SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)) [ ] Definitive Proxy Statement [ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Sec. 240.14a-12
Huntington VA Funds
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(Name of Registrant as Specified In Its Charter)
N/A
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1. Title of each class of securities to which transaction applies: 2.
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computed pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was determined):
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[ ] Fee paid previously with preliminary proxy materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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THE HUNTINGTON FUNDS
Huntington Florida Tax-Free Money Fund
Huntington Money Market Fund
Huntington Ohio Municipal Money Market Fund
Huntington U.S. Treasury Money Market Fund
Huntington Dividend Capture Fund
Huntington Growth Fund
Huntington Income Equity Fund
Huntington International Equity Fund
Huntington Macro 100 Fund
Huntington Mid Corp America Fund
Huntington New Economy Fund
Huntington Rotating Markets Fund
Huntington Situs Small Cap Fund
Huntington Fixed Income Securities Fund
Huntington Intermediate Government Income Fund
Huntington Michigan Tax-Free Fund
Huntington Mortgage Securities Fund
Huntington Ohio Tax-Free Fund
Huntington Short/Intermediate Fixed Income Securities Fund
HUNTINGTON VA FUNDS
Huntington VA Dividend Capture Fund
Huntington VA Growth Fund
Huntington VA Income Equity Fund
Huntington VA International Equity Fund
Huntington VA Macro 100 Fund
Huntington VA Mid Corp America Fund
Huntington VA New Economy Fund
Huntington VA Rotating Markets Fund
Huntington VA Situs Small Cap Fund
Huntington VA Mortgage Securities Fund
IMPORTANT SHAREHOLDER INFORMATION
These materials are for a special meeting of shareholders of The Huntington
Funds and Huntington VA Funds (the "Special Meeting") scheduled for June 22,
2006 at 2:00 p.m., Eastern time. This information will provide you with details
of the proposals to be voted on at the Special Meeting, and includes your Proxy
Statement and proxy card. A proxy card is, in essence, a ballot. When you vote
your proxy, it tells us how you wish to vote on important issues relating to
your Fund(s). If you complete and sign the proxy, we'll vote it exactly as you
tell us. If you simply sign the proxy, we'll vote it in accordance with the
Board of Trustees' recommendations.
WE URGE YOU TO SPEND A FEW MINUTES REVIEWING THE PROPOSALS IN THE PROXY
STATEMENT. THEN, FILL OUT THE PROXY CARD AND RETURN IT TO US SO THAT WE KNOW HOW
YOU WOULD LIKE TO VOTE. WHEN SHAREHOLDERS RETURN THEIR PROXIES PROMPTLY, THE
HUNTINGTON FUNDS AND HUNTINGTON VA FUNDS MAY BE ABLE TO SAVE MONEY BY NOT HAVING
TO CONDUCT ADDITIONAL MAILINGS.
We welcome your comments. If you have any questions, call 1-800-253-0412.
THE HUNTINGTON FUNDS
HUNTINGTON VA FUNDS
A LETTER FROM THE PRESIDENT
Dear Shareholders:
I am writing to request that you consider a number of important matters relating
to your investment in The Huntington Funds (the "Huntington Trust") and/or
Huntington VA Funds (the "VA Trust") (collectively, the "Trusts") in connection
with a special meeting of shareholders (the "Special Meeting") of the Trusts'
portfolios listed on the previous page (each, a "Fund", and collectively, the
"Funds"), to be held on June 22, 2006 at 2:00 p.m., Eastern time, at the Trusts'
address at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010. The
materials that we have included discuss the proposals to be voted on at the
Special Meeting that will affect the future of the Trusts and the Funds.
I am sure that, like most people, you lead a busy life and are tempted to put
this proxy aside for another day. Please don't! Your vote for the proposals set
forth below will make a measurable difference in the quality and value of the
services you receive from the Funds. Also, your vote will help the Funds avoid
additional expenses for follow-up mailings and telephone calls when shareholders
do not return their proxies.
The Boards of Trustees (collectively, the "Board") of each Trust recommend that
shareholders cast their votes in favor of:
1. Electing four individuals to the Board of Trustees of each Trust -TO BE
VOTED ON BY ALL SHAREHOLDERS OF EACH TRUST SEPARATELY.
We ask you to confirm the Board's recommendation by electing Carl A.
Nelson, Tadd C. Seitz, Mark D. Shary and Thomas J. Westerfield to the Board
of Trustees of each Trust. These individuals have not previously been
elected by shareholders.
2. Ratifying the appointment by the Board of Ernst & Young LLP as the
independent auditors for each Trust, for the fiscal year ending December
31, 2006 - TO BE VOTED ON BY ALL SHAREHOLDERS OF EACH TRUST SEPARATELY.
3. Amending certain of the Funds' fundamental investment policies - TO BE
VOTED ON BY ALL SHAREHOLDERS OF THOSE FUNDS AFFECTED.
4. Eliminating certain of the Funds' fundamental investment policies - TO BE
VOTED ON BY ALL SHAREHOLDERS OF THOSE FUNDS AFFECTED.
5. Amending Huntington Income Equity Fund's and Huntington VA Income Equity
Fund's fundamental investment objective - TO BE VOTED ON BY SHAREHOLDERS OF
THE HUNTINGTON INCOME EQUITY FUND AND HUNTINGTON VA INCOME EQUITY FUND
VOTING SEPARATELY.
6. Reorganizing the Huntington Trust (together with the VA Trust) from
separate Massachusetts business trusts to a single Delaware statutory trust
- TO BE VOTED ON BY ALL FUNDS OF THE HUNTINGTON TRUST SEPARATELY. THE
SHAREHOLDERS OF THE VA TRUST ARE NOT REQUIRED TO APPROVE, AND THEREFORE
WILL NOT VOTE WITH RESPECT TO THIS PROPOSAL.
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To give you the greatest convenience possible in voting, you may vote in one of
three ways:
1. By filling out, signing and returning the enclosed proxy card,
2. By attending the Special Meeting and voting in person,
3. By calling toll-free 1-800-___-____, or
4. Online through the web site www.proxyweb.com
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The Proxy Statement uses a question and answer format designed to provide you
with a simpler and more concise explanation of certain issues. Although much of
the information in the Proxy Statement is technical and is required by the
various regulations that govern the Funds, we hope that this format will be
helpful to you.
Sincerely,
B. Randolph Bateman
President
THE HUNTINGTON FUNDS
Huntington Florida Tax-Free Money Fund
Huntington Money Market Fund
Huntington Ohio Municipal Money Market Fund
Huntington U.S. Treasury Money Market Fund
Huntington Dividend Capture Fund
Huntington Growth Fund
Huntington Income Equity Fund
Huntington International Equity Fund
Huntington Macro 100 Fund
Huntington Mid Corp America Fund
Huntington New Economy Fund
Huntington Rotating Markets Fund
Huntington Situs Small Cap Fund
Huntington Fixed Income Securities Fund
Huntington Intermediate Government Income Fund
Huntington Michigan Tax-Free Fund
Huntington Mortgage Securities Fund
Huntington Ohio Tax-Free Fund
Huntington Short/Intermediate Fixed Income Securities Fund
HUNTINGTON VA FUNDS
Huntington VA Dividend Capture Fund
Huntington VA Growth Fund
Huntington VA Income Equity Fund
Huntington VA International Equity Fund
Huntington VA Macro 100 Fund
Huntington VA Mid Corp America Fund
Huntington VA New Economy Fund
Huntington VA Rotating Markets Fund
Huntington VA Situs Small Cap Fund
Huntington VA Mortgage Securities Fund
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON June 22, 2006
NOTICE IS HEREBY GIVEN that a Special Meeting of shareholders (the "Special
Meeting") of The Huntington Funds (the "Huntington Trust") and Huntington VA
Funds (the "VA Trust") (collectively, the "Trusts") will be held at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7010, on June 22, 2006 at 2:00
p.m., Eastern time. The Huntington Trust presently consists of 19 portfolios, as
listed above. The VA Trust presently consists of 10 portfolios, as listed above.
Each of the 29 portfolios is referred to as a "Fund," and collectively as the
"Funds." The purpose of the Special Meeting is to consider and vote on the
following Proposals:
1. To elect four Trustees of each Trust (each Trust to vote separately);
2. To ratify the selection of Ernst & Young LLP as the independent auditors of
each Trust (each Trust to vote separately);
3. To approve amendments to certain of the Funds' fundamental investment
policies, primarily for the purpose of updating archaic policies or making
them consistent among the Funds:
(a) To (1) amend the fundamental investment policies regarding diversification
for certain of the Funds (applies to the Huntington Money Market Fund,
Huntington U.S. Treasury Money Market Fund, Huntington Dividend Capture
Fund, Huntington Growth Fund, Huntington Income Equity Fund, Huntington
International Equity Fund, Huntington Macro 100 Fund, Huntington Mid Corp
America Fund, Huntington New Economy Fund, Huntington Rotating Markets
Fund, Huntington Situs Small Cap Fund, Huntington Intermediate Government
Income Fund, Huntington Fixed Income Securities Fund, Huntington Mortgage
Securities Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund only);
and (2) eliminate the fundamental policies regarding diversification for
certain of the Funds (applies to the Huntington Florida Tax-Free Money
Fund, Huntington Ohio Municipal Money Market Fund, Huntington Michigan
Tax-Free Fund and Huntington Ohio Tax-Free Fund only);
(b) To amend the fundamental investment policies regarding concentration for
certain of the Funds (applies to the Huntington Florida Tax-Free Money
Fund, Huntington Money Market Fund, Huntington Ohio Municipal Money Market
Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth Fund,
Huntington Income Equity Fund, Huntington Intermediate Government Income
Fund, Huntington Fixed Income Securities Fund, Huntington Michigan Tax-Free
Fund, Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only);
(c) To amend the fundamental investment policies regarding issuing senior
securities for certain of the Funds (applies to the Huntington Florida
Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only);
(d) To amend the fundamental investment policies regarding lending for certain
of the Funds (applies to the Huntington Florida Tax-Free Money Fund,
Huntington Money Market Fund, Huntington Ohio Municipal Money Market Fund,
Huntington U.S. Treasury Money Market Fund, Huntington Growth Fund,
Huntington Income Equity Fund, Huntington Intermediate Government Income
Fund, Huntington Fixed Income Securities Fund, Huntington Michigan Tax-Free
Fund, Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only);
(e) To amend the fundamental investment policies regarding borrowing money for
certain of the Funds (applies to the Huntington Florida Tax-Free Money
Fund, Huntington Money Market Fund, Huntington Ohio Municipal Money Market
Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth Fund,
Huntington Income Equity Fund, Huntington Intermediate Government Income
Fund, Huntington Fixed Income Securities Fund, Huntington Michigan Tax-Free
Fund, Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only);
(f) To amend the fundamental investment policies regarding investments in
commodities for certain of the Funds (applies to the Huntington Florida
Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only);
(g) To amend the fundamental investment policies regarding investments in real
estate for certain of the Funds (applies to the Huntington Florida Tax-Free
Money Fund, Huntington Money Market Fund, Huntington Ohio Municipal Money
Market Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth
Fund, Huntington Income Equity Fund, Huntington Intermediate Government
Income Fund, Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities Fund,
Huntington VA Growth Fund and Huntington VA Income Equity Fund only);
(h) To amend the fundamental investment policies regarding underwriting
securities for certain of the Funds (applies to the Huntington Florida
Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only); and
(i) To amend the fundamental investment policies regarding pledging, mortgaging
or hypothecating assets for certain of the Funds (applies to the Huntington
Florida Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only).
4. To approve the elimination of certain of the Funds' fundamental investment
policies, which are no longer required to be fundamental:
(a) To eliminate the fundamental investment policies regarding investing in
illiquid securities for certain of the Funds (applies to the Huntington
Florida Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only);
(b) To eliminate the fundamental investment policies regarding investments in
new issuers for certain of the Funds (applies to the Huntington Florida
Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only);
(c) To eliminate the fundamental investment policies regarding purchases on
margin for certain of the Funds (applies to the Huntington Florida Tax-Free
Money Fund, Huntington Money Market Fund, Huntington Ohio Municipal Money
Market Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth
Fund, Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan Tax-Free Fund,
Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only);
(d) To eliminate the fundamental investment policies regarding short selling
for certain of the Funds (applies to the Huntington Florida Tax-Free Money
Fund, Huntington Money Market Fund, Huntington Ohio Municipal Money Market
Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth Fund,
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan Tax-Free Fund,
Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only);
(e) To eliminate the fundamental investment policies regarding certain
transactions with "interested persons" of the Funds for certain of the
Funds (applies to the Huntington Florida Tax-Free Money Fund, Huntington
Money Market Fund, Huntington Ohio Municipal Money Market Fund, Huntington
U.S. Treasury Money Market Fund, Huntington Growth Fund, Income Equity
Fund, Huntington Intermediate Government Income Fund, Huntington Fixed
Income Securities Fund, Huntington Michigan Tax-Free Fund, Huntington
Mortgage Securities Fund, Huntington Ohio Tax-Free Fund, Huntington
Short/Intermediate Fixed Income Securities Fund, Huntington VA Growth Fund
and Huntington VA Income Equity Fund only);
(f) To eliminate the fundamental investment policies regarding investing in
issuers owned by officers and Trustees for certain of the Funds (applies to
the Huntington Florida Tax-Free Money Fund, Huntington Money Market Fund,
Huntington Ohio Municipal Money Market Fund, Huntington U.S. Treasury Money
Market Fund, Huntington Growth Fund, Huntington Income Equity Fund,
Huntington Intermediate Government Income Fund, Huntington Fixed Income
Securities Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage
Securities Fund, Huntington Ohio Tax-Free Fund, Huntington
Short/Intermediate Fixed Income Securities Fund, Huntington VA Growth Fund
and Huntington VA Income Equity Fund only); and
(g) To eliminate the fundamental investment policies regarding purchasing
securities of other investment companies for certain of the Funds (applies
to the Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S. Treasury
Money Market Fund, Huntington Growth Fund, Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income Securities
Fund, Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only).
5. To approve amending the Income Equity Fund's and VA Income Equity Fund's
fundamental investment objective;
6. To approve the reorganization of the Huntington Trust (together with the VA
Trust) from separate Massachusetts business trusts to a single Delaware
statutory trust (applies to the shareholders of the Huntington Trust only)
(all Funds of the Huntington Trust to vote separately); and
7. To vote upon any other business that may properly come before the Special
Meeting or any adjournments thereof.
The Board of Trustees has fixed April 21, 2006 as the record date for
determination of the shareholders entitled to notice of, and to vote at, the
Special Meeting or any adjournments of the Special Meeting.
By Order of the Board of Trustees,
Victor R. Siclari
Secretary
_________, 2006
TABLE OF CONTENTS
PAGE
Questions and Answers About the Special Meeting and Proxy Statement.........1
Proposal 1: Election of certain Trustees of each Trust......................6
Proposal 2: Ratification of the Selection of Ernst & Young LLP..............7
as the Independent Auditors for each Trust
Proposal 3: Approval of Amendments to, or Elimination of Certain of the Funds'
Fundamental Investment Policies.................................8
(a) Diversification of Investments............................9
(b) Concentration of Investments.............................11
(c) Issuing Senior Securities................................12
(d) Lending..................................................13
(e) Borrowing Money..........................................15
(f) Investments in Commodities...............................16
(g) Investments in Real Estate...............................17
(h) Underwriting Securities..................................18
(i) Pledge, Mortgage or Hypothecate Assets...................19
Proposal 4: Approval of the Elimination of Certain of the Funds' Fundamental
Investment Policies 19
(a) Illiquid Securities......................................20
(b) Investments in New Issuers...............................21
(c) Purchases on Margin......................................21
(d) Short Selling............................................22
(e) Certain Transactions with "Interested Persons" of the
Funds....................................................22
(f) Investing in Issuers Owned by Officers and Trustees......23
(g) Purchasing Securities of Other Investment Companies......23
Proposal 5: Approval of Amending the Income Equity Fund's and VA Income Equity
Fund's Fundamental Investment Objective........................24
Proposal 6: Approval of the Reorganization of the Huntington Trust
(together with the VA Trust) from a Separate Massachusetts Business
Trust to a Single Delaware Statutory Trust.....................25
Other Business.............................................................29
Information about the Trusts...............................................29
Further Information about Voting and the Special Meeting...................41
EXHIBITS
Exhibit A: Agreement and Plan of Reorganization..........................A-1
Exhibit B: Comparison of Significant Differences Between the Proposed Delaware
Statutory Trust and
Existing Massachusetts Business Trusts........................B-1
Exhibit C: Nominating Committee Charter..................................C-1
THE HUNTINGTON FUNDS
Huntington Florida Tax-Free Money Fund
Huntington Money Market Fund
Huntington Ohio Municipal Money Market Fund
Huntington U.S. Treasury Money Market Fund
Huntington Dividend Capture Fund
Huntington Growth Fund
Huntington Income Equity Fund
Huntington International Equity Fund
Huntington Macro 100 Fund
Huntington Mid Corp America Fund
Huntington New Economy Fund
Huntington Rotating Markets Fund
Huntington Situs Small Cap Fund
Huntington Fixed Income Securities Fund
Huntington Intermediate Government Income Fund
Huntington Michigan Tax-Free Fund
Huntington Mortgage Securities Fund
Huntington Ohio Tax-Free Fund
Huntington Short/Intermediate Fixed Income Securities Fund
HUNTINGTON VA FUNDS
Huntington VA Dividend Capture Fund
Huntington VA Growth Fund
Huntington VA Income Equity Fund
Huntington VA International Equity Fund
Huntington VA Macro 100 Fund
Huntington VA Mid Corp America Fund
Huntington VA New Economy Fund
Huntington VA Rotating Markets Fund
Huntington VA Situs Small Cap Fund
Huntington VA Mortgage Securities Fund
5800 Corporate Drive
Pittsburgh, Pennsylvania 15237-7010
PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING
AND PROXY STATEMENT
INFORMATION ABOUT VOTING
Q. Who is asking for my vote?
A. The Boards of Trustees (collectively, the "Board" or the "Trustees") of The
Huntington Funds (the "Huntington Trust") and Huntington VA Funds (the "VA
Trust") (collectively, the "Trusts") have requested your vote on several
matters as part of the special meeting of shareholders to be held at 2:00
p.m., Eastern time, on June 22, 2006 (the "Special Meeting") at 5800
Corporate Drive, Pittsburgh, Pennsylvania 15237-7010. The Trustees propose
to mail the notice of the Special Meeting, the proxy card, and this Proxy
Statement to shareholders of record on or about May 5, 2006.
This Proxy Statement relates to the Huntington Trust's 19 portfolios:
o Huntington Florida Tax-Free Money Fund ("Florida Tax-Free Money Fund"),
o Huntington Money Market Fund ("Money Market Fund"),
o Huntington Ohio Municipal Money Market Fund ("Ohio Municipal Money Market
Fund"),
o Huntington U.S. Treasury Money Market Fund ("U.S. Treasury Money
Market Fund"),
o Huntington Dividend Capture Fund ("Dividend Capture Fund"),
o Huntington Growth Fund ("Growth Fund"),
o Huntington Income Equity Fund ("Income Equity Fund"),
o Huntington International Equity Fund ("International Equity Fund"),
o Huntington Macro 100 Fund ("Macro 100 Fund"),
o Huntington Mid Corp America Fund ("Mid Corp America Fund"),
o Huntington New Economy Fund ("New Economy Fund"),
o Huntington Rotating Markets Fund ("Rotating Markets Fund"),
o Huntington Situs Small Cap Fund ("Situs Small Cap Fund"),
o Huntington Fixed Income Securities Fund ("Fixed Income Securities Fund"),
o Huntington Intermediate Government Income Fund ("Intermediate Government
Income Fund"),
o Huntington Michigan Tax-Free Fund ("Michigan Tax-Free Fund"),
o Huntington Mortgage Securities Fund ("Mortgage Securities Fund"),
o Huntington Ohio Tax-Free Fund ("Ohio Tax-Free Fund"), and
o Huntington Short/Intermediate Fixed Income Securities Fund
("Short/Intermediate Fixed Income Securities Fund").
This Proxy Statement relates to the VA Trust's 10 portfolios:
o Huntington VA Dividend Capture Fund ("VA Dividend Capture Fund"),
o Huntington VA Growth Fund ("VA Growth Fund"),
o Huntington VA Income Equity Fund ("VA Income Equity Fund"),
o Huntington VA International Equity Fund ("VA International Equity Fund"),
o Huntington VA Macro 100 Fund ("VA Macro 100 Fund"),
o Huntington VA Mid Corp America Fund ("VA Mid Corp America Fund"),
o Huntington VA New Economy Fund ("VA New Economy Fund"),
o Huntington VA Rotating Markets Fund ("VA Rotating Markets Fund"),
o Huntington VA Situs Small Cap Fund ("VA Situs Small Cap Fund"), and
o Huntington VA Mortgage Securities Fund ("VA Mortgage Securities Fund").
Each Trust's portfolio may be referred to in this Proxy Statement as a "Fund,"
and the Trusts' portfolios are collectively called the "Funds."
Q. Who is eligible to vote?
A. Shareholders of record of the Funds at the close of business on April 21,
2006 (the "Record Date") are entitled to notice of and to vote at the
Special Meeting or at any adjournment of the Special Meeting. Shareholders
of record will be entitled to one vote for each full share and a fractional
vote for each fractional share that they hold on each matter presented at
the Special Meeting on which they are entitled to vote.
Q. What is being voted on at the Special Meeting?
A. The Board is asking shareholders to vote on the following proposals
affecting the Trusts:
1. To elect certain individuals to the Board of Trustees of each Trust
(Proposal 1);
2. To ratify the selection of Ernst & Young LLP as the independent auditors
for each Trust for the fiscal year ending December 31, 2006 (Proposal 2);
3. To amend certain of the Funds' fundamental investment policies, primarily
for the purpose of updating archaic policies or making them consistent
among the Funds (Proposals 3(a)-3(i));
4. To eliminate certain of the Funds' fundamental investment policies, which
are no longer required to be fundamental (Proposals 4(a)-4(g));
5. To amend Income Equity Fund's and VA Income Equity Fund's fundamental
investment objective (Proposal 5); and
6. To reorganize the Huntington Trust (together with the VA Trust) from
separate Massachusetts business trusts to a single Delaware statutory trust
(Proposal 6).
At its meeting on February 16, 2006, the Board reviewed the proposed changes,
and on April 7, 2006, the Board reviewed and unanimously approved the election
of Trustees, the amendments to and deletions of fundamental investment policies
of the Funds, the amendment of Income Equity Fund's and VA Income Equity Fund's
fundamental investment objective, and the Agreement and Plan of Reorganization
relating to the proposal to reorganize the Trusts from separate Massachusetts
business trusts to a single Delaware statutory trust. All of the proposed
changes, along with the Agreement and Plan of Reorganization, are subject to
shareholder approval. The purposes of the Special Meeting are set forth in the
accompanying notice.
The following table briefly identifies the proposals to be voted on at the
Special Meeting and the shareholders who are being solicited with respect to
each proposal. As reflected in the Notice and the Proxy Statement, Proposals 3 -
5 contain sub-proposals that apply to only certain Funds. Shareholders of a Fund
to which a sub-proposal applies will vote separately on that sub-proposal. The
discussion in the Proxy Statement and your proxy card(s) clarify which
sub-proposals apply to your Fund(s).
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Proposal Shareholders Solicited
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1. Election of Trustees of each Each Trust to vote separately.
Trust
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2. Ratification of the Selection Each Trust to vote separately.
of Independent Auditors
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3. Amendments to certain of the Shareholders of the Huntington Florida
Funds' fundamental investment Tax-Free Money Fund, Huntington Money
policies Market Fund, Huntington Ohio Municipal
Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington
Dividend Capture Fund, Huntington Growth
Fund, Huntington Income Equity Fund,
Huntington International Equity Fund,
Huntington Macro 100 Fund, Huntington
Mid Corp America Fund,
Huntington New Economy Fund, Huntington
Rotating Markets Fund, Huntington Situs
Small Cap Fund, Huntington Intermediate
Government Income Fund, Huntington Fixed
Income Securities Fund, Huntington
Michigan Tax-Free Fund, Huntington
Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/-
Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and
Huntington VA Income Equity
Fund, as applicable.
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4. Elimination of certain of the Shareholders of the Huntington Florida
Funds' fundamental investment Tax-Free Money Fund, Huntington Money
policies Market Fund, Huntington Ohio Municipal
Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington
Growth Fund, Income Equity Fund,
Huntington Intermediate
Government Income Fund, Huntington Fixed
Income Securities Fund, Huntington
Michigan
Tax-Free Fund, Huntington Mortgage
Securities Fund, Huntington Ohio Tax-Free
Fund, Huntington Short/Intermediate Fixed
Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income
Equity Fund, as applicable.
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5. Amending Income Equity Fund's Income Equity Fund and VA Income
and VA Income Equity Fund's Equity Fund to vote separately.
fundamental investment objective
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6. Reorganization of the All Funds of the Huntington Trust to vote
Huntington Trust (together with separately.
the VA Trust) from separate
Massachusetts business trusts to The shareholders of the VA Trust are not
a single Delaware statutory trust required to approve, and therefore will
not vote with respect to, this Proposal.
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Q. How do the Trustees recommend that I vote on these Proposals?
A. The Trustees unanimously recommend that shareholders vote FOR each Proposal
for which they are entitled to vote.
Q. Are there any Proposals that will impact the Funds' investment policies or
limitations?
A. Yes. Although none of the proposed changes is expected currently to
materially impact the day-to-day management of the Funds, it is proposed
that certain of the Funds' investment policies that are "fundamental" (that
is, those that cannot be changed without shareholder approval) be either:
(a) amended to update archaic policies or make them consistent among the
Funds; or (b) eliminated because they are no longer required to be
fundamental. If these Proposals are approved by shareholders, the Funds'
Board of Trustees will have more flexibility to respond to future
developments by changing the Funds' investment policies in a manner
intended to achieve the Funds' investment goals without obtaining
shareholder approval. Shareholders, of course, would be informed if any
changes are made to the Funds' investment policies or strategies if they
would materially affect the way the Fund is managed or would have a
material impact on the risk of their investment. These Proposals are
intended to eliminate the cost and delay of seeking shareholder approval
for changes in investment policies that would not otherwise require
convening a shareholder meeting. Given the limited impact that these
changes are expected to have currently on the day-to-day management of the
Funds, shareholder approval of these Proposals is not expected to increase
the Funds' current overall level of risk.
Q. Why am I being asked to approve amendments to certain of the Funds'
fundamental investment policies?
A. Certain of the Funds' fundamental investment policies were adopted in
response to state laws that are no longer applicable, or to market
conditions that no longer exist, and thus may be overly restrictive.
Approval of the proposed amendments of these fundamental policies will
provide the Funds with greater investment flexibility within the boundaries
imposed by applicable law. They will also result in more uniformity of the
policies among the Funds, and help facilitate Fund management and
compliance. The proposed changes are not expected to have any immediate
effect on the manner in which the Funds are managed.
Q. Why am I being asked to approve the elimination of certain of the Funds'
fundamental investment policies?
A. Several of the Funds' current fundamental investment policies reflect past
regulatory, business or industry conditions, and practices or requirements
that are outdated, unnecessary or potentially burdensome. Approval of the
Proposals to eliminate certain investment policies initially will not
result in any immediate changes to the management of the Funds, but will
provide the Funds with greater flexibility to pursue their investment
goals. Again, these changes will help bring uniformity of investment
policies among the Funds.
Q. Why am I being asked to approve amending the Income Equity Fund's and VA
Income Equity Fund's fundamental investment objective?
A. The Funds' investment objective is to seek to achieve high current income
and moderate appreciation of capital primarily through investment in income
producing equity securities. This investment objective cannot be changed
without shareholder approval. On April 7, 2006, the Trustees unanimously
approved changing the Funds' investment objective read as follows: "The
investment objective is to seek to achieve current income and moderate
appreciation of capital primarily through investment in income producing
equity securities." The Proposal to change the "high income" component of
the objective to "current income" reflects the Advisor's determination
that, because those equity securities which provide the highest dividends
may also carry a disportionately high market risk, the overall return of
the Funds (i.e., the combination of income and capital appreciation) could
be enhanced by eliminating the existing constraint that requires the
Advisor to focus on the highest dividend-paying equity securities. It also
could allow the Advisor to invest in better quality companies than would be
the case if it were required to invest primarily in high dividend-paying
companies.
Q. Why am I being asked to approve the reorganization of the Trusts from
separate Massachusetts business trusts to a single Delaware statutory
trust?
A. There are no legal reasons to maintain the Trusts as separate entities, and
combining the Trusts will eliminate duplication and inconsistencies which
exist in administering the Funds. In addition, Delaware law offers several
advantages to investment companies organized as a Delaware statutory trust
as compared to Massachusetts business trusts. The Delaware statutory trust
allows greater flexibility in an investment company's business operations,
is a more detailed and comprehensive set of statutory regulations, and
offers greater clarity about shareholder and Trustee responsibility and
liability.
Q. When will the Proposals take effect if they are approved?
A. If approved, each of the Proposals will become effective on or about June
23, 2006.
Q. How do I vote my shares?
A. You may vote your shares (i) in person, by attending the Special Meeting;
(ii) by mail; (iii) by calling toll-free 1-800-___-____; or (iv) online
through the website at www.proxyweb.com. To vote by mail, sign, date and
send us the enclosed proxy in the envelope provided.
Proxy cards that are properly signed, dated and received at or prior to the
Special Meeting will be voted as specified. If you specify a vote for any
of the Proposals 1 through 6, your proxy will be voted as you indicate. If
you simply sign, date and return the proxy card, but do not specify a vote
for any of the Proposals 1 through 6, your shares will be voted by the
proxies as follows:
o IN FAVOR of the nominees for the Board of Trustees (Proposal 1);
o IN FAVOR of ratifying the selection of Ernst & Young LLP as independent
auditors (Proposal 2);
o IN FAVOR of amending the fundamental investment policies that apply to your
Fund(s) (Proposals 3(a)-3(i));
o IN FAVOR of eliminating certain of the fundamental investment policies that
apply to your Fund(s) (Proposals 4(a)-4(g));
o IN FAVOR of amending Income Equity Fund's and VA Income Equity Fund's
fundamental investment objective (Proposal 5); and
o IN FAVOR of the reorganization of the Trusts from Massachusetts business
trusts to a single Delaware statutory trust (Proposal 6).
Q. If I send my proxy in now as requested, can I change my vote later?
A. You may revoke your proxy at any time before it is voted by: (1) sending to
the Secretary of the Trusts a written revocation or a later-dated proxy
that is at or prior to the Special Meeting, or (2) attending the Special
Meeting and voting in person. Even if you plan to attend the Special
Meeting, we ask that you return the enclosed proxy. This will help us
ensure that an adequate number of shares are present for the Special
Meeting to be held.
THE PROPOSALS
PROPOSAL 1: ELECTION OF CARL A. NELSON, TADD C. SEITZ, MARK D. SHARY and THOMAS
J. WESTERFIELD AS TRUSTEES OF EACH TRUST
Who are the current Trustees, and who is standing for election as a Trustee?
The Board of Trustees of each Trust currently consists of four (4) Trustees:
David S. Schoedinger, John M. Shary, Thomas J. Westerfield and William R. Wise.
Except for Mr. Thomas J. Westerfield, each of the Trustees currently serving on
the Board was previously elected as Trustees by shareholders of the Trusts and
is not an "interested person" as defined under the Investment Company Act of
1940, as amended, (the "1940 Act") (hereafter referred to as an "Independent
Trustee"). Please see "Who are the Incumbent Trustees of the Trusts?" and "Who
are the Nominees/Trustees Standing for Election," in this Proxy Statement for
biographical information about the current Trustees and Carl A. Nelson, Tadd C.
Seitz, Mark D. Shary and Thomas J. Westerfield, who are standing for shareholder
election as Trustees.
At the January 2006 Nominating Committee meetings of the Trusts, the Independent
Trustees nominated Carl A. Nelson, Tadd C. Seitz and Mark D. Shary to serve as
Independent Trustees of the Trusts, effective the date of their election by
shareholders of the Trusts. The Board proposed adding three Independent Trustee
positions in anticipation of, and to allow for a transition period before, the
mandatory retirement of Messrs. John M. Shary and William R. Wise in April 2007.
Thomas J. Westerfield was elected to serve as a Trustee at the January 2001
Board meeting by the Trustees then in office, but has not been elected by
shareholders. Under Section 16(a) of the 1940 Act, the Board may not elect new
Trustees in the absence of shareholder approval unless, after giving effect to
the election, at least two-thirds of the Trustees then in office shall have been
elected by shareholders. In order to give the Board the ability to add a limited
number of new Trustees in the future without the added expense of holding
another shareholder meeting, it is proposed that Thomas J. Westerfield be
elected by shareholders at the same time shareholders approve the addition of
Carl A. Nelson, Tadd C. Seitz and Mark D. Shary.
The role of the Trustees is to oversee the operations of the Funds. The Board is
responsible for managing the Trusts' business affairs and for exercising all of
the Trusts' powers except those reserved to shareholders. The Trustees seek to
make certain that the Trusts are operated for the benefit of shareholders. The
Trustees review the Funds' performance, and select and oversee the services
provided to the Funds by Huntington Asset Advisors, Inc., the Funds' investment
advisor (the "Advisor"), as well as Laffer Investments, Inc., sub-advisor to the
Macro 100 Fund and VA Macro 100 Fund, (the "Sub-Advisor"), and the Trusts' other
service providers.
Carl A. Nelson, Tadd C. Seitz and Mark D. Shary are currently eligible and each
has consented to serve as a Trustee of the Trusts if elected by shareholders.
The Board has no reason to believe that Messrs. Nelson, Seitz or M. Shary will
become unavailable for election as Trustee. If elected by shareholders, Messrs.
Nelson, Seitz and M. Shary, like the other Trustees, will each hold office
without limit in time until death, resignation, retirement (which is mandatory
at age 72) or removal, or until the next meeting of shareholders to elect
successor Trustees and the election and qualification of his successor. The
election of Messrs. Nelson, Seitz, M. Shary and Westerfield as Trustees of the
Huntington Trust and the VA Trust, respectively, requires a plurality vote of
the shares of the Huntington Trust and the VA Trust, respectively, represented
in person or by proxy at the Special Meeting and entitled to vote.
If Messrs. Nelson, Seitz, M. Shary or Westerfield shall by reason of death or
for any other reason become unavailable as a candidate at the Special Meeting,
votes pursuant to the enclosed proxy may be cast for a substitute candidate by
the persons named on the proxy card, or their substitutes, present and acting at
the Special Meeting. The selection of any substitute candidate for election as a
Trustee will be made by the Nominating Committee and approved by a majority of
the Trustees who are Independent Trustees.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE TO ELECT AS TRUSTEES THE NOMINEES FOR ELECTION TO THE BOARD
OF TRUSTEES OF THE TRUSTS AS DESCRIBED IN THIS PROPOSAL 1
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PROPOSAL 2: APPROVAL OF RATIFICATION OF THE SELECTION OF ERNST & YOUNG LLP AS
THE INDEPENDENT AUDITORS FOR THE TRUSTS
The 1940 Act requires that the Trusts' independent auditors be selected by the
Board, including a majority of the Independent Trustees, and submitted for
ratification or rejection at the next succeeding meeting of shareholders. The
Board of the Trusts, including a majority of the Independent Trustees,
unanimously approved the selection of Ernst & Young LLP (the "Auditors") for the
current fiscal year at an Audit Committee meeting held on February 15, 2006.
On March 2, 2004, the Board of Trustees of the Trusts, upon the recommendation
of the Trusts' Audit Committee, decided to engage Ernst & Young LLP as
independent auditors for the Funds' fiscal year ending December 31, 2004. For
the prior fiscal years ended December 31, 2002 and 2003, KPMG LLP ("KPMG")
audited the funds' financial statements. KPMG's audit reports contained no
adverse opinion or disclaimer of opinion; nor were its reports qualified or
modified as to uncertainty, audit scope, or accounting principles. Further,
there were no disagreements between the Trusts and KPMG on accounting principles
or practices, financial statement disclosure or audit scope or procedure, which
if not resolved to the satisfaction of KPMG would have caused it to make
reference to the disagreement in its report.
The selection by the Board of the Auditors as independent auditors for the
current fiscal year is hereby submitted to the shareholders for ratification.
Apart from their fees as independent auditors, neither the Auditors nor any of
their partners have a direct, or material indirect, financial interest in the
Trusts or their Advisor. The Auditors are a major international independent
accounting firm. The Board believes that the continued employment of the
services of the Auditors for the current fiscal year would be in the Trusts'
best interests.
Representatives of the Auditors are not expected to be present at the Special
Meeting. If a representative is present, he or she will have the opportunity to
make a statement and would be available to respond to appropriate questions. The
ratification of the selection of the Auditors for the Huntington Trust and the
VA Trust, respectively, will require the vote of "a majority of the outstanding
voting securities" of the Huntington Trust and the VA Trust, respectively, as
defined in the 1940 Act. (See "Further Information About Voting and the Special
Meeting" below.)
Audit Fees. The aggregate fees billed by Ernst & Young LLP in connection with
the annual audit of each Trust's financial statements and for services normally
provided by the independent auditors in connection with statutory and regulatory
filings or engagements for the last two fiscal years ended December 2005 and
2004 were $294,039 and $280,498, respectively, for the Huntington Trust and
$9,961 and $9,502, respectively, for the VA Trust.
Audit-Related Fees. There were no fees billed by Ernst & Young LLP for assurance
and other services related to the performance of the audit of each Trust's
financial statements and not reported above under "Audit Fees" for the last two
fiscal years ended December 31, 2005 and 2004.
Tax-Fees. The aggregate fees billed by Ernst & Young LLP for tax compliance, tax
advice and tax planning (together "tax-related services") provided to the Trusts
for the last two fiscal years ended December 31, 2005 and 2004 were $58,750 and
$55,861, respectively, for the Huntington Trust and $2,250 and $2,139,
respectively, for the VA Trust. These tax-related services include services
related to tax compliance, tax advice and tax planning. These tax-fees were
approved by the Audit Committee of the Trusts.
All Other Fees. There were no fees billed by Ernst & Young LLP for products and
services other than those set forth above for the Trusts' last two fiscal years
ended December 31, 2005 and 2004. There were no fees for products and services
other than those set forth above billed by Ernst & Young LLP that relate
directly to the operations or financial reporting of the Trusts.
Aggregate Non-Audit Fees. The aggregate non-audit fees billed by Ernst & young
LLP for services rendered to the Trusts and the Advisor and any entity
controlling, controlled by or under common control with the Advisor that
provides ongoing services to the Trusts for their last two fiscal years ended
December 31, 2005 and 2004 were $68,275 and $72,941, respectively, for the
Huntington Trust and $11,775 and $19,219, respectively, for the VA Trust. These
amounts include the tax fees described above for the Trusts and tax fees for
Huntington National Bank's trust department related to settlement funds where
Huntington National Bank is executor.
The Audit Committee has considered whether, and determined that, the provisions
of the non-audit services that were rendered to the Trusts' Advisor, and any
entity controlling, controlled by, or under common control with the Advisor that
provides ongoing services to the Trusts that were not pre-approved are
compatible with maintaining the Auditor's independence. There were no
audit-related fees, tax service fees or other service fees with respect to the
Advisor, and any entity controlling, controlled by, or under common control with
the Advisor subject to pre-approval for the fiscal years ended December 31, 2005
and 2004.
Please see the discussion under the title "Audit Committee" on page 34 for a
discussion of the Audit Committee's pre-approval policies and procedures.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE TO RATIFY THE SELECTION OF INDEPENDENT AUDITORS
AS DESCRIBED IN THIS PROPOSAL 2
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INTRODUCTION TO PROPOSALS 3 AND 4: APPROVAL OF CHANGES TO CERTAIN FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
Why are the Funds amending or eliminating certain of their fundamental
investment policies?
The 1940 Act, which was adopted to protect mutual fund shareholders, requires
investment companies such as the Funds to adopt certain specific investment
policies or restrictions that can be changed only by shareholder vote. An
investment company may also elect to voluntarily designate other policies or
restrictions that may be changed only by shareholder vote. Both types of
policies and restrictions are referred to as "fundamental policies." These
policies and restrictions limit the investment activities of the Advisor, as
well as the Sub-Advisor.
After the Huntington Trust was formed in 1987 (the VA Trust was formed in 1999),
legal and regulatory requirements applicable to mutual funds changed. Among
other developments, certain restrictions imposed by state laws and regulations
were preempted by the National Securities Markets Improvement Act of 1996
("NSMIA"), and no longer apply. As a result of prior state regulatory
restrictions, the Funds are subject to fundamental policies that are no longer
required to be fundamental, and to other policies that are no longer required at
all. In addition, because the Funds have been formed at different times, they
are subject to differing fundamental investment policies regarding the same
types of investment activities. Accordingly, the Trustees have authorized the
submission to the Funds' shareholders for their approval, and recommend that
shareholders approve, the amendment or elimination of certain of the Funds'
fundamental investment policies.
The proposed amendments would:
(i) simplify, modernize and standardize the fundamental policies that are
required to be stated under the 1940 Act; and
(ii) eliminate those fundamental policies that are no longer required by the
securities laws of the various states.
By reducing the number of policies that can be changed only by shareholder vote,
and by standardizing and streamlining those investment policies, the Trustees
believe that the Funds would be able to minimize the costs and delays associated
with holding future shareholder meetings to revise fundamental policies that
become outdated or inappropriate. The Trustees also believe that the Advisor's
(and the Sub-Advisor's) ability to manage the Funds' assets in a changing
investment environment will be enhanced and that investment management
opportunities will be increased by these changes.
The recommended changes are specified below. Each of Proposals 3(a) through 3(i)
and Proposals 4(a) through 4(g), will be voted on separately by shareholders of
each Fund that is affected by the proposed changes, and the approval of each
Proposal by each Fund will require the approval of "a majority of the
outstanding voting securities" of each such Fund as defined in the 1940 Act.
(See "Further Information About Voting and the Special Meeting" below.)
Description of Proposed Changes
The proposed standardized fundamental investment policies (discussed in
Proposals 3(a) through 3(i)) cover those areas for which the 1940 Act and the
rules and regulations of the Securities and Exchange Commission (the "SEC")
related thereto (the "Regulatory Standard") requires the Funds to have a
fundamental restriction. As modified, the proposed policies will satisfy current
regulatory requirements and are written to provide flexibility to respond to
future legal, regulatory, market or technical changes. The proposed standardized
changes will not affect the Funds' investment objectives. Although the proposed
changes in fundamental policies will allow the Funds greater flexibility to
respond to future investment opportunities, the Advisor has represented to the
Board of Trustees that the Advisor does not anticipate that the changes,
individually or in the aggregate, will result at this time in a material change
(i.e., increase) in the level of investment risk associated with investments in
the Funds. Based on the Advisor's representations to the Board of Trustees, it
is not anticipated that the proposed changes in fundamental investment policies,
individually or in the aggregate, will, at this time, change materially the
manner in which the Funds are currently managed. Shareholders, of course, would
be informed if any changes are made to the Funds' investment policies or
strategies if they would materially affect the way the Fund is managed or would
have a material impact on the risk of their investment.
The following is the text and a summary description of the proposed changes to
the Funds' fundamental policies and restrictions. Shareholders should note that
certain of the fundamental investment policies that are treated separately below
currently are combined within a single existing fundamental investment policy.
Presently, if a Fund adheres to a fundamental policy percentage restriction at
the time of an investment or transaction, a later increase or decrease in the
percentage resulting from a change in the value of the Fund's portfolio
securities or the amount of its total assets does not create a violation of the
policy except for limitations on borrowing. This policy will continue to apply
for any of the proposed changes that are approved.
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PROPOSAL 3: APPROVAL OF AMENDMENTS TO CERTAIN OF THE FUNDS' FUNDAMENTAL
INVESTMENT POLICIES
PROPOSAL 3(a): TO (1) AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
DIVERSIFICATION (Money Market Fund, U.S. Treasury Money Market Fund, Dividend
Capture Fund, Growth Fund, Income Equity Fund, International Equity Fund, Macro
100 Fund, Mid Corp America Fund, New Economy Fund, Rotating Markets Fund, Situs
Small Cap Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Mortgage Securities Fund, Short/Intermediate Fixed Income Securities Fund,
VA Growth Fund and VA Income Equity Fund (collectively, the "Diversified
Funds"); AND (2) ELIMINATE THE FUNDAMENTAL POLICIES REGARDING DIVERSIFICATION
(Florida Tax-Free Money Fund, Ohio Municipal Money Market Fund, Michigan
Tax-Free Fund and Ohio Tax-Free Fund (collectively, the "Tax-Exempt Funds")):
The Tax-Exempt Funds, Money Market Fund, U.S. Treasury Money Market Fund, Growth
Fund, Income Equity Fund, Intermediate Government Income Fund, Fixed Income
Securities Fund, Mortgage Securities Fund and Short/Intermediate Fixed Income
Securities Fund are presently subject to certain fundamental investment policies
relating to diversification of their investments that provide that each such
Fund may not:
Purchase more than 10% of the voting securities of any issuer.
In addition, except for the Tax-Exempt Funds, each of the foregoing Funds may
not:
Invest more than 5% of the value of its total assets in the securities
of any one issuer (this limitation does not apply to securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities or to repurchase agreements secured by such
obligations).
The VA Growth Fund and VA Income Equity Fund are presently subject to
fundamental investment policies relating to diversification of their investments
that provide that each such Fund may not:
Purchase more than 10% of the voting securities of any issuer.
Invest more than 5% of the value of its total assets in the securities
of any one issuer (this limitation does not apply to securities issued
or guaranteed by the U.S. government or any of its agencies or
instrumentalities or to repurchase agreements secured by such
obligations).
The Dividend Capture Fund, International Equity Fund, Macro 100 Fund, Mid Corp
America Fund, New Economy Fund, Rotating Markets Fund and Situs Small Cap Fund
are presently subject to a fundamental investment policy which merely states
that each such Fund is a "diversified fund" (which would incorporate the 1940
Act definition of "diversification" set forth below).
Under the 1940 Act, the Funds' policies relating to the diversification of their
investments must be fundamental. The 1940 Act prohibits a "diversified" mutual
fund from purchasing securities of any one issuer if, at the time of purchase,
more than 5% of the fund's total assets would be invested in securities of that
issuer or the fund would own or hold more than 10% of the outstanding voting
securities of that issuer. However, up to 25% of the fund's total assets may be
invested without regard to these limitations. In addition, the 5% and 10%
limitations do not apply to securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, or to securities issued by other
open-end investment companies.
"Non-diversified" mutual funds are not subject to the 1940 Act prohibitions, but
must meet the diversification requirements of the Internal Revenue Code, which
prohibits the purchase of securities of any issuer if, at the end of each fiscal
quarter, more than 5% of the Fund's total assets would be invested in securities
of that issuer (except that up to 50% of the Fund's total assets (taken at
current value) may be invested without regard to such 5% limitation), provided
that no more than 25% of its total assets (taken at current value) would be
invested in the securities of a single issuer. There is no limit to the
percentage of assets that may be invested in securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities.
In order to afford the Advisor maximum flexibility in managing the assets of the
Funds subject to this Proposal, and to create uniform diversification policies
among the Funds, the Board proposes (i) with respect to the Tax-Exempt Funds
(which are classified as "non-diversified" investment companies), to eliminate
the 10% issuer diversification policy because it is inconsistent with such
Funds' status as "non-diversified" investment companies, and (ii) with respect
to the Diversified Funds, to amend the diversification policies to make them
consistent with the definition of a "diversified investment company" under the
1940 Act, the SEC general definition of diversification, and the SEC staff's
interpretations regarding the classification of certain portfolio investments
for these purposes under the 1940 Act ("Regulatory Diversification Standard").
Upon approval of such Funds' shareholders, the fundamental investment policies
of the Diversified Funds relating to diversification will be amended to provide
that each such Fund may:
Purchase securities of any issuer only when consistent with the
maintenance of its status as a diversified company under the 1940 Act,
or the rules or regulations thereunder, as such statute, rules or
regulations may be amended from time to time.
Upon approval of the shareholders of the Tax-Exempt Funds, the fundamental
investment policies of such Funds relating to the 10% issuer diversification
will be deleted.
What effect will amending the current fundamental diversification policies
described above have on the Funds?
With respect to the Diversified Funds, amending the diversification policies as
described above would make the policies continuously co-extensive over time with
the definition of a "diversified investment company." This would allow the
Advisor to manage the Funds, from a diversification standpoint, in as broad a
manner as is permissible under the then-current Regulatory Diversification
Standard. Under the current Regulatory Diversification Standard, the Diversified
Funds would be able to exclude holdings in securities in other investment
companies from the 5% investment limitation, thus enhancing the Diversified
Funds' ability to use money market funds for cash management purposes. The
proposed investment policies also clarify that the 5% limitation does not apply
to 25% of the Diversified Funds' total assets, and thus would allow the
Diversified Funds to invest a greater portion of their assets in a smaller
number of issuers.
With respect to the Tax-Exempt Funds, the proposed deletion of the current 10%
issuer diversification policies as described above would cause these Funds to be
subject to diversification requirements of the Internal Revenue Code, thereby
enabling such Funds to invest, with respect to 50% of their total assets, up to
25% in a single issuer (unless the issuer was a government security or a
registered investment company, where the limitations would not apply). Because
of the limited number of tax-exempt issuers in a single state, it would allow
these Funds greater flexibility to invest more of their assets in a single
issuer.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(a)
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PROPOSAL 3(b): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
CONCENTRATION OF INVESTMENTS (Florida Tax-Free Money Fund, Money Market Fund,
Ohio Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund and
Short/Intermediate Fixed Income Securities Fund are presently subject to a
fundamental investment policy relating to the concentration of their investments
that provides that each such Fund may not:
Invest 25% or more of the value of its total assets (i) in securities of
companies primarily engaged in any one industry (other than the U.S.
government, its agencies and instrumentalities and securities of other
investment companies), and (ii) with respect to the Tax-Exempt Funds, in
municipal obligations of one issuer or which are related in such a way
that, in the opinion of the Advisor, an economic, business or political
development other than state-wide, national or international
development) affecting one such municipal obligation would also affect
others in a similar manner. Such concentration may occur as a result of
changes in the market value of portfolio securities, but such
concentration may not result from investment.
The VA Growth Fund and VA Income Equity Fund are presently subject to a
fundamental investment policy relating to the concentration of their
investments that provides that each such Fund may not:
Invest 25% or more of the value of its total assets in securities of
companies primarily engaged in any one industry (other than the U.S.
government, its agencies and instrumentalities), such concentration may
occur as a result of changes in the market value of portfolio
securities, but such concentration may not result from investment.
Under the 1940 Act, each Fund's policy relating to the concentration of its
investments in securities of companies in a single industry must be fundamental.
Under the federal securities laws, an investment company "concentrates" its
investments if it invests more than 25% of its "net" assets (exclusive of
certain items such as cash, U.S. government securities, securities of other
investment companies, and tax-exempt securities) in a particular industry or
group of industries. An investment company is not permitted to concentrate its
investments in a particular industry unless it has adopted a fundamental policy
authorizing it to do so.
Upon the approval of shareholders of the Funds subject to this Proposal, each
Fund's fundamental investment policy regarding concentration will be amended to
provide that each such Fund may not:
Concentrate investments in a particular industry or group of industries
as concentration is defined under the 1940 Act, or the rules or
regulations thereunder, as such statute, rules or regulations may be
amended from time to time.
In addition, the Trustees have approved certain related non-fundamental
investment policies for all Funds of the Huntington Trust and (except for the
policy described in (d) below) for all Funds of the VA Trust, which will be
adopted if the new fundamental investment policy is approved by shareholders.
These non-fundamental policies will provide that, in applying the concentration
restriction: (a) utility companies will be divided according to their services
(for example, gas, gas transmission, electric and telephone will each be
considered a separate industry); (b) financial service companies will be
classified according to the end users of their services (for example, automobile
finance, bank finance and diversified finance will each be considered a separate
industry); (c) asset-backed securities will be classified according to the
underlying assets securing such securities; and (d) with respect to the
Tax-Exempt Funds, municipal securities will not be deemed to constitute an
industry. Also, to conform to the current view of the SEC that only domestic
bank instruments may be excluded from industry concentration limitations, as a
matter of non-fundamental policy, a Fund will not exclude foreign bank
instruments from industry concentration limits as long as the policy of the SEC
remains in effect. Moreover, investments in bank instruments, and investments in
certain industrial development bonds funded by activities in a single industry,
will be deemed to constitute investment in an industry, except when held for
temporary defensive purposes. The investment of more than 25% of the value of
the Fund's total assets in any one industry will constitute "concentration."
What effect will amending the current policies regarding industry concentration
have on the Funds?
The proposed amended fundamental policy would significantly simplify the Funds'
current concentration policies. Further, the new policy would provide the VA
Growth Fund and VA Income Equity Fund with additional flexibility by removing
the 25% limitation on investing in securities of other investment companies.
Also, by making the policy continuously co-extensive with the then-current
regulatory definition of "concentration," the Advisor would at all times be able
to manage the Funds, from a concentration standpoint, in as broad a manner as is
regulatorily permissible.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(b)
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PROPOSAL 3(c): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING ISSUING
SENIOR SECURITIES (Florida Tax-Free Money Fund, Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to fundamental investment policies that provide that each such
Fund may not issue senior securities.
Under the 1940 Act, the Funds must have a fundamental investment policy
describing their ability to issue senior securities. A "senior security" is an
obligation of an investment company, with respect to its earnings or assets,
that takes precedence over the claims of the company's shareholders with respect
to the same earnings or assets. The 1940 Act limits the ability of an open-end
investment company to issue senior securities in order to limit the use of
leverage. In general, an investment company uses leverage when it borrows money
to enter into securities transactions, or acquires an asset without being
required to make payment until a later time.
SEC staff interpretations allow an investment company to engage in a number of
types of transactions that might otherwise be considered to create "senior
securities" or "leverage," provided the investment company meets certain
collateral requirements designed to protect shareholders. For example, some
transactions that may create senior security concerns include short sales,
certain options and futures transactions, reverse repurchase agreements and
securities transactions that obligate the investment company to pay money at a
future date (such as when-issued, forward commitment or delayed delivery
transactions). Each of these transactions may provide the Fund with additional
investment options to help hedge against market changes, manage their cash flow
and generate additional investment return with a measured amount of risk.
According to regulatory interpretations, when engaging in such transactions, an
investment company must mark on its or its custodian bank's books, or set aside
in a segregated account with its custodian bank, cash or other liquid securities
to meet the SEC staff's collateralization requirements. This procedure limits an
investment company's ability to engage in these types of transactions and
thereby limits the investment company's exposure to risks associated with these
transactions.
The proposed investment policy would allow the Funds to issue senior securities
(i.e., engage in the types of transactions described above if otherwise
consistent with their investment objectives and strategies) within the limits
established under the 1940 Act or under any rule or regulation of the SEC, or
any SEC staff interpretation thereof.
However, please note that the Funds can engage in limited borrowings (see
Proposal 3(e)).
Upon shareholder approval, the fundamental investment policy governing issuing
senior securities by the Funds subject to this Proposal will state that each
such Fund may:
Issue senior securities to the extent permitted by the 1940 Act, or the
rules or regulations thereunder, as such statute, rules or regulations may
be amended from time to time.
What effect will amending the fundamental investment policies regarding issuing
senior securities have on the Funds?
The proposed senior securities policy would clarify the Funds' ability to engage
in the permissible types of transactions outlined above, which, while appearing
to raise senior security concerns, have been interpreted as not constituting the
issuance of senior securities under the federal securities laws. It should be
noted, though, that engaging in those transactions may subject a Fund to
additional costs and risks and that the Advisor will carefully consider whether
the potential benefits of these transactions outweigh such costs and risks.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(c)
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PROPOSAL 3(d): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING LENDING
(Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund and
Short/Intermediate Fixed Income Securities Fund are presently subject to a
fundamental investment policy relating to lending that provides that each such
Fund may not:
Loan more than 20% of the Funds' portfolio securities to brokers,
dealers or other financial organizations. All such loans will be
collateralized by cash or U.S. government obligations that are
maintained at all times in an amount equal to at least 102% of the
current value of the loaned securities.
Make loans to any person or firm except as provided below; provided,
however, that the making of a loan shall not be construed to include (i)
the acquisition for investment of bonds, debentures, notes or other
evidences of indebtedness of any corporation or government which are
publicly distributed or of a type customarily purchased by institutional
investors (which are debt securities, generally rated not less than A by
Moody's or S&P, or the equivalent, privately issued and purchased by
such entities as banks, insurance companies and investment companies),
or (ii) the entry into repurchase agreements. However, each of the Funds
may lend its portfolio securities to brokers, dealers or other
institutional investors deemed by the Advisor, the Trust's manager,
pursuant to criteria adopted by the Trustees, to be creditworthy if, as
a result thereof, the aggregate value of all securities loaned does not
exceed 20% (5% in the case of the Michigan Tax-Free Fund) of the value
of total assets and the loan is collateralized by cash or U.S.
government obligations that are maintained at all times in an amount
equal to at least 102% of the current market value of the loaned
securities. Such transactions will comply with all applicable laws and
regulations.
The VA Growth Fund and VA Income Equity Fund are presently subject to a
fundamental investment policy relating to lending that provides that each such
Fund may not:
Loan more than 20% of the Funds' portfolio securities to brokers,
dealers or other financial organizations. All such loans will be
collateralized by cash or U.S. government obligations that are
maintained at all times in an amount equal to at least 102% of the
current value of the loaned securities.
Make loans to any person or firm except as provided below; provided,
however, that the making of a loan shall not be construed to include (i)
the acquisition for investment of bonds, debentures, notes or other
evidences of indebtedness of any corporation or government which are
publicly distributed or of a type customarily purchased by institutional
investors (which are debt securities, generally rated not less than A by
Moody's or S&P, or the equivalent, privately issued and purchased by
such entities as banks, insurance companies and investment companies),
or (ii) the entry into repurchase agreements. However, each of the Funds
may lend its portfolio securities to brokers, dealers or other
institutional investors deemed by the Advisor, the Trust's manager,
pursuant to criteria adopted by the Trustees, to be creditworthy if, as
a result thereof, the aggregate value of all securities loaned does not
exceed 20% of the value of total assets and the loan is collateralized
by cash or U.S. government obligations that are maintained at all times
in an amount equal to at least 102% of the current market value of the
loaned securities. Such transactions will comply with all applicable
laws and regulations.
Under the 1940 Act, an investment company's policy regarding lending must be
fundamental. Certain investment techniques could be, under certain
circumstances, considered to be loans. For example, if the Funds invest in debt
securities, such investments might be considered to be a loan from the Funds to
the issuer of the debt securities. In order to ensure that a Fund may invest in
certain debt securities or repurchase agreements, which also could technically
be characterized as the making of loans, the Funds' current fundamental policies
specifically carve out such activities from their prohibitions.
The proposed investment policy would allow the Funds subject to this Proposal to
lend within the limits established under the 1940 Act or under any rule or
regulation of the SEC, or any SEC staff interpretation thereof.
Upon shareholder approval, the fundamental investment policy governing lending
by the Funds subject to this Proposal will state that each such Fund may:
Lend or borrow money to the extent permitted by the 1940 Act, or the
rules or regulations thereunder, as such statute, rules or regulations
may be amended from time to time.
The fundamental policies relating to lending will be combined with such Funds'
fundamental policies relating to borrowing money (See Proposal 3(e) below).
What effect will amending the current lending policies have on the Funds?
The proposed amended lending policy would expand the current policy (which
enumerates specific exceptions to the general prohibition against lending) by
defining permissible lending of money and other assets to encompass any such
activity which is, at the time in question, permitted by the then-current
Regulatory Standard. This would provide the Funds with greater lending
flexibility. In the current instance, the Funds would now be able to lend up to
33-1/3% (rather than the 20% at present and 5% in the case of the Michigan
Tax-Free Fund) of their portfolio securities to brokers under its securities
lending program which provides the Funds with additional income they otherwise
would not have. It is not expected that the adoption of the proposed policy
would pose any significant additional risks as the proposed policy is not
expected to affect the way the Funds are currently managed.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(d)
- --------------------------------------------------------------------------------
PROPOSAL 3(e): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING BORROWING
MONEY (Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money
Market Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, and
Short/Intermediate Fixed Income Securities Fund are presently subject to a
fundamental investment policy relating to borrowing money that provides that
each such Fund may not:
Borrow in excess of 5% of its total assets (borrowings are permitted
only as a temporary measure for extraordinary or emergency purposes) or
pledge (mortgage) its assets as security for an indebtedness, except
that each of the Michigan Tax-Free Fund, Intermediate Government Income
Fund and Florida Tax-Free Money Fund may borrow from banks up to 10% of
the current value of its total net assets for temporary or defensive
purposes and those borrowings may be secured by the pledge of not more
than 15% (10% for the Florida Tax-Free Money Fund) of the current value
of its total net assets (but investments may not be purchased by these
Funds while any such borrowings are outstanding).
The VA Growth Fund and VA Income Equity Fund are presently subject to a
fundamental investment policy relating to borrowing money that provides that
each such Fund may not:
Borrow in excess of 5% of its total assets (borrowings are permitted
only as a temporary measure for extraordinary or emergency purposes) or
pledge (mortgage) its assets as security for an indebtedness.
The 1940 Act requires investment companies to impose certain limitations on
borrowing activities. The limitations on borrowing are generally designed to
protect shareholders and their investments by restricting an investment
company's ability to subject its assets to the claims of creditors who might
have a claim to the company's assets that would take precedence over the claims
of shareholders. An investment company's borrowing policy must be fundamental.
Under the 1940 Act, an investment company may borrow from banks up to one-third
of its total assets (including the amount borrowed). Within this limitation, an
investment company may borrow up to 5% of its total assets for temporary
purposes from any person. Investment companies typically borrow money to meet
redemptions in order to avoid forced, unplanned sales of portfolio securities.
This technique allows an investment company greater flexibility to buy and sell
portfolio securities for investment or tax considerations, rather than for cash
flow considerations.
The proposed investment policies would allow the Funds subject to this Proposal
to borrow money within the limits established under the 1940 Act or under any
rule or regulation of the SEC, or any SEC staff interpretation thereof.
Upon shareholder approval, the fundamental investment policy governing borrowing
money by the Funds subject to this Proposal will state that each such Fund may:
Lend or borrow money to the extent permitted by the 1940 Act, or the
rules or regulations thereunder, as such statute, rules or regulations
may be amended from time to time.
The fundamental policies of the Funds subject to this Proposal relating to
borrowing money will be combined with such Funds' fundamental policies relating
to lending (See Proposal 3(d) above).
What effect will amending the current borrowing policies have on the Funds?
Currently, a Fund may only borrow up to 5% (or, in some cases 10%) of its total
(or net) assets, and only for temporary or emergency purposes. The proposed
policy would clarify that the Funds may borrow: (1) from banks to the extent
permitted by the 1940 Act or any exemptions therefrom (currently 33 1/3% of
current assets), and (2) from any other person for temporary or emergency
purposes. In addition, under the proposed policy, the Funds would be permitted
to make additional investments, even if borrowings exceed 5% of total assets
(the current policy prohibiting such investments is not required by the 1940 Act
and originated from informal regulatory positions).
Since the proposed borrowing policies would provide the Funds with greater
borrowing flexibility, the Funds may be subject to additional costs, as well as
the risks inherent to borrowing, such as reduced total returns. However, the
Advisor will carefully consider whether the risks of borrowing are worth the
benefits it seeks to achieve.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(e)
- --------------------------------------------------------------------------------
PROPOSAL 3(f): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTMENTS IN COMMODITIES (Florida Tax-Free Money Fund, Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to investments in
commodities that provides that each such Fund may not:
Purchase or sell commodities or commodities contracts, or interests in oil,
gas, or other mineral exploration or development programs provided,
however, that the Funds may invest in futures contracts for bona fide
hedging transactions, as defined in the General Regulations under the
Commodity Exchange Act, or for other transactions permitted to entities
exempt from the definition of the term commodity pool operator, as long as,
immediately after entering a futures contract no more than 5% of the fair
market value of the Funds' assets would be committed to initial margins.
Under the 1940 Act, the Funds' policies concerning investments in
commodities must be fundamental. Historically, the most common types of
commodities have been physical commodities such as wheat, cotton, rice and
corn. However, under federal law, futures contracts are considered to be
commodities and, therefore, financial futures contracts, such as futures
contracts related to currencies, stock indices or interest rates are
considered to be commodities. Financial futures contracts enable an
investment company to buy (or sell) the right to receive the cash
difference between the contract price for an underlying asset or index and
the future market price, if the market price is higher. If the future price
is lower, the investment company is obligated to pay (or, if the investment
company sold the contract, the investment company receives) the amount of
the decrease. Investment companies often desire to invest in financial
futures contracts and options related to such contracts for hedging or
other investment reasons (such as generating additional income or return).
In addition, the General Regulations under the Commodity Exchange Act have
been repealed.
Upon shareholder approval, the fundamental investment policy governing
investments in commodities by the Funds subject to this Proposal will
state that each such Fund may:
Purchase or sell commodities, commodities contracts, futures
contracts, or real estate to the extent permitted by the 1940 Act, or
the rules or regulations thereunder, as such statute, rules or
regulations may be amended from time to time.
The fundamental policies of the Funds subject to this Proposal relating to
investments in commodities will be combined with such Funds' fundamental
policies relating to investments in real estate (See Proposal 3(g) below).
What effect will amending the commodities policies have on the Funds?
The proposed policy would afford each Fund greater flexibility to invest in
financial futures contracts and related options. For example, as proposed, the
policy would permit investments in financial futures instruments for either
investment or hedging purposes to the full extent permitted by the current
Regulatory Standard, while the current policy limits investments in futures for
investment purposes to instances where no more than 5% of the fair market value
of the Fund's assets would be committed to initial margins. Using financial
futures instruments can involve substantial risks, and would be utilized only if
the Advisor determined that such investments are advisable. Gains or losses on
investments in financial futures instruments depend on the direction of
securities prices, interest rates and other economic factors, and losses from
engaging in these types of transactions are potentially unlimited. At the
present time, the Funds do not intend to engage in these activities beyond what
is disclosed in the Funds' current prospectuses. As a matter of non-fundamental
operating policy, for purposes of the proposed policy, investments in
transactions involving futures contracts and options, forward currency
contracts, swap transactions and other financial contracts that settle by
payment of cash are not deemed to be investments in commodities.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(f)
- --------------------------------------------------------------------------------
PROPOSAL 3(g): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTMENTS IN REAL ESTATE (Florida Tax-Free Money Fund, Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to investing in
real estate that provides that each such Fund may not:
Purchase or sell real estate or real estate mortgage loans; provided,
however, that the Fund may invest in securities secured by real estate or
interests therein or issued by companies which invest in real estate or
interests therein.
Under the 1940 Act, the Funds' policies regarding investing in real estate must
be fundamental. The 1940 Act does not prohibit funds from investing in real
estate, either directly or indirectly. The Funds' current fundamental investment
policy relating to real estate prohibits them from purchasing or selling real
estate or real estate mortgage loans, but allows them to invest in securities
secured by real estate or interests therein or issued by companies which invest
in real estate or interests therein.
Upon shareholder approval, the fundamental investment policy governing investing
in real estate by the Funds subject to this Proposal will state that each such
Fund may:
Purchase or sell commodities, commodities contracts, futures contracts, or
real estate to the extent permitted by the 1940 Act, or the rules or
regulations thereunder, as such statute, rules or regulations may be
amended from time to time.
The fundamental policies of the Funds subject to this Proposal relating to
investments in real estate will be combined with such Funds' fundamental
policies relating to investments in commodities (See Proposal 3(f) above).
What effect will amending the real estate policies have on the Funds?
The proposed fundamental investment policy will provide flexibility to the
Advisor by expanding the current policy (which generally prohibits the Funds
from investing in real estate, subject to certain exceptions) to instead permit
the Funds to invest in any real estate related investment which is, at the time
of investment, permitted by the then-current Regulatory Standard. The Funds do
not, however, presently anticipate changing their current practices relating to
investing in real estate if the new policy is approved by shareholders.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(g)
- --------------------------------------------------------------------------------
PROPOSAL 3(h): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
UNDERWRITING SECURITIES (Florida Tax-Free Money Fund, Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to underwriting
securities that provides that each such Fund may not:
Engage in the business of underwriting securities issued by others or
purchase securities, other than time deposits and restricted securities
(i.e., securities which cannot be sold without registration or an exemption
from registration), subject to legal or contractual restrictions on
disposition.
Under the 1940 Act, each Fund's policy concerning underwriting is required to be
fundamental. Under the federal securities laws, a person or company generally is
considered an underwriter if it participates in the public distribution of
securities of other issuers, usually by purchasing the securities from the
issuer with the intention of re-selling the securities to the public. From time
to time, an investment company may purchase a security for investment purposes
that it later resells or redistributes to institutional investors or others
under circumstances where the Funds could possibly be considered to be an
underwriter under the technical definition of underwriter contained in the
federal securities laws. For example, an investment company often purchases
securities in private placement securities transactions where a resale could
raise a question relating to whether or not the investment company is
technically acting as an underwriter. However, recent SEC interpretations
clarify that re-sales of privately placed securities by institutional investors
do not make the institutional investor an underwriter in these circumstances.
The proposed fundamental investment policy will permit the Funds subject to this
Proposal to underwrite securities, but within the limits established under the
1940 Act or under any rule or regulation of the SEC, or any SEC staff
interpretation thereof.
Upon shareholder approval, the fundamental investment policy governing
underwriting investments by the Funds subject to this Proposal will state that
each such Fund may:
Underwrite securities to the extent permitted by the 1940 Act, or the rules
or regulations thereunder, as such statute, rules or regulations may be
amended from time to time.
What effect will amending the current underwriting policies have on the Funds?
This does not constitute a substantive change in the Funds' policies, but it
would add flexibility by making the amended policy continuously co-extensive
with the definition of "underwriting" under the Regulatory Standard from
time-to-time in effect.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(h)
- --------------------------------------------------------------------------------
PROPOSAL 3(i): TO AMEND THE FUNDAMENTAL INVESTMENT POLICIES REGARDING PLEDGING,
MORTGAGING OR HYPOTHECATING ASSETS (Florida Tax-Free Money Fund, Money Market
Fund, Ohio Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth
Fund, Income Equity Fund, Intermediate Government Income Fund, Fixed Income
Securities Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free
Fund, Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA
Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to pledging,
mortgaging, hypothecating assets which provides that each such Fund may not:
Borrow in excess of 5% of its total assets (borrowings are permitted only
as a temporary measure for extraordinary or emergency purposes) or pledge
(mortgage) its assets as security for an indebtedness.
Upon shareholder approval, the fundamental investment policy governing pledging,
mortgaging and hypothecating assets by the Funds subject to this Proposal will
state that each such Fund may:
Pledge, mortgage or hypothecate any of its assets to the extent permitted
by the 1940 Act, or the rules or regulations thereunder, as such statute,
rules or regulations may be amended from time to time.
What effect will amending the pledging policies have on the Funds?
The Board does not expect this change to have any material effect on the Funds'
operation. However, while the current provision prohibits any pledge of Fund
assets as security for indebtedness, the proposed policy would permit such
activity if permitted by the then-current Regulatory Standard. Currently, the
Regulatory Standard allows the pledge of Fund assets if made in connection with
permissible borrowings or other permissible activities. As noted under Proposal
3(e), it is proposed that the Funds' borrowing policy be amended to permit
borrowings of up to no more than 33 1/3% of Fund assets.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 3(i)
- --------------------------------------------------------------------------------
PROPOSAL 4: ELIMINATION OF CERTAIN OF THE FUNDS'
FUNDAMENTAL INVESTMENT POLICIES
Why are the Boards of the Trusts recommending that certain of the fundamental
policies be eliminated, and what effect will their elimination have on the
Funds?
The Boards of the Trusts have determined that certain of the Funds' current
fundamental investment policies are unnecessary and should be removed. Until
NSMIA was adopted in 1996, the securities laws of several states required every
investment company that intended to sell its shares in those states to adopt
policies governing a variety of operational issues, including investments in
certain securities. As a consequence of those restrictions, the Funds adopted
the investment policies described below and agreed that the policies would be
changed only upon the approval of shareholders. Since these prohibitions are no
longer required under current law, the management of the Funds has recommended,
and the Boards have determined, that these policies should be eliminated. The
elimination of these policies would provide greater flexibility in the
management of the Funds by permitting the Funds to purchase a broader range of
securities provided that the investments are consistent with the Funds'
investment objectives and policies. Also, the Boards believe that the Funds will
be able to eliminate the costs and delays associated with holding future
shareholder meetings to revise policies in the future.
What are the risks in eliminating the policies?
The Boards do not anticipate that eliminating the policies will result in any
additional material risk to the Funds. Although the Funds' current policies, as
drafted, are no longer legally required, the Funds' ability to employ the
investment strategies covered by them will continue to be subject to the
limitations of the 1940 Act, and any exemptive orders granted under the 1940
Act. Further, the Funds have no current intention of changing their present
investment practices as a result of eliminating these policies, except to the
limited extent described below. The Boards believe that eliminating the policies
is in the best interest of the Funds' shareholders, as it will provide the Funds
with increased flexibility to pursue their investment goals.
PROPOSAL 4(a): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTING IN ILLIQUID SECURITIES (Florida Tax-Free Money Fund, Money Market
Fund, Ohio Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth
Fund, Income Equity Fund, Intermediate Government Income Fund, Fixed Income
Securities Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free
Fund, Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA
Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund and
Short/Intermediate Fixed Income Securities Fund are presently subject to a
fundamental investment policy relating to investing in illiquid securities that
provides that each such Fund may not:
For all Funds except Florida Tax-Free Money Fund, invest more than 10% (15%
in the case of the Government Income Fund) of the value of its total assets
in illiquid securities including restricted securities, repurchase
agreements of over seven days' duration and OTC options. The Florida
Tax-Free Money Fund will not invest more than 10% of the value of its net
assets in such illiquid securities. The Money Market Fund will not include
in this limitation commercial paper issued under Section 4(2) of the
Securities Act of 1933 and certain other restricted securities which meet
the criteria for liquidity as established by the Trustees.
The VA Growth Fund and VA Income Equity Fund are presently subject to a
fundamental investment policy relating to investing in illiquid securities that
provides that each such Fund may not:
Invest more than 10% of the value of its total assets in illiquid
securities including restricted securities, repurchase agreements of
over seven days' duration and OTC options.
The SEC takes the position that an investment company should not invest more
than 15% of its net assets in illiquid securities (10% in the case of money
market funds), because investment companies issuing redeemable securities are
required to meet a shareholder's redemption request at the current net asset
value within seven days of receiving the request for redemption. In order to do
this, some portion of the securities in each Fund's portfolio must be "liquid,"
so that the securities can be sold in sufficient time to obtain the necessary
cash to meet redemption requests.
Moreover, certain state securities regulators previously required mutual funds
to have a fundamental investment policy limiting investment in restricted
securities. Since the enactment of NSMIA, states no longer have the authority to
impose such requirements. Furthermore, rules adopted by the SEC have
substantially increased the number of restricted securities that can now be
considered liquid and, in addition, have given to the directors and trustees of
investment companies the ability to determine, under specific guidelines, that a
security is liquid. The Trustees may delegate this duty to the Advisor, provided
the Advisor's determination of liquidity is made in accordance with the
guidelines established and monitored by the Trustees.
There is no legal requirement for the Funds to have a fundamental policy dealing
with illiquid and restricted securities and, therefore, it is proposed that the
fundamental policy be eliminated. However, the Trustees have approved a
non-fundamental policy for all Funds of each Huntington Trust which will be
adopted if the fundamental policy is deleted. This policy will limit illiquid
securities consistent with the SEC position stated above (using the Board's
liquidity guidelines to determine liquidity of "restricted securities").
However, the elimination of the fundamental policy would enable the Funds to
modify its non-fundamental limitation in the future without shareholder approval
should regulations change.
Upon shareholder approval of Proposal 4(a), the existing fundamental policies
regarding illiquid investments will be eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(a)
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PROPOSAL 4(b): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTMENTS IN NEW ISSUERS (Florida Tax-Free Money Fund, Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to investments in
new issuers that provides that each such Fund may not:
Invest more than 5% of its total assets in securities of any issuer which,
together with any predecessor, has been in operation for less than three
years.
Following the adoption of NSMIA, such limitations are no longer required to be a
fundamental investment policy. As a general matter, elimination of this
fundamental policy is not expected to have a material impact on the day-to-day
management and operation of the Funds.
Upon shareholder approval of Proposal 4(b), the existing fundamental policy
regarding investments in new issuers will be eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(b)
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PROPOSAL 4(c): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
PURCHASES ON MARGIN (Florida Tax-Free Money Fund, Money Market Fund, Ohio
Municipal Money Market Fund, U.S. Treasury Money Market Fund, Growth Fund,
Income Equity Fund, Intermediate Government Income Fund, Fixed Income Securities
Fund, Michigan Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund,
Short/Intermediate Fixed Income Securities Fund, VA Growth Fund and VA Income
Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to purchases on
margin that provides that each such Fund may not:
Purchase securities on margin or effect short sales (except that the Funds
may obtain such short-term credits as may be necessary for the clearance of
purchases or sales of securities).
The Funds are not required under applicable law to have a fundamental investment
policy relating to purchases on margin provided the Funds adhere to the SEC's
collateralization requirements. This restriction was imposed by state laws, and
NSMIA preempts the requirement.
To maximize the Funds' flexibility in this area, the Board believes that the
restriction on margin purchases should be eliminated. As a general matter, the
Funds ability to purchase securities on margin raises senior security issues and
is specifically prohibited under the 1940 Act, absent collateralization.
Assuming adequate collateralization, the Funds may, consistent with the 1940
Act, make margin deposits in connection with their use of financial options and
futures, forward and spot currency contracts, swap transactions and other
financial contracts or derivative instruments, and they may obtain short-term
credits for clearance of purchases and sales of securities.
Upon shareholder approval of Proposal 4(c), the existing fundamental policy
regarding purchases on margin will be eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(c)
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PROPOSAL 4(d): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING SHORT
SELLING (Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money
Market Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to selling short
that provides that each such Fund may not:
Purchase securities on margin or effect short sales (except that the Funds
may obtain such short-term credits as may be necessary for the clearance of
purchases or sales of securities).
The Funds are not required under applicable law to have a fundamental investment
policy with respect to short sales of securities provided the Funds adhere to
the SEC's collateralization requirements. To provide the Funds with enhanced
flexibility, the Board believes that each Fund's policy prohibiting short sales
of securities should be eliminated. These restrictions were imposed by state
laws, and NSMIA preempts those restrictions. Notwithstanding the elimination of
these policies, the Funds do not expect to engage in short sales of securities,
except to the extent that the Funds contemporaneously own or have the right to
acquire, at no additional cost, securities identical to, or convertible into or
exchangeable for, those sold short. To the extent that the Funds engage in short
sales (including short sales that are properly collateralized), the Funds are
subject to certain risks because short selling is an aggressive trading practice
with a high risk/return potential. For example, if the price of a stock sold
short by a Fund rises, the Fund will lose money.
Upon shareholder approval of Proposal 4(d), the existing fundamental policies on
selling securities short by the Funds will be eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(d)
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PROPOSAL 4(e): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
CERTAIN TRANSACTIONS WITH "INTERESTED PERSONS" OF THE FUNDS (Florida Tax-Free
Money Fund, Money Market Fund, Ohio Municipal Money Market Fund, U.S. Treasury
Money Market Fund, Growth Fund, Income Equity Fund, Intermediate Government
Income Fund, Fixed Income Securities Fund, Michigan Tax-Free Fund, Mortgage
Securities Fund, Ohio Tax-Free Fund, Short/Intermediate Fixed Income Securities
Fund, VA Growth Fund and VA Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to purchases of
"interested persons" that provides that each such Fund may not:
Purchase from or sell portfolio securities to officers, Trustees or other
"interested persons" (as defined by the 1940 Act) of the Funds, including
its investment manager and its affiliates, except as permitted by the 1940
Act and exemptive Rules or Orders thereunder.
This policy was adopted many years ago pursuant to now preempted state
securities laws concerning conflicts of interest. As a general matter,
elimination of this fundamental investment policy would not have any impact on
the day-to-day management of the Funds, because it merely prohibits activities
which are already prohibited by the 1940 Act.
Upon shareholder approval of Proposal 4(e), the existing fundamental policy
regarding purchases of "interested persons" will be eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(e)
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PROPOSAL 4(f): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
INVESTING IN ISSUERS OWNED BY OFFICERS AND TRUSTEES (Florida Tax-Free Money
Fund, Money Market Fund, Ohio Municipal Money Market Fund, U.S. Treasury Money
Market Fund, Growth Fund, Income Equity Fund, Intermediate Government Income
Fund, Fixed Income Securities Fund, Michigan Tax-Free Fund, Mortgage Securities
Fund, Ohio Tax-Free Fund, Short/Intermediate Fixed Income Securities Fund, VA
Growth Fund and VA Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to investments in
issuers owned by officers and Trustees that provides that each such Fund may
not:
Purchase or retain the securities of any issuer if, to the Funds'
knowledge, one or more of the officers, directors or Trustees of the Trust,
the Advisor or the administrator, individually own beneficially more than
one-half of one percent of the securities of such issuer and together own
beneficially more than 5% of such securities.
This policy was adopted many years ago pursuant to now preempted state
securities laws concerning conflicts of interest. As a general matter,
elimination of this fundamental investment policy should not have any impact on
the day-to-day management of the Funds, as the 1940 Act's conflict of interest
restrictions would continue to apply to the Funds.
Upon shareholder approval of Proposal 4(f), the existing fundamental policy
regarding investments in issuers owned by officers and Trustees will be
eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(f)
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PROPOSAL 4(g): TO ELIMINATE THE FUNDAMENTAL INVESTMENT POLICIES REGARDING
PURCHASING SECURITIES OF OTHER INVESTMENT COMPANIES (Florida Tax-Free Money
Fund, Money Market Fund, Ohio Municipal Money Market Fund, U.S. Treasury Money
Market Fund, Growth Fund, Income Equity Fund, Intermediate Government Income
Fund, Fixed Income Securities Fund, Michigan Tax-Free Fund, Mortgage Securities
Fund, Ohio Tax-Free Fund, Short/Intermediate Fixed Income Securities Fund, VA
Growth Fund and VA Income Equity Fund):
The Florida Tax-Free Money Fund, Money Market Fund, Ohio Municipal Money Market
Fund, U.S. Treasury Money Market Fund, Growth Fund, Income Equity Fund,
Intermediate Government Income Fund, Fixed Income Securities Fund, Michigan
Tax-Free Fund, Mortgage Securities Fund, Ohio Tax-Free Fund, Short/Intermediate
Fixed Income Securities Fund, VA Growth Fund and VA Income Equity Fund are
presently subject to a fundamental investment policy relating to purchasing
securities of other investment companies that provides that each such Fund may
not:
Purchase the securities of other investment companies except by purchase in
the open market where no commission or profit to a sponsor or dealer
results from such purchase other than the customary broker's commission or
except when such purchase is part of a plan of merger, consolidation,
reorganization or acquisition and except as permitted pursuant to Section
12(d)(1) of the 1940 Act.
This policy was originally included in such Funds' fundamental investment
policies in response to various state law requirements. Under NSMIA, however,
such Funds are no longer required to retain such a policy. Section 12(d)(1) of
the 1940 Act contains certain limitations on an investment company's ability to
invest in securities of other investment companies, and the Funds would continue
to be subject to such limitations (subject to any receipt by the Funds of SEC
exemptive relief). The Funds currently invest in securities of other money
market funds (including affiliated funds), within the current regulatory
constraints, for cash management purposes. The proposed deletion of the
fundamental policy would allow the Advisor maximum flexibility to invest in
securities of other funds (including non-money market funds, exchange-traded
funds, unit investment trusts, etc.) to the extent permitted by the then-current
Regulatory Standard.
Upon shareholder approval of Proposal 4(g), the existing fundamental policy
regarding purchasing securities of other investment companies will be
eliminated.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 4(g)
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PROPOSAL 5: TO AMEND THE FUNDAMENTAL INVESTMENT OBJECTIVE (Income Equity Fund
and VA Income Equity Fund)
The Funds' investment objective is to seek to achieve high income and moderate
appreciation of capital primarily through investment in income producing equity
securities. This investment objective cannot be changed without shareholder
approval.
On April 7, 2006, the Trustees unanimously approved changing the Funds'
investment objective. The Trustees have determined that it would be in the best
interest of the Funds to change the investment objective to read as follows:
The investment objective is to seek to achieve current income and moderate
appreciation of capital primarily through investment in income producing
equity securities.
The Proposal to change the "high income" component of the objective to "current
income" reflects the Advisor's determination that, because those equity
securities which provide the highest dividends may also carry a disportionately
high market risk, the overall return of the Funds (i.e., the combination of
income and capital appreciation) could be enhanced by eliminating the current
constraint requiring the Advisor to focus on the highest dividend-paying equity
securities. It also could allow the Advisor to invest in better quality
companies than would be the case if it were required to invest primarily in high
dividend-paying companies.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE APPLICABLE FUNDS VOTE FOR PROPOSAL 5
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PROPOSAL 6: APPROVAL BY THE SHAREHOLDERS OF THE HUNTINGTON TRUST OF THE
REORGANIZATION OF THE HUNTINGTON TRUST (TOGETHER WITH THE VA TRUST) FROM A
MASSACHUSETTS BUSINESS TRUST TO A SINGLE DELAWARE STATUTORY TRUST
What will the Reorganization mean for the Trusts and their shareholders?
The Trustees of the Huntington Trust unanimously recommend that shareholders of
the portfolios of the Huntington Trust approve an Agreement and Plan of
Reorganization (the "Agreement"), substantially in the form attached to this
Proxy Statement as Exhibit A, which would change the state of organization of
the Huntington Trust. This Agreement calls for the tax-free reorganization of
both Trusts from separate Massachusetts business trusts into a single newly
formed Delaware statutory trust. This proposed reorganization is referred to
throughout this Proxy Statement as the "Reorganization." To implement the
Reorganization, the Trustees of the Trusts have approved the Agreement, which
contemplates the continuation of the current business of the Trusts in the form
of a new Delaware statutory trust, named "The Huntington Funds" (the "DE
Trust"). As of the effective date of the Reorganization, the DE Trust will have
series (each a "DE Fund" and, together, the "DE Funds") that correspond to each
of the then current series of the Trusts (i.e., each Fund). Each DE Fund will
have the same name as its corresponding Fund. The shareholders of the VA Trust
do not need to vote on this Proposal because the Trustees of the VA Trust are
authorized to reorganize the VA Trust without shareholder approval. However, the
implications of the Reorganization are described below and the shareholders of
the VA Trust are encouraged to read this Proposal in order to learn the facts
and circumstances regarding the Reorganization.
If the Agreement is approved by shareholders of the Huntington Trust and the
Reorganization is implemented, the DE Funds will have the same investment
objectives, policies, and restrictions as their corresponding Funds (including,
if approved by shareholders at the Special Meeting, the revised investment
policies described in Proposals 3-4 and the amended investment objective
described in Proposal 5 of this Proxy Statement). The Board, including the
nominees identified under Proposal 1, and officers of the DE Trust would be the
same as those of the Trusts, and would operate the DE Trust and the DE Funds in
the same manner as these persons previously operated the Trusts and the Funds
except as otherwise described below. Thus, on the effective date of the
Reorganization, you will hold an interest in the applicable DE Fund that is
equivalent to your then interest in the corresponding Fund. For all practical
purposes, a shareholder's investment in a Fund will not change.
Why are the Trustees recommending approval of the Agreement and the
Reorganization?
The Trustees have determined that there are no legal reasons to maintain the
Huntington Trust and the VA Trust as separate entities, and that there are
advantages in combining the Trusts, including streamlining the organizational
structure and thereby eliminating duplication and inconsistency currently
existing in certain administrative areas.
In addition, the Trustees have determined that investment companies formed as
Delaware statutory trusts have certain advantages over investment companies
organized as Massachusetts business trusts, as set forth in the following
comparison.
Accordingly, the Board believes that it is in the best interests of the
shareholders of the Huntington Trust to approve the Agreement.
How do the Massachusetts business trust law and the Trusts' governing documents
compare to the Delaware statutory trust law and the DE Trust's governing
documents?
The following summary compares certain rights and characteristics of the Trusts
and their shares to the DE Trust and its shares. The summary is qualified in its
entirety by the more complete comparisons of Massachusetts business trust law
and Delaware statutory trust law, and a comparison of the relevant provisions of
the governing documents of the Trusts and the DE Trust, attached as Exhibit B to
this Proxy Statement, which is entitled "Comparison of Significant Differences
Between the Proposed Delaware Statutory Trust and Existing Massachusetts
Business Trusts."
Reorganizing the Trusts from Massachusetts business trusts to a single Delaware
statutory trust is expected to provide several benefits to the Trusts and their
shareholders. The operations of a Delaware statutory trust formed under the
Delaware Statutory Trust Act (the "Delaware Act") are governed by a declaration
of trust and by-laws. The DE Trust's Agreement and Declaration of Trust
("Declaration of Trust") and By-Laws streamline some of the provisions in each
Trusts' current Declaration of Trust and By-Laws, and, thus, should lead to
enhanced flexibility in management and administration as compared to the Trusts'
current operation as Massachusetts business trusts. As a Delaware statutory
trust, the DE Trust may be able to adapt more quickly and cost effectively to
new developments in the mutual fund industry and the financial markets.
Funds formed as Delaware statutory trusts under the Delaware Act are granted a
significant amount of operational flexibility, resulting in efficiencies of
operation that may translate into savings for a fund, such as the DE Trust, and
the fund's shareholders. For example, the Delaware Act authorizes trust
management to take various actions without requiring shareholder approval if
permitted by the governing instrument, such as fund mergers or the sale of all
or substantially all of the assets of a trust, or a series thereof (see
discussion below). Additionally, unlike Massachusetts business trust law, the
Delaware Act permits any amendment to the statutory trust's governing instrument
without the need for a state or city filing, which can reduce administrative
burdens and costs.
Moreover, to the extent provisions in the DE Trust's Declaration of Trust and
By-Laws are addressed by rules and principles established under Delaware
corporate law and the laws governing other Delaware statutory entities (such as
limited partnerships and limited liability companies), the Delaware courts may
look to such other laws to help interpret provisions of the DE Trust's
Declaration of Trust and By-Laws. Applying this body of law to the operation of
the DE Trust should prove beneficial because these laws are extensively
developed and business-oriented. In addition, Delaware's Chancery Court is
dedicated to business law matters, which means that the judges tend to be more
specialized in the nuances of the law that will be applied to the DE Trust.
These legal advantages tend to make more certain the resolution of legal
controversies and help to reduce legal costs resulting from uncertainty in the
law.
In addition, Massachusetts business trust law does not specifically provide that
the shareholders of the Trusts are not subject to any personal liability for any
claims against, or liabilities of, the Trusts solely by reason of being or
having been a shareholder of the Trusts or that the liabilities of one series
are not enforceable against another series of that trust. Under the Delaware
Act, shareholders of the DE Trust will be entitled to the same limitation of
personal liability as is extended to shareholders of a private corporation
organized for profit under the General Corporation Law of the State of Delaware.
In addition, the Delaware Act permits the DE Trust to limit the enforceability
of the liabilities of one DE Fund solely to the assets of that DE Fund.
Massachusetts business trusts, as creatures of common law, involve the risk that
a Trustee may be deemed to have personal liability for obligations of the Trust.
By contrast, the Delaware Act specifically provides personal protection to
Trustees for their acts as Trustees, much like a charter of a private
corporation. Such protection will make it easier for the DE Trust to attract and
retain highly qualified individuals to serve as Trustees and will reduce
uncertainty.
Shares of the DE Trust and the Trusts are similar, in that each has one vote per
full share and a proportionate fractional vote for each fractional share. Both
the DE Trust and the Trusts provide for noncumulative voting in the election of
their Trustees. Like the Trusts, the DE Trust is not required by its governing
instrument to hold annual shareholder meetings. For the DE Trust, shareholder
meetings may be called at any time by the Board for the purpose of taking action
upon any matter deemed by the Board to be necessary or desirable. For the
Trusts, shareholder meetings may be called by the Boards and shall be called by
the Board for the purpose of voting upon the question of the removal of any
Trustee or Trustees when requested in writing to do so by the holders of not
less than 10% of the outstanding shares of the Trusts. However, under SEC
interpretations of the 1940 Act, the holders of not less than 10% of the
outstanding shares of the DE Trust similarly will be able to call a shareholder
meeting for the purpose of voting on the proposed removal of one or more
Trustees. The Trusts and the DE Trust each provide certain rights to its
shareholders to inspect a fund's books and records.
Nevertheless, while shareholders of the DE Trust will have similar distribution
and voting rights as they currently have as shareholders of the Trusts, there
are certain differences. The organizational structures differ in record date
parameters for determining shareholders entitled to notice, to vote, and to a
distribution. Under the DE Trust's Declaration of Trust, all or substantially
all of the DE Trust's assets may be sold to another fund or trust without
shareholder approval unless required by the 1940 Act. The DE Trust and the
Trusts and any series thereof may be liquidated or dissolved, in each case by
the Trustees without shareholder approval. The Huntington Trust and any series
thereof may be liquidated or dissolved by the Trustees with the consent of not
less than two-thirds of the shares (or series of shares) of the Huntington
Trust.
What are the procedures and consequences of the Reorganization?
Immediately upon completion of the proposed Reorganization, the DE Trust will
continue the business of the Trusts, and each DE Fund: (i) will have the same
investment objectives, policies and restrictions as those of its corresponding
Fund existing on the date of the Reorganization (including, if approved by
shareholders at the Special Meeting, the revised investment policies described
in Proposals 3 and 4 and the amended investment objective described in Proposal
5 of this Proxy Statement); (ii) will hold the same portfolio of securities
previously held by such corresponding Fund; and (iii) will be operated under
substantially identical overall management, investment management, distribution,
and administrative arrangements as those of its corresponding Fund. As the
successor to the Trusts' operations, the DE Trust will adopt each Trust's
registration statement under the federal securities laws with amendments to show
the new Delaware statutory trust structure.
The DE Trust will be created solely for the purpose of becoming the successor
organization to, and carrying on the business of, the Trusts. To accomplish the
Reorganization, the Agreement provides that each Trust, on behalf of each Fund,
will transfer all of its portfolio securities, any other assets and its
liabilities to the DE Trust, on behalf of each corresponding DE Fund, in a
tax-free transaction. In exchange for these assets and liabilities, the DE Trust
will issue shares of each DE Fund to the Trusts, which will then distribute
those shares pro rata to shareholders of the corresponding Fund. Through this
procedure, you will receive exactly the same number and dollar amount of shares
of each DE Fund as you held in the corresponding Fund immediately prior to the
Reorganization. The net asset value of each share of each series of the DE Trust
will be the same as that of the corresponding Fund of the Trusts on the date of
the Reorganization. You will retain the right to any declared, but
undistributed, dividends or other distributions payable on the shares of a Fund
that you may have had as of the effective date of the Reorganization. As soon as
practicable after the date of the Reorganization, the Trusts will be dissolved
and will cease its existence.
The Trustees may terminate the Agreement and abandon the Reorganization at any
time prior to the effective date of the Reorganization if the Trustees determine
that proceeding with the Reorganization is inadvisable. If the Reorganization is
not approved by shareholders of the Huntington Trust, or if the Trustees abandon
the Reorganization, each Trust will continue to operate as a Massachusetts
business trust. If the Reorganization is approved by shareholders of the
Huntington Trust, it is expected to be completed on June 23, 2006.
What effect will the Reorganization have on the current investment advisory
agreements and the sub-advisory agreements?
As a result of the Reorganization, the DE Trust will be subject to a new
investment advisory agreement between the DE Trust and the Advisor. The new
advisory agreement will be substantially identical to the current management
agreements between the Advisor and each Trust. It is anticipated that there will
be no material change to the investment advisory agreements as a result of the
Reorganization. Similarly, the Reorganization will have no material effect on
the sub-advisory agreements currently in place for the Macro 100 Fund and the VA
Macro 100 Fund.
What effect will the Reorganization have on the shareholder servicing agreements
and distribution plans?
The DE Trust will enter into an agreement with The Huntington National Bank
regarding administrative personnel and services, and an agreement with Federated
Services Company regarding assisting with the provision of administrative
services (including legal services) that are substantially identical to the
agreements currently in place for the Trusts, including the same fee schedule.
The DE Trust will also enter into (i) agreements with The Huntington National
Bank for certain financial administration and portfolio accounting services;
(ii) The Huntington National Bank, State Street Bank and Trust Company and The
Bank of New York for custodial services; and (iii) Unified Fund Services, Inc.
for transfer agency and dividend disbursing services substantially identical to
the agreements currently in place for the Trusts. Edgewood Services, Inc. will
serve as the distributor for the shares of the DE Trust under a separate
distribution agreement that is substantially identical to the distribution
agreement currently in effect for the Trusts, including the same fee schedule.
The DE Trust will have a distribution plan under Rule 12b-1 of the 1940 Act
relating to the distribution of shares of each series of the DE Trust that is
substantially identical to the current distribution plan. There will be no
material change to the distribution plan or fees as a result of the
Reorganization.
What is the effect of shareholder approval of the Agreement?
Under the 1940 Act, the shareholders of a mutual fund must vote on the
following: (i) the election of Trustees; (2) selection of the independent
auditors; and (3) approval of the initial investment advisory agreements and the
sub-advisory agreements for the investment company. Theoretically, if the
Reorganization is approved, the shareholders would need to vote on these three
items for the DE Trust. In fact, the DE Trust must have shareholder approval of
these issues or else it will not comply with the 1940 Act. However, the Trustees
have determined that it is in the best interests of the shareholders to avoid
the considerable expense of another shareholder meeting to obtain these
approvals after the Reorganization. Therefore, the Trustees have determined that
approval of the Reorganization also will constitute the requisite shareholder
approval for the Agreement contained in Exhibit A, and also, for purposes of the
1940 Act, constitute shareholder approval of: (1) the election of the Trustees
of the Trusts who are in office at the time of the Reorganization as Trustees of
the DE Trust, (2) the selection of Ernst & Young LLP as independent auditors for
the DE Trust; and (3) new investment advisory agreements between the DE Trust
and the Advisor and Sub-Advisor, which are substantially identical to the
investment advisory agreements and sub-advisory agreements currently in place
for the Trusts.
Prior to the Reorganization, the officers will cause each Trust, as the sole
shareholders of the DE Trust, to vote their shares FOR the matters specified
above. This action will enable the DE Trust to satisfy the requirements of the
1940 Act without involving the time and expense of another shareholder meeting.
What is the capitalization and structure of the DE Trust?
The DE Trust will be formed as a Delaware statutory trust pursuant to the
Delaware Act. As of the effective date of the Reorganization, the DE Trust will
have separate series, each of which will correspond to the similarly named
series of the Trusts, each with an unlimited number of shares of beneficial
interest without par value authorized. The shares of each DE Fund will be
allocated into classes to correspond to the current classes of shares of the
corresponding Fund.
As of the effective date of the Reorganization, like the existing shares you
hold, outstanding shares of the DE Trust will be fully paid, nonassessable
(i.e., you will not owe any further money to the DE Trust to own your shares),
and have no preemptive or subscription rights (i.e., no special rights to
purchase shares in advance of other investors). The DE Trust will also have the
same fiscal year as the Trusts.
Who will bear the expenses of the Reorganization?
Since the Reorganization will benefit each Trust and its shareholders, the Board
has authorized that the expenses incurred in the Reorganization shall be paid by
the Trusts, whether or not the Reorganization is approved by shareholders.
Are there any tax consequences for shareholders?
The Reorganization is designed to be "tax-free" for federal income tax purposes
so that you will not experience a taxable gain or loss when the Reorganization
is completed. As such, the basis and holding period of your shares in a DE Fund
will be the same as the basis and holding period of your shares in the
corresponding Fund. Consummation of the Reorganization is subject to receipt of
a legal opinion from the law firm of Reed Smith LLP, that, under the Internal
Revenue Code of 1986, as amended, the Reorganization will not give rise to the
recognition of income, gain, or loss for federal income tax purposes to the
Trusts, the Funds, the DE Trust, or the DE Funds, or to their shareholders.
What if I choose to sell my shares at any time?
A request to sell Fund shares that is received and processed prior to the
effective date of the Reorganization will be treated as a redemption of shares
of that Fund. A request to sell shares that is received and processed after the
effective date of the Reorganization will be treated as a request for the
redemption of the same number of shares of the corresponding DE Fund. The value
of your shares will not be affected by the Reorganization.
What is the effect of my voting "FOR" the Agreement?
By voting "FOR" the Agreement, and if the Reorganization is approved and
completed, all shareholders of the Trusts will become shareholders of a mutual
fund organized as a Delaware statutory trust, with trustees, an investment
advisory agreement, a distribution plan, and other service arrangements that are
substantially identical to those currently in place for your corresponding Fund
or Funds. In addition, if the Reorganization is approved and completed, you will
have the same exchange and conversion rights that you have currently, including
counting the time you held shares of a Fund for purposes of calculating any
redemption fee or contingent deferred sales charges on shares you receive of the
corresponding DE Fund.
What vote is required to approve the Agreement?
Assuming a quorum is present, the approval of the Agreement requires an
affirmative majority vote of the outstanding shares of each Fund of the
Huntington Trust. Shareholders of the VA Trust are not required or being asked
to vote on this Proposal.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE HUNTINGTON TRUST VOTE FOR PROPOSAL 6
- --------------------------------------------------------------------------------
OTHER BUSINESS
The Trustees know of no other business to be presented at the Special Meeting
other than Proposals 1 through 6 and do not intend to bring any other matters
before the Special Meeting. However, if any additional matters should be
properly presented, proxies will be voted or not voted as specified. Proxies
reflecting no specification will be voted for Proposals 1 through 6 (as
applicable), and, as to any other matter properly coming before the meeting, in
accordance with the judgment of the persons named in the proxy.
- --------------------------------------------------------------------------------
INFORMATION ABOUT THE TRUSTS
Who are the Incumbent Trustees of the Trusts?
The Board is responsible for managing the Trusts' business affairs and for
exercising all the Trusts' powers except those reserved for the shareholders.
The following table gives information about each Board member of the Trusts.
Where required, the tables separately list Board members who are "interested
persons" of the Funds (i.e., "Interested" Board members) and those who are not
(i.e., "Independent" Board members). Each Board member oversees all portfolios
of the Trusts and serves for an indefinite term. Information about each Board
member is provided below and includes each person's name, age as of the date of
this Proxy Statement, present position(s) held with the Huntington Trust and VA
Trust, principal occupations for the past five years, and other directorships
held for its most recent fiscal year. Unless otherwise noted, the business
address of each person listed below is c/o Huntington Funds, 5800 Corporate
Drive, Pittsburgh, PA. The Huntington Fund Complex consists of two investment
companies: the Huntington Trust with 19 portfolios and the VA Trust with 10
portfolios. Each Trustee serves as Trustee for all portfolios of the Huntington
Fund Complex.
Independent Trustees Background
Name
Age
Position With Trusts Principal Occupations for Past Five Years and Other
Date Service Began Directorships Held
-----------------------------------------------------------------------------------------
David S. Schoedinger Principal Occupation: Since 1965, Chairman of the
-------------------------- Board, Schoedinger Funeral Service. Since 1987, CEO,
Age: 63 Schoedinger Financial Services, Inc.
CHAIRMAN OF THE BOARD AND
TRUSTEE Previous Position: President, Board of Directors of
Began serving Huntington National Selected Morticians (1992- 1993) (national
Trust: May 1990 trade association for morticians).
Began serving VA Trust:
June 1999 Other Directorships Held: None.
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
John M. Shary* Principal Occupations: Retired.
Age: 75
TRUSTEE Previous Positions: Member, Business Advisory Board,
Began serving Huntington HIE-HEALTHCARE.COM (formerly Hublink, Inc.)
Trust: October 1991 (1993-1997) (database integration software); Member,
Began serving VA Trust: Business Advisory Board, Mind Leaders, Inc. (formerly
June 1999 DPEC Data Processing Education Corp.) (1993-1996)
(data processing education); Member, Business Advisory
Board, Miratel Corporation (1993-1995) (research and
development firm for CADCAM); Chief Financial Officer
of OCLC Online Computer Library Center, Inc.
(1978-1993); Member, Board of Directors, Applied
Information Technology Research Center (1987-1990);
Member, Board of Directors, AIT (1987-1990)
(technology).
Other Directorships Held: None.
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
William R. Wise Principal Occupations: Retired.
--------------------------
Age: 74 Previous Positions: Corporate Director of Financial
TRUSTEE Services and Treasurer, Children's Hospital, Columbus,
Began serving Huntington Ohio; Associate Executive Director and Treasurer,
Trust: April 1991 Children's Hospital, Columbus, Ohio (1985-1989).
Began serving VA Trust:
June 1999 Other Directorships Held: None.
-----------------------------------------------------------------------------------------
Interested Trustee Background
------------------------------------------------------------------------------------------
Name
-------------------------- ---------------------------------------------------------
Age
Position With Trusts Principal Occupations for Past Five Years and Other
Date Service Began Directorships Held
------------------------------------------------------------------------------------------
Thomas J. Westerfield+ Principal Occupation: Since August 2005, of
-------------------------- Counsel, Dinsmore & Shohl LLP (law firm).
Age: 51
TRUSTEE Previous Position: Of Counsel, Cors & Bassett LLC
Began serving Huntington (1993 to 2005) (law firm).
Trust: January 2001
Began serving VA Trust: Other Directorships Held: None.
January 2001
------------------------------------------------------------------------------------------
+ Thomas J. Westerfield has been designated an Interested Trustee due to the fact that
his law firm may be retained to provide legal services to the Advisor or its
affiliates.
Who are the Nominees/Trustees Standing for Election?
In addition to Mr. Westerfield, whose information is described above as an
Interested Trustee, the following nominees are proposed for election as Independent
Trustees:
-----------------------------------------------------------------------------------------
Name
------------------------ -----------------------------------------------------------
Age Principal Occupations for Past Five Years and Other
Position With Trusts Directorships Held
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Carl A. Nelson Principal Occupations: Independent Business
------------------------ Consultant, major manufacturing company (2002 to
Age: 60 present); lecturer, Fisher College of Business at the
Nominee/Trustee Ohio State University.
Previous Position: Managing Partner, Arthur Andersen
(1971-2002)
Other Directorships Held: Director, Worthington
Industries (steel fabricator) and Dominion Homes, Inc.
(homebuilder).
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Tadd C. Seitz Principal Occupations: Retired.
Age: 64
Nominee/Trustee Previous Positions: Chairman and Chief Executive
Officer, The Scotts Company (June 1983-March 1995);
Interim, Chief Executive Officer (February 1996-July
1996).
Other Directorships Held: None.
-----------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------
Mark D. Shary* Principal Occupations: Chief Executive Officer and
Age: 46 President, BestTransport.com, Inc. (2003 to present).
Nominee/Trustee
Previous Positions: President, Bostech Corporation
(2000-2002).
Other Directorships Held: None.
-----------------------------------------------------------------------------------------
* Family relationship: Mark D. Shary is the nephew of John M. Shary, an
Independent Trustee of the Trusts.
Nominees/Trustees ownership of shares in the Funds and in the Huntington Family
of Investment Companies(1) as of December 31, 2005
- --------------------------------------------------------------------------------
(1) (2) (3) Aggregate Dollar
Range of Equity
Dollar Range of Shares Securities in All
Name of Nominee/Trustee Owned Registered Investment
in the Funds Companies Overseen by
Trustees in the
Huntington Family of
Invesmtent Companies
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
David S. Schoedinger Over $100,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dividend Capture Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Growth Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mid Corp America Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
New Economy Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Situs Small Cap Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Huntington VA Funds None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
John M. Shary $50,001 - $100,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Growth Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income Equity Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Huntington VA Funds None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Thomas J. Westerfield $50,001 - $100,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Money Market Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dividend Capture Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Growth Fund $10.001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income Equity Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
International Equity Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Macro 100 Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mid Corp America Fund $10,001 - $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
New Economy Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Situs Small Cap Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fixed Income Securities $1 - $10,000
Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Intermediate Government $1 - $10,000
Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Short Intermediate Fixed $1 - $10,000
Income Securities Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mortgage Securities Fund $1 - $10,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Huntington VA Funds None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
William R. Wise Over $100,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Growth Fund $10,001- $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Income Equity Fund $10,001- $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mid Corp America Fund $10,001- $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Macro 100 Fund $10,001- $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Situs Small Cap Fund $10,001- $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fixed Income Fund $10,001- $50,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Huntington VA Funds None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Carl A. Nelson None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Tadd C. Seitz None
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mark D. Shary None
- --------------------------------------------------------------------------------
(1) The "Huntington Family of Investment Companies" refers to both the
Huntington Trust and VA Trust, as both are held out to investors as related
entities for investor or investment purposes.
How often do the Trustees meet and what are they paid?
The Trustees regularly meet at least four times during each fiscal year to
review the operations of the Funds and the Funds' investment performance. The
Trustees also oversee the services provided to the Funds by Huntington Asset
Advisors, Inc. and the Trusts' other service providers. The Trusts currently pay
each Trustee an annual retainer of $18,000 and a fee of $6,000 per in-person
Board meeting ($4,500 per telephone Board meeting) attended. Members of the
Audit Committee receive a fee of $3,000 per Audit Committee meeting attended.
During the fiscal year ended December 31, 2005, there were nine meetings of the
Board of each of the Trusts. Each of the Trustees attended at least 75% of the
total number of meetings of the Board. The following table shows the fees paid
to the Trustees by the Trusts for the fiscal year ended December 31, 2005:
Name of Trustee Total Fees Received
from the Trusts
- -----------------------------------------------------------------
David S. Schoedinger $39,500
John J. Shary $34,500
Thomas J. Westerfield $37,250
William R. Wise $37,000
Each Trust's Declaration of Trust provides that each Trustee will continue in
office until his or her respective successor is elected, and therefore, when
elected, Trustees will hold office during the lifetime of the Trusts until the
death or incapacity of the Trustee, except that: (a) any Trustee may resign; (b)
any Trustee may be removed with cause by action of two-thirds of the Trustees;
and (c) any Trustee may be removed at any special meeting of the shareholders
when requested in writing by the holders of not less than 10% of the outstanding
shares of the Trusts. Pursuant to policies adopted by the Trustees of each
Trust, the Trustees have a mandatory retirement age of 72, which was waived
through April 26, 2007 for Messrs. Wise and J. Shary for the purpose of finding
qualified Trustees to fill their vacancy and allow a reasonable transition time.
In case a vacancy shall exist for any reason, the remaining Trustees will fill
such vacancy by appointment of another Trustee as they in their discretion see
fit, made by a written instrument and signed by a majority of Trustees then in
office. If, at any time, less than a majority of the Trustees holding office
have been elected by the shareholders, the Trustees then in office will call a
shareholders' meeting for the purpose of electing Trustees to fill vacancies.
Otherwise, there will normally be no meeting of shareholders called for the
purpose of electing Trustees.
What are the Committees of the Board?
Audit Committee
The Audit Committee of the Trusts was established on April 26, 2000 and
currently consists of David S. Schoedinger (Chairman), John M. Shary, Thomas J.
Westerfield and William R. Wise. If elected, it is proposed that Carl A. Nelson,
Tadd C. Seitz and Mark D. Shary will each also become a member of the Audit
Committee.
The purposes of the Audit Committee are:
(a) to oversee the Trusts' accounting and financial reporting processes and
their internal control over financial reporting and, as the Audit Committee
deems appropriate, to inquire into the internal control over financial
reporting of certain third-party service providers;
(b) to oversee the quality and objectivity of the Trusts' financial statements
and the independent audit thereof;
(c) to act as a liaison between the Trusts' independent auditors and the full
Board of Trustees;
(d) to act as a qualified legal compliance committee; and
(e) to review the Trusts' internal audit function, including their charters,
authority and organizational structure, and to annually approve and monitor
progress of the internal audit plan. The Director of Internal Audit will
report to the Audit Committee.
The function of the Audit Committee is oversight; it is management's
responsibility to maintain appropriate systems for accounting and internal
controls, and the auditors' responsibility to plan and carry out a proper audit.
To carry out its purposes, the Audit Committee shall have the following duties
and powers:
(a) to pre-approve and recommend to the Board the selection, retention or
termination of auditors to perform any auditing of the Trusts' financial
statements and, in connection therewith, to evaluate the independence of
the auditors and to receive the auditors' specific representations as to
their independence;
(b) to pre-approve any non-audit services to be provided to the Trusts by such
auditors;
(c) to pre-approve non-audit services provided by the auditors to (i) the
Trusts' investment adviser, and (ii) an affiliate of the Trusts' investment
adviser that provides ongoing services to the Trusts where the nature of
the non-audit services has a direct impact on the operations or financial
reporting of the Trusts; (1)
(d) to review information from and/or meet with the Trusts' independent
auditors, including private meetings, as necessary (i) to review the
arrangements for and the scope of the annual audit and any special audits;
(ii) to discuss any matters of concern relating to the Trusts' financial
statements, including any adjustments to such statements recommended by the
auditors, or other results of said audit(s); (iii) to consider the
auditors' comments with respect to the Trusts' financial policies,
procedures and internal accounting controls and management's responses
thereto; and (iv) to review the form of opinion the auditors propose to
render to the Board and shareholders;
(e) to consider the effect upon the Trusts of any changes in accounting
principles or practices proposed by management or the auditors;
(f) to review the fees charged by the auditors for audit and non-audit
services;
(g) to investigate any known or suspected improprieties with respect to the
Trusts' financial reporting policies or practices;
(h) to receive in confidence, consider and, if appropriate, investigate in its
capacity as a qualified legal compliance committee and report by an
attorney of a material violation of an applicable United States federal or
state securities law or a material breach of fiduciary duty arising under
United States or state law, or a similar material violation of any United
States or state law by the Trusts (or any officer, director, employee, or
agent of the Trusts) (a "material violation"). At the conclusion of any
investigation of a material violation, the Audit Committee shall be
authorized (i) to recommend that the Trusts implement an appropriate
response to evidence of a material violation, and (ii) to inform the chief
executive officer of the Trusts and the Board of any such investigation and
the appropriate remedial measures to be adopted. The Audit Committee is
further authorized to take all other appropriate action, including
notification to the Securities and Exchange Commission in the event the
Trusts fail in any material respect to implement an appropriate response
recommended by the Audit Committee;
(i) to review such other matters or information that the Audit Committee
believes may be relevant to the auditor, the audit engagement, or the
Trusts' financial policies and procedures or internal auditing controls;
and
(j) to report its activities to the full Board on a regular basis and to make
such recommendations with respect to the above and other matters as the
Audit Committee may deem necessary or appropriate.
A simple majority of members shall constitute a quorum and actions may be taken
by a majority vote at any meeting at which a quorum is present.
The Audit Committee shall meet at least twice a year, once to review the
proposed scope of the annual audit and once with the auditor (and outside the
presence of management) to review the results of the annual audit. The Audit
Committee is also empowered to hold special meetings as circumstances require.
The Audit Committee shall have the resources and authority appropriate to
discharge its responsibilities, including the authority to retain special
counsel and other experts or consultants at the expense of the appropriate
Fund(s) of the Trusts. The Audit Committee may request any officer or employee
of the Trusts, or any of the Trusts' service providers, or the Trusts' outside
legal counsel, or auditor to attend a meeting of the Audit Committee or to meet
with any member of, or consultants to, the Audit Committee.
The Audit Committee shall review the Audit Committee Charter at least annually
and recommend any changes to the full Board.
The qualified legal compliance committee, as part of the Audit Committee, is
authorized to receive reports from attorneys of a material violation of an
applicable United States federal or state securities law or a material breach of
fiduciary duty arising under United States or state law, or a similar material
violation of any United States or state law by the Trusts (or any officer,
director, employee, or agent of the Trusts). The qualified legal compliance
committee is also authorized to receive in confidence and investigate a report
of a violation of the Trusts' Code of Ethics for Principal Executive and
Principal Financial Officers.
Compliance Committee
The Compliance Committee of the Trusts was established on November 4, 2004 and
currently consists of David S. Schoedinger, John M. Shary, Thomas J. Westerfield
(Chairman) and William R. Wise. If elected, it is proposed that Carl A. Nelson,
Tadd C. Seitz and Mark D. Shary will also become a member of the Compliance
Committee. The purpose of the Compliance Committee is to oversee the Trusts'
compliance with the legal and regulatory requirements of the Trusts' operations
including compliance with securities laws and regulations. The Compliance
Committee met six times during the fiscal year ended 2005.
Nominating Committee
The Nominating Committee of the Trusts was established on August 9, 2000 and
currently consists of David S. Schoedinger, John M. Shary (Chairman) and William
R. Wise. If elected, it is proposed that Carl A. Nelson, Tadd C. Seitz and Mark
D. Shary will also become a member of the Nominating Committee. The Board has
adopted a written charter for the Nominating Committee, a copy of which is
attached as Exhibit A to this Proxy Statement. The Nominating Committee met one
time during the fiscal year ended 2005.
The purpose of the Nominating Committee is to nominate a person or persons to
serve as a member of the Board. The Nominating Committee will consider nominees
recommended by shareholders.
This Policy for the Consideration of Trustee Nominees (the "Policy") shall be
followed by the Nominating Committee (the "Committee") of the Trusts in filling
vacancies on its Board or when Trustees are to be nominated for election by
shareholders.
Minimum Nominee Qualifications
1. With respect to nominations for Trustees who are not interested persons of
the Trusts, as defined by Section 2(a)(19) of the 1940 Act ("Independent
Trustees"), nominees must meet the definition of a non-interested person
under the 1940 Act. The Committee should consider all relationships (beyond
those delineated in the 1940 Act) that might impair independence, such as
business, financial or family relationships with the Advisor or its
affiliates.
2. Independent Trustee nominees must qualify for service on the Trusts' Audit
Committee.
3. With respect to all Trustees, nominees must fully complete a Trustee
questionnaire and must qualify under all applicable laws and regulations.
4. The proposed nominee may not be within five years of the Trusts' retirement
age for Trustees unless he or she is nominated for re-election.
5. The Committee may also consider such other factors as it may determine to
be relevant.
Other Qualifications
1. With respect to all proposed nominees, the Committee shall consider whether
the proposed nominee serves on boards of or is otherwise affiliated with
competing financial service organizations or their related fund complexes
or companies in which the Trusts may invest.
2. The Committee shall consider whether the proposed nominee is able to and
intends to commit the time necessary for the performance of Trustee duties.
3. The Committee shall consider the integrity and character of the proposed
nominee, and the proposed nominee's compatibility with the current
Trustees.
4. The Committee may require an interview with the proposed nominee.
Nominees Recommended by Shareholders
The Committee shall consider nominations for openings on the Board from
shareholders who have separately or as a group held at least 5% of the shares of
one of the Trust's Funds for at least one full year.
The Committee shall give candidates recommended by shareholders the same
consideration as any other candidate.
Shareholder recommendations should be sent to the attention of the Committee in
care of the Trusts' Secretary and should include biographical information,
including business experience for the past ten years and a description of the
qualifications of the proposed nominee, along with a statement from the proposed
nominee that he or she is willing to serve and meets the requirements to be an
Independent Trustee, if applicable.
Process for Identifying and Evaluating Trustee Nominees
1. When identifying and evaluating prospective nominees for openings on the
Board, the Committee shall review all recommendations in the same manner,
including those received from shareholders, Trustees, officers or employees
of any of the Trusts' agents or service providers, and counsel to the
Trusts.
2. The Committee shall first determine if the prospective nominee meets the
minimum qualifications set forth above. Those proposed nominees meeting the
minimum qualifications will then be considered by the Committee with
respect to the other qualifications listed above, and any other
qualifications deemed to be important by the Committee.
3. Those nominees selected by the Committee shall be recommended to the Board.
Special Proxy Voting Committee
The Special Proxy Voting Committee of the Trusts currently consists of David S.
Schoedinger, John M. Shary, Thomas J. Westerfield and William R. Wise. If
elected, it is proposed that Carl A. Nelson, Tadd C. Seitz and Mark D. Shary
will also become a member of the Special Proxy Voting Committee.
The purpose of the Special Proxy Voting Committee is to consider and determine
how to vote on behalf of the Trusts with respect to specific votes referred by
the Trusts' Advisor. The Special Proxy Voting Committee did not meet during the
fiscal year ended 2005.
What is the process for delivering shareholder communications to the Board of
Trustees?
Any shareholder who wishes to send a communication to the Board of Trustees of
the Trusts should send the communication to the attention of the Trusts'
Secretary at 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010. If a
shareholder wishes to send a communication directly to an individual Trustee or
to a Committee of a Trust's Board of Trustees, then the communication should be
specifically addressed to such individual Trustee or Committee and sent in care
of the Trusts' Secretary at the same address.
After reviewing the communication, the Trusts' Secretary will then immediately
forward the communication to the Board of Trustees. Communications to individual
Trustees or to a Committee sent in care of the Trusts' Secretary will be
immediately forwarded to the individual Trustee or to the Committee, as
applicable.
What is the policy concerning Trustee attendance at shareholder meetings?
The Trusts are not required to hold annual meetings of shareholders. However, if
a shareholder meeting is held, it is the policy of the Trusts to invite
Trustees, but not require them, to attend.
Who are the Senior Officers of the Trusts?
The officers of the Trusts are elected annually by the Trustees. Each officer
holds the office until qualification of his or her successor. The names, ages as
of the date of this Proxy Statement, and addresses of the officers of the
Trusts, as well as their principal occupations during the past five years, are
set forth below:
Name
--------------------------
Address
Age Principal Occupations for Past Five Years and
Position With Trusts Previous Positions
Date Service Began
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
B. Randolph Bateman Principal Occupation: President and Chief
---------------------------- Investment Officer, Huntington Asset Advisors, Inc.
Age: 50 (February 2001 to present); Chief Investment
41 South High Street Officer, Huntington National Bank (October 2000 to
Columbus, OH present).
PRESIDENT
Began Serving Huntington Previous Positions: Senior Vice President, Star
Trust and VA Trust: Bank (June 1988-October 2000).
September 2005
-----------------------------
------------------------------------------------------------------------------------------
Charles L. Davis, Jr. Principal Occupation: Director of Sales
Age: 46 Administration, Federated Securities Corp. (March
1001 Liberty Avenue 2006 to present); President, Edgewood Services,
Pittsburgh, PA Inc., the Funds' distributor (March 2004 to
CHIEF EXECUTIVE OFFICER present); Officer of various funds distributed by
Began Serving Huntington Edgewood Services, Inc. (December 2002 to present);
Trust and VA Trust: April President, Southpointe Distribution Services, Inc.
2003 (August 2005 to present)
Previous Positions: Vice President, Managing
Director of Mutual Fund Services, Federated Services
Company (October 2002 to 2006); Vice President,
Edgewood Services, Inc. (January 2000 to March
2004); President, Federated Clearing Services
(January 2000 to October 2002); Director, Business
Development, Mutual Fund Services, Federated
Services Company (September 1998 to December 2000).
-----------------------------
------------------------------------------------------------------------------------------
David R. Carson Principal Occupation: Chief Compliance Officer, and
Age: 47 Anti-Money Laundering Officer of the Huntington
3805 Edwards Road Funds and Huntington VA Funds (September 2005 to
Suite 3805 present).
Cincinnati, OH
CHIEF COMPLIANCE OFFICER Previous Position: Treasurer and Assistant
and ANTI-MONEY LAUNDERING Treasurer of the Huntington Funds, Huntington Asset
OFFICER Advisors, Inc. (February 2002 to February 2005);
Began Serving Huntington Vice President and Private Financial Group Marketing
Trust and VA Trust: Manager, Huntington National Bank (June 2001 to
September 2005 September 2005); Trust Officer, Firstar Bank
(October 1982 to February 2001).
-----------------------------
------------------------------------------------------------------------------------------
George Polatas Principal Occupation: Assistant Vice President,
Age: 44 Federated Services Company; Vice President and
1001 Liberty Avenue Assistant Treasurer of various funds distributed by
Pittsburgh, PA Edgewood Services, Inc. (January 1997 to present).
VICE PRESIDENT
Began Serving Huntington
Trust and VA Trust:
July 2003
----------------------------- ------------------------------------------------------
------------------------------------------------------------------------------------------
Christopher E. Sabato Principal Occupations: Vice President-Financial
Age: 37 Services, BISYS Fund Services Ohio, Inc. (February
3435 Stelzer Road 1993 to present).
Columbus, OH
TREASURER
Began Serving Huntington
Trust and VA Trust: May 2005
----------------------------- ------------------------------------------------------
--------------------------------------------------------------------------------------------
Victor R. Siclari Principal Occupations: Partner, Reed Smith LLP
Age: 44 (October 2002 to present).
1001 Liberty Avenue
Pittsburgh, PA Previous Positions: Sr. Corporate Counsel and Vice
SECRETARY President, Federated Services Company (prior to
Began Serving Huntington Trust and October 2002).
VA Trust: August 2002
--------------------------------------------------------------------------------------------
* Officers do not receive any compensation from the Funds.
As of December 31, 2005, the Trusts' Board and officers, as a group, owned less
than 1% of each Fund's and the Trusts' outstanding shares.
Who are the service providers for the Funds?
The Advisor. The investment advisor of the Funds is Huntington Asset Advisors,
Inc. (the "Advisor"), a subsidiary of The Huntington National Bank ("HNB").
Pursuant to the advisory agreements, the Advisor manages the Funds' assets,
including buying and selling portfolio securities. The Advisor's address is 41
South High Street, Columbus, OH 43215.
The Sub-Advisor. The Advisor has delegated daily management of the Huntington
Macro 100 Fund's and the Huntington VA Macro 100 Fund's assets to Laffer
Investments, Inc. (the "Sub-Advisor"). The Sub-Advisor's address is 2908 Poston
Avenue, Nashville, TN 37203.
The Administrator. HNB provides the Funds with certain administrative services
necessary to operate the Funds. HNB also serves as financial administrator,
providing portfolio accounting services to the Funds. The Administrator's
address is 41 South High Street, Columbus, OH 43215.
The Sub-Administrator. Federated Services Company ("FServ"), a wholly-owned
subsidiary of Federated Investors, Inc. ("Federated"), provides the Funds with
certain administrative personnel and generally assists with the provision of
administrative services to operate the Funds. FServ's address is 5800 Corporate
Drive, Pittsburgh, PA 15237-7010.
The Distributor. Edgewood Services, Inc. ("Edgewood"), a registered
broker-dealer and a member in good standing of the National Association of
Securities Dealers, Inc., serves as the Trusts' distributor. Edgewood, an
indirect, wholly-owned subsidiary of Federated, is located at 5800 Corporate
Drive, Pittsburgh, PA 15237-5829.
The Transfer Agent and Dividend Disbursing Agent. Unified Fund Services, Inc.
("Unified"), a registered transfer agent, provides the Funds with certain
financial and transfer agency services. The principal business address of
Unified is P.O. Box 6110, Indianapolis, IN 46206-6110.
The Custodian and Fund Accountant. The custodian for all Funds except the
Huntington International Equity Fund and Huntington VA International Equity Fund
and fund accountant for the Funds is HNB. HNB's address is 41 South High Street,
Columbus, OH 43215. The custodian for the Huntington International Equity Fund
and Huntington VA International Equity Fund is State Street Bank and Trust
Company. State Street Bank and Trust Company's address is Two Heritage Drive,
Quincy, MA 02171. The Sub-Custodian of the foreign assets of the Situs Small Cap
Fund and VA Situs Small Cap Fund is the Bank of New York. The Bank of New York's
address is 100 Church Street, New York, NY 10286. The Sub-Accountant for the
Funds is BISYS. BISYS' address is 3435 Stelzer Road, Columbus, Ohio 43219.
Other Matters. The Funds' last audited financial statements and annual report,
for the fiscal year ended December 31, 2005, have been previously mailed to
shareholders and are available free of charge. If you have not received the
annual report or would like to receive additional copies, free of charge, please
write the Trusts at the address on the cover page of this Proxy Statement or
call the Trusts at 1-800-253-0412 and the annual report will be sent by
first-class mail within three business days.
Principal Shareholders. As of April 21, 2006, the Funds had the following number
of outstanding shares of beneficial interest:
Name of Fund Shares
Huntington Florida Tax-Free Money Fund
Huntington Money Market Fund
Huntington Ohio Municipal Money Market Fund
Huntington U.S. Treasury Money Market Fund
Huntington Dividend Capture Fund
Huntington Growth Fund
Huntington Income Equity Fund
Huntington International Equity Fund
Huntington Macro 100 Fund
Huntington Mid Corp America Fund
Huntington New Economy Fund
Huntington Rotating Markets Fund
Huntington Situs Small Cap Fund
Huntington Fixed Income Securities
Huntington Intermediate Government Income Fund
Huntington Michigan Tax-Free Fund
Huntington Mortgage Securities Fund
Huntington Ohio Tax-Free Fund
Huntington Short/Intermediate Fixed Income
Securities Fund
Huntington VA Dividend Capture Fund
Huntington VA Growth Fund
Huntington VA Income Equity Fund
Huntington VA International Equity Fund
Huntington VA Macro 100 Fund
Huntington VA Mid Corp America Fund
Huntington VA New Economy Fund
Huntington VA Rotating Markets Fund
Huntington VA Situs Small Cap Fund
Huntington VA Mortgage Securities Fund
Each share is entitled to one vote and fractional shares have proportionate
voting rights.
From time to time, the number of shares held in "street name" accounts of
various securities dealers for the benefit of their clients may exceed 5% of the
total shares outstanding. To the knowledge of the Trusts' management, as of
April 21, 2006, the following entities held beneficially or of record more than
5% of each Fund's outstanding shares:
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Name of Fund Shareholder Name and Address Percentage Owned
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Shareholders owning 25% or more of outstanding Shares may be in control and be
able to affect the outcome of certain matters presented for a vote of
shareholders.
_____________________ is organized in the state of _______________ and is a
subsidiary of ______________; organized in the state of _________________.
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FURTHER INFORMATION ABOUT VOTING AND THE SPECIAL MEETING
Record Date. Shareholders of record at the close of business on April 21, 2006
(the "Record Date") are entitled to be present and to vote at the Special
Meeting or any adjournment of the Special Meeting. Each share of record is
entitled to one vote on each matter presented at the Special Meeting.
How may I vote my shares?
You may vote your shares (i) in person, by attending the Special Meeting, (ii)
by mail, (iii) by calling toll-free 1-800-___-____, or (iv) online through the
web site at www.proxyweb.com. To vote by mail, sign, date and send us the
enclosed proxy card in the envelope provided.
Proxy cards that are properly signed, dated and received at or prior to the
Special Meeting will be voted as specified. If you specify a vote for any of the
proposals on the proxy card, your proxy card will be voted as you indicated. If
you simply sign and date the proxy card, but do not indicate a choice as to the
proposals on the proxy card, your shares will be voted IN FAVOR of the election
of four Trustees (Proposal 1); IN FAVOR of ratifying the selection of Ernst &
Young LLP as the independent auditors for the Trusts (Proposal 2); IN FAVOR of
amending certain of the Funds' fundamental investment policies (Proposal 3); IN
FAVOR of eliminating certain of the Funds' fundamental investment policies
(Proposal 4); IN FAVOR of amending the investment objective of Income Equity
Fund and VA Income Equity Fund (Proposal 5); and IN FAVOR of reorganizing the
Huntington Trust from a Massachusetts business trust to a single Delaware
statutory trust (Proposal 6).
Revocation of Proxies. You may revoke your proxy at any time by sending to the
Secretary of the Trusts a written revocation or a later-dated proxy card that is
received at or before the Special Meeting, or by attending the Special Meeting
and voting in person.
Solicitation of Proxies. Your vote is being solicited by the Board of Trustees
of the Trusts. The cost of preparing and mailing the notice of meeting, proxy
cards, this Proxy Statement, and any additional proxy materials, has been or
will be borne by the Trusts. The Trusts will reimburse brokerage firms and
others for their expenses in forwarding proxy materials to the beneficial owners
and soliciting them to execute proxies. The Trusts will not reimburse Trustees
and officers of the Trusts, or regular employees and agents of HNB or FServ
involved in the solicitation of proxies. The Trusts intend to pay all costs
associated with the solicitation and the Special Meeting.
Proxy solicitations will be made primarily by mail, but they may also be made by
telephone, telegraph, personal interview or oral solicitations conducted by
certain officers or employees of the Trusts, Unified (the Trusts' transfer
agent), or HNB (the Trusts' administrator), or FServ (the Trusts'
sub-administrator) or, if necessary, a commercial firm retained for this
purpose. Proxy solicitations may also be made through the Internet. Any
telephonic solicitations will follow procedures designed to ensure accuracy and
prevent fraud, including requiring identifying shareholder information,
recording the shareholder's instructions, and confirming to the shareholder
after the fact. Shareholders who communicate proxies by telephone or by other
electronic means have the same power and authority to issue, revoke, or
otherwise change their voting instruction as shareholders submitting proxies in
written form. The Trusts do not anticipate engaging a solicitation firm to
solicit proxies from brokers, banks, other institutional holders and individual
shareholders.
Voting by Broker-Dealers. The Trusts expect that, before the Special Meeting,
broker-dealer firms holding shares of the Funds in "street name" for their
customers will request voting instructions from their customers and beneficial
owners. If these instructions are not received by the date specified in the
broker-dealer firms' proxy solicitation materials, the Funds understand that New
York Stock Exchange rules permit the broker-dealers to vote on certain of the
proposals to be considered at the Special Meeting on behalf of their customers
and beneficial owners. Certain broker-dealers may exercise discretion over
shares held in their name for which no instructions are received by voting these
shares in the same proportion as they vote shares for which they received
instructions.
Voting by Variable Annuity Contract Owners. Insurance company separate accounts,
as shareholders of the Huntington VA Dividend Capture Fund, Huntington VA Growth
Fund, Huntington VA Income Equity Fund, Huntington VA International Equity Fund,
Huntington VA Macro 100 Fund, Huntington VA Mid Corp America Fund, Huntington VA
New Economy Fund, Huntington VA Rotating Markets Fund, Huntington VA Situs Small
Cap Fund and Huntington VA Mortgage Securities Fund (each, a "Variable Annuity
Fund"), will request voting instructions from the owners of variable life
insurance policies and variable annuity contracts ("Variable Contract Owners")
of the separate accounts, and will vote the accounts' shares or other voting
interests in the Variable Annuity Fund in proportion to the voting instructions
received. Each separate account is required to vote its shares of a Variable
Annuity Fund in accordance with instructions received from Variable Contract
Owners. Each separate account is also required to vote shares of a Variable
Annuity Fund held in each of its respective variable accounts for which no
voting instructions have been received in the same proportion as the separate
account votes shares held by variable accounts for which it has received
instructions. Shares held by an insurance company in its general account, if
any, must be voted in the same proportions as the votes cast with respect to
shares held in all of the insurance company's variable accounts in the
aggregate. Variable Contract Owners are permitted to give instructions to the
Variable Annuity Fund and the number of shares for which such instructions may
be given for purposes of voting at the Special Meeting, and any adjournment
thereof, will be determined as of the Record Date. In connection with the
solicitation of such instructions from Variable Contract Owners, it is expected
that insurance companies will furnish a copy of this Proxy Statement to Variable
Contract Owners.
Quorum and Required Vote. The presence in person or by proxy of shareholders of
each Fund or Trust, as the case may be, entitled to cast at least a majority of
the votes to be cast shall constitute a quorum at the Special Meeting. For
purposes of determining the presence of a quorum and counting votes on the
matters presented, shares represented by abstentions and "broker non-votes" will
be counted as present, but not treated as votes cast, at the Special Meeting.
The affirmative vote necessary to approve a matter under consideration is
determined with reference to a percentage of votes considered to be present at
the Special Meeting, which would have the effect of treating abstentions and
broker non-votes as if they were votes against the proposal.
Shares of the Funds of each respective Trust will be counted as a single group
of shares for purposes of determining the presence of a quorum and the requisite
vote for the approval of the election of Trustees of each such Trust, and the
ratification of the selection of the independent auditors for each such Trust.
Shares of each Fund will be counted separately for determining the presence of a
quorum and the requisite vote for the approval of the changes to a Fund's
fundamental investment policies as described herein and the approval of the
Agreement and Plan of Reorganization. The presence of a quorum for the Funds,
separately and when counted as a single group, will be established by the
presence, in person or by proxy, of 50% of their outstanding shares.
The election of each Trustee with respect to the Huntington Trust and the VA
Trust, respectively, will require a plurality vote of the shares of the
Huntington Trust and the VA Trust, respectively, represented in person or by
proxy at the Special Meeting and entitled to vote. The ratification of the
selection of the independent auditors with respect to the Huntington Trust and
the VA Trust, respectively, will require approval of "a majority of the
outstanding voting securities" of the Huntington Trust and the VA Trust,
respectively, represented in person or by proxy at the Special Meeting and
entitled to vote. The shareholder approval of each change to a Fund's
fundamental policies and limitations will be determined on the basis of a vote
of "a majority of the outstanding voting securities" of each Fund, as defined in
and required by the 1940 Act. A vote of a "majority of the outstanding voting
securities" with respect to the votes by a Trust or a Fund, as the case may be,
requires the lesser of (A) 67% or more of the voting securities present at such
Special Meeting, if the holders of more than 50% of the outstanding voting
securities are present or represented by proxy; or (B) more than 50% of the
outstanding voting securities. The approval of the Agreement and Plan of
Reorganization of each Trust as a single Delaware statutory trust requires, with
respect to each Fund of the Huntington Trust, the affirmative vote of a majority
of such Fund's shares outstanding and entitled to vote.
Adjournment. In the event that a quorum is not present at the Special Meeting,
the Special Meeting will be adjourned to permit further solicitation of proxies.
In the event that a quorum is present, but sufficient votes have not been
received to approve one or more of the items on the proxy card, the persons
named as proxies may propose one or more adjournments of the Special Meeting to
permit further solicitation of proxies with respect to those items. The persons
named as proxies will vote in their discretion on questions of adjournment on
those shares for which proxies have been received that grant discretionary
authority to vote on matters that may properly come before the Special Meeting.
Shareholder Proposals. Neither of the Trusts are required to, and they do not
intend to, hold regular shareholder meetings. Shareholders wishing to submit
proposals for consideration for inclusion in a proxy statement for the next
meeting of shareholders should send their written proposals to the Trusts'
offices, 5800 Corporate Drive, Pittsburgh, Pennsylvania 15237-7010, Attention:
Secretary, so that they are received within a reasonable time before any such
meeting. The Trustees know of no business, other than the matters mentioned in
the Notice and described above, that is expected to come before the Special
Meeting. Should any other matter requiring a vote of shareholders arise,
including any question as to an adjournment or postponement of the Special
Meeting, the persons named as proxies will vote on such matters according to
their best judgment in the interests of the Trusts.
By the Order of the Board of Trustees
of The Huntington Funds and Huntington VA
Funds
Victor R. Siclari
Secretary
May __, 2006
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as of this
__ day of April, 2006 by and between The Huntington Funds ("The Huntington
Funds-Massachusetts") and The Huntington VA Funds, each a business trust created
under the laws of the Commonwealth of Massachusetts (each, a "Trust"), and The
Huntington Funds, a statutory trust created under the laws of the State of
Delaware (the "Successor Trust") (the Trusts and the Successor Trust are
hereinafter collectively referred to as the "parties").
The Agreement shall be deemed for all purposes to constitute a separate and
discrete agreement between the Successor Trust and each of the Trusts, and no
series of shares of either Trust shall be liable or responsible for any of the
obligations of any series of the other Trust under this Agreement or otherwise
notwithstanding anything to the contrary contained herein.
1. PLAN OF REORGANIZATION.
(a) Upon satisfaction of the conditions precedent described in Section 2
hereof, each Trust will convey, transfer and deliver to the Successor
Trust, at the closing (the "Closing") to be held on the closing date (the
"Closing Date") provided for in Section 1(d) herein, all of such Trust's
assets (consisting of all the assets belonging to each series of such
Trust, which series are set forth in Schedule A hereto), to the
corresponding series of the Successor Trust as set forth in Schedule A
hereto. In consideration thereof, the Successor Trust will at the Closing
(i) assume all of each Trust's obligations and liabilities, whether
absolute, accrued, contingent or otherwise, including all fees and expenses
incurred in connection with the Agreement (which fees and expenses shall
include, without limitation, costs of legal advice, accounting, printing,
mailing, proxy solicitation and transfer taxes, if any), with the effect
that the obligations and liabilities of each series of each Trust shall
become the obligations and liabilities of the corresponding series of the
Successor Trust; and (ii) deliver to each Trust, in accordance with
paragraph (b) of this Section 1, full and fractional shares of beneficial
interest of the Successor Trust's separate series and classes, equal in
number to the number of full and fractional shares of each such Trust's
corresponding series and classes (if any), outstanding immediately prior to
the Closing, all as set forth in Schedule A hereto. The transactions
contemplated hereby are intended to qualify as a reorganization within the
meaning of Section 368 of the Internal Revenue Code of 1986, as amended
("Code").
(b) In order to effect delivery of such shares, the Successor Trust will
establish an open account for each shareholder of each series of each
Trust, and, on the Closing Date, will credit to such account full and
fractional shares of the appropriate series and class of the Successor
Trust equal to the number of full and fractional shares such shareholder
holds in the corresponding series and class of each such Trust at the close
of regular trading on the New York Stock Exchange on the Closing Date;
fractional shares of the Successor Trust will be carried to the third
decimal place. No certificates of the Successor Trust will be delivered. On
the Closing Date, the net asset value per share of each share of the
Successor Trust shall be deemed to be the same as the net asset value per
share of the corresponding share of each Trust at the close of regular
trading on the New York Stock Exchange on the Closing Date.
(c) As soon as practicable after the Closing Date, each Trust shall take all
necessary steps under Massachusetts law to effect a complete dissolution of
such Trust.
(d) The Closing Date shall be June 23, 2006, or such earlier or later date as
may be mutually agreed upon by the parties.
(e) Delivery of the assets (subject to the liabilities) of each Trust to be
transferred shall be made to The Huntington National Bank (State Street
Bank and Trust Company, in the case of Huntington International Equity Fund
and Huntington VA International Equity Fund; and The Bank of New York, in
the case of foreign assets of Huntington Situs Small Cap Fund and
Huntington VA Situs Small Cap Fund), the Successor Funds' custodian,
foreign custodian and foreign sub-custodian, respectively (together, the
"Custodian"), for the account of the Successor Trust with all securities
not in bearer or book entry form duly endorsed, or accompanied by duly
executed separate assignments or stock powers, in proper form for transfer,
with signatures guaranteed, and with all necessary stock transfer stamps,
sufficient to transfer good and marketable title thereto (including all
accrued interest and dividends and rights pertaining thereto) to the
Custodian for the account of the Successor Trust free and clear of all
liens, encumbrances, rights, restrictions and claims. All cash delivered
shall be in the form of immediately available funds payable to the order of
the Custodian for the account of the Successor Trust.
(f) Each Trust will pay or cause to be paid to the Successor Trust any interest
received on or after the Closing Date with respect to assets transferred
from each such Trust to the Successor Trust and any distributions, rights
or other assets received by a Trust after the Closing Date as distributions
on or with respect to the securities transferred from a Trust to the
Successor Trust hereunder. All such assets shall be deemed included in
assets transferred to the Successor Trust on the Closing Date and shall not
be separately valued.
2. CONDITIONS PRECEDENT. The obligations of each Trust and the Successor Trust
to effectuate the reorganization hereunder shall be subject to the
satisfaction of each of the following conditions:
(a) Such authority and orders from the U.S. Securities and Exchange Commission
(the "Commission") as may be necessary to permit the parties to carry out
the transactions contemplated by this Agreement shall have been received;
(b) (i) One or more post-effective amendments to each Trust's Registration
Statement on Form N-1A ("Registration Statement") under the Securities Act
of 1933, as amended, and the Investment Company Act of 1940, as amended
(the "1940 Act"), containing such amendments to the Registration Statement
as are determined under the supervision of the Trustees of each such Trust
to be necessary and appropriate as a result of this Agreement, shall have
been filed with the Commission; (ii) the Successor Trust shall have adopted
the Registration Statement, as so amended, as its own; and (iii) the most
recent post-effective amendment or amendments to the Registration Statement
filed with the Commission relating to the Successor Trust shall have become
effective, and no stop-order suspending the effectiveness of the
Registration Statement shall have been issued, and no proceeding for that
purpose shall have been initiated or threatened by the Commission (other
than any such stop-order, proceeding or threatened proceeding that shall
have been withdrawn or terminated).
(c) Each party shall have received an opinion from Reed Smith, LLP, to the
effect that the reorganization contemplated by this Agreement qualifies as
a "reorganization" under Section 368(a)(1)(F) of the Code, and thus will
not give rise to the recognition of income, gain or loss for federal income
tax purposes to either Trust, the Successor Trust or shareholders of either
Trust or the Successor Trust;
(d) The shares of each series and class of the Successor Trust shall have been
duly registered, qualified or otherwise authorized and are eligible for
offering to the public in those states of the United States and
jurisdictions in which the shares of their corresponding series and class
of each Trust are presently eligible for offering to the public so as to
permit the issuance and delivery of shares contemplated by this Agreement
to be consummated;
(e) This Agreement and the reorganization contemplated hereby shall have been
adopted and approved by the appropriate action of The Huntington
Funds-Massachusetts at an annual or special meeting or any adjournment
thereof (approval of the shareholders of The Huntington VA Funds is not
required);
(f) The Trustees of the Successor Trust shall have taken the following actions
at a meeting duly called for such purposes:
(1) Approval of the investment advisory agreement between the Successor
Trust and Huntington Asset Advisors, Inc. ("HAA"), and sub-advisory
agreement among the Successor Trust, HAA and Laffer Investments, Inc.,
substantially identical to the current investment advisory contracts
and sub-advisory agreements between the Trust, HAA and Laffer
Investments, Inc.;
(2) Approval of the Successor Trust's Distributor's Contract with
Edgewood Services, Inc.;
(3) Approval of the Successor Trust's Administrative Services
Agreement (Form of Shareholder Services Agreement) with The
Huntington National Bank;
(4) Approval of the Successor Trust's Tax Services Agreement with
BISYS Fund Services Ohio, Inc.;
(5) Approval of the Successor Trust's Administrative Services
Agreement with The Huntington National Bank;
(6) Approval of the Successor Trust's Agreement for
Sub-Administrative Services with Federated Services Company and
The Huntington National Bank;
(7) Approval of the Accounting Agreement (and related agreement)
between The Huntington National Bank and BISYS Fund Services
Ohio, Inc., with respect to the Successor Trust;
(8) Approval of the Successor Trust's Financial Administrative and
Accounting Services Agreement with The Huntington National Bank;
(9) Approval of the Successor Trust's Custodian Contract and
Agreement with The Huntington National Bank;
(10) Approval of the Foreign Custody Agreements between The Huntington
National Bank and The Bank of New York, with respect to foreign
assets of Huntington Situs Small Cap Fund and Huntington VA Situs
Small Cap Fund;
(11) Approval of the Successor Trust's Custodian Agreement with State
Street Bank and Trust Company;
(12) Approval of the Distribution Plan for the Successor Trust;
(13) Approval of the Successor Trust's Mutual Funds Services
Agreements for Transfer Agency Services with Unified Fund
Services, Inc.;
(14) Approval of the Successor Trust's Form of Mutual Fund Sales and
Services Agreement;
(15) Approval of the Successor Trust's Multiple Class Plan;
(16) Approval of the Successor Trust's three separate Fund
Participation Agreements for VA Funds with Hartford Life
Insurance Company, Transamerica Life Insurance Company and
Nationwide Life Insurance Company et al., respectively;
(17) Approval of the Successor Trust's Securities Lending Agreement
and related agreements with PFPC Trust Company;
(18) Selection of Ernst & Young LLP, as the Successor Trust's
independent auditors, for the fiscal year ending December 31,
2006;
(19) Authorization of the issuance by the Successor Trust, prior to
the Closing Date, of one share of each series and class of the
Successor Trust to each Trust in consideration for the payment of
the current public offering price of each such share for the
purpose of enabling each Trust to vote on the matter referred to
in Section 2(g);
(20) Submission of the matter referred to in Section 2(g) to each
Trust as sole shareholder of each series of the Successor Trust;
and
(21) Authorization of the issuance and delivery by the Successor Trust
of shares of each series and class of the Successor Trust on the
Closing Date in exchange for the assets of the corresponding
series and class of each Trust pursuant to the terms and
provisions of this Agreement;
(22) Approval of the Successor Trust's Foreign Custody Manager
Agreement with The Bank of New York;
(23) Approval of the Successor Trust's Employee Lease Agreement with
The Huntington National Bank.
(g) The shareholders of The Huntington Funds-Massachusetts shall have voted to
approve the reorganization and, in connection with that vote, been informed
that such a vote would have the effect of directing The Huntington
Funds-Massachusetts to vote, as (together with The Huntington VA Funds) the
sole shareholders of the Successor Trust, to approve a new investment
advisory contract between the Successor Trust and HAA and a new
sub-advisory contract among the Successor Trust, HAA and Laffer
Investments, Inc.
At any time prior to the Closing, any of the foregoing conditions may be waived
by the Board of Trustees of the Trusts if, in the judgment of such Trustees,
such waiver will not affect in a materially adverse way the benefits intended to
be accorded to the shareholders of the Trust under this Agreement.
3. TERMINATION. The Board of Trustees of the Trusts may terminate this
Agreement and abandon the reorganization contemplated hereby,
notwithstanding approval thereof by the shareholders of The Huntington
Funds-Massachusetts, at any time prior to the Closing Date if, in the
judgment of such Board of Trustees, the facts and circumstances make
proceeding with this Agreement inadvisable. The termination of this
Agreement with respect to either Trust shall also constitute the
termination of this Agreement by the other Trust.
4. ENTIRE AGREEMENT. This Agreement embodies the entire agreement between the
parties and there are no agreements, understandings, restrictions or
warranties among the parties other than those set forth herein or herein
provided for.
5. FURTHER ASSURANCES. Each Trust and the Successor Trust shall take such
further action as may be necessary or desirable and proper to consummate
the transactions contemplated hereby.
6. COUNTERPARTS. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
7. GOVERNING LAW. This Agreement and the transactions contemplated hereby
shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware.
IN WITNESS WHEREOF, each Trust and the Successor Trust have each caused this
Agreement and Plan of Reorganization to be executed on its behalf by its Vice
President and attested by its Secretary, all as of the day and year first-above
written.
Attest: THE HUNTINGTON FUNDS
(a Delaware statutory trust)
By:___________________________ By:________________________
Secretary Vice President
Attest: THE HUNTINGTON FUNDS
(a Massachusetts business trust)
By:___________________________ By:________________________
Secretary Vice President
Attest: THE HUNTINGTON VA FUNDS
(a Delaware statutory trust)
By:___________________________ By:________________________
Secretary Vice President
SCHEDULE A
CLASS/SERIES OF THE TRUSTS CLASS/SERIES OF THE SUCCESSOR TRUST
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A. THE HUNTINGTON FUNDS
Huntington Dividend Capture Fund Huntington Dividend Capture Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Fixed Income Securities Fund Huntington Fixed Income Securities Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Florida Tax-Free Money Fund Huntington Florida Tax-Free Money Fund
Investment A Shares Investment A Shares
Trust Shares Trust Shares
Huntington Growth Fund Huntington Growth Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Income Equity Fund Huntington Income Equity Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Intermediate Government Huntington Intermediate Government
Income Fund Income Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington International Equity Fund Huntington International Equity Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Macro 100 Fund Huntington Macro 100 Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Michigan Tax-Free Fund Huntington Michigan Tax-Free Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Mid Corp America Fund Huntington Mid Corp America Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Money Market Fund Huntington Money Market Fund
Interfund Shares Interfund Shares
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Mortgage Securities Fund Huntington Mortgage Securities Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington New Economy Fund Huntington New Economy Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Ohio Municipal Money Market Huntington Ohio Municipal Money Market
Fund Fund
Investment A Shares Investment A Shares
Trust Shares Trust Shares
Huntington Ohio Tax-Free Fund Huntington Ohio Tax-Free Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Rotating Markets Fund Huntington Rotating Markets Fund
Investment A Shares Investment A Shares
Trust Shares Trust Shares
Huntington Short/Intermediate Fixed Huntington Short/Intermediate Fixed
Income Securities Fund Income Securities Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Situs Small Cap Fund Huntington Situs Small Cap Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington U.S. Treasury Money Market Huntington U.S. Treasury Money Market
Fund Fund
Investment A Shares Investment A Shares
Trust Shares Trust Shares
B. THE HUNTINGTON VA FUNDS
Huntington VA Dividend Capture Fund Huntington VA Dividend Capture Fund
Shares Shares
Huntington VA Growth Fund Shares Huntington VA Growth Fund Shares
Huntington VA Income Equity Fund Shares Huntington VA Income Equity Fund Shares
Huntington VA International Equity Fund Huntington VA International Equity Fund
Shares Shares
Huntington VA Macro 100 Fund Shares Huntington VA Macro 100 Fund Shares
Huntington VA Mid Corp America Fund Huntington VA Mid Corp America Fund
Shares Shares
Huntington VA Mortgage Securities Fund Huntington VA Mortgage Securities Fund
Shares Shares
Huntington VA New Economy Fund Shares Huntington VA New Economy Fund Shares
Huntington VA Rotating Markets Fund Huntington VA Rotating Markets Fund
Shares Shares
Huntington VA Situs Small Cap Fund Huntington VA Situs Small Cap Fund
Shares Shares
EXHIBIT B
COMPARISON OF SIGNIFICANT DIFFERENCES BETWEEN THE PROPOSED DELAWARE STATUTORY TRUST AND
EXISTING MASSACHUSETTS BUSINESS TRUSTS
DELAWARE STATUTORY TRUST MASSACHUSETTS BUSINESS MASSACHUSETTS BUSINESS TRUST
TRUST
HUNTINGTON VA FUNDS
THE HUNTINGTON FUNDS
GOVERNING A Delaware Statutory A Massachusetts Business A Massachusetts Business Trust
DOCUMENTS/ Trust (a "DST") is formed Trust (an "MBT") is (an "MBT") is created by filing a
GOVERNING BODY by the execution of a created by filing a declaration of trust with the
governing instrument and declaration of trust with Secretary of the Commonwealth of
the filing of a the Secretary of the Massachusetts and with the clerk
certificate of trust with Commonwealth of of every city or town in
the Delaware Secretary of Massachusetts and with the Massachusetts where the trust has
State. The Delaware law clerk of every city or a usual place of business. MBTs
governing a DST is town in Massachusetts are organized under the
referred to in this where the trust has a Massachusetts statute governing
comparison as the usual place of business. business trusts (the
"Delaware Act." MBTs are organized under "Massachusetts Statute").
the Massachusetts statute
governing business trusts
(the "Massachusetts
Statute").
DESIGNATION OF The DE Trust's beneficial The Trust's beneficial The VA Trust's beneficial
OWNERSHIP interests are designated interests are designated interests are designated as
SHARES OR as "shares" and are as "shares" with a par "shares" and are without par
INTERESTS without par value. value of $.001 per share. value.
AMENDMENTS TO The Delaware Act provides The Massachusetts Statute The Massachusetts Statute
GOVERNING broad flexibility as to provides that the Trustees provides that the Trustees shall,
DOCUMENTS the manner of amending shall, within thirty (30) within thirty (30) days after the
and/or restating the days after the adoption of adoption of any amendment to the
governing instrument of a any amendment to the declaration of trust, file a copy
DST. Amendments to any declaration of trust, file with the Secretary of The
governing instrument that a copy with the Secretary Commonwealth of Massachusetts and
do not change the of The Commonwealth of with the clerk of every city or
information in the DST's Massachusetts and with the town in Massachusetts where the
certificate of trust are clerk of every city or VA Trust has a usual place of
not required to be filed town in Massachusetts business.
with the Delaware where the Trust has a
Secretary of State. usual place of business.
Certificate of Trust Certificate of Trust Certificate of Trust
The Delaware Act provides No Certificate of Trust is No Certificate of Trust is
that, except to the required for the Trust. required for the VA Trust.
extent otherwise provided
in the certificate of
trust, the certificate of
trust of a DST may be
amended at any time for
any purpose as the
Trustees may determine.
The Declaration of Trust
for the DE Trust (the
"Declaration") provides
that the Trustees may
amend or restate the
certificate of trust of
the DE Trust at any time,
without shareholder
approval, to correct any
inaccuracy contained
therein. Any such
restatement and/or
amendment of the
certificate of trust
shall be executed by at
least one (1) Trustee and
shall be effective
immediately upon its
filing with the office of
the Secretary of State of
the State of Delaware or
upon such future date as
may be stated therein.
Declaration of Trust Declaration of Trust Declaration of Trust
The Declaration provides The Declaration of Trust The Declaration of Trust for the
that it may be restated for the Trust (the VA Trust (the "Declaration")
and/or amended at any "Declaration") provides provides that, except as
time by an instrument in that it may be amended by specifically provided in the
writing signed by a a majority shareholder Declaration, the Trustees may,
majority of the then vote of the outstanding without a vote of the
Board of Trustees and, if shares of the Trust with shareholders, amend the
required, by approval of the shareholders of all Declaration. Shareholders have a
such amendment by series and classes voting right to vote on (i) amendments
shareholders. together as a single class that affect their right to vote
or by any instrument in granted in the Declaration; (ii)
writing, without a amendments that alter the maximum
meeting, signed by a number of Trustees permitted by
majority of the Trustees the Declaration; (iii) amendments
and consented to by the that change the vote required to
holders of a majority of amend the Declaration; (iv)
such shares. However, an amendments required by law or by
amendment which will the VA Trust's registration
affect the shareholders of statement filed with the
a particular series or Securities and Exchange
class shall be authorized Commission; and (v) amendments
by a majority shareholder submitted to shareholders by the
vote of such series or Trustees. Any amendment required
class affected, and no or permitted to be submitted to
vote of shareholders of a shareholders that, as the
series or class not Trustees may determine, affect
affected shall be the shareholders of one or more
required. The Trustees series or classes shall be
may also amend the authorized by the vote of the
Declaration, without the shareholders of each series or
vote or consent of class affected and no vote of
shareholders, to change shareholders of a series or class
the name of the Trust or not affected shall be required.
if they deem it necessary
to conform the Declaration
to the requirements of
applicable federal laws or
regulations or the
requirements of the
regulated investment
company provisions of the
Internal Revenue Code of
1986.
By-Laws By-Laws By-Laws
The By-Laws of the DE The By-Laws of the Trust The By-Laws of the VA Trust
Trust provide that they provide that they may be provide that they may be altered,
may be restated and/or altered, amended or amended or repealed, or new
amended at any time, repealed, or new By-Laws By-Laws may be adopted by the
without the approval of may be adopted by the Trustees, provided, however, that
the shareholders, by an Trustees, provided, no By-Law may be amended, adopted
instrument in writing however, that no By-Law or repealed by the Trustees if
signed by, or a may be amended, adopted or such amendment, adoption or
resolution of, a majority repealed by the Trustees repeal requires, pursuant to law,
of the Board. if such amendment, the Declaration or the By- Laws,
adoption or repeal a vote of the shareholders.
requires, pursuant to law,
the Declaration or the By-
Laws, a vote of the
shareholders.
DISSOLUTION The DE Trust may be The Trust may be The VA Trust may be terminated
AND dissolved at any time by terminated by the (i) by a majority shareholder
TERMINATION vote of a majority of the affirmative vote of the vote of the VA Trust, each
EVENTS shares of the Trust holders of not less than affected series or each affected
entitled to vote or by two-thirds of the class, as applicable; or (ii)
the Board of Trustees by outstanding shares of the without the vote or consent of
written notice to the Trust entitled to vote at shareholders, by a majority of
shareholders. Any series any meeting of the Trustees either at a meeting
or class may be dissolved shareholders with the or by written consent.
or liquidated at any time shareholders of all series
by vote of a majority of and classes voting
the shares of that series together as a single
or class or by the Board class, or by an instrument
of Trustees by written in writing, without a
notice to the meeting, signed by a
shareholders of that majority of the Trustees
series or class. and consented to by the
holders of not less than
two-thirds of such
shares. Any series or
class may be terminated by
the affirmative vote of
the holders of not less
than two-thirds of the
outstanding shares of such
series or class entitled
to vote at any meeting of
shareholders, or by an
instrument in writing,
without a meeting, by a
majority of the Trustees
and consented to by the
holders of not less than
two-thirds of such shares.
LIQUIDATION Upon the winding up of After termination of the After termination of the VA Trust
UPON the Trust in accordance Trust or any series or or any series or class and
DISSOLUTION OR with Section 3808 of the class and distribution to distribution to the shareholders,
TERMINATION Delaware Act and its the shareholders, a a majority of the Trustees shall
termination, any one (1) majority of the Trustees execute and lodge among the
Trustee shall execute, shall execute and lodge records of the VA Trust an
and cause to be filed, a among the records of the instrument in writing setting
certificate of Trust an instrument in forth the fact of such
cancellation, with the writing setting forth the termination, and the Trustees
office of the Secretary fact of such termination, shall thereupon be discharged
of State of the State of and the Trustees shall from all further liabilities and
Delaware in accordance thereupon be discharged duties, and the rights and
with the provisions of from all further interests of all shareholders of
Section 3810 of the liabilities and duties, the VA Trust or such series or
Delaware Act. and the rights and class shall cease.
interests of all
shareholders of the Trust
or such series or class
shall cease.
SHAREHOLDER Shareholder Votes Shareholder Votes Shareholder Votes
----------------- ----------------- -----------------
AND TRUSTEE
VOTING Pursuant to the Pursuant to the Pursuant to the Declaration,
Declaration, shareholders Declaration, shareholders shareholders shall have power to
shall have power to vote shall have power to vote vote (i) for the election of
only (i) for the election only (i) for the election Trustees; (ii) with respect to
of Trustees, including of Trustees; (ii) with any investment advisory or
the filling of any respect to any investment management contract entered into
vacancies in the Board of advisory or management by the VA Trust; (iii) with
Trustees; (ii) with contract entered into by respect to termination of the VA
respect to such the Trust; (iii) with Trust or a series or class; (iv)
additional matters respect to termination of with respect to any amendment of
relating to the Trust as the Trust or a series or the Declaration to the extent
may be required by the class; (iv) with respect provided in the Declaration; (v)
Declaration, the By-Laws, to any amendment of the with respect to any merger,
the 1940 Act or any Declaration to the extent consolidation or sale of assets
registration statement of provided in the as provided in the Declaration;
the Trust filed with the Declaration; (v) with (vi) with respect to
Securities and Exchange respect to any merger, incorporation of the VA Trust to
Commission; and (iii) on consolidation or sale of the extent provided in the
such other matters as the assets as provided in the Declaration; (vii) to the same
Board of Trustees may Declaration; (vi) with extent as the stockholders of a
consider necessary or respect to incorporation Massachusetts business
desirable. of the Trust to the extent corporation as to whether or not
provided in the a court action, proceeding or
Declaration; (vii) to the claim should or should not be
same extent as the brought or maintained
stockholders of a derivatively or as a class action
Massachusetts business on behalf of the VA Trust or the
corporation as to whether shareholders provided, however,
or not a court action, that a shareholder of a
proceeding or claim should particular series or class shall
or should not be brought not be entitled to bring any
or maintained derivatively derivative or class action on
or as a class action on behalf of any other series or
behalf of the Trust or the class; and (viii) with respect to
shareholders provided, such additional matters relating
however, that a to the VA Trust as may be
shareholder of a required by the Declaration, the
particular series or class By-Laws or because of any
shall not be entitled to registration of the VA Trust as
bring any derivative or an investment company under the
class action on behalf of 1940 Act or as the Trustees may
any other series or class; consider necessary or desirable.
and (viii) with respect to
such additional matters
relating to the Trust as
may be required by the
Declaration, the By-Laws
or because of any
registration of the Trust
as an investment company
under the 1940 Act or as
the Trustees may consider
necessary or desirable.
Shareholders' Meetings Shareholders' Meetings Shareholders' Meetings
The Declaration provides The Declaration provides that
that special meetings of special meetings of the
the shareholders of any or shareholders of any or all series
all series or classes may or classes may be called by the
be called by the Trustees Trustees and shall be called by
and shall be called by the the Trustees for the purpose of
Trustees for the purpose voting upon the question of the
of voting upon the removal of any Trustee or
question of the removal of Trustees when requested in
any Trustee or Trustees writing to do so by the holders
when requested in writing of not less than 10% of the
to do so by the holders of outstanding shares of the Trust,
not less than 10% of the with the shares of all series and
outstanding shares of the classes considered as a whole.
Trust, with the shares of At any time when less than a
all series and classes majority of the Trustees holding
considered as a whole. At office have been elected by the
any time when less than a shareholders, the then remaining
majority of the Trustees Trustees shall call a special
holding office have been meeting of shareholders to be
elected by the held as promptly as possible and
shareholders, the then in any event within 60 days for
remaining Trustees shall the purpose of electing Trustees
forthwith call a special to fill any existing vacancies.
meeting of shareholders to All such meetings shall be held
be held as promptly as either at the principal office of
possible and in any event the Trust, or at such other place
within 60 days for the as may be designated by the
purpose of electing Trustees. Whenever ten or more
Trustees to fill any shareholders meeting the
existing vacancies. All qualifications set forth in
such meetings shall be Section 16(c) of the 1940 Act
held either at the seek the opportunity of
principal office of the furnishing materials to the other
Trust, or at such other shareholders with a view to
place as may be designated obtaining signatures on such a
by the Trustees. Whenever request for a meeting, the
ten or more shareholders Trustees shall comply with the
meeting the qualifications provisions of said Section 16(c)
set forth in Section 16(c) with respect to providing such
of the 1940 Act seek the shareholders access to the list
opportunity of furnishing of shareholders or the mailing of
materials to the other such materials to shareholders.
shareholders with a view
to obtaining signatures on
such a request for a
meeting, the Trustees
shall comply with the
provisions of said Section
16(c) with respect to
providing such
shareholders access to the
list of shareholders or
the mailing of such
materials to shareholders.
The By-Laws provide that The By-Laws provide that The By-Laws provide that notice
all notices of meetings notice of all meetings of of all meetings of the
of shareholders shall be the shareholders, stating shareholders, stating the time,
sent or otherwise given the time, place and place and purposes of the
not less than seven (7) purposes of the meeting, meeting, shall be given by the
nor more than shall be given by the Trustees by mail or any
ninety-three (93) days Trustees by mail to each electronic means permitted by law
before the date of the shareholder at his address to each shareholder at his
meeting. The notice as recorded on the address as recorded on the
shall specify (i) the register of the Trust register of the VA Trust mailed
place, date and hour of mailed at least (10) days, or sent at least (10) days, but
the meeting, and (ii) the but not more than sixty not more than sixty (60) days,
general nature of the (60) days, before the before the meeting. Only the
business to be meeting. Only the business stated in the notice of
transacted. The notice business stated in the the meeting shall be considered
of any meeting at which notice of the meeting at such meeting. Any adjourned
trustees are to be shall be considered at meeting may be held as adjourned
elected also shall such meeting. Any without further notice. No notice
include the name of any adjourned meeting may be need be given to any shareholder
nominee or nominees who held as adjourned without who shall have failed to inform
at the time of the notice further notice. No notice the VA Trust of his current
are intended to be need be given to any address or if a written waiver of
presented for election. shareholder who shall have notice, executed before or after
Except with respect to failed to inform the Trust the meeting by the shareholder or
adjournments as provided of his current address or his attorney thereunto
by the By-Laws, no if a written waiver of authorized, is filed with the
business shall be notice, executed before or records of the meeting.
transacted at such after the meeting by the
meeting other than that shareholder or his
specified in the notice. attorney thereunto
Notice of any meeting of authorized, is filed with
shareholders shall be the records of the
given either personally meeting.
or by first-class mail,
courier, telegraphic,
facsimile or electronic
mail, or other written
communication, charges
prepaid, addressed to the
shareholder at the
address of that
shareholder appearing on
the books of the Trust or
its transfer agent or
given by the shareholder
to the Trust for the
purpose of notice.
The By-Laws state that The By-Laws state that for The By-Laws state that for the
when any shareholders' the purpose of determining purpose of determining the
meeting is adjourned to the shareholders of any shareholders of any series or
another time or place, series or class who are class who are entitled to notice
notice need not be given entitled to notice to vote to vote at any meeting, or to
of the adjourned meeting at any meeting, or to participate in any distribution,
at which the adjournment participate in any or for the purpose of any other
is taken, unless a new distribution, or for the action, the Trustees may from
record date of the purpose of any other time to time close the transfer
adjourned meeting is action, the Trustees may books of the VA Trust with
fixed or unless the from time to time close respect to such series or class
adjournment is for more the transfer books of the for such period, not exceeding
than one hundred eighty Trust with respect to such thirty (30) days, as the Trustees
(180) days from the series or class for such may determine; or without closing
record date set for the period, not exceeding the transfer books the Trustees
original meeting, in thirty (30) days, as the may fix a date not more than
which case the Board Trustees may determine; or sixty (60) days prior to the date
shall set a new record without closing the of any meeting of shareholders or
date. If notice of any transfer books the distribution or other action as a
such adjourned meeting is Trustees may fix a date record date for the determination
required pursuant to the not more than sixty (60) of the persons to be treated as
preceding sentence, it days prior to the date of shareholders of record for such
shall be given to each any meeting of purposes, except for dividend
shareholder of record shareholders or payments which shall be governed
entitled to vote at the distribution or other by the Declaration.
adjourned meeting in action as a record date
accordance with the for the determination of
By-Laws. At any the persons to be treated
adjourned meeting, the as shareholders of record
Trust may transact any for such purposes, except
business that might have for dividend payments
been transacted at the which shall be governed by
original meeting. the Declaration.
Quorum for Shareholders' Quorum for Shareholders' Quorum for Shareholders' Meeting
Meeting Meeting
The By-Laws state that holders of
The Declaration provides The By-Laws state that a majority of the outstanding
that, except when a holders of a majority of shares entitled to vote, present
larger quorum is required the outstanding shares in person or by proxy, shall
by applicable law, by the entitled to vote, present constitute a quorum at any
By-Laws or by the in person or by proxy, meeting of the shareholders.
Declaration, thirty-three shall constitute a quorum
and one-third percent at any meeting of the
(33-1/3%) of the shareholders.
outstanding shares
entitled to vote, present
in person or represented
by proxy, shall
constitute a quorum at
such meeting. When a
separate vote by one or
more series or classes is
required, thirty-three
and one-third percent
(33-1/3%) of the shares
of each such series or
class present in person
or represented by proxy
and entitled to vote
shall constitute a quorum
at a shareholders'
meeting of such series or
class.
Action Without Meeting of Action Without Meeting of Action Without Meeting of
Shareholders Shareholders Shareholders
The Declaration states The By-Laws state that any The By-Laws state that any action
that any action which may action which may be taken which may be taken by
be taken at any meeting by shareholders may be shareholders may be taken without
of shareholders may be taken without a meeting if a meeting if a majority of
taken without a meeting a majority of shareholders shareholders entitled to vote on
and without prior notice entitled to vote on the the matter (or such larger
if a consent in writing matter (or such larger proportion thereof as shall be
setting forth the action proportion thereof as required by law, the Declaration
so taken is signed by the shall be required by law, or the By-Laws for approval of
holders of shares having the Declaration or the such matter) consent to the
not less than the minimum By-Laws for approval of action in writing and the written
number of votes that such matter) consent to consents are filed with the
would be necessary to the action in writing and records of the meetings of
authorize or take that the written consents are shareholders.
action at a meeting at filed with the records of
which all shares entitled the meetings of
to vote on that action shareholders.
were present and voted.
Meetings of the Trustees Meetings of the Trustees Meetings of the Trustees
------------------------ ------------------------ ------------------------
Special meetings of the Board for Meetings of the Trustees other Meetings of the Trustees other
any purpose or purposes may be than regular or stated meetings than regular or stated meetings
called at any time by the shall be held whenever called by shall be held whenever called by
chairperson of the Board, the the President, or by any one of the President, or by any one of
president, any vice president, the Trustees, at the time being the Trustees, at the time being
the secretary or any trustee. in office. in office.
REMOVAL OF TRUSTEES The governing instrument of a DST The Massachusetts Statute does The Massachusetts Statute does
may contain any provision not contain specific provisions not contain specific provisions
relating to the removal of with respect to the removal of with respect to the removal of
Trustees; provided however, that the Trustees of an MBT. The the Trustees of an MBT. The
there shall at all times be at Declaration provides that any of Declaration provides that any of
least one Trustee of the DST. The the Trustees may be removed the Trustees may be removed
Declaration provides that the (provided the aggregate number of (provided the aggregate number of
Board of Trustees, by action of Trustees after such removal shall Trustees after such removal shall
two-thirds of the then Trustees not be less than two) with cause, not be less than two) with cause,
at a duly constituted meeting, by the action of two-thirds of by the action of two-thirds of
may remove any trustee with or the remaining Trustees. the remaining Trustees.
without cause. Shareholders
shall have the power to remove a
Trustee only to the extent
provided by the 1940 Act and the
rules and regulations thereunder.
SHAREHOLDER Under the Delaware Act, except to The Massachusetts Statute does The Massachusetts Statute does
LIABILITY the extent otherwise provided in not include an express provision not include an express provision
the governing instrument of a relating to the limitation of relating to the limitation of
DST, shareholders of a DST are liability of the beneficial liability of the beneficial
entitled to the same limitation owners of an MBT. Therefore, the owners of an MBT. Therefore, the
of personal liability extended to owners of an MBT could owners of an MBT could
shareholders of a private potentially be liable for the potentially be liable for the
corporation organized for profit obligations of the MBT, obligations of the MBT,
under the general corporation law notwithstanding any express notwithstanding any express
of the State of Delaware (such provision in the governing provision in the governing
shareholders are generally not instrument stating that the instrument stating that the
liable for the obligations of the beneficial owners are not beneficial owners are not
corporation). personally liable in connection personally liable in connection
with trust property or the acts, with trust property or the acts,
obligations or affairs of the MBT. obligations or affairs of the MBT.
TRUSTEE/AGENT Subject to the provisions in the The Massachusetts Statute does The Massachusetts Statute does
LIABILITY governing instrument, the not include an express provision not include an express provision
Delaware Act provides that a limiting the liability of the limiting the liability of the
Trustee or any other person Trustees of an MBT. The Trustees Trustees of an MBT. The Trustees
appointed, elected or engaged to of an MBT could potentially be of an MBT could potentially be
manage the DST, when acting in held personally liable for the held personally liable for the
such capacity, will not be obligations of the MBT. obligations of the MBT.
personally liable to any person
other than the DST or a
shareholder of the DST for any
act, omission or obligation of
the DST or any Trustee.
INDEMNIFICATION Subject to such standards and The Massachusetts Statute is The Massachusetts Statute is
restrictions, if any, contained silent as to the indemnification silent as to the indemnification
in the governing instrument of a of Trustees, officers and of Trustees, officers and
DST, the Delaware Act authorizes shareholders. shareholders.
a DST to indemnify and hold
harmless any Trustee, shareholder
or other person from and against
any and all claims and demands.
DERIVATIVE ACTIONS Under the Delaware Act, a The Massachusetts Statute does The Massachusetts Statute does
shareholder may bring a not contain specific provisions not contain specific provisions
derivative action if Trustees addressing derivative actions. addressing derivative actions.
with authority to do so have
refused to bring the action or if
a demand upon the Trustees to
bring the action is not likely to
succeed. A shareholder may bring
a derivative action only if the
shareholder is a shareholder at
the time the action is brought
and: (i) was a shareholder at
the time of the transaction
complained about or (ii) acquired
the status of shareholder by
operation of law or pursuant to
the governing instrument from a
person who was a shareholder at
the time of the transaction. A
shareholder's right to bring a
derivative action may be subject
to such additional standards and
restrictions, if any, as are set
forth in the governing instrument.
EXHIBIT C
NOMINATING COMMITTEE CHARTER
THE HUNTINGTON FUNDS
HUNTINGTON VA FUNDS
(each a "Trust" and collectively, the "Trusts")
This charter shall be followed by the Nominating Committee of the Board of
Trustees (the "Board") of each Trust. It sets forth the purpose, authority, and
responsibilities of each Nominating Committee, and is reviewed and approved
annually by the Board.
Purpose
The Nominating Committee (the "Committee") has as its primary purpose
responsibility for the nomination of a person or persons to serve as a member of
the Board.
Authority
The Committee has been duly established by the Board, and shall be provided with
appropriate resources to effectively discharge its responsibilities.
Composition and Term of Committee Members
The Committee shall be comprised of all Trustees who are not "interested
persons" of the Trust as defined in Section 2(a)(19) of the Investment Company
Act of 1940, as amended (the "1940 Act") (individually, an "Independent Trustee"
and collectively the "Independent Trustees"). The members of the Committee shall
designate one member to serve as Chairman of the Committee.
Each member of the Committee shall serve as long as he or she qualifies as an
"Independent Trustee."
Meetings
Meetings of the Committee will be called on an "as needed" basis. Meetings may
be held as often as deemed appropriate by the Committee. A majority of the
members of the Committee shall constitute a quorum for the transaction of
business. The Committee may meet by telephone and may act by unanimous written
consent. The Committee may adopt such rules, procedures or policies as it deems
appropriate from time to time to facilitate the conduct of its business.
Minutes of each meeting will be taken and circulated to all members of the
Committee in a timely manner. Counsel to the Board will serve as counsel to the
Committee, and will be responsible for maintaining the minutes of the
Committee's meetings.
Responsibilities
The Committee shall select and nominate persons for election to the Board as and
when vacancies occur or are reasonably anticipated, or in the event the Board
determines it should be expanded. Nominees shall be presented by the Committee
to the Board for election, or nomination for election by shareholders, as the
case may be. The Committee will follow its written Policy for the Consideration
of Trustee Nominees in identifying and evaluating Trustee nominees.
Board Policies
The Committee shall inform each candidate of relevant Board policies, including
the Board's policy regarding Trustee ownership of shares of the Trusts' funds.
- --------------------------------------------------------------------------------
IMPORTANT NOTICE ABOUT FUND DOCUMENT DELIVERY
- --------------------------------------------------------------------------------
In an effort to reduce costs and avoid duplicate mailings, the Funds intend to
deliver a single copy of certain documents to each household in which more than
one shareholder of the Funds resides (so-called "householding"), as permitted by
applicable rules. The Funds' "householding" program covers their Prospectuses
and Statements of Additional Information, and supplements to each, as well as
Semi-Annual and Annual Shareholder Reports and any Proxies or information
statements. Shareholders must give their written consent to participate in the
"householding" program. The Funds are also permitted to treat a shareholder as
having given consent ("implied consent") if (i) shareholders with the same last
name, or believed to be members of the same family, reside at the same street
address or receive mail at the same post office box, (ii) the Funds give notice
of their intent to "household" at least sixty (60) days before they begin
"householding" and (iii) none of the shareholders in the household have notified
the Funds or their agent of the desire to "opt out" of "householding."
Shareholders who have granted written consent, or have been deemed to have
granted implied consent, can revoke that consent and opt out of "householding"
at any time: shareholders who purchased shares through an intermediary should
contact their representative; other shareholders may contact the Funds by mail
at The Huntington Fund Complex, 5800 Corporate Drive, Pittsburgh, Pennsylvania
15237-7010 or call the Funds at 1-800-253-0412.
Edgewood Services, Inc., Distributor
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_____ (5/06)
(1) The Audit Committee may perform its functions under subparagraph 3(b) and
3(c) through implementation of policies and procedures whereby services are
pre-approved other than by the full Audit Committee and reported to the
Audit Committee at its next scheduled meeting.
THE HUNTINGTON FUNDS
HUNTINGTON VA FUNDS
Proxy for Special Meeting of Shareholders - June 22, 2006
KNOW ALL PERSONS BY THESE PRESENTS that the undersigned shareholders of
Huntington Florida Tax-Free Money Fund, Huntington Money Market Fund, Huntington
Ohio Municipal Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Dividend Capture Fund, Huntington Growth Fund, Huntington Income
Equity Fund, Huntington International Equity Fund, Huntington Macro 100 Fund,
Huntington Mid Corp America Fund, Huntington New Economy Fund, Huntington
Rotating Markets Fund, Huntington Situs Small Cap Fund, Huntington Fixed Income
Securities Fund, Huntington Intermediate Government Income Fund, Huntington
Michigan Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund and Huntington Short/Intermediate Fixed Income Securities Fund,
portfolios of The Huntington Funds (the "Huntington Trust"); and Huntington VA
Dividend Capture Fund, Huntington VA Growth Fund, Huntington VA Income Equity
Fund, Huntington VA International Equity Fund, Huntington VA Macro 100 Fund,
Huntington VA Mid Corp America Fund, Huntington VA New Economy Fund, Huntington
VA Rotating Markets Fund, Huntington VA Situs Small Cap Fund and Huntington VA
Mortgage Securities Fund, portfolios of the Huntington VA Funds (the "VA
Trust"), hereby appoint ___________________________________________________, or
any one of them, true and lawful attorneys, with the power of substitution of
each, to vote all shares of each Fund listed above (collectively, the "Funds")
which the undersigned may be entitled to vote at the Special Meeting of
Shareholders (the "Special Meeting") to be held on June 22, 2006, at 5800
Corporate Drive, Pittsburgh, Pennsylvania, at 2:00 p.m., and at any adjournment
thereof.
The proxies named will vote the shares represented by this proxy in accordance
with the choices made on this ballot. If no choice is indicated as to the item,
this proxy will be voted affirmatively on the matters. The matters being
proposed are related to, but not conditioned on, the approval of each other,
except as noted. Discretionary authority is hereby conferred as to all other
matters as may properly come before the Special Meeting or any adjournment
thereof.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE HUNTINGTON
TRUST AND THE VA TRUST (EACH A "TRUST" AND COLLECTIVELY, THE "TRUSTS"). THIS
PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR"
THE PROPOSALS.
Proposal 1 Election of Carl A. Nelson, Tadd C. Seitz, Mark D. Shary and
Thomas J. Westerfield as Trustees
of each Trust -TO BE VOTED ON BY ALL SHAREHOLDERS OF EACH TRUST
SEPARATELY.
FOR [ ]
WITHHOLD
AUTHORITY
TO VOTE [ ]
VOTE FOR ALL
EXCEPT [ ]
If you do not wish your shares to be voted "FOR" a particular
nominee, mark the "VOTE FOR ALL EXCEPT" box and strike a line
through the name of each nominee for whom you are NOT voting. Your
shares will be voted for the remaining nominees.
Proposal 2 To ratify the selection of Ernst & Young LLP as independent auditors
of each Trust - TO BE VOTED ON BY ALL SHAREHOLDERS OF EACH TRUST SEPARATELY.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 3 To make amendments to certain Funds' fundamental investment policies
- - TO BE VOTED ON BY ALL SHAREHOLDERS OF THOSE FUNDS AFFECTED.
3 (a)(1) To amend the fundamental investment policies regarding
diversification for certain of the Funds (applies to the Huntington
Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Dividend Capture Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington International Equity Fund, Huntington
Macro 100 Fund, Huntington Mid Corp America Fund, Huntington New
Economy Fund, Huntington Rotating Markets Fund, Huntington Situs
Small Cap Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Mortgage
Securities Fund, Huntington Short/Intermediate Fixed Income
Securities Fund, Huntington VA Growth Fund and Huntington VA Income
Equity Fund only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3(a)(2) To eliminate the fundamental policies regarding diversification
for certain of the Funds (applies to the Huntington Florida Tax-Free
Money Fund, Huntington Ohio Municipal Money Market Fund, Huntington
Michigan Tax-Free Fund and Huntington Ohio Tax-Free Fund only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (b) To amend the fundamental investment policies regarding
concentration for certain of the Funds (applies to the Huntington
Florida Tax-Free Money Fund, Huntington Money Market Fund,
Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (c) To amend the fundamental investment policies regarding issuing
senior securities for certain of the Funds (applies to the
Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (d) To amend the fundamental investment policies regarding lending
for certain of the Funds (applies to the Huntington Florida Tax-Free
Money Fund, Huntington Money Market Fund, Huntington Ohio Municipal
Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Huntington Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income
Securities Fund, Huntington Michigan Tax-Free Fund, Huntington
Mortgage Securities Fund, Huntington Ohio Tax-Free Fund, Huntington
Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (e) To amend the fundamental investment policies regarding borrowing
money for certain of the Funds (applies to the Huntington Florida
Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market
Fund, Huntington Growth Fund, Huntington Income Equity Fund,
Huntington Intermediate Government Income Fund, Huntington Fixed
Income Securities Fund, Huntington Michigan Tax-Free Fund,
Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund,
Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (f) To amend the fundamental investment policies regarding
investments in commodities for certain of the Funds (applies to the
Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (g) To amend the fundamental investment policies regarding
investments in real estate for certain of the Funds (applies to the
Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (h) To amend the fundamental investment policies regarding
underwriting securities for certain of the Funds (applies to the
Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
3 (i) To amend the fundamental investment policies regarding pledging,
mortgaging or hypothecating assets for certain of the Funds (applies
to the Huntington Florida Tax-Free Money Fund, Huntington Money
Market Fund, Huntington Ohio Municipal Money Market Fund, Huntington
U.S. Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 4 To eliminate certain Funds' fundamental investment policies - TO BE
VOTED ON BY ALL SHAREHOLDERS OF THOSE FUNDS AFFECTED.
4 (a) To eliminate the fundamental investment policies regarding
investing in illiquid securities for certain of the Funds (applies
to the Huntington Florida Tax-Free Money Fund, Huntington Money
Market Fund, Huntington Ohio Municipal Money Market Fund, Huntington
U.S. Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (b) To eliminate the fundamental investment policies regarding
investments in new issuers for certain of the Funds (applies to the
Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Huntington
Income Equity Fund, Huntington Intermediate Government Income Fund,
Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (c) To eliminate the fundamental investment policies regarding
purchases on margin for certain of the Funds (applies to the
Huntington Florida Tax-Free Money Fund, Huntington Money Market
Fund, Huntington Ohio Municipal Money Market Fund, Huntington U.S.
Treasury Money Market Fund, Huntington Growth Fund, Income Equity
Fund, Huntington Intermediate Government Income Fund, Huntington
Fixed Income Securities Fund, Huntington Michigan Tax-Free Fund,
Huntington Mortgage Securities Fund, Huntington Ohio Tax-Free Fund,
Huntington Short/Intermediate Fixed Income Securities Fund,
Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (d) To eliminate the fundamental investment policies regarding short
selling for certain of the Funds (applies to the Huntington Florida
Tax-Free Money Fund, Huntington Money Market Fund, Huntington Ohio
Municipal Money Market Fund, Huntington U.S. Treasury Money Market
Fund, Huntington Growth Fund, Income Equity Fund, Huntington
Intermediate Government Income Fund, Huntington Fixed Income
Securities Fund, Huntington Michigan Tax-Free Fund, Huntington
Mortgage Securities Fund, Huntington Ohio Tax-Free Fund, Huntington
Short/Intermediate Fixed Income Securities Fund, Huntington VA
Growth Fund and Huntington VA Income Equity Fund only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (e) To eliminate the fundamental investment policies regarding
certain transactions with "interested persons" of the Funds for
certain of the Funds (applies to the Huntington Florida Tax-Free
Money Fund, Huntington Money Market Fund, Huntington Ohio Municipal
Money Market Fund, Huntington U.S. Treasury Money Market Fund,
Huntington Growth Fund, Income Equity Fund, Huntington Intermediate
Government Income Fund, Huntington Fixed Income Securities Fund,
Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate
Fixed Income Securities Fund, Huntington VA Growth Fund and
Huntington VA Income Equity Fund only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (f) To eliminate the fundamental investment policies regarding
investing in issuers owned by officers and Trustees for certain of
the Funds (applies to the Huntington Florida Tax-Free Money Fund,
Huntington Money Market Fund, Huntington Ohio Municipal Money Market
Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth
Fund, Huntington Income Equity Fund, Huntington Intermediate
Government Income Fund, Huntington Fixed Income Securities Fund,
Huntington Michigan Tax-Free Fund, Huntington Mortgage Securities
Fund, Huntington Ohio Tax-Free Fund, Huntington Short/Intermediate
Fixed Income Securities Fund, Huntington VA Growth Fund and
Huntington VA Income Equity Fund only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
4 (g) To eliminate the fundamental investment policies regarding
purchasing securities of other investment companies for certain of
the Funds (applies to the Huntington Florida Tax-Free Money Fund,
Huntington Money Market Fund, Huntington Ohio Municipal Money Market
Fund, Huntington U.S. Treasury Money Market Fund, Huntington Growth
Fund, Income Equity Fund, Huntington Intermediate Government Income
Fund, Huntington Fixed Income Securities Fund, Huntington Michigan
Tax-Free Fund, Huntington Mortgage Securities Fund, Huntington Ohio
Tax-Free Fund, Huntington Short/Intermediate Fixed Income Securities
Fund, Huntington VA Growth Fund and Huntington VA Income Equity Fund
only).
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 5 To amend the Huntington Income Equity Fund's and Huntington VA
Income Equity Fund's fundamental investment objective - TO BE VOTED
ON BY ALL SHAREHOLDERS OF THE HUNTINGTON INCOME EQUITY FUND AND
HUNTINGTON VA INCOME EQUITY FUND VOTING SEPARATELY.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
Proposal 6 To approve Reorganizing the Huntington Trust (together with the VA
Trust) from separate Massachusetts business trusts to a single
Delaware statutory trust - TO BE VOTED ON BY ALL FUNDS OF THE
HUNTINGTON TRUST SEPARATELY. THE SHAREHOLDERS OF THE VA TRUST ARE
NOT REQUIRED TO APPROVE, AND THEREFORE WILL NOT VOTE WITH RESPECT TO
THIS PROPOSAL.
FOR [ ]
AGAINST [ ]
ABSTAIN [ ]
YOUR VOTE IS IMPORTANT Please
complete, sign and return this card as
soon as possible.
Dated
Signature
Please sign this proxy exactly as your name appears on the books of the
Trusts. Trustees and other fiduciaries should indicate the capacity in which
they sign, and where more than one name appears, a majority must sign. If a
corporation, this signature should be that of an authorized officer who
should state his or her title.