SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934
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Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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.
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1. Title of each class of securities to which transaction applies:
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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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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 the 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
four 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 1-888-221-0697, 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,
/s/ B. Randolph Bateman
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 (all shareholders of each
Fund to vote separately);
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
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,
/s/ Victor R. Siclari
Victor R. Siclari
Secretary
May 1, 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
Introduction to Proposals 3 and 4: Approval of Changes to Certain Funds'
Fundamental Investment Policies.................................8
Proposal 3: Approval of Amendments to, or Elimination of Certain of the Funds'
Fundamental Investment Policies.................................9
(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
23
(f) Investing in Issuers Owned by Officers and Trustees......23
(g) Purchasing Securities of Other Investment Companies......24
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...................46
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 on or about May 5, 2006 to
shareholders of record as of the close of business on April 21, 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 the 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 9, 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
elimination of fundamental investment policies of the Funds, the
amendment of the 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 Trust to vote separately.
each Trust
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2. Ratification of the Each Trust to vote separately.
Selection of Independent
Auditors
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3. Amendments to certain of Shareholders of the Huntington Florida
the Funds' fundamental Tax-Free Money Fund, Huntington Money
investment 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 Shareholders of the Huntington Florida
of the Funds' fundamental Tax-Free Money Fund, Huntington Money
investment 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 the Income The Income Equity Fund and VA Income
Equity Fund's and VA Income Equity Fund to vote separately.
Equity Fund's fundamental
investment objective
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6. Reorganization of the All Funds of the Huntington Trust to vote
Huntington Trust (together separately.
with the VA Trust) from
separate Massachusetts The shareholders of the VA Trust are not
business trusts to a single required to approve, and therefore will
Delaware statutory trust 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 1-888-221-0697; 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 certain of 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 the 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. (Assuming that the proposed nominees are elected, the number
of members constituting the entire Board would be increased to seven from
four, and upon the retirement of Messrs. J. Shary and Wise that number would
be reduced to five. There is no present intention on the part of the Board
to increase the number of Board members beyond five following the
resignations of Messrs. J. Shary and Wise, although the Board may at any time
add one or more members if it is deemed appropriate.)
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 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 ended 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" 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 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, 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 (i.e., additional interest expense) and
risks and that the Advisor will carefully consider whether the potential
benefits of these transactions outweigh such costs and risks. The principal
risk created by the use of senior securities is leverage risk, i.e., that it
is possible that the Fund's loss on the transaction may exceed the amount
invested.
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. Lending of money or other assets creates credit
risk (the risk that the borrower will not pay the interest and principal on
the loan when due) and interest rate risk (the risk that interest rates will
rise and, therefore, the return of the Funds' loan will be lower than current
market rates). 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)
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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.
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. Investment in
real estate, directly or indirectly, is subject to the risk that a Fund's
investment may decline in response to declines in property values,
fluctuations of mortgage interest rates, or other adverse changes to the real
estate market.
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)
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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 or 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 or 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?
As a general matter, the Funds' ability to pledge their assets raises senior
security issues described above under Proposal 3(c) and is specifically
prohibited under the 1940 Act in the absence of collateralization. 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 is the Board of the Trusts recommending that certain of the fundamental
policies be eliminated, and what effect will their elimination have on the
Funds?
The Board of the Trusts has 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 Board has 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
Board believes 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 Board does 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 Board believes 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 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.
Newer companies tend to have unproven track records (including a limited
history of public financial reports), a limited product or service base, and
limited access to capital, and thus are more likely to fail than are more
established companies. In addition, their shares are likely to be relatively
illiquid, and volatile in price. 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 described under Proposal 3(c) 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 policy
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. It should be noted
that investment companies incur certain expenses, such as management fees,
and, therefore, any investment by the Funds in shares of other investment
companies may be subject to a layering of fees and expenses.
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 (The 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 Trusts. 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 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 Trust's 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 (Rule
17a-8 under the 1940 Act may in certain instances require shareholder
approval where the acquiring entity is another fund of the DE Trust). 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 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: (1) 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
Date Service Began Other Directorships Held
------------------------------------------------------------------------------
David S. Schoedinger Principal Occupations: Since 1965, Chairman of
Age: 63 the Board, Schoedinger Funeral Service. Since
CHAIRMAN OF THE BOARD 1987, CEO, Schoedinger Financial Services, Inc.
AND TRUSTEE
Began serving Previous Position: President, Board of Directors
Huntington Trust: May of National Selected Morticians (1992- 1993)
1990 (national trade association for morticians).
Began serving VA Trust:
June 1999 Other Directorships Held: None.
------------------------------------------------------------------------------
------------------------------------------------------------------------------
John M. Shary* Principal Occupation: Retired.
Age: 75
TRUSTEE Previous Positions: Member, Business Advisory
Began serving Board, HIE-HEALTHCARE.COM (formerly Hublink,
Huntington Trust: Inc.) (1993-1997) (database integration
October 1991 software); Member, Business Advisory Board, Mind
Began serving VA Trust: Leaders, Inc. (formerly DPEC Data Processing
June 1999 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 Occupation: Retired.
Age: 74
TRUSTEE Previous Positions: Corporate Director of
Began serving Financial Services and Treasurer, Children's
Huntington Trust: April Hospital, Columbus, Ohio; Associate Executive
1991 Director and Treasurer, 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
Date Service Began Other Directorships Held
------------------------------------------------------------------------------
Thomas J. Westerfield+ Principal Occupation: Since August 2005, of
Age: 51 Counsel, Dinsmore & Shohl LLP (law firm).
TRUSTEE
Began serving Previous Position: Of Counsel, Cors & Bassett
Huntington Trust: LLC (1993 to 2005) (law firm).
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
Position With Trusts Other Directorships Held
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Carl A. Nelson Principal Occupations: Independent Business
Age: 60 Consultant, major manufacturing company (2002 to
Nominee/Trustee present); lecturer, Fisher College of Business
at the 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 Occupation: 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
Age: 46 and President, BestTransport.com, Inc. (2003 to
Nominee/Trustee present).
Previous Position: 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, 200
5
- --------------------------------------------------------------------------------
(1) (2) (3)
Name of Nominee/Trustee Dollar Range of Aggregate Dollar Range of
Shares Owned Equity Securities in All
in the Funds Registered Investment
Companies Overseen by Trustees
in the Huntington Family of
Investment 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 $1 - $10,000
Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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 $1 - $10,000
Securities Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Intermediate $1 - $10,000
Government Income Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Short Intermediate $1 - $10,000
Fixed Income
Securities Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Mortgage Securities $1 - $10,000
Fund
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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. During the
fiscal year ended December 31, 2005, the Trusts paid each Trustee annually a
retainer of $16,500 ($21,500 in the case of the Board's Chair) and a fee of
$1,500 per regular Board meeting ($750 per special Board meeting) attended.
With respect to each of the Audit Committee and the Compliance Committee,
each respective member received $750 for each meeting attended, and the
respective Chair of each such Committee received, in addition, annually a
retainer of $2,000 and an additional $250 fee for each 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
Commencing in 2006, the Trusts will pay each Independent Trustee annually a
retainer of $19,000 ($25,000 in the case of the Board's Chair), and a fee of
$2,000 per regular Board meeting ($750 per special Board meeting) attended.
With respect to each of the Audit Committee and the Compliance Committee,
each respective member will receive a fee of $750 for each meeting attended
and the respective Chair of each such Committee will receive, in addition,
annually a retainer of $3,000 and an additional $250 for each meeting
attended.
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, John M. Shary and William R. Wise
(Chairman). 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;
(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' Advisor, and (ii) an affiliate of the Trusts' Advisor
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 SEC 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 (Chairman), John M. Shary 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 C 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
Age
Address
Position With Trusts Principal Occupations for Past Five Years
--------------------------- and Previous Positions
Date Service Began
------------------------------------------------------------------------------
------------------------------------------------------------------------------
B. Randolph Bateman Principal Occupations: President and Chief
Age: 50 Investment Officer, Huntington Asset
--------------------------- Advisors, Inc. (February 2001 to present);
41 South High Street Chief Investment Officer, Huntington
Columbus, OH National Bank (October 2000 to present).
PRESIDENT
Began Serving Huntington Previous Position: Senior Vice President,
Trust and VA Trust: Star Bank (June 1988-October 2000).
September 2005
----------------------------
------------------------------------------------------------------------------
Charles L. Davis, Jr. Principal Occupations: Director of Sales
Age: 46 Administration, Federated Securities Corp.
1001 Liberty Avenue (March 2006 to present); President, Edgewood
Pittsburgh, PA Services, Inc., the Funds' distributor
CHIEF EXECUTIVE OFFICER (March 2004 to present); Officer of various
Began Serving Huntington funds distributed by Edgewood Services, Inc.
Trust and VA Trust: April (December 2002 to present); President,
2003 Southpointe Distribution Services, Inc.
(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 Occupations: Chief Compliance
Age: 47 Officer, and Anti-Money Laundering Officer
3805 Edwards Road of the Huntington Funds and Huntington VA
Suite 3805 Funds (September 2005 to present).
Cincinnati, OH
CHIEF COMPLIANCE OFFICER Previous Positions: Treasurer and Assistant
and ANTI-MONEY LAUNDERING Treasurer of the Huntington Funds,
OFFICER Huntington Asset Advisors, Inc. (February
Began Serving Huntington 2002 to February 2005); Vice President and
Trust and VA Trust: Private Financial Group Marketing Manager,
September 2005 Huntington National Bank (June 2001 to
September 2005); Trust Officer, Firstar Bank
(October 1982 to February 2001).
------------------------------------------------------------------------------
------------------------------------------------------------------------------
George Polatas Principal Occupations: Assistant Vice
Age: 44 President, Federated Services Company; Vice
1001 Liberty Avenue President and Assistant Treasurer of various
Pittsburgh, PA funds distributed by Edgewood Services, Inc.
VICE PRESIDENT (January 1997 to present).
Began Serving Huntington
Trust and VA Trust:
July 2003
---------------------------- ----------------------------------------------
------------------------------------------------------------------------------
Christopher E. Sabato Principal Occupation: Vice
Age: 37 President-Financial Services, BISYS Fund
3435 Stelzer Road Services Ohio, Inc. (February 1993 to
Columbus, OH present).
TREASURER
Began Serving Huntington
Trust and VA Trust: May
2005
---------------------------- ----------------------------------------------
------------------------------------------------------------------------------
Victor R. Siclari Principal Occupation: Partner, Reed Smith LLP
Age: 44 (October 2002 to present).
1001 Liberty Avenue
Pittsburgh, PA Previous Positions: Sr. Corporate Counsel and
SECRETARY Vice President, Federated Services Company
Began Serving Huntington (prior to October 2002).
Trust and 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 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 Share Class Outstanding
Shares
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Florida Tax-Free Money Fund Investment A Shares 11,734,706
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 18,659,249
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Money Market Fund Investment A Shares 259,947,180
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 58,717
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 520,050,582
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Interfund Shares 39,698,156
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Ohio Municipal Money Market Investment A Shares 117,759,062
Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 65,473,015
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington U.S. Treasury Money Market Investment A Shares 85,702,266
Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 509,384,687
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Dividend Capture Fund Investment A Shares 914,337
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 1,603,797
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 8,754,652
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Growth Fund Investment A Shares 257,432
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 156,912
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 5,753,682
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Income Equity Fund Investment A Shares 193,623
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 264,203
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 6,016,009
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington International Equity Fund Investment A Shares 267,941
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 122,233
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 17,378,506
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Macro 100 Fund Investment A Shares 207,874
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 152,549
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 2,714,602
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Mid Corp America Fund Investment A Shares 316,257
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 548,416
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 9,341,379
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington New Economy Fund Investment A Shares 444,812
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 235,780
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 5,345,919
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Rotating Markets Fund Investment A Shares 196,879
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 2,705,877
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Situs Small Cap Fund Investment A Shares 432,811
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 160,719
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 4,247,982
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Fixed Income Securities Investment A Shares 85,404
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 146,546
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 8,202,082
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Intermediate Government Investment A Shares 188,981
Income Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 51,411
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 10,636,386
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Michigan Tax-Free Fund Investment A Shares 454,033
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 58,137
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 1,927,167
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Mortgage Securities Fund Investment A Shares 183,793
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 78,067
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 9,338,074
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Ohio Tax-Free Fund Investment A Shares 97,259
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Investment B Shares 68,013
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 2,290,387
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington Short/Intermediate Fixed Investment A Shares 51,515
Income Securities Fund
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Trust Shares 5,937,604
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Dividend Capture Fund 3,650,311
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Growth Fund 2,197,647
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Income Equity Fund 2,993,092
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA International Equity Fund 245,808
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Macro 100 Fund 720,198
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Mid Corp America Fund 1,580,446
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA New Economy Fund 702,877
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Rotating Markets Fund 541,415
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Situs Small Cap Fund 737,074
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Huntington VA Mortgage Securities Fund 365,194
- -------------------------------------------------------------------------------
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:
- -------------------------------------------------------------------------------------------------------------
Name of Fund Shareholder Name and Total Shares / Percentage Owned
Address
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
Huntington Florida Tax-Free Money Fund - Carey & Co., 11,425,200 / 97.36%
Investment A Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Florida Tax-Free Money Fund - Carey & Co., 18,659,249 / 100%
Trust Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Money Market Fund - Investment A Carey & Co., 129,189,513 / 49.70%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 86,495,527 / 33.27%
Services LLC, New
York, NY
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 23,120,500 / 8.89%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Money Market Fund - Investment B National Financial 37,480 / 63.83%
Shares Services LLC,
Springfield OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 7,082 / 12.06%
Services LLC, London,
OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 6,588 / 11.22%
Services LLC, New
Albany, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Money Market Fund - Trust Shares Carey & Co., 517,668,408 / 99.54%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Money Market Fund - Interfund Carey & Co., 39,698,156 / 100%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Ohio Municipal Money Market Fund Carey & Co., 102,287,635 / 86.86%
- - Investment A Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 7,488,622 / 6.36%
Services LLC, New
York, NY
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Ohio Municipal Money Market Fund Carey & Co., 65,229,137 / 99.63%
- - Trust Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington U.S. Treasury Money Market Fund - National Financial 54,695,421 / 63.82%
Investment A Shares Services LLC, New
York, NY
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 24,075,674 / 28.09%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 5,316,021 / 6.20%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington U.S. Treasury Money Market Fund - Carey & Co., 509,177,959 / 99.96%
Trust Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Dividend Capture Fund - Trust Carey & Co., 4,025,177 / 45.98%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 3,968,898 / 45.33%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 753,958 / 8.61%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Growth Fund - Trust Shares Carey & Co., 3,175,269 / 55.19%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 1,988,179 / 34.55%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 336,506 / 5.85%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Income Equity Fund - Trust Shares Carey & Co., 3,431,224 / 57.03%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 1,820,731 / 30.26%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 353,433 / 5.87%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington International Equity Fund - FMCO, Columbus, OH 42,116 / 15.72%
Investment A Shares
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 20,046 / 7.48%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington International Equity Fund - Trust Carey & Co., 10,410,112 / 59.90%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 5,360,349 / 30.84%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Macro 100 Fund - Investment A National Financial 11,395 / 5.48%
Shares Services LLC,
Bloomfield Hills, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Macro 100 Fund - Trust Shares Carey & Co., 1,181,164 / 43.51%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 926,073 / 34.11%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Mid Corp America Fund - Carey & Co., 27,272 / 8.62%
Investment A Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Mid Corp America Fund - Trust Carey & Co., 5,805,341 / 62.15%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 2,876,967 / 30.80%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington New Economy Fund - Investment A FMCO, Columbus, OH 84,363 / 18.97%
Shares
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 25,718 / 5.78%
Services LLC, W.
Bloomfield, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington New Economy Fund - Trust Shares Carey & Co., 2,431,040 / 45.47%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 2,087,929 / 39.06%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 824,448 / 15.42%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Rotating Markets Fund - FMCO, Columbus, OH 43,456 / 22.07%
Investment A Shares
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 17,128 / 8.70%
Services LLC,
Belleville, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Rotating Markets Fund - Trust Carey & Co., 1,265,986 / 46.79%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 1,252,054 / 46.27%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 182,599 / 6.75%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Situs Small Cap Fund - Investment FMCO, Columbus, OH 139,633 / 32.26%
A Shares
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Situs Small Cap Fund - Trust Carey & Co., 1,849,617 / 43.54%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 1,269,350 / 29.88%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 898,259 / 21.15%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Key Bank NA TTEE, 218,742 / 5.15%
Cleveland, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Fixed Income Securities - William J. Umberg, 8,311 / 9.73%
Investment A Shares Cincinnati, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Fixed Income Securities - Trust Carey & Co., 4,794,842 / 58.46%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 2,146,054 / 26.16%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
SEI-Trust, Oaks, PA 735,252 / 8.96%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 458,949 / 5.60%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Intermediate Government Income National Financial 28,728 / 15.20%
Fund - Investment A Shares Services LLC FEBO,
Jenison, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Intermediate Government Income National Financial 4,525 / 8.80%
Fund - Investment B Shares Services LLC, N. Fort
Myers, FL
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 2,939 / 5.72%
Services LLC, Clinton
Twp., MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Intermediate Government Income Carey & Co., 6,327,231 / 59.49%
Fund - Trust Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 3,661,294 / 34.42%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
FMCO, Columbus, OH 645,984 / 6.07%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Michigan Tax-Free Fund - National Financial 57,166 / 12.59%
Investment A Shares Services LLC,
Charlevoix, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Welland W. Sprague, 49,552 / 10.91%
Portland, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Coleman Living Trust, 33,716 / 7.43%
Grand Rapids, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 27,479 / 6.05%
Services LLC,
Charlevoix, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 22,929 / 5.05%
Services LLC, Romeo,
MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Michigan Tax-Free Fund - National Financial 9,456 / 16.27%
Investment B Shares Services LLC, Troy, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Cousino, Quincy, MI 7,097 / 12.21%
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 6,028 / 10.37%
Services LLC, Clinton
Twp., MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,978 / 8.56%
Services LLC, Indian
Land, SC
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,831 / 8.31%
Services LLC,
Sterling Heights, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,212 / 7.24%
Services LLC, Clinton
Twp., MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 3,535 / 6.08%
Services LLC,
Washington, MI
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Michigan Tax-Free Fund - Trust Carey & Co., 1,829,495 / 94.93%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Mortgage Securities Fund - National Financial 12,565 / 6.84%
Investment A Shares Services LLC, Copley,
OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Mortgage Securities Fund - National Financial 7,966 / 10.20%
Investment B Shares Services LLC,
Garfield Hts., OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 6,075 / 7.78%
Services LLC,
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,150 / 5.32%
Services LLC, Port
Clinton, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Mortgage Securities Fund - Trust Carey & Co., 4,680,308 / 50.12%
Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 4,531,743 / 48.53%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Ohio Tax-Free Fund - Investment A National Financial 11,379 / 11.70%
Shares Services LLC,
Wickliffe, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 9,716 / 9.99%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Ursula E. M. Umberg, 9,450 / 9.72%
Cincinnati, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
John W. Warbritton, 8,548 / 8.79%
Westerville, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 5,352 / 5.50%
Services LLC,
Fremont, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Ohio Tax-Free Fund - Investment B National Financial 4,803 / 7.06%
Shares Services LLC, Toledo,
OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,384 / 6.45%
Services LLC, Grove
City, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,234 / 6.22%
Services LLC, Port
Clinton, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 4,048 / 5.95%
Services LLC FEBO,
Massillon, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 3,607 / 5.30%
Services LLC,
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Ohio Tax-Free Fund - Trust Shares Carey & Co., 2,140,893 / 93.47%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Short/Intermediate Fixed Income National Financial 12,885 / 25.01%
Securities Fund - Investment A Shares Services LLC,
Charleston, WV
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 10,355 / 20.10%
Services LLC, Somers,
MT
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
National Financial 3,226 / 6.26%
Services LLC, Dublin,
OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Huntington Short/Intermediate Fixed Income Carey & Co., 3,725,204 / 62.74%
Securities Fund - Trust Shares Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Carey & Co., 2,020,175 / 34.02%
Columbus, OH
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Name of Fund Shareholder Name and Total Shares /
Address Percentage Owned
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Dividend Capture Fund Hartford Life 2,916,405 / 79.89%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 733,906 / 20.11%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Growth Fund Hartford Life 1,784,776 / 81.21%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 412,871 / 18.79%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Income Equity Fund Hartford Life 2,515,668 / 84.05%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 477,423 / 15.95%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA International Equity Fund Transamerica Life 145,301 / 59.11%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Hartford Life 76,098 / 30.96%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Carey & Co., 24,407 / 9.93%
Columbus, OH
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Macro 100 Fund Hartford Life 400,477 / 55.61%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 299,681 / 41.61%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Mid Corp America Fund Hartford Life 1,317,233 / 83.35%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 263,213 / 16.65%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA New Economy Fund Hartford Life 550,142 / 78.27%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 152,735 / 21.73%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Rotating Markets Fund Hartford Life 472,343 / 87.24%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 69,073 / 12.76%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Transamerica Life 216,377 / 29.36%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Huntington VA Mortgage Securities Fund Transamerica Life 287,674 / 78.77%
Insurance Company,
Cedar Rapids, IA
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Hartford Life 57,383 / 15.71%
Insurance Co.,
Hartford, CT
- ----------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------
Carey & Co., 20,136 / 5.51%
Columbus, OH
- ----------------------------------------------------------------------------------------
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.
Hartford Life Insurance Co. is organized in the state of Connecticut and is a
subsidiary of Hartford Life and Accident Insurance Co.; organized in the
state of Connecticut.
National Financial Services LLC is organized in the state of Massachusetts
and is a subsidiary of Fidelity Brokerage Services LLC; organized in the
state of Massachusetts.
Transamerica Life Insurance Co. is organized in the state of Iowa and is a
subsidiary of Aegon USA Inc.; organized in the state of Iowa.
- ------------------------------------------------------------------------------
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
1-888-221-0697, 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 (together
with the VA 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), 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 VA
Trust, respectively, will require a plurality vote of the shares of the
Huntington Trust and 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 VA Trust, respectively, will require approval of "a majority of the
outstanding voting securities" of the Huntington Trust and 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
/s/ Victor R. Siclari
Victor R. Siclari
Secretary
May 1, 2006
EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is made as
of this __ day of May, 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 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: 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 Massachusetts business trust)
By:___________________________ By:________________________
Secretary Vice President
SCHEDULE A
CLASS/SERIES OF THE TRUSTS CLASS/SERIES OF THE SUCCESSOR TRUST
- -------------------------------------- -------------------------------------
- -------------------------------------- -------------------------------------
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 Huntington Fixed Income Securities
Fund Fund
Investment A Shares Investment A Shares
Investment B Shares Investment B Shares
Trust Shares Trust Shares
Huntington Florida Tax-Free Money Huntington Florida Tax-Free Money
Fund 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 Huntington Ohio Municipal Money
Market Fund Market 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 Huntington U.S. Treasury Money
Market Fund Market 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 Huntington VA Income Equity Fund
Shares Shares
Huntington VA International Equity Huntington VA International Equity
Fund Shares Fund 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 Huntington VA Mortgage Securities
Fund Shares Fund Shares
Huntington VA New Economy Fund Shares Huntington VA New Economy Fund
Shares
Huntington VA Rotating Markets Fund
Shares Huntington VA Rotating Markets Fund
Shares
Huntington VA Situs Small Cap Fund
Shares Huntington VA Situs Small Cap Fund
Shares
EXHIBIT B
COMPARISON OF SIGNIFICANT DIFFERENCES BETWEEN THE PROPOSED DELAWARE STATUTORY TRUST
AND EXISTING MASSACHUSETTS BUSINESS TRUSTS
DELAWARE STATUTORY TRUST MASSACHUSETTS BUSINESS TRUST MASSACHUSETTS BUSINESS TRUST
THE HUNTINGTON FUNDS HUNTINGTON VA FUNDS
GOVERNING DOCUMENTS/ A Delaware Statutory Trust (a A Massachusetts Business Trust A Massachusetts Business Trust
GOVERNING BODY "DST") is formed by the execution (an "MBT") is created by filing a (an "MBT") is created by filing a
of a governing instrument and the declaration of trust with the declaration of trust with the
filing of a certificate of trust Secretary of the Commonwealth of Secretary of the Commonwealth of
with the Delaware Secretary of Massachusetts and with the clerk Massachusetts and with the clerk
State. The Delaware law of every city or town in of every city or town in
governing a DST is referred to in Massachusetts where the trust has Massachusetts where the trust has
this comparison as the "Delaware a usual place of business. MBTs a usual place of business. MBTs
Act." are organized under the are organized under the
Massachusetts statute governing Massachusetts statute governing
business trusts (the business trusts (the
"Massachusetts Statute"). "Massachusetts Statute").
DESIGNATION OF The DE Trust's beneficial The Trust's beneficial interests The VA Trust's beneficial
OWNERSHIP SHARES OR interests are designated as are designated as "shares" with a interests are designated as
INTERESTS "shares" and are without par par value of $.001 per share. "shares" and are without par
value. value.
AMENDMENTS TO The Delaware Act provides broad The Massachusetts Statute The Massachusetts Statute
GOVERNING DOCUMENTS flexibility as to the manner of provides that the Trustees shall, provides that the Trustees shall,
amending and/or restating the within thirty (30) days after the within thirty (30) days after the
governing instrument of a DST. adoption of any amendment to the adoption of any amendment to the
Amendments to any governing declaration of trust, file a copy declaration of trust, file a copy
instrument that do not change the with the Secretary of The with the Secretary of The
information in the DST's Commonwealth of Massachusetts and Commonwealth of Massachusetts and
certificate of trust are not with the clerk of every city or with the clerk of every city or
required to be filed with the town in Massachusetts where the town in Massachusetts where the
Delaware Secretary of State. Trust has a usual place of VA Trust has a usual place of
business. business.
Certificate of Trust Certificate of Trust Certificate of Trust
The Delaware Act provides that, No Certificate of Trust is No Certificate of Trust is
except to the extent otherwise required for the Trust. required for the VA Trust.
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 that it The Declaration of Trust for the The Declaration of Trust for the
may be restated and/or amended at Trust (the "Declaration") VA Trust (the "Declaration")
any time by an instrument in provides that it may be amended provides that, except as
writing signed by a majority of by a majority shareholder vote of specifically provided in the
the then Board of Trustees and, the outstanding shares of the Declaration, the Trustees may,
if required, by approval of such Trust with the shareholders of without a vote of the
amendment by shareholders. all series and classes voting shareholders, amend the
together as a single class or by Declaration. Shareholders have a
any instrument in writing, right to vote on (i) amendments
without a meeting, signed by a that affect their right to vote
majority of the Trustees and granted in the Declaration; (ii)
consented to by the holders of a amendments that alter the maximum
majority of such shares. number of Trustees permitted by
However, an amendment which will the Declaration; (iii) amendments
affect the shareholders of a that change the vote required to
particular series or class shall amend the Declaration; (iv)
be authorized by a majority amendments required by law or by
shareholder vote of such series the VA Trust's registration
or class affected, and no vote of statement filed with the
shareholders of a series or class Securities and Exchange
not affected shall be required. Commission; and (v) amendments
The Trustees may also amend the submitted to shareholders by the
Declaration, without the vote or Trustees. Any amendment required
consent of shareholders, to or permitted to be submitted to
change the name of the Trust or shareholders that, as the
if they deem it necessary to Trustees may determine, affect
conform the Declaration to the the shareholders of one or more
requirements of applicable series or classes shall be
federal laws or regulations or authorized by the vote of the
the requirements of the regulated shareholders of each series or
investment company provisions of class affected and no vote of
the Internal Revenue Code of 1986. shareholders of a series or class
not affected shall be required.
By-Laws By-Laws By-Laws
The By-Laws of the DE Trust The By-Laws of the Trust provide The By-Laws of the VA Trust
provide that they may be restated that they may be altered, amended provide that they may be altered,
and/or amended at any time, or repealed, or new By-Laws may amended or repealed, or new
without the approval of the be adopted by the Trustees, By-Laws may be adopted by the
shareholders, by an instrument in provided, however, that no By-Law Trustees, provided, however, that
writing signed by, or a may be amended, adopted or no By-Law may be amended, adopted
resolution of, a majority of the repealed by the Trustees if such or repealed by the Trustees if
Board. amendment, adoption or repeal such amendment, adoption or
requires, pursuant to law, the repeal requires, pursuant to law,
Declaration or the By- Laws, a the Declaration or the By- Laws,
vote of the shareholders. a vote of the shareholders.
DISSOLUTION AND The DE Trust may be dissolved at The Trust may be terminated by The VA Trust may be terminated
TERMINATION EVENTS any time by vote of a majority of the affirmative vote of the (i) by a majority shareholder
the shares of the Trust entitled holders of not less than vote of the VA Trust, each
to vote or by the Board of two-thirds of the outstanding affected series or each affected
Trustees by written notice to the shares of the Trust entitled to class, as applicable; or (ii)
shareholders. Any series or vote at any meeting of without the vote or consent of
class may be dissolved or shareholders with the shareholders, by a majority of
liquidated at any time by vote of shareholders of all series and the Trustees either at a meeting
a majority of the shares of that classes voting together as a or by written consent.
series or class or by the Board single class, or by an instrument
of Trustees by written notice to in writing, without a meeting,
the shareholders of that series signed by a majority of the
or class. Trustees 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 Upon the winding up of the Trust After termination of the Trust or After termination of the VA Trust
DISSOLUTION OR in accordance with Section 3808 any series or class and or any series or class and
TERMINATION of the Delaware Act and its distribution to the shareholders, distribution to the shareholders,
termination, any one (1) Trustee a majority of the Trustees shall a majority of the Trustees shall
shall execute, and cause to be execute and lodge among the execute and lodge among the
filed, a certificate of records of the Trust an records of the VA Trust an
cancellation, with the office of instrument in writing setting instrument in writing setting
the Secretary of State of the forth the fact of such forth the fact of such
State of Delaware in accordance termination, and the Trustees termination, and the Trustees
with the provisions of Section shall thereupon be discharged shall thereupon be discharged
3810 of the Delaware Act. from all further liabilities and from all further liabilities and
duties, and the rights and duties, and the rights and
interests of all shareholders of interests of all shareholders of
the Trust or such series or class the VA Trust or such series or
shall cease. class shall cease.
SHAREHOLDER AND Shareholder Votes Shareholder Votes Shareholder Votes
----------------- ----------------- -----------------
TRUSTEE VOTING
Pursuant to the Declaration, Pursuant to the Declaration, Pursuant to the Declaration,
shareholders shall have power to shareholders shall have power to shareholders shall have power to
vote only (i) for the election of vote only (i) for the election of vote (i) for the election of
Trustees, including the filling Trustees; (ii) with respect to Trustees; (ii) with respect to
of any vacancies in the Board of any investment advisory or any investment advisory or
Trustees; (ii) with respect to management contract entered into management contract entered into
such additional matters relating by the Trust; (iii) with respect by the VA Trust; (iii) with
to the Trust as may be required to termination of the Trust or a respect to termination of the VA
by the Declaration, the By-Laws, series or class; (iv) with Trust or a series or class; (iv)
the 1940 Act or any registration respect to any amendment of the with respect to any amendment of
statement of the Trust filed with Declaration to the extent the Declaration to the extent
the Securities and Exchange provided in the Declaration; (v) provided in the Declaration; (v)
Commission; and (iii) on such with respect to any merger, with respect to any merger,
other matters as the Board of consolidation or sale of assets consolidation or sale of assets
Trustees may consider necessary as provided in the Declaration; as provided in the Declaration;
or desirable. (vi) with respect to (vi) with respect to
incorporation of the Trust to the incorporation of the VA Trust to
extent provided in the the extent provided in the
Declaration; (vii) to the same Declaration; (vii) to the same
extent as the stockholders of a extent as the stockholders of a
Massachusetts business Massachusetts business
corporation as to whether or not corporation as to whether or not
a court action, proceeding or a court action, proceeding or
claim should or should not be claim should or should not be
brought or maintained brought or maintained
derivatively or as a class action derivatively or as a class action
on behalf of the Trust or the on behalf of the VA Trust or the
shareholders provided, however, shareholders provided, however,
that a shareholder of a that a shareholder of a
particular series or class shall particular series or class shall
not be entitled to bring any not be entitled to bring any
derivative or class action on derivative or class action on
behalf of any other series or behalf of any other series or
class; and (viii) with respect to class; and (viii) with respect to
such additional matters relating such additional matters relating
to the Trust as may be required to the VA Trust as may be
by the Declaration, the By-Laws required by the Declaration, the
or because of any registration of By-Laws or because of any
the Trust as an investment registration of the VA Trust as
company under the 1940 Act or as an investment company under the
the Trustees may consider 1940 Act or as the Trustees may
necessary or desirable. consider necessary or desirable.
Shareholders' Meetings Shareholders' Meetings Shareholders' Meetings
The Declaration provides that The Declaration provides that
special meetings of the special meetings of the
shareholders of any or all series shareholders of any or all series
or classes may be called by the or classes may be called by the
Trustees and shall be called by Trustees and shall be called by
the Trustees for the purpose of the Trustees for the purpose of
voting upon the question of the voting upon the question of the
removal of any Trustee or removal of any Trustee or
Trustees when requested in Trustees when requested in
writing to do so by the holders writing to do so by the holders
of not less than 10% of the of not less than 10% of the
outstanding shares of the Trust, outstanding shares of the Trust,
with the shares of all series and with the shares of all series and
classes considered as a whole. classes considered as a whole.
At any time when less than a At any time when less than a
majority of the Trustees holding majority of the Trustees holding
office have been elected by the office have been elected by the
shareholders, the then remaining shareholders, the then remaining
Trustees shall forthwith call a Trustees shall call a special
special meeting of shareholders meeting of shareholders to be
to be held as promptly as held as promptly as possible and
possible and in any event within in any event within 60 days for
60 days for the purpose of the purpose of electing Trustees
electing Trustees to fill any to fill any existing vacancies.
existing vacancies. All such All such meetings shall be held
meetings shall be held either at either at the principal office of
the principal office of the the Trust, or at such other place
Trust, or at such other place as as may be designated by the
may be designated by the Trustees. Whenever ten or more
Trustees. Whenever ten or more shareholders meeting the
shareholders meeting the qualifications set forth in
qualifications set forth in Section 16(c) of the 1940 Act
Section 16(c) of the 1940 Act seek the opportunity of
seek the opportunity of furnishing materials to the other
furnishing materials to the other shareholders with a view to
shareholders with a view to obtaining signatures on such a
obtaining signatures on such a request for a meeting, the
request for a meeting, the Trustees shall comply with the
Trustees shall comply with the provisions of said Section 16(c)
provisions of said Section 16(c) with respect to providing such
with respect to providing such shareholders access to the list
shareholders access to the list of shareholders or the mailing of
of shareholders or the mailing of such materials to shareholders.
such materials to shareholders.
The By-Laws provide that notice The By-Laws provide that notice
The By-Laws provide that all of all meetings of the of all meetings of the
notices of meetings of shareholders, stating the time, shareholders, stating the time,
shareholders shall be sent or place and purposes of the place and purposes of the
otherwise given not less than meeting, shall be given by the meeting, shall be given by the
seven (7) nor more than Trustees by mail to each Trustees by mail or any
ninety-three (93) days before the shareholder at his address as electronic means permitted by law
date of the meeting. The notice recorded on the register of the to each shareholder at his
shall specify (i) the place, date Trust mailed at least (10) days, address as recorded on the
and hour of the meeting, and (ii) but not more than sixty (60) register of the VA Trust mailed
the general nature of the days, before the meeting. Only or sent at least (10) days, but
business to be transacted. The the business stated in the notice not more than sixty (60) days,
notice of any meeting at which of the meeting shall be before the meeting. Only the
trustees are to be elected also considered at such meeting. Any business stated in the notice of
shall include the name of any adjourned meeting may be held as the meeting shall be considered
nominee or nominees who at the adjourned without further at such meeting. Any adjourned
time of the notice are intended notice. No notice need be given meeting may be held as adjourned
to be presented for election. to any shareholder who shall have without further notice. No notice
Except with respect to failed to inform the Trust of his need be given to any shareholder
adjournments as provided by the current address or if a written who shall have failed to inform
By-Laws, no business shall be waiver of notice, executed before the VA Trust of his current
transacted at such meeting other or after the meeting by the address or if a written waiver of
than that specified in the shareholder or his attorney notice, executed before or after
notice. Notice of any meeting of thereunto authorized, is filed the meeting by the shareholder or
shareholders shall be given with the records of the meeting. his attorney thereunto
either personally or by mail, authorized, is filed with the
courier, telegraphic, facsimile records of the meeting.
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 when any The By-Laws state that for the The By-Laws state that for the
shareholders' meeting is purpose of determining the purpose of determining the
adjourned to another time or shareholders of any series or shareholders of any series or
place, notice need not be given class who are entitled to notice class who are entitled to notice
of the adjourned meeting at which to vote at any meeting, or to to vote at any meeting, or to
the adjournment is taken, unless participate in any distribution, participate in any distribution,
a new record date of the or for the purpose of any other or for the purpose of any other
adjourned meeting is fixed or action, the Trustees may from action, the Trustees may from
unless the adjournment is for time to time close the transfer time to time close the transfer
more than one hundred eighty books of the Trust with respect books of the VA Trust with
(180) days from the record date to such series or class for such respect to such series or class
set for the original meeting, in period, not exceeding thirty (30) for such period, not exceeding
which case the Board shall set a days, as the Trustees may thirty (30) days, as the Trustees
new record date. If notice of determine; or without closing the may determine; or without closing
any such adjourned meeting is transfer books the Trustees may the transfer books the Trustees
required pursuant to the fix a date not more than sixty may fix a date not more than
preceding sentence, it shall be (60) days prior to the date of sixty (60) days prior to the date
given to each shareholder of any meeting of shareholders or of any meeting of shareholders or
record entitled to vote at the distribution or other action as a distribution or other action as a
adjourned meeting in accordance record date for the determination record date for the determination
with the By-Laws. At any of the persons to be treated as of the persons to be treated as
adjourned meeting, the Trust may shareholders of record for such shareholders of record for such
transact any business that might purposes, except for dividend purposes, except for dividend
have been transacted at the payments which shall be governed payments which shall be governed
original meeting. by the Declaration. by the Declaration.
Quorum for Shareholders' Meeting Quorum for Shareholders' Meeting Quorum for Shareholders' Meeting
The Declaration provides that, The By-Laws state that holders of The By-Laws state that holders of
except when a larger quorum is a majority of the outstanding a majority of the outstanding
required by applicable law, by shares entitled to vote, present shares entitled to vote, present
the By-Laws or by the in person or by proxy, shall in person or by proxy, shall
Declaration, thirty-three and constitute a quorum at any constitute a quorum at any
one-third percent (33-1/3%) of meeting of the shareholders. meeting of the shareholders.
the 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 that any The By-Laws state that any action The By-Laws state that any action
action which may be taken at any which may be taken by which may be taken by
meeting of shareholders may be shareholders may be taken without shareholders may be taken without
taken without a meeting and a meeting if a majority of a meeting if a majority of
without prior notice if a consent shareholders entitled to vote on shareholders entitled to vote on
in writing setting forth the the matter (or such larger the matter (or such larger
action so taken is signed by the proportion thereof as shall be proportion thereof as shall be
holders of shares having not less required by law, the Declaration required by law, the Declaration
than the minimum number of votes or the By-Laws for approval of or the By-Laws for approval of
that would be necessary to such matter) consent to the such matter) consent to the
authorize or take that action at action in writing and the written action in writing and the written
a meeting at which all shares consents are filed with the consents are filed with the
entitled to vote on that action records of the meetings of records of the meetings of
were present and voted. shareholders. shareholders.
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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(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 C. Grant Anderson, Amy Bredl, Maureen Ferguson, Jonathan
Lushko, Susan Maroni, Alicia Powell and Victor R. Siclari, 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.