
Net Expenses 529,015 312,893 (68,386) 773,522
--------------------------------------------------------------------
NET INVESTMENT INCOME 5,092,471 2,289,409 68,386 7,450,266
--------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain/(loss) on investments (920,694) 557,326 -- (363,368)
Net change in unrealized appreciation on investments 6,576,668 2,681,578 -- 9,258,246
--------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS 5,655,974 3,238,904 -- 8,894,878
--------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 10,748,445 $ 5,528,313 $ 68,386 $ 16,345,144
====================================================================
(a) Reflects adjustment to the acquired fund contractual fee level.
(b) Reflects expected savings/increases based on current year budget.
(c) Reflects adjustment to the acquired fund's contractual expense limitation.
See Notes to Pro Forma Financial Statements
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS (UNAUDITED)
OCTOBER 31, 2001
PAR VALUE DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------
INDEPENDENCE INDEPENDENCE
ONE FIXED ONE U.S.
INCOME GOVERNMENT PRO FORMA
FUND SECURITIES FUND COMBINED
- -----------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS--67.05%
FEDERAL FARM CREDIT BANK--11.86%
$ 2,000,000 $ 4,000,000 $ 6,000,000 5.970%, 03/11/05
1,000,000 -- 1,000,000 5.150%, 01/07/03
-- 1,500,000 1,500,000 6.010%, 06/16/10
-- 2,000,000 2,000,000 6.750%, 01/13/03
1,000,000 -- 1,000,000 6.300%, 08/08/07
3,000,000 -- 3,000,000 6.875%, 05/01/02
FEDERAL HOME LOAN BANK--22.46%
-- 500,000 500,000 6.750%, 02/15/02
-- 5,000,000 5,000,000 5.250%, 03/26/04
-- 3,000,000 3,000,000 6.350%, 06/28/04
-- 4,000,000 4,000,000 7.200%, 06/14/11
2,000,000 -- 2,000,000 5.530%, 01/15/03
4,000,000 -- 4,000,000 5.125%, 09/15/03
1,000,000 -- 1,000,000 5.575%, 09/02/03
2,000,000 -- 2,000,000 5.020%, 02/11/04
2,000,000 -- 2,000,000 5.610%, 02/27/07
2,000,000 -- 2,000,000 5.875%, 11/15/07
2,000,000 -- 2,000,000 6.500%, 08/14/09
U.S. TREASURY BONDS--8.31%
-- 3,000,000 3,000,000 8.125%, 08/15/19
-- 1,500,000 1,500,000 7.125%, 02/15/23
1,000,000 -- 1,000,000 6.000%, 02/15/26
-- 3,000,000 3,000,000 6.500%, 11/15/26
U.S. TREASURY NOTES--24.42%
-- 3,000,000 3,000,000 5.750%, 08/15/10
5,000,000 4,000,000 9,000,000 6.000%, 08/15/09
2,000,000 -- 2,000,000 6.375%, 08/15/02
5,500,000 -- 5,500,000 5.625%, 05/15/08
3,000,000 -- 3,000,000 5.750%, 08/15/10
6,000,000 -- 1,000,000 6.250%, 02/15/07
TOTAL U. S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $34,939,185 and $39,939,185)
CORPORATE BONDS & NOTES--29.61%
AUTOMOBILE--2.34%
1,000,000 -- 1,000,000 DaimlerChrysler AG, Unsecured Note
7.400%, 01/20/05
2,000,000 -- 2,000,000 Ford Motor Credit, Note
6.750%, 08/15/08
BANKING--3.40%
3,000,000 -- 3,000,000 Bank One Corp., Unsecured Senior Notes
7.625%, 08/01/05
1,000,000 -- 1,000,000 Bank One Corp., Subordinated Notes
8.740%, 09/15/03
CHEMICALS--2.52%
3,000,000 -- 3,000,000 Du Pont (E.I.) de Nemours & Co., Note
6.750%, 10/15/04
COMMERCIAL SERVICES--5.63%
1,000,000 -- 1,000,000 Associates Corp. of North America, Senior Note
6.260%, 02/15/06
1,000,000 -- 1,000,000 General Electric Capital Corp., Debentures
5.500%, 11/01/01
2,000,000 -- 2,000,000 General Electric Capital Corp., Note
6.500%, 11/01/06
3,000,000 -- 3,000,000 International Business Machines Corp., Note
5.375%, 02/01/09
ENTERTAINMENT--1.65%
2,000,000 -- 2,000,000 Disney (Walt) Co., Senior Note, Series B
6.750%, 03/30/06
DESCRIPTION MARKET VALUE
- ----------------------------------------------------------------------------------------------------------------------------
INDEPENDENCE ABN AMRO
INDEPENDENCE ONE U.S. INVESTMENT
ONE FIXED GOVERNMENT GRADE BOND
INCOME SECURITIES PRO FORMA FUND PRO FORMA
FUND FUND ADJUSTMENT COMBINED
- ----------------------------------------------------------------------------------------------------------------------------
U.S. GOVERNMENT & AGENCY OBLIGATIONS--67.05%
FEDERAL FARM CREDIT BANK--11.86%
5.970%, 03/11/05 $ 2,144,260 $ 4,288,520 $ -- $ 6,432,780
5.150%, 01/07/03 1,028,110 -- -- 1,028,110
6.010%, 06/16/10 -- 1,607,400 -- 1,607,400
6.750%, 01/13/03 -- 2,097,160 -- 2,097,160
6.300%, 08/08/07 1,101,880 -- -- 1,101,880
6.875%, 05/01/02 3,073,740 -- -- 3,073,740
------------------------------------------------------------
7,347,990 7,993,080 -- 15,341,070
------------------------------------------------------------
FEDERAL HOME LOAN BANK--22.46%
6.750%, 02/15/02 -- 506,950 -- 506,950
5.250%, 03/26/04 -- 5,051,900 -- 5,051,900
6.350%, 06/28/04 -- 3,070,470 -- 3,070,470
7.200%, 06/14/11 -- 4,646,920 -- 4,646,920
5.530%, 01/15/03 2,066,200 -- -- 2,066,200
5.125%, 09/15/03 4,180,560 -- -- 4,180,560
5.575%, 09/02/03 1,052,490 -- -- 1,052,490
5.020%, 02/11/04 2,012,460 -- -- 2,012,460
5.610%, 02/27/07 2,058,000 -- -- 2,058,000
5.875%, 11/15/07 2,168,040 -- -- 2,168,040
6.500%, 08/14/09 2,223,040 -- -- 2,223,040
------------------------------------------------------------
15,760,790 13,276,240 -- 29,037,030
------------------------------------------------------------
U.S. TREASURY BONDS--8.31%
8.125%, 08/15/19 -- 4,096,590 -- 4,096,590
7.125%, 02/15/23 -- 1,900,620 -- 1,900,620
6.000%, 02/15/26 1,129,150 -- -- 1,129,150
6.500%, 11/15/26 -- 3,614,370 -- 3,614,370
------------------------------------------------------------
1,129,150 9,611,580 -- 10,740,730
------------------------------------------------------------
U.S. TREASURY NOTES--24.42%
5.750%, 08/15/10 -- 3,328,110 -- 3,328,110
6.000%, 08/15/09 5,610,650 4,488,520 -- 10,099,170
6.375%, 08/15/02 2,069,420 -- -- 2,069,420
5.625%, 05/15/08 6,021,510 -- -- 6,021,510
5.750%, 08/15/10 3,328,110 -- -- 3,328,110
6.250%, 02/15/07 6,721,620 -- -- 6,721,620
------------------------------------------------------------
23,751,310 7,816,630 -- 31,567,940
------------------------------------------------------------
TOTAL U. S. GOVERNMENT AND AGENCY OBLIGATIONS
(Cost $34,939,185 and $39,939,185) 47,989,240 38,697,530 -- 86,686,770
------------------------------------------------------------
CORPORATE BONDS & NOTES--29.61%
AUTOMOBILE--2.34%
DaimlerChrysler AG, Unsecured Note
7.400%, 01/20/05 1,037,530 -- -- 1,037,530
Ford Motor Credit, Note
6.750%, 08/15/08 1,991,940 -- -- 1,991,940
------------------------------------------------------------
3,029,470 -- -- 3,029,470
------------------------------------------------------------
BANKING--3.40%
Bank One Corp., Unsecured Senior Notes
7.625%, 08/01/05 3,302,370 -- -- 3,302,370
Bank One Corp., Subordinated Notes
8.740%, 09/15/03 1,093,560 -- -- 1,093,560
------------------------------------------------------------
4,395,930 -- -- 4,395,930
------------------------------------------------------------
CHEMICALS--2.52%
Du Pont (E.I.) de Nemours & Co., Note
6.750%, 10/15/04 3,255,060 -- -- 3,255,060
------------------------------------------------------------
COMMERCIAL SERVICES--5.63%
Associates Corp. of North America, Senior Note
6.260%, 02/15/06 1,048,250 -- -- 1,048,250
General Electric Capital Corp., Debentures
5.500%, 11/01/01 1,000,000 -- -- 1,000,000
General Electric Capital Corp., Note
6.500%, 11/01/06 2,196,200 -- -- 2,196,200
International Business Machines Corp., Note
5.375%, 02/01/09 3,030,150 -- -- 3,030,150
------------------------------------------------------------
7,274,600 -- -- 7,274,600
------------------------------------------------------------
ENTERTAINMENT--1.65%
Disney (Walt) Co., Senior Note, Series B
6.750%, 03/30/06 2,133,760 -- -- 2,133,760
------------------------------------------------------------
See Notes to Pro Forma Financial Statements
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS (Unaudited)
October 31, 2001
PAR VALUE DESCRIPTION
- -----------------------------------------------------------------------------------------------------------------------------
INDEPENDENCE INDEPENDENCE
ONE FIXED ONE U.S.
INCOME GOVERNMENT PRO FORMA
FUND SECURITIES FUND COMBINED
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES--6.68%
$ 1,000,000 $ -- 1,000,000 BellSouth Capital Funding Corp., Note
7.750%, 02/15/10
Merrill Lynch & Co., Note
1,000,000 -- 1,000,000 6.800%, 11/03/03
1,000,000 -- 1,000,000 7.000%, 03/15/06
3,000,000 -- 3,000,000 Morgan Stanley, Dean Witter & Co., Senior Note, Series C
7.375%, 04/15/03
2,000,000 -- 2,000,000 Salomon Smith Barney Holdings, Inc., Note
7.000%, 03/15/04
FOOD AND BEVERAGE--0.82%
1,000,000 -- 1,000,000 Sara Lee Corp., MTN
6.300%, 11/07/05
PHARMACEUTICALS--0.91%
1,000,000 -- 1,000,000 Lilly (Eli) & Co., Unsecured Note
8.375%, 12/01/06
RETAIL TRADE--2.44%
1,000,000 -- 1,000,000 Gap (The), Inc., Note
6.900%, 09/15/07
2,000,000 -- 2,000,000 Wal--Mart Stores, Inc., Unsecured Senior Note
6.550%, 08/10/04
TELECOMMUNICATIONS--3.22%
AT&T Corp., Note
2,000,000 -- 2,000,000 6.500%, 09/15/02
1,000,000 -- 1,000,000 7.500%, 06/01/06
1,000,000 -- 1,000,000 U.S. West Communications, Inc., Note
6.625%, 09/15/05
TOTAL CORPORATE BONDS AND NOTES
(Cost $36,096,091 and $0)
INVESTMENT COMPANY -- 2.36%
2,515,000 540,000 3,055,000 Independence One Mutual Fund
(Cost $2,515,000 and $540,000)
TOTAL INVESTMENTS--99.02%
(Cost $83,501,144 and $35,479,185)**
NET OTHER ASSETS AND LIABILITIES--0.98%
NET ASSETS--100.00%
DESCRIPTION MARKET VALUE
- -----------------------------------------------------------------------------------------------------------------------------
INDEPENDENCE ABN AMRO
INDEPENDENCE ONE U.S. INVESTMENT
ONE FIXED GOVERNMENT GRADE BOND
INCOME SECURITIES PRO FORMA FUND PRO FORMA
FUND FUND ADJUSTMENT COMBINED
- -----------------------------------------------------------------------------------------------------------------------------
FINANCIAL SERVICES--6.68%
BellSouth Capital Funding Corp., Note
7.750%, 02/15/10 $ 1,134,490 $ -- $ -- 1,134,490
Merrill Lynch & Co., Note
6.800%, 11/03/03 1,070,840 -- -- 1,070,840
7.000%, 03/15/06 1,085,740 -- -- 1,085,740
Morgan Stanley, Dean Witter & Co., Senior Note, Series C
7.375%, 04/15/03 3,182,580 -- -- 3,182,580
Salomon Smith Barney Holdings, Inc., Note
7.000%, 03/15/04 2,157,620 -- -- 2,157,620
------------------------------------------------------------
8,631,270 -- -- 8,631,270
------------------------------------------------------------
FOOD AND BEVERAGE--0.82%
Sara Lee Corp., MTN
6.300%, 11/07/05 1,065,130 -- -- 1,065,130
------------------------------------------------------------
PHARMACEUTICALS--0.91%
Lilly (Eli) & Co., Unsecured Note
8.375%, 12/01/06 1,177,490 -- -- 1,177,490
------------------------------------------------------------
RETAIL TRADE--2.44%
Gap (The), Inc., Note
6.900%, 09/15/07 997,660 -- -- 997,660
Wal-Mart Stores, Inc., Unsecured Senior Note
6.550%, 08/10/04 2,162,100 -- -- 2,162,100
------------------------------------------------------------
3,159,760 -- -- 3,159,760
------------------------------------------------------------
TELECOMMUNICATIONS--3.22%
AT&T Corp., Note
6.500%, 09/15/02 2,051,860 -- -- 2,051,860
7.500%, 06/01/06 1,081,370 -- -- 1,081,370
U.S. West Communications, Inc., Note
6.625%, 09/15/05 1,026,590 -- -- 1,026,590
------------------------------------------------------------
4,159,820 -- -- 4,159,820
------------------------------------------------------------
TOTAL CORPORATE BONDS AND NOTES
(Cost $36,096,091 and $0) 38,282,290 -- -- 38,282,290
------------------------------------------------------------
INVESTMENT COMPANY -- 2.36%
Independence One Mutual Fund 2,515,000 540,000 -- 3,055,000
------------------------------------------------------------
(Cost $2,515,000 and $540,000) 2,515,000 540,000 -- 3,055,000
------------------------------------------------------------
TOTAL INVESTMENTS--99.02%
(Cost $83,501,144 and $35,479,185)** 88,786,530 39,237,530 -- 128,024,060
------------------------------------------------------------
NET OTHER ASSETS AND LIABILITIES--0.98% 806,889 389,603 68,386 1,264,878
------------------------------------------------------------
NET ASSETS--100.00% $89,593,419 $39,627,133 $ 68,386 $129,288,938
============================================================
** Aggregate cost for Federal income tax purposes is $119,213,488.
MTN Medium Term Note
See Notes to Pro Forma Financial Statements
ABN AMRO INVESTMENT GRADE BOND FUND
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The ABN AMRO Funds, a Delaware business trust (the "Trust"), is registered under
the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end
management investment company. As of October 31, 2001, the Trust offered
twenty-eight managed investment portfolios. The ABN AMRO Investment Grade Bond
Fund, a newly organized series of the Trust, will commence operations upon the
completion of the transactions contemplated in the next paragraph. The unaudited
Pro Forma Combining Portfolio of Investments and the unaudited Pro Forma
Statement of Assets and Liabilities of the ABN AMRO Investment Grade Bond Fund
assumes the exchange described in the next paragraph occurred as of October 31,
2001 and the unaudited Pro Forma Combining Statement of Operations assumes the
exchange occurred as of November 1, 2001. These statements have been derived
from books and records utilized in calculating the net asset value of each
Independence One Fund at October 31, 2001.
The pro forma statements give effect to the proposed transfer of substantially
all of the assets and stated liabilities of the Independence One Fixed Income
Fund and the Independence One U.S. Government Securities Fund in exchange for
shares of the ABN AMRO Investment Grade Bond Fund. Under generally accepted
accounting principles, the historical cost of investment securities will be
carried forward to the surviving entity and the results of operations of the
Independence One Fixed Income Fund and Independence One U.S. Government
Securities Fund for pre-combination periods will not be restated. The pro forma
statements do not reflect the expenses of the funds in carrying out their
obligations under the proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma Combining Financial Statements should be read in
conjunction with the historical financial statements of the Independence One
Funds incorporated by reference in the Statement of Additional Information.
For the Pro Forma Combining Financial Statements, the ABN AMRO Investment Grade
Bond Fund's investment advisory fee was computed based on the annual rate of
0.70% of its average daily net assets for the year ended October 31, 2001. The
administration fee was computed based on the annual rate of 0.060% of the first
$2.0 billion of the Trust's combined average daily net assets, 0.050% of the
next $10.5 billion, and 0.045% of the combined average daily net assets in
excess of $12.5 billion, and was allocated to each series of the Trust based on
the relative net assets of the Trust.
2. SECURITY VALUATION
The ABN AMRO Investment Grade Bond Fund, Independence One Fixed Income Fund and
Independence One U.S. Government Securities Fund's fixed income securities,
except short-term investments, are valued on the basis of mean prices provided
by a pricing service when such prices are believed by the Advisor to reflect the
fair market value of such securities in accordance with guidelines adopted. When
fair market value quotations are not readily available, securities and other
assets are valued at fair value by or under the direction of the Board of
Trustees. Short-term investments, that is, those with a remaining maturity of 60
days or less, are valued at amortized cost, which approximates market value.
Foreign securities are converted to United States dollars using exchange rates
at the time the net asset value ("NAV") is computed. The ABN AMRO Investment
Grade Bond Fund, Independence One Fixed Income Fund and Independence One U.S.
Government Securities Fund's equity securities and index options, traded on a
national exchange and over-the-counter securities listed on the NASDAQ National
Market System, are valued at the last reported sales price at the close of the
respective exchange. Over-the-counter securities not listed on the NASDAQ
National Market System are valued at the mean of the last reported bid and asked
prices.
ABN AMRO INVESTMENT GRADE BOND FUND
INDEPENDENCE ONE FIXED INCOME FUND
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of shares of the
ABN AMRO Investment Grade Bond Fund that at October 31, 2001 in connection with
the proposed reorganization. The pro forma number of shares outstanding of
12,568,392 consists of the shares assumed issued in the reorganization at
October 31, 2001.
4. PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS
The pro forma adjustments and pro forma combined columns of the statement of
operations reflect the adjustments necessary to show expenses at the rates which
would have been in effect if the Independence One Fixed Income Fund and
Independence One U.S. Government Securities Fund were the ABN AMRO Investment
Grade Bond Fund for the period November 1, 2000 to October 31, 2001. Investment
Advisory and Administration fees in the pro forma combined column are calculated
at the rates in effect for the ABN AMRO Investment Grade Bond Fund based upon
the combined net assets of the Independence One Fixed Income Fund and the
Independence One U.S. Government Securities Fund.
The pro forma Statement of Assets and Liabilities and Schedule of Investments
give effect to the proposed transfer of such assets as if the reorganization had
occurred at October 31, 2001.
5. COSTS OF REORGANIZATION
Reorganization expenses incurred by the ABN AMRO Funds will be paid by ABN AMRO
Asset Management (USA) and/or affiliates thereof. Reorganization expenses
include, without limitation: (a) expenses associated with the preparation and
filing of this Prospectus/Proxy Statement; (b) postage; (c) printing; (d)
accounting fees; (e) legal fees incurred by each Fund; (f) solicitation costs;
and (g) brokerage cost of any necessary rebalancing of the Funds' investment
portfolios.
6. FEDERAL INCOME TAXES
The ABN AMRO Investment Grade Bond Fund will elect to be treated as a "regulated
investment company" under Subchapter M of the Internal Revenue Code and will
distribute substantially all of its taxable income. Accordingly, no provisions
for federal income taxes have been made in the accompanying financial
statements. The Fund intends to utilize provisions for federal income tax laws
which will allow it to carry a realized capital loss forward eight years
following the year of the loss and offset such losses against any future
realized capital gains. At October 31, 2001, there is a capital loss carry
forward from the Independence One U.S. Government Securities Fund of $2,218,217
which will expire October 31, 2009.
The Independence One Fixed Income Fund and the Independence One U.S. Government
Securities Fund will each distribute all ordinary income and capital gains, if
any, prior to the reorganization.
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET
INDEPENDENCE ONE PRIME MONEY MARKET
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
OCTOBER 31, 2001
ABN AMRO
INSTITUTIONAL INDEPENDENCE PRO FORMA
PRIME MONEY ONE PRIME PRO FORMA COMBINED
MARKET MONEY MARKET ADJUSTMENTS (NOTE 1)
---------------------------------------------------------------------------
ASSETS:
Investments:
Investments at cost $1,353,744,906 $ 265,425,970 $ -- $1,619,170,876
Repurchase agreements 388,082,579 83,010,000 -- 471,092,579
---------------------------------------------------------------------------
Total Investments at value 1,741,827,485 348,435,970 -- 2,090,263,455
Cash 24,432 606 -- 25,038
Receivables:
Dividends and interest 5,277,607 324,925 -- 5,602,532
Fund shares sold 2,303 -- -- 2,303
Other assets 52,424 -- -- 52,424
---------------------------------------------------------------------------
Total assets 1,747,184,251 348,761,501 -- 2,095,945,752
---------------------------------------------------------------------------
LIABILITIES:
Payables:
Dividend distribution 3,497,073 724,623 -- 4,221,696
Shares redeemed -- 58,706 -- 58,706
Due to Adviser, net 157,583 62,762 -- (143,915)
Administration fee 81,380 -- -- (360,912)
Shareholder service fee 19,863 -- -- (44,898)
Trustees fees 27,423 -- -- (24,040)
Accrued expenses and other payables 288,084 367,872 -- 148,859
---------------------------------------------------------------------------
Total liabilities 4,071,406 1,213,963 -- 3,855,496
---------------------------------------------------------------------------
NET ASSETS $1,743,112,845 $ 347,547,538 $ -- $2,092,090,256
===========================================================================
NET ASSETS CONSISTS OF:
Paid in capital $1,743,110,974 $ 347,547,538 $ -- $2,090,658,512
Accumulated undistributed net investment income 1,871 -- -- 1,431,744
----------------------------------------------------------------------------
TOTAL NET ASSETS $1,743,112,845 $ 347,547,538 $ -- $2,092,090,256
===========================================================================
ABN AMRO CLASS Y
Net Assets $1,651,103,603 N/A $ 119,884,628(a) $1,772,342,629
Shares of beneficial interest outstanding 1,651,103,632 N/A 119,884,628(a) 1,772,342,658
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) $ 1.00 N/A $ -- $ 1.00
===========================================================================
INDEPENDENCE ONE CLASS Y
Net Assets N/A $ 119,884,628 $ (119,884,628)(a) N/A
Shares of beneficial interest outstanding N/A 119,884,628 (119,884,628)(a) N/A
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) N/A $ 1.00 $ -- N/A
===========================================================================
ABN AMRO CLASS YS
Net Assets $ 92,009,242 N/A $ 227,662,910(b) $ 319,747,627
Shares of beneficial interest outstanding 92,009,243 N/A 227,662,910(b) 319,747,628
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) $ 1.00 N/A $ -- $ 1.00
===========================================================================
INDEPENDENCE ONE CLASS K
Net Assets N/A $ 227,662,910 $ (227,662,910)(b) N/A
Shares of beneficial interest outstanding N/A 227,662,910 (227,662,910)(b) N/A
NET ASSET VALUE
Offering and redemption price per share
(Net Assets/Shares Outstanding) N/A $ 1.00 $ -- N/A
===========================================================================
(a) Reflects net effect of combining Independence One Class Y into the ABN AMRO
Class Y.
(b) Reflects net effect of combining Independence One Class K into the ABN AMRO
Class YS.
See Notes to Pro Forma Financial Statements
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET
INDEPENDENCE ONE PRIME MONEY MARKET
PRO FORMA COMBINING STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE YEAR ENDED OCTOBER 31, 2001
ABN AMRO
INSTITUTIONAL INDEPENDENCE PRO FORMA
PRIME MONEY ONE PRIME PRO FORMA COMBINED
MARKET MONEY MARKET ADJUSTMENTS (NOTE 1)
-----------------------------------------------------------------------
INVESTMENT INCOME:
Interest Income $ 90,779,856 $ 36,072,694 $ -- $126,852,550
-----------------------------------------------------------------------
Total Investment Income 90,779,856 36,072,694 -- 126,852,550
-----------------------------------------------------------------------
EXPENSES:
Investment advisory fees 1,872,893 2,903,138 (2,178,720)(a) 2,597,311
Transfer agent fees 128,763 137,359 (230,744)(b) 35,378
Administration fees 940,663 852,231 (442,292)(a) 1,350,602
Registration fees 165,589 20,596 (149,398)(b) 36,787
Custodian fees 137,935 73,739 (80,123)(b) 131,551
Professional fees 60,994 25,027 (25,436)(b) 60,585
Reports to shareholder expense 41,482 37,624 (41,106)(b) 38,000
Trustees fees 58,525 52,485 (51,463)(b) 59,547
Other expenses 134,121 11,137 19,710 (b) 164,968
Shareholder Service fees 203,673 1,317,031 (64,761)(a) 1,455,943
-----------------------------------------------------------------------
Total expenses before waivers/reimbursements 3,744,638 5,430,367 (3,244,333) 5,930,672
Less: Fund level waivers/reimbursements -- (1,814,460) 1,814,460(c) --
-----------------------------------------------------------------------
Net Expenses 3,744,638 3,615,907 (1,429,873) 5,930,672
-----------------------------------------------------------------------
NET INVESTMENT INCOME 87,035,218 32,456,787 1,429,873 120,921,878
-----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments -- -- -- --
Net change in unrealized appreciation on investments -- -- -- --
-----------------------------------------------------------------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS -- -- -- --
-----------------------------------------------------------------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 87,035,218 $ 32,456,787 $ 1,429,873 $120,921,878
=======================================================================
(a) Reflects adjustment to the acquired fund contractual fee level.
(b) Reflects expected savings/increases based on current year budget.
(c) Reflects adjustment to the acquired fund's contractual expense limitation.
See Notes to Pro Forma Financial Statements
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND
INDEPENDENCE ONE PRIME MONEY MARKET FUND
PRO FORMA COMBINING SCHEDULE OF INVESTMENTS (UNAUDITED)
OCTOBER 31, 2001
PAR VALUE DESCRIPTION RATE MATURITY
- ----------------------------------------------------------------------------------------------------------------------------
ABN AMRO INDEPENDENCE ONE
Prime Money Prime Money Pro Forma
Market Fund Market Fund Combined
- ----------------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER (A)--34.78%
$ -- $ 15,000,000 $ 15,000,000 AIG Funding 2.230% 12/06/2001
40,000,000 -- 40,000,000 American Express Credit 2.480% 11/08/2001
40,000,000 -- 40,000,000 American Express Credit 2.530% 11/15/2001
-- 15,000,000 15,000,000 Blue Ridge Asset Funding (B) 2.360% 11/26/2001
18,485,000 -- 18,485,000 Blue Ridge Asset Funding (B) 2.370% 11/26/2001
75,000,000 75,000,000 Citicorp 2.490% 11/07/2001
-- 15,000,000 15,000,000 Dexia Delaware 2.150% 01/22/2002
-- 15,000,000 15,000,000 Edison Asset Securitization (B) 2.220% 12/18/2001
25,000,000 25,000,000 Edison Asset Securitization (B) 2.190% 01/24/2002
-- 10,000,000 10,000,000 Enterprise Capital Funding 2.350% 11/20/2001
20,000,000 20,000,000 Falcon Asset Securitization (B) 2.680% 11/01/2001
-- 15,000,000 15,000,000 Fountain Square Commercial Funding (B) 3.440% 11/15/2001
-- 10,000,000 10,000,000 Fountain Square Commercial Funding (B) 3.370% 11/26/2001
25,000,000 25,000,000 Fountain Square Commercial Funding (B) 2.350% 01/15/2002
50,000,000 50,000,000 General Electric Capital 2.220% 01/25/2002
-- 10,000,000 10,000,000 Goldman Sachs 2.500% 11/06/2001
50,000,000 50,000,000 Household Finance 2.450% 11/20/2001
-- 15,000,000 15,000,000 National Rural Utilities Cooperative Finance 2.190% 12/07/2001
-- 15,000,000 15,000,000 Nordea NA 2.150% 01/25/2002
30,000,000 30,000,000 Quincy Capital (B) 2.500% 11/05/2001
-- 15,000,000 15,000,000 Quincy Capital (B) 2.350% 11/21/2001
-- 25,950,000 25,950,000 Sysco 2.500% 11/02/2001
-- 15,000,000 15,000,000 Toyota Motor Credit 2.250% 11/29/2001
-- 30,000,000 30,000,000 Transamerica Finance 2.880% 11/20/2001
50,000,000 50,000,000 Variable Funding (B) 2.220% 01/10/2002
-- 15,000,000 15,000,000 Verizon Network Funding 2.220% 01/22/2002
30,000,000 30,000,000 Verizon Network Funding 2.190% 01/22/2002
25,000,000 25,000,000 Verizon Network Funding 2.240% 01/24/2002
-- 15,000,000 15,000,000 Wal-Mart Stores 2.320% 11/14/2001
TOTAL COMMERCIAL PAPER
(Cost $477,283,442 and $250,425,970)
CERTIFICATES OF DEPOSIT--30.83%
50,000,000 -- 50,000,000 Abbey National (NY) 2.350% 12/12/2001
30,000,000 -- 30,000,000 Bayerische Hypo-und Vereinsbank (NY) 3.430% 11/06/2001
10,000,000 -- 10,000,000 Canadian Imperial Bank (NY) 6.600% 11/01/2001
28,000,000 -- 28,000,000 Commerce Bank (NY) 3.640% 01/22/2002
-- 15,000,000 15,000,000 Commerzbank (NY) 4.180% 05/21/2002
50,000,000 -- 50,000,000 Deutsche Bank (NY) 3.410% 11/21/2001
80,000,000 -- 80,000,000 Harris Trust and Savings 2.350% 12/11/2001
25,000,000 -- 25,000,000 Lloyds TBS Bank (NY) 3.470% 02/20/2002
58,000,000 -- 58,000,000 Merita Bank (NY) 2.240% 01/28/2002
37,000,000 -- 37,000,000 Rabobank Nederland (NY) 3.450% 02/14/2002
15,000,000 -- 15,000,000 Royal Bank of Canada (NY) 3.825% 07/22/2002
38,000,000 -- 38,000,000 Royal Bank of Scotland (NY) 3.420% 02/25/2002
50,000,000 -- 50,000,000 Societe Generale (NY) 3.410% 11/21/2001
50,000,000 -- 50,000,000 Toronto Dominion (NY) 3.610% 01/31/2002
15,000,000 -- 15,000,000 UBS Finance (NY) 3.805% 07/29/2002
94,000,000 -- 94,000,000 Westdeutsche Landesbank (NY) 3.620% 01/22/2002
TOTAL CERTIFICATES OF DEPOSIT
(Cost $630,017,670 and $15,000,000)
BANK NOTES--7.96%
16,000,000 -- 16,000,000 Bank of America 8.125% 06/15/2002
50,000,000 -- 50,000,000 US Bank NA 2.300% 01/22/2002
25,000,000 -- 25,000,000 US Bank NA 2.250% 01/24/2002
40,000,000 -- 40,000,000 Wells Fargo Bank 2.370% 12/10/2001
35,000,000 -- 35,000,000 Wells Fargo Bank 2.290% 01/16/2002
TOTAL BANK NOTES
(Cost $166,443,794 and $0)
EURO TIME DEPOSIT--3.82%
80,000,000 -- 80,000,000 Caisse des Depots et Consignations 2.650% 11/01/2001
TOTAL EURO TIME DEPOSIT
(Cost $80,000,000 and $0)
REPURCHASE AGREEMENTS--22.52%
-- 41,000,000 41,000,000 BA Securities, 2.500%, dated 10/31/01, matures
11/01/01 (C)
-- 42,010,000 42,010,000 Banc One Capital Markets, 2.510%, dated
10/31/01, matures 11/01/01 (C)
299,351,684 -- 299,351,684 J.P. Morgan Chase , 2.550%, dated 10/31/01,
matures 11/01/01, repurchase price $299,372,889
(collateralized by U.S. Government Agency
Instruments, total market value: $305,341,159)
88,730,895 -- 88,730,895 Morgan Stanley, 2.550%, dated 10/31/01, matures
11/01/01, repurchase price $88,737,180
(collateralized by U.S. Government Agency
Instruments, total market value: $90,514,665)
TOTAL REPURCHASE AGREEMENTS
(Cost $388,082,579 and $83,010,000)
TOTAL INVESTMENTS--99.91%
(Cost $1,741,827,485 and $348,435,970)
NET OTHER ASSETS AND LIABILITIES--0.09%
NET ASSETS--100.0%
DESCRIPTION MARKET VALUE
- ----------------------------------------------------------------------------------------------------------------------
ABN AMRO INDEPENDENCE
Prime Money ONE Prime Money Pro Forma Pro Forma
Market Fund Market Fund Adjustment Combined
- ----------------------------------------------------------------------------------------------------------------------
COMMERCIAL PAPER (A)--34.78%
AIG Funding $ -- $ 14,967,479 $ -- $ 14,967,479
American Express Credit 39,980,711 -- -- 39,980,711
American Express Credit 39,960,644 -- -- 39,960,644
Blue Ridge Asset Funding (B) -- 14,975,417 -- 14,975,417
Blue Ridge Asset Funding (B) 18,454,577 -- -- 18,454,577
Citicorp 74,968,875 -- -- 74,968,875
Dexia Delaware -- 14,926,542 -- 14,926,542
Edison Asset Securitization (B) -- 14,956,525 -- 14,956,525
Edison Asset Securitization (B) 24,872,250 -- -- 24,872,250
Enterprise Capital Funding -- 9,987,597 -- 9,987,597
Falcon Asset Securitization (B) 20,000,000 -- -- 20,000,000
Fountain Square Commercial Funding (B) -- 14,979,933 -- 14,979,933
Fountain Square Commercial Funding (B) -- 9,976,597 -- 9,976,597
Fountain Square Commercial Funding (B) 24,877,604 -- -- 24,877,604
General Electric Capital 49,737,917 -- -- 49,737,917
Goldman Sachs -- 9,996,528 -- 9,996,528
Household Finance 49,935,347 -- -- 49,935,347
National Rural Utilities Cooperative Finance -- 14,967,150 -- 14,967,150
Nordea NA -- 14,923,854 -- 14,923,854
Quincy Capital (B) 29,991,667 -- -- 29,991,667
Quincy Capital (B) -- 14,980,417 -- 14,980,417
Sysco -- 25,948,198 -- 25,948,198
Toyota Motor Credit -- 14,973,750 -- 14,973,750
Transamerica Finance -- 29,954,400 -- 29,954,400
Variable Funding (B) 49,784,167 -- -- 49,784,167
Verizon Network Funding -- 14,924,150 -- 14,924,150
Verizon Network Funding 29,850,350 -- -- 29,850,350
Verizon Network Funding 24,869,333 -- -- 24,869,333
Wal-Mart Stores -- 14,987,433 -- 14,987,433
--------------------------------------------------------------------
TOTAL COMMERCIAL PAPER
(Cost $477,283,442 and $250,425,970) 477,283,442 250,425,970 -- 727,709,412
--------------------------------------------------------------------
CERTIFICATES OF DEPOSIT--30.83%
Abbey National (NY) 50,000,000 -- -- 50,000,000
Bayerische Hypo-und Vereinsbank (NY) 30,000,000 -- -- 30,000,000
Canadian Imperial Bank (NY) 10,000,000 -- -- 10,000,000
Commerce Bank (NY) 28,002,437 -- -- 28,002,437
Commerzbank (NY) -- 15,000,000 -- 15,000,000
Deutsche Bank (NY) 50,000,138 -- -- 50,000,138
Harris Trust and Savings 80,000,000 -- -- 80,000,000
Lloyds TBS Bank (NY) 25,005,231 -- -- 25,005,231
Merita Bank (NY) 58,001,409 -- -- 58,001,409
Rabobank Nederland (NY) 37,004,997 -- -- 37,004,997
Royal Bank of Canada (NY) 15,001,317 -- -- 15,001,317
Royal Bank of Scotland (NY) 38,002,407 -- -- 38,002,407
Societe Generale (NY) 50,000,275 -- -- 50,000,275
Toronto Dominion (NY) 50,000,000 -- -- 50,000,000
UBS Finance (NY) 14,999,459 -- -- 14,999,459
Westdeutsche Landesbank (NY) 94,000,000 -- -- 94,000,000
--------------------------------------------------------------------
TOTAL CERTIFICATES OF DEPOSIT
(Cost $630,017,670 and $15,000,000) 630,017,670 15,000,000 -- 645,017,670
--------------------------------------------------------------------
BANK NOTES--7.96%
Bank of America 16,443,794 -- -- 16,443,794
US Bank NA 50,000,000 -- -- 50,000,000
US Bank NA 25,000,000 -- -- 25,000,000
Wells Fargo Bank 40,000,000 -- -- 40,000,000
Wells Fargo Bank 35,000,000 -- -- 35,000,000
--------------------------------------------------------------------
TOTAL BANK NOTES
(Cost $166,443,794 and $0) 166,443,794 -- -- 166,443,794
--------------------------------------------------------------------
EURO TIME DEPOSIT--3.82%
Caisse des Depots et Consignations 80,000,000 -- -- 80,000,000
--------------------------------------------------------------------
TOTAL EURO TIME DEPOSIT
(Cost $80,000,000 and $0) 80,000,000 -- -- 80,000,000
--------------------------------------------------------------------
REPURCHASE AGREEMENTS--22.52%
BA Securities, 2.500%, dated 10/31/01, matures
11/01/01 (C) -- 41,000,000 -- 41,000,000
Banc One Capital Markets, 2.510%, dated
10/31/01, matures 11/01/01 (C) -- 42,010,000 -- 42,010,000
J.P. Morgan Chase , 2.550%, dated 10/31/01,
matures 11/01/01, repurchase price $299,372,889
(collateralized by U.S. Government Agency
Instruments, total market value: $305,341,159) 299,351,684 -- -- 299,351,684
Morgan Stanley, 2.550%, dated 10/31/01, matures
11/01/01, repurchase price $88,737,180
(collateralized by U.S. Government Agency
Instruments, total market value: $90,514,665) 88,730,895 -- -- 88,730,895
--------------------------------------------------------------------
TOTAL REPURCHASE AGREEMENTS
(Cost $388,082,579 and $83,010,000) 388,082,579 83,010,000 -- 471,092,579
--------------------------------------------------------------------
TOTAL INVESTMENTS--99.91%
(Cost $1,741,827,485 and $348,435,970) 1,741,827,485 348,435,970 -- 2,090,263,455
--------------------------------------------------------------------
NET OTHER ASSETS AND LIABILITIES--0.09% 1,285,360 (888,432) 1,429,873 1,826,801
--------------------------------------------------------------------
NET ASSETS--100.0% $1,743,112,845 $ 347,547,538 $ 1,429,873 $2,092,090,256
====================================================================
* At October 31, 2001, cost is identical for book and Federal income tax
purposes.
(A) Rate noted represents annualized discount yield at the time of purchase.
(B) Securities exempt from registration under section 4(2) of the Securities
Act of 1933, as amended. These securities may only be sold in an exempt
transaction to qualified institutional buyers. At October 31, 2001, these
securities amounted to $237,849,154 or 11.37% of total net assets.
(C) The repurchase agreements are fully collateralized by U.S. Treasury
obligations based on market prices at the date of the portfolio.
(DE) Delaware
(NY) New York
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND
INDEPENDENCE ONE PRIME EQUITY MONEY MARKET FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF COMBINATION
The ABN AMRO Funds, a Delaware business trust (the "Trust"), is registered under
the Investment Company Act of 1940, as amended, (the "1940 Act") as an open-end
management investment company. As of October 31, 2001, the Trust offered twenty
eight managed investment portfolios. The unaudited Pro Forma Combining Portfolio
of Investments and the unaudited Pro Forma Statement of Assets and Liabilities
assumes the exchange described in the next paragraph occurred as of October 31,
2001 and the unaudited Pro Forma Combining Statement of Operations assumes the
exchange occurred as of November 1, 2001. These statements have been derived
from books and records utilized in calculating the net asset value of each fund
at October 31, 2001 and for the year then ended.
The pro forma statements give effect to the proposed transfer of substantially
all of the assets and stated liabilities of the Independence One Prime Money
Market Fund in exchange for shares of the ABN AMRO Institutional Prime Money
Market Fund. Under generally accepted accounting principles, the historical cost
of investment securities will be carried forward to the surviving entity and the
results of operations of the Independence One Prime Money Market Fund for
pre-combination periods will not be restated. The pro forma statements do not
reflect the expenses of either fund in carrying out its obligations under the
proposed Agreement and Plan of Reorganization.
The unaudited Pro Forma Combining Financial Statements should be read in
conjunction with the historical financial statements of the funds incorporated
by reference in the Statement of Additional Information.
For the year ended October 31, 2001 the ABN AMRO Institutional Prime Money
Market Fund's investment advisory fee was computed based on the annual rate of
0.10% of its average daily net assets. The administration fee was computed based
on the annual rate of 0.060% of the first $2.0 billion of the Trust's combined
average daily net assets, 0.050% of the next $10.5 billion, and 0.045% of the
combined average daily net assets in excess of $12.5 billion, and was allocated
to each fund based on the relative net assets of the Trust.
Pursuant to a shareholder servicing plan (the "Plan") adopted by the ABN AMRO
Institutional Prime Money Market Fund with respect to Class YS Shares, the Fund
pays certain expenses for its efforts in maintaining client accounts, arranging
bank wires, responding to inquiries concerning services provided on investments
and assisting clients in purchase, redemption and exchange transactions, and
changing their dividend options, account designations and addresses. Under the
Plan, the Fund may pay actual expenses not exceeding, on an annual basis, 0.25%
of the Fund's Class YS shares average daily net assets.
2. SECURITY VALUATION
The ABN AMRO Institutional Prime Money Market Fund and Independence One Prime
Money Market Fund securities are valued at amortized cost, which approximates
market value. Under amortized cost methods, discounts and premiums are accreted
and amortized ratably to maturity and are included as interest income.
ABN AMRO INSTITUTIONAL PRIME MONEY MARKET FUND
INDEPENDENCE ONE PRIME MONEY MARKET FUND
NOTES TO PRO FORMA COMBINING FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional
shares of the ABN AMRO Institutional Prime Money Market Fund that would have
been issued at October 31, 2001 in connection with the proposed reorganization.
The pro forma number of shares outstanding of 2,090,660,413 consists of
347,547,538 shares assumed issued in the reorganization plus 1,743,112,875
shares of the ABN AMRO Institutional Prime Money Market Fund at October 31,
2001.
4. PRO FORMA ADJUSTMENTS AND PRO FORMA COMBINED COLUMNS
The pro forma adjustments and pro forma combined columns of the statement of
operations reflect the adjustments necessary to show expenses at the rates which
would have been in effect if the Independence One Prime Money Market Fund was
included in the ABN AMRO Institutional Prime Money Market Fund for the period
November 1, 2000 to October 31, 2001. Investment Advisory, Administration and
12b-1 fees in the pro forma combined column are calculated at the rates in
effect for the ABN AMRO Institutional Prime Money Market Fund based upon the
combined net assets of the Independence One Prime Money Market Fund and ABN AMRO
Institutional Prime Money Market Fund.
The pro forma Statement of Assets and Liabilities and Schedule of Investments
give effect to the proposed transfer of such assets as if the reorganization had
occurred at October 31, 2001.
5. COSTS OF REORGANIZATION
Reorganization expenses incurred by the ABN AMRO Funds will be paid by ABN AMRO
Asset Management (USA) and/or affiliates thereof. Reorganization expenses
include, without limitation: (a) expenses associated with the preparation and
filing of this Prospectus/Proxy Statement; (b) postage; (c) printing; (d)
accounting fees; (e) legal fees incurred by each Fund; (f) solicitation costs;
and (g) brokerage cost of any necessary rebalancing of the Funds' investment
portfolios.
6. FEDERAL INCOME TAXES
The Fund has elected to be treated as a "regulated investment company" under
Subchapter M of the Internal Revenue Code and to distribute substantially all of
their respective taxable income. Accordingly, no provisions for federal income
taxes have been made in the accompanying financial statements. The Fund intends
to utilize provisions for federal income tax laws which will allow them to carry
a realized capital loss forward eight years following the year of the loss and
offset such losses against any future realized capital gains. At October 31,
2001, there is a capital loss carry forward of $35,489 from the Independence One
Prime Money Market Fund which will expire in October 31, 2008.
The Independence One Prime Money Market Fund will distribute all of its ordinary
income and capital gains, if any, prior to the Fund merging.
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE U.S. TREASURY MONEY MARKET FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One U.S. Treasury Money
Market Fund (the "Fund"), a series of Independence One Mutual Funds (the
"Trust") hereby appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L.
McDowell, C. Grant Anderson and William Haas (each with full power of
substitution), the proxy or proxies of the undersigned to attend the Special
Meeting of Shareholders (the "Special Meeting") of the Fund to be held on
Friday, May 10, 2002, and any adjournments thereof, to vote all of the shares of
the Fund that the signer would be entitled to vote if personally present at the
Special Meeting and on any other matters brought before the Special Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy
Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One U.S. Treasury Money Market Fund to the ABN
AMRO Treasury Money Market Fund in exchange for ABN AMRO
Treasury Money Market Fund shares, and the distribution of
shares so received to shareholders of the Independence One
U.S. Treasury Money Market Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002 --------------------------------------
------------- Signature
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE INTERNATIONAL EQUITY FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One International
Equity Fund (the "Fund"), a series of Independence One Mutual Funds (the
"Trust") hereby appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L.
McDowell, C. Grant Anderson and William Haas (each with full power of
substitution), the proxy or proxies of the undersigned to attend the Special
Meeting of Shareholders (the "Special Meeting") of the Fund to be held on
Friday, May 10, 2002, and any adjournments thereof, to vote all of the shares of
the Fund that the signer would be entitled to vote if personally present at the
Special Meeting and on any other matters brought before the Special Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy
Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One International Equity Fund to the ABN AMRO
International Equity Fund in exchange for ABN AMRO
International Equity Fund shares, and the distribution of
shares so received to shareholders of the Independence One
International Equity Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002 --------------------------------------
------------- Signature
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE FIXED INCOME FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One Fixed Income Fund
(the "Fund"), a series of Independence One Mutual Funds (the "Trust") hereby
appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L. McDowell, C. Grant
Anderson and William Haas (each with full power of substitution), the proxy or
proxies of the undersigned to attend the Special Meeting of Shareholders (the
"Special Meeting") of the Fund to be held on Friday, May 10, 2002, and any
adjournments thereof, to vote all of the shares of the Fund that the signer
would be entitled to vote if personally present at the Special Meeting and on
any other matters brought before the Special Meeting, all as set forth in the
Notice of Special Meeting of Shareholders. Said proxies are directed to vote or
refrain from voting pursuant to the Proxy Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One Fixed Income Fund to the ABN AMRO Investment
Grade Bond Fund in exchange for ABN AMRO Investment Grade Bond
Fund shares, and the distribution of shares so received to
shareholders of the Independence One Fixed Income Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002 --------------------------------------
Signature
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE U.S. GOVERNMENT SECURITIES FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One U.S. Government
Securities Fund (the "Fund"), a series of Independence One Mutual Funds (the
"Trust") hereby appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L.
McDowell, C. Grant Anderson and William Haas (each with full power of
substitution), the proxy or proxies of the undersigned to attend the Special
Meeting of Shareholders (the "Special Meeting") of the Fund to be held on
Friday, May 10, 2002, and any adjournments thereof, to vote all of the shares of
the Fund that the signer would be entitled to vote if personally present at the
Special Meeting and on any other matters brought before the Special Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy
Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One U.S. Government Securities Fund to the ABN
AMRO Investment Grade Bond Fund in exchange for ABN AMRO
Investment Grade Bond Fund shares, and the distribution of
shares so received to shareholders of the Independence One
U.S. Government Securities Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002
------------- --------------------------------------
Signature
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE SMALL CAP FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One Small Cap Fund (the
"Fund"), a series of Independence One Mutual Funds (the "Trust") hereby
appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L. McDowell, C. Grant
Anderson and William Haas (each with full power of substitution), the proxy or
proxies of the undersigned to attend the Special Meeting of Shareholders (the
"Special Meeting") of the Fund to be held on Friday, May 10, 2002, and any
adjournments thereof, to vote all of the shares of the Fund that the signer
would be entitled to vote if personally present at the Special Meeting and on
any other matters brought before the Special Meeting, all as set forth in the
Notice of Special Meeting of Shareholders. Said proxies are directed to vote or
refrain from voting pursuant to the Proxy Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One Small Cap Fund to the ABN AMRO Select Small
Cap Fund in exchange for ABN AMRO Select Small Cap Fund
shares, and the distribution of shares so received to
shareholders of the Independence One Small Cap Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002 --------------------------------------
------------- Signature
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE EQUITY PLUS FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One Equity Plus Fund
(the "Fund"), a series of Independence One Mutual Funds (the "Trust") hereby
appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L. McDowell, C. Grant
Anderson and William Haas (each with full power of substitution), the proxy or
proxies of the undersigned to attend the Special Meeting of Shareholders (the
"Special Meeting") of the Fund to be held on Friday, May 10, 2002, and any
adjournments thereof, to vote all of the shares of the Fund that the signer
would be entitled to vote if personally present at the Special Meeting and on
any other matters brought before the Special Meeting, all as set forth in the
Notice of Special Meeting of Shareholders. Said proxies are directed to vote or
refrain from voting pursuant to the Proxy Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One Equity Plus Fund to the ABN AMRO Equity Plus
Fund in exchange for ABN AMRO Equity Plus Fund shares, and the
distribution of shares so received to shareholders of the
Independence One Equity Plus Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002 --------------------------------------
Signature
INDEPENDENCE ONE MUTUAL FUNDS
5800 CORPORATE DRIVE
PITTSBURGH, PENNSYLVANIA 15237
INDEPENDENCE ONE PRIME MONEY MARKET FUND
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
MAY 10, 2002
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF
INDEPENDENCE ONE MUTUAL FUNDS
The undersigned Shareholder(s) of the Independence One Prime Money Market
Fund (the "Fund"), a series of Independence One Mutual Funds (the "Trust")
hereby appoint(s) Heather A. Eastgate, Maureen Ferguson, Shannon L. McDowell, C.
Grant Anderson and William Haas (each with full power of substitution), the
proxy or proxies of the undersigned to attend the Special Meeting of
Shareholders (the "Special Meeting") of the Fund to be held on Friday, May 10,
2002, and any adjournments thereof, to vote all of the shares of the Fund that
the signer would be entitled to vote if personally present at the Special
Meeting and on any other matters brought before the Special Meeting, all as set
forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy
Statement/Prospectus as checked below.
All properly executed proxies will be voted as directed herein by the
signing Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal. Please date, sign and
return promptly.
To vote by Telephone
1) Read the Proxy Statement and have the proxy card below at hand.
2) Call 1-800-890-8903.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the proxy card below at hand.
2) Go to Website www.proxyvote.com.
3) Enter the 12-digit control number set forth on the proxy card and
follow the simple instructions.
To vote by Mail
1) Read the Proxy Statement.
2) Check the appropriate boxes on the proxy card below.
3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS
PORTION FOR YOUR RECORDS.
---------------------------------------------------------
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN
THIS PORTION ONLY.
THE BOARD OF TRUSTEES OF THE TRUST RECOMMENDS A VOTE "FOR" THE PROPOSAL
TO:
Proposal 1: To approve an Agreement and Plan of Reorganization providing
for the transfer of all of the assets and liabilities of the
Independence One Prime Money Market Fund to the ABN AMRO
Institutional Prime Money Market Fund in exchange ABN AMRO
Institutional Prime Money Market Fund shares, and the
distribution of shares so received to shareholders of the
Independence One Prime Money Market Fund.
[ ] For [ ] Against [ ] Abstain
The undersigned acknowledges receipt with this proxy card of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement/Prospectus.
Your signature(s) on this proxy card should be exactly as your name or names
appear on this proxy card. If signing is by attorney, executor, administrator,
trustee or guardian, please print your full title below your signature.
Dated: , 2002
------------- --------------------------------------
Signature
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
Section 10.2 of the Registrant's Trust Instrument provides as follows:
10.2 Indemnification. The Trust shall indemnify each of its Trustees
against all liabilities and expenses (including amounts paid in
satisfaction of judgments, in compromise, as fines and penalties, and as
counsel fees) reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or
criminal, in which he may be involved or with which he may be threatened,
while as a Trustee or thereafter, by reason of his being or having been
such a Trustee except with respect to any matter as to which he shall have
been adjudicated to have acted in bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties, provided that as to any
matter disposed of by a compromise payment by such person, pursuant to a
consent decree or otherwise, no indemnification either for said payment or
for any other expenses shall be provided unless the Trust shall have
received a written opinion from independent legal counsel approved by the
Trustees to the effect that if either the matter of willful misfeasance,
gross negligence or reckless disregard of duty, or the matter of bad faith
had been adjudicated, it would in the opinion of such counsel have been
adjudicated in favor of such person. The rights accruing to any person
under these provisions shall not exclude any other right to which he may
be lawfully entitled, provided that no person may satisfy any right of
indemnity or reimbursement hereunder except out of the property of the
Trust. The Trustees may make advance payments in connection with the
indemnification under this Section 10.2, provided that the indemnified
person shall have given a written undertaking to reimburse the Trust in
the event it is subsequently determined that he is not entitled to such
indemnification.
The Trust shall indemnify officers, and shall have the power to indemnify
representatives and employees of the Trust, to the same extent that
Trustees are entitled to indemnification pursuant to this Section 10.2.
Insofar as indemnification for liability arising under the 1933 Act may be
permitted to trustees, officers and controlling persons of Registrant pursuant
to the foregoing provisions, or otherwise, Registrant has been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in that Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in that Act and will
be governed by the final adjudication of such issue.
Section 10.3 of the Registrant's Trust Instrument, also provides for the
indemnification of shareholders of the Registrant. Section 10.3 states as
follows:
10.3 Shareholders. In case any Shareholder or former Shareholder of any
Series shall be held to be personally liable solely by reason of his being
or having been a shareholder of such Series and not because of his acts or
omissions or for some other reason, the Shareholder or former Shareholder
(or his heirs, executors, administrators or other legal representatives
or, in the case of a corporation or other entity, its corporate or other
general successor) shall be entitled out of the assets belonging to the
applicable Series to be held harmless from and indemnified against all
loss and expense arising from such liability. The Trust, on behalf of the
affected Series, shall, upon
C-1
request by the Shareholder, assume the defense of any claim made against
the Shareholder for any act or obligation of the Trust and satisfy any
judgment thereon from the assets of the Series.
In addition, the Registrant currently has a trustees' and officers' liability
policy covering certain types of errors and omissions.
ITEM 16. EXHIBITS
(1)(a) Trust Instrument dated September 10, 1993, is incorporated by
reference to Exhibit (a) of Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on April 16, 1996.
(1)(b) State of Delaware Certificate of Amendment to Certificate of Trust
dated February 25, 1998, is incorporated by reference to Exhibit
(a)(2) of Post-Effective Amendment No. 33 to the Registrant's
Registration Statement on Form N-1A as filed via EDGAR on September
21, 2001.
(1)(c) State of Delaware Certificate of Amendment to Certificate of Trust
dated September 10, 2001, is incorporated by reference to Exhibit
(a)(3) of Post-Effective Amendment No. 33 to the Registrant's
Registration Statement on Form N-1A as filed via EDGAR on September
21, 2001.
(2) By-Laws are incorporated by reference to Exhibit No. 2 of
Post-Effective Amendment No. 7 to the Registrant's Registration
Statement on Form N-1A filed via EDGAR on February 22, 1996.
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization is filed herewith as
Exhibit A to Part A of this Registration Statement.
(5) Not Applicable.
(6)(a) Investment Advisory Agreement dated September 27, 2001 between ABN
AMRO Asset Management (USA) LLC and ABN AMRO International Equity
Fund is incorporated by reference to Exhibit (d)(13) of
Post-Effective Amendment No. 36 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on December 28, 2001.
(6)(b) Investment Advisory Agreement dated September 27, 2001 between ABN
AMRO Asset Management (USA) LLC and ABN AMRO Treasury Money Market
Fund is incorporated by reference to Exhibit (d)(17) of
Post-Effective Amendment No. 36 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on December 28, 2001.
(6)(c) Investment Advisory Agreement dated September 27, 2001 between ABN
AMRO Asset Management (USA) LLC and ABN AMRO Institutional Prime
Money Market Fund is incorporated by reference to Exhibit (d)(21) of
Post-Effective Amendment No. 36 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on December 28, 2001.
(6)(d) Form of Investment Advisory Agreement for ABN AMRO Select Small Cap
Fund, ABN AMRO Equity Plus Fund and ABN AMRO Investment Grade Bond
Fund between ABN AMRO Asset Management (USA) LLC and ABN AMRO Funds
is incorporated by reference to Exhibit (d)(23) of Post-Effective
Amendment No. 40 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on or about March 18, 2002.
(6)(e) Form of Sub-Advisory Agreement for ABN AMRO Select Small Cap Fund
and ABN AMRO Equity Plus Fund is incorporated by reference to
Exhibit (d)(28) of Post-Effective Amendment No. 40 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on or about March 18, 2002.
(7)(a) Distribution Agreement between ABN AMRO Funds and ABN AMRO
Distribution Services (USA), Inc., is incorporated by reference to
Exhibit (e)(1) of Post-Effective Amendment No. 36 to Registrant's
Registration Statement on Form N-1A as filed via EDGAR on December
28, 2001.
(7)(b) Amended Schedule A to the Distribution Agreement between ABN AMRO
Funds and ABN AMRO Distribution Services (USA), Inc. is incorporated
by reference to Exhibit (e)(2) of Post-Effective Amendment No. 36 to
the Registrant's Registration Statement on Form N-1A as filed via
EDGAR on December 28, 2001.
7(c) Form of Selling/Services Agreement for ABN AMRO Funds is
incorporated by reference to Exhibit (e)(2) of Post-Effective
Amendment No. 33 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on September 21, 2001.
(8) Not Applicable.
(9)(a) Custodian Agreement between Bankers Trust Company and CT&T Funds,
dated June 1, 1997, incorporated by reference to Exhibit No. 8(a)
of Post-Effective Amendment No. 10 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on February 27, 1998.
(9)(b) Amendment No. 2 to the Custodian Agreement is incorporated by
reference to Exhibit (e) of Post-Effective Amendment No. 22 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on June 30, 2000.
C-2
(9)(c) Amendment No. 3 to the Custodian Agreement is incorporated by
reference to Exhibit (e) of Post-Effective Amendment No. 24 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on December 29, 2000.
(9)(d) Form of Amendment No. 4 to the Custodian Agreement between Deutsche
Bank/Bankers Trust Company and ABN AMRO Funds is incorporated by
reference to Exhibit (e)(4) of Post-Effective Amendment No. 36 to
the Registrant's Registration Statement on Form N-1A as filed via
EDGAR on December 28, 2001.
(9)(e) Global Custody Agreement between ABN AMRO Funds and The Chase
Manhattan Bank, dated August 13, 1998, including all amendments,
will be filed by amendment.
(10)(a) Distribution and Services Plan pursuant to Rule 12b-1 is
incorporated by reference to Exhibit (m)(1) of Post-Effective
Amendment No. 33 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on September 21, 2001.
(10)(b) Amended Schedule A to Distribution and Services Plan pursuant to
Rule 12b-1 is incorporated by reference to Exhibit (m)(2) of
Post-Effective Amendment No. 36 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on December 28, 2001.
(10)(c) Amended and Restated Distribution and Services Plan pursuant to Rule
12b-1 is incorporated by reference to Exhibit (m)(2) of
Post-Effective Amendment No. 33 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on September 21, 2001.
(10)(d) Shareholder Servicing Agent Agreement for Class S and Class YS
Shares is incorporated by reference to Exhibit (m)(3) of
Post-Effective Amendment No. 33 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on September 21, 2001.
(10)(e) Shareholder Service Plan for Class S and Class YS Shares is
incorporated by reference to Exhibit (m)(4) of Post-Effective
Amendment No. 33 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on September 21, 2001.
(10)(f) Rule 18f-3 Plan is incorporated by reference to Exhibit (n)(1) of
Post-Effective Amendment No. 33 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on September 21, 2001.
(10)(g) Amendment Schedule A to 18f-3 Plan is incorporated by reference to
Exhibit (n)(2) of Post-Effective Amendment No. 36 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on December 28, 2001.
(11) Opinion and Consent of Counsel is incorporated by reference to
Exhibit 11 of the Registrant's Registration Statement on Form N-14
as filed via EDGAR on February 6, 2002.
(12) Form of Opinion and Consent of Counsel supporting the tax matters
and consequences to shareholders discussed in the proxy
statement/prospectus is incorporated by reference to Exhibit 12 of
the Registrant's Registration Statement on Form N-14 as filed via
EDGAR on February 6, 2002.
(13)(a) Transfer Agency Services Agreement between Alleghany Funds and
PFPC, Inc., dated April 1, 2000, is incorporated by reference to
Exhibit (h)(1) of Post-Effective Amendment No. 22 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on June 30, 2000.
(13)(b) Amendment No. 1 to the Transfer Agency Services Agreement is
incorporated by reference to Exhibit (h)(2) of Post-Effective
Amendment No. 22 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on June 30, 2000.
(13)(c) Amendment No. 2 to the Transfer Agency Services Agreement is
incorporated by reference to Post-Effective Amendment No. 26 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on March 1, 2001.
(13)(d) Form of Amendment No. 3 to the Transfer Agency Services Agreement
is incorporated by reference to Exhibit (h)(4) of Post-Effective
Amendment No. 33 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on September 21, 2001.
(13)(e) Form of Amendment No. 4 to the Transfer Agency Services Agreement is
incorporated by reference to Exhibit (h)(6) of Post-Effective
Amendment No. 36 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on December 28, 2001.
(13)(f) Administration Agreement between Alleghany Funds and Alleghany
Investment Services Inc., dated June 7, 1999, is incorporated by
reference to Exhibit (h) of Post-Effective Amendment No. 17 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on June 28, 1999.
(13)(g) Amendment No. 1 to the Administration Agreement is incorporated by
reference to Exhibit (h)(3) of Post-Effective Amendment No. 22 to
the Registrant's Registration Statement on Form N-1A as filed via
EDGAR on June 30, 2000.
C-3
(13)(h) Amendment No. 2 to the Administration Agreement is incorporated by
reference to Exhibit (h) of Post Effective Amendment No. 24 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on December 29, 2000.
(13)(i) Amendment No. 3 to the Administration Agreement is incorporated by
reference to Exhibit (h)(8) of Post-Effective Amendment No. 36 to
the Registrant's Registration Statement on Form N-1A as filed via
EDGAR on December 28, 2001.
(13)(j) Amendment No. 4 to the Administration Agreement is incorporated by
reference to Exhibit (h)(9) of Post-Effective Amendment No. 36 to
the Registrant's Registration Statement on Form N-1A as filed via
EDGAR on December 28, 2001.
(13)(k) Amendment No. 4 to the Administration Agreement is incorporated by
reference to Exhibit (h)(10) of Post-Effective Amendment No. 36 to
the Registrant's Statement on Form N-1A as filed via EDGAR on
December 28, 2001.
(13)(l) Form of Amendment No. 5 to the Administration Agreement is
incorporated by reference to Exhibit (h)(11) of Post-Effective
Amendment No. 36 to the Registrant's Registration Statement on Form
N-1A as filed via EDGAR on December 28, 2001.
(13)(m) Sub-Administration and Accounting Services Agreement between
Alleghany Investment Services Inc. and PFPC Inc., dated April 1,
2000, is incorporated by reference to Exhibit (h)(4) of
Post-Effective Amendment No. 22 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on June 30, 2000.
(13)(n) Amendment No. 1 to the Sub-Administration and Accounting Services
Agreement is incorporated by reference to Exhibit (h)(5) of
Post-Effective Amendment No. 22 to the Registrant's Registration
Statement on Form N-1A as filed via EDGAR on June 30, 2000.
(13)(o) Amendment No. 2 to the Sub-Administration and Accounting Services
Agreement is incorporated by reference to Post-Effective Amendment
No. 26 to the Registrant's Registration Statement on Form N-1A as
filed via EDGAR on March 1, 2001.
(14)(a) Consent of Ernst & Young LLP is filed herewith.
(14)(b) Consent of KPMG LLP is incorporated by reference to Exhibit 14(b) of
the Registrant's Registration Statement of Form N-14 as filed via
EDGAR on February 6, 2002
(15) Not Applicable.
(16) Not Applicable.
(17)(a) Prospectuses for the ABN AMRO Funds dated March 1, 2002, are
incorporated by reference to Post-Effective Amendment No. 39 to the
Registrant's Registration Statement on Form N-1A as filed via EDGAR
on February 28, 2002.
(17)(b) Prospectuses and SAI for the ABN AMRO Funds dated on or about March,
20, 2002, are incorporated by reference to Post-Effective Amendment
No. 40 to the Registrant's Registration Statement on Form N-1A as
filed via EDGAR on or about March 18, 2002.
(17)(c) Audited Financial Statements for the ABN AMRO Funds dated October
31, 2001, are incorporated by reference to the Registrant's N-30D
filings as filed via EDGAR on January 3, 2001.
(17)(d) Prospectuses and SAIs for the Independence One Mutual Funds dated
June 30, 2001, are incorporated by reference to Post-Effective
Amendment No. 33 to ABN AMRO Funds' Registration Statement on Form
N-1A as filed via EDGAR on June 27, 2001.
(17)(e) Audited Financial Statements for the Independence One Mutual Funds
dated April 30, 2001, are incorporated by reference to Independence
One Trust's N-30D filing as filed via EDGAR on June 25, 2001.
(17)(f) Unaudited Financial Statements for the Independence One Mutual Funds
dated October 31, 2001 are incorporated by reference to the
Independence One Trust's N-30D filing as filed via EDGAR on December
19, 2001.
ITEM 17. UNDERTAKINGS.
(1) The undersigned 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
C-4
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 undersigned 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.
C-5
SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the registrant, in the City of Chicago, the State of
Illinois, on the 19th day of March, 2002.
ABN AMRO Funds
By /s/ Kenneth C. Anderson
------------------------------------
Kenneth C. Anderson, President
As required by the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated:
/s/ Leonard F. Amari Trustee March 19, 2002
- ------------------------ --------------
Leonard F. Amari Date
/s/ Stuart D. Bilton Chairman, Board of March 19, 2002
- ------------------------ --------------
Stuart D. Bilton Trustees Date
/s/ Arnold F. Brookstone Trustee March 19, 2002
- ------------------------ --------------
Arnold F. Brookstone Date
/s/ Robert Feitler Trustee March 19, 2002
- ------------------------ --------------
Robert Feitler Date
/s/ Robert A. Kushner Trustee March 19, 2002
- ------------------------ --------------
Robert A. Kushner Date
/s/ Gregory T. Mutz Trustee March 19, 2002
- ------------------------ --------------
Gregory T. Mutz Date
/s/ Robert B. Scherer Trustee March 19, 2002
- ------------------------ --------------
Robert B. Scherer Date
/s/ Nathan Shapiro Trustee March 19, 2002
- ------------------------ --------------
Nathan Shapiro Date
/s/ Denis Springer Trustee March 19, 2002
- ------------------------ --------------
Denis Springer Date
/s/ James Wynsma Trustee March 19, 2002
- ------------------------ --------------
James Wynsma Date
/s/ Kenneth C. Anderson President March 19, 2002
- ------------------------ (Principal Executive --------------
Kenneth C. Anderson Officer) Date
/s/ Gerald F. Dillenburg Senior Vice President, March 19, 2002
- ------------------------ Secretary & Treasurer --------------
Gerald F. Dillenburg (Principal Accounting & Date
Financial Officer)
EXHIBIT INDEX
Ex. 99.14(a) Consent of Ernst & Young LLP.