As filed with the Securities and Exchange Commission on October 26, 2004
REGISTRATION NO._______________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. ___
[ ] Post-Effective Amendment No. ___
(Check appropriate Box or Boxes)
STI CLASSIC FUNDS
(Exact Name of Registrant as Specified in Charter)
101 Federal Street
Boston, Massachusetts 02110
(Address of Principal Executive Offices, Zip Code)
Registrant's Telephone Number, including Area Code (800)-342-5734
Patrick Paparelli
Trusco Capital Management, Inc.
50 Hurt Plaza, Suite 1400
Atlanta, Georgia 30303
(Name and Address of Agent for Service)
Copies to:
Richard W. Grant, Esq. W. John McGuire, Esq.
Morgan, Lewis & Bockius LLP Morgan, Lewis & Bockius LLP
One Oxford Centre 1111 Pennsylvania Avenue, NW
Pittsburgh, PA 15219 Washington, DC 20004
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective under the Securities Act of 1933.
Title of Securities Being Registered: Shares of beneficial interest without par
value.
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.
It is proposed that this filing will become effective on November 25, 2004
pursuant to Rule 488.
STI CLASSIC FUNDS
INFORMATION AND TECHNOLOGY FUND
101 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
NOVEMBER ___, 2004
Dear Shareholder:
On behalf of the Board of Trustees of the STI Classic Funds, we are pleased to
invite you to a Special Meeting of Shareholders of the Information and
Technology Fund (the "Meeting") to be held at _____ (Eastern time) on December
27, 2004 at the offices of BISYS Fund Services, 100 Summer Street, Suite 1500,
Boston, Massachusetts, 02110. At the Special Meeting, you will be asked to
approve an Agreement and Plan of Reorganization, dated as of October __, 2004,
by and between the Information and Technology Fund (the "Selling Fund") and the
STI Classic Aggressive Growth Stock Fund (the "Acquiring Fund"), which
contemplates the reorganization of each class of the Selling Fund into a
corresponding share class of the Acquiring Fund as follows:
<Table>
<Caption>
STI CLASSIC INFORMATION AND STI CLASSIC AGGRESSIVE GROWTH
TECHNOLOGY FUND STOCK FUND
- ------------------------------- -----------------------------
A Shares A Shares
L Shares L Shares
T Shares T Shares
</Table>
The Board of Trustees of the STI Classic Funds unanimously approved the
Agreement and Plan of Reorganization, on behalf of the Funds, at a meeting held
on August 20, 2004. In coming to this conclusion, the Trustees considered a
variety of factors including:
- THE COMPATIBILITY OF THE FUNDS' OBJECTIVES AND POLICIES
- THE EXPENSE RATIOS OF THE FUNDS
- THE POTENTIAL ECONOMIES OF SCALE RESULTING FROM THE
REORGANIZATION
- THE PERFORMANCE OF THE FUNDS
- THE CHARACTERISTICS OF THE FUNDS, INCLUDING ASSET SIZE AND
HOLDINGS
- THE INVESTMENT ADVISER OF THE FUNDS AND, WITH RESPECT TO THE
ACQUIRING FUND, THE SUBADVISER
- THE FACT THAT THE MERGER IS EXPECTED TO BE FREE FROM FEDERAL
INCOME TAXES TO THE INFORMATION AND TECHNOLOGY FUND AND ITS
SHAREHOLDERS
The details of the proposed Agreement and Plan of Reorganization are set forth
in the combined prospectus/proxy statement which accompanies this letter. We
encourage you to read it thoroughly. In addition, we have included a list of
commonly asked questions and answers on the next page.
Shareholders may cast their votes by:
-- Telephone by calling 1-800- [ ]
-- Via the Internet at www.___________________
-- Completing, signing and dating the enclosed proxy card, and
returning it in the enclosed postage-paid envelope.
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES YOU OWN. In
order to conduct the Meeting, a majority of shares must be represented in person
or by proxy vote. Please vote promptly.
We thank you for your continued confidence and support in the STI Classic Funds.
Sincerely,
R. Jeffrey Young
President
STI Classic Funds
QUESTIONS & ANSWERS
FOR SHAREHOLDERS
OF THE INFORMATION AND TECHNOLOGY FUND
Q. WHY IS THE BOARD OF TRUSTEES PROPOSING TO MERGE THE STI CLASSIC INFORMATION
AND TECHNOLOGY FUND AND THE STI CLASSIC AGGRESSIVE GROWTH STOCK FUND?
A. Before approving the reorganization of these Funds, the Board of Trustees
evaluated several factors including THE COMPATIBILITY OF THE FUNDS' INVESTMENT
OBJECTIVES, THE FUNDS' EXPENSE RATIOS, THE POTENTIAL ECONOMIES OF SCALE
RESULTING FROM THE REORGANIZATION, THE PERFORMANCE OF THE FUNDS, THE
CHARACTERISTICS OF THE FUNDS, INCLUDING ASSET SIZE AND HOLDINGS, AND THE
MANAGEMENT OF THE FUNDS. After careful consideration, the Board of Trustees
determined that the Agreement and Plan of Reorganization is in the best
interests of the Information and Technology Fund shareholders.
Q. HOW WILL THIS AFFECT ME AS A SHAREHOLDER?
A. If the reorganization is approved, you will become a shareholder of the
Aggressive Growth Stock Fund, which has similar investment objectives and
policies as the Information and Technology Fund that you currently hold. As an
Aggressive Growth Stock Fund shareholder, you will continue to have access to
the wide array of portfolios offered by the STI Classic Funds.
The reorganization provides for the transfer of all of the assets and stated
liabilities of the Information and Technology Fund to the Aggressive Growth
Stock Fund in exchange for shares of corresponding classes of the Aggressive
Growth Stock Fund of equal value. There are NO SALES CHARGES associated with
this transaction. Each Information and Technology Fund shareholder will receive
shares of the Aggressive Growth Stock Fund equal in value to their Information
and Technology Fund shares. In certain cases, the Net Asset Value of your fund
may change. However, in these cases, the number of shares that you own will be
adjusted so that there will be NO CHANGE in the value of your account as a
result of the reorganization.
Finally, the net total operating expenses actually charged by the Aggressive
Growth Stock Fund are expected to remain lower than those of the Information and
Technology Fund, resulting in a reduction of fund operating expenses to you as a
shareholder.
Q. WILL THE REORGANIZATION RESULT IN ANY TAXES?
A. The reorganization is expected to be accomplished on a tax-free basis for
federal income tax purposes; thus, it is expected that neither the Information
and Technology Fund nor its shareholders will incur any federal income tax as a
result of the reorganization. The reorganization will not occur unless it is
determined to be tax free to shareholders.
Q. WHO GETS TO VOTE?
A. All shareholders of the Information and Technology Fund as of October 15,
2004 are eligible and entitled to vote.
Q. HOW DOES THE STI CLASSIC FUNDS' BOARD OF TRUSTEES RECOMMEND THAT I VOTE?
A. After careful consideration, the Board of Trustees of the STI Classic Funds
unanimously recommends that you vote "FOR" the proposed reorganization.
IF A PROXY CARD IS NOT MARKED TO INDICATE VOTING INSTRUCTIONS BUT IS SIGNED,
DATED AND RETURNED, IT WILL BE TREATED AS AN INSTRUCTION TO VOTE THE SHARES FOR
THE PROPOSAL.
Q. WHO SHOULD I CALL WITH QUESTIONS ABOUT THIS PROXY?
A. If you have any questions regarding this proxy, please contact your financial
consultant or the STI Classic Funds directly at 1-800-428-6970.
PLEASE VOTE THE ENCLOSED PROXY CARD.
YOUR VOTE IS IMPORTANT!
Using a touch tone phone, call the toll-free number shown below or, if you
prefer, vote by Internet or return your signed proxy in the postage paid
envelope provided.
VOTE BY TELEPHONE
It's fast, convenient, and your vote is immediately confirmed and posted.
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement/Prospectus.
2. Call the toll-free number located on your ballot.
3. Enter your control number located on your ballot.
4. Follow the simple recorded instructions.
VOTE BY INTERNET
It's fast, convenient, and your vote is immediately confirmed and posted and you
can get all future materials by Internet.
Just follow these 4 easy steps:
1. Read the accompanying Proxy Statement/Prospectus.
2. Go to the website WWW.PROXYVOTE.COM.
3. Enter your control number located on your ballot.
4. Follow the simple instructions.
BENEFITS OF TOUCH TONE AND INTERNET VOTING:
* Immediate voting results.
* Voting 7 days a week, 24 hours a day (except day of Shareholder Meeting).
DO NOT RETURN PROXY VOTING CARD
IF YOU ARE VOTING BY TELEPHONE OR INTERNET.
-2-
STI CLASSIC FUNDS
INFORMATION AND TECHNOLOGY FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON DECEMBER 27, 2004
TO THE SHAREHOLDERS OF THE INFORMATION AND TECHNOLOGY FUND:
Notice is hereby given that a Special Meeting of Shareholders (the "Meeting") of
the Information and Technology Fund (the "Selling Fund"), a series of the STI
Classic Funds (the "Trust"), will be held at the offices of BISYS Fund Services,
100 Summer Street, Suite 1500, Boston, Massachusetts 02110, on December 27, 2004
at ____ _.m., Eastern Time, for the purpose of considering and voting upon the
following proposals:
Proposal 1: To approve the Agreement and Plan of Reorganization by and
between the Information and Technology Fund and the Aggressive
Growth Stock Fund, which provides for and contemplates (i) the
transfer of all of the assets and stated liabilities of the
Information and Technology Fund in exchange for shares of
corresponding classes of the Aggressive Growth Stock Fund of
equal value; and (ii) the distribution of the corresponding
classes of the Aggressive Growth Stock Fund of equal value to
the shareholders of the Information and Technology Fund.
Proposal 2: The transaction of such other business as may properly be
brought before the Meeting.
Proposal 1 is described in the attached Proxy Statement/Prospectus. Your
Trustees unanimously recommend that you vote in favor of the proposal.
Shareholders of record as of the close of business on October 15, 2004 are
entitled to notice of, and to vote at, the Meeting or any adjournment(s) hereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY THE ACCOMPANYING PROXY
CARD WHICH IS BEING SOLICITED BY THE BOARD OF TRUSTEES OF THE TRUST. YOU MAY
EXECUTE THE PROXY CARD BY ONE OF THE THREE METHODS DESCRIBED IN THE PROXY CARD.
RETURNING 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. DO NOT RETURN THE PROXY VOTING CARD IF YOU ARE
VOTING BY TELEPHONE OR INTERNET.
R. Jeffrey Young
President
STI Classic Funds
PROXY STATEMENT/PROSPECTUS
DATED _________, 2004
STI CLASSIC FUNDS
101 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
INFORMATION AND TECHNOLOGY FUND
This combined proxy statement/prospectus ("Proxy/Prospectus") is being furnished
in connection with the solicitation of proxies by the Board of Trustees (the
"Board") of the STI Classic Funds (the "Trust") in connection with the Special
Meeting of Shareholders (the "Meeting") of the Trust's Information and
Technology Fund (the "Selling Fund ") to be held on December 27, 2004 at __:00
__.m., Eastern Time, at the offices of BISYS Fund Services, 100 Summer Street,
Suite 1500, Boston, Massachusetts 02110. At the Meeting, the Selling Fund's
shareholders will be asked to consider and approve the Agreement and Plan of
Reorganization dated October __, 2004 (the "Agreement"), by and between the
Selling Fund and the STI Classic Funds' Aggressive Growth Stock Fund (the
"Acquiring Fund"). The Selling Fund and Acquiring Fund are referred to
collectively herein as the "Funds." A copy of the Agreement is attached as
Exhibit A.
Proposal 1: To approve the Agreement and Plan of Reorganization by and
between the Information and Technology Fund and the Aggressive
Growth Stock Fund, which provides for and contemplates (i) the
transfer of all of the assets and stated liabilities of the
Information and Technology Fund in exchange for shares of the
corresponding classes of the Aggressive Growth Stock Fund of
equal value; and (ii) the distribution of the corresponding
classes of the Aggressive Growth Stock Fund of equal value to
the shareholders of the Information and Technology Fund.
Proposal 2: The transaction of such other business as may properly be
brought before the Meeting.
The Agreement provides that the Selling Fund will transfer all of its assets and
stated liabilities to the Acquiring Fund. In exchange for the transfer of these
assets and liabilities, the Acquiring Fund will simultaneously issue shares of
corresponding classes to the Selling Fund in an amount equal in value to the net
asset value of the Selling Fund's shares. This transaction is expected to occur
on or about December 28, 2004 (the "Reorganization").
Immediately after the transfer of the Selling Fund's assets and stated
liabilities, the Selling Fund will make a liquidating distribution to
shareholders of the corresponding Acquiring Fund's shares received, so that a
holder of shares of the Selling Fund at the Effective Time (as defined in the
Agreement) of the Reorganization will receive a number of shares of the
Acquiring Fund with the same aggregate value, and of the same class, as the
shareholder had in the Selling Fund immediately before the Reorganization. At
the Effective Time of the Reorganization, shareholders will become shareholders
of the Acquiring Fund, and the Selling Fund's legal existence will be
terminated.
The Trust is an open-end management investment company registered under
the Investment Company Act of 1940, as amended (the "1940 Act"). Each Fund is a
separate series of the Trust and offers three classes of shares: A Shares, L
Shares, and T Shares. Trusco Capital Management, Inc. ("Trusco" or the
"Adviser") is the investment adviser to the Funds. Trusco is registered under
the Investment Advisers Act of 1940, as amended (the "Advisers Act"). Trusco is
a direct, wholly-owned subsidiary of SunTrust Banks, Inc. ("SunTrust"), a
Georgia corporation and a bank holding company. The Acquiring Fund is subadvised
by Zevenbergen Capital Investments LLC
("Zevenbergen" or "Subadviser"), a Washington limited liability company
registered under the Advisers Act.(1)
This Proxy/Prospectus sets forth concisely the information that a
shareholder of the Information and Technology Fund should know before voting on
the Reorganization, and should be retained for future reference.
Additional Information is set forth in the Statement of Additional Information
dated _________, 2004 relating to this Proxy/Prospectus and in the A Shares, L
Shares and T Shares prospectuses dated October 1, 2004 for the Selling Fund and
Acquiring Fund, which you have previously received, and are incorporated herein
by reference. A more detailed discussion of the Funds' investment objectives,
principal strategies and principal risks is contained in the Funds' prospectuses
dated October 1, 2004. A Statement of Additional Information for the Funds dated
October 1, 2004, has been filed with the SEC, and is incorporated by reference
into this Proxy/Prospectus. Copies of the prospectuses and Statement of
Additional Information for the Funds are on file with the Securities and
Exchange Commission (the "SEC") and are available without charge on STI Classic
Funds' website at www.sticlassicfunds.com, by writing to BISYS Fund Services,
Inc. at 3435 Stelzer Road, Columbus, OH 43219, or by calling toll-free
1-800-428-6970.
The Annual Report for the Selling Fund and Acquiring Fund for the year ended May
31, 2004 can be obtained without charge on the STI Classic Funds' website at
www.sticlassicfunds.com or by calling or writing the Trust at the telephone
number or address stated above. The Annual Report is also available on the SEC's
website at www.sec.gov.
This Proxy/Prospectus constitutes the proxy statement of the Selling
Fund for the Meeting and is expected to be sent to shareholders on or about
_________, 2004.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE U.S.
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ----------
(1) On October 1, 2004, the Adviser acquired a controlling interest in the
Subadviser. The 1940 Act requires that an investment subadvisory agreement
between an investment adviser and its subadviser terminate automatically when
there is a change in controlling interest in the subadviser. Accordingly,
Zevenbergen's subadvisory agreement has terminated and Zevenbergen is providing
services to the Acquiring Fund under an interim subadvisory agreement pending
shareholder approval of a new subadvisory agreement. The Trust has called a
special meeting of shareholders of the Acquiring Fund scheduled to be held on
November 15, 2004 to approve a new subadvisory agreement between the Adviser and
Zevenbergen that is identical in all material respect to the prior subadvisory
agreement between the Adviser and Zevenbergen. At the same meeting, all
shareholders of the Trust will also be considering the election of members to
the Board of the Trustees of the Trust.
-2-
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
SUMMARY..........................................................................................................1
Background of the Reorganization........................................................................1
Tax Consequences........................................................................................1
Special Considerations and Risk Factors.................................................................1
Business of the Trust...................................................................................1
Investment Adviser......................................................................................1
Subadviser..............................................................................................1
Other Services Providers................................................................................2
Distribution Fees.......................................................................................2
COMPARATIVE FEES AND EXPENSES....................................................................................2
Advisory Fees...........................................................................................4
Subadvisory Fees Paid to the Subadviser of the Acquiring Fund...........................................4
INVESTMENT OBJECTIVES AND PRINCIPAL STRATEGIES...................................................................5
Investment Strategies Differences.......................................................................6
PRINCIPAL RISK FACTORS...........................................................................................6
Equity Risk.............................................................................................6
Derivative Risk.........................................................................................6
Exchange Traded Fund Risk...............................................................................6
Small - Mid Capitalization Stock Risk...................................................................7
Risk Differences........................................................................................7
THE FUNDS' PURCHASE AND REDEMPTION PROCEDURES....................................................................7
Purchase Procedures.....................................................................................7
Redemption Procedures...................................................................................7
Redemption Fee..........................................................................................7
Redemptions In Kind.....................................................................................7
Dividend Policies.......................................................................................8
INFORMATION RELATING TO THE REORGANIZATION.......................................................................8
Description of the Reorganization.......................................................................8
Costs of Reorganization.................................................................................8
Federal Income Taxes....................................................................................8
</Table>
-i-
\
TABLE OF CONTENTS
(continued)
<Table>
<Caption>
PAGE
----
Capitalization..........................................................................................9
REASONS FOR THE REORGANIZATION...................................................................................9
General.................................................................................................9
The Terms and Conditions of the Reorganization..........................................................9
Lack of Dilution to Shareholder Interest................................................................9
Relative Expense Ratios.................................................................................9
The Comparative Performance Records....................................................................10
Compatibility of Investment Objectives, Policies and Restrictions......................................10
The Experience and Expertise of the Investment Adviser and Sub-Adviser.................................10
Assumption Of Liabilities..............................................................................10
Tax Consequences.......................................................................................10
Shareholder Liabilities and Rights.....................................................................10
SHAREHOLDER RIGHTS..............................................................................................10
General................................................................................................10
Shares.................................................................................................10
Voting Requirements....................................................................................10
Shareholder Meetings...................................................................................10
Election And Term Of Trustees..........................................................................11
Shareholder Liability..................................................................................11
Liability of Trustees..................................................................................11
ADDITIONAL INFORMATION ABOUT THE FUNDS..........................................................................11
Interest of Certain Persons in the Transactions........................................................11
Financial Statements...................................................................................11
VOTING MATTERS..................................................................................................11
General Information....................................................................................11
Voting Rights And Required Vote........................................................................12
Record Date and Outstanding Shares.....................................................................12
PRINCIPAL SHAREHOLDERS..........................................................................................12
Selling Fund...........................................................................................12
Acquiring Fund.........................................................................................13
</Table>
-ii-
TABLE OF CONTENTS
(continued)
<Table>
<Caption>
PAGE
----
OTHER BUSINESS..................................................................................................14
SHAREHOLDER INQUIRIES...........................................................................................14
EXHIBIT A - AGREEMENT AND PLAN OF REORGANIZATION...............................................................A-1
EXHIBIT B - MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE........................................................B-1
</Table>
iii
SUMMARY
This summary is designed to allow you to compare the current fees, investment
objectives, policies and restrictions, and distribution, purchase, exchange and
redemption procedures of the Selling Fund with those of the Acquiring Fund. It
is a summary of certain information contained elsewhere in this
Proxy/Prospectus, the Agreement or incorporated by reference into this
Proxy/Prospectus. Shareholders should read this entire Proxy/Prospectus
carefully. The Agreement governs the terms of the Reorganization and is attached
as Exhibit A. For more information, please read the Funds' prospectuses.
BACKGROUND OF THE REORGANIZATION. Pursuant to the Agreement between the Funds
(attached hereto as Exhibit A), the Selling Fund will transfer all of its assets
and stated liabilities to the Acquiring Fund in exchange for shares of
corresponding classes of the Acquiring Fund. The Selling Fund will distribute
the Acquiring Fund's shares that it receives to its shareholders in liquidation.
The result of the Reorganization is that shareholders will become shareholders
of the Acquiring Fund. The Board of Trustees of the Trust, including a majority
of 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 the shareholders, and that the interests of the shareholders
would not be diluted as a result of effecting the Reorganization. The Board
recommends that you vote to approve the Agreement.
TAX CONSEQUENCES. It is not anticipated that the Reorganization will result in
any federal income tax consequences to the shareholders. If so, shareholders
will not recognize gain or loss in the transaction. The Reorganization will not
occur unless it is determined to be tax free to shareholders.
SPECIAL CONSIDERATIONS AND RISK FACTORS. Although the investment objectives and
policies of the Funds are generally similar, there are certain differences.
Therefore, an investment in the Acquiring Fund may involve investment risks
that, in some respects, are different from those of the Selling Fund. For a more
complete discussion of the risks associated with the Funds, see "PRINCIPAL RISKS
FACTORS" below.
BUSINESS OF THE TRUST. The Trust is an open-end management investment company
organized as a Massachusetts business trust on January 15, 1992. The Trust
offers redeemable shares in 49 separate series of investment portfolios, two of
which are the Selling Fund and the Acquiring Fund. The Selling Fund and
Acquiring Fund offer three classes of shares: A Shares, L Shares, and T Shares.
INVESTMENT ADVISER. Trusco is a direct wholly-owned subsidiary of SunTrust and
serves as the investment adviser to the Funds. Trusco is located at 50 Hurt
Plaza, Suite 1400, Atlanta, Georgia 30303. As of June 30, 2004, Trusco had
approximately $66.7 billion in assets under management.
SUBADVISER. Zevenbergen is a Washington limited liability company located at 601
Union Street, Suite 4600, Seattle, Washington 98101, and had approximately $1.0
billion in assets under management as of June 30, 2004. Zevenbergen is
registered under the Advisers Act and currently serves as the subadviser to the
Acquiring Fund. On October 1, 2004, the Adviser acquired a controlling interest
in the Subadviser. See footnote 1 above for discussion regarding this
transaction.
OTHER SERVICES PROVIDERS. The Funds have the same administrator, distributor,
transfer agent, custodian and independent registered public accounting firm.
DISTRIBUTION FEES. The distributor for the Funds is BISYS Fund Services Limited
Partnership (the "Distributor"), 3435 Stelzer Road, Columbus, Ohio 43219. The
Distributor receives no compensation for the distribution of T Shares. A Shares
of the Funds have adopted a distribution plan under which the Selling Fund and
Acquiring Fund pay the Distributor up to 0.55% and 0.35%, respectively, of the
average daily net assets of the Fund's A Shares. L Shares of the Funds have
adopted a distribution and service plan under which the Funds pay the
Distributor a fee of up to 1.00% of the average daily net assets of the
applicable Fund.
COMPARATIVE FEES AND EXPENSES
The following table (1) compares the fees and expenses for the Selling Fund and
the Acquiring Fund based on actual expenses for the twelve-month period ended
May 31, 2004 and (2) shows the estimated fees and expenses for the Acquiring
Fund on a pro forma basis after giving effect to the Reorganization. The table
enables you to compare and contrast the recent expense levels for the Selling
Fund and the Acquiring Fund and obtain a general idea of what the expense level
would be if the Reorganization occurs. The table does not reflect any charges
that may be imposed by institutions directly on their customer accounts in
connection with investments in the Funds. Pro forma expense levels shown should
not be considered an actual representation of future expenses or performance.
Such pro forma expense levels project anticipated levels but actual expenses may
be greater or less than those shown. The table shows fees and expenses without
any waivers. The footnotes following the tables show fees and expenses after
waivers, if any.
-2-
INFORMATION AND TECHNOLOGY FUND - A SHARES, L SHARES AND T SHARES
AGGRESSIVE GROWTH STOCK FUND - A SHARES, L SHARES AND T SHARES
<Table>
<Caption>
INFORMATION AND TECHNOLOGY
FUND AGGRESSIVE GROWTH STOCK FUND Combined Fund PRO FORMA
----------------------------- ----------------------------- -----------------------------
A SHARES L SHARES T SHARES A SHARES L SHARES T SHARES A SHARES L SHARES T SHARES
-------- -------- -------- -------- -------- -------- -------- -------- --------
SHAREHOLDER FEES
(fees paid directly from your
investment):
Maximum Sales Charge Imposed on 3.75% None None 3.75% None None 3.75% None None
Purchases(1)
Maximum Deferred Sales Charge(2) None 2.00% None None 2.00% None None 2.00% None
Redemption Fee(3) 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from
Fund assets):
Management Fees 1.10% 1.10% 1.10% 1.25% 1.25% 1.25% 1.25% 1.25% 1.25%
Distribution and Service (12b-1)
Fees 0.55% 1.00% None 0.35% 1.00% None 0.35% 1.00% None
Other Expenses 0.22%(4) 0.22%(4) 0.22%(4) 0.32%(4) 0.32%(4) 0.32%(4) 0.32% 0.32% 0.32%
Total Fund Operating Expenses(5) 1.87% 2.32% 1.32% 1.92% 2.57% 1.57% 1.92% 2.57% 1.57%
</Table>
- -----------------------
(1) This sales charge varies depending upon how much you invest. You may buy A
Shares in amounts of $1,000,000 or more at net asset value (without an
initial sales charge), but if you redeem those shares within one year of
your purchase, you will pay a deferred sales charge of 1.00%.
(2) This sales charge is imposed if you sell L Shares within one year of your
purchase.
(3) This redemption fee may be imposed if you are deemed a Market Timer and
redeem or exchange your shares within ninety days of purchase. This fee is
discussed in the Funds' Prospectuses under "Market Timers".
(4) Other Expenses have been restated to reflect current fees.
(5) Net expenses are lower because the Adviser and Distributor have voluntarily
waived a portion of their fees in order to limit the Total Fund Operating
Expenses to the levels set forth below. The Adviser and Distributor may
discontinue all or part of the fee waivers at any time. There are no fee
waivers with respect to T Shares of the Information and Technology Fund.
With fee waivers, the expenses are expected to be:
<Table>
<Caption>
INFORMATION AND
TECHNOLOGY FUND AGGRESSIVE GROWTH STOCK FUND Combined Fund PRO FORMA
-------------------- -------------------------------- --------------------------------
A SHARES L SHARES A SHARES L SHARES T SHARES A SHARES L SHARES T SHARES
-------- -------- -------- -------- -------- -------- -------- --------
Net Total Operating Expenses (After 1.72% 2.21% 1.57% 2.10% 1.22% 1.57% 2.10% 1.22%
Voluntary Fee Waivers)
</Table>
-3-
EXAMPLE.
This Example is intended to help you compare the cost of investing in the Funds
with the cost of investing in other mutual funds. The Example assumes that you
invest $10,000 in the Funds for the time periods indicated. The Example also
assumes that each year your investment has a 5% return, Fund operating expenses
remain the same and you reinvest all dividends and distributions. Although your
actual costs and returns might be different, your approximate costs of investing
$10,000 in the listed Fund would be:
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
INFORMATION AND TECHNOLOGY FUND
A Shares $ 558 $ 941 $ 1,348 $ 2,483
L Shares
- assuming complete redemption at end of period $ 435 $ 724 $ 1,240 $ 2,656
- assuming no redemption $ 235 $ 724 $ 1,240 $ 2,656
T Shares $ 134 $ 418 $ 723 $ 1,590
AGGRESSIVE GROWTH STOCK FUND
A Shares $ 563 $ 955 $ 1,373 $ 2,534
L shares
- assuming complete redemption at end of period $ 460 $ 799 $ 1,365 $ 2,905
- assuming no redemption $ 260 $ 799 $ 1,365 $ 2,905
T Shares $ 160 $ 496 $ 855 $ 1,867
COMBINED FUND PRO FORMA
A Shares $ 563 $ 955 $ 1,373 $ 2,534
L Shares
- assuming complete redemption at end of period $ 460 $ 799 $ 1,365 $ 2,905
- assuming no redemption $ 260 $ 799 $ 1,365 $ 2,905
T Shares $ 160 $ 496 $ 855 $ 1,867
</Table>
ADVISORY FEES. The following table compares management fees paid to the Adviser
for the Funds. The table shows advisory fees before any waivers ("Contractual")
and advisory fees after any waivers ("Net of Waivers").
<Table>
<Caption>
Selling Fund Acquiring Fund
------------ --------------
Contractual 1.10% Contractual 1.25%
Net of Waivers* 1.10% Net of Waivers* 1.10%
</Table>
* The Net of Waivers fees for the Funds, if applicable, are based on the Adviser
waiving a portion of advisory fees as described in the Comparative Fees and
Expenses table above. The Adviser may terminate all or part of the fee waiver at
any time.
SUBADVISORY FEES PAID TO THE SUBADVISER OF THE ACQUIRING FUND. The Subadviser is
entitled to a fee, which is calculated daily and paid quarterly by the Adviser,
at an annual rate of up to 0.625% based on the average daily net assets of the
Aggressive Growth Stock Fund.
-4-
INVESTMENT OBJECTIVES AND PRINCIPAL STRATEGIES
This section will help you compare the investment objectives, strategies and
policies of the Selling Fund and the Acquiring Fund. Please also refer to the
Funds' prospectuses.
<Table>
AGGRESSIVE GROWTH STOCK FUND INFORMATION AND TECHNOLOGY FUND
(Acquiring Fund) (Selling Fund)
INVESTMENT GOAL Long-term capital appreciation Long-term capital growth
INVESTMENT FOCUS Common stocks of U.S. multi-cap Common stocks of companies
growth companies benefiting from information and
technology
PRINCIPAL INVESTMENT STRATEGY Attempts to identify securities of Attempts to identify companies
companies with favorable prospects benefiting from technology and
for future revenue, earnings, and/or information to achieve above
cash flow growth average growth
INVESTOR PROFILE Investors who want to increase the Aggressive investors with long-term
value of their investment, but do investment goals who are willing to
not need income, and who are willing accept significant volatility for
to accept more volatility for the the possibility of higher returns
possibility of higher returns
PRINCIPAL STRATEGIES Under normal circumstances, the Invests at least 80% of its net
Acquiring Fund invests at least 80% assets in common stocks of U.S.
of its net assets in common stocks companies that are expected to
and other equity securities of benefit substantially from
companies. Invests primarily in information and technology and
common stocks of U.S. companies of achieve above average growth. The
all sizes that exhibit strong growth Selling Fund believes that
characteristics. Using a information-oriented companies and
"bottom-up" approach, the subadviser technology-oriented companies offer
identifies companies with favorable the potential for significant
prospects for future revenue, long-term growth.
earnings, and/or cash flow growth.
Growth "drivers" are identified for The Selling Fund's holdings are
each company and become critical to generally diversified across three
the ongoing evaluation process. market segments. The first segment
Industry growth dynamics, company is comprised of corporations whose
competitive positioning, pricing core line of business focuses on an
flexibility, and diversified product emerging information-related or
offerings are evaluated, providing technology-related market. The
the foundation for further second segment consists of
fundamental research to determine established technology companies
the weighting of the Acquiring that provide the infrastructure to
Fund's investments in various equity support the transfer of
market sectors. information. The third segment
includes established, non-tech
corporations from multiple industries
that are harnessing the power of
information to drive company growth.
In selecting investments for the Selling
Fund, the adviser uses a "bottom-
</Table>
-5-
<Table>
up" advantages and market sustainability of
individual companies.
The Selling Fund invests primarily in
companies with market capitalizations over
$1 billion, but may invest a portion of its
assets in smaller companies.
</Table>
Both Funds may also buy or sell, to a limited extent, derivative instruments
(such as futures, options and swaps) to use as a substitute for a purchase or
sale of a position in the underlying assets and/or as part of a strategy
designed to reduce exposure to other risks, such as market risks. The Funds may
also purchase shares of exchange-traded funds ("ETFs") to temporarily gain
exposure to a particular portion of the market while awaiting an opportunity to
purchase securities directly. ETFs are investment companies that are bought and
sold on a securities exchange. An ETF holds a portfolio of securities designed
to track a particular market segment or index.
INVESTMENT STRATEGIES DIFFERENCES. The Selling Fund focuses its investments in
companies benefiting from technology and information, while the Acquiring Fund
does not. The Selling Fund also buys and sells securities frequently, which has
generally resulted in it having a higher portfolio turnover rate than the
Acquiring Fund.
PRINCIPAL RISK FACTORS
This section will help you compare the principal risks of investing in the
Selling Fund and the Acquiring Fund. Please also refer to the Funds'
prospectuses.
The Selling Fund and the Acquiring Fund are both subject to the following risks:
EQUITY RISK. The risk that stock prices will fall over short or extended periods
of time. Historically, the equity market has moved in cycles, and the value of
each Fund's securities may fluctuate drastically from day to day. Individual
companies may report poor results or be negatively affected by industry and/or
economic trends and developments. The prices of securities issued by such
companies may suffer a decline in response. These factors contribute to price
volatility, which is a principal risk of investing in the Funds.
DERIVATIVE RISK. Derivatives may involve risks different from, and possibly
greater than, those of traditional investments. A Fund may use derivatives (such
as futures, options, and swaps) to attempt to achieve its investment objective
and offset certain investment risks, while at the same time maintaining
liquidity. These positions may be established for hedging or non-hedging
purposes. Risks associated with the use of derivatives include those associated
with hedging and leveraging activities. For example, some of those risks
include: the success of a hedging strategy may depend on an ability to predict
movements in the prices of individual securities, fluctuations in markets, and
movements in interest rates; the Fund experiencing losses over certain ranges in
the market that exceed losses experienced by a fund that does not use
derivatives; there may be an imperfect or no correlation between the changes in
market value of the securities held by the Fund and the prices of derivatives;
or there may not be a liquid secondary market for derivatives.
EXCHANGE TRADED FUND RISK. ETFs, like mutual funds, have expenses associated
with their operation, including advisory fees. When the Fund invests in an ETF,
in addition to directly bearing expenses associated with its own operations, it
will bear a pro rata portion of the ETF's expense. The risks of owning shares of
an ETF generally reflect the risks of owning the underlying securities the ETF
is designed to track, although lack of liquidity in an ETF could result in being
more volatile than the underlying portfolio of securities. In addition, because
of ETF expenses, compared to owning the underlying securities directly, it may
be more costly to own ETFs.
-6-
SMALL - MID CAPITALIZATION STOCK RISK. The Funds are subject to the risks
associated with small-and mid-capitalization stocks. Both involve risks that
small-or mid-capitalization stocks may underperform other segments of the equity
market or the equity market as a whole. Small- and mid-capitalization companies
may be more vulnerable to adverse business or economic events than larger, more
established companies. In particular, these companies may have limited product
lines, markets and financial resources, and may depend upon a relatively small
management group. Therefore, small- and mid-cap stocks may be more volatile than
those of larger companies. These securities may be traded over-the-counter or
listed on an exchange.
RISK DIFFERENCES. Due to the focus of the Selling Fund, many of its holdings
share similar risk factors. Many companies in the portfolio have limited
operating histories, function in rapidly changing business environments, and
trade at valuations that are significantly higher than average. As a result, the
Selling Fund's net asset value may be more volatile than other, broadly
diversified equity funds. However, there can be no assurance that the Acquiring
Fund's net asset value will not be more volatile than the Selling Fund or other,
broadly diversified funds. The Selling Fund may also buy and sell securities
frequently, which may result in higher transaction costs and additional capital
gains tax liability.
THE FUNDS' PURCHASE AND REDEMPTION PROCEDURES
PURCHASE PROCEDURES. The Funds have the same procedures for purchasing shares.
The price per share (the offering price) will be the net asset value per share
(NAV) next determined after the Funds receive your purchase order plus any
applicable sales load. Each Fund calculates its NAV once each business day at
the regularly-scheduled close of normal trading on the NYSE (normally 4:00 p.m.,
Eastern Time). So, for you to receive the current business day's NAV, a Fund
must receive your purchase order in proper form before 4:00 p.m., Eastern Time.
If the NYSE closes early - such as on days in advance of certain holidays - the
Funds reserve the right to calculate NAV as of the earlier closing time. The
Funds will not accept orders that request a particular day or price for the
transaction or any other special conditions.
You may have to transmit your purchase and sale requests to SunTrust or other
financial institutions at an earlier time for your transaction to become
effective that day. This allows the financial institution time to process your
request and transmit it to the administrator or transfer agent in time to meet
the above stated fund cut-off times. For more information about how to purchase
or sell fund shares, including specific SunTrust or other financial institutions
internal order entry cut-off times, please contact your financial institution
directly.
REDEMPTION PROCEDURES. The Funds have the same procedures for the redemption of
shares. You may sell (sometimes called "redeem") your shares on any business
day. Normally, all redemption requests will be processed and payments will be
made within five business days after the Funds receive your request, but it may
take up to 7 days.
REDEMPTION FEE. A Shares, L Shares and T Shares of the Funds may be subject to a
2% redemption fee on the redemption of shares (including by exchange) held for
90 days or less. No redemption fee will be imposed in connection with the
Reorganization. This fee is discussed in the Funds' prospectuses under "Market
Timers."
REDEMPTIONS IN KIND. The Funds have the same policy regarding redemptions
in-kind rather than cash. Each Fund generally pays sale (redemption) proceeds in
cash. However, under unusual conditions that make the payment of cash unwise
(and for the protection of a Fund's remaining shareholders), a Fund may pay all
or part of a shareholder's redemption proceeds in liquid securities with a
market value equal to the redemption price (redemption in kind). Although it is
highly unlikely that shares would ever be redeemed in kind, shareholders would
have to pay brokerage costs to sell the securities distributed to them, as well
as taxes on any capital gains from the sale as with any redemption.
-7-
DIVIDEND POLICIES. Both the Selling Fund and the Acquiring Fund declare and
distribute income quarterly. Capital gains, if any, are distributed at least
annually.
INFORMATION RELATING TO THE REORGANIZATION
DESCRIPTION OF THE REORGANIZATION. The following summary is qualified in its
entirety by reference to the Agreement found in Exhibit A.
The Agreement provides that all of the assets and stated liabilities of the
Selling Fund will be transferred to the Acquiring Fund at the Effective Time (as
defined in the Agreement) of the Reorganization. In exchange for the transfer of
these assets, the Acquiring Fund will simultaneously issue at the Effective Time
of the Reorganization full and fractional shares of the Acquiring Fund to the
Selling Fund equal in value to the net asset value of the Selling Fund
immediately prior to the Effective Time of the Reorganization.
Following the transfer of assets and stated liabilities in exchange for
Acquiring Fund shares, the Selling Fund will distribute, in complete
liquidation, pro rata to its Shareholders of record all the shares of
corresponding classes of the Acquiring Fund so received. Shareholders of the
Selling Fund owning shares at the Effective Time of the Reorganization will
receive a number of shares of the applicable class of the corresponding
Acquiring Fund with the same aggregate value as the Shareholder had in the
Selling Fund immediately before the Reorganization. Such distribution will be
accomplished by the establishment of accounts in the names of the Selling Fund's
Shareholders on the share records of the Acquiring Fund's transfer agent. Each
account will represent the respective pro rata number of full and fractional
shares of the Acquiring Fund due to the Shareholders of the Selling Fund. The
Acquiring Fund does not issue share certificates to Shareholders. Shares of the
Acquiring Fund to be issued will have no preemptive or conversion rights. No
front-end sales loads or contingent deferred sales charges will be imposed in
connection with the Reorganization. The Selling Fund's legal existence will then
be terminated. The Agreement provides for the Reorganization to occur on or
about December 28, 2004 (the "Closing Date").
The Agreement contains customary representations, warranties and conditions. The
Agreement provides that the consummation of the Reorganization is contingent
upon, among other things, (i) approval of the Agreement by Selling Fund
Shareholders, and (ii) the receipt by the Selling Fund and the Acquiring Fund of
a tax opinion to the effect that the Reorganization will be tax-free to the
Selling Fund and the Acquiring Fund and their shareholders. The Agreement may be
terminated, on the Closing Date, if any of the required conditions have not been
met or if the representations and warranties are not true or, at any time prior
to the Effective Time of the Reorganization, if the Board of the Trust
determines that the consummation of the transactions contemplated by the
Agreement is not in the best interests of the Shareholders of the Selling Fund
or the Acquiring Fund.
COSTS OF REORGANIZATION. The Reorganization expenses will be borne by Trusco.
Such 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; and (f)
proxy solicitation costs.
FEDERAL INCOME TAXES. The combination of the Selling Fund and the Acquiring Fund
in the Reorganization is intended to qualify for federal income tax purposes as
a tax-free reorganization under Section 368(a) of the Internal Revenue Code of
1986, as amended. It is not anticipated that the Reorganization will result in
any federal income tax consequences to the Shareholders. As a condition to the
closing of the Reorganization, the Trust will receive an opinion from counsel to
that effect. If so, neither the Selling Fund nor its Shareholders will recognize
gain or loss as a result of the Reorganization; the tax basis of the Acquiring
Fund shares received will be the same as the basis of the Selling Fund shares
exchanged; and the holding period of the Acquiring Fund shares received will
include the holding period of the Selling Fund shares exchanged, provided that
the shares exchanged were held as capital assets at the time of the
Reorganization. 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. Shareholders should consult their own tax advisers
concerning the potential tax consequences of the Reorganization to them,
including foreign, state and local tax consequences.
-8-
CAPITALIZATION. The following table sets forth as of May 31, 2004 (i) the
capitalization of the Acquiring Fund; (ii) the capitalization of the Selling
Fund; and (iii) the pro forma combined capitalization of the Fund assuming the
Reorganization is approved.
<Table>
<Caption>
INFORMATION AND AGGRESSIVE COMBINED FUND
TECHNOLOGY FUND GROWTH FUND PRO FORMA
--------------- ------------- -------------
NET ASSETS: $ 1,539 $ 49,267 $ 50,806
(A Shares) (A Shares) (A Shares)
$ 7,377,522 $ 65,098 $ 7,442,620
(L Shares) (L Shares) (L Shares)
$ 9,712,279 $ 20,500,987 $ 30,213,266
(T Shares) (T Shares) (T Shares)
NET ASSET VALUE PER SHARE: $ 7.49 $ 9.99 $ 9.99
(A Shares) (A Shares) (A Shares)
$ 7.18 $ 9.97 $ 9.97
(L Shares) (L Shares) (L Shares)
$ 7.50 $ 10.00 $ 10.00
(T Shares) (T Shares) (T Shares)
SHARES OUTSTANDING: 205 4,934 5,088
(A Shares) (A Shares) (A Shares)
1,027,350 6,528 746,500
(L Shares) (L Shares) (L Shares)
1,294,272 2,050,154 3,021,381
(T Shares) (T Shares) (T Shares)
</Table>
REASONS FOR THE REORGANIZATION
GENERAL. At a meeting held on August 20, 2004, the Board of the Funds reviewed
the proposed Agreement. They received detailed information, including materials
describing the Reorganization in terms of relative net assets, performance and
comparative investment objectives, and policies and restrictions.
After thorough consideration, the Board approved submission of the proposed
Agreement to Shareholders, concluding that participation in the Reorganization
is in the best interests of the Funds and that the interests of the Funds'
shareholders will not be diluted as a result of the Reorganization. In
particular, the Board reached the following conclusions:
THE TERMS AND CONDITIONS OF THE REORGANIZATION. The Board approved the terms of
the Agreement, and, in particular, the requirement that the transfer of assets
in exchange for shares of corresponding classes of the Acquiring Fund will be at
relative net asset value. In this regard, the Board concluded that the terms of
the Reorganization do not involve overreaching on the part of any person
concerned and that the conditions and policies of Rule 17a-8 under the 1940 Act
will, to the extent possible, be followed. The Board also took note of the fact
that no sales charges would be imposed in connection with the Agreement. The
Board also noted that the Reorganization would be submitted to the Selling
Fund's shareholders for approval.
LACK OF DILUTION TO SHAREHOLDER INTEREST. The Board noted that the Funds would
not bear any expenses in connection with the Reorganization.
RELATIVE EXPENSE RATIOS. The Board carefully reviewed information regarding
comparative expense ratios (current and pro forma expense ratios are set forth
in the "Comparative Fees and Expenses" section above). The net total operating
expense ratios after voluntary fee waivers, which may be discontinued at any
time, is lower for each class of the Acquiring Fund versus the corresponding
class of the Selling Fund and are expected to remain
-9-
lower after the Reorganization. If the waivers are terminated, the total
operating expense ratios for each class of the Acquiring Fund will be higher
after the Reorganization than they were for the corresponding class of the
Selling Fund. The Board also noted that the Acquiring Fund had greater growth of
assets than the Selling Fund and therefore has the better potential for
economies of scale.
THE COMPARATIVE PERFORMANCE RECORDS. The Board reviewed comparative performance
information for the Funds, taking into account that the Acquiring Fund has a
limited history in which to review performance. A Shares, L Shares and T Shares
of the Acquiring Fund commenced operations on February 23, 2004 while the T
Shares of the Selling Fund commenced operations on September 30, 1999. The A
Shares and L Shares of the Selling Fund commenced operations on October 27, 2003
and January 24, 2000, respectively. See also Exhibit B for Management
Discussion of the Acquiring Fund's performance.
COMPATIBILITY OF INVESTMENT OBJECTIVES, POLICIES AND RESTRICTIONS. The Board
concluded that the investment objectives, policies and restrictions of the
respective Funds are similar.
THE EXPERIENCE AND EXPERTISE OF THE INVESTMENT ADVISER AND SUB-ADVISER. The
Board noted that Trusco will remain as the investment adviser to the Acquiring
Fund. The Board also considered the experience and expertise of Zevenbergen as
the subadviser to the Acquiring Fund.
ASSUMPTION OF LIABILITIES. The Board took note of the fact that, under the
Agreement, the Acquiring Fund expects to acquire substantially all of the stated
liabilities of the Selling Fund, other than those (if any) for which specific
reserves have been set aside.
TAX CONSEQUENCES. The Board concluded that the Reorganization is expected to be
free from federal income taxes.
SHAREHOLDER LIABILITIES AND RIGHTS. The Board concluded that there would be no
substantial change in potential shareholder liability or in shareholder rights.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE AGREEMENT.
SHAREHOLDER RIGHTS
GENERAL. The Trust was established as a business trust under Massachusetts law
by a Declaration of Trust dated January 15, 1992. The Trust is also governed by
its By-laws and by applicable Massachusetts law.
SHARES. The 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 Trust consists of 49 separate investment series. The
Acquiring and Selling Funds offer three different classes of shares: A Shares, L
Shares and T Shares. (The Funds participating in the Reorganization do not offer
B Shares). The four classes differ with respect to minimum investment
requirements, fund expenses, distribution and shareholder servicing costs,
front-end sales charges and contingent deferred sales charges as set forth in
the Funds' prospectuses.
VOTING REQUIREMENTS. Shareholders are entitled each to one vote for each full
share held and fractional votes for fractional shares. On any matter submitted
to a vote of shareholders, all shares of the Trust entitled to vote shall be
voted on by individual series or class, except that (i) when so required by the
1940 Act, then shares shall be voted in the aggregate and not by individual
series or class, and (ii) when the Trustees of the 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(es) shall be entitled to vote. The Trust's
Declaration of Trust provides that any action may be taken or authorized upon
the concurrence of a majority of the aggregate number of votes entitled to be
cast thereon, subject to any applicable requirements of the 1940 Act.
SHAREHOLDER MEETINGS. Annual meetings of shareholders will not be held, but
special meetings of shareholders may be held under certain circumstances. A
special meeting of the shareholders may be called at any
-10-
time by the Trustees, by the President or, if the Trustees and the President
shall fail to call any meeting of shareholders for a period of 30 days after
written application of one or more shareholders who hold at least 10% of all
shares issued and outstanding and entitled to vote at the meeting, then such
shareholders may call the meeting.
ELECTION AND TERM OF TRUSTEES. The Funds' affairs are supervised by the Trustees
under the laws governing business trusts in the Commonwealth of Massachusetts.
Trustees of the Trust are elected by shareholders holding a majority of shares
entitled to vote. Trustees hold office until their successors are duly elected
and qualified or until their death, removal, retirement or resignation.
Shareholders may remove a Trustee by vote of a majority of the votes entitled to
vote, with or without cause.
SHAREHOLDER LIABILITY. Pursuant to the Trust's Declaration of Trust,
shareholders of the Funds generally are not personally liable for the acts,
omissions or obligations of the Trustees or the Trust.
LIABILITY OF TRUSTEES. The Trustees shall not be personally liable for any
obligation of the Trust. The Trust will indemnify its Trustees and officers
against all liabilities and expenses except for liabilities arising from such
person's willful misfeasance, bad faith, gross negligence or reckless disregard
of that person's duties. The foregoing is only a summary of certain rights of
shareholders of the Funds under the Declaration of Trust and By-Laws, state law
and the 1940 Act and is not a complete description of provisions contained in
those sources. Shareholders should refer to the provisions of state law, the
1940 Act and rules thereunder directly for a more thorough description.
ADDITIONAL INFORMATION ABOUT THE FUNDS
Information concerning the operation and management of the Funds is incorporated
herein by reference to the current prospectuses relating to the Funds dated
October 1, 2004, which are incorporated by reference herein solely with respect
to those participating Funds. Additional information about the Funds is included
in the Statement of Additional Information for the Funds dated October 1, 2004,
which, along with the current prospectuses, are available upon request and
without charge by calling 1-800-428-6970. The prospectuses and Statement of
Additional Information have been filed with the SEC.
The 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 NW, Washington, DC 20549.
INTEREST OF CERTAIN PERSONS IN THE TRANSACTIONS. SunTrust may be deemed to have
an interest in the Reorganization because Trusco, a subsidiary of SunTrust,
provides investment advisory services to the Acquiring Fund pursuant to an
advisory agreement with the Trust. Future growth of the Acquiring Fund can be
expected to increase the total amount of fees payable to Trusco and thereby to
reduce the amount of fees that would be voluntarily waived.
FINANCIAL STATEMENTS. The audited financial statements and financial highlights
of the Funds contained in the Funds' Annual Report to Shareholders for the
fiscal year ended May 31, 2004, have been audited by PricewaterhouseCoopers,
LLP, independent registered public accounting firm, as set forth in their report
therein and are incorporated by reference into the Statement of Additional
Information relating to this Proxy/Prospectus. Such financial statements and
financial highlights are incorporated therein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and auditing
VOTING MATTERS
GENERAL INFORMATION. This Proxy/Prospectus is being furnished in
connection with the solicitation of proxies by the Board of Trustees of the
Selling Fund in connection with the Meeting. It is expected that the
solicitation of proxies will be primarily by mail. Officers and service
providers of the Funds may also solicit proxies by telephone, facsimile,
Internet or in person. The cost of solicitation will be borne by Trusco.
-11-
VOTING RIGHTS AND REQUIRED VOTE. Each share, or fraction thereof, of the Selling
Fund is entitled to one vote, or fraction thereof. The holders of a majority of
the Selling Fund present in person or represented by proxy will constitute a
quorum for the Meeting. Approval of the Agreement requires the affirmative vote
of a majority of the shares present in person or represented by proxy. Any
shareholder giving a proxy may revoke it at any time before it is exercised by
submitting to the Trust a written notice of revocation or a subsequently
executed proxy or by attending the Meeting and voting in person. The proposed
Reorganization will be voted upon by the Shareholders of the Selling Fund.
Shares represented by a properly executed proxy will be voted in accordance with
the instructions thereon, or if no specification is made, the shares will be
voted "FOR" the approval of the Agreement. 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 for purposes of establishing a quorum, but will not
count toward approval of a proposal. 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 proposal set forth in the Notice of the
Special Meeting are not received by the time scheduled for the Meeting, the
persons named as proxies may propose one or more adjournments of the Meeting for
a reasonable period of time to permit further solicitation of proxies with
respect to the proposals. Any such adjournment will require the affirmative vote
of a majority of the votes cast on the question in person or by proxy at the
session of the Meeting to be adjourned. The persons named as proxies will vote
in favor of such adjournment those proxies for which they are entitled to vote
in favor of the proposal. They will vote against any such adjournment those
proxies required to be voted against the proposal. The costs of any additional
solicitation and of any adjourned session will be borne by Trusco.
RECORD DATE AND OUTSTANDING SHARES. Only shareholders of record of the Selling
Fund at the close of business on October 15, 2004 (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, as shown on
the books of the Trust, there were issued and outstanding 2,029,390 shares of
beneficial interest of the Selling Fund.
PRINCIPAL SHAREHOLDERS
SELLING FUND. As of October 15, 2004, the officers and Trustees of the Selling
Fund as a group, beneficially owned less than 1% of the outstanding shares of
the Selling Fund. The following table sets forth the name, address and share
ownership of each person known to have ownership with respect to 5% or more of a
class of the Selling Fund as of October 15, 2004. [The type of ownership of each
entry listed on the table is record ownership.] The percentage of the Acquiring
Fund that would be owned by the below named shareholders upon consummation of
the Reorganization is expected to decline.
<Table>
<Caption>
PRO FORMA
NAME CLASS; AMOUNT PERCENTAGE PERCENTAGE PERCENTAGE
AND OF OF OF OF FUND
ADDRESS SHARES OWNED CLASS OWNED FUND OWNED POST CLOSING
------- ------------ ----------- ---------- ------------
NFSC FEBO F2F-005215 Class A 911 100.00% 0.03% 0.01%
NFS FMTC SEP IRA
10860 NW 198th Street
Micanopy, FL 32667
</Table>
-12-
<Table>
<Caption>
PRO FORMA
NAME CLASS; AMOUNT PERCENTAGE PERCENTAGE PERCENTAGE
AND OF OF OF OF FUND
ADDRESS SHARES OWNED CLASS OWNED FUND OWNED POST CLOSING
------- ------------ ----------- ---------- -------------
NFSC FEBO JH1-500488 Class L 859,555 93.15% 27.42% 12.01%
NFS FMTC ROTH IRA
5766 SW 50 Street
Miami, FL 33155
SunTrust Bank Class T 579,909 52.44% 18.50% 8.10%
Various Benefit Plans
8515 E. Orchard Road
Greenwood Village, CO
80111-5002
Trustman Class T 492,150 44.51% 15.70% 6.88%
SunTrust Banks
P.O. Box 105870
Atlanta, GA 30348-5870
</Table>
ACQUIRING FUND. As of October 15, 2004, the officers and Trustees of the
Acquiring Fund as a group, beneficially owned less than 1% of the outstanding
shares of the Acquiring Fund. The following table sets forth the name, address
and share ownership of each person known to have ownership with respect to 5% or
more of a class of the Acquiring Fund as of October 15, 2004. [The type of
ownership of each entry listed on the table is record ownership.] The percentage
of the Acquiring Fund that would be owned by the below named shareholders upon
consummation of the Reorganization is expected to decline.
<Table>
<Caption>
PRO FORMA
NAME CLASS; AMOUNT PERCENTAGE PERCENTAGE PERCENTAGE
AND OF OF OF OF FUND
ADDRESS SHARES OWNED CLASS OWNED FUND OWNED POST CLOSING
------- ------------ ----------- ---------- -------------
NFSC FEBO FER-114901 Class A 6,994 77.94% 0.17% 0.10%
Delores F. Bennett TTEE
343 Bayshore Drive
U A 3 14 89
Palm Harbor, FL 34683
Wachovia Securities LLC FBO Class A 1,980 22.06% 0.05% 0.03%
Herbert W. Albin, Jr.
124 North 177th Street
Shoreline, WA 98133-4707
</Table>
-13-
<Table>
<Caption>
PRO FORMA
NAME CLASS; AMOUNT PERCENTAGE PERCENTAGE PERCENTAGE
AND OF OF OF OF FUND
ADDRESS SHARES OWNED CLASS OWNED FUND OWNED POST CLOSING
------- ------------ ----------- ---------- -------------
NFSC FEBO G1R-153664 Class L 7,618 86.76% 0.19% 0.11%
Jonathan T. Walton TTEE
37 Warner Road
Grosse Pointe, MI 48236-3745
Wachovia Securities LLC FBO Class L 1,163 13.24% 0.03% 0.02%
Leslie C. Tubbs
12931 SE 26th Pl., Apt. C2
Bellevue, WA 98005-5112
Trustman Class T 3,987,831 100.00% 99.12% 55.71%
SunTrust Banks
P.O. Box 105870
Atlanta, GA 30348-5870
</Table>
OTHER BUSINESS
The Board of Trustees 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 which 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
Shareholder inquiries may be addressed to the Funds, c/o BISYS Fund Services,
3435 Stelzer Road, Columbus, Ohio 42319 or by calling 1-800-428-6970.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
VOTE BY MAIL, PHONE OR THE INTERNET. INFORMATION ON THE VARIOUS MANNERS OF
VOTING ARE SET FORTH IN THE ENCLOSED PROXY.
-14-
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement"), is dated
as of October __, 2004 by and between the Aggressive Growth Stock Fund (the
"Acquiring Fund") and the Information and Technology Fund (the "Selling Fund")
of STI Classic Funds (the "Trust").
WHEREAS, the Trust was organized under Massachusetts law as a business
trust under a Declaration of Trust dated January 15, 1992;
WHEREAS, the Trust is an open-end management investment company
registered under the 1940 Act and the Acquiring and Selling Fund are each duly
organized and validly existing series of the Trust;
NOW, THEREFORE, in consideration of the mutual premises herein
contained, the parties hereto agree to effect (i) the transfer of all of the
assets of the Selling Fund solely in exchange for (a) the assumption by the
Acquiring Fund of certain stated liabilities of the Selling Fund and (b)
beneficial shares of the Acquiring Fund followed by the distribution, at the
Effective Time (as defined in Section 9 of this Agreement), of such beneficial
shares of the Acquiring Fund to the holders of beneficial shares of the Selling
Fund on the terms and conditions hereinafter set forth in liquidation of the
Selling Fund (the "Reorganization"). The beneficial shares of the Acquiring Fund
that are given in exchange for the assets of the Selling Fund are referred to
hereinafter as the "Acquiring Fund Shares," and the beneficial shares of the
Selling Fund that are held by the holders of such shares at the Effective Time
are referred to hereinafter as the "Selling Fund Shares." The parties hereto
covenant and agree as follows:
1. Plan of Reorganization. At the Effective Time, the Selling Fund will
assign, deliver and otherwise transfer all of its assets and good and marketable
title thereto, free and clear of all liens, encumbrances and adverse claims
except as provided in this Agreement, and assign certain stated liabilities are
set forth in a statement of assets and liabilities, to be prepared as of the
Effective Time (the "Statement of Assets and Liabilities") to the Acquiring
Fund, and the Acquiring Fund shall acquire all such assets, and shall assume all
such liabilities of the Selling Fund, in exchange for delivery to the Selling
Fund by the Acquiring Fund of a number of its Acquiring Fund Shares (both full
and fractional) equivalent in value to the Selling Fund Shares of the Selling
Fund outstanding immediately prior to the Effective Time. The assets and stated
liabilities of the Selling Fund, as set forth in the Statement of Assets and
Liabilities shall be exclusively assigned to and assumed by the Acquiring Fund.
All debts, liabilities, obligations and duties of the Selling Fund, to the
extent that they exist at or after the Effective Time and are stated in the
Statement of Assets and Liabilities, shall after the Effective Time attach to
the Acquiring Fund and may be enforced against the Acquiring Fund to the same
extent as if the same had been incurred by the Acquiring Fund.
2. Transfer of Assets. The assets of the Selling Fund to be acquired by
the Acquiring Fund shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable) as set forth in the Statement of Assets and Liabilities, as well as
any claims or rights of action or rights to register shares under applicable
securities laws, any books or records of the Selling Fund and other property
owned by the Selling Fund at the Effective Time.
3. Liquidation and Dissolution of the Selling Fund. At the Effective
Time, the Selling Fund will liquidate and the Acquiring Fund Shares (both full
and fractional) received by the Selling Fund will be distributed to the
shareholders of record of the Selling Fund as of the Effective Time in exchange
for Selling Fund Shares and in complete liquidation of the Selling Fund. Each
shareholder of the Selling Fund will receive a number of Acquiring Fund Shares
equal in value to the Selling Fund Shares held by that shareholder. Such
liquidation and distribution will be accompanied by the establishment of an open
account on the share records of the Acquiring Fund in the name of each
shareholder of record of the Selling Fund and representing the respective number
of Acquiring Fund Shares due such shareholder.
4. Representations and Warranties of the Acquiring Fund. The Acquiring
Fund represents and warrants to the Selling Fund as follows:
A-1
(a) Shares to be Issued upon Reorganization. The Acquiring Fund Shares
to be issued in connection with the Reorganization have been duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable.
(b) Liabilities. There are no liabilities of the Acquiring Fund,
whether or not determined or determinable, other than liabilities disclosed or
provided for in the Acquiring Fund's statement of assets and liabilities, if
any, and liabilities incurred in the ordinary course of business prior to the
Effective Time or otherwise previously disclosed to the Selling Fund, none of
which has been materially adverse to the business, assets or results of
operations of the Acquiring Fund.
(c) Litigation. Except as previously disclosed to the Selling Fund,
there are no claims, actions, suits or proceedings pending or, to the actual
knowledge of the Acquiring Fund, threatened which would materially adversely
affect the Acquiring Fund or its assets or business or which would prevent or
hinder in any material respect consummation of the transactions contemplated
hereby.
(d) Taxes. As of the Effective Time, all federal and other tax returns
and reports of the Acquiring Fund required by law to have been filed shall have
been filed, and all other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and 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 any of such returns.
5. Representations and Warranties of the Selling Fund. The Selling Fund
represents and warrants to the Acquiring Fund as follows:
(a) Marketable Title to Assets. The Selling Fund will have, at the
Effective Time, good and marketable title to, and full right, power and
authority to sell, assign, transfer and deliver, the assets to be transferred to
the Acquiring Fund. Upon delivery and payment for such assets, the Acquiring
Fund will have good and marketable title to such assets without restriction on
the transfer thereof free and clear of all liens, encumbrances and adverse
claims.
(b) Liabilities. There are no liabilities of the Selling Fund, whether
or not determined or determinable, other than liabilities disclosed or provided
for in the Selling Fund's Statement of Assets and Liabilities, and liabilities
incurred in the ordinary course of business prior to the Effective Time or
otherwise previously disclosed to the Acquiring Fund, none of which has been
materially adverse to the business, assets or results of operations of the
Selling Fund.
(c) Litigation. Except as previously disclosed to the Acquiring Fund,
there are no claims, actions, suits or proceedings pending or, to the knowledge
of the Selling Fund, threatened which would materially adversely affect the
Selling Fund or its assets or business or which would prevent or hinder in any
material respect consummation of the transactions contemplated hereby.
(d) Taxes. As of the Effective Time, all federal and other tax returns
and reports of the Selling Fund required by law to have been filed shall have
been filed, and all other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof, and 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 any of such returns.
6. Condition Precedent to Obligations of the Acquiring Fund. All representations
and warranties of the Selling Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and, except as they may
be affected by the transactions contemplated by this Agreement, as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time.
7. Condition Precedent to Obligations of the Selling Fund. All representations
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, except as they
may be affected by the transactions contemplated by this Agreement, as of the
Effective Time, with the same force and effect as if made on and as of the
Effective Time.
A-2
8. Further Conditions Precedent to Obligations of the Selling Fund and the
Acquiring Fund. The obligations of the Selling Fund and the Acquiring Fund to
effectuate this Agreement shall be subject to the satisfaction of each of the
following conditions:
(a) Such authority from the U.S. Securities and Exchange Commission (the "SEC")
as may be necessary to permit the parties to carry out the transactions
contemplated by this Agreement shall have been received.
(b) The registration statement on Form N-lA of the Acquiring Fund shall be
effective under the Securities Act of 1933 (the "1933 Act"), and, to the best
knowledge of the Acquiring Fund, no investigation or proceeding for that purpose
shall have been instituted or be pending, threatened or contemplated under the
1933 Act.
(c) The Acquiring Fund has filed all documents and paid all fees required to
permit its shares to be offered to the public in all states of the United
States, the Commonwealth of Puerto Rico and the District of Columbia (except
where such qualifications are not required) so as to permit the transfer
contemplated by this Agreement to be consummated.
(d) The Selling Fund and Acquiring Fund shall have received on or before the
Effective Time an opinion of counsel, based upon customary representations
provided by the Trust, satisfactory to the Selling Fund and the Acquiring Fund
substantially to the effect that the Reorganization, as a tax-free
reorganization, will have the following federal income tax consequences for
Selling Fund shareholders, the Selling Fund, and the Acquiring Fund:
1. No gain or loss will be recognized by the Selling Fund upon the
transfer of its assets in exchange solely for Acquiring Fund Shares and
the assumption by the Acquiring Fund of the Selling Fund's stated
liabilities;
2. No gain or loss will be recognized by the Acquiring Fund on its receipt
of the Selling Fund's assets in exchange for Acquiring Fund Shares and
the assumption by the Acquiring Fund of the Selling Fund's liabilities;
3. The basis of the Selling Fund's assets in the Acquiring Fund's hands
will be the same as the basis of those assets in the Selling Fund's
hands immediately before the Reorganization;
4. The Acquiring Fund's holding period for the assets transferred to the
Acquiring Fund by the Selling Fund will include the holding period of
those assets in the Selling Fund's hands immediately before the
Reorganization;
5. No gain or loss will be recognized by the Selling Fund on the
distribution of Acquiring Fund Shares to the Selling Fund's
shareholders in exchange for Selling Fund Shares;
6. No gain or loss will be recognized by the Selling Fund's shareholders
as a result of the Selling Fund's distribution of Acquiring Fund Shares
to the Selling Fund's shareholders in exchange for the Selling Fund's
shareholders' Selling Fund Shares;
7. The basis of the Acquiring Fund Shares received by the Selling Fund's
shareholders will be the same as the adjusted basis of that Selling
Fund's shareholders' Selling Fund Shares surrendered in exchange
therefore; and
8. The holding period of the Acquiring Fund Shares received by the Selling
Fund's shareholders will include the Selling Fund's shareholders'
holding period for the Selling Fund's shareholders' Selling Fund Shares
surrendered in exchange therefore, provided that said Selling Fund
Shares were held as capital assets on the date of the Reorganization.
(e) A vote approving this Agreement and the Reorganization contemplated hereby
shall have been adopted by at least a majority of the outstanding shares of the
Selling Funds entitled to vote at an annual or special meeting.
A-3
(f) The Board of Trustees of the Trust, at a meeting duly called for such
purpose, shall have authorized the issuance by the Acquiring Fund of Acquiring
Fund Shares at the Effective Time in exchange for the assets of the Selling Fund
pursuant to the terms and provisions of this Agreement.
9. Effective Time of the Reorganization. The exchange of the Selling Funds'
assets for corresponding Acquiring Fund Shares shall be effective as of the
close of business on December 28, 2004 or at such other time and date as fixed
by the mutual consent of the parties (the "Effective Time").
10. Termination. This Agreement and the transactions contemplated hereby may be
terminated and abandoned with respect to the Acquiring Fund and/or the Selling
Fund, without penalty, by resolution of the Board of Trustees of the Trust or at
the discretion of any duly authorized officer of the Trust, at any time prior to
the Effective Time, if circumstances should develop that, in the opinion of such
Board or officer, make proceeding with the Agreement inadvisable.
11. Amendment and Waiver. This Agreement may be amended, modified or
supplemented in such manner as may be mutually agreed upon in writing by the
parties; Provided, that no such amendment may have the effect of changing the
provisions for determining the number or value of Acquiring Fund Shares to be
paid to the Selling Fund's shareholders under this Agreement to the detriment of
the Selling Fund's shareholders without their further approval. Furthermore,
either party may waive any breach by the other party or the failure to satisfy
any of the conditions to its obligations (such waiver to be in writing and
authorized by the President or any Vice President of the waiving party with or
without the approval of such party's shareholders).
12. Governing Law. This Agreement shall be governed and construed in accordance
with the laws of the Commonwealth of Massachusetts.
13. Fees and Expenses.
(a) The Acquiring Fund and Selling Fund represent and warrant to each other that
there are no brokers or finders entitled to receive any payments in connection
with the transactions provided for herein.
(b) Except as otherwise provided for herein, Trusco Capital Management, Inc.
shall bear all expenses of the transactions contemplated by this Agreement. Such
expenses include, without limitation, (i) expenses incurred in connection with
the entering into and the carrying out of the provisions of this Agreement; (ii)
expenses associated with the preparation and filing of the Prospectus/Proxy
Statement on Form N-14 under the 1933 Act; (iii) registration or qualification
fees and expenses of preparing and filing such forms as necessary under
applicable state securities laws to qualify the Acquiring Fund Shares to be
issued in connection herewith in each state in which the Selling Fund's
shareholders are resident as of the date of the mailing of the Proxy Statement
to such shareholders; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees; and (viii) solicitation costs of the transaction.
14. Headings, Counterparts, Assignment.
(a) The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not effect in any way the meaning or
interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, but 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.
15. Entire Agreement. The Acquiring Fund and Selling Fund agree that neither
party has made any representation, warranty or covenant not set forth herein and
that this Agreement constitutes the entire agreement between the
A-4
parties. The representations, warranties and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall survive
the consummation of the transactions contemplated hereunder.
16. Further Assurances. The Acquiring Fund and Selling Fund shall take such
further action as may be necessary or desirable and proper to consummate the
transactions contemplated hereby.
17. Binding Nature of Agreement. As provided in the Trust's Declaration of
Trust, as amended and supplemented to date, this Agreement was executed by the
undersigned officers of the Trust, on behalf of the Acquiring Fund and the
Selling Fund, as officers and not individually, and the obligations of this
Agreement are not binding upon the undersigned officers individually, but are
binding only upon the assets and property of the Trust. Moreover, no series of
the Trust shall be liable for the obligations of any other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
STI CLASSIC FUNDS,
on behalf of its series,
INFORMATION AND TECHNOLOGY FUND
By
------------------------------------
Name:
Title: Vice President
STI CLASSIC FUNDS,
on behalf of its series,
AGGRESSIVE GROWTH STOCK FUND
By
------------------------------------
Name:
Title: Vice President
A-5
Appendix A
<Table>
<Caption>
Before: Information and Technology Fund After: Aggressive Growth Stock Fund
- --------------------------------------- -----------------------------------
Class A Class A
Class L Class L
Class T Class T
</Table>
A-6
EXHIBIT B
MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE
[INSERT FROM MAY 31, 2004 ANNUAL REPORT THE MD&A AND MOUNTAIN CHART FOR
THE AGGRESSIVE GROWTH STOCK FUND]
STI CLASSIC AGGRESSIVE GROWTH STOCK FUND
The STI Classic Aggressive Growth Stock Fund ("the Fund") was added to the STI
Classic lineup February 23, 2004. The Fund invests primarily in common stocks of
U.S. companies of all sizes that exhibit strong growth characteristics. Using a
"bottom-up" investment approach, we identify companies with favorable prospects
for future revenue, earnings, and/or cash flow growth. Growth "drivers" are
identified for each company and become critical to the ongoing evaluation
process. Industry growth dynamics, competitive positioning, pricing flexibility,
and diversified product offerings in conjunction with stock price appreciation
potential help establish the foundation for the weighting of each security
within the Fund and the resulting exposure to specific industries and economic
sectors.
Since the initiation of the Fund, macro economic and geopolitical issues have
dominated the investing environment. After a brief rally late in February, the
Fund experienced successive negative returns in March and April, rebounding
during the last weeks of May. From inception through May 31, 2004, the Fund's
T Shares returned 0% compared to -0.83% for the Russell 3000(R) Growth Index.
Stock selection in Consumer Discretionary and Technology sectors led the Fund's
relative outperformance. Consumer-driven and internet-related fund holdings were
top aggregate contributors. Firming ad spending (increasingly via online
vehicles), a rebounding economy and unflagging spending patterns were primary
drivers to strength in the Consumer Discretionary sector. Supported by
exceptional earnings reports, Fund Technology holdings produced broad-based
gains (since Fund inception) significantly ahead of benchmark issues. However,
weakness in Health Care and Telecommunications issues kept the Fund's
performance in check. Health care declined late in the period lacking event
catalysts, and the Fund's only telecommunications holding posted a negative
return due to uncertainty pending a FCC ruling on spectrum expansion for its
wireless data strategy.
Better-than-expected growth across many sectors has yet to translate into
comparable stock price performance. Looking forward, we are encouraged as
corporate America exhibits signs of improving health with strong operating
margins, large cash balances and a renewed propensity to hire. Our task remains
the same: focus on fundamental research to uncover unique growth companies
exhibiting rewarding investment potential for the Fund.
/s/Nancy Zevenbergen
Nancy Zevenbergen, CFA
Co-Portfolio Manager
/s/Brooke de Boutray
Brooke de Boutray, CFA
Co-Portfolio Manager
/s/Leslie Tubbs
Leslie Tubbs, CFA
Co-Portfolio Manager
2
T SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- -------------
Cumulative
Inception
to Date
- -------------
0.00%
- -------------
(Line Graph omitted) Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Aggressive
Growth Stock Fund, Russel 3000
T Shares Growth Index
2/29/04 10,000 10,000
5/04 9,950 9,870
A SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- -------------
Cumulative
Inception
to Date
- -------------
-0.10% Without Load
- -------------
-3.85% With Load
- -------------
(Line Graph omitted) Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Aggressive
Growth Stock Fund, Russel 3000
A Shares Growth Index
2/29/04 9,625 10,000
5/04 9,567 9,870
L SHARES(1)
AVERAGE ANNUAL TOTAL RETURNS
(PERIOD ENDED MAY 31, 2004)
- -------------
Cumulative
Inception
to Date
- -------------
-0.30% Without CDSC
- -------------
-2.29% With CDSC
- -------------
(Line Graph omitted) Plot points are as follows:
COMPARISON OF CHANGE IN THE VALUE
OF A $10,000 INVESTMENT
STI Classic Aggressive
Growth Stock Fund, Russel 3000
L Shares Growth Index
2/29/04 10,000 10,000
5/04 9,722 9,870
Past performance is no indication of future performance.
The Fund's comparative benchmarks do not include the annual operating expenses
incurred by the Fund.
(1) Commenced operations on February 23, 2004.
Returns shown do not reflect the deduction of taxes that a shareholder would pay
on fund distributions or the redemption of fund shares.
B-1
STI CLASSIC FUNDS
AGGRESSIVE GROWTH STOCK FUND
INFORMATION AND TECHNOLOGY FUND
Statement of Additional Information
__________, 2004
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the Proxy
Statement/Prospectus dated _________, 2004, relating to the proposed acquisition
of the Information and Technology Fund (the "Selling Fund"), a series of STI
Classic Funds (the "Trust"), by the Aggressive Growth Stock Fund (the "Acquiring
Fund"), another series of the Trust, and the assumption by the Acquiring Fund of
all of the stated liabilities of the Selling Fund, in exchange for A Shares, L
Shares or T Shares, as the case may be, of the Acquiring Fund having an
aggregate value equal to the net asset value of the Selling Fund's A Shares, L
Shares or T Shares as of the Closing Date; the distribution of the Acquiring
Fund's shares to each holder of the Selling Fund's shares in an amount equal in
value to the shareholder's Selling Fund shares as of the Closing Date; and the
complete liquidation of the Selling Fund (collectively, the "Reorganization"). A
copy of the Proxy Statement/Prospectus may be obtained upon request and without
charge by calling 1-800-428-6970 or by writing to BISYS Fund Services, 3435
Stelzer Road, Columbus, Ohio 43219. 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. The Reorganization is expected to
occur in accordance with the terms of the Reorganization Agreement.
Incorporation of Documents by Reference into the Statement of
Additional Information
This Statement of Additional Information incorporates by reference the following
documents:
(1) Prospectus dated October 1, 2004 with respect to T Shares of the
Trust's equity funds, including the Selling Fund and the Acquiring Fund
(previously filed on EDGAR, Accession No. 0000950152-04-007130).
(2) Prospectus dated October 1, 2004 with respect to A Shares and L Shares
of the Trust's equity funds, including the Selling Fund and the
Acquiring Fund (previously filed on EDGAR, Accession No.
0000950152-04-007130).
(3) The Trust's Statement of Additional Information dated October 1, 2004
(previously filed on EDGAR, Accession No. 0000950152-04-007130).
(4) Annual Financial Report dated May 31, 2004 with respect to the Trusts'
equity funds, including the Selling Fund and the Acquiring Fund
(previously filed on EDGAR, Accession No. 0000935069-04-001045).
Pro Forma Financial Statements
Under the Reorganization Agreement, the Selling Fund will be
reorganized into the Acquiring Fund.
Shown below are unaudited pro forma financial statements for the
combined Acquiring Fund assuming the Reorganization, as more fully described in
the Proxy Statement/Prospectus dated ________, 2004, had been consummated as of
May 31, 2004.
The Pro Forma Combined Statement of Net Assets has been adjusted to
give effect to the Reorganization as if the Reorganization had occurred at May
31, 2004.
The Pro Forma Combined Statement of Operations is for the twelve-months
ended May 31, 2004 and has been adjusted to give effect to the Reorganization as
if the Reorganization had occurred June 1, 2003.
The unaudited pro forma combined schedules and financial statements
are presented for informational purposes only and do not purport to be
indicative of the financial condition that actually would have resulted if the
Reorganization had been consummated at May 31, 2004. These pro forma numbers
have been estimated in good faith based on information regarding the Selling
Fund and Acquiring Fund for the twelve month period ended May 31, 2004.
Additional information regarding the performance of the Acquiring Fund
is contained in "Management's Discussion of Fund Performance" in the Proxy
Statement/Prospectus.
The unaudited pro forma combined schedules and financial statements
have been derived from the schedules and financial statements of the Selling
Fund and Acquiring Fund and such information has been adjusted to give effect to
the Reorganization as if the Reorganization had occurred at May 31, 2004. The
unaudited pro forma combined schedules and financial statements should be read
in conjunction with the financial statements and related notes of the Selling
Fund and Acquiring Fund included in their Annual Financial Report for the fiscal
year ended May 31, 2004, which is incorporated herein by reference. The
combination of the Selling Fund into the Acquiring Fund will be accounted for as
a tax-free reorganization.
-2-
PRO-FORMA STATEMENT OF NET ASSETS (UNAUDITED)
STI CLASSIC FUNDS
AGGRESSIVE GROWTH STOCK FUND AND
INFORMATION AND TECHNOLOGY FUND
MAY 31, 2004
AGGRESSIVE GROWTH STOCK FUND / INFORMATION AND TECHNOLOGY FUND
Proforma Combined Schedule of Portfolio Investments May 31, 2004
(Unaudited)
Fund 1 represents Aggressive Growth Stock Fund. Fund 2 represents the
Information and Technology Fund.
<Table>
<Caption>
PROFORMA FUND 1 FUND 2 PROFORMA
FUND 1 FUND 2 COMBINED MARKET MARKET COMBINED
SECURITY DESCRIPTION SHARES SHARES SHARES VALUE (000) VALUE (000) MARKET VALUE (000)
- -------------------- ------ ------ -------- ----------- ----------- -----------------
COMMON STOCK (95.5%)
CAPITAL GOODS (3.0%)
American Power Conversion 10,000 10,000 181 181
Applied Materials* 11,000 11,000 220 220
Celestica* 15,000 15,000 282 282
Jabil Circuit* 10,000 10,000 283 283
Sanmina-SCI 9,000 9,000 95 95
TTM Technologies 7,000 7,000 80 80
-------- -----------
1,141 1,141
-------- -----------
COMMUNICATIONS SERVICES (0.8%)
Nextel Communications* 13,100 13,100 303 303
------- -----------
303 303
------- -----------
COMPUTER SOFTWARE (10.0%)
Adobe Systems 6,000 6,000 268 268
Automatic Data Processing 7,000 7,000 311 311
BMC Software* 10,000 10,000 176 176
Cognizant Technology Solutions* 16,000 16,000 740 740
Cognos* 6,000 6,000 202 202
Microsoft 19,000 19,000 501 501
Network Associates* 8,000 8,000 133 133
Oracle* 10,000 10,000 113 113
Packeteer* 5,000 5,000 71 71
SAP ADR 12,000 12,000 485 485
Symantec* 7,000 7,000 321 321
Veritas Software* 17,000 17,000 452 452
------- -------- -----------
740 3,033 3,773
------- -------- -----------
CONSUMER CYCLICALS (3.7%)
Best Buy 7,400 7,400 390 390
Coach* 8,100 8,100 353 353
Tiffany 6,300 6,300 223 223
Walt Disney 18,600 18,600 437 437
------- -----------
1,403 1,403
------- -----------
CONSUMER DISCRETIONARY (5.1%)
Avon Products 7,400 7,400 656 656
Clear Channel Communications 7,400 7,400 294 294
Starbucks* 17,500 17,500 711 711
Univision Communications* 8,100 8,100 264 264
------- -----------
1,925 1,925
------- -----------
CONSUMER STAPLES (0.9%)
Fred's 5,100 5,100 107 107
Whole Foods Market 2,900 2,900 250 250
------- -----------
357 357
------- -----------
FINANCE (9.3%)
AMBAC Financial Group 5,000 5,000 346 346
Blackrock 3,800 3,800 240 240
Capital One Financial 13,000 13,000 911 911
Investors Financial Services 22,300 22,300 872 872
</Table>
<Table>
Lehman Brothers Holdings 4,800 4,800 363 363
Morgan Stanley 4,500 4,500 241 241
Paychex 5,300 5,300 199 199
SLM 8,800 8,800 337 337
------- ----- -----
2,559 950 3,509
------ ----- -----
HEALTH CARE (13.1%)
Align Technology* 12,200 12,200 233 233
Biogen Idec 10,000 10,000 621 621
Biomet 3,600 3,600 144 144
Biosite* 5,600 5,600 223 223
Cardinal Health 3,600 3,600 244 244
Cephalon* 8,300 8,300 447 447
Forest Laboratories* 9,300 9,300 590 590
Genentech* 4,200 4,200 251 251
Gilead Sciences* 7,600 7,600 497 497
Johnson & Johnson 6,000 6,000 334 334
Martek Biosciences* 4,500 4,500 288 288
Medicis Pharmaceutical 5,500 5,500 233 233
Pfizer 10,000 10,000 353 353
Wilson Greatbatch Technologies* 8,500 8,500 231 231
Wright Medical Group* 8,100 8,100 263 263
------ ----- -----
4,331 621 4,952
------ ----- -----
PRODUCER DURABLES (1.0%)
Kla-Tencor* 6,700 6,700 323 323
Lam Research* 1,700 1,700 42 42
------ -----
365 365
------ -----
SEMICONDUCTORS (7.5%)
Amkor Technology* 6,900 6,900 71 71
Broadcom, Cl A* 6,000 5,000 11,000 253 211 464
Cypress Semiconductor* 6,500 6,500 106 106
Intel 21,400 21,400 611 611
Marvell Technology Group Ltd. 3,792 3,792 180 180
Micrel* 30,000 30,000 443 443
Microchip Technology* 17,000 17,000 539 539
Taiwan Semiconductor* Manufacturing ADR 10,000 10,000 102 102
Triquint Semiconductor* 5,000 5,000 28 28
Omnivision Technologies* 7,100 7,100 166 166
Teradyne* 5,000 5,000 112 112
------ ------ -----
1,101 1,721 2,822
------ ------ -----
SERVICES (19.2%)
Accenture Ltd., Cl A* 10,000 10,000 246 246
Akamai Technologies* 10,000 10,000 149 149
Amazon.com* 14,000 14,000 676 676
CNET Networks* 21,600 21,600 209 209
eBay* 11,100 6,000 17,100 986 533 1,519
Getty Images* 7,000 7,000 394 394
Infospace* 9,000 9,000 329 329
InterActiveCorp* 20,000 20,000 625 625
Knight-Ridder 3,000 3,000 228 228
Omnicom Group 6,500 6,500 519 519
Sohu.com* 5,700 5,700 118 118
Time Warner* 20,000 20,000 341 341
VeriSign 15,000 15,000 272 272
Yahoo!* 30,800 22,000 52,800 944 674 1,618
------ ------ -----
3,401 3,842 7,243
------ ------ -----
TECHNOLOGY (21.9%)
Alcatel ADR* 32,000 32,000 461 461
Apple Computer* 12,000 12,000 337 337
Avaya* 6,400 40,000 46,400 101 633 734
Cisco Systems* 28,000 28,000 620 620
Comverse Technology* 30,000 30,000 530 530
Dell* 11,800 11,800 415 415
Enterasys Networks 14,000 14,000 27 27
eResearch Technology* 11,850 11,850 300 300
Flextronics International Ltd.* 51,600 51,600 906 906
Hewlett-Packard 11,000 11,000 234 234
International Business Machines 6,500 6,500 576 576
Juniper Networks* 10,100 19,400 29,500 211 406 617
Nortel Networks* + 30,000 30,000 115 115
Polycom 15,000 15,000 307 307
</Table>
<Table>
Qualcomm 14,500 1,500 16,000 972 101 1,073
STMicroelectronics 5,000 5,000 113 113
Utstarcom*+ 20,100 6,000 26,100 626 187 813
-------- -------- --------
3,531 4,647 8,178
-------- -------- --------
Total Common Stock 20,016 15,955 35,971
-------- -------- --------
REPURCHASE AGREEMENT (4.9%)
Dresdner Bank(a) 1,182,083 1,182,083 1,182 1,182
Merrill Lynch(b) 678,821 678,821 679 679
-------- -------- --------
Total Repurchase Agreement 679 1,182 1,861
-------- -------- --------
CASH EQUIVALENT (0.6%)
Boston Global Investment 239,400 239,400 239 239
-------- --------
Trust-Enhanced Portfolio (C)
Total Cash Equivalent 239 239
-------- --------
Total Investments (101.0%) $ 20,695 $ 17,376 $ 38,071
(Cost $20,306, $15,301 and $35,607, respectively) ======== ======== ========
OTHER ASSETS AND LIABILITIES (-1.0%)
Payable Upon Return of Securities Loaned -- (239) (239)
Investment Advisory Fees Payable (17) (15) (32)
Payable to Affiliated Funds (7) -- --(d)
Distribution Fees Payable -- (4) (4)
Administration Fees Payable (1) (1) (2)
Receivable from Advisor 6 -- 6
Receivable from Distributor 3 -- 3
Other Assets and Liabilities, Net (64) (26) (107)(e)
-------- -------- --------
Total Other Assets and Liabilities (80) (285) (375)
-------- -------- --------
NET ASSETS:
Paid in Capital - T Shares (unlimited authorization - no par value)
based on 2,050,154; 1,294,272 and 3,021,381 outstanding shares of
beneficial interest, respectively $ 20,157 $ 72,809 $ 92,966
Paid in Capital - A Shares (unlimited authorization - no par value)
based on 4,934; 205 and 5,088 outstanding shares of beneficial
interest, respectively 48 2 50
Paid in Capital - L Shares (unlimited authorization - no par value)
based on 6,528; 1,027,350 and 746,500 outstanding shares of
beneficial interest, respectively 65 27,072 27,137
Accumulated net investment loss (5) -- (5)
Accumulated net realized loss on investements (39) (84,867) (84,906)
Net Unrealized appreciation on investments 389 2,075 2,464
-------- -------- --------
Total Net Assets (100.0%) $ 20,615 $ 17,091 $ 37,706
======== ======== ========
Net Asset Value, Offering and Redemption Price Per Share - T Shares
($20,500,987 / 2,050,154 shares; $9,712,279 / 1,294,272 shares and
$30,213,266 / 3,021,381 shares, respectively) $ 10.00 $ 7.50 $ 10.00
======== ======== ========
Net Asset Value and Redemption Price Per Share - A Shares ($49,267 /
4,934 shares; $1,539.3 / 205.4 shares and $50,806 / 5,088 shares,
respectively) $ 9.99 $ 7.49 $ 9.99
======== ======== ========
Maximum Offering Price Per Share - A Shares ($9.99 / 96.25%, $7.49 /
96.25% and $9.99 / 96.25%, respectively) $ 10.38 $ 7.78 $ 10.38
======== ======== ========
Net Asset Value and Offering Price Per Share - L Shares ($65,098 /
6,528, $7,377,522 / 1,027,350 and $7,442,620 / 746,500, respectively) $ 9.97 $ 7.18 $ 9.97
======== ======== ========
- ----------
The categories of investments are shown as a percentage of the proforma combined
net assets.
* Non-income producing security
+ All or part of this security was on loan at May 31, 2004. The total value
of the securities on loan at May 31, 2004 was $248,641.
(a) Tri-Party Repurchase Agreement; 0.950%, dated 05/28/04, to be
repurchased on 06/01/04, repurchase price $1,182,176 (collateralized by
FNMA obligations; total market value $1,209,922)
(b) Tri-Party Repurchase Agreement; 1.020%, dated 05/28/04, to be repurchased
on 06/01/04, repurchase price $678,878 (collateralized by FHLB obligations;
total market value $693,444)
(c) This security was purchased with cash collateral held from securities
lending.
(d) Reversal of Aggressive Growth Fund's payable to affiliated funds.
(e) Reversal of deferred organizational cost.
PRO-FORMA COMBINED STATEMENT OF OPERATIONS
STI CLASSIC FUNDS
AGGRESSIVE GROWTH STOCK FUND AND
INFORMATION AND TECHNOLOGY FUND
MAY 31, 2004
PRO FORMA COMBINING STATEMENTS OF OPERATIONS (000)
FOR THE TWELVE MONTHS ENDED MAY 31, 2004
(UNAUDITED)
<Table>
<Caption>
Information
Aggressive And Pro Forma
Growth Stock Technology Pro Forma Combined
Fund (1) Fund Adjustments (Note 1)
------------- ------------- ------------- -------------
Income:
Dividend Income $ 10 $ 35 -- $ 45
Interest income 4 7 -- 11
Securities Lending Income -- 48 -- 48
Less: Foreign Taxes Withheld -- (1) -- (1)
------------- ------------- ------------- -------------
Total Income 14 89 -- 103
------------- ------------- ------------- -------------
Expenses:
Investment Advisory Fees 36 205 127(a) 368
Administration Fees 2 13 (7)(b) 8
Distribution Fees - A Shares -- -- -- --
Distribution Fees - L Shares -- 76 -- 76
Custodian Fees -- 4 -- 4
Transfer Agent Shareholder Servicing Fees -- -- -- --
Trustees' Fees -- -- -- --
Transfer Agent Fees - T Shares 1 16 (17)(b) --
Transfer Agent Fees - A Shares 1 5 (6)(b) --
Transfer Agent Fees - L Shares 1 49 (50)(b) --
Professional Fees -- 1 -- 1
Printing Fees -- 1 -- 1
Transfer Agent Out of Pocket Fees -- 1 -- 1
Registration Fees -- 1 -- 1
Offering Cost 7 -- (7)(c) --
Other Fees -- 1 -- 1
------------- ------------- ------------- -------------
Total Expenses 48 373 40 461
------------- ------------- ------------- -------------
Less: Investment Advisory Fees Waived (10) -- (34)(d) (44)
Less: Fees Reimbursed by Distributor (1) -- -- (1)
Less: Distribution Fees Waived/Reimbursed - A (1) (5) 6(e) --
Shares
Less: Distribution Fees Waived - L Shares (1) (46) 38(e) (9)
------------- ------------- ------------- -------------
Net Expenses 35 322 50 407
------------- ------------- ------------- -------------
Net Investment Income (Loss) (21) (233) (50) (304)
------------- ------------- ------------- -------------
Net Realized and Unrealized Gain (Loss) on Investments:
Net Realized Gain (Loss) on Securities Sold (39) 4,946 -- 4,907
Net Change in Unrealized Appreciation (Depreciation)
on Investments 389 (901) -- (512)
------------- ------------- ------------- -------------
350 4,045 -- 4,395
------------- ------------- ------------- -------------
CHANGE IN NET ASSETS RESULTING
FROM OPERATIONS $ 329 $ 3,812 $ (50) $ 4,091
============= ============= ============= =============
</Table>
(1) Commenced operations on February 23, 2004.
(a) Change based on assumption that current advisory fee structure for the
Aggressive Growth Fund would have been in place during the period and assuming a
full year of operations for the Aggressive Growth Fund.
(b) Change reflects current expense structure associated with change in service
provider for Administration, Fund Accounting and Transfer Agent and assuming a
full year of operations for the Aggressive Growth Fund. Under the current
expense agreement, Administration, Fund Accounting and Transfer Agent fees are
charged as one expense.
(c) Removed non reoccurring charge.
(d) Change based on assumption that current advisory fee waiver would have been
in place during the period and assuming a full year of operations for Aggressive
Growth Fund.
(e) Change based on the assumption that the current distribution fee waivers
for the Aggressive Growth Fund would have been in place during the period and
assuming a full year of operations for Aggressive Growth Fund.
STI CLASSIC FUNDS
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The unaudited Pro Forma Combining Statement of Net Assets and
Statement of Operations reflect the accounts of two investment portfolios
offered by STI Classic Funds, a Massachusetts business trust (the "Trust"): STI
Classic Aggressive Growth Stock Fund ("Aggressive Growth Fund") and STI Classic
Information and Technology Fund ("Information and Technology Fund")
(individually a "Fund," collectively the "Funds") as if the proposed
reorganization (the "Reorganization") occurred as of and for the year ended May
31, 2004 and taking into account contractual fee changes expected to have a
continuing impact on the Funds. The historical statements have been derived from
books and records utilized in calculating daily net asset value at May 31, 2004.
The Plan of Reorganization provides that the Aggressive Growth Fund
would acquire all of the assets and subject to liabilities, of the Information
and Technology Fund in exchange solely for corresponding classes of the
Aggressive Growth Fund's shares. The Reorganization is anticipated to occur on
or about December 28, 2004 (the "Closing Date").
For accounting purposes, the historical basis of assets and liabilities
of the Aggressive Growth Fund will survive the Reorganization.
In exchange for the transfer of assets, subject to liabilities, the
Aggressive Growth Fund will issue to the Information and Technology Fund full
and fractional shares of the corresponding class of the Aggressive Growth Fund,
and the Information and Technology Fund will make a liquidating distribution of
such shares to its shareholders. The value of the shares of the Aggressive
Growth Fund so issued will be equal in value to the full and fractional shares
of the Information and Technology Fund that are outstanding immediately prior to
the Reorganization. At and after the Reorganization, all debts, liabilities and
obligations of the Information and Technology Fund will attach to the assets so
transferred to the Aggressive Growth Fund and may thereafter be enforced against
the Aggressive Growth Fund to the extent of the assets received as if such
liabilities had been incurred by it.
The following is a summary of significant accounting policies followed
by each Fund in preparation of its financial statements. The preparation of
financial statements in accordance with accounting principles generally accepted
in the United States of America ("GAAP") requires management to make estimates
and assumptions that affect the reported amounts and disclosures in the
financial statements. Actual results could differ from those estimates.
Under generally accepted accounting principles, the Aggressive Growth
Fund's basis, for purposes of determining net asset value, of the assets and
liabilities of the Information and Technology Fund will be the fair market value
of such assets and liabilities computed as of the close of regular trading of
the New York Stock Exchange (normally 4:00 p.m. eastern time) on the business
day proceeding the Closing Date. The Aggressive Growth Fund will recognize no
gain or loss for federal tax purposes on its issuance of shares in the
Reorganization.
It is the Growth Fund's intention to qualify as a regulated investment
company under the Internal Revenue Code and to distribute all of its taxable
income, including any net realized gains to shareholders. Net investment income
and short-term gains are taxed as ordinary income. Accordingly, no provision for
federal taxes is required in the financial statements.
The accompanying pro forma financial statements represent the
Aggressive Growth Fund, and reflect the combined results of operations of the
Aggressive Growth Fund and Information and Technology Fund. However, should the
Reorganization be effected, the historical statements of operations of the
Aggressive Growth Fund will not be restated to take into account the
addition of the Information and Technology Fund's assets and liabilities. The
Pro Forma Combining Statements of Net Assets, Statements of Operations, and
Schedules of Portfolio Investments should be read in conjunction with the
historical financial statements of the Funds incorporated by reference into the
Statement of Additional Information.
2. PORTFOLIO VALUATION:
Securities listed on a securities exchange, market or automated
quotation system for which quotations are readily available (except for
securities traded on NASDAQ) are valued at the last quoted sale price on the
primary exchange or market (foreign or domestic) on which they are traded, or,
if there is no such reported sale, at the most recent quoted bid price. For
securities traded on NASDAQ, the NASDAQ Official Closing Price will be used. If,
available, debt securities are priced based upon valuations provided by
independent, third-party pricing agents. Such values generally reflect the last
reported sales price if the security is actively traded. The third-party pricing
agents may also value debt securities at an evaluated bid price by employing
methodologies that utilize actual market transactions, broker-supplied
valuations, or other methodologies designed to identify the market value for
such for such securities. Debt obligations with remaining maturities of sixty
days or less may be valued at their amortized cost, which approximates market
value. The prices for foreign securities are reported in local currency and
converted to U.S. dollars using currency exchange rates. Prices for most
securities held in the Funds are provided daily by recognized independent
pricing agents. If a security price cannot be obtained from an independent,
third-party pricing agent, the Funds seek to obtain a bid price from at least on
independent broker.
Securities for which market prices are not "readily available" are
valued in accordance with Fair Value Procedures established by the Funds' Board
of Trustees. The Funds' Fair Value Procedures are implemented through a Fair
Value Committee (the "Committee") designated by the Funds' Board of Trustees.
Some of the more common reasons that may necessitate that a security be valued
using Fair Value Procedures include: the security's trading has been halted or
suspended; the security has been de-listed from a national exchange; the
security's primary trading market is temporarily closed at a time when under
normal conditions it would be open; or the security's primary pricing source is
not able or willing to provide a price. When a security is valued in accordance
with Fair Value Procedures, the Committee will determine the value after taking
into consideration relevant information reasonably available to the Committee.
For securities that principally trade on a foreign market or exchange,
a significant gap in time can exist between the time of a particular security's
last trade and the time at which a Fund calculates its net asset value. The
closing prices of such securities may no longer reflect their market value at
the time the Fund calculates net asset value if an event that could materially
affect the value of those securities (a "Significant Event") has occurred
between the time of the security's last close and the time that the Fund
calculates net asset value. A Significant Event may relate to a single issuer or
to an entire market sector. If the adviser or sub-adviser of a Fund becomes
aware of a Significant Event that has occurred with respect to a security or
group of securities after the closing of the exchange or market on which the
security or securities principally trade, but before the time at which the Fund
calculates net asset value, it may request that a Fair Value Committee Meeting
be called. In addition, the Funds' administrator monitors price movements among
certain selected indices, securities and/or baskets of securities that may be an
indicator that the closing prices received earlier from foreign exchanges or
markets may not reflect market value at the time the Fund calculates net asset
value. If price movements in a monitored index or security exceed levels
established by the administrator, the administrator notifies the adviser or
sub-adviser for any Fund holing the relevant securities that such limits have
been exceeded. In such event, the adviser or sub-adviser makes the determination
whether a fair value committee meeting should be called based on the information
provided.
3. CAPITAL SHARES:
The pro forma net asset value per share assumes the Aggressive Growth
Fund that would have been issued at May 31, 2004, in connection with the
proposed reorganization. The number of shares assumed to be issued is equal to
the net asset value of shares of Information and Technology Fund, as of May 31,
2004, divided by the net asset value per share of the share of the Aggressive
Growth Funds as of May 31, 2004. The pro forma number of shares outstanding, by
class, for the combined fund consists of the following at May 31, 2004:
<Table>
<Caption>
SHARES OF THE AGGRESSIVE
GROWTH FUND PRE-COMBINATION ADDITIONAL SHARES ASSUMED TOTAL OUTSTANDING SHARES
CLASS OF SHARES ISSUED IN REORGANIZATION POST-COMBINATION
- ------------------------------- ---------------------------- ---------------------------- ----------------------------
A Shares 4,934 154 5,088
L Shares 6,528 739,972 746,500
T Shares 2,050,154 971,227 3,021,381
</Table>
4. FEDERAL INCOME TAXES:
Each fund has elected to be taxed as a "regulated investment company"
under the Internal Revenue Code. After the reorganization, the Aggressive Growth
Fund intends to continue to qualify as a regulated investment company, if such
qualification is in the best interest of its shareholders, by complying with the
provisions available to certain investment companies, as defined in applicable
sections of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from all, or substantially all, Federal income
taxes.
The identified cost of investments for the funds is substantially the
same for both financial accounting and Federal income tax purposes. The tax cost
of investments will remain unchanged for the combined fund.
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
Article VIII of the Agreement and Declaration of Trust provides for
indemnification of the trustees and officers of the registrant, subject to
certain limitations. Article VIII of the Agreement and Declaration of Trust is
incorporated herein by reference. Section 1.12 of the Distribution Agreement
between the STI Classic Funds ("Registrant") and BISYS Fund Services Limited
Partnership provides that the Registrant will indemnify BISYS Fund Services
Limited Partnership against certain liabilities. Section 9 of the Investment
Advisory Agreements between the Registrant and Trusco Capital Management, Inc.,
Sun Bank Capital Management and Trust Company Bank provide that the adviser
shall not be liable for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in carrying out its
duties, except a loss resulting from willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of reckless disregard
of its obligations and duties. The investment sub-advisory agreement between
Trusco Capital Management, Inc. and Zevenbergen Capital Investments LLC provides
that Zevenbergen Capital Investments will indemnify Trusco Capital Management,
Inc. against certain liabilities. Insofar as indemnification for liabilities
arising under the Securities Act of 1933 (the "Act") may be permitted to
trustees, directors, officers and controlling persons of the Registrant by the
Registrant pursuant to the Declaration of Trust or otherwise, the Registrant is
aware that in the opinion of the U.S. Securities and Exchange Commission
("SEC"), such indemnification is against public policy as expressed in the Act
and, therefore, is unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by trustees, directors, officers or controlling persons of the
Registrant in connection with the successful defense of any act, suit or
proceeding) is asserted by such trustees, directors, officers or controlling
persons in connection with the shares being registered, the 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 the Act and
will be governed by the final adjudication of such issues.
ITEM 16. EXHIBITS
(1) Declaration of Trust as originally filed with the Registrant's
registration statement on Form N-1A ("Registration Statement"), filed
on February 12, 1992, is incorporated herein by reference to Exhibit 1
of Post-Effective Amendment No. 15 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(2) Amended and Restated By-Laws, as approved by the Board of Trustees on
August 15, 2000, are incorporated herein by reference to Exhibit (b) of
Post-Effective Amendment No. 37 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000935069-00-000528 on September 21, 2000.
(3) Not Applicable.
(4) Agreement and Plan of Reorganization is filed herein as Exhibit A to
the Proxy Statement/Prospectus.
(5) Not Applicable.
(6)(a) Revised Investment Advisory Agreement with Trusco Capital Management,
Inc., dated June 15,1993, as originally filed with the Registrant's
Post-Effective Amendment No. 5, filed on August 2, 1993, is
incorporated herein by reference to Exhibit 5(c) of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement filed with
the SEC via EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.
(6)(b) Revised Schedule A dated November 12, 2003 to the Revised Investment
Advisory Agreement with Trusco Capital Management, Inc. dated June 15,
1993 is incorporated herein by reference to Exhibit (d)(2) of
Post-Effective Amendment No. 48 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000935069-03-001651 on December 10, 2003.
(6)(c) Investment Advisory Agreement with Sun Bank Capital Management,
National Association (now Trusco Capital Management, Inc.) as
originally filed with the Registrant's Post-Effective Amendment No. 6,
filed on October 22, 1993, is incorporated herein by reference to
Exhibit 5(e) of Post-Effective Amendment No. 15 to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0000912057-96-015938 on July 31, 1996.
(6)(d) Investment Advisory Agreement with Trust Company Bank (now Trusco
Capital Management, Inc.) as originally filed with the Registrant's
Post-Effective Amendment No. 6, filed on October 22, 1993, is
incorporated herein by reference to Exhibit d(4) of Post-Effective
Amendment No. 24 to the Registrant's Registration Statement filed with
the SEC via EDGAR Accession No. 0001047469-98-028802 on July 30, 1998.
(6)(e) Investment Subadvisory Agreement dated February 20, 2004, between
Trusco Capital Management, Inc. and Zevenbergen Capital Investments LLC
is incorporated herein by reference to Exhibit (d)(5) of Post-Effective
Amendment No. 50 to the Registrant's Registration Statement filed with
the SEC via EDGAR Accession No. 0000950152-04-005770 on July 30, 2004.
(6)(f) Revised Schedule A for the Classic Institutional Core Bond Fund,
Classic Institutional Intermediate Bond Fund, Seix Institutional High
Yield Fund and Classic Institutional Limited Duration Fund to the
Revised Investment Advisory Agreement between the Registrant and Trusco
Capital Management, Inc. dated June 15, 1993 is incorporated herein by
reference to Exhibit (d)(6) of Post-Effective Amendment No. 51 to the
Registrant's Registration Statement filed with the SEC via EDGAR
accession No. 0000950152-04-007101 on September 28, 2004.
(7) Distribution Agreement between the Registrant and BISYS Fund Services,
Limited Partnership is incorporated by reference to Exhibit (e) of
Post-Effective Amendment No. 51 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000950152-04-007101 on September 28, 2004.
(8) Not Applicable.
(9)(a) Custodian Agreement with Trust Company Bank (now SunTrust Bank) dated
February 1, 1994, as originally filed with the Registrant's
Post-Effective Amendment No. 13, filed on September 28, 1995, is
incorporated herein by reference to Exhibit 8(b) of Post-Effective
Amendment No. 15 to the Registrant's Registration Statement filed with
the SEC via EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.
(9)(b) Securities Lending Amendment dated October 1, 2002 to the Custodian
Agreement dated February 1, 1994 between the Registrant and SunTrust
Bank is incorporated herein by reference to Exhibit (g)(2) of
Post-Effective Amendment No. 47 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000935069-03-001371 on September 30, 2003.
(9)(c) Amendment to the Custodian Agreement between the Registrant and
SunTrust Bank, formerly Trust Company Bank, dated as of February 1,
1994, as amended October 1, 2002, and Schedule A of such Agreement
amended as of August 16, 1995 and January 1, 1996, is incorporated
herein by reference to Exhibit (g)(3) of Post-Effective Amendment No.
48 to the Registrant's Registration Statement filed with the SEC via
EDGAR Accession No. 0000935069-03-001651 on December 10, 2003.
(9)(d) Custodian Agreement with the Bank of California is incorporated herein
by reference to Exhibit 8(a) of Post-Effective Amendment No. 15 to the
Registrant's Registration Statement filed with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(9)(e) Custodian Agreement dated January 29, 2003 between the Registrant, STI
Classic Variable Trust and Brown Brothers Harriman & Co., with respect
to the International Equity Fund , International Equity Index Fund and
Strategic Income Fund, is incorporated herein by reference to
Exhibit g(7) of Post-Effective
-2-
Amendment No. 13 to the Registration Statement of the STI Classic
Variable Trust (SEC No. 033-91476) filed with the SEC via EDGAR
Accession No. 0000935069-03-00052 on April 25, 2003.
(9)(f) Amendment dated November 25, 2003 to the Custodian Agreement dated
February 1, 1994 between the Registrant and Trust Company Bank (now
SunTrust Bank) is incorporated by reference to Exhibit (g)(6) of
Post-Effective Amendment No. 50 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000950152-04-005770 on July 30, 2004.
(10)(a) Distribution Plan relating to Investor Shares (now A Shares) is
incorporated herein by reference to Exhibit 15 of Post-Effective
Amendment No. 16 to the Registrant's Registration Statement filed with
the SEC via EDGAR Accession No. 0000912057-96-021336 on September 27,
1996.
(10)(b) Distribution and Service Agreement relating to Flex Shares (now L
Shares) dated May 29, 1995 as originally filed with Post-Effective
Amendment No. 12, filed on August 17, 1995, is incorporated herein by
reference to Exhibit 15(a) of Post-Effective Amendment No. 15 to the
Registrant's Registration Statement filed with the SEC via EDGAR
Accession No. 0000912057-96-015938 on July 31, 1996.
(10)(c) Distribution and Service Plan relating to B Shares dated February 11,
2003 is incorporated herein by reference to Exhibit (m)(3) of
Post-Effective Amendment No. 47 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000935069-03-001371 on September 30, 2003.
(10)(d) Amended Schedule A to the Distribution Plan relating to A Shares
(formerly Investor Shares) dated November 12, 2003 is incorporated
herein by reference to Exhibit (m)(4) of Post-Effective Amendment No.
48 to the Registrant's Registration Statement filed with the SEC via
EDGAR Accession No. 0000935069-03-001651 on December 10, 2003.
(10)(e) Amended Schedule A to the Distribution Plan for A Shares as it relates
to the Classic Institutional Core Bond Fund, Classic Institutional
Intermediate Bond Fund, Seix Institutional High Yield Fund and Classic
Institutional Limited Duration Fund is incorporated herein by
reference to Exhibit (m)(5) of Post-Effective Amendment No. 51 to the
Registrant's Registration Statement filed with the SEC via EDGAR
Accession No. 0000950152-04-007101 on September 28, 2004.
(10)(f) Rule 18f-3 Multiple Class Plan dated May 24, 1995, last amended
November 12, 2003, is incorporated herein by reference to Exhibit
(n)(1) of Post-Effective Amendment No. 48 to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0000935069-03-001651 on December 10, 2003.
(11) Opinion and Consent of Morgan, Lewis & Bockius LLP that the
shares will be validly issued, fully paid and non-assessable is filed
herewith.
(12) Form of Opinion and Consent of Morgan, Lewis & Bockius LLP supporting
the tax matters and consequences to shareholders discussed in the
prospectus is filed herewith.
(13)(a) Master Services Agreement between the Registrant and BISYS Fund
Services Ohio, Inc. is incorporated herein by reference to Exhibit
(h)(1) of Post-Effective Amendment No. 51 to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0000950152-04-007101 on September 28, 2004.
(13)(b) Amendment to Master Services Agreement between the Registrant and BISYS
Fund Services Ohio, Inc. is incorporated herein by reference to Exhibit
(h)(2) of Post-Effective Amendment No. 51 to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0000950152-04-007101 on September 28, 2004.
(13)(c) Shareholder Service Plan and Agreement relating to Institutional
Shares, dated August 20, 2002, is incorporated herein by reference to
Exhibit (h)(5) of Post-Effective Amendment No. 47 to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0000935069-03-001371 on September 30, 2003.
-3-
(13)(d) Shareholder Service Plan and Agreement relating to Trust Shares (now T
Shares) is incorporated herein by reference to Exhibit (h)(3) of
Post-Effective Amendment No. 50 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000950152-04-005770 on July 30, 2004.
(13)(e) Shareholder Service Plan and Agreement relating to Corporate Trust
Shares is incorporated herein by reference to Exhibit (h)(7) of
Post-Effective Amendment No. 47 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000935069-03-001371 on September 30, 2003.
(13)(f) Amended Schedule to the Shareholder Service Plan and Agreement for T
Shares as it related to the Classic Institutional Core Bond Fund,
Classic Institutional Intermediate Bond Fund, Seix institutional High
Yield Fund and Classic Institutional Limited Duration Fund is
incorporated herein by reference to Exhibit (h)(6) of Post-Effective
Amendment No. 51 to the Registrant's Registration Statement filed with
the SEC via EDGAR Accession No. 0000950152-04-007101 on September 28,
2004.
(13)(g) Amended Schedule to the Shareholder Service Plan and Agreement for
Institutional Shares as it relates to the classic Institutional Core
Bond Fund, Classic Institutional Intermediate Bond Fund, Seix
Institutional High Yield Fund and Classic Institutional Limited
Duration Fund is incorporated herein by reference to Exhibit (h)(7) of
Post-Effective Amendment No. 51 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000950152-04-007101 on September 28, 2004.
(14) Consent of PricewaterhouseCoopers LLP, independent registered public
accounting firm is filed herewith.
(15) Not Applicable.
(16)(a) Powers of Attorney are incorporated herein by reference to
Post-Effective Amendment No. 50 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No.
0000950152-04-005770 on July 30, 2004.
(17)(a) Prospectuses and Statement of Additional Information for the STI
Classic Funds dated October 1, 2004 are incorporated herein by
reference to Post-Effective Amendment No. 51 to the Registrant's
Registration Statement filed with the SEC via EDGAR Accession No.
0000950152-04-007101 on September 28, 2004.
(17)(b) Audited Annual Financial Report for the STI Classic Funds dated May 31,
2004 is incorporated herein by reference to Form N-CSR filed with the
SEC via EDGAR Accession No. 0000935069-04-001045 on August 9, 2004.
(17)(c) Form of proxy card is filed herewith.
ITEM 17. UNDERTAKINGS
(1) The registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to
be an underwriter within the meaning of Rule 145(c) of the Securities
Act of 1933 (the "1933 Act"), the reoffering prospectus will contain
the information called for by the applicable registration form for
reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other items of the applicable form.
(2) The registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
-4-
SIGNATURES
As required by the Securities Act of 1933, this registration statement has been
signed on behalf of the registrant in the City of Boston, Commonwealth of
Massachusetts on the 26th day of October 2004.
STI Classic Funds
R. Jeffery Young*
----------------------------------------
Name: R. Jeffery Young
Title: 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:
<Table>
F. Wendell Gooch* Trustee October 26, 2004
- ------------------------------------
F. Wendell Gooch
Jonathon T. Walton* Trustee October 26, 2004
- ------------------------------------
Jonathan T. Walton
James O. Robbins* Trustee October 26, 2004
- ------------------------------------
James O. Robbins
Thomas Gallagher* Trustee October 26, 2004
- ------------------------------------
Thomas Gallagher
Richard W. Courts, II* Trustee October 26, 2004
- ------------------------------------
Richard W. Courts, II
Clarence H. Ridley* Trustee October 26, 2004
- ------------------------------------
Clarence H. Ridley
R. Jeffrey Young* President October 26, 2004
- ------------------------------------
R. Jeffrey Young
Bryan C. Haft* Treasurer & Chief October 26, 2004
- ------------------------------------ Financial Officer
Bryan C. Haft
</Table>
*By: /s/ Julie Powers
Name: Julie Powers, pursuant to Powers of Attorney incorporated herein by
reference to Post-Effective Amendment No. 50 to the Registrant's Registration
Statement filed with the SEC via EDGAR Accession No. 0000950152-04-005770 on
July 30, 2004.
EXHIBIT INDEX
<Table>
<Caption>
Exhibit Number Exhibit Name
- -------------- ------------
EX-4 Form of Agreement and Plan of Reorganization is filed herein as
Exhibit A to the Proxy Statement/Prospectus
EX-11 Opinion and Consent of Morgan, Lewis & Bockius LLP that the
shares will be validly issued, fully paid and non-assessable.
EX-12 Form of Tax Opinion and Consent of Morgan, Lewis & Bockius LLP
EX-14 Consent of PricewaterhouseCoopers LLP
EX-17(c) Form of Proxy Card
</Table>