485BPOS

Operations Department

Head of Documentation Group

Tel: 212-325-7699

Fax: 917-326-7930

Fax: 212-325-7679

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QBgFrrL1uu5fBuH6yaMs1/ynUbH1U5dZ3m2/fvK2zFTbBe/AkWPQwOFk2JGGBWjt 5nTOlDM6tay3DhtCPgHyuA== 0000950152-09-001279.txt : 20090212 0000950152-09-001279.hdr.sgml : 20090212 20090212172615 ACCESSION NUMBER: 0000950152-09-001279 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 20 FILED AS OF DATE: 20090212 DATE AS OF CHANGE: 20090212 EFFECTIVENESS DATE: 20090213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RidgeWorth Funds CENTRAL INDEX KEY: 0000883939 IRS NUMBER: 232678674 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-45671 FILM NUMBER: 09596277 BUSINESS ADDRESS: STREET 1: 3435 STELZER RD. CITY: COLUMBUS STATE: OH ZIP: 43219 BUSINESS PHONE: 6144708000 MAIL ADDRESS: STREET 1: 3435 STELZER RD. CITY: COLUMBUS STATE: OH ZIP: 43219 FORMER COMPANY: FORMER CONFORMED NAME: RIDGEWORTH INVESTMENTS VARIABLE TRUST DATE OF NAME CHANGE: 20080414 FORMER COMPANY: FORMER CONFORMED NAME: RIDGEWORTH DATE OF NAME CHANGE: 20080414 FORMER COMPANY: FORMER CONFORMED NAME: STI CLASSIC FUNDS DATE OF NAME CHANGE: 19920929 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RidgeWorth Funds CENTRAL INDEX KEY: 0000883939 IRS NUMBER: 232678674 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06557 FILM NUMBER: 09596278 BUSINESS ADDRESS: STREET 1: 3435 STELZER RD. CITY: COLUMBUS STATE: OH ZIP: 43219 BUSINESS PHONE: 6144708000 MAIL ADDRESS: STREET 1: 3435 STELZER RD. CITY: COLUMBUS STATE: OH ZIP: 43219 FORMER COMPANY: FORMER CONFORMED NAME: RIDGEWORTH INVESTMENTS VARIABLE TRUST DATE OF NAME CHANGE: 20080414 FORMER COMPANY: FORMER CONFORMED NAME: RIDGEWORTH DATE OF NAME CHANGE: 20080414 FORMER COMPANY: FORMER CONFORMED NAME: STI CLASSIC FUNDS DATE OF NAME CHANGE: 19920929

0000883939 S000004723 RidgeWorth Total Return Bond Fund

C000012869 C Shares SCBLX

0000883939 S000004724 RidgeWorth Intermediate Bond Fund

C000012872 C Shares IBLSX

485BPOS 1 l35361be485bpos.htm 485BPOS 485BPOS

AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 12, 2008

File No. 033-45671
File No. 811-06557

U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-1A


		REGISTRATION STATEMENT UNDER THE SECURITIES
		ACT OF 1933		o
		POST-EFFECTIVE AMENDMENT NO. 78 AND		þ

		REGISTRATION STATEMENT UNDER THE INVESTMENT
		COMPANY ACT OF 1940		o
		AMENDMENT NO. 80		þ

RIDGEWORTH FUNDS (formerly, STI Classic Funds)

(Exact Name of Registrant as Specified in Charter)

155 Federal Street, Suite 700
Boston, Massachusetts 02110

(Address of Principal Executive Offices, Zip Code)

Registrant’s Telephone Number, including Area Code: 1-888-784-3863

Julia R. Short, President
RidgeWorth Funds
50 Hurt Plaza
Suite 1400
Atlanta, GA 30303

(Name and Address of Agent for Service)

Copies to:


Richard W. Grant, Esquire Morgan, Lewis & Bockius LLP One Oxford Centre Pittsburgh, PA 15219-6401		W. John McGuire, Esquire Morgan, Lewis & Bockius LLP 1111 Pennsylvania Avenue, NW Washington, DC 20004		Cynthia Surprise Senior Vice President Citi Fund Services Ohio, Inc. 100 Summer St. — Suite 1500 Boston, MA 02110

It is proposed that this filing become effective (check appropriate box):


		o Immediately upon filing pursuant to paragraph (b)
		þ On February 13, 2009 pursuant to paragraph (b)
		o 60 days after filing pursuant to paragraph (a)(1)
		o On [date] pursuant to paragraph (a)(1)
		o 75 days after filing pursuant to paragraph (a)(2)
		o On [date] pursuant to paragraph (a)(2) of Rule 485

If appropriate, check the following box:

o this post-effective amendment designates a new effective date for a previously filed post- effective amendment.

RidgeWorth Fixed Income Funds

R Shares

Prospectus

February 13, 2008

Investment Adviser: RidgeWorth Investments

Fixed Income

Subadviser: Seix Investment Advisor LLC

•		Intermediate Bond Fund

•		Total Return Bond Fund

The Securities and Exchange Commission has not approved or disapproved these securities or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

As of March 31, 2008, the STI Classic Funds became RidgeWorth Funds and Trusco Capital Management, Inc. became RidgeWorth Capital Management, Inc.

RidgeWorth Investments is the trade name of RidgeWorth Capital Management, Inc.

About This Prospectus

The RidgeWorth Funds (formerly, STI Classic Funds) is a mutual fund family that offers shares in separate investment portfolios that have individual investment goals and strategies. This prospectus gives you important information about the R Shares of the Intermediate Bond Fund and the Total Return Bond Fund (“Funds”) that you should know before investing. Please read this prospectus and keep it for future reference.

This prospectus has been arranged into different sections so that you can easily review this important information. On the next page, there is some general information you should know about risk and return that is common to each of the Funds. For more detailed information about each Fund, please see:



2		Intermediate Bond Fund

6		Total Return Bond Fund

10		More Information About Risk

13		More Information About Fund Investments

14		Information About Portfolio Holdings

14		Management

16		Purchasing and Selling Fund Shares


19		Market Timing Policies and Procedures

20		Distribution of Fund Shares

20		Dividends and Distributions

21		Taxes

22		Financial Highlights

Inside Back Cover		Privacy Policy

Back Cover		How to Obtain More Information About the RidgeWorth Funds

February 13, 2009

CUSIP/TICKER SYMBOLS


Fund Name	Class	Inception*		Ticker	CUSIP
Intermediate Bond Fund	R Shares		2/13/2009	IBLSX	76628T884
Total Return Bond Fund	R Shares		2/13/2009	SCBLX	76628T488


*	The performance included under “Performance Information” may include the performance of predecessors of the Fund.

RISK/RETURN INFORMATION COMMON TO RIDGEWORTH FUNDS

Each Fund is a mutual fund. A mutual fund pools shareholders’ money and, using professional investment managers, invests it in securities.

Each Fund has its own investment goal and strategies for reaching that goal. The Subadviser (under the supervision of the Adviser) invests Fund assets in a way that it believes will help a Fund achieve its goal. Still, investing in each Fund involves risk and there is no guarantee that a Fund will achieve its goal. The Subadviser’s judgments about the markets, the economy or companies may not anticipate actual market movements, economic conditions or company performance, and these judgments may affect the return on your investment. In fact, no matter how good a job the Subadviser does, you could lose money on your investment in the Fund, just as you could with other investments. A Fund share is not a bank deposit and it is not insured or guaranteed by the FDIC or any government agency.

The value of your investment in a Fund is based on the market prices of the securities the Fund holds. These prices change daily due to economic and other events that affect particular companies and other issuers. These price movements, sometimes called volatility, may be greater or lesser depending on the types of securities a Fund owns and the markets in which they trade. The effect on a Fund of a change in the value of a single security will depend on how widely the Fund diversifies its holdings.

Each Fund’s investment goal may be changed without shareholder approval. Before investing, make sure that the Fund’s goal matches your own.

Investment Grade Funds 2

INTERMEDIATE BOND FUND

Fund Summary


*Investment Goal*		Total return that consistently exceeds the total return of the broad U.S. dollar denominated, investment grade market of intermediate term government and corporate bonds

*Investment Focus*		Intermediate term investment grade debt securities

*Share Price Volatility*		Moderate

*Principal Investment Strategy*		Invest in intermediate term fixed income securities with an emphasis on corporate and mortgage backed securities

*Investor Profile*		Investors who want to receive income from their investment, as well as an increase in the value of the investment

*Subadviser*		Seix Investment Advisors LLC

Investment Strategy

The Intermediate Bond Fund invests in various types of income producing debt securities including mortgage and asset backed securities, government and agency obligations, corporate obligations and floating rate loans. The Fund may invest in debt securities of U.S. and non-U.S. issuers, including emerging market debt. The Fund’s investment in non-U.S. issuers may at times be significant. Under normal circumstances, the Fund invests at least 80% of its net assets in fixed income securities. These securities will be chosen from the broad universe of available intermediate term fixed income securities rated investment grade by Standard & Poor’s Ratings Services, Moody’s Investors Service or Fitch Ratings or unrated securities that the Subadviser believes are of comparable quality. The Fund may invest up to 20% of its net assets in below investment grade or high yield debt obligations. The Fund may also invest a portion of its assets in securities that are restricted as to resale.

The Subadviser anticipates that the Fund will maintain an average weighted maturity of 3 to 10 years and the Fund will be managed with a duration that is close to that of its comparative benchmark, the Barclays Capital U.S. Intermediate Government/Credit Bond Index, which is generally between 3 to 4 years. In selecting investments for the Fund, the Subadviser generally selects a greater weighting in obligations of domestic corporations and mortgage backed securities relative to the Fund’s comparative benchmark, and a lower relative weighting in U.S. Treasury and government agency issues.

The Fund may buy and sell securities frequently, which may result in higher transaction costs and lower performance, and will be more likely to generate short-term capital gains (which are generally taxed at ordinary income tax rates).

In addition, to implement its investment strategy, the Fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The Fund may count the value of certain derivatives with investment grade intermediate-term fixed income characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in fixed income securities.

What are the principal risks of investing in this Fund?

Debt securities will generally lose value if interest rates increase. Interest rate risk is generally higher for investments with longer maturities or durations.

Debt securities are subject to the risk that an issuer will fail to make timely payments of interest or principal, or go bankrupt, reducing the Fund’s return. The lower the rating of a debt security, the higher its credit risk.

Mortgage-backed and other asset-backed investments, which are types of debt securities, are subject to credit risk and interest rate risk as described above. Because of the sensitivity of these securities to changes in interest rates, the Fund’s performance may be more volatile than if it did not hold these securities. In addition, these securities are subject to the risk of loss due to prepayments. Moreover, losses on mortgage loans and increased investor yield requirements could lead to reduced demand for mortgage loans and limited liquidity of mortgage-backed securities, which may make mortgage-backed securities difficult to value.

Foreign securities involve special risks such as currency fluctuations, economic or financial

3 Investment Grade Funds

INTERMEDIATE BOND FUND

instability, lack of timely or reliable financial information and unfavorable political or legal developments. These risks are increased for investments in emerging markets.

Below investment grade securities (sometimes referred to as “junk bonds”) involve greater risk of default or downgrade and are more volatile than investment grade securities. Below investment grade securities may also be less liquid than higher quality securities.

The risks associated with floating rate loans are similar to the risks of below investment grade securities. In addition, the value of the collateral securing the loan may decline, causing a loan to be substantially unsecured. Difficulty in selling a floating rate loan may result in a loss. Borrowers may pay back principal before the scheduled due date when interest rates decline, which may require the Fund to replace a particular loan with a lower-yielding security. There may be less extensive public information available with respect to loans than for rated, registered or exchange listed securities. The Fund may assume the credit risk of the primary lender in addition to the borrower, and investments in loan assignments may involve the risks of being a lender.

Derivatives expose the Fund to additional volatility and potential loss. The technique of purchasing foreign currency forward contracts to obtain exposure to currencies or manage currency risk may not be effective. In addition, currency markets generally are not as regulated as securities markets.

The Fund may enter into swap agreements, including credit default swaps, for purposes of attempting to gain exposure to a particular asset without actually purchasing that asset, or to hedge a position. Credit default swaps may increase the Fund’s exposure to credit risk and could result in losses if the Subadviser does not correctly evaluate the creditworthiness of the entity on which the credit default swap is based. The Fund may also be subject to the risk that the counterparty to the transaction may not meet its obligations.

The Fund may enter into futures contracts. The risks associated with futures include: the successful use of futures contracts depends on the Subadviser’s ability to manage these instruments, the potential inability to terminate or sell a position, the lack of a liquid secondary market for the Fund’s position and the risk that the counterparty to the transaction will not meet its obligations.

Certain transactions and the use of derivatives such as foreign currency forward contracts, swaps and futures may create leveraging risk. To mitigate leveraging risk, the Fund will segregate or “earmark” liquid assets or otherwise cover the transactions that may give rise to such risk. Leverage may cause the Fund to be more volatile than if the Fund had not been leveraged. This is because leverage tends to exaggerate the effect of any increase or decrease in the value of the Fund’s portfolio securities.

U.S. government securities can exhibit price movements resulting from changes in interest rates. Treasury inflation protected securities (“TIPS”) can also exhibit price movements as a result of changing inflation expectations and seasonal inflation patterns. Certain obligations of the U.S. Government, its agencies and instrumentalities are backed by the full faith and credit of the U.S. Government (such as U.S. Treasury bonds and GNMA mortgage-backed securities) while others are backed by only the credit of a federal agency or government sponsored entity (such as Fannie Mae and Freddie Mac mortgage-backed securities).

Restricted securities may increase the level of illiquidity in the Fund during any period that qualified institutional buyers become uninterested in purchasing these restricted securities. The Subadviser intends to invest only in restricted securities that it believes present minimal liquidity risk.

For further information about these and other risks, see “More Information About Risk.”

Investment Grade Funds 4

INTERMEDIATE BOND FUND

Performance Information

The bar chart and the performance table that follow illustrate the risks and volatility of an investment in the Fund. The Fund’s past performance does not indicate how the Fund will perform in the future. The Fund began operating on October 11, 2004. Performance prior to October 11, 2004 is that of the Class I Shares of the Seix Intermediate Bond Fund, the Fund’s predecessor, which began operations on June 30, 1999, and has not been adjusted to reflect C Share expenses. If it had been, performance would have been lower. At the close of business on February 13, 2009, all outstanding C Shares converted to R Shares. The performance shown below from October 11, 2004 is that of C Shares and has not been adjusted to reflect R Shares expenses, which are lower. If it had been, performance would have been higher.

This bar chart shows changes in the performance of the Fund’s R Shares from year to year.*


Best Quarter		Worst Quarter
6.18%		–2.33%
(12/31/08)		(6/30/04)


*	The performance information shown above is based on a calendar year.

Average Annual Total Returns

This table compares the Fund’s average annual total returns for the periods ended December 31, 2008, to those of the Barclays Capital U.S. Intermediate Government/Credit Bond Index. These returns assume shareholders redeem all of their shares at the end of the period indicated.

After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Your actual after-tax returns will depend on your tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.


					Since
R Shares*	1 Year		5 Years		Inception**

Fund Returns Before Taxes		7.04%		3.87%		5.14%

Fund Returns After Taxes on Distributions		4.92%		2.53%		3.34%

Fund Returns After Taxes on Distributions and Sale of Fund Shares		4.53%		2.52%		3.30%


Barclays Capital U.S. Intermediate Government/Credit Bond Index*** (reflects no deduction for fees, expenses or taxes)		5.07%		4.21%		5.79%


*	The average annual total returns information shown above from October 11, 2004 is that of C Shares.


**	Since inception of the predecessor fund on June 30, 1999.


***	The Lehman Brothers Intermediate U.S. Government/Credit Bond Index was renamed the Barclays Capital U.S. Intermediate Government/Credit Bond Index.

What is an Index?

An index measures the market prices of a specific group of securities in a particular market or market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The Barclays Capital U.S. Intermediate Government/Credit Bond Index is composed of all bonds that are investment grade rated Baa or higher by Moody’s or BBB or higher by S&P, if unrated by Moody’s. Issues must have at least one year to maturity.

5 Investment Grade Funds

INTERMEDIATE BOND FUND

Fund Fees and Expenses

This table describes the fees and expenses that you may pay if you buy and hold Fund shares.

Annual Fund Operating Expenses (expenses deducted from Fund assets)


	R Shares
Investment Advisory Fees		0.25%
Distribution and Service (12b-1) Fees¹		0.50%
Other Expenses²		0.30%

Total Annual Operating Expenses³		1.05%


¹	Adjusted to reflect a reduction in 12b-1 fees effective February 13, 2009.


²	Other Expenses have been adjusted to reflect expected changes for the current fiscal year and include a 0.25% shareholder servicing fee.


³	The Adviser, the Subadviser and/or other service providers may voluntarily waive a portion of their fees in order to limit Total Annual Operating Expenses. These waivers may be discontinued at any time.

Example

This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds. The Example assumes that you invest $10,000 in the Fund for the time periods indicated and that you sell your shares at the end of the period.

The Example also assumes that each year your investment has a 5% return, Fund operating expenses remain the same and you reinvest all dividends and distributions. Although your actual costs and returns might be different, your approximate costs of investing $10,000 in the Fund would be:


1 Year		3 Years		5 Years		10 Years

$	107	$	334	$	579	$	1,283

Fund Expenses

Every mutual fund has operating expenses to pay for professional advisory, shareholder, distribution, administration and custody services. The Fund’s expenses in the table above are shown as a percentage of the Fund’s net assets. These expenses are deducted from Fund assets. For more information about these fees, see “Investment Adviser” and “Distribution of Fund Shares.”

Investment Grade Funds 6

TOTAL RETURN BOND FUND

Fund Summary


*Investment Goal*		Total return that consistently exceeds the total return of the broad U.S. investment grade bond market

*Investment Focus*		Investment grade debt securities

*Share Price Volatility*		Moderate

*Principal Investment Strategy*		Invest in fixed income securities with an emphasis on corporate and mortgage-backed securities

*Investor Profile*		Investors who want to receive income from their investment, as well as an increase in the value of the investment

*Subadviser*		Seix Investment Advisors LLC

Investment Strategy

The Total Return Bond Fund invests in various types of income producing debt securities including mortgage- and asset-backed securities, government and agency obligations, corporate obligations and floating rate loans. The Fund may invest in debt obligations of U.S. and non-U.S. issuers, including emerging market debt. The Fund’s investment in non-U.S. issuers may at times be significant. Under normal circumstances, the Fund invests at least 80% of its net assets in fixed income securities. These securities will be chosen from the broad universe of available fixed income securities rated investment grade by Standard & Poor’s Ratings Services, Moody’s Investors Service or Fitch Ratings or unrated securities that the Subadviser believes are of comparable quality. The Fund may invest up to 20% of its net assets in below investment grade, high yield debt obligations. The Fund may also invest a portion of its assets in securities that are restricted as to resale.

The Subadviser anticipates that the Fund’s modified adjusted duration will generally range from 3 to 6 years, similar to that of the Barclays Capital U.S. Aggregate Bond Index, the Fund’s comparative benchmark. Duration measures a bond or Fund’s sensitivity to interest rate changes. Duration is expressed as a number of years. The higher the number, the greater the risk. Under normal circumstances, for example, if a portfolio has a duration of five years, its value will change by 5% if rates change by 1%. Shorter duration bonds result in lower expected volatility. In selecting investments for the Fund, the Subadviser generally selects a greater weighting in obligations of domestic corporations and mortgage-backed securities relative to the Fund’s comparative benchmark, and a lower relative weighting in U.S. Treasury and government agency issues.

In addition, to implement its investment strategy, the Fund may buy or sell derivative instruments (such as foreign currency forward contracts, swaps, including credit default swaps, futures, credit linked notes, options, inverse floaters and warrants) to use as a substitute for a purchase or sale of a position in the underlying assets and/or as part of a strategy designed to reduce exposure to other risks, such as interest rate or credit risks. The Fund may count the value of certain derivatives with investment grade fixed income characteristics towards its policy to invest, under normal circumstances, at least 80% of its net assets in fixed income securities.

What are the principal risks of investing in this Fund?

Debt securities will generally lose value if interest rates increase. Interest rate risk is generally higher for investments with longer maturities or durations.

7 Investment Grade Funds

TOTAL RETURN BOND FUND

Foreign securities involve special risks such as currency fluctuations, economic or financial instability, lack of timely or reliable financial information and unfavorable political or legal developments. These risks are increased for investments in emerging markets.

For further information about these and other risks, see “More Information About Risk.”

8 Investment Grade Funds

TOTAL RETURN BOND FUND

Performance Information

The bar chart and the performance table that follow illustrate the risks and volatility of an investment in the Fund. The Fund’s past performance does not indicate how the Fund will perform in the future. The Fund began operating on October 11, 2004. Performance prior to October 11, 2004 is that of the Class I Shares of the Seix Core Bond Fund, the Fund’s predecessor and has not been adjusted to reflect C Share expenses. If it had been, performance would have been lower. At the close of business on February 13, 2009, all outstanding C Shares converted to R Shares. The performance shown below from October 11, 2004 is that of C Shares and has not been adjusted to reflect R Shares expenses, which are lower. If it had been, performance would have been higher.

This bar chart shows changes in the performance of the Fund’s R Shares from year to year.*


Best Quarter		Worst Quarter
6.34%		–2.16%
(12/31/08)		(6/30/04)


*	The performance information shown above is based on a calendar year.

Average Annual Total Returns

 

This table compares the Fund’s average annual total returns for the periods ended December 31, 2008, to those of the Barclays Capital U.S. Aggregate Bond Index. These returns assume shareholders redeem all of their shares at the end of the period indicated.


R Shares*	1 Year		5 Years		10 Years

Fund Returns Before Taxes		6.03%		4.08%		4.92%

Fund Returns After Taxes on Distributions		4.53%		2.74%		3.13%

Fund Returns After Taxes on Distributions and Sale of Fund Shares		3.88%		2.69%		3.10%

Barclays Capital U.S. Aggregate Bond Index** (reflects no deduction for fees, expenses or taxes)		5.24%		4.65%		5.63%


*	The average annual total returns information shown above from October 11, 2004 is that of C Shares.


**	The Lehman Brothers U.S. Aggregate Bond Index was renamed the Barclays Capital U.S. Aggregate Bond Index.

What is an Index?

An index measures the market prices of a specific group of securities in a particular market or market sector. You cannot invest directly in an index. Unlike a mutual fund, an index does not have an investment adviser and does not pay any commissions or expenses. If an index had expenses, its performance would be lower. The Barclays Capital U.S. Aggregate Bond Index is a widely-recognized index of U.S. dollar-denominated, investment-grade, fixed rate, taxable bond market of SEC-registered securities. The index includes bonds from the Treasury, Government-related, Corporate, MBS (agency fixed-rate and hybrid ARM passthroughs), ABS, and CMBS sectors.

9 Investment Grade Funds

TOTAL RETURN BOND FUND

Fund Fees and Expenses

This table describes the fees and expenses that you may pay if you buy and hold Fund shares.

Annual Fund Operating Expenses (expenses deducted from Fund assets)


	R Shares
Investment Advisory Fees		0.25%
Distribution and Service (12b-1) Fee¹		0.50%
Other Expenses²		0.30%

Total Annual Operating Expenses³		1.05%


¹	Adjusted to reflect a reduction in 12b-1 fees effective February 13, 2009.


²	Other Expenses have been adjusted to reflect expected changes for the current fiscal year and include a 0.25% shareholder servicing fee.


³	The Adviser, the Subadviser and/or other service providers may voluntarily waive a portion of their fees in order to limit Total Annual Operating Expenses. These waivers may be discontinued at any time.

Example


1 Year		3 Years		5 Years		10 Years
$	107	$	334	$	579	$	1,283

Fund Expenses

MORE INFORMATION ABOUT RISK

More Information About Risk

Below Investment Grade Risk

All Funds

High yield securities, which are also known as “junk bonds,” involve greater risks of default or downgrade and are more volatile than investment grade securities. High yield securities involve greater risk of default or price declines than investment grade securities due to actual or perceived changes in an issuer’s credit-worthiness. In addition, issuers of high yield securities may be more susceptible than other issuers to economic downturns. High yield securities are subject to the risk that the issuer may not be able to pay interest or dividends and ultimately to repay principal upon maturity. Discontinuation of these payments could substantially adversely affect the market value of the security. High yield securities may be less liquid than higher quality investments. A security whose credit rating has been lowered may be particularly difficult to sell.

Derivatives Risk

All Funds

Derivatives may involve risks different from, and possibly greater than, those of traditional investments. A derivative is a financial contract whose value depends on changes in the value of one or more underlying assets, reference rates or indices. A Fund may use derivatives (such as credit linked notes, futures, options, inverse floaters, swaps and warrants) to attempt to achieve its investment objective and offset certain investment risks, while at the same time attempting to maintain liquidity. These positions may be established for hedging, as a substitute for taking a position in the underlying asset, or for speculation purposes. Hedging involves making an investment (e.g. in a futures contract) to reduce the risk of adverse price movements in an already existing investment position. Risks associated with the use of derivatives include those associated with hedging and leveraging activities:


•	The success of a hedging strategy may depend on an ability to predict movements in the prices of individual securities, fluctuations in markets, and movements in interest rates.

•	A Fund may experience losses over certain market movements that exceed losses experienced by a Fund that does not use derivatives.

•	There may be an imperfect or no correlation between the changes in market value of the securities held by a Fund and the prices of derivatives used to hedge those positions.

•	There may not be a liquid secondary market for derivatives.

•	Trading restrictions or limitations may be imposed by an exchange.

•	Government regulations may restrict trading in derivatives.

•	The other party to an agreement (e.g., options or swaps) may default; however, in certain circumstances, such counterparty risk may be reduced by the credit worthiness of the counterparty and/or using an exchange as an intermediary.

Because premiums or totals paid or received on derivatives are small in relation to the market value of the underlying investments, buying and selling derivatives can be more speculative than investing directly in securities. In addition, many types of derivatives have limited investment lives and may expire or necessitate being sold at inopportune times.

The use of derivatives may cause a Fund to recognize higher amounts of short-term capital gains, which are generally taxed to shareholders at ordinary income tax rates.

Credit default swaps may involve greater risks than if a Fund had invested in the asset directly. A Fund may be more exposed to credit risk. In addition, a Fund may experience losses if the Subadviser does not correctly evaluate the creditworthiness of the entity on which the credit default swap is based. Total return swaps could result in losses if their reference index, security or investments do not perform as anticipated.

To limit leveraging risk, a Fund observes asset segregation requirements to cover its obligations under derivative instruments. By setting aside assets equal only to its net obligations under certain derivative instruments, a Fund will have the

MORE INFORMATION ABOUT RISK

ability to employ leverage to a greater extent than if it were required to segregate assets equal to the full notional value of such derivative instruments.

Emerging Markets Risk

All Funds

Emerging market countries are countries that the World Bank or the United Nations considers to be emerging or developing. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with a Fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar. Governments of some emerging market countries have defaulted on their bonds and may do so in the future.

Exchange-Traded Fund Risk

All Funds

The Funds may purchase shares of exchange-traded funds (“ETFs”) to gain exposure to a particular portion of the market. ETFs are investment companies that are bought and sold on a securities exchange. An ETF holds a portfolio of securities designed to track a particular market segment or index. ETFs, like mutual funds, have expenses associated with their operation, including advisory fees. When the Fund invests in an ETF, in addition to directly bearing expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expense. The risks of owning shares of an ETF generally reflect the risks of owning the underlying securities the ETF is designed to track, although lack of liquidity in an ETF could result in being more volatile than the underlying portfolio of securities. In addition, because of ETF expenses, compared to owning the underlying securities directly, it may be more costly to own shares of an ETF.

Fixed Income Risk

All Funds

The prices of a Fund’s fixed income securities respond to economic developments, particularly interest rate changes, as well as to perceptions about the creditworthiness of individual issuers, including governments. Generally, a Fund’s fixed income securities will decrease in value if interest rates rise and vice versa.

Long-term debt securities generally are more sensitive to changes in interest rates, usually making them more volatile than short-term debt securities and thereby increasing risk.

Debt securities are also subject to credit risk, which is the possibility that an issuer will fail to make timely payments of interest or principal, or go bankrupt. The lower the ratings of such debt securities, the greater their risks. In addition, lower rated securities have higher risk characteristics, and changes in economic conditions are likely to cause issuers of these securities to be unable to meet their obligations.

Debt securities are also subject to income risk, which is the possibility that falling interest rates will cause a Fund’s income to decline. Income risk is generally higher for short-term bonds.

An additional risk of debt securities is reinvestment risk, which is the possibility that a Fund may not be able to reinvest interest or dividends earned from an investment in such a way that they earn the same rate of return as the invested funds that generated them. For example, falling interest rates may prevent bond coupon payments from earning the same rate of return as the original bond. Furthermore, pre-funded loans and issues may cause a Fund to reinvest those assets at a rate lower than originally anticipated.

Floating Rate Loan Risk

All Funds

As fixed income securities, investments in floating rate loans are subject to interest rate risk, but that risk is less because the interest rate of the loan adjusts periodically. As debt securities, investments in floating rate loans are subject to credit risk. Many floating rate loans are in unrated or lower rated

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securities. When a security is unrated, a Fund must rely more heavily on the analytical ability of the Subadviser. Many floating rate loan investments share the same risks as high yield securities, although these risks are reduced when the floating rate loans are senior and secured as opposed to many high yield securities that are junior and unsecured. Floating rate securities are often subject to restrictions on resale which can result in reduced liquidity. A floating rate loan also may not be fully collateralized, although one lending institution will often be required to monitor collateral. Borrowers may repay principal faster than the scheduled due date which may result in a Fund replacing that loan with a lower-yielding security. Investment in loan participation interests may result in increased exposure to financial services sector risk.

A loan may not be fully collateralized which may cause the loan to decline significantly in value, although one lending institution acting as agent for all of the lenders will generally be required to administer and manage the loan and, with respect to collateralized loans, to service or monitor the collateral.

Certain portfolio managers and other personnel of the Subadviser may also manage similar investment portfolios of floating rate loans for another non-investment adviser contracted affiliated business, Seix Structured Products, LLC (“SSP”). SSP is a subsidiary of SunTrust Bank and an affiliate of the Adviser and Subadviser, but not a client of the Adviser or Subadviser. In that role, this group purchases bank loans on behalf of SSP, for purposes of subsequent collateralized loan obligation (“CLO”) transactions where the Adviser, Subadviser and their affiliate, SunTrust Capital Markets, Inc., will serve as collateral manager and as structuring agent/placement agent, respectively. The trustee and custodian of the CLO transactions are not affiliated entities of the Adviser, Subadviser or SunTrust Capital Markets. In addition, the Adviser serves as adviser to an account established with its affiliate, SunTrust Equity Funding, LLC for the purpose of purchasing high yield securities for subsequent sale to these same CLO transactions. Each of these transactions is subject to the approval of the independent trustee of the CLO transaction. In addition to disclosure to the trustee, all such transactions are fully disclosed to potential investors in the CLO’s offering and disclosure documents.

As a result of these multiple investment-oriented and associated relationships, there exists a potential risk that the portfolio managers may favor other adviser and non-adviser contracted businesses over a Fund. The Subadviser has created and implemented additional policies and procedures designed to protect shareholders against such conflicts; however, there can be no absolute guarantee that a Fund will always participate in the same or similar investments or receive equal or better individual investment allocations at any given time.

Foreign Security Risk

All Funds

Investments in securities of foreign companies or governments can be more volatile than investments in U.S. companies or governments. Political and economic events unique to a country or region will affect those markets and their issuers. These events will not necessarily affect the U.S. economy or similar issuers located in the United States. Diplomatic, political, or economic developments, including nationalization or appropriation, could affect investments in foreign countries. Foreign securities markets generally have less trading volume and less liquidity than U.S. markets.

The value of securities denominated in foreign currencies, and of dividends from such securities, can change significantly when foreign currencies strengthen or weaken relative to the U.S. dollar. As a result, changes in the value of those currencies compared to the U.S. dollar may affect (positively or negatively) the value of a Fund’s investment. Foreign currency exchange rates may fluctuate significantly. They are determined by supply and demand in the foreign exchange markets, the relative merits of investments in different countries, actual or perceived changes in interest rates, and other complex factors. Currency exchange rates also can be affected unpredictably by intervention (or the failure to intervene) by U.S. or foreign governments or central banks or by currency controls or political developments. Currency movements may happen separately from and in response to events that do

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not otherwise affect the value of the security in the issuer’s home country.

Foreign companies or governments generally are not subject to uniform accounting, auditing, and financial reporting standards comparable to those applicable to domestic U.S. companies or governments. Transaction costs are generally higher than those in the U.S. and expenses for custodial arrangements of foreign securities may be somewhat greater than typical expenses for custodial arrangements of similar U.S. securities. Some foreign governments levy withholding taxes against dividend and interest income. Although in some countries a portion of these taxes are recoverable, the non-recovered portion will reduce the income received from the securities comprising the portfolio.

Mortgage-Backed and Asset-Backed Securities Risk

All Funds

Mortgage-backed and other asset-backed securities are fixed income securities representing an interest in a pool of underlying mortgages or other cash-flow producing assets such as automobile loans, credit card receivables and other financial assets. The value of these securities may be significantly affected by changes in interest rates, the market’s perception of issuers and the creditworthiness of the parties involved. These securities are sensitive to changes in interest rates, but may respond to these changes differently from other fixed income securities due to the likelihood that a change in the general level of interest rates will impact the magnitude and timing of any prepayments of the underlying mortgage or other loans. As a result, it may not be possible to accurately determine in advance the actual maturity date or average life of these securities. The uncertainty inherent in assessing prepayment risk makes it difficult to calculate the average maturity of a portfolio including these securities, and therefore, to assess the volatility risk of a Fund.

Securities Lending Risk

All Funds

A Fund may lend securities to broker-dealers to earn additional income. Risks include the potential insolvency of the borrower that could result in delays in recovering securities and capital losses. Additionally, losses could result from the reinvestment of collateral received on loaned securities in investments that default or do not perform well. It is also possible that if a security on loan is sold and a Fund is unable to timely recall the security, the Fund may be required to repurchase the security in the market place, which may result in a potential loss to shareholders. As securities on loan may not be voted by the Fund, there is a risk that the Fund may not be able to recall the securities in sufficient time to vote on material proxy matters.

More Information About Fund Investments

This prospectus describes the Funds’ primary strategies, and the Funds will normally invest in the types of securities described in this prospectus. However, in addition to the investments and strategies described in this prospectus, each Fund also may invest in other securities, use other strategies and engage in other investment practices. These investments and strategies, as well as those described in this prospectus, are described in detail in the Statement of Additional Information.

The investments and strategies described in this prospectus are those that the Funds use under normal conditions. During unusual economic or market conditions, or for temporary defensive or liquidity purposes, each Fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and short-term obligations that would not ordinarily be consistent with a Fund’s objectives. In addition, each Fund may shorten its average weighted maturity to as little as 90 days. A Fund will do so only if the Subadviser believes that the risk of loss outweighs the opportunity for higher income. Of course, a Fund cannot guarantee that it will achieve its investment goal.

MANAGEMENT

Each Fund may invest in other mutual funds for cash management purposes. When a Fund invests in another mutual fund, in addition to directly bearing expenses associated with its own operations, it will bear a pro rata portion of the other mutual fund’s expenses.

Information About Portfolio Holdings

A description of the Funds’ policies and procedures with respect to the circumstances under which the Funds disclose their portfolio securities is available in the Statement of Additional Information.

Management

The Board of Trustees is responsible for the overall supervision and management of the business and affairs of RidgeWorth Funds. The Board of Trustees supervises the Adviser and Subadviser and establishes policies that the Adviser and Subadviser must follow in their fund related management activities. The day-to-day operations of RidgeWorth Funds are the responsibilities of the officers and various service organizations retained by RidgeWorth Funds.

Investment Adviser

RidgeWorth Investments (formerly, Trusco Capital Management, Inc.), 50 Hurt Plaza, Suite 1400, Atlanta, Georgia 30303 (“RidgeWorth” or the “Adviser”), serves as the investment adviser to the Funds. In addition to being an investment adviser registered with the Securities and Exchange Commission (the “SEC”), RidgeWorth is a money-management holding company with multiple style-focused investment boutiques. As of June 30, 2008, the Adviser had approximately $69.6 billion in assets under management. The Adviser is responsible for overseeing the Subadviser to ensure compliance with each Fund’s investment policies and guidelines and monitors the Subadviser’s adherence to its investment style. The Adviser pays the Subadviser out of the fees it receives from the Funds.

The Adviser may use its affiliates as brokers for Fund transactions.

An investment adviser has a fiduciary obligation to its clients when the adviser has authority to vote their proxies. Under the current contractual agreement, the Adviser is authorized to vote proxies on behalf of each Fund. Information regarding the Adviser’s, and thus each Fund’s, Proxy Voting Policies and Procedures is provided in the Statement of Additional Information. A copy of the Adviser’s Proxy Voting Policies and Procedures may be obtained by contacting the RidgeWorth Funds at 1-888-784-3863, or by visiting www.ridgeworthfunds.com.

For the fiscal year ended March 31, 2008, the following Funds paid the Adviser advisory fees (after waivers) based on the respective Fund’s average daily net assets of:


Intermediate Bond Fund	0.25	%
Total Return Bond Fund	0.25	%

The following breakpoints are used in computing the advisory fee:


Average Daily Net Assets		Discount From Full Fee

First $500 million		None — Full Fee
Next $500 million		5%
Over $1 billion		10%

A discussion regarding the basis for the Board of Trustees’ approval of the investment advisory agreement with the Adviser appears in the Funds’ annual report to shareholders for the period ended March 31, 2008.

Investment Subadviser

The Subadviser is responsible for managing the portfolios of the Funds on a day-to-day basis and selecting the specific securities to buy, sell and hold for the Funds under the supervision of the Adviser and the Board of Trustees. A discussion regarding the basis for the Board of Trustees’ approval of the investment subadvisory agreement appears in the Funds’ annual report to shareholders for the period ended March 31, 2008.

MANAGEMENT

Information about the Subadviser and the individual portfolio managers of the Funds is discussed below. The Statement of Additional Information provides additional information regarding the portfolio managers’ compensation, other accounts managed by the portfolio managers, potential conflicts of interest and the portfolio managers’ ownership of securities in the Funds.

Seix Investment Advisors LLC (“Seix”)
10 Mountainview Road, Suite C-200,
Upper Saddle River, New Jersey 07458
www.seixadvisors.com

Seix, established in 2008 as a wholly-owned subsidiary of RidgeWorth, is an investment adviser registered with the SEC. Its predecessor, Seix Investment Advisors, Inc., was founded in 1992 and was independently-owned until 2004 when the firm joined RidgeWorth as the high grade, high yield investment management division. As of June 30, 2008, Seix had approximately $19.7 billion in assets under management.

Seix is a fundamental, credit driven fixed income boutique specializing in both investment grade and high yield bond management. Seix has employed its bottom-up, research-oriented approach to fixed income management for over 15 years. Seix is focused on delivering superior, risk-adjusted investment performance for its clients. Seix selects, buys and sells securities for the Funds it subadvises.

Seix utilizes a team management approach for certain of the Funds for which it acts as Subadviser. Seix is organized into teams of portfolio managers and credit analysts along sectors and broad investment categories, including government securities, corporate bonds, securitized assets, high yield bonds, high yield loans, emerging market debt, non-U.S. securities and global currencies. The senior portfolio managers are responsible for security selection, portfolio structure and rebalancing, compliance with stated investment objectives, and cash flow monitoring. The Chief Investment Officer is a member of each Fund’s management team and is responsible for setting overall investment strategy. In addition, the Chief Investment Officer works with the senior portfolio managers on establishing sector allocation for each of the Funds. Other members of the team provide analytical support including investment research and monitoring credit risks, financial metrics and market conditions.

Intermediate Bond Fund and Total Return Bond Fund

Mr. James F. Keegan, Chief Investment Officer, has been a member of the Funds’ management team since March 2008, when he joined Seix. Mr. Keegan sets overall investment strategy and works with Mr. Troisi, Mr. Webb and Mr. Rieger on sector allocation for the Funds. Prior to joining Seix, Mr. Keegan was a Senior Vice President at American Century Investments from February 2006 through March 2008, a private investor from July 2003 through January 2006, and the Chief Investment Officer of Westmoreland Capital Management, LLC from February 2002 through June 2003. Mr. Keegan has more than 25 years of investment experience.

Mr. Adrien Webb, CFA, Managing Director and Senior Portfolio Manager, has been a member of the Funds’ management team for several years. Mr. Webb focuses primarily on high grade corporate bonds and related securities held in the Funds. Mr. Webb joined Seix Investment Advisors, Inc., a predecessor of Seix, in 2000, where he served as Senior Portfolio Manager. Mr. Webb has more than 13 years of investment experience.

Mr. Perry Troisi, Managing Director and Senior Portfolio Manager, has been a member of the Funds’ management team for several years. Mr. Troisi focuses primarily on United States government and agency bonds and related securities held in the Funds. Mr. Troisi joined Seix Investment Advisors, Inc., a predecessor of Seix, in 1999, where he served as Senior Portfolio Manager. He has more than 22 years of investment experience.

Mr. Michael Rieger, Managing Director and Senior Portfolio Manager, has been a member of the Funds’ management team since 2007, when he joined Seix. Mr. Rieger focuses primarily on

PURCHASING AND SELLING FUND SHARES

securitized assets including mortgage-backed and asset-backed securities held in the Funds. Prior to joining the Adviser in 2007, Mr. Rieger was a Managing Director at AIG Global Investments since 2005 and a Vice President from 2002 to 2005. Mr. Rieger has more than 21 years of investment experience.

Mr. Seth Antiles, Ph.D., Managing Director and Portfolio Manager, has been a member of the management team for the Total Return Bond Fund since 2007. Mr. Antiles focuses on emerging market debt, foreign currency and related securities held in the Total Return Bond Fund. Mr. Antiles joined the Adviser in 2005 as the Head of Emerging Markets. Prior to joining the Adviser, Mr. Antiles was a Director at Citigroup/Salomon Smith Barney since 1997. Mr. Antiles has more than 14 years investment experience.

Purchasing and Selling Fund Shares

This section tells you how to purchase and sell R Shares of the Funds.

How to Purchase R Shares

R Shares are designed to be sold only through various third-party intermediaries that offer employer-sponsored defined contribution retirement plans and other retirement plan platforms including brokers, dealers, banks, insurance companies, retirement plan recordkeepers and others. R Shares require an agreement with the Funds prior to investment. The intermediary may charge a fee for its services. Please consult your intermediary to find out about how to purchase R Shares of the Funds.

R Shares may also be purchased by shareholders who owned C Shares in the applicable Fund on February 12, 2009.

The offering price of R shares is the next calculated net asset value per share (“NAV”) after the transfer agent receives your request in proper form.

When Can You Purchase Shares?

The Funds are open for business on days when the New York Stock Exchange (the “NYSE”) is open for regular trading (a “Business Day”). RidgeWorth Funds reserves the right to open one or more Funds on days that the principal bond markets (as recommended by the Bond Market Association) are open even if the NYSE is closed.

Each Fund calculates its net asset value per share (“NAV”) once each Business Day at the close of regular trading on the NYSE (normally 4:00 p.m. Eastern Time).

If a Fund or its authorized agent receives your purchase or redemption request in proper form before 4:00 p.m., Eastern Time, your transaction will be priced at that Business Day’s NAV. If your request is received after 4:00 p.m., it will be priced at the next Business Day’s NAV.

The time at which transactions and shares are priced and the time until which orders are accepted may be changed if the NYSE closes early or if the principal bond markets close early on days when the NYSE is closed.

The Funds will not accept orders that request a particular day or price for the transaction or any other special conditions.

You may be required to transmit your purchase and sale orders to your financial institution or intermediary at an earlier time for your transaction to become effective that day. This allows the financial institution or intermediary time to process your order and transmit it to the transfer agent in time to meet the above stated Fund cut-off times. For more information about how to purchase or sell Fund shares, including a specific financial institution’s or intermediary’s internal order entry cut-off time, please contact your financial institution or intermediary directly.

A Fund may reject any purchase order.

How the Funds Calculate NAV

NAV is calculated by adding the total value of a Fund’s investments and other assets, subtracting its liabilities and then dividing that figure by the number of outstanding shares of the Fund.

In calculating NAV, each Fund generally values its investment portfolio at market price. If market prices are not readily available or a Fund reasonably believes that market prices or amortized cost valuation method are unreliable, such as in the case of a security value that has been materially affected by events occurring after the relevant market closes, the Fund is required to price those

PURCHASING AND SELLING FUND SHARES

securities at fair value as determined in good faith using methods approved by the Board of Trustees. A Fund’s determination of a security’s fair value price often involves the consideration of a number of subjective factors, and is therefore subject to the unavoidable risk that the value that a Fund assigns to a security may be higher or lower than the security’s value would be if a reliable market quotation for the security was readily available.

When valuing fixed income securities with remaining maturities of more than 60 days, the Funds use the value of the security provided by pricing services. The values provided by a pricing service may be based upon market quotations for the same security, securities expected to trade in a similar manner, or a pricing matrix. When valuing fixed income securities with remaining maturities of 60 days or less, the Funds use the security’s amortized cost. Amortized cost and the use of a pricing matrix in valuing fixed income securities are forms of fair value pricing. Fair value prices may be determined in good faith using methods approved by the Board of Trustees.

With respect to non-U.S. securities held by a Fund, the Fund may take factors influencing specific markets or issues into consideration in determining the fair value of a non-U.S. security. International securities markets may be open on days when the U.S. markets are closed. In such cases, the value of any international securities owned by a Fund may be significantly affected on days when investors cannot buy or sell shares. In addition, due to the difference in times between the close of the international markets and the time a Fund prices its shares, the value the Fund assigns to securities generally will not be the same as the primary markets or exchanges. In determining fair value prices, a Fund may consider the performance of securities on their primary exchanges, foreign currency appreciation/depreciation, securities market movements in the U.S., or other relevant information as related to the securities.

The prices for many securities held by the Funds are provided by independent pricing services approved by the Board of Trustees.

Customer Identification

Foreign Investors

To purchase R Shares of the Funds, you must be a U.S. citizen residing in the U.S. or its territories, a U.S. resident alien or a U.S. entity with a U.S. tax identification number. If you owned shares on July 31, 2006, you may keep your account open even if you do not reside in the U.S. or its territories, but you may not make additional purchases or exchanges. These restrictions do not apply to investors with U.S. military APO or FPO addresses.

Customer Identification and Verification

To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account.

When you open an account, you will be asked to provide your name, residential street address, date of birth, Social Security number or tax identification number. You may also be asked for other information that will allow us to identify you. Entities are also required to provide additional information. This information will be verified to ensure the identity of all persons opening a mutual fund account.

In certain instances, the Funds are required to collect documents to fulfill their legal obligation. Documents provided in connection with your application will be used solely to establish and verify a customer’s identity.

The Funds are required by law to reject your new account application if the required identifying information is not provided. Attempts to collect the missing information required on the application will be performed by either contacting you or, if applicable, your broker. If this information is unable to be obtained within a timeframe established in the sole discretion of the Funds your application will be rejected.

Upon receipt of your application in proper form (or upon receipt of all identifying information required on the application), your investment will be accepted and your order will be processed at the NAV next-determined.

PURCHASING AND SELLING FUND SHARES

However, the Funds reserve the right to close your account at the then-current day’s price if the Funds are unable to verify your identity. Attempts to verify your identity will be performed within a timeframe established in the sole discretion of the Funds. If the Funds are unable to verify your identity, the Funds reserve the right to liquidate your account at the then-current day’s price and remit proceeds to you via check. The Funds reserve the further right to hold your proceeds until your original check clears the bank. In such an instance, you may be subject to a gain or loss on Fund shares and will be subject to corresponding tax implications.

Anti-Money Laundering Program

Customer identification and verification is part of the Funds’ overall obligation to deter money laundering under federal law. The Funds have adopted an anti-money laundering compliance program designed to prevent the Funds from being used for money laundering or the financing of terrorist activities. In this regard, the Funds reserve the right to (i) refuse, cancel or rescind any purchase or exchange order, (ii) freeze any account and/or suspend account services, or (iii) involuntarily redeem your account in cases of threatening conduct or suspected fraudulent or illegal activity. These actions will be taken when, in the sole discretion of Fund management, they are deemed to be in the best interest of the Funds or in cases when the Funds are requested or compelled to do so by governmental or law enforcement authority.

How to Sell Your R Shares

Please consult your intermediary to find out about how to sell your R Shares of the Funds.

The sale price of each share will be the NAV next determined after the Funds receive your request in proper form.

A Medallion Signature Guarantee ¨ by a bank or other financial institution (a notarized signature is not sufficient) is required to redeem shares:


•	made payable to someone other than the registered shareholder;


•	sent to an address or bank account other than the address or bank account of record; or


•	sent to an address or bank account of record that has been changed within the last 15 calendar days.

Other documentation may be required depending on the registration of the account.


	¨	Medallion Signature Guarantee: A Medallion Signature Guarantee verifies the authenticity of your signature and helps ensure that changes to your account are in fact authorized by you. A Medallion Signature Guarantee may be obtained from a domestic bank or trust company, broker, dealer, clearing agency, savings association or other financial institution participating in a Medallion Program recognized by the Securities Trading Association. Signature guarantees from financial institutions that do not reflect one of the following are not part of the program and will not be accepted. The acceptable Medallion programs are Securities Transfer Agents Medallion Program, (STAMP), Stock Exchange Medallion Program, (SEMP), or the New York Stock Exchange, Inc. Medallion Program, (NYSR MSP). Contact your local financial adviser or institution for further assistance.

Receiving Your Money

Normally, the Funds will send your sales proceeds within five Business Days after a Fund receives your request, but a Fund may take up to seven days to pay the sale proceeds if making immediate payment would adversely affect the Fund (for example, to allow the Fund to raise capital in the case of a large redemption).

Redemptions In Kind

The Funds generally pay redemption proceeds in cash. However, under unusual conditions that make the payment of cash unwise (and for the protection of the Funds’ remaining shareholders), a Fund might pay all or part of your redemption proceeds in liquid securities with a market value equal to the redemption price (redemption in kind). It is highly unlikely that your shares would ever be redeemed in kind, but if they were you would probably have to pay transaction costs to sell the securities distributed to you, as well as taxes on any capital gains from the sale as with any redemption.

MARKET TIMING POLICIES AND PROCEDURES

Suspension of Your Right to Sell Your Shares

A Fund may suspend your right to sell your shares if the NYSE restricts trading, the SEC declares an emergency or for other reasons approved by the SEC. More information about this is in the Statement of Additional Information.

Market Timing Policies and Procedures

The Funds are intended for long-term investment purposes only and discourage shareholders from engaging in “market timing” or other types of excessive short-term trading. This frequent trading into and out of the Funds may present risks to the Funds’ long-term shareholders, all of which could adversely affect shareholder returns. The risks posed by frequent trading include interfering with the efficient implementation of the Funds’ investment strategies, triggering the recognition of taxable gains and losses on the sale of Fund investments, requiring the Funds to maintain higher cash balances to meet redemption requests, and experiencing increased transaction costs. A Fund that invests a significant amount of its assets in overseas markets is particularly susceptible to the risk of certain investors using a strategy known as time-zone arbitrage. Investors using this strategy attempt to take advantage of the differences in value of foreign securities that might result from events that occur between the close of the foreign securities market on which a foreign security is traded and the time at which the Fund calculates its NAV.

The Funds and/or their service providers will take steps reasonably designed to detect and deter frequent trading by shareholders pursuant to the Funds’ policies and procedures described in this prospectus and approved by the Funds’ Board of Trustees. The Funds seek to discourage short-term trading by using fair value pricing procedures to fair value certain investments under some circumstances. For purposes of applying these policies, the Funds’ service providers may consider the trading history of accounts under common ownership or control. The Funds’ policies and procedures include:


•	Shareholders are restricted from making more than one (1) “round trip” into or out of a Fund within 14 days or more than two (2) “round trips” within any continuous 90 day period. If a shareholder exceeds either “round trip” restriction, he or she may be deemed a “Market Timer,” and the Funds and/or their service providers may, at their discretion, reject any additional purchase orders. The Funds define a round trip as a purchase into a Fund by a shareholder, followed by a subsequent redemption out of the Fund. Anyone considered to be a Market Timer by the Funds, the Adviser, the Subadviser or a shareholder servicing agent may be notified in writing of their designation as a Market Timer.

•	The Funds reserve the right to reject any purchase request by any investor or group of investors for any reason without prior notice, including, in particular, if the Funds or their Adviser reasonably believes that the trading activity would be harmful or disruptive to the Funds.

The Funds and/or their service providers seek to apply these policies to the best of their abilities uniformly and in a manner they believe is consistent with the interests of the Funds’ long-term shareholders.

Although these policies are designed to deter frequent trading, none of these measures alone nor all of them taken together eliminate the possibility that frequent trading in the Funds will occur, particularly with respect to trades placed by shareholders that invest in the Funds through omnibus arrangements maintained by brokers, retirement plan accounts and other financial intermediaries. Purchase and redemption transactions submitted to the Funds by these intermediaries reflect the transactions of multiple beneficial owners whose individual transactions are not automatically disclosed to the Funds. Therefore, the Funds rely in large part on the intermediaries who maintain omnibus arrangements (which may represent a majority of Fund shares) to aid in the Funds’ efforts to detect and deter short-term trading. The Funds monitor trading activity at the omnibus account level and look for activity that indicates potential short-term trading. If they detect suspicious trading activity, the Funds contact the intermediaries to determine whether the short-term trading policy has been violated and may request and receive personal identifying information and transaction histories for some or all beneficial owners to make this determination. If

DISTRIBUTION OF FUND SHARES

a Fund believes that a shareholder has violated the short-term trading policy, it will take further steps to prevent any future short-term trading by such shareholder in accordance with the policy. The Funds cannot guarantee the accuracy of the information provided by the intermediaries and may not always be able to track short-term trading effected through these intermediaries. A Fund has the right to terminate an intermediary’s ability to invest in a Fund if excessive trading activity persists and a Fund or its Adviser or Subadviser reasonably believes that such termination would be in the best interests of long-term shareholders. In addition to the Funds’ market timing policies and procedures described above, you may be subject to the market timing policies and procedures of the intermediary through which you invest. Please consult with your intermediary for additional information regarding its frequent trading restrictions.

Distribution of Fund Shares

The R Shares of each Fund have adopted a distribution and service plan that allows each Fund to pay distribution and service fees for the sale and distribution of its shares and for services provided to shareholders. Because these fees are paid out of a Fund’s assets continuously, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges.

The R Shares maximum distribution and service fee is 0.50% of the average daily net assets of a Fund’s R Shares.

The Funds may provide financial assistance in connection with pre-approved seminars, conferences and advertising to the extent permitted by the distribution plan and applicable state or self-regulatory agencies, such as the Financial Industry Regulatory Agency.

From their own assets, the Adviser, the Subadviser or their affiliates may make payments based on gross sales and current assets to selected brokerage firms or institutions. The amount of these payments may be substantial. The minimum aggregate sales required for eligibility for such payments, and the factors in selecting the brokerage firms and institutions to which they will be made, are determined from time to time by the Adviser or Subadviser. Furthermore, in addition to the fees that may be paid by a Fund, the Adviser, the Subadviser or their affiliates may pay fees from their own capital resources to brokers, banks, financial advisers, retirement plan service providers and other financial intermediaries, including affiliates, for providing distribution-related or shareholder services.

The Adviser, the Subadviser or their affiliates may pay fees from their own capital resources to financial intermediaries to compensate them for marketing expenses they incur or to pay for the opportunity to have them distribute the Funds. The amount of these payments is determined by the Adviser or the Subadviser and may differ among financial intermediaries. Such payments may provide incentives for financial intermediaries to make shares of the Funds available to their customers, and may allow the Funds greater access to such financial intermediaries and their customers than would be the case if no payments were made. You may wish to consider whether such arrangements exist when evaluating any recommendation to purchase shares of the Funds.

Please refer to the Statement of Additional Information for more information regarding these arrangements.

Shareholder Servicing Plan

The R Shares Shareholder Servicing Plan permits R Shares to pay specified benefit plans or other financial service firms for shareholder support services they provide, at a rate of up to 0.25% of the average daily net assets of R Shares. The services may include, among others, providing general shareholder liaison services (including responding to shareholder inquiries), providing information on shareholder investments, and establishing and maintaining shareholder accounts and records.

Dividends and Distributions

Each Fund declares dividends daily and pays these dividends monthly. Each Fund makes distributions of its net realized capital gains, if any, at least annually. If you own Fund shares on a Fund’s record date, you will be entitled to receive the distribution.

TAXES

You will receive dividends and distributions in the form of additional Fund shares unless you elect to receive payment in cash. To elect cash payment, you must notify the Funds in writing prior to the date of the distribution. Your election will be effective for dividends and distributions paid after the Funds receive your written notice. To cancel your election, simply send the Funds written notice.

Taxes

Please consult your tax advisor regarding your specific questions about federal, state and local income taxes. Below the Funds have summarized some important tax issues that affect the Funds and their shareholders. This summary is based on current tax laws, which may change.

Each Fund will distribute substantially all of its net investment income and its net realized capital gains, if any, at least annually. The dividends and distributions you receive may be subject to federal, state and local taxation, depending upon your tax situation. Distributions you receive from a Fund may be taxable whether or not you reinvest them. Income distributions are generally taxable at ordinary income tax rates and will not qualify for the reduced tax rates applicable to qualifying dividend income. Capital gains distributions are generally taxable at the rates applicable to long-term capital gains. Long-term capital gains are currently taxed at a maximum rate of 15%. Absent further legislation, the maximum 15% tax rate on long-term capital gains will cease to apply to taxable years beginning after December 31, 2010. A high portfolio turnover rate and a Fund’s use of certain derivatives may cause a Fund to recognize higher amounts of short-term capital gains, which are generally taxed to shareholders at ordinary income tax rates. Each sale or exchange of Fund shares may be a taxable event. For tax purposes, an exchange of your Fund shares for shares of another RidgeWorth Fund is treated the same as a sale. A transfer from one share class to another share class in the same RidgeWorth Fund should not be a taxable event.

Each Fund will inform you of the amount of your ordinary income dividends and capital gain distributions shortly after the close of each calendar year.

If you have a tax-advantaged or other retirement account you will generally not be subject to federal taxation on income and capital gain distributions until you begin receiving your distributions from your retirement account. You should consult your tax advisor regarding the rules governing your own retirement plan.

The Funds expect to distribute primarily ordinary income dividends currently taxable at a maximum rate of 35%.

More information about taxes is in the Statement of Additional Information.

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand a Fund’s (and its predecessor’s) financial performance for the past 5 years or, if shorter, the period of the Fund’s (and its predecessor’s) operations. Certain information reflects financial results for a single Fund share. The total returns in the table represent the rate that an investor would have earned (or lost) on an investment in the Fund (assuming reinvestment of all dividends and distributions). This financial information has been audited by PricewaterhouseCoopers LLP, except the information for the six month period ended September 30, 2008, which is unaudited. The Report of the Independent Registered Public Accounting Firm for each period shown along with the Funds’ financial statements and related notes, are included in the Annual Reports to Shareholders for such periods. The 2008 Annual Report and Semi-Annual Report are available upon request and without charge by calling 1-888-784-3863 or on the Funds’ website at www.ridgeworthfunds.com.


																																		Ratio of
																															Ratio of			Expenses to
						Net																						Ratio of			Net			Average
						Realized																						Net			Investment			Net Assets
						and									Distributions						Net							Expenses			Income			(Excluding
	Net Asset		Net			Unrealized						Dividends			from			Total			Asset							to			to			Waivers,
	Value,		Investment			Gains						from Net			Realized			Dividends			Value,					Net Assets,		Average			Average			Reimbursements			Portfolio
	Beginning		Income			(Losses) on			Total From			Investment			Capital			and			End of		Total			End of		Net			Net			and Expense			Turnover
	of Period		(Loss)			Investments			Operations			Income			Gains			Distributions			Period		Return(1)			Period (000)		Assets(2)			Assets(2)			Offset)(2)			Rate(3)

Intermediate Bond Fund(4)
R Shares*
Six Months Ended September 30, 2008	$	10.29	$	0.16		$	(0.28	)	$	(0.12	)	$	(0.15	)	$	—		$	(0.15	)	$	10.02		(1.15	)%	$	77		1.28	%		3.16	%		1.28	%		93	%
Year Ended March 31, 2008		9.95		0.28			0.34			0.62			(0.27	)		(0.01	)		(0.28	)		10.29		6.35			9		1.32			3.66			1.32			254
Year Ended March 31, 2007		9.85		0.36	(a)		0.12			0.48			(0.38	)		—			(0.38	)		9.95		4.92			1		1.31			3.61			1.31			225
Year Ended March 31, 2006		10.08		0.28			(0.21	)		0.07			(0.29	)		(0.01	)		(0.30	)		9.85		0.74			68		1.24			2.86			1.25			154
Period Ended March 31, 2005		10.36		0.11			(0.21	)		(0.10	)		(0.10	)		(0.08	)		(0.18	)		10.08		(0.96	)		1		0.91			2.47			1.36			94
Period Ended October 31, 2004††		10.32		0.01			0.04			0.05			(0.01	)		—			(0.01	)		10.36		0.51			1		1.00			2.22			1.41			130
Total Return Bond Fund(4)
R Shares*
Six Months Ended September 30, 2008		10.10		0.18			(0.31	)		(0.13	)		(0.17	)		—			(0.17	)		9.80		(1.26	)		60		1.29			3.78			1.29			95
Year Ended March 31, 2008		9.96		0.41			0.14			0.55			(0.41	)		—			(0.41	)		10.10		5.68			40		1.30			4.13			1.30			248
Year Ended March 31, 2007		9.86		0.38			0.11			0.49			(0.39	)		—			(0.39	)		9.96		5.10			29		1.30			3.96			1.30			310
Year Ended March 31, 2006		10.12		0.32			(0.24	)		0.08			(0.33	)		(0.01	)		(0.34	)		9.86		0.76			28		1.24			3.10			1.27			236
Period Ended March 31, 2005		10.30		0.11			(0.13	)		(0.02	)		(0.11	)		(0.05	)		(0.16	)		10.12		(0.17	)		1		1.01			2.50			1.37			150
Period Ended October 31, 2004††		10.25		0.01			0.06			0.07			(0.02	)		—			(0.02	)		10.30		0.65			1		1.10			2.71			1.41			330


*	The financial highlights information shown above from October 11, 2004 is that of C Shares.


(1)		Total return excludes sales charge. Not annualized for periods less than one year.

(2)		Annualized for periods less than one year.

(3)		Not annualized for periods less than one year.


(4)		The following table details the commencement of operations of certain classes of each respective fund.


Intermediate Bond	Class C	October 11, 2004
Total Return Bond	Class C	October 11, 2004


(a)		Per share data was calculated using the average shares method.


		Unaudited


††		Effective November 1, 2003, these Funds adopted a change in the amortization and accretion methodology on fixed income securities. The cumulative effect of this change in methodology was immaterial to all Funds.

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Investment Adviser:
RidgeWorth Investments
50 Hurt Plaza, Suite 1400
Atlanta, Georgia 30303
ridgeworth.com

Investment Subadviser:
Seix Investment Advisors LLC
10 Mountainview Road, Suite C-200
Upper Saddle River, NJ 07458
seixadvisors.com

More information about the RidgeWorth Funds is available without charge through the following:

Statement of Additional Information (SAI):

The SAI includes detailed information about the RidgeWorth Funds. The SAI is on file with the SEC and is incorporated by reference into this prospectus. This means that the SAI, for legal purposes, is a part of this prospectus.

Annual and Semi-Annual Reports:

These reports list each Fund’s holdings and contain information from the Funds’ managers about strategies and recent market conditions and trends and their impact on Fund performance. The reports also contain detailed financial information about the Funds.

To Obtain an SAI, Annual or Semi-Annual Report, or More Information:


Telephone:		Shareholder Services 1-888-784-3863

Mail:
RidgeWorth Funds
3435 Stelzer Road
Columbus, Ohio 43219

Website: ridgeworthfunds.com

SEC:

You can also obtain the SAI or the Annual and Semi-Annual reports, as well as other information about the RidgeWorth Funds , from the EDGAR Database on the SEC’s website at http://www.sec.gov. You may review and copy documents at the SEC Public Reference Room in Washington, DC (for information on the operation of the Public Reference Room, call 202-551-8090). You may request documents by mail from the SEC, upon payment of a duplicating fee, by writing to: Securities and Exchange Commission, Public Reference Section, Washington, DC 20549-0102. You may also obtain this information, upon payment of a duplicating fee, by e-mailing the SEC at publicinfo@sec.gov.

The RidgeWorth Funds ’ Investment Company Act registration number is 811-06557.

RFPRO-FIR-0209

STATEMENT OF ADDITIONAL INFORMATION

RIDGEWORTH FUNDS
(formerly, STI Classic Funds)

RidgeWorth Intermediate Bond Fund (R Shares)

RidgeWorth Total Return Bond Fund (R Shares)

February 13, 2009

Investment Adviser:
RIDGEWORTH INVESTMENTS
(formerly, Trusco Capital Management, Inc.)

(the “Adviser”)

This Statement of Additional Information (“SAI”) is not a prospectus. It is intended to provide additional information regarding the activities and operations of RidgeWorth Funds (the “Trust”) and should be read in conjunction with the Trust’s prospectus dated February 13, 2009 as may be supplemented from time to time. This SAI relates to R Shares (formerly, C Shares) of the Intermediate Bond Fund and the Total Return Bond Fund of the Trust (each a “Fund” and collectively, the “Funds”):

This SAI is incorporated by reference into the Trust’s prospectus dated February 13, 2009. Capitalized terms not defined herein are defined in the prospectus. The prospectus may be obtained by writing to the Trust or calling toll-free 1-888-784-3863.

TABLE OF CONTENTS


THE TRUST			1
DESCRIPTION OF PERMITTED INVESTMENTS			1
INVESTMENT LIMITATIONS			37
THE ADVISER			39
THE SUBADVISER			40
THE PORTFOLIO MANAGERS			41
THE ADMINISTRATOR			43
THE DISTRIBUTOR			44
THE TRANSFER AGENT			48
THE CUSTODIAN			48
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			48
LEGAL COUNSEL			49
TRUSTEES AND OFFICERS OF THE TRUST			49
PURCHASING AND REDEEMING SHARES			56
DETERMINATION OF NET ASSET VALUE			57
TAXES			58
FUND TRANSACTIONS			63
PORTFOLIO TURNOVER RATE			67
PORTFOLIO HOLDINGS			68
DESCRIPTION OF SHARES			69
VOTING RIGHTS			70
SHAREHOLDER LIABILITY			70
LIMITATION OF TRUSTEES’ LIABILITY			70
CODES OF ETHICS			71
PROXY VOTING			71
5% AND 25% SHAREHOLDERS			72
FINANCIAL STATEMENTS			74
DESCRIPTION OF RATINGS			A-1
PROXY VOTING POLICY			B-1

THE TRUST

Each Fund is a separate series of the Trust, an open-end management investment company established under Massachusetts law as a Massachusetts business trust under a Declaration of Trust dated January 15, 1992. The Declaration of Trust permits the Trust to offer separate series of units of beneficial interest (“shares”) and different classes of shares of each series. The Trust reserves the right to create and issue shares of additional funds and/or classes. Each Fund is diversified, as that term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”). Prior to March 31, 2008 the name of the Trust was STI Classic Funds.

DESCRIPTION OF PERMITTED INVESTMENTS

The Funds’ respective investment objectives and principal investment strategies are described in the prospectus. The following information supplements, and should be read in conjunction with, the prospectus. Following are descriptions of the permitted investments and investment practices discussed in the Funds’ prospectus under the “Investment Strategy” section and the associated risk factors. The Subadviser will only invest in any of the following instruments or engage in any of the following investment practices if such investment or activity is consistent with and permitted by the Funds’ stated investment policies.

American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs). ADRs, EDRs, and GDRs are securities, typically issued by a U.S. financial institution or a non-U.S. financial institution in the case of an EDR or GDR (a “depositary”). The institution has ownership interests in a security, or a pool of securities, issued by a foreign issuer and deposited with the depositary. ADRs, EDRs and GDRs may be available through “sponsored” or “unsponsored” facilities. A sponsored facility is established jointly by the issuer of the security underlying the receipt and a depositary. An unsponsored facility may be established by a depositary without participation by the issuer of the underlying security. Holders of unsponsored depositary receipts generally bear all the costs of the unsponsored facility. The depositary of an unsponsored facility frequently is under no obligation to distribute shareholder communications received from the issuer of the deposited security or to pass through, to the holders of the receipts, voting rights with respect to the deposited securities.

Acquisitional/equipment lines (delayed-draw term loans). Acquisitional/equipment lines (delayed-draw term loans) are credits that may be drawn down for a given period to purchase specified assets or equipment of to make acquisitions. The issuer pays a fee during the commitment period (a ticking fee). The lines are then repaid over a specified period (the term-out period). Repaid amounts may not be re-borrowed. To avoid any leveraging concerns, a Fund will segregate or earmark liquid assets with the Fund’s custodian in an amount sufficient to cover its repurchase obligations.

Asset-Backed Securities. Asset-backed securities are securities backed by non-mortgage assets such as company receivables, truck and auto loans, leases, and credit card receivables and mortgage-like assets such as home equity loans on manufactured housing. These securities may be traded over-the-counter and typically have a short-intermediate maturity structure depending on the pay down characteristics of the underlying financial assets which are passed through to the security holder. These securities are generally issued as pass-through certificates, which represent undivided fractional ownership interests in the underlying pool of assets. Asset-backed securities may also be debt obligations, which are known as collateralized obligations and are generally issued as the debt of a special purpose entity, such as a trust, organized solely for the purpose of owning these assets and issuing debt

obligations. Asset-backed securities that are backed by a single type of asset are pooled together by asset type for purposes of calculating a Fund’s industry concentration levels.

Asset-backed securities are not issued or guaranteed by the U.S. Government, its agencies or instrumentalities; however, the payment of principal and interest on such obligations may be guaranteed up to certain amounts and, for a certain period, by a letter of credit issued by a financial institution (such as a bank or insurance company) unaffiliated with the issuers of such securities. The purchase of asset-backed securities raises risk considerations peculiar to the financing of the instruments underlying such securities. There also is the possibility that recoveries on repossessed collateral may not, in some cases, be available to support payments on those securities.

Asset-backed securities entail prepayment risk, which may vary depending on the type of asset, but is generally less than the prepayment risk associated with mortgage-backed securities. In addition, credit card receivables are unsecured obligations of the card holder.

Bank Obligations. A Fund may invest in obligations issued by banks and other savings institutions. Investments in bank obligations include obligations of domestic branches of foreign banks and foreign branches of domestic banks. Such investments in domestic branches of foreign banks and foreign branches of domestic banks may involve risks that are different from investments in securities of domestic branches of U.S. banks. These risks may include future unfavorable political and economic developments, possible withholding taxes on interest income, seizure or nationalization of foreign deposits, currency controls, interest limitations, or other governmental restrictions which might affect the payment of principal or interest on the securities held by a Fund. Additionally, these institutions may be subject to less stringent reserve requirements and to different accounting, auditing, reporting and recordkeeping requirements than those applicable to domestic branches of U.S. banks. The Funds may invest in U.S. dollar-denominated obligations of domestic branches of foreign banks and foreign branches of domestic banks only when the Subadvisers believe that the risks associated with such investment are minimal and that all applicable quality standards have been satisfied. Bank obligations include the following:

	• Bankers’ Acceptances. Bankers’ acceptances are bills of exchange or time drafts drawn on and accepted by a commercial bank. Corporations use bankers’ acceptances to finance the shipment and storage of goods and to furnish dollar exchange. Maturities are generally six months or less.

	• Certificates of Deposit. Certificates of deposit are interest-bearing instruments with a specific maturity. They are issued by banks and savings and loan institutions in exchange for the deposit of funds and normally can be traded in the secondary market prior to maturity. Certificates of deposit with penalties for early withdrawal will be considered illiquid.

	• Time Deposits. Time deposits are non-negotiable receipts issued by a bank in exchange for the deposit of funds. Like a certificate of deposit, it earns a specified rate of interest over a definite period of time; however, it cannot be traded in the secondary market. Time deposits with a withdrawal penalty or that mature in more than seven days are considered to be illiquid securities.

A Fund will not purchase obligations issued by the Adviser, Subadvisers, or their affiliates.

Borrowing. As required by the 1940 Act, a Fund must maintain continuous asset coverage (total assets, including assets acquired with borrowed funds, less liabilities exclusive of borrowings) of 300% of all amounts borrowed. If, at any time, the value of the Fund’s assets should fail to meet this 300% coverage test, the Fund, within three days (not including Sundays and holidays), will reduce the amount of the Fund’s borrowings to the extent necessary to meet this 300% coverage. Maintenance of this percentage limitation may result in the sale of portfolio securities at a time when investment considerations otherwise indicate that it would be disadvantageous to do so. Investment strategies that either obligate a Fund to purchase securities or require a Fund to segregate assets are not considered to be borrowing.

In addition to the foregoing, the Funds are authorized to borrow money as a temporary measure for extraordinary or emergency purposes in amounts not in excess of 5% of the value of a Fund’s total assets. This borrowing is not subject to the foregoing 300% asset coverage requirement.

Borrowing may subject the Funds to interest costs, which may exceed the interest received on the securities purchased with the borrowed funds. The Funds may borrow at times to meet redemption requests rather than sell portfolio securities to raise the necessary cash. Borrowing can involve leveraging when securities are purchased with the borrowed money.

Brady Bonds. A Brady Bond is a U.S. dollar denominated bond issued by an emerging market, particularly those in Latin America, and collateralized by U.S. Treasury zero-coupon bonds. In the event of a default on collateralized Brady Bonds for which obligations are accelerated, the collateral for the payment of principal will not be distributed to investors, nor will such obligations be sold and the proceeds distributed. The collateral will be held by the collateral agent to the scheduled maturity of the defaulted Brady Bonds, which will continue to be outstanding, at which time the face amount of the collateral will equal the principal payments which would have then been due on the Brady Bonds in the normal course. Brady Bonds are subject to the same risks as foreign securities.

Certificates of Deposit. Certificates of deposit are interest bearing instruments with a specific maturity. They are issued by banks and savings and loan institutions in exchange for the deposit of funds and normally can be traded in the secondary market prior to maturity. Certificates of deposit with penalties for early withdrawal will be considered illiquid.

Collateralized Debt Obligations. Collateralized Debt Obligations (“CDOs”) are securitized interests in pools of assets. Assets called collateral usually comprise loans or debt instruments. A CDO may be called a collateralized loan obligation (“CLO”) or collateralized bond obligation (“CBO”) if it holds only loans or bonds, respectively. Investors bear the credit risk of the collateral. Multiple tranches of securities are issued by the CDO, offering investors various maturity and credit risk characteristics. Tranches are categorized as senior, mezzanine, and subordinated/equity, according to their degree of credit risk. If there are defaults or the CDO’s collateral otherwise underperforms, scheduled payments to senior tranches take precedence over those of mezzanine tranches, and scheduled payments to mezzanine tranches take precedence over those to subordinated/equity tranches. Senior and mezzanine tranches are typically rated, with the former receiving ratings of A to AAA/Aaa and the latter receiving ratings of B to BBB/Baa. The ratings reflect both the credit quality of underlying collateral as well as how much protection a given tranche is afforded by tranches that are subordinate to it.

Commercial Paper. Commercial paper is the term used to designate unsecured short-term promissory notes issued by corporations and other entities. Maturities on these issues vary from a few to 270 days.

Convertible Bonds. Convertible bonds are bonds which may be converted, at the option of either the issuer or the holder, into a specified amount of common stock of the issuer, or in the case of exchangeable bonds, into the common stock of another corporation. Convertible bonds are generally subordinate to other publicly held debt of the issuer, and therefore typically have a lower credit rating than nonconvertible debt of the issuer. Convertible bonds generally carry a lower coupon rate than the issuer would otherwise pay at issuance in exchange for the conversion feature. In addition to the interest rate risk factors generally associated with fixed income investments, the market risk of a convertible bond is determined by changes in the credit quality of the issuer and price changes and volatility of the stock into which the bond may be converted. The conversion feature may cause a convertible bond to be significantly more volatile than other types of fixed income investments. Convertible bonds for which the value of the conversion feature is deemed worthless are generally referred to as “busted” convertibles, and risk associated more closely approximates that of similar debt without the conversion feature.

Corporate Issues. Corporate issues refer to debt instruments issued by private corporations or other business entities. Bondholders, as creditors, have a prior legal claim over common and preferred stockholders of the corporation as to both income and assets for the principal and interest due to the bondholder. A Fund will buy corporate issues subject to any quality constraints. Corporate issues may also be issued by master limited partnerships and real estate investment trusts, or REITS.

Credit Linked Notes. A credit linked note (“CLN”) is a type of hybrid instrument in which a special purpose entity issues a structured note (the “Note Issuer”) that is intended to replicate a single bond, a portfolio of bonds, or with respect to the unsecured credit of an issuer, in general (the “Reference Instrument”). The purchaser of the CLN (the “Note Purchaser”) invest a par amount and receives a payment during the term of the CLN that equals a fixed or floating rate of interest equivalent to a high rated funded asset (such as a bank certificate of deposit) plus an additional premium that relates to taking on the credit risk of the Reference Instrument. Upon maturity of the CLN, the Note Purchaser will receive a payment equal to (i) the original par amount paid to the Note Issuer, if there is neither a designated event of default (an “Event of Default”) with respect to the Reference Instrument nor a restructuring of the issuer of the Reference Instrument (a “Restructuring Event”) or (ii) the value of the Reference Instrument, if an Event of Default or Restructuring Event has occurred. Depending upon the terms of the CLN, it is also possible that the Note Purchaser may be required to take physical delivery of the Reference Instrument in the event of an Event of Default or a Restructuring Event. Most CLNs use a corporate bond (or a portfolio of corporate bonds) as the Reference Instrument(s). However, almost any type of fixed income security (including foreign government securities) or derivative contract (such as a credit default swap) can be used as the Reference Instrument.

Custodial Receipts. A custodial receipt represents an indirect interest in a tax-exempt bond that is deposited with a custodian. For example, custodial receipts may be used to permit the sale of the deposited bond in smaller denominations than would otherwise be permitted. Frequently, custodial receipts are issued to attach bond insurance or other forms of credit enhancement to the deposited tax-exempt bond. Note, because a “separate security” is not created by the issuance of a receipt, many of the tax advantages bestowed upon holders of the deposited tax-exempt bond are also conferred upon the custodial receipt holder.

Debt Securities. Debt securities (e.g., bonds, notes, debentures) represent money borrowed that obligates the issuer (e.g., a corporation, municipality, government, government agency) to repay the borrowed amount at maturity (when the obligation is due and payable) and usually to pay the holder interest at specific times.

Dollar Rolls. Dollar rolls are transactions in which securities are sold for delivery in the current month and the seller contracts to repurchase substantially similar securities on a specified future date. Any difference between the sale price and the purchase price (plus interest earned on the cash proceeds of the sale) is applied against the past interest income on the securities sold to arrive at an implied borrowing rate.

Dollar rolls may be renewed prior to cash settlement and initially may involve only a firm commitment agreement by the Fund to buy a security.

If the broker-dealer to whom a Fund sells the security becomes insolvent, the Fund’s right to repurchase the security may be restricted. Other risks involved in entering into dollar rolls include the risk that the value of the security may change adversely over the term of the dollar roll and that the security the Fund is required to repurchase may be worth less than the security that the Fund originally held. To avoid any leveraging concerns, the Fund will segregate or earmark liquid assets with the Fund’s custodian in an amount sufficient to cover its repurchase obligations. A Fund may also cover the transaction by means of an offsetting transaction or by other means permitted under the 1940 Act or the rules and Securities and Exchange Commission (“SEC”) interpretations thereunder.

Equipment Trust Certificates (“ETCs”). ETCs are issued by a trust formed to finance large purchases of equipment, such as airplanes, at favorable interest rates. Legal title on such equipment is held by a trustee. The trustee leases the equipment and sells ETCs at a small discount to the purchase price of the equipment. The lease payments are then used to pay principal and interest to the ETC holders.

Equity Securities. Equity securities represent ownership interests in a company and consist of common stocks, preferred stocks, warrants to acquire common stock, and securities convertible into common stock. Investments in equity securities in general are subject to market risks that may cause their prices to fluctuate over time. Fluctuations in the value of equity securities in which a fund invests will cause the net asset value of a fund to fluctuate. The Funds purchase equity securities traded in the U.S. or foreign countries on securities exchanges or the over-the-counter market. Equity securities are described in more detail below:

	•		Common Stock. Common stock represents an equity or ownership interest in an issuer. In the event an issuer is liquidated or declares bankruptcy, the claims of owners of bonds and preferred stock take precedence over the claims of those who own common stock.

	•		Preferred Stock. Preferred stock represents an equity or ownership interest in an issuer that pays dividends at a specified rate and that has precedence over common stock in the payment of dividends. In the event an issuer is liquidated or declares bankruptcy, the claims of owners of bonds take precedence over the claims of those who own preferred and common stock.

	•		Convertible Securities. Convertible securities are bonds, debentures, notes, preferred stocks or other securities that may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio. A convertible security may also be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue. If a convertible security held by a fund is called for redemption or conversion, the fund could be required to tender it for redemption, convert it into the underlying common stock, or sell it to a third-party.

			Convertible securities generally have less potential for gain or loss than common stocks. Convertible securities generally provide yields higher than the underlying common stocks, but generally lower than comparable non-convertible securities. Because of this higher yield, convertible securities generally sell at a price above their “conversion value,” which is the current market value of the stock to be received upon conversion. The difference between this conversion value and the price of convertible securities will vary over time depending on changes in the value of the underlying common stocks and interest rates. When the underlying common stocks decline in value, convertible securities will tend not to decline to the same extent because of the interest or dividend payments and the repayment of principal at maturity for certain types of convertible securities. However, securities that are convertible other than at the option of the holder generally do not limit the potential for loss to the same extent as securities convertible at the option of the holder. When the underlying common stocks rise in value, the value of convertible securities may also be expected to increase. At the same time, however, the difference between the market value of convertible securities and their conversion value will narrow, which means that the value of convertible securities will generally not increase to the same extent as the value of the underlying common stocks. Because convertible securities may also be interest-rate sensitive, their value may increase as interest rates fall and decrease as interest rates rise. Convertible securities are also subject to credit risk, and are often lower-quality securities.

	•		Small and Medium Capitalization Issuers. Generally, capitalization or market capitalization is a measure of a company’s size. Investing in equity securities of small and medium capitalization companies often involves greater risk than is customarily associated with investments in larger capitalization companies. This increased risk may be due to the greater business risks of smaller size, limited markets and financial resources, narrow product lines and frequent lack of depth of management. The securities of smaller companies are often traded in the over-the-counter market and even if listed on a national securities exchange may not be traded in volumes typical for that exchange. Consequently, the securities of smaller companies are less likely to be liquid, may have limited market stability, and may be subject to more abrupt or erratic market movements than securities of larger, more established growth companies or the market averages in general.

	•		Equity-Linked Securities. A Fund may invest in equity-linked securities, including, among others, PERCS, ELKS or LYONs, which are securities that are convertible into, or the value of which is based upon the value of, equity securities upon certain terms and conditions. The amount received by an investor at maturity of such securities is not fixed but is based on the price of the underlying common stock. It is impossible to predict whether the price of the underlying common stock will rise or fall. Trading prices of the underlying common stock will be influenced by the issuer’s operational results, by complex, interrelated political, economic, financial or other factors affecting the capital markets, the stock exchanges on which the underlying common stock is traded and the market segment of which the issuer is a part. In addition, it is not possible to predict how equity-linked securities will trade in the secondary market. The market for such securities may be shallow, and high volume trades may be possible only with discounting. In addition to the foregoing risks, the return on such securities depends on the creditworthiness of the issuer of the securities, which may be the issuer of the underlying securities or a third-party investment banker or other lender. The creditworthiness of such third-party issuer equity-linked securities may, and often does, exceed the creditworthiness of the issuer of the underlying securities. The advantage of using equity-linked securities over traditional equity and debt securities is that the former are income producing vehicles that may provide a higher income than the dividend income on the underlying equity securities while allowing some participation in the capital appreciation of the underlying equity securities. Another advantage of using equity-linked securities is that they may be used for hedging to reduce the risk of investing in the generally more volatile underlying equity securities.

The following are three examples of equity-linked securities. A Fund may invest in the securities described below or other similar equity-linked securities.

	•		PERCS. Preferred Equity Redemption Cumulative Stock (“PERCS”) technically is preferred stock with some characteristics of common stock. PERCS are mandatorily convertible into common stock after a period of time, usually three years, during which the investors’ capital gains are capped, usually at 30%. Commonly, PERCS may be redeemed by the issuer at any time or if the issuer’s common stock is trading at a specified price level or better. The redemption price starts at the beginning of the PERCS duration period at a price that is above the cap by the amount of the extra dividends the PERCS holder is entitled to receive relative to the common stock over the duration of the PERCS and declines to the cap price shortly before maturity of the PERCS. In exchange for having the cap on capital gains and giving the issuer the option to redeem the PERCS at any time or at the specified common stock price level, the Fund may be compensated with a substantially higher dividend yield than that on the underlying common stock.

	•		ELKS. Equity-Linked Securities (“ELKS”) differ from ordinary debt securities, in that the principal amount received at maturity is not fixed but is based on the price of the issuer’s common stock. ELKS are debt securities commonly issued in fully registered form for a term of three years under an indenture trust. At maturity, the holder of ELKS will be entitled to receive a principal amount equal to the lesser of a cap amount, commonly in the range of 30% to 55% greater than the current price of the issuer’s common stock, or the average closing price per share of the issuer’s common stock, subject to adjustment as a result of certain dilution events, for the 10 trading days immediately prior to maturity. Unlike PERCS, ELKS are commonly not subject to redemption prior to maturity. ELKS usually bear interest six times during the three-year term at a substantially higher rate than the dividend yield on the underlying common stock. In exchange for having the cap on the return that might have been received as capital gains on the underlying common stock, the Fund may be compensated with the higher yield, contingent on how well the underlying common stock does.

	•		LYONS. Liquid Yield Option Notes (“LYONS”) differ from ordinary debt securities, in that the amount received prior to maturity is not fixed but is based on the price of the issuer’s common stock. LYONs are zero-coupon notes that sell at a large discount from face value. For an investment in LYONs, a Fund will not receive any interest payments until the notes mature, typically in 15 to 20 years, when the notes are redeemed at face, or par value. The yield on LYONs, typically, is lower-than-market rate for debt securities of the same maturity, due in part to the fact that the LYONs are convertible into common stock of the issuer at any time at the option of the holder of the LYONs. Commonly, the LYONs are redeemable by the issuer at any time after an initial period or if the issuer’s common stock is trading at a specified price level or better, or, at the option of the holder, upon certain fixed dates. The redemption price typically is the purchase price of the LYONs plus accrued original issue discount to the date of redemption, which amounts to the lower-than-market yield. A Fund will receive only the lower-than-market yield unless the underlying common stock increases in value at a substantial rate. LYONs are attractive to investors, like a Fund, when it appears that they will increase in value due to the rise in value of the underlying common stock.

Eurodollar and Yankee Dollar Obligations. Eurodollar obligations are U.S. dollar denominated obligations issued outside the United States by non-U.S. corporations or other entities. Yankee dollar obligations are U.S. dollar denominated obligations issued in the United States by non-U.S. corporations or other entities. Yankee obligations are subject to the same risks that pertain to the domestic issues, notably credit risk, market risk and liquidity risk. Additionally, Yankee obligations are subject to certain sovereign risks. One such risk is the possibility that a sovereign country might prevent capital from flowing across their borders. Other risks include: adverse political and economic developments; the extent and quality of government regulation of financial markets and institutions; the imposition of foreign withholding taxes; and the expropriation or nationalization or foreign issuers.

Exchange Traded Funds (“ETFs”). ETFs are investment companies whose shares are bought and sold on a securities exchange. An ETF holds a portfolio of securities designed to track a particular market segment or index. Some examples of ETFs are SPDRs^â, DIAMONDS^SM, NASDAQ 100 Index Tracking Stock^{SM (}“QQQs^SM”), iShares^â and VIPERs^â. A Fund could purchase an ETF to temporarily gain exposure to a portion of the U.S. or foreign market. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although lack of liquidity in an ETF could result in it being more volatile than the underlying portfolio of securities and ETFs have management fees that increase their costs versus the costs of owning the underlying securities directly. (See also “Investment Company Shares” below).

Fixed Income Securities. Fixed income securities are debt obligations issued by corporations, municipalities and other borrowers. Coupons may be fixed or adjustable, based on a pre-set formula. The market value of fixed income investments may change in response to interest rate changes and other factors. During periods of falling interest rates, the values of outstanding fixed income securities generally rise. Conversely, during periods of rising interest rates, the values of such securities generally decline. Moreover, while securities with longer maturities tend to produce higher yields, the prices of longer maturity securities are also subject to greater market fluctuations as a result of changes in interest rates. Changes by recognized agencies in the rating of any fixed income security and in the ability of an issuer to make payments of interest and principal will also affect the value of these investments. Changes in the value of portfolio securities will not affect cash income derived from these securities but will affect a Fund’s net asset value.

Floating Rate Instruments. Floating rate instruments have a rate of interest that is set as a specific percentage of a designated base rate (such as LIBOR). Such obligations are frequently secured by letters of credit or other credit support arrangements provided by banks. The quality of the underlying credit or of the bank, as the case may be, must, in the Subadviser’s opinion be equivalent to the long-term bond or commercial paper ratings stated in the prospectus. The Subadviser will monitor the earning power, cash flow and liquidity ratios of the issuers of such instruments and the ability of an issuer of a demand instrument to pay principal and interest on demand.

Foreign Securities. Foreign securities may include U.S. dollar denominated obligations or securities of foreign issuers denominated in other currencies. Possible investments include obligations of foreign corporations and other entities, obligations of foreign branches of U.S. banks and of foreign banks, including, without limitation, European Certificates of Deposit, European Time Deposits, European Bankers’ Acceptances, Canadian Time Deposits, Europaper and Yankee Certificates of Deposit, and investments in Canadian Commercial Paper and foreign securities. These instruments have investment risks that differ in some respects from those related to investments in obligations of U.S. domestic issuers. These risks include future adverse political and economic developments, the possible imposition of withholding taxes on interest or other income, possible seizure, nationalization, or expropriation of foreign deposits, the possible establishment of exchange controls or taxation at the source, greater fluctuations in value due to changes in exchange rates, or the adoption of other foreign

governmental restrictions which might adversely affect the payment of principal and interest on such obligations. These investments may also entail higher custodial fees and sales commissions than domestic investments. Foreign issuers of securities or obligations are often subject to accounting treatment and engage in business practices different from those respecting domestic issuers of similar securities or obligations. Foreign branches of U.S. banks and foreign banks may be subject to less stringent reserve requirements than those applicable to domestic branches of U.S. banks.

In making investment decisions for the Funds, the Subadvisers evaluate the risks associated with investing Fund assets in a particular country, including risks stemming from a country’s financial infrastructure and settlement practices; the likelihood of expropriation, nationalization or confiscation of invested assets; prevailing or developing custodial practices in the country; the country’s laws and regulations regarding the safekeeping, maintenance and recovery of invested assets, the likelihood of government-imposed exchange control restrictions which could impair the liquidity of Fund assets maintained with custodians in that country, as well as risks from political acts of foreign governments (“country risks”). Of course, the Subadviser cannot assure that the Fund will not suffer losses resulting from investing in foreign countries.

Holding Fund assets in foreign countries through specific foreign custodians presents additional risks, including but not limited to the risks that a particular foreign custodian or depository will not exercise proper care with respect to Fund assets or will not have the financial strength or adequate practices and procedures to properly safeguard Fund assets.

By investing in foreign securities, the Funds attempt to take advantage of differences between both economic trends and the performance of securities markets in the various countries, regions and geographic areas as prescribed by each Fund’s investment objective and policies. During certain periods the investment return on securities in some or all countries may exceed the return on similar investments in the United States, while at other times the investment return may be less than that on similar U.S. securities. The international investments of a Fund may reduce the effect that events in any one country or geographic area will have on its investment holdings. Of course, negative movement by a Fund’s investments in one foreign market represented in its portfolio may offset potential gains from the Fund’s investments in another country’s markets.

Emerging countries are all countries that are considered to be developing or emerging countries by the World Bank or the International Finance Corporation, as well as countries classified by the United Nations or otherwise regarded by the international financial community as developing.

Foreign Currency: A Fund may temporarily hold funds in bank deposits in foreign currencies during the completion of investment programs. A Fund may conduct foreign currency exchange transactions either on a spot (cash) basis at the spot rate prevailing in the foreign exchange market or by entering into a foreign currency forward contract (“forward contract”). A forward contract involves an obligation to purchase or sell a specific amount of a specific currency at a future date, which may be any fixed number of days (usually less than one year) from the date of the contract agreed upon by the parties, at a price set at the time of the contract. Forward contracts are considered “derivatives” — financial instruments whose performance is derived, at least in part, from the performance of another asset (such as a security, currency or an index of securities). A forward contract “locks in” the exchange rate between the currency it will deliver and the currency it will receive at the maturity of the contract. A Fund may enter into forward contracts to hedge against risks arising from securities the Fund owns or anticipates purchasing, or the U.S. dollar value of interest and dividends paid on those securities. In addition, the Fund may enter into forward contracts to gain exposure to foreign markets.

At or before settlement of a forward contract, a Fund may either deliver the currency or terminate its contractual obligation to deliver the currency by purchasing an offsetting contract. If a Fund makes delivery of the foreign currency, it may be required to obtain the currency through the conversion of assets of a Fund into the currency. A Fund may close out a forward contract by purchasing or selling an offsetting contract, in which case it will realize a gain or a loss.

A Fund may invest in a combination of forward contracts and U.S. dollar-denominated instruments in an attempt to obtain an investment result that is substantially the same as a direct investment in a foreign currency-denominated instrument. This investment technique creates a “synthetic” position in the particular foreign-currency instrument whose performance the manager is trying to duplicate. For example, the combination of U.S. dollar-denominated money market instruments with “long” forward contracts creates a position economically equivalent to a money market instrument denominated in the foreign currency itself. Such combined positions are sometimes necessary when the money market in a particular foreign currency is small or relatively illiquid.

For hedging purposes, a Fund may invest in forward contracts to hedge either specific transactions (transaction hedging) or portfolio positions (position hedging). Transaction hedging is the purchase or sale of forward contracts with respect to specific receivables or payables of a Fund in connection with the purchase and sale of portfolio securities. Position hedging is the sale of a forward contract on a particular currency with respect to portfolio positions denominated or quoted in that currency.

A Fund may use forward contracts for position hedging if consistent with its policy of trying to expose its net assets to foreign currencies. A Fund is not required to enter into forward contracts for hedging purposes and it is possible that a Fund may not be able to hedge against a currency. It also is possible, under certain circumstances that a Fund may have to limit its currency transactions to qualify as a “regulated investment company” under the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”).

Each Fund currently does not intend to enter into a forward currency contract with a term of more than one year, or to engage in position hedging with respect to the currency of a particular country to more than the aggregate market value (at the time the hedging transaction is entered into) of its portfolio securities denominated in (or quoted in or currently convertible into or directly related through the use of forward currency contracts in conjunction with money market instruments to) that particular currency. At or before the maturity of a forward currency contract, a Fund may either sell a portfolio security and make delivery of the currency, or retain the security and terminate its contractual obligation to deliver the currency by buying an “offsetting” contract obligating it to buy, on the same maturity date, the same amount of the currency. If a Fund engages in an offsetting transaction, it may later enter into a new forward currency contract to sell the currency.

If a Fund engages in an offsetting transaction, it will incur a gain or loss to the extent that there has been movement in forward currency contract prices. If forward prices go down during the period between the date a Fund enters into a forward currency contract for the sale of a currency and the date it enters into an offsetting contract for the purchase of the currency, the Fund will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to buy. If forward prices go up, a Fund will suffer a loss to the extent the price of the currency it has agreed to buy exceeds the price of the currency it has agreed to sell.

A Fund may also enter into a forward contract to sell, for a fixed amount of U.S. dollars or other appropriate currency, the amount of foreign currency approximating the value of some or all of the Fund’s securities denominated in the foreign currency. A Fund may realize a gain or loss from currency transactions.

When a Fund purchases or sells a forward contract, under applicable federal securities laws, rules, and interpretations thereof and applicable exchange rules, a Fund must “set aside” (referred to sometimes as “asset segregation”) liquid assets, or engage in other measures to “cover” open positions with respect to such transactions. For example, with respect to forward contracts that are not contractually required to “cash-settle,” a Fund must cover its open positions by setting aside liquid assets equal to the contracts’ full, notional value. With respect to forward contracts that are contractually required to “cash-settle,” a Fund may set aside or deliver liquid assets, including cash, in an amount equal to a Fund’s daily marked-to-market (net) obligation rather than the notional value. By setting aside or delivering assets equal to only its net obligation under “cash-settled” forward contracts, a Fund will have the ability to employ leverage to a greater extent than if a Fund were required to segregate assets equal to the full notional value of such contracts. The Funds reserve the right to modify their asset segregation policies in the future.

A Fund may otherwise cover the transaction by means of an offsetting transaction or by other means permitted by the 1940 Act or the rules and SEC interpretations thereunder. In as much as these transactions are entered into for hedging purposes or are offset by segregating liquid assets, as permitted by applicable law, the Funds and their Subadviser believe that these transactions do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to a Fund’s borrowing restrictions. The Funds reserve the right to modify their asset segregation policies in the future.

Foreign Sovereign Debt Securities. Investing in fixed and floating rate high yield foreign sovereign debt securities will expose a Fund to the direct or indirect consequences of political, social or economic changes in countries that issue the securities. The ability of a foreign sovereign obligor to make timely payments on its external debt obligations will also be strongly influenced by the obligor’s balance of payments, including export performance, its access to international credits and investments, fluctuations in interest rates and the extent of its foreign reserves. A country whose exports are concentrated in a few commodities or whose economy depends on certain strategic imports could be vulnerable to fluctuations in international prices of these commodities or imports. To the extent that a country receives payment for its exports in currencies other than dollars, its ability to make debt payments denominated in dollars could be adversely affected. If a foreign sovereign obligor cannot generate sufficient earnings from foreign trade to service its external debt, it may need to depend on continuing loans and aid from foreign governments, commercial banks and multilateral organizations, and inflows of foreign investment. The commitment on the part of these foreign governments, multilateral organizations and others to make such disbursements may be conditioned on the government’s implementation of economic reforms and/or economic performance and the timely service of its obligations. Failure to implement such reforms, achieve such levels of economic performance or repay principal or interest when due may result in the cancellation of such third parties’ commitments to lend funds, which may further impair the obligor’s ability or willingness to timely service its debts.

Futures and Options on Futures. Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a specific security at a specified future time and at a specified price. An option on a futures contract gives the purchaser the right, in exchange for a premium, to assume a position in a futures contract at a specified exercise price during the term of the option. A Fund will reduce the risk that it will be unable to close out a futures contract by only entering into futures contracts that are traded on a national futures exchange regulated by the Commodities Futures Trading Commission (“CFTC”). A Fund may use futures contracts and related options for bona fide hedging; attempting to offset changes in the value of securities held or expected to be acquired or be disposed of; attempting to minimize fluctuations in foreign currencies; attempting to gain exposure to a particular market, index or instrument; or other risk management purposes. To the extent the Fund uses futures and/or options on futures, it will do so in accordance with Rule 4.5 of the Commodity Exchange Act (“CEA”). The Trust, on behalf of the Funds, has filed a notice of eligibility for exclusion from the definition of

the term “commodity pool operator” in accordance with Rule 4.5 and therefore, no Fund is subject to registration or regulation as a commodity pool operator under the CEA.

An index futures contract is a bilateral agreement pursuant to which two parties agree to take or make delivery of an amount of cash equal to a specified dollar amount times the difference between the index value at the close of trading of the contract and the price at which the futures contract is originally struck. No physical delivery of the securities comprising the index is made; generally contracts are closed out prior to the expiration date of the contract.

When a Fund purchases or sells a futures contract, under applicable federal securities laws, rules, and interpretations thereof and applicable exchange rules, a Fund must “set aside” (referred to sometimes as “asset segregation”) liquid assets, or engage in other measures to “cover” open positions with respect to such transactions. For example, with respect to futures contracts that are not contractually required to “cash-settle,” a Fund must cover its open positions by setting aside liquid assets equal to the contracts’ full, notional value. With respect to futures contracts that are contractually required to “cash-settle,” a Fund may set aside or deliver liquid assets, including cash, in an amount equal to a Fund’s daily marked-to-market (net) obligation rather than the notional value. By setting aside or delivering assets equal to only its net obligation under “cash-settled” futures contracts, a Fund will have the ability to employ leverage to a greater extent than if a Fund were required to segregate assets equal to the full notional value of such contracts. The Funds reserve the right to modify their asset segregation policies in the future.

The Fund may also cover its long position in a futures contract by purchasing a put option on the same futures contract with a strike price (i.e., an exercise price) as high as or higher than the price of the futures contract. In the alternative, if the strike price of the put is less than the price of the futures contract, the Fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the strike price of the put and the price of the futures contract. The Fund may also cover its long position in a futures contract by taking a short position in the instruments underlying the futures contract, or by taking positions in instruments with prices, which are expected to move relatively consistently with the futures contract. The Fund may cover its short position in a futures contract by taking a long position in the instruments underlying the futures contracts, or by taking positions in instruments with prices, which are expected to move relatively consistently with the futures contract.

A Fund may cover its sale of a call option on a futures contract by taking a long position in the underlying futures contract at a price less than or equal to the strike price of the call option. In the alternative, if the long position in the underlying futures contract is established at a price greater than the strike price of the written (sold) call, a Fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the strike price of the call and the price of the futures contract. The Fund may also cover its sale of a call option by taking positions in instruments with prices which are expected to move relatively consistently with the call option. A Fund may cover its sale of a put option on a futures contract by taking a short position in the underlying futures contract at a price greater than or equal to the strike price of the put option, or, if the short position in the underlying futures contract is established at a price less than the strike price of the written put, the fund will maintain in a segregated account cash or liquid securities equal in value to the difference between the strike price of the put and the price of the futures contract. A Fund may also cover its sale of a put option by taking positions in instruments with prices, which are expected to move relatively consistently with the put option.

In as much as these transactions are entered into for hedging purposes or are offset by segregating liquid assets, as permitted by applicable law, the Funds and their Subadvisers believe that these transactions do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to a Fund’s borrowing restrictions.

There are significant risks associated with a Fund’s use of futures contracts and related options, including the following: (1) the success of a hedging strategy may depend on the Adviser’s ability to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates, (2) there may be an imperfect or no correlation between the changes in market value of the securities held by a Fund and the prices of futures and options on futures, (3) there may not be a liquid secondary market for a futures contract or option, (4) trading restrictions or limitations may be imposed by an exchange, and (5) government regulations may restrict trading in futures contracts and options on futures. In addition, some strategies reduce a Fund’s exposure to price fluctuations, while others tend to increase its market exposure.

Guaranteed Investment Contracts (“GICs”). A GIC is a general obligation of the issuing insurance company and not a separate account. The purchase price paid for a GIC becomes part of the general assets of the issuer, and the contract is paid at maturity from the general assets of the issuer. Generally, GICs are not assignable or transferable without the permission of the issuing insurance company. For this reason, an active secondary market in GICs does not currently exist and GICs are considered to be illiquid investments.

Hedging Techniques. Hedging is an investment strategy designed to offset investment risks. Hedging activities include, among other things, the use of options and futures. There are risks associated with hedging activities, including: (i) the success of a hedging strategy may depend on an ability to predict movements in the prices of individual securities, fluctuations in markets, and movements in interest rates; (ii) there may be an imperfect or no correlation between the changes in market value of the securities held by a Fund and the prices of futures and option on futures; (iii) there may not be a liquid secondary market for a futures contract or option; and (iv) trading restrictions or limitations may be imposed by an exchange, and government regulations may restrict trading in futures contracts and options.

High Yield Securities. High yield securities, commonly referred to as junk bonds, are debt obligations rated below investment grade, i.e., below BBB by Standard & Poor’s Ratings Group (“S&P”) or Baa by Moody’s Investors Service, Inc. (“Moody’s”), or their unrated equivalents. The risks associated with investing in high yield securities include:

1. High yield, lower rated bonds involve greater risk of default or price declines than investments in investment grade securities (e.g., securities rated BBB or higher by S&P or Baa or higher by Moody’s) due to changes in the issuer’s creditworthiness.

2. The market for high risk, high yield securities may be thinner and less active, causing market price volatility and limited liquidity in the secondary market. This may limit the ability of a Fund to sell these securities at their fair market values either to meet redemption requests, or in response to changes in the economy or the financial markets.

3. Market prices for high risk, high yield securities may also be affected by investors’ perception of the issuer’s credit quality and the outlook for economic growth. Thus, prices for high risk, high yield securities may move independently of interest rates and the overall bond market.

4. The market for high risk, high yield securities may be adversely affected by legislative and regulatory developments.

Illiquid Securities. Illiquid securities are securities that cannot be sold or disposed of in the ordinary course of business (within seven days) at approximately the prices at which they are valued. Because of their illiquid nature, illiquid securities must be priced at fair value as determined in good faith pursuant to procedures approved by the Trust’s Board of Trustees. Despite such good faith efforts to determine fair value prices, a Fund’s illiquid securities are subject to the risk that the security’s fair value price may differ from the actual price, which the Fund may ultimately realize upon its sale or disposition. Difficulty in selling illiquid securities may result in a loss or may be costly to a Fund. Under the supervision of the Trust’s Board of Trustees, the Subadviser determines the liquidity of a Fund’s investments. In determining the liquidity of a Fund’s investments, the Subadviser may consider various factors, including (1) the frequency and volume of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, and (4) the nature of the security and the market in which it trades (including any demand, put or tender features, the mechanics and other requirements for transfer, any letters of credit or other credit enhancement features, any ratings, the number of holders, the method of soliciting offers, the time required to dispose of the security, and the ability to assign or offset the rights and obligations of the security). A Fund will not invest more than 15% of its net assets (10% with respect to the Money Market Funds) in illiquid securities.

Inverse Floaters. A Fund may invest in municipal securities whose interest rated bear an inverse relationship to the interest rate on another security or the value of an index (“Inverse Floaters”). An investment in Inverse Floaters may involve greater risk than an investment in a fixed rate bond. Because changes in the interest rate on the other security or index inversely affect the residual interest paid on the Inverse Floater, the value and income of an inverse floater is generally more volatile than that of a fixed rate bond. Inverse Floaters have varying degrees of liquidity, and the market for these securities is relatively volatile. These securities tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline.

Investment Company Shares. A Fund may invest in the securities of other investment companies to the extent that such an investment would be consistent with the requirements of the 1940 Act and the Fund’s investment objectives. Investments in the securities of other investment companies may involve duplication of advisory fees and certain other expenses. By investing in another investment company, a Fund becomes a shareholder of that investment company. As a result, an investing Fund’s shareholders indirectly will bear the Fund’s proportionate share of the fees and expenses paid by shareholders of the other investment company, in addition to the fees and expenses the Fund’s shareholders directly bear in connection with the Fund’s own operations.

Under Section 12(d)(1) of the 1940 Act, a Fund may invest only up to 5% of its total assets in the securities of any one investment company (ETF or other mutual funds), but may not own more than 3% of the outstanding voting stock of any one investment company (the “3% Limitation”) or invest more than 10% of its total assets in the securities of other investment companies. Because other investment companies employ an investment advisor, such investments by a Fund may cause shareholders to bear duplicate fees.

A Fund may exceed the limits established by Section 12(d)(1) if (i) the ETF or the Fund has received an order for exemptive relief from the 3% limitation from the SEC that is applicable to the Fund; and (ii) the ETF and the Fund take appropriate steps to comply with any conditions in such order. In the alternative, a Fund may rely on Rule 12d1-3, which allows unaffiliated mutual funds to exceed the 5% Limitation and the 10% Limitation, provided the aggregate sales loads any investor pays (i.e., the combined distribution expenses of both the acquiring fund and the acquired funds) does not exceed the limits on sales loads established by Financial Industry Regulatory Authority (“FINRA”), for funds of funds.

For hedging or other purposes, each Fund may invest in investment companies that seek to track the composition and/or performance of specific indexes or portions of specific indexes. Certain of these investment companies, known as ETFs, are traded on a securities exchange. (See “Exchange Traded Funds” above.) The market prices of index-based investments will fluctuate in accordance with changes in the underlying portfolio securities of the investment company and also due to supply and demand of the investment company’s shares on the exchange upon which the shares are traded. Index-based investments may not replicate or otherwise match the composition or performance of their specified index due to transaction costs, among other things. Pursuant to orders issued by the SEC to iShares^® Funds, The Select Sector SPDR Trust, streetTRACKS Series Trust, streetTRACKS Index Shares Fund and Vanguard Trust and procedures approved by the Board, each Fund may invest in iShares^® Funds, The Select Sector SPDR Trust, streetTRACKS Series Trust, streetTRACKS Index Shares Fund and Vanguard Trust in excess of the 5% and 10% limits described above, provided that the Fund has described ETF investments in its prospectus and otherwise complies with the conditions of the SEC, as it may be amended, and any other applicable investment limitations. iShares^® is a registered trademark of Barclays Global Investors, N.A. (“BGI”). Neither BGI, The Select Sector SPDR Trust, streetTRACKS Series Trust, streetTRACKS Index Shares Fund nor the iShares^® Funds makes any representations regarding the advisability of investing in the Funds.

Investment Grade Obligations. Investment grade obligations are fixed income obligations rated by one or more of the rating agencies in one of the four highest rating categories at the time of purchase (e.g., AAA, AA, A or BBB by S&P or Fitch, Inc. (“Fitch”), or Aaa, Aa, A or Baa by Moody’s or determined to be of equivalent quality by the Subadviser). Securities rated BBB or Baa represent the lowest of four levels of investment grade obligations and are regarded as borderline between sound obligations and those in which the speculative element begins to predominate. Ratings assigned to fixed income securities represent only the opinion of the rating agency assigning the rating and are not dispositive of the credit risk associated with the purchase of a particular fixed income obligation. A Fund may hold unrated securities if its Subadviser considers the risks involved in owning that security to be equivalent to the risks involved in holding an instrument grade security. Moreover, market risk also will affect the prices of even the highest rated fixed income obligation so that their prices may rise or fall even if the issuer’s capacity to repay its obligation remains unchanged.

Leveraged Buyouts. A Fund may invest in leveraged buyout limited partnerships and funds that, in turn, invest in leveraged buyout transactions (“LBOs”). An LBO, generally, is an acquisition of an existing business by a newly formed corporation financed largely with debt assumed by such newly formed corporation to be later repaid with funds generated from the acquired company. Since most LBOs are by nature highly leveraged (typically with debt to equity ratios of approximately 9 to 1), equity investments in LBOs may appreciate substantially in value given only modest growth in the earnings or cash flow of the acquired business. Investments in LBO partnerships and funds, however, present a number of risks. Investments in LBO limited partnerships and funds will normally lack liquidity and may be subject to intense competition from other LBO limited partnerships and funds. Additionally, if the cash flow of the acquired company is insufficient to service the debt assumed in the LBO, the LBO limited partnership or fund could lose all or part of its investment in such acquired company.

Medium-Term Notes. Medium-term notes are periodically or continuously offered corporate or agency debt that differs from traditionally underwritten corporate bonds only in the process by which they are issued.

Money Market Securities. Money market securities include short-term U.S. government securities; custodial receipts evidencing separately traded interest and principal components of securities issued by the U.S. Treasury; commercial paper rated in the highest short-term rating category by a nationally recognized statistical ratings organization (“NRSRO”), such as S&P or Moody’s, or determined by the Subadviser to be of comparable quality at the time of purchase; short-term bank obligations (certificates of deposit, time deposits and bankers’ acceptances) of U.S. commercial banks with assets of at least $1 billion as of the end of their most recent fiscal year; and repurchase agreements involving such securities. Each of these money market securities are described herein. For a description of ratings, see Appendix A to this SAI.

Mortgage-Backed Securities. A Fund may invest in mortgage-backed and asset-backed securities. Mortgage-backed securities (“MBS”) are securities which represent ownership interests in, or are debt obligations secured entirely or primarily by, “pools” of residential or commercial mortgage loans or other asset-backed securities (the “Underlying Assets”). Such securities may be issued by U.S. government agencies and government-sponsored entities, such as Government National Mortgage Association (“GNMA”), Federal National Mortgage Association (“FNMA”), Federal Home Loan Mortgage Corporation (“FHLMC”), commercial banks, savings and loan associations, mortgage banks, or by issuers that are affiliates of or sponsored by such entities. The payment of interest and principal on mortgage-backed obligations issued by these entities may be guaranteed by the full faith and credit of the U.S. Government (in the case of GNMA), or may be guaranteed by the issuer (in the case of FNMA and MHLMC). However, these guarantees do not apply to the market prices and yields of these securities, which vary with changes in interest rates.

Obligations of GNMA are backed by the full faith and credit of the U.S. Government. Obligations of Fannie Mae and FHLMC are not backed by the full faith and credit of the U.S. Government, but are considered to be of high quality since they are considered to be instrumentalities of the United States. A Fund will not purchase mortgage-backed securities that do not meet the above minimum credit standards. In the case of mortgage-backed securities representing ownership interests in the Underlying Assets, the principal and interest payments on the underlying mortgage loans are distributed monthly to the holders of the mortgage-backed securities. In the case of mortgage-backed securities representing debt obligations secured by the Underlying Assets, the principal and interest payments on the underlying mortgage loans, and any reinvestment income thereon, provide the funds to pay debt service on such mortgage-backed securities.

Certain mortgage-backed securities represent an undivided fractional interest in the entirety of the Underlying Assets (or in a substantial portion of the Underlying Assets, with additional interests junior to that of the mortgage-backed security), and thus have payment terms that closely resemble the payment terms of the Underlying Assets.

In addition, many mortgage-backed securities are issued in multiple classes. Each class of such multi-class mortgage-backed securities, often referred to as a “tranche,” is issued at a specific fixed or floating coupon rate and has a stated maturity or final distribution date. Principal prepayment on the Underlying Assets may cause the MBS to be retired substantially earlier than their stated maturities or final distribution dates. Interest is paid or accrues on all or most classes of the MBS on a periodic basis, typically monthly or quarterly. The principal of and interest on the Underlying Assets may be allocated among the several classes of a series of MBS in many different ways. In a relatively common structure, payments of principal (including any principal prepayments) on the Underlying Assets are applied to the classes of a series of MBS in the order of their respective stated maturities so that no payment of principal will be made on any class of MBS until all other classes having an earlier stated maturity have been paid in full. An important feature of MBS is that the principal amount is generally subject to partial or total prepayment at any time because the Underlying Assets (i.e., loans) generally may be prepaid at any time.

Private pass-through securities are mortgage-backed securities issued by a non-governmental agency, such as a trust. While they are generally structured with one or more types of credit enhancement, private pass-through securities generally lack a guarantee by an entity having the credit status of a governmental agency or instrumentality. The two principal types of private mortgage-backed securities are collateralized mortgage obligations (“CMOs”) and real estate mortgage investment conduits (“REMICs”).

CMOs are collateralized mortgage obligations, which are collateralized by mortgage pass-through securities. Cash flows from the mortgage pass-through securities are allocated to various tranches (a “tranche” is essentially a separate security) in a predetermined, specified order. Each tranche has a stated maturity — the latest date by which the tranche can be completely repaid, assuming no prepayments — and has an average life — the average of the time to receipt of a principal payment weighted by the size of the principal payment. The average life is typically used as a proxy for maturity because the debt is amortized (repaid a portion at a time), rather than being paid off entirely at maturity, as would be the case in a straight debt instrument.

Although some of the mortgages underlying CMOs may be supported by various types of insurance, and some CMOs may be backed by GNMA certificates or other mortgage pass-throughs issued or guaranteed by U.S. government agencies or instrumentalities, the CMOs themselves are not generally guaranteed.

REMICs are private entities formed for the purpose of holding a fixed pool of mortgages secured by an interest in real property. REMICs are similar to CMOs in that they issue multiple classes of securities and are rated in one of the two highest categories by S&P or Moody’s.

Investors may purchase beneficial interests in REMICs, which are known as “regular” interests, or “residual” interests. Guaranteed REMIC pass-through certificates (“REMIC Certificates”) issued by Fannie Mae or FHLMC represent beneficial ownership interests in a REMIC trust consisting principally of mortgage loans or Fannie Mae, FHLMC or GNMA-guaranteed mortgage pass-through certificates.

For FHLMC REMIC Certificates, FHLMC guarantees the timely payment of interest. GNMA REMIC Certificates are backed by the full faith and credit of the U.S. Government.

Parallel pay CMOs and REMICs are structured to provide payments of principal on each payment date to more than one class. These simultaneous payments are taken into account in calculating the stated maturity date or final distribution date of each class, which must be retired by its stated maturity date or final distribution date, but may be retired earlier. Planned Amortization Class CMOs (“PAC Bonds”) generally require payments of a specified amount of principal on each payment date. PAC Bonds are always parallel pay CMOs with the required principal payment on such securities having the highest priority after interest has been paid to all classes.

Stripped mortgage-backed securities are securities that are created when a U.S. government agency or a financial institution separates the interest and principal components of a mortgage-backed security and sells them as individual securities. The holder of the “principal only” security (“PO”) receives the principal payments made by the underlying mortgage-backed security, while the holder of the “interest only” security (“IO”) receives interest payments from the same underlying security.

The prices of stripped mortgage-backed securities may be particularly affected by changes in interest rates. As interest rates fall, prepayment rates tend to increase, which tends to reduce prices of IOs and increase prices of POs. Rising interest rates can have the opposite effect.

Municipal Forwards. Municipal forwards are forward commitments for the purchase of tax-exempt bonds with a specified coupon to be delivered by an issuer at a future date, typically exceeding 45 days but normally less than one year after the commitment date. Municipal forwards are normally used as a refunding mechanism for bonds that may only be redeemed on a designated future date. See “When-Issued Securities and Forward Commitment Securities” for more information.

Municipal Lease Obligations. Municipal lease obligations are securities issued by state and local governments and authorities to finance the acquisition of equipment and facilities. They may take the form of a lease, an installment purchase contract, a conditional sales contract, or a participation interest in any of the above.

Municipal Securities. Municipal bonds include general obligation bonds, revenue or special obligation bonds, private activity and industrial development bonds and participation interests in municipal bonds. General obligation bonds are backed by the taxing power of the issuing municipality. Revenue bonds are backed by the revenues of a project or facility (for example, tolls from a bridge). Certificates of participation represent an interest in an underlying obligation or commitment, such as an obligation issued in connection with a leasing arrangement. The payment of principal and interest on private activity and industrial development bonds generally is totally dependent on the ability of a facility’s user to meet its financial obligations and the pledge, if any, of real and personal property as security for the payment.

Municipal notes consist of general obligation notes, tax anticipation notes (notes sold to finance working capital needs of the issuer in anticipation of receiving taxes on a future date), revenue anticipation notes (notes sold to provide needed cash prior to receipt of expected non-tax revenues from a specific source), bond anticipation notes, certificates of indebtedness, demand notes and construction loan notes. A Fund’s investments in any of the notes described above will be limited to those obligations (i) where both principal and interest are backed by the full faith and credit of the United States, (ii) which are rated MIG-2 or V-MIG-2 at the time of investment by Moody’s, (iii) which are rated SP-2 at the time of investment by S&P, or (iv) which, if not rated by S&P or Moody’s, are in the Subadviser’s judgment, of at least comparable quality to MIG-2, VMIG-2 or SP-2.

From time to time, a municipality may refund a bond that it has already issued prior to the original bond’s call date by issuing a second bond, the proceeds of which are used to purchase securities. The securities are placed in an escrow account pursuant to an agreement between the municipality and an independent escrow agent. The principal and interest payments on the securities are then used to pay off the original bondholders. For purposes of diversification and industry concentration, pre-refunded bonds will be treated as governmental issues.

Municipal bonds generally must be rated investment grade by at least one national securities rating agency or, if not rated, must be deemed by the Subadviser to essentially have characteristics similar to those of bonds having the above rating. Bonds downgraded to below investment grade may continue to be held at the discretion of a Fund’s Subadviser. A Fund may purchase industrial development and pollution control bonds if the interest paid is exempt from federal income tax. These bonds are issued by or on behalf of public authorities to raise money to finance various privately-operated facilities for business and manufacturing, housing, sports and pollution control. These bonds are also used to finance public facilities such as airports, mass transit systems, ports and parking. The payment of the principal and interest on such bonds is dependent solely on the ability of the facility’s user to meet

its financial obligations and the pledge, if any, of real and personal property so financed as security for such payment.

Private activity bonds are issued by or on behalf of states, or political subdivisions thereof, to finance privately owned or operated facilities for business and manufacturing, housing, sports, and pollution control, and to finance activities of and facilities for charitable institutions. Private activity bonds are also used to finance public facilities such as airports, mass transit systems, ports parking and low-income housing. The payment of the principal and interest on private activity bonds is dependent solely on the ability of the facility’s user to meet its financial obligations and may be secured by a pledge of real and personal property so financed.

Investments in floating rate instruments will normally involve industrial development or revenue bonds which provide that the rate of interest is set as a specific percentage of a designated base rate (such as the prime rate) at a major commercial bank, and that a Fund can demand payment of the obligation at all times or at stipulated dates on short notice (not to exceed 30 days) at par plus accrued interest. Such obligations are frequently secured by letters of credit or other credit support arrangements provided by banks. The quality of the underlying credit or of the bank, as the case may be, must, in the Subadviser’s opinion, be equivalent to the long-term bond or commercial paper ratings stated above. The Subadviser will monitor the earning power, cash flow and liquidity ratios of the issuers of such instruments and the ability of an issuer of a demand instrument to pay principal and interest on demand. The Subadviser may purchase other types of tax-exempt instruments as long as they are of a quality equivalent to the bond or commercial paper ratings stated above.

The Subadviser has the authority to purchase securities at a price which would result in a yield to maturity lower than that generally offered by the seller at the time of purchase when they can simultaneously acquire the right to sell the securities back to the seller, the issuer, or a third-party (the “writer”) at an agreed-upon price at any time during a stated period or on a certain date. Such a right is generally denoted as a “standby commitment” or a “put.” The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity in order to meet redemptions and remain as fully invested as possible in municipal securities. The right to put the securities depends on the writer’s ability to pay for the securities at the time the put is exercised. A Fund will limit its put transactions to those with institutions which the Subadviser believe present minimum credit risks, and the Subadviser will use its best efforts to initially determine and thereafter monitor the financial strength of the put providers by evaluating their financial statements and such other information as is available in the marketplace. It may, however, be difficult to monitor the financial strength of the writers where adequate current financial information is not available. In the event that any writer is unable to honor a put for financial reasons, the affected Fund would be a general creditor (i.e., on parity with all other unsecured creditors) of the writer. Furthermore, particular provisions of the contract between a Fund and the writer may excuse the writer from repurchasing the securities in certain circumstances (for example, a change in the published rating of the underlying municipal securities or any similar event that has an adverse effect on the issuer’s credit); or a provision in the contract may provide that the put will not be exercised except in certain special cases, for example, to maintain portfolio liquidity. A Fund could, however, sell the underlying portfolio security in the open market or wait until the portfolio security matures, at which time it should realize the full par value of the security. Municipal securities purchased subject to a put may be sold to third persons at any time, even though the put is outstanding, but the put itself, unless it is an integral part of the security as originally issued, may not be marketable or otherwise assignable. Sale of the securities to third parties or lapse of time with the put unexercised may terminate the right to put the securities. Prior to the expiration of any put option, a Fund could seek to negotiate terms for the extension of such an option. If such a renewal cannot be negotiated on terms satisfactory to a Fund, the Fund could, of course, sell the portfolio security. The maturity of the underlying security will generally be different from that of the put. There will be no limit to the percentage of portfolio securities that a Fund may purchase subject to a put. For the purpose of determining the “maturity” of securities purchased subject to an option to put, and for the purpose of determining the dollar-

weighted average maturity of a Fund including such securities, a Fund will consider “maturity” to be the first date on which it has the right to demand payment from the writer of the put although the final maturity of the security is later than such date.

Other types of tax-exempt instruments which are permissible investments include floating rate notes. Investments in such floating rate instruments will normally involve industrial development or revenue bonds which provide that the rate of interest is set as a specific percentage of a designated base rate (such as the prime rate) at a major commercial bank, and that a Fund can demand payment of the obligation at all times or at stipulated dates on short notice (not to exceed 30 days) at par plus accrued interest. Such obligations are frequently secured by letters of credit or other credit support arrangements provided by banks. The quality of the underlying credit or of the bank, as the case may be, must, in the Subadviser’s opinion, be equivalent to the long-term bond or commercial paper ratings stated above. The Subadviser will monitor the earning power, cash flow and liquidity ratios of the issuers of such instruments and the ability of an issuer of a demand instrument to pay principal and interest on demand. A Fund may also purchase participation interests in municipal securities (such as industrial development bonds and municipal lease/purchase agreements). A participation interest gives a Fund an undivided interest in the underlying municipal security. If it is unrated, the participation interest will be backed by an irrevocable letter of credit or guarantee of a credit-worthy financial institution or the payment obligations otherwise will be collateralized by U.S. government securities. Participation interests may have fixed, variable or floating rates of interest and may include a demand feature. A participation interest without a demand feature or with a demand feature exceeding seven days may be deemed to be an illiquid security subject to a Fund’s investment limitations restricting its purchases of illiquid securities. A Fund may purchase other types of tax-exempt instruments as long as they are of a quality equivalent to the bond or commercial paper ratings stated above.

Opinions relating to the validity of municipal securities and to the exemption of interest thereon from federal income tax are rendered by bond counsel to the respective issuers at the time of issuance. Neither a Fund nor its Subadviser will review the proceedings relating to the issuance of municipal securities or the basis for such opinions.

Non-Publicly Traded Securities; Rule 144A Securities. The Funds may purchase securities that are not registered under the Securities Act of 1933, as amended (the “1933 Act”), but that can be sold to “qualified institutional buyers” in accordance with Rule 144A under the 1933 Act (“Rule 144A Securities”). An investment in Rule 144A Securities will be considered illiquid and therefore subject to a Fund’s limitation on the purchase of illiquid securities (usually 15% of a fund’s net assets, 10% for the Money Market Funds), unless a Fund’s governing Board of Trustees determines on an ongoing basis that an adequate trading market exists for the security. In addition to an adequate trading market, the Board of Trustees will also consider factors such as trading activity, availability of reliable price information and other relevant information in determining whether a Rule 144A Security is liquid. This investment practice could have the effect of increasing the level of illiquidity in a Fund to the extent that qualified institutional buyers become uninterested for a time in purchasing Rule 144A Securities. The Board of Trustees will carefully monitor any investments by a Fund in Rule 144A Securities. The Board of Trustees may adopt guidelines and delegate to the Subadvisers the daily function of determining and monitoring the liquidity of Rule 144A Securities, although the Board of Trustees will retain ultimate responsibility for any determination regarding liquidity.

Non-publicly traded securities (including Rule 144A Securities) may involve a high degree of business and financial risk and may result in substantial losses. These securities may be less liquid than publicly traded securities, and a Fund may take longer to liquidate these positions than would be the case for publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized on such sales could be less than those originally paid by a Fund. Further, companies whose securities are not publicly

traded may not be subject to the disclosure and other investor protection requirements applicable to companies whose securities are publicly traded. A Fund’s investments in illiquid securities are subject to the risk that should a Fund desire to sell any of these securities when a ready buyer is not available at a price that is deemed to be representative of their value, the value of the Fund’s net assets could be adversely affected.

Options. A Fund may purchase and write put and call options on securities or securities indices (traded on U.S. exchanges or over-the-counter markets) and enter into related closing transactions. A put option on a security gives the purchaser of the option the right to sell, and the writer of the option the obligation to buy, the underlying security at any time during the option period. A call option on a security gives the purchaser of the option the right to buy, and the writer of the option the obligation to sell, the underlying security at any time during the option period. The premium paid to the writer is the consideration for undertaking the obligations under the option contract.

Put and call options on indices are similar to options on securities except that options on an index give the holder the right to receive, upon exercise of the option, an amount of cash if the closing level of the underlying index is greater than (or less than, in the case of puts) the exercise price of the option. This amount of cash is equal to the difference between the closing price of the index and the exercise price of the option, expressed in dollars multiplied by a specified number. Thus, unlike options on individual securities, all settlements are in cash, and gain or loss depends on price movements in the particular market represented by the index generally, rather than the price movements in individual securities.

The initial purchase (sale) of an option contract is an “opening transaction.” In order to close out an option position, a Fund may enter into a “closing transaction,” which is simply the sale (purchase) of an option contract on the same security with the same exercise price and expiration date as the option contract originally opened. If a Fund is unable to effect a closing purchase transaction with respect to an option it has written, it will not be able to sell the underlying security until the option expires or the Fund delivers the security upon exercise.

A Fund may purchase and write options on an exchange or over-the-counter. Over-the-counter options (“OTC options”) differ from exchange-traded options in several respects. They are transacted directly with dealers and not with a clearing corporation, and therefore entail the risk of non-performance by the dealer. OTC options are available for a greater variety of securities and for a wider range of expiration dates and exercise prices than are available for exchange-traded options. Because OTC options are not traded on an exchange, pricing is done normally by reference to information from a market maker. It is the SEC’s position that OTC options are generally illiquid.

The market value of an option generally reflects the market price of an underlying security. Other principal factors affecting market value include supply and demand, interest rates, the pricing volatility of the underlying security and the time remaining until the expiration date.

A Fund must cover all options it purchases or writes. For example, when a Fund writes an option on a security, index or foreign currency, it will segregate or earmark liquid assets with the Fund’s custodian in an amount at least equal to the market value of the option and will maintain such coverage while the option is open. A Fund may otherwise cover the transaction by means of an offsetting transaction or other means permitted by the 1940 Act or the rules and SEC interpretations thereunder.

A Fund may trade put and call options on securities, securities indices or currencies, as its Subadviser determines is appropriate in seeking the Fund’s investment objective. For example, a Fund may purchase put and call options on securities or indices to protect against a decline in the market value of the securities in its portfolio or to anticipate an increase in the market value of securities that the Fund may seek to purchase in the future. A Fund purchasing put and call options pays a premium therefor. If price movements in the underlying securities are such that exercise of the options would not be profitable for a Fund, loss of the premium paid may be offset by an increase in the value of the Fund’s securities or by a decrease in the cost of acquisition of securities by the Fund.

In another instance, a Fund may write covered call options on securities as a means of increasing the yield on its assets and as a means of providing limited protection against decreases in its market value. When a Fund writes an option, if the underlying securities do not increase or decrease to a price level that would make the exercise of the option profitable to the holder thereof, the option generally will expire without being exercised and the Fund will realize as profit the premium received for such option. When a call option written by a Fund is exercised, the Fund will be required to sell the underlying securities to the option holder at the strike price, and will not participate in any increase in the price of such securities above the strike price. When a put option written by a Fund is exercised, the Fund will be required to purchase the underlying securities at a price in excess of the market value of such securities.

There are significant risks associated with a Fund’s use of options, including the following: (1) the success of a hedging strategy may depend on the Subadviser’s ability to predict movements in the prices of individual securities, fluctuations in markets and movements in interest rates; (2) there may be an imperfect or no correlation between the movement in prices of options held by the Fund and the securities underlying them; (3) there may not be a liquid secondary market for options; and (4) while a Fund will receive a premium when it writes covered call options, it may not participate fully in a rise in the market value of the underlying security.

Other Investments. The Funds are not prohibited from investing in bank obligations issued by clients of the Funds’ administrator or distributor or their respective parent or affiliated companies. The purchase of Fund shares by these banks or their customers will not be a consideration in deciding which bank obligations the Funds will purchase. The Funds will not purchase obligations issued by the Adviser, Subadvisers or the Funds’ distributor.

Pay-In-Kind Securities. Pay-In-Kind securities are debt obligations or preferred stock that pay interest or dividends in the form of additional debt obligations or preferred stock.

Preferred Stock. Preferred stock is a corporate equity security that pays a fixed or variable stream of dividends. Preferred stock is generally a non-voting security.

Real Estate Investment Trusts. A REIT is a corporation or business trust (that would otherwise be taxed as a corporation) which meets the definitional requirements of the Internal Revenue Code. The Code permits a qualifying REIT to deduct from taxable income the dividends paid, thereby effectively eliminating corporate level federal income tax and making the REIT a pass-through vehicle for federal income tax purposes. A REIT primarily invests in real estate and real estate mortgages. If a corporation, trust or association meets the REIT requirements, it will be taxed only on its undistributed income and capital gains.

REITs are sometimes informally characterized as Equity REITs and Mortgage REITs. An Equity REIT invests primarily in the fee ownership or leasehold ownership of land and buildings; a Mortgage REIT invests primarily in mortgages on real property, which may secure construction, development or long-term loans.

REITs in which a Fund invests may be affected by changes in underlying real estate values, which may have an exaggerated effect to the extent that REITs in which a Fund invests may concentrate investments in particular geographic regions or property types. Additionally, rising interest rates may cause investors in REITs to demand a higher annual yield from future distributions, which may in turn decrease market prices for equity securities issued by REITs. Rising interest rates also generally increase the costs of obtaining financing, which could cause the value of the Fund’s investments to decline. During periods of declining interest rates, certain Mortgage REITs may hold mortgages that the mortgagors elect to prepay, which prepayment may diminish the yield on securities issued by such Mortgage REITs. In addition, Mortgage REITs may be affected by the ability of borrowers to repay when due the debt extended by the REIT and Equity REITs may be affected by the ability of tenants to pay rent.

Certain REITs have relatively small market capitalization, which may tend to increase the volatility of the market price of securities issued by such REITs. Furthermore, REITs are dependent upon specialized management skills, have limited diversification and are, therefore, subject to risks inherent in operating and financing a limited number of projects. By investing in REITs indirectly through the Fund, a shareholder will bear not only his proportionate share of the expenses of the Fund, but also, indirectly, similar expenses of the REITs. REITs depend generally on their ability to generate cash flow to make distributions to shareholders.

In addition to these risks, Equity REITs may be affected by changes in the value of the underlying property owned by the trusts, while Mortgage REITs may be affected by the quality of any credit extended. Further, Equity and Mortgage REITs are dependent upon management skills and generally may not be diversified. Equity and Mortgage REITs are also subject to heavy cash flow dependency defaults by borrowers and self-liquidation. In addition, Equity and Mortgage REITs could possibly fail to qualify for tax free pass-through of income under the Code or to maintain their exemptions from registration under the 1940 Act. The above factors may also adversely affect a borrower’s or a lessee’s ability to meet its obligations to the REIT. In the event of default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting its investments.

Real Estate Securities. A Fund may be subject to the risks associated with the direct ownership of real estate because of its policy of concentration in the securities of companies principally engaged in the real estate industry. For example, real estate values may fluctuate as a result of general and local economic conditions, overbuilding and increased competition, increases in property taxes and operating expenses, demographic trends and variations in rental income, changes in zoning laws, casualty or condemnation losses, regulatory limitations on rents, changes in neighborhood values, related party risks, changes in how appealing properties are to tenants, changes in interest rates and other real estate capital market influences. The value of securities of companies, which service the real estate business sector may also be affected by such risks.

Because a Fund may invest a substantial portion of its assets in REITs, a Fund may also be subject to certain risks associated with the direct investments of the REITs. REITs may be affected by changes in the value of their underlying properties and by defaults by borrowers or tenants. Mortgage REITs may be affected by the quality of the credit extended. Furthermore, REITs are dependent on specialized management skills. Some REITs may have limited diversification and may be subject to risks inherent in financing a limited number of properties. REITs depend generally on their ability to generate cash flow to make distributions to shareholders or unitholders, and may be subject to defaults by borrowers and to self-liquidations. In addition, the performance of a REIT may be

affected by its failure to qualify for tax-free pass-through of income under the Code or its failure to maintain exemption from registration under the 1940 Act. Changes in prevailing interest rates may inversely affect the value of the debt securities in which a Fund will invest. Changes in the value of portfolio securities will not necessarily affect cash income derived from these securities but will affect a Fund’s net asset value. Generally, increases in interest rates will increase the costs of obtaining financing which could directly and indirectly decrease the value of a Fund’s investments.

Repurchase Agreements. A Fund may enter into repurchase agreements with financial institutions. The Funds each follow certain procedures designed to minimize the risks inherent in such agreements. These procedures include effecting repurchase transactions only with creditworthy financial institutions whose condition will be continually monitored by the Subadviser. The repurchase agreements entered into by a Fund will provide that the underlying collateral at all times shall have a value at least equal to 102% of the resale price stated in the agreement. Under all repurchase agreements entered into by a Fund, the custodian or its agent must take possession of the underlying collateral. In the event of a default or bankruptcy by a selling financial institution, a Fund will seek to liquidate such collateral. However, the exercising of each Fund’s right to liquidate such collateral could involve certain costs or delays and, to the extent that proceeds from any sale upon a default of the obligation to repurchase were less than the repurchase price, the Fund could suffer a loss. It is the current policy of each of the Funds, not to invest in repurchase agreements that do not mature within seven days if any such investment, together with any other illiquid assets held by that Fund, amounts to more than 15% of the Fund’s net assets. The investments of each of the Funds in repurchase agreements, at times, may be substantial when, in the view of the Subadviser, liquidity or other considerations so warrant.

Resource Recovery Bonds. Resource recovery bonds are a type of revenue bond issued to build facilities such as solid waste incinerators or waste-to-energy plants. Typically, a private corporation will be involved, at least during the construction phase, and the revenue stream will be secured by fees or rents paid by municipalities for use of the facilities. The viability of a resource recovery project, environmental protection regulations, and project operator tax incentives may affect the value and credit quality of resource recovery bonds.

Reverse Repurchase Agreements. A reverse repurchase agreement is a contract under which a Fund sells a security for cash for a relatively short period (usually not more than one week) subject to the obligation of the Fund to repurchase such security at a fixed time and price (representing the seller’s cost plus interest). Reverse repurchase agreements involve the risk that the market value of the securities a Fund is obligated to repurchase under the agreement may decline below the repurchase price. In the event the buyer of securities under a reverse repurchase agreement files for bankruptcy or becomes insolvent, a Fund’s use of proceeds of the agreement may be restricted pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s obligation to repurchase the securities. In addition, reverse repurchase agreements are techniques involving leverage, and are subject to asset coverage requirements. To avoid any leveraging concerns, the Fund will segregate or earmark liquid assets with the Fund’s custodian in an amount sufficient to cover its repurchase obligations.

Revolving Credit Facilities (“Revolvers”). Revolvers are borrowing arrangements in which the lender agrees to make loans up to a maximum amount upon demand by the borrower during a specified term. As the borrower repays the loan, an amount equal to the repayment may be borrowed again during the term of the Revolver and usually provides for floating or variable rates of interest. These commitments may have the effect of requiring a Fund to increase its investment in a company at a time when it might not otherwise decide to do so (including at a time when the company’s financial condition makes it unlikely that such amounts will be repaid). To avoid any leveraging concerns, a Fund will segregate or earmark liquid assets with the Fund’s custodian in an amount sufficient to cover its repurchase obligations.

A Fund may invest in Revolvers with credit quality comparable to that of issuers of its other investments. Revolvers may be subject to restrictions on transfer, and only limited opportunities may exist to resell such instruments. As a result, a Fund may be unable to sell such investments at an opportune time or may have to resell them at less than fair market value. Each Fund currently intends to treat Revolvers for which there is no readily available market as illiquid for purposes of that Fund’s limitation on illiquid investments.

Securities Lending. Each Fund may lend portfolio securities to brokers, dealers and other financial organizations that meet capital and other credit requirements or other criteria established by the Fund’s Board. These loans, if and when made, may not exceed 33 1/3% of the total asset value of the Fund (including the loan collateral). No Fund will lend portfolio securities to its investment adviser, subadviser or their affiliates unless it has applied for and received specific authority to do so from the SEC. Loans of portfolio securities will be fully collateralized by cash, letters of credit or U.S. government securities, and the collateral will be maintained in an amount equal to at least 100% of the current market value of the loaned securities by marking to market daily. Any gain or loss in the market price of the securities loaned that might occur during the term of the loan would be for the account of the Fund. A Fund may pay a part of the interest earned from the investment of collateral, or other fee, to an unaffiliated third party for acting as the Fund’s securities lending agent.

By lending its securities, a Fund may increase its income by receiving payments from the borrower that reflect the amount of any interest or any dividends payable on the loaned securities as well as by either investing cash collateral received from the borrower in short-term instruments or obtaining a fee from the borrower when U.S. government securities or letters of credit are used as collateral. Each Fund will adhere to the following conditions whenever its portfolio securities are loaned: (i) the Fund must receive at least 100% cash collateral or equivalent securities of the type discussed in the preceding paragraph from the borrower; (ii) the borrower must increase such collateral whenever the market value of the securities rises above the level of such collateral; (iii) the Fund must be able to terminate the loan on demand; (iv) the Fund must receive reasonable interest on the loan, as well as any dividends, interest or other distributions on the loaned securities and any increase in market value; (v) the Fund may pay only reasonable fees in connection with the loan (which fees may include fees payable to the lending agent, the borrower, the Fund’s administrator and the custodian); and (vi) voting rights on the loaned securities may pass to the borrower, provided, however, that if a matter comes up for a vote which would have a material effect on a Fund or its investment, the Fund must attempt to terminate the loan and regain the right to vote the securities. Any securities lending activity in which a Fund may engage will be undertaken pursuant to Board approved procedures reasonably designed to ensure that the foregoing criteria will be met. Loan agreements involve certain risks in the event of default or insolvency of the borrower, including possible delays or restrictions upon a Fund’s ability to recover the loaned securities or dispose of the collateral for the loan, which could give rise to loss because of adverse market action, expenses and/or delays in connection with the disposition of the underlying securities.

Senior Loans

Structure of Senior Loans. A senior floating rate loan (“Senior Loan”) is typically originated, negotiated and structured by a U.S. or foreign commercial bank, insurance company, finance company or other financial institution (the “Agent”) for a group of loan investors (“Loan Investors”). The Agent typically administers and enforces the Senior Loan on behalf of the other Loan Investors in the syndicate. In addition, an institution, typically but not always the Agent, holds any collateral on behalf of the Loan Investors.

Senior Loans primarily include senior floating rate loans and secondarily senior floating rate debt obligations (including those issued by an asset-backed pool), and interests therein. Loan interests primarily take the form of

assignments purchased in the primary or secondary market. Loan interests may also take the form of participation interests in, or novations of a Senior Loan. Such loan interests may be acquired from U.S. or foreign commercial banks, insurance companies, finance companies or other financial institutions who have made loans or are Loan Investors or from other investors in loan interests.

A Fund typically purchases “Assignments” from the Agent or other Loan Investors. The purchaser of an Assignment typically succeeds to all the rights and obligations under the Loan Agreement of the assigning Loan Investor and becomes a Loan Investor under the Loan Agreement with the same rights and obligations as the assigning Loan Investor. Assignments may, however, be arranged through private negotiations between potential assignees and potential assignors, and the rights and obligations acquired by the purchaser of an Assignment may differ from, and be more limited than, those held by the assigning Loan Investor. A Fund may invest up to 10% of its total assets in “Participations.” Participations by a Fund in a Loan Investor’s portion of a Senior Loan typically will result in a Fund having a contractual relationship only with such Loan Investor, not with the borrower. As a result, a Fund may have the right to receive payments of principal, interest and any fees to which it is entitled only from the Loan Investor selling the Participation and only upon receipt by such Loan Investor of such payments from the borrower. In connection with purchasing Participations, a Fund generally will have no right to enforce compliance by the borrower with the terms of the loan agreement, nor any rights with respect to any funds acquired by other Loan Investors through set-off against the borrower and a Fund may not directly benefit from the collateral supporting the Senior Loan in which it has purchased the Participation. As a result, a Fund may assume the credit risk of both the borrower and the Loan Investor selling the Participation. In the event of the insolvency of the Loan Investor selling a participation, a Fund may be treated as a general creditor of such Loan Investor. The selling Loan Investors and other persons interpositioned between such Loan Investors and a Fund with respect to such Participations will likely conduct their principal business activities in the banking, finance and financial services industries. Persons engaged in such industries may be more susceptible to, among other things, fluctuations in interest rates, changes in the Federal Open Market Committee’s monetary policy, governmental regulations concerning such industries and capital raising activities generally, and fluctuations in the financial markets generally.

A Fund will only acquire Participations if the Loan Investor selling the Participation, and any other persons interpositioned between a Fund and the Loan Investor, at the time of investment has outstanding debt or deposit obligations rated investment grade (BBB or A-3 or higher by Standard & Poor’s Ratings Group (“S&P”) or Baa or P-3 or higher by Moody’s or comparably rated by another nationally recognized rating agency (each a “Rating Agency”)) or determined by the Subadviser to be of comparable quality. Securities rated Baa by Moody’s have speculative characteristics. Similarly, a Fund will purchase an Assignment or Participation or act as a Loan Investor with respect to a syndicated Senior Loan only where the Agent with respect to such Senior Loan at the time of investment has outstanding debt or deposit obligations rated investment grade or determined by the Subadviser to be of comparable quality. Long-term debt rated BBB by S&P is regarded by S&P as having adequate capacity to pay interest and repay principal and debt rated Baa by Moody’s is regarded by Moody’s as a medium grade obligation, i.e., it is neither highly protected nor poorly secured. Commercial paper rated A-3 by S&P indicates that S&P believes such obligations exhibit adequate protection parameters but that adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation and issues of commercial paper rated P-3 by Moody’s are considered by Moody’s to have an acceptable ability for repayment of senior short-term obligations. The effect of industry characteristics and market compositions may be more pronounced.

Loan Participations. Loan participations are interests in loans to U.S. corporations, which are administered by the lending bank or agent for a syndicate of lending banks. In a loan participation, the borrower corporation is the issuer of the participation interest except to the extent a Fund derives its rights from the intermediary bank.

Because the intermediary bank does not guarantee a loan participation, a loan participation is subject to the credit risks associated with the underlying corporate borrower.

In the event of bankruptcy or insolvency of the corporate borrower, a loan participation may be subject to certain defenses that can be asserted by the borrower as a result of improper conduct by the intermediary bank. In addition, in the event the underlying corporate borrower fails to pay principal and interest when due, a Fund may be subject to delays, expenses, and risks that are greater than those that would have been involved if a Fund had purchased a direct obligation of the borrower. Under the terms of a Loan Participation, a Fund may be regarded as a creditor of the intermediary bank (rather than of the underlying corporate borrower), so that a Fund may also be subject to the risk that the intermediary bank may become insolvent.

The secondary market for loan participations is limited and any such participation purchased by a Fund may be regarded as illiquid.

Loan Collateral. In order to borrow money pursuant to a Senior Loan, a borrower will frequently, for the term of the Senior Loan, pledge collateral, including but not limited to, (i) working capital assets, such as accounts receivable and inventory; (ii) tangible fixed assets, such as real property, buildings and equipment; (iii) intangible assets, such as trademarks and patent rights (but excluding goodwill); and/or (iv) security interests in shares of stock of subsidiaries or affiliates. In the case of Senior Loans made to non-public companies, the company’s shareholders or owners may provide collateral in the form of secured guarantees and/or security interests in assets that they own. In many instances, a Senior Loan may be secured only by stock in the borrower or its subsidiaries. Collateral may consist of assets that may not be readily liquidated, and there is no assurance that the liquidation of such assets would satisfy a borrower’s obligations under a Senior Loan.

Certain Fees Paid to a Fund. In the process of buying, selling and holding Senior Loans, a Fund may receive and/or pay certain fees. These fees are in addition to interest payments received and may include facility fees, commitment fees, commissions and prepayment penalty fees. When a Fund buys a Senior Loan it may receive a facility fee and when it sells a Senior Loan it may pay a facility fee. On an ongoing basis, a Fund may receive a commitment fee based on the undrawn portion of the underlying line of credit portion of a Senior Loan. In certain circumstances, a Fund may receive a prepayment penalty fee upon the prepayment of a Senior Loan by a borrower. Other fees received by a Fund may include amendment fees.

Borrower Covenants. A borrower must comply with various restrictive covenants contained in a loan agreement or note purchase agreement between the borrower and the holders of the Senior Loan (the “Loan Agreement”). Such covenants, in addition to requiring the scheduled payment of interest and principal, may include restrictions on dividend payments and other distributions to stockholders, provisions requiring the borrower to maintain specific minimum financial ratios, and limits on total debt. In addition, the Loan Agreement may contain a covenant requiring the borrower to prepay the Loan with any free cash flow. Free cash flow is generally defined as net cash flow after scheduled debt service payments and permitted capital expenditures, and includes the proceeds from asset dispositions or sales of securities. A breach of a covenant which is not waived by the Agent, or by the Loan Investors directly, as the case may be, is normally an event of acceleration; i.e., the Agent, or the Loan Investors directly, as the case may be, has the right to call the outstanding Senior Loan. The typical practice of an Agent or a Loan Investor in relying exclusively or primarily on reports from the borrower may involve a risk of fraud by the borrower. In the case of a Senior Loan in the form of a Participation, the agreement between the buyer and seller may limit the rights of the holder to vote on certain changes which may be made to the Loan Agreement, such as waiving a breach of a covenant. However, the holder of the Participation will, in almost all

cases, have the right to vote on certain fundamental issues such as changes in principal amount, payment dates and interest rate.

Administration of Loans. In a typical Senior Loan, the Agent administers the terms of the Loan Agreement. In such cases, the Agent is normally responsible for the collection of principal and interest payments from the borrower and the apportionment of these payments to the credit of all institutions which are parties to the Loan Agreement. A Fund will generally rely upon the Agent or an intermediate participant to receive and forward to a Fund its portion of the principal and interest payments on the Senior Loan. Furthermore, unless under the terms of a Participation Agreement a Fund has direct recourse against the borrower, a Fund will rely on the Agent and the other Loan Investors to use appropriate credit remedies against the borrower. The Agent is typically responsible for monitoring compliance with covenants contained in the Loan Agreement based upon reports prepared by the borrower. The seller of the Senior Loan usually does, but is often not obligated to, notify holders of Senior Loans of any failures of compliance. The Agent may monitor the value of the collateral and, if the value of the collateral declines, may accelerate the Senior Loan, may give the borrower an opportunity to provide additional collateral or may seek other protection for the benefit of the participants in the Senior Loan. The Agent is compensated by the borrower for providing these services under a Loan Agreement, and such compensation may include special fees paid upon structuring and funding the Senior Loan and other fees paid on a continuing basis. With respect to Senior Loans for which the Agent does not perform such administrative and enforcement functions, a Fund will perform such tasks on its own behalf, although a collateral bank will typically hold any collateral on behalf of a Fund and the other Loan Investors pursuant to the applicable Loan Agreement.

A financial institution’s appointment as Agent may usually be terminated in the event that it fails to observe the requisite standard of care or becomes insolvent, enters Federal Deposit Insurance Corporation (“FDIC”) receivership, or, if not FDIC insured, enters into bankruptcy proceedings. A successor Agent would generally be appointed to replace the terminated Agent, and assets held by the Agent under the Loan Agreement should remain available to holders of Senior Loans. However, if assets held by the Agent for the benefit of a Fund were determined to be subject to the claims of the Agent’s general creditors, a Fund might incur certain costs and delays in realizing payment on a Senior Loan, or suffer a loss of principal and/or interest. In situations involving intermediate participants similar risks may arise.

Prepayments. Senior Loans can require, in addition to scheduled payments of interest and principal, the prepayment of the Senior Loan from free cash flow, as defined above. The degree to which borrowers prepay Senior Loans, whether as a contractual requirement or at their election, may be affected by general business conditions, the financial condition of the borrower and competitive conditions among Loan Investors, among others. As such, prepayments cannot be predicted with accuracy. Upon a prepayment, either in part or in full, the actual outstanding debt on which a Fund derives interest income will be reduced. However, a Fund may receive both a prepayment penalty fee from the prepaying borrower and a facility fee upon the purchase of a new Senior Loan with the proceeds from the prepayment of the former. Prepayments generally will not materially affect a Fund’s performance because a Fund should be able to reinvest prepayments in other Senior Loans that have similar yields (subject to market conditions) and because receipt of such fees may mitigate any adverse impact on a Fund’s yield.

Other Information Regarding Senior Loans. From time to time a Subadviser and its affiliates may borrow money from various banks in connection with their business activities. Such banks may also sell interests in Senior Loans to or acquire them from a Fund or may be intermediate participants with respect to Senior Loans in which a Fund owns interests. Such banks may also act as Agents for Senior Loans held by a Fund.

A Fund may purchase and retain in its portfolio a Senior Loan where the borrower has experienced, or may be perceived to be likely to experience, credit problems, including involvement in or recent emergence from bankruptcy reorganization proceedings or other forms of debt restructuring. Such investments may provide opportunities for enhanced income as well as capital appreciation. At times, in connection with the restructuring of a Senior Loan either outside of bankruptcy court or in the context of bankruptcy court proceedings, a Fund may determine or be required to accept equity securities or junior debt securities in exchange for all or a portion of a Senior Loan. As soon as reasonably practical, a Fund will divest itself of any equity securities or any junior debt securities received if it is determined that the security is an ineligible holding for a Fund. As a matter of policy, a Fund will not consider equity securities to be eligible holdings.

A Fund may acquire interests in Senior Loans which are designed to provide temporary or “bridge” financing to a borrower pending the sale of identified assets or the arrangement of longer-term loans or the issuance and sale of debt obligations. Bridge loans are often unrated. A Fund may also invest in Senior Loans of borrowers that have obtained bridge loans from other parties. A borrower’s use of bridge loans involves a risk that the borrower may be unable to locate permanent financing to replace the bridge loan, which may impair the borrower’s perceived creditworthiness.

A Fund will be subject to the risk that collateral securing a loan will decline in value or have no value. Such a decline, whether as a result of bankruptcy proceedings or otherwise, could cause the Senior Loan to be undercollateralized or unsecured. In most credit agreements there is no formal requirement to pledge additional collateral. In addition, a Fund may invest in Senior Loans guaranteed by, or secured by assets of, shareholders or owners, even if the Senior Loans are not otherwise collateralized by assets of the borrower; provided, however, that such guarantees are fully secured. There may be temporary periods when the principal asset held by a borrower is the stock of a related company, which may not legally be pledged to secure a Senior Loan. On occasions when such stock cannot be pledged, the Senior Loan will be temporarily unsecured until the stock can be pledged or is exchanged for or replaced by other assets, which will be pledged as security for the Senior Loan. However, the borrower’s ability to dispose of such securities, other than in connection with such pledge or replacement, will be strictly limited for the protection of the holders of Senior Loans and, indirectly, Senior Loans.

If a borrower becomes involved in bankruptcy proceedings, a court may invalidate a Fund’s security interest in the loan collateral or subordinate a Fund’s rights under the Senior Loan to the interests of the borrower’s unsecured creditors or cause interest previously paid to be refunded to the borrower. If a court required interest to be refunded, it could negatively affect a Fund’s performance. Such action by a court could be based, for example, on a “fraudulent conveyance” claim to the effect that the borrower did not receive fair consideration for granting the security interest in the loan collateral to a Fund. For Senior Loans made in connection with a highly leveraged transaction, consideration for granting a security interest may be deemed inadequate if the proceeds of the Loan were not received or retained by the borrower, but were instead paid to other persons (such as shareholders of the borrower) in an amount which left the borrower insolvent or without sufficient working capital. There are also other events, such as the failure to perfect a security interest due to faulty documentation or faulty official filings, which could lead to the invalidation of a Fund’s security interest in loan collateral. If a Fund’s security interest in loan collateral is invalidated or the Senior Loan is subordinated to other debt of a borrower in bankruptcy or other proceedings, a Fund would have substantially lower recovery, and perhaps no recovery on the full amount of the principal and interest due on the Loan, or a Fund could also have to refund interest (see the prospectus for additional information).

A Fund may acquire warrants and other equity securities as part of a unit combining a Senior Loan and equity securities of a borrower or its affiliates. The acquisition of such equity securities will only be incidental to a Fund’s purchase of a Senior Loan. A Fund may also acquire equity securities or debt securities (including non-dollar

denominated debt securities) issued in exchange for a Senior Loan or issued in connection with the debt restructuring or reorganization of a borrower, or if such acquisition, in the judgment of the Subadviser, may enhance the value of a Senior Loan or would otherwise be consistent with a Fund’s investment policies.

Regulatory Changes. To the extent that legislation or state or federal regulators that regulate certain financial institutions impose additional requirements or restrictions with respect to the ability of such institutions to make loans, particularly in connection with highly leveraged transactions, the availability of Senior Loans for investment may be adversely affected. Further, such legislation or regulation could depress the market value of Senior Loans.

Short Sales. A Fund may engage in short sales that are either “uncovered” or “against the box.” A short sale is “against the box” if at all times during which the short position is open, a Fund owns at least an equal amount of the securities or securities convertible into, or exchangeable without further consideration for, securities of the same issue as the securities that are sold short. A short sale “against-the-box” is a taxable transaction to a Fund with respect to the securities that are sold short.

Uncovered short sales are transactions under which a Fund sells a security it does not own. To complete such a transaction, a Fund must borrow the security to make delivery to the buyer. A Fund then is obligated to replace the security borrowed by purchasing the security at the market price at the time of the replacement. The price at such time may be more or less than the price at which the security was sold by a Fund. Until the security is replaced, a Fund is required to pay the lender amounts equal to any dividends or interest that accrue during the period of the loan. To borrow the security, a Fund is required to pay a premium or daily interest, which will increase the total cost of the security sold. The proceeds of the short sale will be retained by the broker, to the extent necessary to meet margin requirements, until the short position is closed out.

Until a Fund closes its short position or replaces the borrowed security, a Fund will: (a) earmark or maintain in a segregated account cash or liquid securities at such a level that (i) the amount earmarked or deposited in the account plus the amount deposited with the broker as collateral will equal the current value of the security sold short; and (ii) the amount earmarked or deposited in the segregated account plus the amount deposited with the broker as collateral will not be less than the current market value of the security sold short, or (b) otherwise cover a Fund’s short positions. Uncovered short sales incur a higher level of risk because to cover the short sale, the security may have to be purchased in the open market at a much higher price.

Short-Term Obligations. Short-term obligations are debt obligations maturing (becoming payable) in 397 days or less, including commercial paper and short-term corporate obligations. Short-term corporate obligations are short-term obligations issued by corporations.

Standby Commitments and Puts. A Fund may purchase securities at a price which would result in a yield to maturity lower than that generally offered by the seller at the time of purchase when the Fund can simultaneously acquire the right to sell the securities back to the seller, the issuer or a third-party (the “writer”) at an agreed-upon price at any time during a stated period or on a certain date. Such a right is generally denoted as a “standby commitment” or a “put.” The purpose of engaging in transactions involving puts is to maintain flexibility and liquidity to permit a Fund to meet redemptions and remain as fully invested as possible in municipal securities. The Funds reserve the right to engage in put transactions. The right to put the securities depends on the writer’s ability to pay for the securities at the time the put is exercised. A Fund would limit its put transactions to institutions which the Subadviser believes present minimal credit risks, and the Subadviser would use its best efforts to initially determine and continue to monitor the financial strength of the sellers of the options by evaluating their

financial statements and such other information as is available in the marketplace. It may, however be difficult to monitor the financial strength of the writers because adequate current financial information may not be available. In the event that any writer is unable to honor a put for financial reasons, a Fund would be a general creditor (i.e., on a parity with all other unsecured creditors) of the writer. Furthermore, particular provisions of the contract between a Fund and the writer may excuse the writer from repurchasing the securities; for example, a change in the published rating of the underlying securities or any similar event that has an adverse effect on the issuer’s credit or a provision in the contract that the put will not be exercised except in certain special cases, for example, to maintain portfolio liquidity. A Fund could, however, at any time sell the underlying portfolio security in the open market or wait until the portfolio security matures, at which time it should realize the full par value of the security.

The securities purchased subject to a put may be sold to third persons at any time, even though the put is outstanding, but the put itself, unless it is an integral part of the security as originally issued, may not be marketable or otherwise assignable. Therefore, the put would have value only to a Fund. Sale of the securities to third parties or lapse of time with the put unexercised may terminate the right to put the securities. Prior to the expiration of any put option, a Fund could seek to negotiate terms for the extension of such an option. If such a renewal cannot be negotiated on terms satisfactory to a Fund, the Fund could, of course, sell the portfolio security. The maturity of the underlying security will generally be different from that of the put. There will be no limit to the percentage of portfolio securities that a Fund may purchase subject to a standby commitment or put, but the amount paid directly or indirectly for all standby commitments or puts which are not integral parts of the security as originally issued held in a Fund will not exceed one-half of 1% of the value of the total assets of such Fund calculated immediately after any such put is acquired.

STRIPS. Separately Traded Interest and Principal Securities (“STRIPS”) are component parts of U.S. Treasury securities traded through the federal book-entry system. A Subadviser will only purchase STRIPS that it determines are liquid or, if illiquid, do not violate the affected Fund’s investment policy concerning investments in illiquid securities. Consistent with Rule 2a-7 under the 1940 Act, the Subadviser will only purchase, for Money Market Funds, STRIPS that have a remaining maturity of 397 days or less; therefore, the Money Market Funds currently may only purchase interest component parts of U.S. Treasury securities. While there is no limitation on the percentage of a Fund’s assets that may be comprised of STRIPS, the Subadviser will monitor the level of such holdings to avoid the risk of impairing shareholders’ redemption rights and of deviations in the value of shares of the Money Market Funds.

Structured Investments. Structured Investments are derivatives in the form of a unit or units representing an undivided interest(s) in assets held in a trust that is not an investment company as defined in the 1940 Act. A trust unit pays a return based on the total return of securities and other investments held by the trust and the trust may enter into one or more swaps to achieve its objective. For example, a trust may purchase a basket of securities and agree to exchange the return generated by those securities for the return generated by another basket or index of securities. A Fund will purchase structured investments in trusts that engage in such swaps only where the counterparties are approved by the Subadviser in accordance with credit-risk guidelines established by the Board of Trustees.

Structured Notes. Structured Notes are derivatives where the amount of principal repayment and or interest payments is based upon the movement of one or more factors. These factors include, but are not limited to, currency exchange rates, interest rates (such as the prime lending rate and LIBOR) and stock indices such as the S&P 500^® Index. In some cases, the impact of the movements of these factors may increase or decrease through the use of multipliers or deflators. The use of structured notes allows the Fund to tailor its investments to the specific risks and returns the Subadviser wishes to accept while avoiding or reducing certain other risks.

Supranational Agency Obligations. Supranational Agency Obligations are obligations of supranational entities established through the joint participation of several governments, including the Asian Development Bank, Inter-American Development Bank, International Bank for Reconstruction and Development (also known as the “World Bank”), African Development Bank, European Union, European Investment Bank, and the Nordic Investment Bank.

Swap Agreements. A Fund may enter into swap agreements for purposes of attempting to gain exposure to the securities making up an index without actually purchasing those instruments, to hedge a position or to gain exposure to a particular instrument or currency. Swap agreements are two-party contracts entered into primarily by institutional investors for periods ranging from a day to more than one-year. In a standard “swap” transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments. The gross returns to be exchanged or “swapped” between the parties are calculated with respect to a “notional amount,” i.e., the return on or increase in value of a particular dollar amount invested in a “basket” of securities representing a particular index. Forms of swap agreements include interest rate caps, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates exceed a specified rate, or “cap,” interest rate floors, under which, in return for a premium, one party agrees to make payments to the other to the extent that interest rates fall below a specified level, or “floor;” and interest rate dollars, under which a party sells a cap and purchases a floor or vice versa in an attempt to protect itself against interest rate movements exceeding given minimum or maximum levels. A credit default swap is a specific kind of counterparty agreement designed to transfer the third party credit risk between parties. One party in the swap is a lender and faces credit risk from a third party and the counterparty in the credit default swap agrees to insure this risk in exchange for regular periodic payments (essentially an insurance premium). If the third party defaults, the party providing insurance will have to purchase from the insured party the defaulted asset. The Select Aggregate Market Index (“SAMI”) is a basket of credit default swaps whose underlying reference obligations are floating rate loans. Investments in SAMIs increase exposure to risks that are not typically associated with investments in other floating rate debt instruments, and involve many of the risks associated with investments in derivative instruments. The liquidity of the market for SAMIs is subject to liquidity in the secured loan and credit derivatives markets.

The use of equity swaps is a highly specialized activity, which involves investment techniques and risks different from those associated with ordinary portfolio securities transactions.

A Fund’s current obligations under a swap agreement will be accrued daily (offset against any amounts owing to the Fund) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by earmarking or segregating assets determined to be liquid. Obligations under swap agreements so covered will not be construed to be “senior securities” for purposes of a Fund’s investment restriction concerning senior securities. Because they are two party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid for the Fund’s illiquid investment limitations. A Fund will not enter into any swap agreement unless the Subadviser believes that the other party to the transaction is creditworthy. A Fund bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty. A Fund may enter into swap agreements to invest in a market without owning or taking physical custody of securities in circumstances in which direct investment is restricted for legal reasons or is otherwise impracticable. The counterparty to any swap agreement will typically be a bank, investment banking firm or broker/dealer. The counterparty will generally agree to pay a Fund the amount, if any, by which the notional amount of the swap agreement would have increased in value had it been invested in the particular stocks, plus the dividends that would have been received on those stocks. A Fund will agree to pay to the counterparty a floating rate of interest on the notional amount of the swap agreement plus the amount, if any, by

which the notional amount would have decreased in value had it been invested in such stocks. Therefore, the return to a Fund on any swap agreement should be the gain or loss on the notional amount plus dividends on the stocks less the interest paid by a Fund on the notional amount.

Swap agreements typically are settled on a net basis, which means that the two payment streams are netted out, with a Fund receiving or paying, as the case may be, only the net amount of the two payments. Payments may be made at the conclusion of a swap agreement or periodically during its term. Swap agreements do not involve the delivery of securities or other underlying assets. Accordingly, the risk of loss with respect to swap agreements is limited to the net amount of payments that a Fund is contractually obligated to make. If the other party to a swap agreement defaults, a Fund’s risk of loss consists of the net amount of payments that such Fund is contractually entitled to receive, if any. The net amount of the excess, if any, of a Fund’s obligations over its entitlements with respect to each swap will be accrued on a daily basis and liquid assets, having an aggregate net asset value at least equal to such accrued excess will be earmarked or maintained in a segregated account by the Fund’s custodian. In as much as these transactions are entered into for hedging purposes or are offset by segregating liquid assets, as permitted by applicable law, the Funds and their Subadviser believe that these transactions do not constitute senior securities under the 1940 Act and, accordingly, will not treat them as being subject to a Fund’s borrowing restrictions. For purposes of each of the Fund’s requirements under Rule 12d3-1 (where, for example, a Fund is prohibited from investing more than 5% of its total assets in any one broker, dealer, underwriter or investment adviser (the “securities-related issuer”) and Section 5b-1 where, for example, a diversified Fund is prohibited from owning more than 5% of its total assets in any one issuer with respect to 75% of a Fund’s total assets, the mark-to-market value will be used to measure the Fund’s counterparty exposure. In addition, the mark-to-market value will be used to measure the Fund’s issuer exposure for purposes of Section 5b-1.

A Fund may enter into index swap agreements as an additional hedging strategy for cash reserves held by the Fund or to effect investment transactions consistent with the Fund’s investment objective and strategies. Index swaps tend to have a maturity of one year. There is not a well-developed secondary market for index swaps. Many index swaps are considered to be illiquid because the counterparty will typically not unwind an index swap prior to its termination (and, not surprisingly, index swaps tend to have much shorter terms). A Fund may therefore treat all swaps as subject to their limitation on illiquid investments. For purposes of calculating these percentage limitations, a Fund will refer to the notional amount of the swap.

The swap market has grown substantially in recent years with a large number of banks and investment banking firms acting both as principals and as agents utilizing standardized swap documentation. As a result, the swap market has become relatively liquid in comparison with the markets for other similar instruments, which are traded in the over-the-counter market. The Subadviser, under the supervision of the Board of Trustees, is responsible for determining and monitoring the liquidity of Fund transactions in swap agreements.

Taxable Municipal Securities. Taxable municipal securities are municipal securities the interest on which is not exempt from federal income tax. Taxable municipal securities include “private activity bonds” that are issued by or on behalf of states or political subdivisions thereof to finance privately-owned or operated facilities for business and manufacturing, housing, sports, and pollution control and to finance activities of and facilities for charitable institutions. Private activity bonds are also used to finance public facilities such as airports, mass transit systems, ports, parking lots, and low income housing. The payment of the principal and interest on private activity bonds is not backed by a pledge of tax revenues, and is dependent solely on the ability of the facility’s user to meet its financial obligations, and may be secured by a pledge of real and personal property so financed. Interest on these bonds may not be exempt from federal income tax.

Tender Option Bonds

A tender option bond is a municipal obligation (generally held pursuant to a custodial arrangement) having a relatively long maturity and bearing interest at a fixed rate substantially higher than prevailing short-term, tax-exempt rates. The bond is typically issued in conjunction with the agreement of a third party, such as a bank, broker-dealer or other financial institution, pursuant to which the institution grants the security holder the option, at periodic intervals, to tender its securities to the institution. As consideration for providing the option, the financial institution receives periodic fees equal to the difference between the bond’s fixed coupon rate and the rate, as determined by a remarketing or similar agent, that would cause the securities, coupled with the tender option, to trade at par on the date of such determination. Thus, after payment of this fee, the security holder effectively holds a demand obligation that bears interest at the prevailing short-term, tax-exempt rate. An institution will normally not be obligated to accept tendered bonds in the event of certain defaults or a significant downgrading in the credit rating assigned to the issuer of the bond. The tender option will be taken into account in determining the maturity of the tender option bonds and a Fund’s average portfolio maturity. There is a risk that a Fund will not be considered the owner of a tender option bond for federal income tax purposes, and thus will not be entitled to treat such interest as exempt from federal income tax. Certain tender option bonds may be illiquid or may become illiquid as a result of a credit rating downgrade, payment default or a disqualification from tax-exempt status.

Trust Preferred Securities. Trust preferred securities are convertible preferred shares issued by a trust where proceeds from the sale are used to purchase convertible subordinated debt from the issuer. The convertible subordinated debt is the sole asset of the trust. The coupon from the issuer to the trust exactly mirrors the preferred dividend paid by the trust. Upon conversion by the investors, the trust in turn converts the convertible debentures and passes through the shares to the investors.

U.S. Government Securities. Examples of types of U.S. government obligations in which a Fund may invest include U.S. Treasury obligations and the obligations of U.S. government agencies such as Federal Home Loan Banks, Federal Farm Credit Banks, Federal Land Banks, the Federal Housing Administration, Farmers Home Administration, Export-Import Bank of the United States, Small Business Administration, Federal National Mortgage Association, Government National Mortgage Association, General Services Administration, Student Loan Marketing Association, Central Bank for Cooperatives, Freddie Mac (formerly Federal Home Loan Mortgage Corporation), Federal Intermediate Credit Banks, Maritime Administration, and other similar agencies. Whether backed by the full faith and credit of the U.S. Treasury or not, U.S. government securities are not guaranteed against price movements due to fluctuating interest rates. The Student Loan Marketing Association can issue debt both as a U.S. government agency or as corporation. If the debt is issued as a corporation, it is not considered a U.S. government obligation.

• U.S. Treasury Obligations. U.S. Treasury obligations consist of bills, notes and bonds issued by the U.S. Treasury and separately traded interest and principal component parts of such obligations that are transferable through the federal book-entry system known as STRIPS and Treasury Receipts (“TRs”).

• Receipts. Interests in separately traded interest and principal component parts of U.S. government obligations that are issued by banks or brokerage firms and are created by depositing U.S. government obligations into a special account at a custodian bank. The custodian holds the interest and principal payments for the benefit of the registered owners of the certificates or receipts. The custodian arranges for the issuance of the certificates or receipts

evidencing ownership and maintains the register. TRs and STRIPS are interests in accounts sponsored by the U.S. Treasury. Receipts are sold as zero coupon securities.

• Treasury Inflation Protected Notes (“TIPS”). TIPS are securities issued by the U.S. Treasury that are designed to provide inflation protection to investors. TIPS are income-generating instruments whose interest and principal payments are adjusted for inflation. The inflation adjustment, which is typically applied monthly to the principal of the bond, follows a designated inflation index, such as the consumer price index. A fixed coupon rate is applied to the inflation-adjusted principal so that as inflation rises, both the principal value and the interest payments increase. This can provide investors with a hedge against inflation, as it helps preserve the purchasing power of an investment. Because of this inflation adjustment feature, inflation-protected bonds typically have lower yields than conventional fixed-rate bonds.

• Zero Coupon Obligations. Zero coupon obligations are debt obligations that do not bear any interest, but instead are issued at a deep discount from face value or par. The value of a zero coupon obligation increases over time to reflect the interest accumulated. These obligations will not result in the payment of interest until maturity, and will have greater price volatility than similar securities that are issued at face value or par and pay interest periodically.

• U.S. Government Zero Coupon Securities. STRIPS and receipts are sold as zero coupon securities, that is, fixed income securities that have been stripped of their unmatured interest coupons. Zero coupon securities are sold at a (usually substantial) discount and redeemed at face value at their maturity date without interim cash payments of interest or principal. The amount of this discount is accreted over the life of the security, and the accretion constitutes the income earned on the security for both accounting and tax purposes. Because of these features, the market prices of zero coupon securities are generally more volatile than the market prices of securities that have similar maturity but that pay interest periodically. Zero coupon securities are likely to respond to a greater degree to interest rate changes than are non-zero coupon securities with similar maturity and credit qualities. See “Mortgage-Backed Securities.”

• U.S. Government Agencies. Some obligations issued or guaranteed by agencies of the U.S. Government are supported by the full faith and credit of the U.S. Treasury, others are supported by the right of the issuer to borrow from the Treasury, while still others are supported only by the credit of the instrumentality. Guarantees of principal by agencies or instrumentalities of the U.S. Government may be a guarantee of payment at the maturity of the obligation so that in the event of a default prior to maturity there might not be a market and thus no means of realizing on the obligation prior to maturity. Guarantees as to the timely payment of principal and interest do not extend to the value or yield of these securities nor to the value of a Fund’s shares.

Variable and Floating Rate Instruments. Certain of the obligations purchased by a Fund may carry variable or floating rates of interest, may involve a conditional or unconditional demand feature and may include variable amount master demand notes. Such instruments bear interest at rates that are not fixed, but which vary with changes in specified market rates or indices. The interest rates on these securities may be reset daily, weekly, quarterly or some other reset period, and may have a floor or ceiling on interest rate changes. There is a risk that the current interest rate on such obligations may not accurately reflect existing market interest rates. A demand instrument with a demand notice exceeding seven days may be considered illiquid if there is no secondary market for such securities.

Variable Rate Master Demand Notes. Variable rate master demand notes permit the investment of fluctuating amounts at varying market rates of interest pursuant to direct arrangements between a Fund, as lender, and a borrower. Such notes provide that the interest rate on the amount outstanding varies on a daily, weekly or monthly basis depending upon a stated short-term interest rate index. Both the lender and the borrower have the right to reduce the amount of outstanding indebtedness at any time. There is no secondary market for the notes and it is not generally contemplated that such instruments will be traded. The quality of the note or the underlying credit must, in the opinion of the Subadviser, be equivalent to the ratings applicable to permitted investments for the particular Fund. The Subadviser will monitor on an ongoing basis the earning power, cash flow and liquidity ratios of the issuers of such instruments and will similarly monitor the ability of an issuer of a demand instrument to pay principal and interest on demand. Variable rate master demand notes may or may not be backed by bank letters of credit.

Warrant. A Warrant is a financial instrument that gives the holder the right, but not the obligation, to purchase a specified amount of an asset at a specified price during a specified period of time. A warrant may give its holder the right to buy shares of stock, bonds, currencies, or commodities. Index Warrants, a type of warrant, allows investors to take a direct position in a commodity, index, currency or economic variable. An example of an Index Warrant is a GDP Warrant, which is a bond that allows investors to invest directly in a country’s economic growth. A GDP Warrant creates long term securities that would be indexed on the economic growth of a country, or rather an economic zone (for example Euroland). Those securities would have two main purposes: 1) to give those countries or other issuers another source of financing, and a new financial management tool; 2) to give investors a hybrid asset which has some feature(s) of an equity security (variable return and/or capital, based on economic performances) while basically being a bond (it is a debt). In the case of a GDP Warrant, the index would be the Gross Domestic Product (GDP).

When-Issued Securities and Forward Commitment Securities. When-Issued and Forward Commitment Securities are securities with settlement dates in excess of normal settlement periods.

When-issued securities are subject to market fluctuation, and accrue no interest to the purchaser during this pre-settlement period. The payment obligation and the interest rate that will be received on the securities are each fixed at the time the purchaser enters into the commitment. Purchasing when-issued and forward commitment securities entails leveraging and can involve a risk that the yields available in the market when the delivery takes place may actually be higher than those obtained in the transaction itself. In that case, there could be an unrealized loss at the time of delivery.

To avoid any leveraging concerns, a Fund will segregate or earmark liquid assets in an amount at least equal in value to its commitments to purchase when-issued and forward commitment securities for any securities with settlement periods of 30 days or more from trade date.

INVESTMENT LIMITATIONS

Except with respect to a Fund’s non-fundamental policy relating to liquidity, if a percentage limitation stated in the fundamental and non-fundamental policies below is adhered to at the time of investment, a later increase or decrease in percentage resulting from any change in value will not result in a violation of such restriction.

Fundamental Policies

Fundamental policies cannot be changed without the consent of the holders of a majority of each Fund’s outstanding shares. The term “majority of the outstanding shares” means the vote of (i) 67% or more of the Fund’s shares present at a meeting, if more than 50% of the outstanding shares of the Fund are present or represented by proxy, or (ii) more than 50% of the Fund’s outstanding shares, whichever is less.

The following investment limitations are fundamental policies of the Funds.

No Fund may:

1. With respect to 75% of each Fund’s total assets invest more than 5% of the value of the total assets of a Fund in the securities of any one issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities, repurchase agreements involving such securities, and securities issued by investment companies), or purchase the securities of any one issuer if such purchase would cause more than 10% of the voting securities of such issuer to be held by a Fund.

2. Borrow money in an amount exceeding 33 1/3% of the value of its total assets, provided that, for the purposes of this limitation, investment strategies that either obligate a Fund to purchase securities or require a Fund to segregate assets are not considered to be borrowing. Asset coverage of at least 300% is required for all borrowing, except where the Fund has borrowed money for temporary purposes (less than 60 days), and in an amount not exceeding 5% of its total assets.

3. Underwrite securities issued by others, except to the extent that the Fund may be considered an underwriter within the meaning of the 1933 Act in the sale of portfolio securities.

4. Issue senior securities (as defined in the 1940 Act), except as permitted by rule, regulation or order of the SEC.

5. Purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities and securities issued by investment companies) if, as a result, more than 25% of the Fund’s total assets would be invested in the securities of companies whose principal business activities are in the same industry.

6. Purchase or sell real estate, unless acquired as a result of ownership of securities or other instruments (but this shall not prevent a Fund from investing in securities or other instruments either issued by companies that invest in real estate, backed by real estate or securities of companies engaged in the real estate business).

7. Purchase or sell physical commodities, unless acquired as a result of ownership of securities or other instruments.

8. Make loans, except that a Fund may: (i) purchase or hold debt instruments in accordance with its investment objectives and policies; (ii) enter into repurchase agreements; and (iii) lend its portfolio securities.

Non-Fundamental Policies

The following investment policies are non-fundamental policies of the Funds and may be changed by the Board of Trustees without shareholder approval:

1. Any change to a Fund’s investment policy of investing at least 80% of such Fund’s net assets in a particular type or category of securities is subject to 60 days prior notice to shareholders.

2. No Fund may purchase or hold illiquid securities (i.e., securities that cannot be disposed of for their approximate carrying value in seven days or less (which term includes repurchase agreements and time deposits maturing in more than seven days) if, in the aggregate, more than 15% of its net assets would be invested in illiquid securities.

3. The Intermediate Bond Fund will not engage in the strategy of establishing or rolling forward To Be Approved (“TBA”) mortgage commitments.

THE ADVISER

General. RidgeWorth Investments serves as investment adviser to the Funds. RidgeWorth Investments is the trade name of RidgeWorth Capital Management, Inc., a professional investment management firm registered with the SEC under the Investment Advisers Act of 1940. The Adviser oversees the Subadviser to ensure compliance with the respective Fund’s investment policies and guidelines and monitors the Subadviser’s adherence to its investment style. The Board supervises the Adviser and establishes policies that the Adviser must follow in its management activities. The principal business address of the Adviser is 50 Hurt Plaza, Suite 1400, Atlanta, Georgia 30303. The Adviser is a wholly-owned subsidiary of SunTrust Banks, Inc.

Advisory Agreement with the Trust. The Adviser serves as the investment adviser to each Fund pursuant to an agreement (the “Advisory Agreement”) with the Trust. The continuance of the Advisory Agreement must be specifically approved at least annually (i) by the vote of the Board or by a vote of the shareholders of the Funds and (ii) by the vote of a majority of the Trustees who are not parties to the Advisory Agreements or “interested persons” of any party thereto, as defined in the 1940 Act, cast in person at a meeting called for the purpose of voting on such approval. The Advisory Agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the Board or, with respect to any Fund, by a majority of the outstanding shares of that Fund, on not less than 30 days nor more than 60 days written notice to the Adviser, or by the Adviser on 90 days written notice to the Trust. The Advisory Agreement provides that the Adviser shall not be protected against any liability to the Trust or its shareholders by reason of willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder.

The Advisory Agreement provides that if, for any fiscal year, the ratio of expenses of any Fund (including amounts payable to the Adviser but excluding interest, taxes, brokerage commissions, and litigation and other extraordinary expenses) exceeds limitations established by certain states, the Adviser and/or the administrator will bear the amount of such excess. The Adviser will not be required to bear expenses of the Trust to an extent which would result in a Fund’s inability to qualify as a regulated investment company under provisions of the Internal Revenue Code.

Advisory Fees Paid to the Adviser. For its services under the Advisory Agreement, the Adviser is entitled to a fee at the specified annual rate of each Fund’s average daily net assets as listed in the table that follows. Each Fund allocates and pays advisory fees among its constituent classes based on the aggregate daily net asset values of each such class.


Fund	Fee
Intermediate Bond Fund		0.25	%

Total Return Bond Fund		0.25	%

The above fees are also subject to the following breakpoint discounts:

First $500 million = full fee

Next $500 million = 5% discount from full fee

Over $1.0 billion = 10% discount from full fee

For the fiscal years ended March 31, 2008, March 31, 2007, and March 31, 2006, the Funds paid the following advisory fees:


	Fees Paid (in thousands)						Fees Waived (in thousands)
Fund	2008		2007		2006		2008		2007		2006
Intermediate Bond Fund		1,360		201		170		—		—		—
Total Return Bond Fund		1,545		1,364		969		—		—		—

THE SUBADVISER

Seix Investment Advisors LLC (the “Subadviser”) is a professional investment management firm registered with the SEC under the Investment Advisers Act of 1940. The Subadviser is a wholly-owned subsidiary of the Adviser.

The Subadviser serves as the subadviser to the Funds pursuant to an Investment Subadvisory Agreement between the Adviser and Seix. For its subadvisory services, Seix is entitled to receive an annual fee paid by the Adviser equal to 60% of the net advisory fee paid by each applicable Fund.

Investment Subadvisory Agreement. The Adviser and the Subadviser have entered into an investment subadvisory agreement (the “Investment Subadvisory Agreement”) under which the Subadviser makes the investment decisions for and continuously reviews, supervises, and administers the investment program of the respective Funds, subject to the supervision of, and policies established by, the Adviser and the Board of Trustees of the Trust. After an initial two year term, the continuance of the Investment Subadvisory Agreement must be specifically approved at least annually by (i) the vote of the Trustees or a vote of the shareholders of the Fund and (ii) the vote of a majority of the Trustees who are not parties to the Investment Subadvisory Agreement or “interested persons” of any party thereto, cast in person at a meeting called for the purpose of voting on such approval. The Investment Subadvisory Agreement will terminate automatically in the event of its assignment and is terminable at any time without penalty by (i) the Trustees of the Trust or, with respect to each Fund, by a majority of the outstanding shares of that Fund, (ii) the Adviser at any time on not less than 30 days nor more than 60 days written notice to the Subadviser, or (iii) the Subadviser on 90 days written notice to the Adviser. The Investment Subadvisory Agreement provides that the Subadviser shall not be protected against any liability by reason of willful misfeasance, bad faith, or negligence on its part in the performance of its duties or from reckless disregard of its obligations or duties thereunder.

THE PORTFOLIO MANAGERS

Set forth below is information regarding the individuals who are primarily responsible for the day-to-day management of the Funds (“portfolio managers”). All information is as of March 31, 2008, except as otherwise noted.

Management of Other Accounts. The table below shows the number of other accounts managed by each portfolio manager and the approximate total assets in the accounts in each of the following categories: registered investment companies, other pooled investment vehicles and other accounts. For each category, the table also shows the number of accounts and the approximate total assets in the accounts with respect to which the advisory fee is based on account performance.


									Other Accounts with
		Number of Other Accounts Managed/						Performance-Based
		Total Assets in Accounts (millions)						Fees
				Other
		Registered		Pooled						Total
	RidgeWorth	Investment		Investment		Other		Number &		Assets
Portfolio Manager	Fund(s) Managed	Companies		Vehicles		Accounts		Category		(millions)
Seth Antiles	Total Return Bond Fund		2/94.10		0		156/7.1B		2
								separately managed
								accounts			335.70
James Keegan	Intermediate Bond Fund		8/2B		0		0		0		0
	Total Return Bond Fund		8/2.2B		0		0		0		0
Michael Rieger	Intermediate Bond Fund		6/1.9B		0		0		0		0
	Total Return Bond Fund		6/2.1B		0		0		0		0
Perry Troisi	Intermediate Bond Fund		6/1.9B		0		0		0		0
	Total Return Bond Fund		6/2.1B		0		0		0		0
Adrien Webb	Intermediate Bond Fund		8/2B		0		0		0		0
	Total Return Bond Fund		8/2.2B		0		0		0		0

Potential Conflicts of Interest in Managing Multiple Accounts. A portfolio manager’s management of both a Fund and the other accounts listed in the table above at the same time may give rise to potential conflicts of interest. If a Fund and the other accounts have identical investment objectives, the portfolio manager could favor one or more accounts over the Fund. Another potential conflict may arise from the portfolio manager’s knowledge about the size, timing and possible market impact of Fund trades if the portfolio manager used this information to the advantage of other accounts and to the disadvantage of the Fund. In addition, aggregation of trades may create the potential for unfairness to a Fund or another account if one account is favored over another in allocating the securities purchased or sold. The Subadviser has established policies and procedures to ensure that the purchase and sale of securities among all accounts it manages are allocated in a manner the Subadviser believes is fair and equitable.

Portfolio Manager Compensation Structure.

Portfolio Managers of the Adviser and the Subadviser. Portfolio managers earn competitive salaries and participate in incentive bonus plans designed to retain high quality investment professionals. The portfolio managers receive a salary commensurate with the individual’s experience and responsibilities with the firm. The incentive bonus plans may be structured differently, but all incorporate an evaluation of the Fund’s performance returns and/or the Subadviser’s financial performance. Investment performance may be judged directly relative to a peer group and/or benchmark or may be incorporated by measuring business unit financial performance over an extended period under the theory that successful investment performance will translate into improved financial results. Other components that may be considered in the calculation of incentive bonuses include: adherence to compliance policies, marketing, risk management and business development, among others.

Where applicable, investment performance is determined by comparing a Fund’s pre-tax total returns to the returns of the Fund’s benchmark and peer groups over multi-year periods, as applicable. Where portfolio managers manage multiple Funds or other managed accounts, each Fund or other managed account is weighted based on its market value and its relative strategic importance to the Adviser and/or the Subadviser. Other performance attributes are also based on a scorecard that objectively measures key performance attributes, which is then evaluated by the Adviser’s and/or Subadviser’s management to determine the award amount.

As a tool to minimize personnel turnover, the portfolio manager’s incentive bonus will usually have one portion of the incentive bonus paid promptly following the calendar year end and the remaining portion subject to a mandatory deferral which vests over three years subject to the terms and conditions of the incentive bonus plan.

On occasion, a portfolio manager may receive a guaranteed incentive for a fixed period in conjunction with accepting a new position when the Adviser and/or the Subadviser deem it necessary to recruit talented managers.

All full-time employees of the Adviser and Subadviser, including the Funds’ portfolio managers, are provided a benefits package on substantially similar terms. The percentage of each individual’s compensation provided by these benefits is dependent upon length of employment, salary level, and several other factors. In addition, certain portfolio managers may be eligible for one or more of the following additional benefit plans:

• 401(k) Excess Plan — This plan provides benefits which would otherwise be provided under the qualified cash or deferred ESOP plan adopted by the Adviser’s/Subadviser’s parent company (SunTrust Banks, Inc.), were it not for the imposition of certain statutory limits on qualified plan benefits. Certain select individuals within specific salary levels may be eligible for this plan. Participation in the plan must be approved by the individual’s senior executive for the business.

• ERISA Excess Retirement Plan — This plan provides for benefits to certain executives that cannot be paid to them under tax qualified pension plans as a result of federal restrictions. Certain select individuals within specific salary levels may be eligible for this plan. Participation in the plan must be approved by the individual’s senior executive for the business.

• Voluntary Functional Incentive Plan Deferral — This plan is a provision of a SunTrust Deferred Compensation Plan which allows participants of selected annual incentive plans to voluntarily defer portions of their incentive. Eligibility to participate in this plan is offered to employees of selected incentive plans who earn above a specified level of total compensation in the year prior to their deferral. The Adviser’s/Subadviser’s annual incentive plans offer this provision to employees who meet the compensation criteria level.

• Restricted Stock Awards — Restricted stock awards are granted to certain select individuals on a case-by-case basis as a form of long-term compensation and as an additional incentive to retain these professionals. The

awards often vest based on the recipient’s continued employment with the Adviser/Subadviser, but these awards may also carry additional vesting requirements, including performance conditions.

Securities Ownership of Portfolio Managers. The table below shows the range of equity securities beneficially owned by each portfolio manager in the Fund or Funds managed by the portfolio manager. The information is as of March 31, 2008, except as otherwise noted.


	RidgeWorth Fund(s)
Portfolio Manager	Managed	Range of Securities Owned ($)
Seth Antiles	Total Return Bond Fund	None
James Keegan	Intermediate Bond Fund	None
	Total Return Bond Fund	None
Michael Rieger	Total Return Bond Fund	None
	Intermediate Bond Fund	None
Perry Troisi	Intermediate Bond Fund	None
	Total Return Bond Fund	None
Adrien Webb	Intermediate Bond Fund	None
	Total Return Bond Fund	None

THE ADMINISTRATOR

General. Citi Fund Services Ohio, Inc. (the “Administrator”) serves as administrator of the Trust. Prior to the acquisition of the Administrator by a subsidiary of Citibank N.A. on August 1, 2007, the Administrator was known as BISYS Fund Services Ohio, Inc. The Administrator, an Ohio corporation, has its principal business offices at 3435 Stelzer Road, Columbus, Ohio 43219. The Administrator provides administration services to other investment companies.

Master Services Agreement with the Trust. The Trust and the Administrator have entered into a master services agreement (the “Master Services Agreement”). Under the Master Services Agreement, the Administrator provides the Trust with administrative services, including day-to-day administration of matters necessary to each Fund’s operations, maintenance of records and the books of the Trust, preparation of reports, assistance with compliance monitoring of the Funds’ activities, and certain supplemental services in connection with the Trust’s obligations under the Sarbanes-Oxley Act of 2002; fund accounting services; transfer agency services and shareholder services.

The Master Services Agreement provides that it shall remain in effect until July 31, 2010 and shall continue in effect for successive one year periods subject to review at least annually by the Trustees of the Trust unless terminated by either party on not less than 90 days written notice to the other party.

Administration Fees to be Paid to the Administrator. Under the Master Services Agreement, the Administrator is entitled to receive an asset-based fee for administration, fund accounting, transfer agency and shareholder services (expressed as a percentage of the combined average daily net assets of the “RidgeWorth Complex”) of 2.75 basis points (0.0275%) on the first $25 billion, 2.25 basis points (0.0225%) on the next $5 billion, and 1.75

basis points (0.0175%) on the amounts over $30 billion, plus an additional class fee of $2,593 per class annually, applicable to each additional class of shares over 145 classes of shares. The Administrator may waive a portion of its fee.

The Master Services Agreement provides for the Administrator to pay certain insurance premiums for the RidgeWorth Complex, including $300,000 toward the premium for Directors and Officers Liability/Errors and Omissions insurance coverage, and $25,000 toward the premium for Fidelity Bond coverage. The Administrator has also separately agreed to provide, for the benefit of shareholders, (i) annual fee waivers and certain administrative services at an annual value of at least $950,000, and (ii) additional fee waivers expected to be approximately $200,000 to $300,000 annually of its administrative fees annually for the remaining term of the Master Services Agreement. The waivers described in (i) above are not applied uniformly across the Funds. In certain instances, the waivers may be applied to Funds subject to a contractual expense limitation or cap. In other instances, the waivers may be applied to non-capped Funds on a voluntary basis. The application of the Administrator’s waivers to capped Funds decreases the Adviser’s obligation to reimburse the Funds for expenses incurred in excess of the expense cap. The administrative services described in (i) above include: (a) paying for certain legal expenses for the benefit of the Funds associated with fund administration matters such as mergers and acquisitions, proxy statements, exemptive relief, contract review, and preparation of filings and prospectuses with respect to the Funds; (b) providing certain shareholder services; and (c) AccessData services. The waivers described in (ii) above are applied pro rata to reduce the expenses of each Fund in the RidgeWorth Complex. Such payments and fee waivers will not be recouped by the Administrator in subsequent years.

For the fiscal years ended March 31, 2008, March 31, 2007, and March 31, 2006, the Funds paid the following administrative fees to the Administrator:


	Fees Paid (in thousands)($)						Fees Waived (in thousands)($)
Fund	2008		2007		2006		2008		2007		2006
Intermediate Bond Fund		156		20		18		23		2		3
Total Return Bond Fund		183		138		102		7		3		0

THE DISTRIBUTOR

The Trust and RidgeWorth Distributors LLC (formerly, Foreside Distributors, L.P.) (the “Distributor”) are parties to a Distribution Agreement whereby the Distributor acts as principal underwriter for the Trust’s shares. The principal business address of the Distributor is 10 High Street, Suite 302, Boston, Massachusetts 02110. Under the terms of the Distribution Agreement, the Distributor must use all reasonable efforts, consistent with its other business, in connection with the continuous offering of shares of the Trust. The Distributor receives a fee of $3,500 per fund, with a minimum fee of $172,000 annually for the services it performs pursuant to the Distribution Agreement. In addition, the R Shares of the Funds have a distribution and service plan (the “R Shares Plan”). Prior to August 20, 2008, Foreside Distribution Services L.P. (“Foreside”) served as the distributor of the Trust’s shares.

The continuance of a distribution agreement must be specifically approved at least annually (i) by the vote of the trustees or by a vote of the shareholders of the funds and (ii) by the vote of a majority of the trustees who are not parties to such distribution agreement or “interested persons” of any party thereto, as defined in the 1940 Act, cast in person at a meeting called for the purpose of voting on such approval. A distribution agreement will terminate automatically in the event of its assignment, and is terminable at any time without penalty by the trustees, the distributor, or, with respect to any fund, by a majority of the outstanding shares of that fund, upon 60 days written notice by either party. The Distributor has no obligation to sell any specific quantity of Fund shares.

For the fiscal years ended March 31, 2008, March 31, 2007 and March 31, 2006, the Funds paid the aggregate sales charge payable to Foreside with respect to the C Shares shown below. C Shares of the Intermediate Bond Fund and the Total Return Bond Fund converted to R Shares on February 13, 2009.


	Aggregate Sales Charge						Amount Retained by
	Payable to Distributor (in thousands) ($)						Distributor (in thousands) ($)
Fund	2008		2007		2006		2008		2007		2006
Intermediate Bond Fund		0		0		1		0		0		0
Total Return Bond Fund		0		0		0		0		0		0

R Shares Distribution Plan

The Distribution Agreement and the R Shares Plan provide that R Shares will pay the Distributor a fee of up 0.25% of the average daily net assets of the Intermediate Bond Fund and the Total Return Bond Fund, respectively. The Distributor can use these fees to compensate broker-dealers and service providers, including SunTrust and its affiliates, which provide administrative and/or distribution services to each Fund. Prior to February 13, 2009, the Distribution Agreement provide that C Shares of each Fund could pay the Distributor a fee of up to 0.75% of the average daily net assets of the Funds. In addition, R Shares are subject to a service fee of up to 0.25% of the average daily net assets of the R Shares of each applicable Fund. This service fee will be used for services provided and expenses incurred in maintaining shareholder accounts, responding to shareholder inquiries and providing information to R Shares shareholders or their customers who beneficially own R Shares.

Services for which broker-dealers and service providers may be compensated include establishing and maintaining customer accounts and records; aggregating and processing purchase and redemption requests from customers; placing net purchase and redemption orders with the Distributor; automatically investing customer account cash balances; providing periodic statements to customers; arranging for wires; answering customer inquiries concerning their investments; assisting customers in changing dividend options, account designations, and addresses; performing sub-accounting functions; processing dividend payments from the Trust on behalf of customers; and forwarding shareholder communications from the Trust (such as proxies, shareholder reports, and dividend distribution and tax notices) to these customers with respect to investments in the Trust. Certain state securities laws may require those financial institutions providing such distribution services to register as dealers pursuant to state law. Although banking laws and regulations prohibit banks from distributing shares of open-end investment companies such as the Trust, according to an opinion issued to the staff of the SEC by the Office of the Comptroller of the Currency, financial institutions are not prohibited from acting in other capacities for investment

companies, such as providing shareholder services. Should future legislative, judicial, or administrative action prohibit or restrict the activities of financial institutions in connection with providing shareholder services, the Trust may be required to alter materially or discontinue its arrangements with such financial institutions.

The Trust has adopted the R Shares Plan in accordance with the provisions of Rule 12b-1 under the 1940 Act, which rule regulates circumstances under which an investment company may directly or indirectly bear expenses relating to the distribution of its shares. Continuance of the R Shares Plan must be approved annually by a majority of the Trustees of the Trust and by a majority of the disinterested Trustees. Distribution related expenditures under the R Shares Plan may support the distribution of any class or combination of classes of Shares of a Fund. The R Shares Plan requires that quarterly written reports of amounts spent under the R Shares Plan and the purposes of such expenditures be furnished to and reviewed by the Trustees. The R Shares Plan may not be amended to increase materially the amount that may be spent thereunder without approval by a majority of the outstanding shares of the affected class of shares of the Trust. All material amendments of the Plans will require approval by a majority of the Trustees of the Trust and of the disinterested Trustees.

There is no sales charge on purchases of R Shares. Prior to February 13, 2009, C Shares were subject to a contingent deferred sales charge if they were redeemed within one year of purchase. C Shares held on February 12, 2009 and sold less than one year from the date of purchase will not be charged a contingent deferred sales charge (“CDSC”). Pursuant to the Distribution Agreement and the R Shares Plan, R Shares are subject to an ongoing distribution and service fee calculated on each Fund’s aggregate average daily net assets attributable to its R Shares.

The following amounts paid to Foreside by the Funds under the Plan during the fiscal year ended March 31, 2008 were used as set forth below:

Printing and

Mailing of

Interest

Prospectuses

Carrying or

to Other Than

Compensation

Other

Current

Compensation

to Sales

Financing

Marketing

Fund Name

Advertising

Shareholders

to Underwriters

to Dealers

Personnel

Charges

Expenses

Intermediate Bond Fund

6,721.81

2,808.05

—

1,583.92

—

7,151.45

Total Return Bond Fund

7,625.84

3,185.70

—

762.55

—

8,113.26

For the fiscal year ended March 31, 2008, the Funds paid $0 as compensation to broker-dealers pursuant to the C Shares Plan. C Shares of the Funds converted to R Shares on February 13, 2009.

Prior to February 13, 2009 (the date C Shares converted to R Shares), other than any portion of the sales charges imposed on purchases, and unless otherwise agreed upon by the Distributor and such broker-dealer, the Distributor paid broker-dealers selling C Shares purchased beginning August 1, 2005, an initial payment at the time of sale of 1.00% and annual 12(b)-1 payout effective in the 13th month of 1.00%. The Distributor used fees it received from both the distribution plan and from contingent deferred sales charges to make these upfront payments to broker-dealers. If, for any reason, there were insufficient fees available to the Distributor from the distribution plan and the contingent deferred sales charges, to make these payments, the Adviser provided the Distributor with funds that could, in turn, be used by the Distributor to make these upfront payments to broker-dealers.

For the period February 13, 2009 through March 1, 2009, no initial payment at the time of sale will be paid to broker-dealers; broker-dealers will receive, on an annualized basis, a 12b-1 payout of 1.00% on such assets invested in the Fund during this period. Beginning March 1, 2009, no initial payment at the time of sale will be paid to broker-dealers and broker-dealers will be paid an annual 12b–1 payout of 0.50%.

Participation Payment Program. The Adviser, the Subadvisers and their affiliates may make payments to certain intermediaries for marketing support services, including business planning assistance, educating dealer personnel about the Funds and shareholder financial planning needs, placement on the intermediary’s preferred or recommended fund company list, and access to sales meetings, sales representatives and management representatives of the dealer. These payments are made to intermediaries that are registered as holders of record or dealers of record for accounts in a Fund. These payments are generally based on one or more of the following factors: average net assets of the Funds attributable to that intermediary, gross or net sales of the Funds attributable to that intermediary, reimbursement of ticket charges (fees that an intermediary firm charges its representatives for effecting transactions in fund shares) or a negotiated lump sum payment for services rendered. The Adviser, the

Subadvisers and their affiliates compensate dealers differently depending upon, among other factors, the level and/or type of marketing support provided by the intermediary. As of August 1, 2008, no intermediaries are currently receiving participation payment program payments.

Shareholder Servicing Plans.

R Shares. The Trust has adopted a Shareholder Servicing Plan for the R Shares of the Funds (the “R Shares Servicing Plan”). Under the R Shares Servicing Plan, the Funds may pay Intermediaries a fee of up to 0.25% of the average daily net assets attributable to the R Shares. Intermediaries may perform, or may compensate other service providers for performing, the following shareholder services: (i) establishing and maintaining accounts and records relating to shareholders; (ii) processing dividend and distribution payments from a Fund on behalf of shareholders; (iii) providing information periodically to shareholders showing their positions in shares and integrating such statements with those of other transactions and balances in shareholders’ other accounts serviced by such intermediary; (iv) arranging for bank wires; (v) responding to shareholder inquiries relating to the services performed; (vi) responding to routine inquiries from shareholders concerning their investment; (vii) providing subacccounting with respect to shares beneficially owned by shareholders, or the information to a Fund necessary for subaccounting; (viii) if required by law, forwarding shareholder communications from a Fund (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to shareholders; (ix) assisting in processing purchase, exchange and redemption requests from shareholders and in placing such orders with service contractors; (x) assisting shareholders in changing dividend options, account designations and addresses; (xi) providing shareholders with a service that invests the assets of their accounts in shares pursuant to specific or pre-authorized instructions; and (xiii) providing such other similar services as a Fund or its shareholders may reasonable request to the extent the intermediary is permitted to do so under applicable statutes, rules and regulations.

THE TRANSFER AGENT

Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio 43219, serves as the transfer agent and dividend paying agent to the Trust.

THE CUSTODIAN

SunTrust Bank, 303 Peachtree Street N.E., 14th Floor, Atlanta, GA 30308 serves as the custodian for the Funds. SunTrust Bank is paid on the basis of net assets and transactions costs of the Funds. The custodian is responsible for the safekeeping of the assets of the Funds.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

PricewaterhouseCoopers LLP, located at 100 East Broad Street, Columbus, OH 43215, serves as the Trust’s independent registered public accounting firm.

LEGAL COUNSEL

Morgan, Lewis & Bockius LLP, located at 1111 Pennsylvania Avenue, NW, Washington, DC 20004, serves as legal counsel to the Trust.

TRUSTEES AND OFFICERS OF THE TRUST

Board Responsibilities. The management and affairs of the Trust and each of the Funds are supervised by the Board under the laws of the Commonwealth of Massachusetts. The Board is responsible for overseeing each of the Funds. The Trustees have approved contracts, as described above, under which certain companies provide essential management services to the Trust.

Members of the Board. Set forth below are the names, business addresses, states of residence, ages, positions with the Trust, principal occupations for the last five years and other directorships of each of the persons currently serving as Trustees of the Trust. Each Trustee is also a Trustee of the RidgeWorth Variable Trust which is comprised of five series. None of the Trustees of the Trust are considered “interested persons” as that term is defined in the 1940 Act.

Number of

Portfolios in

Term of

the

Position

Office and

RidgeWorth

Name, Business

Held

Length of

Complex

Address, State of

With the

Time

Principal Occupation(s)

Overseen by

Other Directorships

Residence, Age

Trust

Served

During the Past 5 Years

Trustees

Held By Trustee

Jeffrey M. Biggar
3435 Stelzer Road
Columbus, OH 43219
(Ohio)
Age: 58

Trustee

Indefinite; since January 2007

Chief Operating Officer (Cedar Brook Financial Partners LLC) (March 2008-present). Retired (2006-March 2008). Chief Executive Officer and Senior Managing Director, Sterling (National City Corp.) (2002-2006)

GenSpring Trust

George C. Guynn
3435 Stelzer Road
Columbus, OH 43219
(Georgia)
Age: 66

Trustee

Indefinite; since January 2008

Retired. President (1996-October 2006) and Chief Executive Officer (1995-October 2006) Federal Reserve Bank of Atlanta

Genuine Parts Company; Oxford Industries; John Wieland Homes and Neighborhoods Inc.; Acuity Brands Inc.

Number of

Portfolios in

Term of

the

Position

Office and

RidgeWorth

Name, Business

Held

Length of

Complex

Address, State of

With the

Time

Principal Occupation(s)

Overseen by

Other Directorships

Residence, Age

Trust

Served

During the Past 5 Years

Trustees

Held By Trustee

Sidney E. Harris
3435 Stelzer Road
Columbus, OH 43219
(Georgia)
Age: 59

Trustee

Indefinite; since
November 2004

Professor (since 1997), Dean (1997-2004), J. Mack Robinson College of Business, Georgia State University

Total System Services, Inc.;
GenSpring Trust

Warren Y. Jobe
3435 Stelzer Road
Columbus, OH 43219
(Georgia)
Age: 68

Trustee

Indefinite; since November 2004

Retired. Executive Vice President, Georgia Power Company and Senior Vice President, Southern Company (1998-2001)

WellPoint, Inc; UniSource Energy Corp.

Connie D. McDaniel
3435 Stelzer Road
Columbus, OH 43219
(Georgia)
Age: 50

Trustee

Indefinite; since May 2005

Vice President Global Finance Transformation (since 2007), Vice President and Controller (1999 - 2007), The Coca-Cola Company

None

Clarence H. Ridley*
3435 Stelzer Road
Columbus, OH 43219
(Georgia)
Age: 66

Trustee

Indefinite; since November 2001

Chairman, Haverty
Furniture Companies

Crawford & Co.; Haverty Furniture Companies

Charles D. Winslow
3435 Stelzer Road
Columbus, OH 43219
(Florida)
Age: 73

Trustee

Indefinite; since November 2004

Retired. Formerly Partner, Accenture (consulting)

None


*		Prior to May 12, 2008, Mr. Ridley was deemed to be an “interested person” of the Trust.

Board Committees. The Board has established the following committees:

•		Audit Committee. The Board’s Audit Committee is composed exclusively of independent Trustees of the Trust. The Audit Committee operates under a written charter approved by the Board. The principal responsibilities of the Audit Committee include: recommending which firm to engage as the Trust’s independent registered public accounting firm and whether to terminate this relationship; reviewing the independent registered public accounting firm’s compensation, the proposed scope and terms of its engagement, and the firm’s independence; pre-approving audit and non-audit services provided by the Trust’s independent registered public accounting firm to the Trust and certain other affiliated entities; serving as a channel of communication between the independent registered public accounting firm and the Trustees; reviewing the results of each external audit, including any qualifications in the independent registered public accounting firms’ opinion, any related management letter, management’s responses to recommendations made by the independent registered public accounting firm in connection with the audit, reports submitted to the Committee by the internal auditing department of the Trust’s Administrator that are material to the Trust as a whole, if any, and management’s responses to any such reports; reviewing the Trust’s audited financial statements and considering any significant disputes between the Trust’s management and the independent registered public accounting firm that arose in connection with the preparation of those financial statements; considering, in consultation with the independent registered public accounting firm and the Trust’s senior internal accounting executive, if any, the independent registered public accounting firm’s report on the adequacy of the Trust’s internal financial controls; reviewing, in consultation with the Trust’s independent registered public accounting firm, major changes regarding auditing and accounting principles and practices to be followed when preparing the Trust’s financial statements; and other audit related matters. Messrs. Biggar, Harris and Winslow and Ms. McDaniel currently serve as members of the Audit Committee. The Audit Committee meets periodically, as necessary, and met twice in the most recently completed fiscal year.

•		Governance and Nominating Committee. The Board’s Governance and Nominating Committee is composed exclusively of independent Trustees of the Trust. The Governance and Nominating Committee operates under a written charter approved by the Board. The purposes of the Governance and Nominating Committee are: to evaluate the qualifications of candidates for Trustee and to make recommendations to the Independent trustees and the entire Board with respect to nominations for Trustee membership on the Board when necessary or considered advisable; to review periodically Board governance practices, procedures and operations and to recommend any appropriate changes to the Board; to review periodically the size and composition of the Board and to make recommendations to the Independent Trustees and the Board as to whether it may be appropriate to add to the membership of the Board; to review as necessary the committees established by the Board and to make recommendations to the Board; to review periodically Trustee compensation and any other benefits and to recommend any appropriate changes to the Board and the Independent Trustees; to review periodically and make recommendations regarding ongoing Trustee education and orientation for new Trustees; to make recommendations regarding any self-assessment conducted by the Board; and to review as necessary any other similar matters relating to the governance of the Trust at the request of any Trustee or on its own initiative. While the Governance and Nominating Committee is solely responsible for the selection and nomination of Trustees, the Committee may consider nominees recommended by shareholders. A nomination submission must be sent in writing to the Governance and Nominating Committee, addressed to the Secretary of the Trust, and must be accompanied by all information relating to the recommended nominee that is required to be disclosed in solicitations or proxy statements for the election of Trustees. Nomination submissions must also be accompanied by a written consent of the individual to stand for election if nominated by the Board and to serve if elected by the shareholders. Additional information must be provided regarding the recommended nominee as reasonably requested by the Governance and Nominating Committee. Messrs. Guynn, Harris, Jobe and Ridley currently

		serve as members of the Nominating Committee. The Governance and Nominating Committee meets periodically as necessary. The Governance and Nominating Committee met twice during the most recently completed fiscal year.

•		Valuation Committee. The Board has established the Trust’s Valuation Committee, which is composed of two Trustees, as non-voting members, and various representatives of the Trust’s service providers, as appointed by the Board. The Valuation Committee operates under procedures approved by the Board. The principal responsibility of the Valuation Committee is to determine the fair value of securities for which current market quotations are not readily available. The Valuation Committee’s determinations are reviewed by the Board. The Valuation Committee meets periodically, as necessary, and met 44 times during the most recently completed fiscal year.

Fund Shares Owned by Board Members. The following table shows the dollar amount range of each Trustee’s “beneficial ownership” of shares of each of the Funds as of the end of the most recently completed calendar year. Dollar amount ranges disclosed are established by the SEC.

“Beneficial ownership” is determined in accordance with Rule 16a-1(a)(2) under the 1934 Act. The “Family of Investment Companies” referenced in the table consists of the Trust and the RidgeWorth Variable Trust.


		Aggregate Dollar
		Range of Shares in All
		Investment Companies
		Overseen By Trustee in
		Family of Investment
Trustee	Dollar Range of Fund Shares	Companies
Jeffrey M. Biggar	None	$	50,001-$100,000
George C. Guynn*	None	None
Sidney E. Harris	None	Over $100,000
Warren Jobe	None	Over $100,000
Connie D. McDaniel	None	Over $100,000
Clarence H. Ridley*	None	Over $100,000
Charles D. Winslow	None	$	10,001-$50,000


*		Mr. Guynn became a Trustee on January 30, 2008. Prior to May 12, 2008 Mr. Ridley was deemed to be an “interested person” of the Trust.

As of January 15, 2009, the Trustees and Officers of the Trust as a group owned less that 1% of the outstanding shares of each class of each Fund.

Board Compensation. The table below shows the compensation paid to the Trustees during the fiscal year ended March 31, 2008. The “Fund Complex” referenced in the table consists of the Trust and the RidgeWorth Variable Trust.

Pension or

Retirement

Benefits

Estimated

Aggregate

Accrued as Part

Annual Benefits

Total Compensation From

Compensation from

of Fund

Upon

the Trust and Fund

Name of Trustee

the Trust ($)¹

Expenses

Retirement

Complex ($)

Jeffrey M. Biggar

114,642

N/A

115,000

F. Wendell Gooch²

89,700

N/A

90,000

George C. Guynn²

25,437

N/A

25,500

Sidney E. Harris

147,786

N/A

148,250

Warren Y. Jobe

113,146

N/A

113,500

Connie McDaniel

108,169

N/A

108,500

Clarence H. Ridley³

108,660

N/A

109,000

James O. Robbins²

50,319

N/A

50,500

Charles D. Winslow

114,642

N/A

115,000


¹		Amounts include payments deferred by Trustees for the fiscal year ended March 31, 2008. The total amount of deferred compensation (including interest) accrued for the Trustees is as follows: Biggar ($98,876) and Harris ($49,112).

²		Mr. Guynn became a Trustee on January 30, 2008, Mr. Robbins is deceased and Mr. Gooch retired as a Trustee on December 31, 2008.

³		Prior to May 12, 2008 Mr. Ridley was deemed to be an “interested person” of the Trust.

Deferred Compensation Plan. A Deferred Compensation Plan designed to comply with section 409A of the Internal Revenue Code was in effect during the fiscal year ended March 31, 2008. Pursuant to the Deferred Compensation Plan, each Trustee could elect to defer receipt of between 30% to 100% of his or her aggregate annual compensation from the RidgeWorth Complex, and such amount was placed into a deferral account. Deferred amounts accumulated at an earnings rate determined by the return of one or more Funds as designated by the Trustees. Amounts deferred and accumulated earning on such amounts are unfunded and are general unsecured liabilities of the RidgeWorth Complex until paid to the Trustees. The Board terminated the Deferred Contribution Plan effective May 20, 2008.

Trust Officers. The officers of the Trust, their business addresses, their ages, and their principal occupations for the last five years are set forth below. The officers of the Trust who are employees of the Administrator may also serve as officers to one or more mutual funds for which the Administrator or its affiliates act as administrator or transfer agent. None of the officers receive compensation from the Trust for their services. Officers of the Trust are elected annually by the Board and hold office until their respective successors are chosen and qualified, or in each case until he or she sooner dies, resigns, is removed or becomes disqualified.


	Position(s)	Term of Office
Name, Address	Held with	and Length
and Ages	Trust	of Time Served	Principal Occupation(s) During the Past 5 Years
Officers:
Julia R. Short 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Age: 36	President and Chief Executive Officer	One year; since June 2007	Managing Director, Product Manager, RidgeWorth Investments. (since 2004); Relationship Manager, SEI Investments (financial services) (1994 – 2004)

Patrick A. Paparelli 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Age: 46	Vice President; Chief Compliance Officer	One year; since May 2008;	Managing Director, Director of Legal and Compliance (since 2001) and Chief Compliance Officer (since July 2004), RidgeWorth Investments

Diana Hanlin 50 Hurt Plaza Suite 1400 Atlanta, GA 30303 Age: 41	Vice President; Deputy Chief Compliance Officer	One year; since June 2008	Director, RidgeWorth Capital Management, Inc. (Since May, 2008); Employee of BB&T Asset Management, Inc. ( 2007 - 2008); Employee of BISYS Fund Services Ohio, Inc. (1996-2007)

Martin R. Dean 3435 Stelzer Road Columbus, OH 43219 Age: 45	Treasurer; Chief Financial Officer and Chief Accounting Officer	One year; since March 2007	Senior Vice President, Fund Administration, Citi Fund Services Ohio, Inc.


	Position(s)	Term of Office
Name, Address	Held with	and Length
and Ages	Trust	of Time Served	Principal Occupation(s) During the Past 5 Years
Cynthia J. Surprise 3435 Stelzer Road Columbus, OH 43219 Age: 62	Secretary and Chief Legal Officer	One year; since February 2005	Senior Vice President, Regulatory Administration, Citi Fund Services Ohio, Inc. (since December 2004); Director, Investors Bank & Trust Company (1999-2004)

Katherine A. Reilly 3435 Stelzer Road Columbus, OH 43219 Age: 43	Assistant Secretary	One year; since February 2008	Vice President (since July 2007), Assistant Counsel (January 2006-July 2007), Regulatory Administration, Citi Fund Services Ohio, Inc.; Employee of CitiStreet LLC (June 2004 - May 2005); Employee of Fidelity Investments (1987 - 2001).

PURCHASING AND REDEEMING SHARES

Purchases and redemptions of shares of the Funds may be made on any day the New York Stock Exchange (“NYSE”) is open for business. The Trust reserves the right to open the Funds when the principal bond markets are open for business even if the NYSE is closed. Shares of each Fund are offered and redeemed on a continuous basis. Currently, the NYSE is closed on the days the following holidays are observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day. Currently, the Fed and the principal bond markets are closed on the same days that the NYSE is closed except for Good Friday. In addition, the Fed and the principal bond markets are closed on the days that Columbus Day and Veterans Day are observed.

It is currently the Trust’s policy to pay for all redemptions in cash, however, the Trust retains the right to alter this policy to provide for redemptions in whole or in part by a distribution in-kind of readily marketable securities held by the Funds in lieu of cash. Shareholders may incur brokerage charges on the sale of any such securities so received in payment of redemptions. A shareholder will at all times be entitled to aggregate cash redemptions from all Funds of the Trust up to the lesser of $250,000 or 1% of the Trust’s net assets during any 90-day period. The Board of Trustees has adopted procedures which permit the Trust to make in-kind redemptions to those shareholders of the Trust that are affiliated with the Trust solely by their ownership of a certain percentage of the Trust’s investment portfolios.

The Trust reserves the right to suspend the right of redemption and/or to postpone the date of payment upon redemption for any period during which trading on the NYSE is restricted, or during the existence of an emergency (as determined by the SEC by rule or regulation) as a result of which disposal or valuation of a Fund’s portfolio securities is not reasonably practicable, or for such other periods as the SEC has by order permitted. The Trust reserves the right to postpone payment or redemption proceeds for up to seven days if the redemption would harm existing shareholders. The Trust also reserves the right to suspend sales of shares of a Fund for any period during which the NYSE, the Adviser, the Administrator and/or the Custodian are not open for business.

The Trust reserves the right to waive any minimum investment requirements or sales charges for immediate family members of the Trustees or employees of the Adviser and its affiliates. “Immediate Family” means a spouse, mother, father, mother-in-law, father-in-law or children (including step children) age 21 years or under. Currently, the front-end sales charge is waived on A Shares purchased by Trustees, employees of the Adviser, and its affiliates and their respective immediate family members.

DETERMINATION OF NET ASSET VALUE

General Policy. Each of the Funds adheres to Section 2(a)(41), and Rules 2a-4 and 2a-7 thereunder, of the 1940 Act with respect to the valuation of portfolio securities. In general, securities for which market quotations are readily available are valued at current market value, and all other securities are valued at fair value as determined in good faith by the Trusts’ Board of Trustees. In complying with the 1940 Act, the Trust relies on guidance provided by the SEC and by the SEC staff in various interpretive letters and other guidance.

Equity Securities. Securities listed on a securities exchange, market or automated quotation system for which quotations are readily available (except securities traded on NASDQ), including securities traded over the counter, are valued at the official closing price or the last quoted sale price on the principal exchange or market (foreign or domestic) on which they are traded on valuation date (or at approximately 4:00 p.m., Eastern Time if a security’s principal exchange is normally open at that time). If there is no official closing price and there is no such reported sale on the valuation date, the security is valued at the most recent quoted bid price, or if such prices are not available, the security will be valued at fair value as determined in good faith by the Trust’s Board of Trustees. For securities traded on NASDAQ, the NASDAQ Official Closing Price is used.

Money Market Securities and other Debt Securities. If available, Money Market Securities and other debt securities are priced based upon valuations provided by recognized independent, third-party pricing agents. Such values generally reflect the last reported sales price if the security is actively traded. The third-party pricing agents may also value debt securities by employing methodologies that utilize actual market transactions, broker-supplied valuations, or other methodologies designed to identify the market value for such securities. Such methodologies generally consider such factors as security prices, yields, maturities, call features, ratings and developments relating to specific securities in arriving at valuations. Money Market Securities and other debt securities with remaining maturities of sixty days or less may be valued at their amortized cost, which approximates market value. If such prices are not available, the security will be valued at fair value as determined in good faith by the Trust’s Board of Trustees.

The prices for foreign securities are reported in local currency and converted to U.S. dollars at the exchange rate of such currencies against the U.S. dollar, as of the close of regular trading on the NYSE (usually 4:00 p.m. Eastern Time) as provided by an independent pricing service approved by the Trust’s Board of Trustees.

Use of Third-Party Pricing Agents. Pursuant to contracts with the Trust’s Administrator, prices for most securities held by the Funds are provided daily by third-party independent pricing agents that are approved by the Board of Trustees of the Trust. The valuations provided by third-party independent pricing agents are reviewed daily by the Administrator. If a security price cannot be obtained from an independent pricing service, the Trust’s accounting agent will seek to obtain a bid price from at least one independent broker.

Investments in other investment companies are valued at their respective daily net asset values.

Amortized Cost Method of Valuation. The amortized cost method involves valuing a security at its cost on the date of purchase and thereafter (absent unusual circumstances) assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuations in general market rates of interest on the value of the instrument. While this method provides certainty in valuation, it may result in periods during which a security’s value, as determined by this method, is higher or lower than the price a Fund would receive if it sold the

instrument. During periods of declining interest rates, the daily yield of a Fund may tend to be higher than a like computation made by a company with identical investments utilizing a method of valuation based upon market prices and estimates of market prices for all of its portfolio securities. Thus, if the use of amortized cost by a Fund resulted in a lower aggregate portfolio value on a particular day, a prospective investor in a Fund would be able to obtain a somewhat higher yield than would result from investment in a company utilizing solely market values, and existing investors in a Fund would experience a lower yield. The converse would apply in a period of rising interest rates.

A Fund’s use of amortized cost and the maintenance of a Fund’s net asset value at $1.00 are permitted by regulations promulgated by Rule 2a-7 under the 1940 Act, provided that certain conditions are met. The regulations also require the Trustees to establish procedures which are reasonably designed to stabilize the net asset value per share at $1.00 for the Funds. Such procedures include the determination of the extent of deviation, if any, of the Funds current net asset value per share calculated using available market quotations from the Funds amortized cost price per share at such intervals as the Trustees deem appropriate and reasonable in light of market conditions and periodic reviews of the amount of the deviation and the methods used to calculate such deviation. In the event that such deviation exceeds one half of 1%, the Trustees are required to consider promptly what action, if any, should be initiated, and, if the Trustees believe that the extent of any deviation may result in material dilution or other unfair results to shareholders, the Trustees are required to take such corrective action as they deem appropriate to eliminate or reduce such dilution or unfair results to the extent reasonably practicable. Such actions may include the sale of portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redeeming shares in kind; or establishing a net asset value per share by using available market quotations. In addition, if the Funds incur a significant loss or liability, the Trustees have the authority to reduce pro rata the number of shares of the Funds in each shareholder’s account and to offset each shareholder’s pro rata portion of such loss or liability from the shareholder’s accrued but unpaid dividends or from future dividends while each other Fund must annually distribute at least 90% of its investment company taxable income.

TAXES

The following is a summary of certain federal income tax considerations generally affecting the Funds and their investors. No attempt is made to present a detailed explanation of the federal tax treatment of a Fund or its investors, and the discussion here and in the Trust’s prospectuses is not intended as a substitute for careful tax planning.

Federal Income Tax

This discussion of federal income tax considerations is based on the Internal Revenue Code of 1986 and the regulations issued thereunder, in effect on the date of this SAI. New legislation, as well as administrative changes or court decisions may change the conclusions expressed herein, and may have a retroactive effect with respect to the transactions contemplated herein. In order to qualify for treatment as a regulated investment company (“RIC”) under the Code, the Funds must distribute annually to its shareholders at least the sum of 90% of its net investment income excludable from gross income plus 90% of its investment company taxable income (generally, net investment income plus the excess, if any, of net short-term capital gain) (the “Distribution Requirement”) and also must meet several additional requirements. Among these requirements are the following: (i) at least 90% of a Fund’s gross income each taxable year must be derived from dividends, interest, payments with respect to securities loans, and gains from the sale or other disposition of stock or securities or foreign currencies, or other income derived with respect to its business of investing in such stock, securities or currencies, and net income

derived from interests in qualified publicly traded partnerships, (ii) at the close of each quarter of a Fund’s taxable year, at least 50% of the value of its total assets must be represented by cash and cash items, U.S. government securities, securities of other RICs and other securities, with such other securities limited, in respect to any one issuer, to an amount that does not exceed 5% of the value of a Fund’s assets and that does not represent more than 10% of the outstanding voting securities of such issuer; and (iii) at the close of each quarter of a Fund’s taxable year, not more than 25% of the value of the Fund’s assets may be invested in securities (other than U.S. government securities or the securities of other RICs) of any one issuer, or of two or more issuers engaged in same or similar businesses if a Fund owns at least 20% of the voting power of such issuers, or of one or more qualified publicly traded partnerships, or the securities of one or more qualified publicly traded partnerships.

Notwithstanding the Distribution Requirement described above, which only requires a Fund to distribute at least 90% of its annual investment company taxable income and does not require any minimum distribution of net capital gains (the excess of net long-term capital gains over net short-term capital loss), a Fund will be subject to a nondeductible 4% excise tax to the extent it fails to distribute by the end of any calendar year 98% of its ordinary income for that year and 98% of its capital gain net income for the one-year period ending on October 31 of that year (and any retained amount from that prior calendar year on which the Fund paid no federal income tax). The Funds intend to make sufficient distributions prior to the end of each calendar year to avoid liability for the federal excise tax applicable to regulated investment companies but can make no assurances that distributions will be sufficient to avoid this tax.

If a Fund fails to maintain qualification as a RIC for a tax year, that Fund will be subject to federal income tax on its taxable income and gains at corporate rates, without any benefit for distributions paid to shareholders, and distributions to shareholders will be taxed as ordinary income to the extent of that Fund’s current and accumulated earnings and profits. In such case, the dividends received deduction generally will be available for eligible corporate shareholders (subject to certain limitations) and the lower tax rates applicable to qualified dividend income would be available to individual shareholders. The board reserves the right not to maintain qualification of a Fund as a RIC if it determines such course of action to be beneficial to shareholders.

Each Fund may invest in complex securities. These investments may be subject to numerous special and complex tax rules. These rules could affect whether gains and losses recognized by a Fund are treated as ordinary income or capital gains, accelerate the recognition of income to a Fund, and/or defer a Fund’s ability to recognize losses. In turn, these rules may affect the amount, timing or character of the income distributed to shareholders by a Fund.

With respect to investments in STRIPs, TRs, and other zero coupon securities which are sold at original issue discount and thus do not make periodic cash interest payments, a Fund will be required to include as part of its current income the imputed interest on such obligations even though the Fund has not received any interest payments on such obligations during that period. Because each Fund distributes all of its net investment income to its shareholders, a Fund may have to sell Fund securities to distribute such imputed income at a time when the Adviser would not have chosen to sell such securities and which may result in taxable gain or loss.

The Fixed Income Funds receive income generally in the form of interest derived from Fund investments. This income, less expenses incurred in the operation of a Fund, constitutes its net investment income from which dividends may be paid to shareholders. Any distributions by a Fund may be taxable to shareholders regardless of whether they are received in cash or additional shares. A Fund may derive capital gains and losses in connection with sales or other dispositions of its portfolio securities. Distributions of net short-term capital gains will be taxable to shareholders as ordinary income. In general, the Fixed Income Funds do not expect to realize net-long

term capital gains because the Bond Funds and the portion of such Funds’ distributions are expected to be eligible for the corporate dividends received deduction.

The Equity Funds receive income generally in the form of dividends and interest on Fund investments. This income, less expenses incurred in the operation of a Fund, constitutes its net investment income from which dividends may be paid to you. All or a portion of the net investment income distributions may be treated as qualified dividend income (eligible for the reduced maximum rate to individuals of 15% (lower rates apply to individuals in lower tax brackets)) to the extent that a Fund receives qualified dividend income.

Qualified dividend income is, in general, dividend income from taxable domestic corporations and certain foreign corporations (e.g., foreign corporations incorporated in a possession of the United States or in certain countries with a comprehensive tax treaty with the United States, or the stock of which is readily tradable on an established securities market in the United States). In order for some portion of the dividends received by a Fund shareholder to be qualified dividend income, a Fund must meet holding period and other requirements with respect to the dividend paying stocks in its portfolio, and the shareholder must meet holding period and other requirements with respect to a Fund’s shares. Any distributions by a Fund may be taxable to shareholders regardless of whether they are received in cash or in additional shares. The Equity Funds may derive capital gains and losses in connection with sales or other dispositions of each Fund’s portfolio securities. Distributions from net short-term capital gains will be taxable to you as ordinary income. Distributions from net long-term capital gains will be taxable to you as long-term capital gains regardless of how long you have held your shares in the fund. Currently, the maximum tax rate on long-term capital gains is 15%.

A Fund’s participation in loans of securities may affect the amount, timing and character of distributions to shareholders. If a Fund participates in a securities lending transaction, to the extent that a Fund makes a distribution of income received by the Fund in lieu of dividends (a “substitute payment”) with respect to securities on loan pursuant to such a securities lending transaction, such income will not constitute qualified dividend income and thus will not be eligible for taxation at the rates applicable to long-term capital gain. Such income will also not be qualifying dividends eligible for the dividends received deduction for corporate investors. The Funds expect to use such substitute payments, if any, to satisfy a Fund’s expenses, and therefore expect that their receipt of substitute payments, if any, will not adversely affect the percentage of distributions qualifying as qualified dividend income. Withholding taxes accrued on dividends during the period that any security was not directly held by a Fund will not qualify as a foreign tax paid by a Fund and therefore cannot be passed through to shareholders.

Absent further legislation, the maximum 15% tax rate on qualified dividend income and long-term capital gains will cease to apply to taxable years beginning after December 31, 2010.

Shareholders who have not held Fund shares for a full year should be aware that a Fund may designate and distribute, as ordinary income or capital gain, a percentage of income that is not equal to the actual amount of such income earned during the period of investment in a Fund.

Each Fund will inform you of the amount of your ordinary income dividends, qualified dividend income, and capital gain distributions shortly after the close of each calendar year.

If a Fund’s distributions exceed its taxable income and capital gains realized during a taxable year, all or a portion of the distributions made in the same taxable year may be recharacterized as a return of capital to shareholders. A

return of capital distribution will generally not be taxable, but will reduce each shareholder’s cost basis in a Fund and result in higher reported capital gain or lower reported capital loss when those shares on which distribution was received are sold.

If a shareholder that is a tax-exempt investor (e.g., a pension plan, individual retirement account, 401(k), similar tax-advantaged plan, charitable organization, etc.) incurs debt to finance the acquisition of its shares, a portion of the income received by that shareholder with respect to its shares would constitute unrelated business taxable income (“UBTI”). A tax-exempt investor is generally subject to federal income tax to the extent that its UBTI for a taxable year exceeds its annual $1,000 exclusion. If a charitable remainder trust incurs any UBTI in a taxable year, all of its net income for the taxable year is subject to federal income tax.

Sale, Redemption or Exchange of Fund Shares

Sales, redemptions and exchanges of Fund shares are generally taxable transactions for federal, state and local income tax purposes.

Any gain or loss recognized on a sale or redemption of shares of a Fund by a shareholder who holds his or her shares as a capital asset will generally be treated as long-term capital gain or loss if the shares have been held for more than one year, and short-term if for a year or less. If shares held for six months or less are sold or redeemed for a loss, two special rules apply. First, if shares on which a net capital gain distribution has been received are subsequently sold or redeemed, and such shares have been held for six months or less, any loss recognized will be treated as long-term capital loss to the extent of the long-term capital gain distributions. Second, any loss recognized by a shareholder upon the sale or redemption of shares of a tax-exempt fund held for six months or less will be disallowed to the extent of any exempt interest dividends received by the shareholder with respect to such shares. All or a portion of any loss that you realize upon the redemption of your fund shares will be disallowed to the extent that you buy other shares in a Fund (through reinvestment of dividends or otherwise) within 30 days before or after your share redemption. Any loss disallowed under these rules will be added to your tax basis in the new shares you buy.

In certain cases, a Fund will be required to withhold, at the applicable withholding rates, an amount from any distributions and redemptions to shareholders, and to remit such amount to the Internal Revenue Service (“IRS”) if the shareholder: (1) has failed to provide a correct taxpayer identification number, (2) is subject to backup withholding by the IRS, or (3) has failed to provide the Fund with certain certifications that are required by the IRS, or (4) has failed to certify that he or she is a U.S. person (including a U.S. resident alien).

The Funds will make annual reports to shareholders of the federal income tax status of all distributions.

State Taxes

A Fund is not liable for any income or franchise tax in Massachusetts if it qualifies as a RIC for federal income tax purposes. Distributions by the Funds to investors and the ownership of shares may be subject to state and local taxes.

Shareholders are urged to consult their tax advisors regarding state and local taxes affecting an investment in shares of a Fund.

Many states grant tax-free status to dividends paid to you from interest earned on direct obligations of the U.S. Government, subject in some states to minimum investment requirements that must be met by a Fund. Investments in Government National Mortgage Association and Fannie Mae securities, bankers’ acceptances, commercial paper and repurchase agreements collaterized by U.S. government securities do not generally qualify for tax-free treatment. The rules on exclusion of this income are different for corporations.

Foreign Taxes

Dividends and interests received by a Fund may be subject to income, withholding or other taxes imposed by foreign countries and U.S. possessions that would reduce the yield on the Fund’s stock or securities. Tax conventions between certain countries and the United States may reduce or eliminate these taxes. Foreign countries generally do not impose taxes on capital gains with respect to investments by foreign investors.

FUND TRANSACTIONS

Brokerage Transactions. The Trust has no obligation to deal with any dealer or group of dealers in the execution of transactions in portfolio securities.

Subject to policies established by the Board of Trustees and oversight by the Adviser, the Subadviser is responsible for placing the orders to execute transactions for each Fund.

In placing orders, it is the policy of the Trust to seek to obtain the best net results taking into account such factors as price (including the applicable dealer spread), the size, type and difficulty of the transaction involved, the firm’s general execution and operational facilities, and the firm’s risk in positioning the securities involved. Where possible, the Adviser or the Subadviser will deal directly with the dealers who make a market in the securities involved except in those circumstances where better prices and execution are available elsewhere. Such dealers usually are acting as principal for their own account. On occasion, securities may be purchased directly from the issuer. While the Adviser or the Subadviser generally seeks reasonably competitive spreads or commissions, the Trust will not necessarily be paying the lowest spread or commission available due to reasons described herein.

The money market securities in which the Funds invest are traded primarily in the over-the-counter market. Bonds and debentures are usually traded over-the-counter, but may be traded on an exchange. Money market and debt securities are generally traded on a net basis and do not normally involve either brokerage commissions or transfer taxes. Certain Funds may also enter into financial futures and option contracts, which normally involve brokerage commissions. The cost of executing portfolio securities transactions of the Trust will primarily consist of dealer spreads and underwriting commissions.

For the fiscal years ended March 31, 2008, March 31, 2007 and March 31, 2006, the Funds paid the following aggregate brokerage commissions on portfolio transactions:

Aggregate Dollar Amount of

Brokerage Commissions Paid ($)

Fund

2008

2007

2006

Intermediate Bond Fund

Aggregate Dollar Amount of

Brokerage Commissions Paid ($)

Fund

2008

2007

2006

Total Return Bond Fund

Brokerage Selection. The Trust does not expect to use one particular broker or dealer, and when one or more brokers is believed capable of providing the best combination of price and execution, the Funds’ Adviser or Subadviser may select a broker based upon brokerage or research services provided to the Adviser or Subadviser. The Adviser or Subadviser may pay a higher commission than otherwise obtainable from other brokers in return for such services only if a good faith determination is made that the commission is reasonable in relation to the services provided.

Section 28(e) of the 1934 Act permits the Adviser or Subadviser, under certain circumstances, to cause each Fund to pay a broker or dealer a commission for effecting a transaction in excess of the amount of commission another broker or dealer would have charged for effecting the transaction in recognition of the value of brokerage and research services provided by the broker or dealer. In addition to agency transactions, the Adviser or Subadviser may receive brokerage and research services in connection with certain riskless principal transactions, in accordance with applicable SEC guidance. Brokerage and research services include: (1) furnishing advice as to the value of securities, the advisability of investing in, purchasing or selling securities, and the availability of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of accounts; and (3) effecting securities transactions and performing functions incidental thereto (such as clearance, settlement, and custody). In the case of research services, the Adviser or Subadviser believes that access to independent investment research is beneficial to their investment decision-making processes and, therefore, to each Fund.

To the extent research services may be a factor in selecting brokers, such services may be in written form or through direct contact with individuals and may include information as to particular companies and securities as well as market, economic, or institutional areas and information which assists in the valuation and pricing of investments. Examples of research-oriented services for which the Adviser or Subadviser might utilize Fund commissions include research reports and other information on the economy, industries, sectors, groups of securities, individual companies, statistical information, political developments, technical market action, pricing and appraisal services, credit analysis, risk measurement analysis, performance and other analysis. The Adviser or Subadviser may use research services furnished by brokers in servicing all client accounts and not all services may necessarily be used in connection with the account that paid commissions to the broker providing such services. Information so received by the Adviser or Subadviser will be in addition to and not in lieu of the services required to be performed by the Funds’ Adviser or Subadviser under the Advisory or Subadvisory Agreement. Any advisory or other fees paid to the Adviser or Subadviser are not reduced as a result of the receipt of research services.

In some cases the Adviser or Subadviser may receive a service from a broker that has both a “research” and a “non-research” use. When this occurs, the Adviser or Subadviser makes a good faith allocation, under all the circumstances, between the research and non-research uses of the service. The percentage of the service that is used for research purposes may be paid for with client commissions, while the Adviser or Subadviser will use its own funds to pay for the percentage of the service that is used for non-research purposes. In making this good faith allocation, the Adviser or Subadviser faces a potential conflict of interest, but the Adviser or Subadviser believes that its allocation procedures are reasonably designed to ensure that it appropriately allocates the anticipated use of such services to their research and non-research uses.

From time to time, the Funds may purchase new issues of securities for clients in a fixed price offering. In these situations, the seller may be a member of the selling group that will, in addition to selling securities, provide the Adviser or Subadviser with research services. FINRA has adopted rules expressly permitting these types of arrangements under certain circumstances. Generally, the seller will provide research “credits” in these situations

at a rate that is higher than that which is available for typical secondary market transactions. These arrangements may not fall within the safe harbor of Section 28(e).

For the fiscal years ended March 31, 2008, March 31, 2007 and March 31, 2006, the Funds did not pay any commissions on brokerage transactions directed to brokers pursuant to an agreement or understanding whereby the broker provides research or other brokerage services to the Adviser or Subadviser.

Brokerage with Fund Affiliates. A Fund may execute brokerage or other agency transactions through registered broker-dealer affiliates of the Fund, the Adviser, the Subadviser or the Distributor for a commission in conformity with the 1940 Act, the Securities Exchange Act of 1934 (the “1934 Act”) and rules promulgated by the SEC. Under the 1940 Act and the 1934 Act, affiliated broker-dealers are permitted to receive and retain compensation for effecting portfolio transactions for the Fund on an exchange if a written contract is in effect between the affiliate and the Fund expressly permitting the affiliate to receive and retain such compensation. These rules further require that commissions paid to the affiliate by the Fund for exchange transactions not exceed “usual and customary” brokerage commissions. The rules define “usual and customary” commissions to include amounts which are “reasonable and fair compared to the commission, fee or other remuneration received or to be received by other brokers in connection with comparable transactions involving similar securities being purchased or sold on a securities exchange during a comparable period of time.” The Trustees, including those who are not “interested persons” of the Fund, as defined in the 1940 Act, have adopted procedures for evaluating the reasonableness of commissions paid to affiliates and review these procedures periodically.

For the fiscal years ended March 31, 2008, March 31, 2007 and March 31, 2006 the Funds paid the following aggregate brokerage commissions on portfolio transactions effected by affiliated brokers. All amounts shown reflect fees paid in connection with Fund repurchase agreement transactions.


							Percentage of Total						Percentage of Total
							Brokerage						Brokerage Transactions
	Aggregate Dollar Amount of						Commissions/Fees						Effected Through
	Brokerage Commissions/Fees						Paid to Affiliated Brokers						Affiliated
	Paid to Affiliated Brokers ($)						(%)+						Brokers (%)
Fund	2008		2007		2006		2008		2007		2006		2008		2007		2006
Intermediate Bond Fund		0		382		905		0		100		100		0		100		100
Total Return Bond Fund		0		5,574		12,291		0		100		100		0		100		100


+		Transactions in repurchase agreements, which are generally traded through an affiliated broker-dealer, are the only transactions that result in the payment of commissions. Therefore, it might appear, based on the percentage of commissions paid, that the Funds’ portfolio transactions are made through affiliated broker-dealers. However, transactions in repurchase agreements make up only a small part of a Fund’s portfolio transactions.

PORTFOLIO TURNOVER RATE

Portfolio turnover rate is defined under SEC rules as the value of the securities purchased or securities sold, excluding all securities whose maturities at the time of acquisition were one-year or less, divided by the average monthly value of such securities owned during the year. Based on this definition, instruments with remaining maturities of less than one-year are excluded from the calculation of the portfolio turnover rate. Instruments excluded from the calculation of portfolio turnover generally would include the futures contracts and option contracts in which the Funds invest since such contracts generally have remaining maturities of less than one-year. The Funds may at times hold investments in other short-term instruments such as money market instruments and repurchase agreements, which are excluded for purposes of computing portfolio turnover. Each Fund’s portfolio turnover rate for the fiscal years ended March 31, 2007 and 2008 is shown in the table below. Variations in turnover rate may be due to market conditions, fluctuating volume of shareholder purchases and redemptions or changes in the Adviser’s investment outlook.


	Turnover Rate (%)
Fund	2008		2007
Intermediate Bond Fund		254		225
Total Return Bond Fund¹		248		310


¹		Increased exposure to specified pools combined with decreased exposure to TBAs, compared to 2007 trading volumes in TBAs, resulted in lower turnover.

PORTFOLIO HOLDINGS

The Board of Trustees has approved a policy and procedures that govern the timing and circumstances regarding the disclosure of Fund portfolio holdings information to shareholders and third parties. These policies and procedures are designed to ensure that disclosure of information regarding the Funds’ portfolio securities is in the best interests of Fund shareholders, and include procedures to address conflicts between the interests of the Funds’ shareholders, on the one hand, and those of the Funds’ investment adviser, principal underwriter or any affiliated person of the Funds, its investment adviser, or its principal underwriter, on the other. Pursuant to such procedures, the Board has authorized the Adviser’s Chief Compliance Officer (the “CCO”) to authorize the release of the Funds’ portfolio holdings, as necessary, in conformity with the foregoing principles. The Funds’ CCO reports quarterly to the Board regarding the implementation of such policies and procedures.

Pursuant to applicable law, each Fund is required to disclose its complete portfolio holdings quarterly, within 60 days of the end of each fiscal quarter (currently, each March 31, June 30, September 30, and December 31). Each Fund discloses a complete schedule of investments in each Semi-Annual Report and Annual Report to Fund shareholders or, following the first and third fiscal quarters, in quarterly holdings reports filed with the SEC on Form N-Q. Semi-Annual and Annual Reports are distributed to Fund shareholders. Quarterly holdings reports filed with the SEC on Form N-Q are not distributed to Fund shareholders, but are available, free of charge, on the EDGAR database on the SEC’s website at www.sec.gov and may be reviewed and copied at the SEC’s public reference room. Information on the operation and terms of usage of the SEC public reference room is available at http://www.sec.gov/info/edgar/prrrules.htm or by calling 1-800-SEC-0330. The Funds’ Annual Reports and Semi-Annual Reports are available, free of charge, on the Trust’s website at www.ridgeworthfunds.com.

The Trust’s website will provide complete portfolio holdings for the Funds on the 15^th day of each month (or on the next business day should the 15^th be other than a business day) as of the end of the most recent month. Information will remain available until updated.

Portfolio holdings for previous month-ends are available for each Fund. To request this historical information without charge, call 1-888-784-3863, or write to the Trust at RidgeWorth Funds, c/o Citi Fund Services, Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio 43219.

In addition to information provided to shareholders and the general public, from time to time rating and ranking organizations, such as S&P and Morningstar, Inc., may request complete portfolio holdings information in connection with rating the Funds. Similarly, institutional investors, financial planners, pension plan sponsors and/or their consultants may request a complete list of portfolio holdings in order to assess the risks of a Fund’s portfolio along with related performance attribution statistics. The Trust believes that these third parties have legitimate objectives in requesting such portfolio holdings information. The Trust may also disclose the portfolio holdings to broker-dealers and/or pricing services in order to allow the Funds to accurately price and potentially sell portfolio securities. The Trust’s policies and procedures provide that the Adviser’s CCO may authorize disclosure of portfolio holdings information to such parties at differing times and/or with different lag times to such third parties provided that the recipient is, either by contractual agreement or otherwise by law, (i) required to maintain the confidentiality of the information and (ii) prohibited from using the information to facilitate or assist in any securities transactions or investment program.

The Trust requires any third party receiving non-public holdings information to enter into a Confidentiality Agreement with the Adviser. The Confidentiality Agreement provides, among other things, that non-public

portfolio holdings information will be kept secret and confidential and that such information will be used solely for the purpose of analysis and evaluation of the Funds. Specifically, the Confidentiality Agreement prohibits anyone in possession of non-public portfolio holdings information from purchasing or selling securities based on such information, or from disclosing such information to other persons, except for those who are actually engaged in, and need to know, such information to perform the analysis or evaluation of the Funds.

Currently, the Trust has arrangements to provide additional disclosure of portfolio holdings information on a monthly basis with no lag time to the following third parties: ABN-AMRO, Advest, Inc., AG Edwards & Sons, Inc., Banc of America Securities, LLC, BB&T Capital Markets, Bear Stearns & Co, Inc., BMO Nesbit Burns, Buckingham Research Group, Inc., Cantor Fitzgerald & Co., Credit Suisse First Boston, LLC, Davenport & Company, LLC, Empirical Research Partners, Ferris Baker Watts, Inc., Freidman, Billings, Ramsey & Co., Inc., FTN Financial, Janney Montgomery Scott, LLC, JP Morgan Securities, Inc., Lehman Brothers, Inc., McDonald Investments, Inc., Merrill Lynch Pierce Fenner & Smith, Inc., FTN Midwest Research, Moody’s Investors Service, Morgan Keegan & Co., Inc., Oppenheimer & Company, Piper Jaffray & Co., Raymond James Financial, Inc., RBC Dain Rauscher, Inc, Robert W. Baird & Co., Smith Barney, Starboard Capital Markets, LLC, Sterne, Agee & Leach, Inc., UBS Financial Services, Inc., and Wachovia Bank, N.A., Zions First National Bank, N.A.

Currently, the Trust has arrangements to provide additional disclosure of complete portfolio holdings information on a quarterly basis with no lag to the following third parties: Aon Consulting, Inc., Callan Associates, Inc., Colonial Consulting, Inc., CRA Business Strategies Group, Gabriel Roder, Smith & Co., New England Pension Consultants, Prime Buchholz & Associates, Inc., Towers Perrin HR Services, Watson Wyatt Investment Consulting, Inc., Wilshire Associates Incorporated.

Currently, the Trust has arrangements to provide additional disclosure of complete portfolio holdings information on a weekly basis with a lag time of 7 days to S&P.

In addition, the Trust’s service providers, such as the custodian, administrator and transfer agent, may receive portfolio holdings information in connection with their services to the Funds. Financial printers, proxy voting service providers and pricing information vendors may receive portfolio holdings information, as necessary, in connection with their services to the Funds.

No compensation or other consideration is paid to or received by any party in connection with the disclosure of portfolio holdings information, including the Funds, the Adviser and its affiliates or recipient of the Funds’ portfolio holdings information.

DESCRIPTION OF SHARES

The Declaration of Trust authorizes the issuance of an unlimited number of shares of the Funds each of which represents an equal proportionate interest in that Fund with each other share. Shares are entitled upon liquidation to a pro rata share in the net assets of the Funds. Shareholders have no preemptive rights. The Declaration of Trust provides that the Trustees of the Trust may create additional series of shares. All consideration received by the Trust for shares of any additional series and all assets in which such consideration is invested would belong to that series and would be subject to the liabilities related thereto. Share certificates representing shares will not be issued.

VOTING RIGHTS

Each share held entitles the shareholder of record to one vote for each dollar invested. In other words, each shareholder of record is entitled to one vote for each full share held on the record date for any shareholder meeting. Each Fund will vote separately on matters relating solely to it. As a Massachusetts business trust, the Trust is not required, and does not intend, to hold annual meetings of shareholders. Shareholder approval will be sought, however, for certain changes in the operation of the Trust and for the election of Trustees under certain circumstances. Under the Declaration of Trust, the Trustees have the power to liquidate one or more Funds without shareholder approval. While the Trustees have no present intention of exercising this power, they may do so if a Fund fails to reach or maintain a viable size or for some other extraordinary reason.

In addition, a Trustee may be removed by the remaining Trustees or by shareholders at a special meeting called upon written request of shareholders owning at least 10% of the outstanding shares of the Trust. In the event that such a meeting is requested, the Trust will provide appropriate assistance and information to the shareholders requesting the meeting.

SHAREHOLDER LIABILITY

The Trust is an entity of the type commonly known as a “Massachusetts business trust.” Under Massachusetts law, shareholders of such a trust could, under certain circumstances, be held personally liable as partners for the obligations of the trust. Even if, however, the Trust were held to be a partnership, the possibility of the shareholders’ incurring financial loss for that reason appears remote because the Trust’s Declaration of Trust contains an express disclaimer of shareholder liability for obligations of the Trust and requires that notice of such disclaimer be given in each agreement, obligation or instrument entered into or executed by or on behalf of the Trust or the Trustees, and because the Declaration of Trust provides for indemnification out of the Trust property for any investor held personally liable for the obligations of the Trust.

LIMITATION OF TRUSTEES’ LIABILITY

The Declaration of Trust provides that a Trustee shall be liable only for his own willful defaults and, if reasonable care has been exercised in the selection of officers, agents, employees or investment advisers, shall not be liable for any neglect or wrongdoing of any such person. The Declaration of Trust also provides that the Trust will indemnify its Trustees and officers against liabilities and expenses incurred in connection with actual or threatened litigation in which they may be involved because of their offices with the Trust unless it is determined in the manner provided in the Declaration of Trust that they have not acted in good faith in the reasonable belief that their actions were in the best interests of the Trust. However, nothing in the Declaration of Trust shall protect or indemnify a Trustee against any liability for his willful misfeasance, bad faith, gross negligence or reckless disregard of his duties. Nothing contained in this section attempts to disclaim a Trustee’s individual liability in any manner inconsistent with the federal securities laws.

CODES OF ETHICS

The Board of the Trust has adopted a Code of Ethics pursuant to Rule 17j-1 under the 1940 Act. In addition, the Adviser, the Subadvisers and the Distributor have adopted Codes of Ethics pursuant to Rule 17j-1. These Codes of Ethics apply to the personal investing activities of trustees, officers and certain employees (“access persons”). Rule 17j-1 and the Codes of Ethics are designed to prevent unlawful practices in connection with the purchase or sale of securities by access persons. The Code of Ethics adopted by each of these entities governs the manner and extent to which certain persons associated with that entity may invest in securities for their own accounts, including securities that may be purchased or held by the Trust. Under each Code of Ethics, access persons are permitted to engage in personal securities transactions, but are required to report their personal securities transactions for monitoring purposes. In addition, certain access persons of the Adviser, and the Subadvisers are generally prohibited from acquiring beneficial ownership of securities offered in connection with initial public offerings. Certain access persons of the Adviser and Subadvisers are required to obtain approval before investing in limited offerings. Copies of these Codes of Ethics are on file with the SEC and are available to the public.

PROXY VOTING

The Board has delegated the responsibility for decisions regarding proxy voting for securities held by the Funds to the Adviser. The Adviser will vote such proxies in accordance with its proxy policies and procedures, summaries of which are included in Appendix B to this SAI.

Information regarding how the Funds’ voted proxies during the most recent twelve-month period ended June 30 has been filed with the SEC on Form N-PX. The Funds’ proxy voting record, along with the Funds’ full proxy voting policies and procedures, is available on the Funds’ website at www.ridgeworthfunds.com, , without charge upon request by calling 1-888-784-3863, or by writing to the Funds at RidgeWorth Funds, c/o Citi Fund Services Ohio, Inc., 3435 Stelzer Road, Columbus, Ohio 43219. The Funds’ proxy voting record is also available on the SEC’s website at www.sec.gov.

5% AND 25% SHAREHOLDERS

As of January 20, 2009, the following persons were the only persons who were record owners (or to the knowledge of the Trust, beneficial owners) of 5% or more of the shares of the Funds. Persons who owned of record or beneficially more than 25% of a Fund’s outstanding shares may be deemed to control the Fund within the meaning of the 1940 Act. The nature of ownership for each position listed is “Record” unless otherwise indicated. The Trust believes that most of the shares of the Funds were held for the record owner’s fiduciary, agency or custodial customers.


	PERCENT OF
	CLASS
NAME AND ADDRESS OF OWNER	OWNED
TOTAL RETURN BOND FUND — A
NATIONAL FINANCIAL SERVICES LLC 200 LIBERTY STREET ONE WORLD FINANCIAL CENTER NEW YORK, NY 10281		71.97	%

CITIGROUP GLOBAL MARKETS INC. 333 WEST 34TH STREET, 7TH FLOOR EMPIRE STATE, NY 10001		21.64	%

UBS FINANCIAL SERVICES INC. 1200 HARBOR BLVD 4TH FLOOR BERGENLINE, NJ 07087		6.40	%

TOTAL RETURN BOND FUND — C
NATIONAL FINANCIAL SERVICES LLC 200 LIBERTY STREET ONE WORLD FINANCIAL CENTER NEW YORK, NY 10281		100.00	%

TOTAL RETURN BOND FUND — I
SEI PRIVATE TRUST COMPANY C/O SUNTRUST BANK ONE FREEDOM VALLEY DRIVE ATTN MUTUAL FUNDS OAKS, PA 19456		91.63	%

INTERMEDIATE BOND FUND — A
NATIONAL FINANCIAL SERVICES LLC 200 LIBERTY STREET ONE WORLD FINANCIAL CENTER MANHATTAN, NY 10281		84.01	%


	PERCENT OF
	CLASS
NAME AND ADDRESS OF OWNER	OWNED
INTERMEDIATE BOND FUND — C
NATIONAL FINANCIAL SERVICES LLC 200 LIBERTY STREET ONE WORLD FINANCIAL CENTER NEW YORK, NY 10281		48.10	%

RBC CAPITAL MARKETS CORPORATION 60 SOUTH 6TH STREET DAIN BOSWORTH PLAZA MINNEAPOLIS, MN 55402		31.42	%

SCOTTRADE, INC. ATTN: MUTUAL FUNDS DEPT 12800 CORPORATE HILL DRIVE PO BOX 31759 ST LOUIS, MO 63131		16.83	%

INTERMEDIATE BOND FUND — I
SEI PRIVATE TRUST COMPANY C/O SUNTRUST BANK ONE FREEDOM VALLEY DRIVE ATTN MUTUAL FUNDS OAKS, PA 19456		90.89	%

FINANCIAL STATEMENTS

The Funds’ financial statements for the fiscal year ended March 31, 2008, including notes thereto and the reports of PricewaterhouseCoopers LLP thereon, and the unaudited financial statements for the six month period ended September 30, 2008 are incorporated into this Statement of Additional Information by reference from the 2008 Annual Report to Shareholders and the 2008 Semi-Annual Report to Shareholders. Copies of the 2008 Annual Report and Semi-Annual Report will be provided without charge to each person receiving this Statement of Additional Information.

APPENDIX A

INVESTMENT RATINGS

STANDARD & POOR’S (S&P) SHORT-TERM MUNICIPAL OBLIGATION RATINGS

An S&P note rating reflects the liquidity concerns and market access risks unique to notes.

SP-1—Strong capacity to pay principal and interest. An issue determined to possess a very strong capacity to pay debt service is given a plus sign (+) designation.

SP-2—Satisfactory capacity to pay principal and interest, with some vulnerability to adverse financial and economic changes over the term of the notes.

S&P VARIABLE RATE DEMAND NOTES (VRDNs) AND TENDER OPTION BONDS (TOBs) RATINGS

S&P assigns “dual” ratings to all long-term debt issues that have as part of their provisions a demand feature. The first rating addresses the likelihood of repayment of principal and interest as due, and the second rating addresses only the demand feature. The long-term debt rating symbols are used for bonds to denote the long-term maturity and the commercial paper rating symbols are usually used to denote the put (demand) options (i.e., AAA/A-1+). Normally demand notes receive note-rating symbols combined with commercial paper symbols (i.e., SP-1+/A-1+).

S&P COMMERCIAL PAPER (CP) RATINGS

An S&P commercial paper rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than 365 days.

A-1—A Short-term obligation rated ‘A-1’ is rated in the highest category by Standard & Poor’s. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong.

A-2—A Short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory.

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S&P LONG-TERM DEBT RATINGS

AAA—Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA—Very high credit quality. ‘AA’ ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A—High credit quality. ‘A’ ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.

BBB—Good credit quality. ‘BBB’ ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

BB—Speculative. ‘BB’ ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment-grade.

B—Highly speculative. ‘B’ ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.

CCC, CC, C—High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A ‘CC’ rating indicates that default of some kind appears probable. ‘C’ ratings signal imminent default.

D—In payment default. The ‘D’ rating category is used when payments on a financial commitment are not made on the date due even if the applicable grace period has not expired, unless Standard & Poor’s believes that such payments will be made during such grace period. The ‘D’ rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on a financial commitment are jeopardized.

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MOODY’S INVESTORS SERVICE (MOODY’S) SHORT-TERM MUNICIPAL OBLIGATION RATINGS

Moody’s short-term ratings are designated Moody’s Investment Grade (MIG or VMIG). (See below.) The purpose of the MIG or VMIG ratings is to provide investors with a simple system by which the relative investment qualities of short-term obligations may be evaluated.

MIG1—This designation denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad based access to the market for refinancing.

MIG2—This designation denotes high quality. Margins of protection are ample although not so large as in the preceding group.

MOODY’S VARIABLE RATE DEMAND NOTES (VRDNs) AND TENDER OPTION BONDS (TOBs) RATINGS

Short-term ratings on issues with demand features are differentiated by the use of the VMIG symbol to reflect such characteristics as payment upon periodic demand rather than fixed maturity dates and payment relying on external liquidity. In this case, two ratings are usually assigned, (for example, Aaa/VMIG-1); the first representing an evaluation of the degree of risk associated with scheduled principal and interest payments, and the second representing an evaluation of the degree of risk associated with the demand feature. The VMIG rating can be assigned a 1 or 2 designation using the same definitions described above for the MIG rating.

MOODY’S COMMERCIAL PAPER (CP) RATINGS

Prime-1—Issuers rated Prime-1 (or supporting institutions) have a superior ability for repayment of senior short-term debt obligations.

Prime-1 repayment ability will often be evidenced by many of the following characteristics: leading market positions in well established industries, high rates of return on funds employed, conservative capitalization structure with moderate reliance on debt and ample asset protection, broad margins in earning coverage of fixed financial charges and high internal cash generation, and well-established access to a range of financial markets and assured sources of alternate liquidity.

A-3

Prime-2—Issuers rated Prime-2 (or supporting institutions) have a strong ability for repayment of senior short-term debt obligations. This will normally be evidenced by many of the characteristics cited above, but to a lesser degree. Earnings trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternate liquidity is maintained.

MOODY’S LONG-TERM DEBT RATINGS

Aaa—Bonds and preferred stock which are rated Aaa are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as “gilt edged.” Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.

Aa—Bonds and preferred stock which are rated Aa are judged to be of high quality by all standards. Together with the Aaa group they comprise what are generally known as high-grade bonds. They are rated lower than the best bonds because margins of protection may not be as large as in Aaa securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risk appear somewhat larger than the Aaa securities.

A—Bonds and preferred stock which are rated A possess many favorable investment attributes and are to be considered as upper medium-grade obligations. Factors giving security to principal and interest are considered adequate, but elements may be present which suggest a susceptibility to impairment some time in the future.

Baa—Bonds and preferred stock which are rated Baa are considered as medium-grade obligations (i.e., they are neither highly protected nor poorly secured). Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.

Ba—Bonds and preferred stock which are rated Ba are judged to have speculative elements; their future cannot be considered as well-assured. Often the protection of interest and principal payments may be very moderate, and thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.

B—Bonds and preferred stock which are rated B generally lack characteristics of the desirable investment. Assurance of interest and principal payments or of maintenance of other terms of the contract over any long period of time may be small.

A-4

Caa—Bonds and preferred stock which are rated Caa are of poor standing. Such issues may be in default or there may be present elements of danger with respect to principal or interest.

Ca—Bonds and preferred stock which are rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C—Bonds and preferred stock which are rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.

NR—Indicates that both the bonds and the obligor or credit enhancer are not currently rated by S&P or Moody’s with respect to short-term indebtedness. However, management considers them to be of comparable quality to securities rated A-1 or P-1.

NR(1)—The underlying issuer/obligor/guarantor has other outstanding debt rated AAA by S&P or Aaa by Moody’s.

NR(2)—The underlying issuer/obligor/guarantor has other outstanding debt rated AA by S&P or Aa by Moody’s.

NR(3)—The underlying issuer/obligor/guarantor has other outstanding debt rated A by S&P or Moody’s.

A-5

FITCH RATINGS SHORT-TERM DEBT RATING DEFINITIONS

F-1—Indicates the strongest capacity for timely payment of financial commitments relative to other issuers or issues in the same country. Under their national rating scale, this rating is assigned to the “best” credit risk relative to all others in the same country and is normally assigned to all financial commitments issued or guaranteed by the sovereign state. Where the credit risk is particularly strong, a “+” is added to the assigned rating.

F-2—Indicates a satisfactory capacity for timely payment of financial commitments relative to other issuers or issues in the same country. However, the margin of safety is not as great as in the case of the higher ratings.

F-3—Indicates an adequate capacity for timely payment of financial commitments relative to other issuers or issues in the same country. However, such capacity is more susceptible to near-term adverse changes than for financial commitments in higher rated categories.

FITCH RATINGS COMMERCIAL PAPER RATING DEFINITIONS

FITCH RATINGS LONG-TERM DEBT RATING DEFINITIONS

AAA—Highest credit quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA—Very high credit quality. ‘AA’ ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A-6

A—High credit quality. ‘A’ ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.

BBB—Good credit quality. ‘BBB’ ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

BB—Speculative. ‘BB’ ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment-grade.

B—Highly Speculative. ‘B’ ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.

DBRS SHORT-TERM DEBT AND COMMERCIAL PAPER RATING DEFINITIONS

As is the case with all Dominion Bond Rating Service (“DBRS”) rating scales, commercial paper ratings are meant to give an indication of the risk that the borrower will not fulfill its obligations in a timely manner.

R-1 (high) Short-term debt rated “R-1 (high)” is of the highest credit quality, and indicates an entity which possesses unquestioned ability to repay current liabilities as they fall due. Entities rated in this category normally maintain strong liquidity positions, conservative debt levels and profitability which is both stable and above average. Companies achieving an “R-1 (high)” rating are normally leaders in structurally sound industry segments with proven track records, sustainable positive future results and no substantial qualifying negative factors. Given the extremely tough definition which DBRS has established for an “R-1 (high),” few entities are strong enough to achieve this rating.

R-1 (middle) Short-term debt rated “R-1 (middle)” is of superior credit quality and, in most cases, ratings in this category differ from “R-1 (high)” credits to only a small degree. Given the extremely tough definition which DBRS has for the “R-1 (high)” category (which few companies are able to achieve), entities rated “R-1 (middle)” are also considered strong credits

A-7

which typically exemplify above average strength in key areas of consideration for debt protection.

R-1 (low) Short-term debt rated “R-1 (low)” is of satisfactory credit quality. The overall strength and outlook for key liquidity, debt and profitability ratios is not normally as favorable as with higher rating categories, but these considerations are still respectable. Any qualifying negative factors which exist are considered manageable, and the entity is normally of sufficient size to have some influence in its industry.

R-2 (high), R-2 (middle), R-2 (low) Short-term debt rated “R-2” is of adequate credit quality and within the three subset grades, debt protection ranges from having reasonable ability for timely repayment to a level which is considered only just adequate. The liquidity and debt ratios of entities in the “R-2” classification are not as strong as those in the “R-1” category, and the past and future trend may suggest some risk of maintaining the strength of key ratios in these areas. Alternative sources of liquidity support are considered satisfactory; however, even the strongest liquidity support will not improve the commercial paper rating of the issuer. The size of the entity may restrict its flexibility, and its relative position in the industry is not typically as strong as an “R-1 credit”. Profitability trends, past and future, may be less favorable, earnings not as stable, and there are often negative qualifying factors present which could also make the entity more vulnerable to adverse changes in financial and economic conditions.

DBRS LONG-TERM DEBT RATING DEFINITIONS

As is the case with all DBRS rating scales, long-term debt ratings are meant to give an indication of the risk that the borrower will not fulfill its full obligations in a timely manner with respect to both interest and principal commitments.

“AAA” Bonds rated “AAA” are of the highest credit quality, with exceptionally strong protection for the timely repayment of principal and interest. Earnings are considered stable, the structure of the industry in which the entity operates is strong, and the outlook for future profitability is favorable. There are few qualifying factors present which would detract from the performance of the entity, the strength of liquidity and coverage ratios is unquestioned and the entity has established a creditable track record of superior performance. Given the extremely tough definition which DBRS has established for this category, few entities are able to achieve a AAA rating.

“AA” Bonds rated “AA” are of superior credit quality, and protection of interest and principal is considered high. In many cases, they differ from bonds rated AAA only to a small degree. Given the extremely tough definition which DBRS has for the AAA category (which few companies are able to achieve), entities rated AA are also considered to be strong credits which typically

A-8

exemplify above average strength in key areas of consideration and are unlikely to be significantly affected by reasonably foreseeable events.

“A” Bonds rated “A” are of satisfactory credit quality. Protection of interest and principal is still substantial, but the degree of strength is less than with AA rated entities. While a respectable rating, entities in the “A” category are considered to be more susceptible to adverse economic conditions and have greater cyclical tendencies than higher rated companies.

“BBB” Bonds rated “BBB” are of adequate credit quality, with acceptable protection of principal and interest; Issuers in this category are fairly susceptible to adverse changes in financial and economic conditions.

“BB” Bonds rated “BB” are of speculative credit quality, with uncertain protection of principal and interest, particularly during periods of economic recession.

“B” Bonds rated “B” are of highly speculative credit quality, with a reasonably high level of uncertainty as to the ability of the issuers to pay principal and interest on a continuing basis in the future, especially in periods of economic recession or industry adversity.

“CCC, CC, C” Bonds rated “CCC, CC, or C” are of very highly speculative credit quality, with principal and interest being in danger of default. In practice, there is little difference between the categories.

“D” For bonds rated “D,” the issuer has either not met a scheduled payment of principal or interest or interest issuer has made it clear that it will miss such a payment in the near future.

“High” or “low” grades are used to indicate the relative standing of a credit within a particular rating category. The lack of one of these designations indicates a rating which is essentially in the middle of the category. Note that “high” and “low” grades are not used for the AAA category.

A.M. BEST SHORT-TERM DEBT RATINGS

An A.M. Best Short-Term Debt Rating (issue credit rating) is an opinion as to the issuer’s ability to meet its obligations having maturities generally less than one year, such as commercial paper.

A-9

AMB-1+—Strongest. Assigned to issues where the issuer has, in A.M. Best’s opinion, the strongest ability to repay short-term debt obligations.

AMB-1—Outstanding. Assigned to issues where the issuer has, in A.M. Best’s opinion, an outstanding ability to repay short-term debt obligations.

AMB-2—Satisfactory. Assigned to issues where the issuer has, in A.M. Best’s opinion, a satisfactory ability to repay short-term debt obligations.

AMB-3—Adequate. Assigned to issues where the issuer has, in A.M. Best’s opinion, an adequate ability to repay short-term debt obligations; however, adverse economic conditions will likely lead to a reduced capacity to meet its financial commitments on short-term debt obligations.

A.M. BEST LONG-TERM DEBT RATINGS

An A.M. Best Long-Term Debt Rating (issue credit rating) is an opinion as to the issuer’s ability to meet its financial obligations to security holders when due. These ratings are assigned to debt and preferred stock issues.

aaa—Exceptional. Assigned to issues where the issuer has, in A.M. Best’s opinion, an exceptional ability to meet the terms of the obligation.

aa—Very Strong. Assigned to issues where the issuer has, in A.M. Best’s opinion, a very strong ability to meet the terms of the obligation.

a—Strong. Assigned to issues where the issuer has, in A.M. Best’s opinion, a strong ability to meet the terms of the obligation.

bbb—Adequate. Assigned to issues where the issuer has, in A.M. Best’s opinion, an adequate ability to meet the terms of the obligation; however, is more susceptible to changes in economic or other conditions.

bb —Speculative. Assigned to issues where the issuer has, in A.M. Best’s opinion, speculative credit characteristics, generally due to a moderate margin of principal and interest payment protection and vulnerability to economic changes.

A-10

b—Very Speculative. Assigned to issues where the issuer has, in A.M. Best’s opinion, very speculative credit characteristics, generally due to a modest margin of principal and interest payment protection and extreme vulnerability to economic changes.

ccc,cc, c— Extremely Speculative. Assigned to issues where the issuer has, in A.M. Best’s opinion, extremely speculative credit characteristics, generally due to a minimal margin of principal and interest payment protection and/or limited ability to withstand adverse changes in economic or other conditions.

d—In Default. In default on payment of principal, interest or other terms and conditions. The rating also is utilized when a bankruptcy petition, or similar action, has been filed.

Ratings from “aa” to “ccc” may be enhanced with a “+” (plus) or “-” (minus) to indicate whether credit quality is near the top or bottom of a category. A company’s Long-Term Credit Rating also may be assigned an Under Review modifier(“u”) that generally is event-driven (positive, negative or developing) and indicates that the company’s A.M. Best Rating opinion is under review and may be subject to near-term change. Ratings prefixed with an (“i”) denote indicative ratings. Ratings may also be assigned a Public Data modifier (“pd”) which indicates that a company does not subscribe to A.M. Best’s interactive rating process.

A.M. BEST RATING OUTLOOK

A.M. Best Credit Ratings (aaa to c) are assigned a Rating Outlook that indicates the potential direction of a company’s rating for an intermediate period, generally defined as the next 12 to 36 months. Public Data Ratings are not assigned an Outlook. Ratings Outlooks are as follows:

Positive—Indicates a company’s financial/market trends are favorable, relative to its current rating level, and if continued, the company has a good possibility of having its rating upgraded.

Negative—Indicates a company is experiencing unfavorable financial/market trends, relative to its current rating level, and if continued, the company has a good possibility of having its rating downgraded.

Stable—Indicates a company is experiencing stable financial/market trends and that there is a low likelihood that its rating will change in the near term.

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APPENDIX B

RIDGEWORTH CAPITAL MANAGEMENT, INC. PROXY DISCLOSURE TO THE
RIDGEWORTH FUNDS SHAREHOLDERS

Dear Shareholders:

Securities and Exchange Commission rules under the Investment Advisers Act of 1940 and the Investment Company Act of 1940 address an investment adviser’s fiduciary obligation to its clients when the adviser has authority to vote their proxies. Under our current contractual agreement, RidgeWorth Capital Management, Inc. (“RidgeWorth”), is authorized to vote proxies on behalf of the RidgeWorth Funds.

The rules require an investment company to adopt policies and procedures reasonably designed to ensure that the fund: 1) votes proxies in the best interests of clients; 2) discloses information about those policies and procedures and how to obtain copies; 3) discloses how clients may obtain information about proxy votes cast; and 4) maintains appropriate records relating to actual proxy voting.

The RidgeWorth Funds’ board has delegated voting authority to RidgeWorth and accordingly has adopted RidgeWorth’s proxy voting policies.

RidgeWorth’s existing Proxy Voting Committee (“Committee”) is structured to seek to ensure compliance with all of the requirements. After an extensive review, the Committee determined that the use of a professional proxy voting administration servicing agency would be the most efficient and effective course of action to accommodate certain portions of the regulations. The Committee conducted comprehensive due diligence of the most established and capable proxy voting servicing agencies in the industry and chose to hire Glass Lewis & Co. as RidgeWorth’s agent to assist us with meeting the administrative, clerical, functional, and recordkeeping aspects of our fiduciary obligations.

Several of the determining factors in choosing Glass Lewis & Co. as an agent to provide such services included its excellent research tools and advanced, state of the art technical capabilities and large scale system support required to accommodate an advisor of our size.

B-1

The Committee recognizes that each proxy vote must be evaluated on its own merits. Factors such as a company’s organizational structure, executive and operational management, structure of the board of directors, corporate culture and governance process, and the impact of economic, environmental and social implications remain key elements in all voting decisions. Management believes that it is in the best interest of shareholders to abstain from voting shares of securities held in the RidgeWorth International Equity 130/30 Fund in countries that participate in share blocking.

To address material conflicts of interest, as defined by SEC regulations, involving RidgeWorth relationships, the Committee will engage the services of an independent fiduciary voting service to vote on any proxies for securities for which the Committee determines a material conflict of interest exists so as to provide shareholders with the most beneficial and objective proxy voting possible.

Material conflicts might occur, for example, (1) in the case of securities of a company where a director or officer may serve as an independent director on RidgeWorth’s, SunTrust Banks, Inc. (“SunTrust”) or a related SunTrust affiliate’s board of directors or (2) where an issuer has substantial banking or other financial relationships with RidgeWorth and/or SunTrust, or a SunTrust affiliate.

If the Committee engages an independent fiduciary voting service to perform the voting analysis, Glass Lewis & Co., as our agent for administrative, clerical and recordkeeping proxy services, will then vote the shares according to the directions of the independent fiduciary. RidgeWorth will have no power to participate in, alter or change the decision or final vote for any proxy matters entrusted to the properly appointed independent fiduciary.

Please be assured that although RidgeWorth has engaged Glass Lewis & Co. to assist with physical proxy voting matters, we retain the primary obligation of proxy voting and will review all issues and actively monitor all information prior to determining each vote placed on behalf of shareholders. RidgeWorth will continue to utilize available resources in order to make well-informed, qualified proxy vote decisions.

Further information, such as copies of RidgeWorth’s Proxy Policies and Procedures and voting records of the RidgeWorth Funds, may be obtained without charge by contacting the RidgeWorth Funds by telephone at 1-800-874-4770, Option 5 or by visiting www.ridgeworthfunds.com. The policies and procedures are also available in the RidgeWorth Funds’ Statement of Additional Information. Actual voting records will also be filed and available on the SEC’s website.

Again, please know that, as with all matters relating to the RidgeWorth Funds, we at RidgeWorth take our fiduciary proxy voting obligations very seriously, and will continue to do our utmost to protect the interests of each and every shareholder.

Regards,

RidgeWorth Capital Management, Inc.

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RidgeWorth Capital Management, Inc. Proxy Policy

RidgeWorth Capital Management, Inc. (“RidgeWorth”) has a Proxy Committee (“Committee”) that is responsible for establishing policies and a procedure designed to ensure the firm ethically and effectively discharges its fiduciary obligation to vote all applicable proxies on behalf of all discretionary client accounts and funds. Annually (or more often as needed), the Committee will review, reaffirm and/or amend guidelines, strategies and proxy policies for all domestic and international client accounts, funds and product lines.

After an extensive review of established service providers including size, experience and technical capabilities, RidgeWorth contracted with the Institutional Shareholder Services (“ISS”) of Risk Metrics Group as its agent to provide certain administrative, clerical, functional recordkeeping and support services related to the firm’s proxy voting processes/procedures, which include, but are not limited to:

	1.		The collection and coordination of proxy material from each custodian for each RidgeWorth client’s account, including RidgeWorth’s managed fund clients.

	2.		The facilitation of the mechanical act of proxy voting, reconciliation, and disclosure for each RidgeWorth client’s accounts, including RidgeWorth’s fund clients, in accordance with RidgeWorth’s proxy policies and the Committee’s direction.

	3.		Required record keeping and voting record retention of all RidgeWorth proxy voting on behalf RidgeWorth’s clients, including RidgeWorth’s fund clients.

As reflected in RidgeWorth’s proxy policies, the Committee will affirmatively vote proxies for proposals that it interprets are deemed to be in the best economic interest of its clients as shareholders and beneficiaries to those actions.

The Committee will retain the ability to consider client specific preferences and/or develop and apply criteria unique to its client base and product lines, where appropriate. As needed, this information will be communicated to ISS as RidgeWorth’s agent to ensure that the relative shares proxies will be voted accordingly. The Committee has reviewed ISS’ capabilities as agent for the administerial services above and is confident in its abilities to effectively provide these services. The Committee will monitor such capability on an ongoing basis.

An Independent, Objective Approach to Proxy Issues

In the absence of express contractual provisions to the contrary, the Committee will vote proxies for all RidgeWorth discretionary investment management clients and RidgeWorth managed funds, such as the RidgeWorth Funds.

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As indicated above, the Committee utilizes the services of ISS, an independent third party agent, to assist with facilitating the administrative, clerical, functional and recordkeeping proxy duties and to assist in managing certain aspects of our proxy obligations. Accordingly, RidgeWorth maintains its own proxy policies for U.S. domestic and global proxy voting issues, as well as guidelines applicable to “Taft Hartley” plans and relationships. ERISA accounts will be voted in accordance with the U.S. domestic proxy policy as ERISA specific guidelines and requirements are incorporated into this policy.

RidgeWorth provides and maintains the following standard proxy voting policies:

	•		RidgeWorth U.S. Domestic Proxy Policy (applied to both ERISA and Non-ERISA related accounts)

	•		RidgeWorth Taft Hartley Proxy Policy

	•		RidgeWorth Global/International Proxy Policy

These policies are available as described below. Both brief and extended summaries are available for the RidgeWorth Taft Hartley Proxy Policy and the RidgeWorth Global/International Proxy Policy.

The Committee’s process includes a review and evaluation of relevant, information related to the issuer’s proxy, applying the firm’s proxy voting policy in a prudent and appropriate manner ensuring votes are cast in the best interest of our clients.

Under the RidgeWorth Global/International Proxy Policy the Committee generally votes in a manner similar to that recommended by ISS for an account’s international holdings including, to the extent permitted by law, ERISA accounts international holdings.* In this regard the Committee has reviewed and will monitor ISS’ capabilities and conflict policies with respect to international securities proxy vote recommendations.

Exceptions to Policy

The RidgeWorth Proxy Policies and guidelines as outlined herein generally will not be applied where RidgeWorth has further delegated discretionary investment management and the authority to vote shares to a properly appointed subadvisor, such as may be the case in some managed separate accounts, wrap programs, and funds.

In those situations proxy votes cast by the subadvisor will be governed by the subadvisor’s proxy voting policies and procedures.

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Conflicts of Interest

Due to its diversified client base, numerous product lines, independent board of directors, and affiliation with SunTrust Banks, Inc., and its subsidiaries, the Committee may determine a potential conflict exists in connection with a proxy vote based on the SEC guidelines. In such instances, the Committee will review the potential conflict to determine if it is material.

Examples of material conflicts of interest which may arise could include those where the shares to be voted involve:

	1.		Common stock of SunTrust Banks, Inc., The Coca-Cola Company, Inc., and/or other public corporate issuers with which either RidgeWorth or SunTrust Banks, Inc. or its affiliates, may have a similar on-going non-investment management associated relationship.

	2.		An issuer with a director, officer or employee who presently serves as an independent director on the board of RidgeWorth or SunTrust Banks, Inc. or any of its affiliates.

	3.		An issuer having substantial and numerous banking, investment or other financial relationships with RidgeWorth, SunTrust Banks, Inc. or its affiliates.

	4.		A director or senior officer of RidgeWorth or SunTrust Banks, Inc. serving on the board of a publicly held company.

	5.		A direct common stock ownership position of five percent (5%) or greater held individually by RidgeWorth or in conjunction with SunTrust Banks, Inc. and/or its affiliates

Although RidgeWorth utilizes a pre-determined proxy voting policy, occasions may arise in which a conflict of interest could be deemed to be material. In this case, the Committee will determine the most fair and reasonable procedure to be followed in order to properly address all conflict concerns. The Committee may employ one or more of the options listed below:

	1.		Retain an independent fiduciary to vote the shares.

	2.		Send the proxy material to the client (in the case of mutual funds, the funds’ shareholders) so he or she may vote the proxies.

Although RidgeWorth does its best to alleviate or diffuse known conflicts, there is no guarantee that all situations have been or will be mitigated through proxy policy incorporation.

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Securities Lending Program

RidgeWorth also manages assets for several clients (including mutual funds, such as the RidgeWorth Funds) who engage in “security lending” programs. A typical security lending program such as the “RidgeWorth Securities Lending Program” is where the clients or funds lend equities and/or fixed-income assets from their accounts or portfolio to various approved-broker-dealers against cash collateral (102% of loan value) and earn incremental income by: 1.) extracting intrinsic value from each loan; and, 2.) generating investment income through reinvestment activities involving cash collateral. Consistent with SEC guidelines, the Committee will generally refrain from voting securities loaned out under this type of lending arrangement when the costs and lost revenue to the client or fund combined with the administrative effects of recalling the securities outweigh the benefit of voting the proxy. In addition, the Committee must make a good-faith determination that the individual proxy ballot decisions would not materially impact the portfolio manager’s desire to retain the position in the portfolio. and that the entire position of loaned shares’ votes would not significantly affect the overall voting outcome. The Committee will rely on the portfolio manager’s input to make such decisions. Furthermore, absent compelling economic and/or security related research or news, the Committee will generally not consider recalling shares unless total beneficial ownership under management is greater than 4.55%

Under the current RIdgeWorth Securities Lending Program, RidgeWorth is required to notify the Custodian to recall securities on loan 10 business days prior to the record date or as soon as reasonably possible thereafter if RidgeWorth wishes to vote proxy on the securities so as to ensure that they are in Custodian’s possession by the voting deadline.

Additional Information

RidgeWorth clients:

Extended summaries of RidgeWorth Capital Management, Inc.’s U.S. Domestic Proxy Policy (includes ERISA related accounts,) Taft Hartley Proxy Policy, and Global/International Proxy Policy and voting records are available to clients upon request. (Complete copies are quite voluminous but are also available.) For this information, or to obtain information about specific voting issues, please contact RidgeWorth Capital Management, Inc, Attn: Proxy Voting Committee Administrator, 50 Hurt Plaza, 14^th Floor, Atlanta, Georgia, 30303, by telephone at 404.827.6177, or via e-mail at: PMP.operations@ridgeworth.com.

RidgeWorth Funds and RidgeWorth Variable Trust shareholders:

Shareholders of the RidgeWorth Funds or the RidgeWorth Variable Trust may access this information by contacting the RidgeWorth by telephone at 1-888-784-3863 or by visiting www.ridgeworthfunds.com.

* With the exception of the RidgeWorth International Equity 130/30 Fund. Management believes that it is in the best interest of shareholders to abstain from voting shares in countries that participate in share blocking.

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2008 RidgeWorth Capital Management, Inc. International Proxy Voting Guidelines

Following is a concise summary of general policies for voting global proxies. In addition, RidgeWorth has country- and market-specific policies, which are not captured below.

Financial Results/Director and Auditor Reports

Vote FOR approval of financial statements and director and auditor reports, unless:

	•		there are concerns about the accounts presented or audit procedures used; or

	•		the company is not responsive to shareholder questions about specific items that should be publicly disclosed.

Appointment of Auditors and Auditor Compensation

Vote FOR the reelection of auditors and proposals authorizing the board to fix auditor fees, unless:

	•		there are serious concerns about the accounts presented or the audit procedures used;

	•		the auditors are being changed without explanation; or

	•		non audit-related fees are substantial or are routinely in excess of standard annual audit fees.

Vote AGAINST the appointment of external auditors if they have previously served the company in an executive capacity or can otherwise be considered affiliated with the company.

Appointment of Internal Statutory Auditors

Vote FOR the appointment or reelection of statutory auditors, unless:

	•		there are serious concerns about the statutory reports presented or the audit procedures used;

	•		questions exist concerning any of the statutory auditors being appointed; or

	•		the auditors have previously served the company in an executive capacity or can otherwise be considered affiliated with the company.

Allocation of Income

Vote FOR approval of the allocation of income, unless:

	•		the dividend payout ratio has been consistently below 30 percent without adequate explanation; or

	•		the payout is excessive given the company’s financial position.

Stock (Scrip) Dividend Alternative

Vote FOR most stock (scrip) dividend proposals.

Vote AGAINST proposals that do not allow for a cash option unless management demonstrates that the

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cash option is harmful to shareholder value.

Amendments to Articles of Association

Vote amendments to the articles of association on a CASE-BY-CASE basis.

Change in Company Fiscal Term

Vote FOR resolutions to change a company’s fiscal term unless a company’s motivation for the change is to postpone its AGM.

Lower Disclosure Threshold for Stock Ownership

Vote AGAINST resolutions to lower the stock ownership disclosure threshold below five percent unless specific reasons exist to implement a lower threshold.

Amend Quorum Requirements

Vote proposals to amend quorum requirements for shareholder meetings on a CASE-BY-CASE basis.

Transact Other Business

Vote AGAINST other business when it appears as a voting item.

Director Elections

Vote FOR management nominees in the election of directors, unless:

	•		Adequate disclosure has not been provided in a timely manner;

	•		There are clear concerns over questionable finances or restatements;

	•		There have been questionable transactions with conflicts of interest;

	•		There are any records of abuses against minority shareholder interests; and

	•		The board fails to meet minimum corporate governance standards.

Vote FOR individual nominees unless there are specific concerns about the individual, such as criminal wrongdoing or breach of fiduciary responsibilities.

Vote AGAINST shareholder nominees unless they demonstrate a clear ability to contribute positively to board deliberations.

Vote AGAINST individual directors if they cannot provide an explanation for repeated absences at board meetings (in countries where this information is disclosed).

Vote AGAINST labor representatives if the sit on either the audit or compensation committee, as they are not required to be on those committees.

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Director Compensation

Vote FOR proposals to award cash fees to non-executive directors unless the amounts are excessive relative to other companies in the country or industry.

Vote non-executive director compensation proposals that include both cash and share-based components on a CASE-BY-CASE basis.

Vote proposals that bundle compensation for both non-executive and executive directors into a single resolution on a CASE-BY-CASE basis.

Vote AGAINST proposals to introduce retirement benefits for non-executive directors.

Discharge of Board and Management

Vote FOR discharge of the board and management, unless:

	•		there are serious questions about actions of the board or management for the year in question; or

	•		legal action is being taken against the board by other shareholders.

Vote AGAINST proposals to remove approval of discharge of board and management from the agenda.

Director, Officer, and Auditor Indemnification and Liability Provisions

Vote proposals seeking indemnification and liability protection for directors and officers on a CASE-BY-CASE basis.

Vote AGAINST proposals to indemnify auditors.

Board Structure

Vote FOR proposals to fix board size.

Vote AGAINST mandatory retirement ages for directors.

Vote AGAINST proposals to alter board structure or size in the context of a fight for control of the company or the board.

Share Issuance Requests

General Issuances:

Vote FOR issuance requests with preemptive rights to a maximum of 100 percent over currently issued capital.

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Vote FOR issuance requests without preemptive rights to a maximum of 20 percent of currently issued capital.

Specific Issuances:

Vote on a CASE-BY-CASE basis on all requests, with or without preemptive rights.

Increases in Authorized Capital

Vote FOR nonspecific proposals to increase authorized capital up to 100 percent over the current authorization unless the increase would leave the company with less than 30 percent of its new authorization outstanding.

Vote FOR specific proposals to increase authorized capital to any amount, unless:

	•		the specific purpose of the increase (such as a share-based acquisition or merger) does not meet RidgeWorth’s guidelines for the purpose being proposed; or

	•		the increase would leave the company with less than 30 percent of its new authorization outstanding after adjusting for all proposed issuances.

Vote AGAINST proposals to adopt unlimited capital authorizations.

Reduction of Capital

Vote FOR proposals to reduce capital for routine accounting purposes unless the terms are unfavorable to shareholders.

Vote proposals to reduce capital in connection with corporate restructuring on a CASE-BYCASE basis.

Capital Structures

Vote FOR resolutions that seek to maintain or convert to a one share, one vote capital structure.

Vote AGAINST requests for the creation or continuation of dual class capital structures or the creation of new or additional supervoting shares.

Preferred Stock

Vote FOR the creation of a new class of preferred stock or for issuances of preferred stock up to 50 percent of issued capital unless the terms of the preferred stock would adversely affect the rights of existing shareholders.

Vote FOR the creation/issuance of convertible preferred stock as long as the maximum number of common shares that could be issued upon conversion meets RidgeWorth’s guidelines on equity issuance requests.

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Vote AGAINST the creation of a new class of preference shares that would carry superior voting rights to the common shares.

Vote AGAINST the creation of blank check preferred stock unless the board clearly states that the authorization will not be used to thwart a takeover bid.

Vote proposals to increase blank check preferred authorizations on a CASE-BY-CASE basis.

Debt Issuance Requests

Vote nonconvertible debt issuance requests on a CASE-BY-CASE basis, with or without preemptive rights.

Vote FOR the creation/issuance of convertible debt instruments as long as the maximum number of common shares that could be issued upon conversion meets RidgeWorth’s guidelines on equity issuance requests.

Vote FOR proposals to restructure existing debt arrangements unless the terms of the restructuring would adversely affect the rights of shareholders.

Pledging of Assets for Debt

Vote proposals to approve the pledging of assets for debt on a CASE-BY-CASE basis.

Increase in Borrowing Powers

Vote proposals to approve increases in a company’s borrowing powers on a CASE-BY-CASE basis.

Share Repurchase Plans

Vote FOR share repurchase plans, unless:

	•		clear evidence of past abuse of the authority is available; or

	•		the plan contains no safeguards against selective buybacks.

Reissuance of Shares Repurchased

Vote FOR requests to reissue any repurchased shares unless there is clear evidence of abuse of this authority in the past.

Capitalization of Reserves for Bonus Issues/Increase In Par Value

Vote FOR requests to capitalize reserves for bonus issues of shares or to increase par value.

Reorganizations/Restructurings

Vote reorganizations and restructurings on a CASE-BY-CASE basis.

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Mergers and Acquisitions

Vote mergers and acquisitions on a CASE-BY-CASE basis.

For every M&A analysis, ISS reviews publicly available information as of the date of the report and evaluates the merits and drawbacks of the proposed transaction, balancing various and sometimes countervailing factors including:

	•		Valuation — Is the value to be received by the target shareholders (or paid by the acquirer) reasonable? While the fairness opinion may provide an initial starting point for assessing valuation reasonableness, ISS places emphasis on the offer premium, market reaction, and strategic rationale.

	•		Market reaction — How has the market responded to the proposed deal? A negative market reaction will cause ISS to scrutinize a deal more closely.

	•		Strategic rationale — Does the deal make sense strategically? From where is the value derived? Cost and revenue synergies should not be overly aggressive or optimistic, but reasonably achievable. Management should also have a favorable track record of successful integration of historical acquisitions.

	•		Conflicts of interest — Are insiders benefiting from the transaction disproportionately and inappropriately as compared to non-insider shareholders? ISS will consider whether any special interests may have influenced these directors and officers to support or recommend the merger.

	•		Governance — Will the combined company have a better or worse governance profile than the current governance profiles of the respective parties to the transaction? If the governance profile is to change for the worse, the burden is on the company to prove that other issues (such as valuation) outweigh any deterioration in governance.

Vote AGAINST if the companies do not provide sufficient information upon request to make an informed voting decision.

Mandatory Takeover Bid Waivers

Vote proposals to waive mandatory takeover bid requirements on a CASE-BY-CASE basis.

Reincorporation Proposals

Vote reincorporation proposals on a CASE-BY-CASE basis.

Expansion of Business Activities

Vote FOR resolutions to expand business activities unless the new business takes the company into risky areas.

Related-Party Transactions

Vote related-party transactions on a CASE-BY-CASE basis.

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Compensation Plans

Vote compensation plans on a CASE-BY-CASE basis.

Antitakeover Mechanisms

Vote AGAINST all antitakeover proposals unless they are structured in such a way that they give shareholders the ultimate decision on any proposal or offer.

Shareholder Proposals

Vote all shareholder proposals on a CASE-BY-CASE basis.

Vote FOR proposals that would improve the company’s corporate governance or business profile at a reasonable cost.

Vote AGAINST proposals that limit the company’s business activities or capabilities or result in significant costs being incurred with little or no benefit.

B-13

Proxy Voting Policies Updated 2/6/2009

RIDGEWORTH Capital Management, Inc.


1. 0.	Operational Items	Adjourn Meeting	To provide management with the authority to adjourn an annual or special meeting, except in cases where it does not benefit shareholders	F

1.1.	Operational Items	Amend Quorum Requirements	To reduce quorum requirements for shareholder meetings below a majority of the shares outstanding	A

1.2.	Operational Items	Amend Minor Bylaws	To make housekeeping changes (updates or corrections) to bylaw or charter, except in cases where there is an adverse effect on shareholder value	F

1.3.	Operational Items	Change Company Name	To change the corporate name	F

1.4.	Operational Items	Date, Time, or Location of Annual Meeting	Management proposals to change the date/time/location of the annual meeting	F

1.5.	Operational Items	Date, Time, or Location of Annual Meeting	Shareholder proposals To change the date/time/location of the annual meeting	A

1.6.	Operational Items	Auditors	To ratify auditors (except as described below)	F

1.6.a	Operational Items	Auditors	To ratify auditors if significant material restatement, the auditor’s contract contains certain provisions that require the company to use alternative dispute resolution or any other situation is identified that may impair the auditor’s ability to perform an independent audit (this can include: audit fees too low or too high, the auditor performs other work than the audit such as tax-shelter work, etc.).	A

1.7.	Operational Items	Auditors	Shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services	A

1.8.	Operational Items	Auditors	Shareholder proposals to require audit firm rotation	A

1.9.	Operational Items	Transact Other Business	To approve other business when it appears as voting item	A

2. 0.	Board of Directors	Voting on Director Nominees in Uncontested Elections	Director nominees are evaluated taking into consideration independence, performance, experience, and corporate governance.	C

2.1.	Board of Directors	Age Limits	To limit the tenure of outside directors either through term limits or mandatory retirement ages.	A

2.2.	Board of Directors	Board Size	To fix the board size or designate a range for the board size	F

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2.3.	Board of Directors	Board Size	To give management the ability to alter the size of the board outside of a specified range without shareholder approval	A

2.4.	Board of Directors	Classification/Declassification of the Board	Management and shareholder proposals to classify the board	C

2.5.	Board of Directors	Classification/Declassification of the Board	Management and shareholder proposals to repeal classified boards and to elect all directors annually.	F

2.6.	Board of Directors	Cumulative Voting	To eliminate cumulative voting.	F

2.7.	Board of Directors	Cumulative Voting	To restore or permit cumulative voting.	A

2.8.	Board of Directors	Director and Officer Indemnification and Liability Protection	Proposals on director and officer indemnification and liability protection not particularly described below.	C

2.9.	Board of Directors	Director and Officer Indemnification and Liability Protection	To eliminate entirely directors’ and officers’ liability for monetary damages for violating the duty of care.	A

2.10.	Board of Directors	Director and Officer Indemnification and Liability Protection	To expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness	A

2.11.	Board of Directors	Director and Officer Indemnification and Liability Protection	To expand coverage in cases when a director’s or officer’s legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and (2) only if the director’s legal expenses would be covered.	F

2.12.	Board of Directors	Establish/Amend Nominee Qualifications	To establish or amend director qualifications	A

2.13.	Board of Directors	Establish/Amend Nominee Qualifications	Shareholder proposals requiring two candidates per board seat	A

2.14.	Board of Directors	Filling Vacancies/Removal of Directors	To provide that directors may be removed only for cause.	A

2.15.	Board of Directors	Filling Vacancies/Removal of Directors	To restore shareholder ability to remove directors with or without cause.	F

2.16.	Board of Directors	Filling Vacancies/Removal of Directors	To provide that only continuing directors may elect replacements to fill board vacancies.	A

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2.17.	Board of Directors	Filling Vacancies/Removal of Directors	To permit shareholders to elect directors to fill board vacancies.	F

2.18.	Board of Directors	Independent Chairman (Separate Chairman/CEO)	To recommend that the positions of chairman and CEO be combined.	C

2.19.	Board of Directors	Independent Chairman (Separate Chairman/CEO	To recommend that the positions of chairman and CEO be separate and distinct positions held by 2 different individuals.	A

2.20.	Board of Directors	Majority of Independent Directors/Establishment of Committees	Shareholder proposals to require that a majority or more of directors be independent	F

2.21.	Board of Directors	Majority of Independent Directors/Establishment of Committees	Shareholder proposals asking that board audit, compensation, and/or nominating committees be composed exclusively of independent directors	F

2.22.	Board of Directors	Open Access	Shareholder proposals asking for open access	A

2.23.	Board of Directors	Stock Ownership Requirements	Shareholder proposals that mandate a minimum amount of stock that directors must own in order to qualify as a director or to remain on the board	A

2.24.	Board of Directors	Stock Ownership Requirements	Shareholder proposals asking that the company adopt a holding or retention period for its executives (for holding stock after the vesting or exercise of equity awards)	A

2.25.	Board of Directors	Term Limits	Shareholder or management proposals to limit the tenure of outside directors	A

2.30.	Board of Directors	Majority Voting Standard	Shareholder proposals requesting a majority voting standard on election of directors	F

3. 0.	Proxy Contests	Voting for Director Nominees in Contested Elections	Votes in a contested election of directors	C

3.1.a	Proxy Contests	Reimbursing Proxy Solicitation Expenses	To reimburse proxy solicitation expenses if dissident wins	F

3.1.b	Proxy Contests	Reimbursing Proxy Solicitation Expenses	To reimburse proxy solicitation expenses (unless described above)	A

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3.2.	Proxy Contests	Confidential Voting	Shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election	A

3.3.	Proxy Contests	Confidential Voting	Management proposals to adopt confidential voting.	A

4. 0.	Antitakeover Defenses and Voting Related Issues	Advance Notice Requirements for Shareholder Proposals/Nominations	Advance notice proposals	F

4.1.	Antitakeover Defenses and Voting Related Issues	Amend Bylaws without Shareholder Consent	Proposals giving the board exclusive authority to amend the bylaws	F

4.2.	Antitakeover Defenses and Voting Related Issues	Amend Bylaws without Shareholder Consent	Proposals giving the board the ability to amend the bylaws in addition to shareholders	F

4.3.	Antitakeover Defenses and Voting Related Issues	Poison Pills	Shareholder proposals that ask a company to submit its poison pill for shareholder ratification	C

4.4.	Antitakeover Defenses and Voting Related Issues	Poison Pills	Shareholder proposals asking that any future pill be put to a shareholder vote	F

4.5.a	Antitakeover Defenses and Voting Related Issues	Poison Pills	Management proposals to ratify a poison pill	C

4.6.	Antitakeover Defenses and Voting Related Issues	Shareholder Ability to Act by Written Consent	To restrict or prohibit shareholder ability to take action by written consent	A

4.7.	Antitakeover Defenses and Voting Related Issues	Shareholder Ability to Act by Written Consent	To allow or make easier shareholder action by written consent	F

4.8.	Antitakeover Defenses and Voting Related Issues	Shareholder Ability to Call Special Meetings	To restrict or prohibit shareholder ability to call special meetings.	A

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4.9.	Antitakeover Defenses and Voting Related Issues	Shareholder Ability to Call Special Meetings	To remove restrictions on the right of shareholders to act independently of management.	F

4.10.	Antitakeover Defenses and Voting Related Issues	Supermajority Vote Requirements	To require a supermajority shareholder vote pertaining to issues other than election of directors.	A

4.11.	Antitakeover Defenses and Voting Related Issues	Supermajority Vote Requirements	To lower supermajority vote requirements pertaining to issues other than election of directors.	F

5. 0.	Mergers and Corporate Restructurings	Appraisal Rights	To restore, or provide shareholders with, rights of appraisal.	A

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5.1.	Mergers and Corporate Restructurings	Asset Purchases	On asset purchase proposals	C

5.2.	Mergers and Corporate Restructurings	Asset Sales	Asset sales	C

5.3.	Mergers and Corporate Restructurings	Bundled Proposals	Bundled or “conditioned” proxy proposals	C

5.4.	Mergers and Corporate Restructurings	Conversion of Securities	Proposals regarding conversion of securities, absent penalties or likely bankruptcy.	C

5.5.	Mergers and Corporate Restructurings	Conversion of Securities	Proposals regarding conversion of securities, if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved.	F

5.6.	Mergers and Corporate Restructurings	Corporate Reorganization	Proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan, absent likely bankruptcy.	C

5.7.	Mergers and Corporate Restructurings	Corporate Reorganization	Proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan where bankruptcy is likely if the transaction is not approved	F

5.8.	Mergers and Corporate Restructurings	Formation of Holding Company	To form a holding company	C

5.9.	Mergers and Corporate Restructurings	Going Private Transactions (LBOs and Minority Squeeze outs)	To make the company private rather than public	C

5.10.	Mergers and Corporate Restructurings	Joint Ventures	To form joint ventures	C

5.11.	Mergers and Corporate Restructurings	Liquidations	To liquidate when bankruptcy is not likely	C

5.12.	Mergers and Corporate Restructurings	Liquidations	To liquidate when bankruptcy is likely	F

5.13.	Mergers and Corporate Restructurings	Mergers and Acquisitions/Issuance of Shares to Facilitate Merger or Acquisition	To merge with or acquire another company	C

5.14.	Mergers and Corporate Restructurings	Private Placements/Warrants/Convertible Debentures	To issue a private placement security when bankruptcy is not likely	C

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5.15.	Mergers and Corporate Restructurings	Private Placements/Warrants/Convertible Debentures	To issue a private placement security when bankruptcy is likely	F

5.16.	Mergers and Corporate Restructurings	Spin-offs	To spin off a unit or line of business	C

5.17.	Mergers and Corporate Restructurings	Value Maximization Proposals	To maximize shareholder value by hiring a financial advisor to explore strategic alternatives, selling the company or liquidating the company and distributing the proceeds to shareholders.	C

6. 0.	State of Incorporation	Control Share Acquisition Provisions	To opt out of control share acquisition statutes	F

6.1.	State of Incorporation	Control Share Acquisition Provisions	To amend the charter to include control share acquisition provisions.	A

6.2.	State of Incorporation	Control Share Acquisition Provisions	To restore voting rights to the control shares.	F

6.3.	State of Incorporation	Control Share Cash out Provisions	To opt out of control share cash out statutes.	F

6.4.	State of Incorporation	Disgorgement Provisions	To opt out of state disgorgement provisions.	F

6.5.	State of Incorporation	Fair Price Provisions	To adopt fair price provisions	C

6.6.	State of Incorporation	Fair Price Provisions	To adopt fair price provisions with shareholder vote requirements greater than a majority of disinterested shares.	A

6.7.	State of Incorporation	Freeze Out	proposals to opt out of state freeze out provisions	F

6.8.	State of Incorporation	Greenmail	To adopt anti greenmail charter of bylaw amendments Or otherwise restrict a company’s ability to make greenmail payments.	F

6.9.	State of Incorporation	Greenmail	To adopt anti greenmail proposals when they are bundled with other charter or bylaw amendments.	F

6.10.	State of Incorporation	Reincorporation Proposals	To change a company’s state of incorporation	C

6.11.	State of Incorporation	Stakeholder Provisions	To consider non-shareholder constituencies or other non-financial effects when evaluating a merger or business combination.	A

6.12.	State of Incorporation	State Anti takeover Statutes	To opt in or out of state takeover statutes (including control share acquisition statutes, control share cash-out statutes, freeze out provisions, fair price provisions, stakeholder laws, poison pill endorsements, severance pay and labor contract provisions, anti greenmail provisions, and disgorgement provisions).	C

B-20


7. 0.	Capital Structure	Adjustments to Par Value of Common Stock	Management proposals to reduce or eliminate the par value of common stock.	F

7.1.	Capital Structure	Common Stock Authorization	To increase the number of shares of common stock authorized for issuance	C

7.2.	Capital Structure	Common Stock Authorization	To increase the number of authorized shares of the class of stock that has superior voting rights.	C

7.3.	Capital Structure	Common Stock Authorization	To approve increases beyond the allowable increase when a company’s shares are in danger of being de-listed or if a company’s ability to continue to operate as a going concern is uncertain	F

7.4.	Capital Structure	Dual-class Stock	Proposals to create a new class of common stock with superior voting rights	A

			To create a new class of nonvoting or sub-voting common stock if:

7.5.	Capital Structure	Dual-class Stock	• It is intended for financing purposes with minimal or no dilution to current shareholders	F

			• It is not designed to preserve the voting power of an insider or significant shareholder

7.6.	Capital Structure	Issue Stock for Use with Rights Plan	To increase authorized common stock for the explicit purpose of implementing a shareholder rights plan (poison pill).	A

7.7.	Capital Structure	Preemptive Rights	Shareholder proposals that seek preemptive rights	C

7.8.	Capital Structure	Preferred Stock	To authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights (“blank check” preferred stock).	A

7.9.	Capital Structure	Preferred Stock	To create “declawed” blank check preferred stock (stock that cannot be used as a takeover defense).	F

7.10.	Capital Structure	Preferred Stock	To authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable	F

7.11.	Capital Structure	Preferred Stock	To increase the number of blank check preferred stock authorized for issuance when no shares have been issued or reserved for a specific purpose.	A

7.12.	Capital Structure	Preferred Stock	To increase the number of blank check preferred shares	A

B-21


7.13.	Capital Structure	Recapitalization	Recapitalizations (reclassifications of securities)	C

7.14.	Capital Structure	Reverse Stock Splits	Management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced	F

7.15.	Capital Structure	Reverse Stock Splits	Management proposals to implement a reverse stock split to avoid delisting.	F

7.16.	Capital Structure	Reverse Stock Splits	To implement a reverse stock splits that do not proportionately reduce the number of shares authorized or considered “going dark” transactions.	C

7.17.	Capital Structure	Share Repurchase Programs	Management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms	F

7.17.a	Capital Structure	Share Repurchase Programs	Management proposals to institute open-market share repurchase plans in which derivatives may be utilized	C

7.18.	Capital Structure	Stock Distributions: Splits and Dividends	Management proposals to increase the common share authorization for a stock split or share dividend, provided that the increase in authorized shares would not result in an excessive number of shares available for issuance	F

7.19.	Capital Structure	Tracking Stock	To authorize the creation of tracking stock	C

8.0.	Executive and Director Compensation	Executive Compensation	Executive compensation plans or plan amendments.	C

8.1.	Executive and Director Compensation	Director Compensation	Plans for director compensation	C

8.5.	Executive and Director Compensation	Employee Stock Purchase Plans	Employee stock purchase plans.	C

8.6.	Executive and Director Compensation	Shareholder Proposals Regarding Executive and Director Pay	Shareholder proposals seeking additional disclosure of executive and director pay information,	A

8.7.	Executive and Director Compensation	Shareholder Proposals Regarding Executive and Director Pay	Shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation.	A

8.8.	Executive and Director Compensation	Shareholder Proposals Regarding Executive and Director Pay	Shareholder proposals requiring director fees be paid in stock only	A

8.9.	Executive and Director Compensation	Shareholder Proposals Regarding Executive and Director Pay	Shareholder proposals to put option re-pricings to a shareholder vote	F

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8.10.	Executive and Director Compensation	Shareholder Proposals Regarding Executive and Director Pay	For all other shareholder proposals regarding executive and director pay	C

8. 25	Executive and Director Compensation	Performance-Based Stock Options	Shareholder proposals advocating the use of performance-based stock options (indexed, premium-priced, and performance-vested options).	C

8.26.	Executive and Director Compensation	Golden Parachutes and Executive Severance Agreements	Shareholder proposals to require golden parachutes or executive severance agreements to be submitted for shareholder ratification	A

8.27.	Executive and Director Compensation	Golden Parachutes and Executive Severance Agreements	Proposals to ratify or cancel golden parachutes.	C

8.28.	Executive and Director Compensation	Pension Plan Income Accounting	Shareholder proposals to exclude pension plan income in the calculation of earnings used in determining executive bonuses/compensation	F

8.29.	Executive and Director Compensation	Supplemental Executive Retirement Plans (SERPs)	Shareholder proposals requesting to put extraordinary benefits contained in SERP agreements to a shareholder vote	A

8.31.	Executive and Director Compensation	Equity Based Compensation Plans	Management proposals for equity plans	C

8.32	Executive and Director Compensation	Transferable Stock Options	Management and shareholder proposals for new on-going Transferable Stock option plans if the total cost of the company’s equity plans is less than the company’s allowable cap.	F

9.0.	Social and Environmental	CONSUMER ISSUES AND PUBLIC SAFETY:	To phase out the use of animals in product testing	A
	Issues	Animal Rights

9.1.	Social and Environmental	CONSUMER ISSUES AND PUBLIC SAFETY:	Report on animal welfare	A
	Issues	Animal Rights

9.2.	Social and Environmental	CONSUMER ISSUES AND PUBLIC SAFETY:	Adopt animal welfare policy	A
	Issues	Animal Rights

9.3.	Social and Environmental	CONSUMER ISSUES AND PUBLIC SAFETY:	To implement price restraints on pharmaceutical products	A
	Issues	Drug Pricing

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9.4.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: Drug Reimportation	Proposals requesting that companies report on the financial and legal impact of their policies regarding prescription drug reimportation or proposals requesting that companies adopt specific policies to encourage or constrain prescription drug reimportation	A

9.5.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: Genetically Modified Foods	To voluntarily label genetically engineered (GE) ingredients in their products or alternatively to provide interim labeling and eventually eliminate GE ingredients due to the costs and feasibility of labeling and/or phasing out the use of GE ingredients.	A

9.6.	Social and Environmental Issues	Genetically Modified Foods	A report on the feasibility of labeling products containing GE ingredients	A

9.7.	Social and Environmental Issues	Genetically Modified Foods	A report on the financial, legal, and environmental impact of continued use of GE ingredients/seeds	A

9.8.	Social and Environmental Issues	Genetically Modified Foods	Report on the health and environmental effects of genetically modified organisms (GMOs)	A

9.9.	Social and Environmental Issues	Genetically Modified Foods	To completely phase out GE ingredients from the company’s products or proposals asking for reports outlining the steps necessary to eliminate GE ingredients from the company’s products. Such resolutions presuppose that there are proven health risks to GE ingredients	A

9.10.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: Handguns	Reports on a company’s policies aimed at curtailing gun violence in the United States	A

9.11.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: HIV/AIDS	Reports outlining the impact of the health pandemic (HIV/AIDS, malaria and tuberculosis) on the company’s Sub-Saharan operations	A

9.12.	Social and Environmental Issues	HIV/AIDS	To establish, implement, and report on a standard of response to the HIV/AIDS, tuberculosis and malaria health pandemic in Africa and other developing countries	A

9.13.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: Predatory Lending	Reports on the company’s procedures for preventing predatory lending, including the establishment of a board committee for oversight,	A

9.14.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: Tobacco	Proposals seeking stronger product warnings	A

B-24


9.15.	Social and Environmental Issues	Tobacco	Proposals asking that the company’s operating facilities be smoke-free	A

9.16.	Social and Environmental Issues	Tobacco	Proposals dealing with product placement in stores or advertising to youth.	A

9.17.	Social and Environmental Issues	Tobacco	Proposals asking the company to cease production of tobacco-related products or cease selling products to tobacco companies.	A

9.18.	Social and Environmental Issues	Tobacco	Proposals to spin-off tobacco-related businesses:	A

9.19.	Social and Environmental Issues	Tobacco	Proposals prohibiting investment in tobacco equities.	A

9.20.	Social and Environmental Issues	CONSUMER ISSUES AND PUBLIC SAFETY: Toxic Chemicals	Proposals requesting that a company discloses its policies related to toxic chemicals, proposals requesting that companies evaluate and disclose the potential financial and legal risks associated with utilizing certain chemicals, or proposals requiring that a company reformulate its products within a certain timeframe.	A

9.21.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Arctic National Wildlife Refuge	Requests for reports outlining potential environmental damage from drilling in the Arctic National Wildlife Refuge (ANWR)	A

9.22.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: CERES Principles	Proposals to adopt the CERES Principles	A

9.23.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Environmental-Economic Risk Report	Proposals requests reports assessing economic risks of environmental pollution or climate change or reports outlining potential environmental damage from operations in protected regions, including wildlife refuges.	A

9.24.	Social and Environmental Issues	Environmental Reports	Proposals for reports disclosing the company’s environmental policies.	A

9.25.	Social and Environmental Issues	Nuclear Safety	Proposals requesting that companies report on risks associated with their nuclear reactor designs and/or the production and interim storage of irradiated fuel rods	A

9.26.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Global Warming	Proposals to make reports on the level of greenhouse gas emissions from the company’s operations and products.	A

9.27.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Recycling	Proposals to adopt a comprehensive recycling strategy	A

9.28.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Renewable Energy	Proposals to invest in renewable energy sources.	A

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9.29.	Social and Environmental Issues	Renewable Energy	Requests for reports on the feasibility of developing renewable energy sources	A

9.30.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Sustainability Report	Proposals to make report on its policies and practices related to social, environmental, and economic sustainability	A

9.31.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Efficiency Report	Report on energy efficiency	A

9.32.	Social and Environmental Issues	ENVIRONMENT AND ENERGY: Kyoto Protocol	Proposals requesting that companies outline their preparations to comply with standards established by Kyoto Protocol signatory markets	A

9.33.	Social and Environmental Issues	LAND USE	Proposals that request the disclosure of detailed information on a company’s policies related to land use or development	A

9.34.	Social and Environmental Issues	CAFOs	Proposals requesting that companies report to shareholders on the risks and liabilities associated with concentrated animal feeding operations (CAFOs)	A

9.35.	Social and Environmental Issues	GENERAL CORPORATE ISSUES: Charitable/ Political Contributions	Proposals to affirm political nonpartisanship in the workplace	A

9.36.	Social and Environmental Issues	Charitable/ Political Contributions	Proposals to report or publish in newspapers the company’s political and/or charitable contributions	A

9.37.	Social and Environmental Issues	Charitable/ Political Contributions	Proposals to prohibit the company from making political contributions	A

9.38.	Social and Environmental Issues	Charitable/ Political Contributions	Proposals to restrict the company from making charitable contributions	A

9.39.	Social and Environmental Issues	Charitable/ Political Contributions	Proposals to publish a list of company executives, directors, consultants, legal counsels, lobbyists, or investment bankers that have prior government service and whether such service had a bearing on the business of the company	A

9.40.	Social and Environmental Issues	GENERAL CORPORATE ISSUES: Link Executive Compensation to Social Performance	Proposals to review ways of linking executive compensation to social factors	A

9.41.	Social and Environmental Issues	LABOR STANDARDS AND HUMAN RIGHTS: China Principles	Proposals to implement the China Principles.	A

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9.42.	Social and Environmental Issues	LABOR STANDARDS AND HUMAN RIGHTS: Country- specific human rights reports	Proposals to make reports detailing the company’s operations in a particular country and steps to protect human rights	A

9.43.	Social and Environmental Issues	LABOR STANDARDS AND HUMAN RIGHTS: International Codes of Conduct/Vendor Standards	Proposals to implement certain human rights standards at company facilities or those of its suppliers and to commit to outside, independent monitoring	A

9.44.	Social and Environmental Issues	LABOR STANDARDS AND HUMAN RIGHTS: MacBride Principles	Proposals to endorse or increase activity on the MacBride Principles.	A

9.45.	Social and Environmental Issues	MILITARY BUSINESS: Foreign Military Sales/Offsets	Proposals to make reports on foreign military sales or offsets.	A

9.46.	Social and Environmental Issues	MILITARY BUSINESS: Landmines and Cluster Bombs	Proposals asking the company to renounce future involvement in antipersonnel landmine production	A

9.47.	Social and Environmental Issues	MILITARY BUSINESS: Nuclear Weapons	Proposals asking the company to cease production of nuclear weapons components and delivery systems, including disengaging from current and proposed contracts	A

9.48.	Social and Environmental Issues	MILITARY BUSINESS: Operations in Nations Sponsoring Terrorism (Iran)	Proposals asking the company to appoint a board committee review and report outlining the company’s financial and reputational risks from its operations in Iran,	A

9.49.	Social and Environmental Issues	MILITARY BUSINESS: Spaced-Based Weaponization	Proposals asking the company to make reports on a company’s involvement in spaced-based weaponization	A

9.50.	Social and Environmental Issues	WORKPLACE DIVERSITY: Board Diversity	Requests for reports on the company’s efforts to diversify the board	A

9.51.	Social and Environmental Issues	WORKPLACE DIVERSITY: Board Diversity	Proposals asking the company to increase the representation of women and minorities on the board	C

9.52.	Social and Environmental Issues	WORKPLACE DIVERSITY: Equal Employment Opportunity (EEO)	Proposals to increase regulatory oversight of EEO programs	A

9.53.	Social and Environmental Issues	WORKPLACE DIVERSITY: Glass Ceiling	To increase regulatory oversight of EEO programs and Glass Ceiling proposals	A

9.54.	Social and Environmental Issues	WORKPLACE DIVERSITY: Sexual Orientation	Exclude reference to sexual orientation from the EEO statement	A

B-27


9.55.	Social and Environmental Issues	WORKPLACE DIVERSITY: Sexual Orientation	Proposals to amend a company’s EEO statement in order to prohibit discrimination based on sexual orientation	A

9.56.	Social and Environmental Issues	Sexual Orientation	Proposals to extend company benefits to or eliminate benefits from domestic partners	A

9.57	Social and Environmental Issues	Outsourcing	Proposals asking for companies to report on the risks associated with outsourcing or offshoring.	A

9.58	Social and Environmental Issues	Community Impact Assessment	Proposals asking for reports outling the potential community impact of company operations in specific regions.	A

9.59	Social and Environmental Issues	Internet Privacy and Censorship	Proposals requesting the disclosure and implementation of Internet privacy and censorship policies and procedures.	F

10. 0	Mutual Fund Proxies	Election of Directors	Director nominees who are not described below	F

10.1.	Mutual Fund Proxies	Election of Directors	Ignore a shareholder proposal that is approved by a majority of the votes cast for two consecutive years	W

10.2.	Mutual Fund Proxies	Convert Closed-end Fund to Open-end Fund	Conversion Proposals	C

10.3.	Mutual Fund Proxies	Proxy Contests	Proxy Contests	C

10.4.	Mutual Fund Proxies	Investment Advisory Agreements	Investment Advisory Agreements	F

10.5.	Mutual Fund Proxies	Approve New Classes or Series of Shares	The establishment of new classes or series of shares.	F

10.6.	Mutual Fund Proxies	Change Fundamental Restriction to Nonfundamental Restriction	Proposals to change a fund’s fundamental restriction to a non fundamental restriction	C

10.7.	Mutual Fund Proxies	Change Fundamental Investment Objective to Nonfundamental	Proposals to change a fund’s fundamental investment objective to a non fundamental investment objective	C

10.8.	Mutual Fund Proxies	Name Change Proposals	Name change proposals.	F

10.9.	Mutual Fund Proxies	Change in Fund’s Sub classification	To change a fund’s sub-classification	F

B-28


10.10.	Mutual Fund Proxies	Disposition of Assets/Termination/Liquidation	To dispose of assets, liquidate or terminate the fund	F

10.11.	Mutual Fund Proxies	Changes to the Charter Document	To make changes to the charter document	C

10.12.	Mutual Fund Proxies	Changes to the Charter Document	Removal shareholder approval requirement to reorganize or terminate the trust or any of its series	F

10.13.	Mutual Fund Proxies	Changes to the Charter Document	Removal of shareholder approval requirement for amendments to the new declaration of trust	F

10.14.	Mutual Fund Proxies	Changes to the Charter Document	Removal of shareholder approval requirement to amend the fund’s management contract, allowing the contract to be modified by the investment manager and the trust management, as permitted by the 1940 Act	F

10.15.	Mutual Fund Proxies	Changes to the Charter Document	Allow the trustees to impose other fees in addition to sales charges on investment in a fund, such as deferred sales charges and redemption fees that may be imposed upon redemption of a fund’s shares	F

10.16.	Mutual Fund Proxies	Changes to the Charter Document	Removal of shareholder approval requirement to engage in and terminate Sub-advisory arrangements	F

10.17.	Mutual Fund Proxies	Changes to the Charter Document	Removal of shareholder approval requirement to change the domicile of the fund	F

10.18.	Mutual Fund Proxies	Change the Fund’s Domicile	Fund’s Reincorporation	C

10.19.	Mutual Fund Proxies	Authorize the Board to Hire and Terminate Subadvisors Without Shareholder Approval	Proposals authorizing the board to hire/terminate sub-advisors without shareholder approval.	F

10.20.	Mutual Fund Proxies	Distribution Agreements	Distribution agreements	F

10.21.	Mutual Fund Proxies	Master-Feeder Structure	Establishment of a master-feeder structure.	F

10.22.	Mutual Fund Proxies	Mergers	Mergers and Acquisitions	C

10.23.	Mutual Fund Proxies	Shareholder Proposals to Establish Director Ownership Requirement	To mandate a specific minimum amount of stock that directors must own in order to qualify as a director or to remain on the board	A

B-29


10.24.a	Mutual Fund Proxies	Shareholder Proposals to Reimburse Proxy Solicitation Expenses	To reimburse proxy solicitation expenses if dissident wins	F

10.24.b	Mutual Fund Proxies	Shareholder Proposals to Reimburse Proxy Solicitation Expenses	To reimburse proxy solicitation expenses (except as described above)	A

10.25.	Mutual Fund Proxies	Shareholder Proposals to Terminate Investment Advisor	To terminate the investment advisor	C

RFSAI-FIR-0209

B-30

PART C: OTHER INFORMATION
POST-EFFECTIVE AMENDMENT NO. 78

ITEM 23. Exhibits:

(a)(1) Agreement and Declaration STI Calssic Funds (now, RidgeWorth Funds) (the “Registrant”) of Trust as originally filed with the Registrant’s Registration Statement on Form N-1A, filed on February 12, 1992, is incorporated herein by reference to Exhibit 1 of Post-Effective Amendment No. 15 to the Registrant’s Registration Statement filed with the Securities and Exchange Commission (the “SEC”) via EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.

(a)(2) Amendment dated March 31, 2008 to the Agreement and Declaration of Trust is incorporated herein by reference to Exhibit (a)(2) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(b) (1) Amended and Restated By-Laws, as approved by the Board of Trustees on August 15, 2000, as approved by the Board of Trustees on August 15, 2000, are incorporated herein by reference to Exhibit (b) of Post-Effective Amendment No. 37 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000935069-00-000528 on September 21, 2000.

(b)(2) Amendment dated March 31, 2008 to Amended and Restated By-laws, is incorporated herein by reference to Exhibit (b)(2) of Post-Effective Amendment No. 75 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004343 on May 30, 2008.

(d)(1) Amended and Restated Investment Advisory Agreement between the Registrant and Trusco Capital Management, Inc. (now, RidgeWorth Capital Management, Inc.) dated November 14, 2006, is incorporated herein by reference to Exhibit (d)(1) of Post-Effective Amendment No. 67 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-07-004809 on May 30, 2007.

(d)(2) Amended Schedule A to the Amended and Restated Investment Advisory Agreement dated November 14, 2006, between the Registrant and RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.), is filed herewith.

(d)(3) Amendment dated April 1, 2008, to the Amended and Restated Investment Advisory Agreement dated November 14, 2006, between the Registrant and RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) is incorporated herein by reference to Exhibit (d)(3) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(4) Expense Limitation Agreement dated January 9, 2008 between the Registrant, Trusco Capital Management, Inc. (now RidgeWorth Capital Management, Inc.) and Alpha Equity Management LLC, is incorporated herein by reference to Exhibit (d)(5) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(d)(5) Expense Limitation Agreement dated August 1, 2008 among the Registrant, RidgeWorth Capital Management, Inc., Alpha Equity Management LLC and StableRiver Capital Management, LLC, is filed herewith.

(d)(6) Investment Subadvisory Agreement dated December 19, 2008, between RidgeWorth Capital Management, Inc. and Zevenbergen Capital Investments, LLC, is filed herewith.

(d)(7) Investment Subadvisory Agreement dated December 13, 2007, between Trusco Capital Management, Inc. (now RidgeWorth Capital Management, Inc.) and Alpha Equity Management LLC is incorporated herein by reference

C-1

to Exhibit (d)(7) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(8) Amendment dated April 1, 2008 to the Investment Subadvisory Agreement dated December 13, 2007, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and Alpha Equity Management LLC is incorporated herein by reference to Exhibit (d)(8) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(9) Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and Ceredex Value Advisors LLC is incorporated herein by reference to Exhibit (d)(10) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(10) Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and Certium Asset Management LLC is incorporated herein by reference to Exhibit (d)(11) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(11) Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and IronOak Advisors LLC is incorporated herein by reference to Exhibit (d)(12) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(12) Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and Seix Investment Advisors LLC, is incorporated herein by reference to Exhibit (d)(15) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(d)(13)Amended Schedule A to the Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and Seix Investment Advisors LLC, is incorporated herein by reference to Exhibit (d)(16) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(d)(14) Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and Silvant Capital Management LLC is incorporated herein by reference to Exhibit (d)(14) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(d)(15) Investment Subadvisory Agreement dated March 31, 2008, between RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) and StableRiver Capital Management LLC is incorporated herein by reference to Exhibit (d)(15) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(e)(1) Distribution Agreement dated August 20, 2008 between the Registrant and RidgeWorth Distributors LLC is is incorporated herein by reference to Exhibit (e)(1) of Post-Effective Amendment No. 77 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-010270 on December 15, 2008.

(f) Not applicable.

(g)(1) Custodian Agreement between the Registrant and Trust Company Bank (now, SunTrust Bank) dated February 1, 1994, as originally filed with the Registrant’s Post-Effective Amendment No. 13, filed on September 28, 1995, is incorporated herein by reference to Exhibit 8(b) of Post-Effective Amendment No. 15 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000912057-96-015938 on July 31, 1996.

C-2

(g)(2) Securities Lending Amendment dated October 1, 2002 to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank is incorporated herein by reference to Exhibit (g)(2) of Post-Effective Amendment No. 47 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000935069-03-001371 on September 30, 2003.

(g)(3) Amendment dated July 1, 2003 to the Custodian Agreement between the Registrant and SunTrust Bank, dated as of February 1, 1994, as amended October 1, 2002, and Schedule A of such Agreement amended as of August 16, 1995 and January 1, 1996, is incorporated herein by reference to Exhibit (g)(3) of Post-Effective Amendment No. 48 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000935069-03-001651 on December 10, 2003.

(g)(4) Amendment dated November 25, 2003 to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank, is incorporated herein by reference to Exhibit (g)(6) of Post-Effective Amendment No. 50 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-04-005770 on July 30, 2004.

(g)(5) Amendment dated August 19, 2005 to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank, is incorporated herein by reference to Exhibit (g)(5) of Post-Effective Amendment No. 60 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-05-009415 on November 18, 2005.

(g)(6) Amendment dated March 31, 2008 to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank, is incorporated herein by reference to Exhibit (g)(6) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(g)(7) Form of Amendment to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank, is filed herewith.

(g)(8) Amended Schedule A dated March 31, 2008 to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank is incorporated herein by reference to Exhibit (g)(7) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(g)(9) Custodian Agreement dated January 29, 2003 among the Registrant, STI Classic Variable Trust (now, RidgeWorth Variable Trust) and Brown Brothers Harriman & Co., with respect to the Institutional Cash Management Fund, International Equity Fund, International Equity Index Fund, International Equity 130/30 Fund, Real Estate 130/30 Fund, U.S. Equity 130/30 Fund, Seix Global Strategy Fund and Strategic Income Fund, is incorporated herein by reference to Exhibit (g)(7) of Post-Effective Amendment No. 13 to the Registration Statement of the STI Classic Variable Trust (now, RidgeWorth Variable Trust) (SEC No. 033-91476) filed with the SEC via EDGAR Accession No. 0000935069-03-00052 on April 25, 2003.

(g)(10) Amendment dated March 31, 2008 to the Custodian Agreement dated January 29, 2003 among the Registrant, RidgeWorth Variable Trust (formerly, STI Classic Variable Trust) and Brown Brothers Harriman & Co., is incorporated herein by reference to Exhibit (g)(9) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(h)(1) Master Services Agreement between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) dated July 16, 2004, is incorporated herein by reference to Exhibit (h)(1) of Post-Effective Amendment No. 51 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-04-007101 on September 28, 2004.

C-3

(h)(2) Revised Schedule A to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to Exhibit(h)(2) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(h)(3) Amendment dated as of August 11, 2004 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to Exhibit (h)(2) of Post-Effective Amendment No. 51 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-04-007101 on September 28, 2004.

(h)(4) Amendment dated November 5, 2004 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services, Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated by reference to Exhibit (h)(3) of Post-Effective Amendment No. 53 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-04-009220 on December 30, 2004.

(h)(5) Amendment dated November 18, 2005 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to exhibit (h)(4) of Post Effective Amendment No. 63 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-06-002527 on March 24, 2006.

(h)(6) Amendment dated July 1, 2007 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services, Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to Exhibit (p)(4) of Post-Effective Amendment No. 72 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-07-009632 on December 14, 2007.

(h)(7) Amendment dated May 15, 2007 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services, Ohio, Inc., (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to Exhibit (h)(7) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(h)(8) Amendment dated August 21, 2007 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services, Ohio, Inc., (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to Exhibit (h)(8) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

(h)(9) Form of Amendment dated April 1, 2008 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services, Ohio, Inc., (formerly, BISYS Fund Services, Ohio, Inc.), is filed herewith.

(h)(10) Amendment dated May 20, 2008 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.), is incorporated herein by reference to Exhibit (h)(10) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(h)(11) Form of Amendment to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.), is filed herewith.
(h)(12) Form of Shareholder Service Plan and Agreement relating to Corporate Trust Shares, is filed herewith.

(h)(13) Shareholder Servicing Plan related to R Shares, is is incorporated herein by reference to Exhibit (h)(12) of Post-Effective Amendment No. 77 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-010270 on December 15, 2008.

(h)(14) Amended and Restated Securities Lending Management Agreement dated January 16, 2009, between the Registrant and Credit Suisse First Boston, is filed herewith.

C-4

(h)(15) Compliance Services Agreement dated October 1, 2004, among the Registrant, STI Classic Variable Trust (now, RidgeWorth Variable Trust) and Citi Fund Services, Inc. (formerly, BISYS Fund Services, Ohio, Inc.) is incorporated herein by reference to Exhibit (h)(8) of Post-Effective Amendment No. 64 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-06-004792 on May 30, 2006.

(h)(16) Form of Amendment dated May 1, 2008 to the Compliance Services Agreement dated October 1, 2004, among the Registrant, RidgeWorth Variable Trust (formerly, STI Classic Variable Trust) and Citi Fund Services, Inc. (formerly, BISYS Fund Services, Ohio, Inc.), is filed herewith.

(i) Opinion and Consent of Counsel is filed herewith.

(j) Consent of independent registered public accounting firm, is filed herewith.

(k) Not applicable.

(l) Not applicable.

(m)(1) Distribution and Service Plan relating to C Shares and R Shares (with respect to certain Funds) dated May 17, 2005, as amended November 20, 2008 is is incorporated herein by reference to Exhibit (m)(1) of Post-Effective Amendment No. 77 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-010270 on December 15, 2008.

(m)(2) Distribution and Service Plan relating to B Shares dated February 11, 2003 is incorporated herein by reference to Exhibit (m)(3) of Post-Effective Amendment No. 47 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000935069-03-001371 on September 30, 2003.

(m)(3) Distribution and Service Plan relating to A Shares dated May 17, 2005 is incorporated herein by reference to Exhibit (m)(6) of Post-Effective Amendment No. 58 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-05-0048058 on May 27, 2005.

(m)(4) Amended Schedule A dated August 1, 2008 to the Distribution and Service Plan relating to A Shares dated May 17, 2005, is incorporated herein by reference to Exhibit (m)(4) of Post-Effective Amendment No. 76 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-005746 on July 29, 2008.

(n)(1) Rule 18f-3 Multiple Class Plan is is incorporated herein by reference to Exhibit (n)(1) of Post-Effective Amendment No. 77 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-010270 on December 15, 2008.

(o) Not applicable.

(p)(1) Registrant’s Code of Ethics is incorporated herein by reference to Exhibit (p)(1) of Post-Effective Amendment No. 75 to the Registrant’s Registration statement filed with the SEC via EDGAR Accession No. 0000950152-08-004343 on May 30, 2008.

(p)(2) Code of Ethics for RidgeWorth Capital Management, Inc., Ceredex Value Advisors LLC, Certium Asset Management LLC, IronOak Advisors LLC, Seix Investment Advisors LLC, Silvant Capital Management LLC and StableRiver Capital Management LLC is filed herewith.

(p)(3) Code of Ethics for Zevenbergen Capital Investments LLC, dated October 1, 2007 is incorporated herein by reference to Exhibit (p)(3) of Post-Effective Amendment No. 74 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-004114 on May 16, 2008.

C-5

(p)(4) Code of Ethics for Alpha Equity Management LLC is is incorporated herein by reference to Exhibit (p)(4) of Post-Effective Amendment No. 77 to the Registrant’s Registration Statement filed with the SEC via EDGAR Accession No. 0000950152-08-010270 on December 15, 2008.

ITEM 24. Persons Controlled by or under Common Control with Registrant:

See the prospectus and Statement of Additional Information regarding the Registrant’s control relationships.

ITEM 25. Indemnification:

Article VIII of the Agreement and Declaration of Trust filed as Exhibit (a) to the Registrant’s Registration Statement is incorporated herein by reference. Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to trustees, directors, officers and controlling persons of the Registrant by the Registrant pursuant to the Declaration of Trust or otherwise, the Registrant is aware that in the opinion of the U.S. Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and, therefore, is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by trustees, directors, officers or controlling persons of the Registrant in connection with the successful defense of any act, suit or proceeding) is asserted by such trustees, directors, officers or controlling persons in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issues.

ITEM 26. Business and Other Connections of the Investment Adviser:

RidgeWorth Capital Management, Inc. (formerly, Trusco Capital Management, Inc.) (the “Adviser”) serves as the investment adviser for each series of the Registrant. The Adviser’s principal address is 50 Hurt Plaza, Suite 1400, Atlanta, Georgia 30303.

Other business, profession, vocation, or employment of a substantial nature in which each director or principal officer of the adviser is or has been, at any time during the last two fiscal years, engaged for his own account or in the capacity of director, officer, employee, partner or trustee are as follows:


NAME	NAME OF OTHER COMPANY	CONNECTION WITH OTHER COMPANY
David Eidson	SunTrust Banks, Inc.	Senior Vice President
Chairman & Chief Executive Officer	SunTrust Bank	Executive Vice
	SunTrust Capital Markets	President Board Member

Ashi Parikh	CeredexValue Advisors LLC	CEO
	(“Ceredex”)
President & CIO	IronOak Advisors LLC	CEO
	(“IronOak”)
	Silvant Capital Management LLC	CEO
	(“Silvant”)
	StableRiver Capital Management	Chairman
	LLC (“StableRiver”)
	Certium Asset Management LLC	CEO
	(“Certium”)

C-6


NAME	NAME OF OTHER COMPANY	CONNECTION WITH OTHER COMPANY
Christina Seix	SunTrust Bank	Officer
Executive Vice President	SunTrust International Banking	Officer
	Company
	Seix Investment Advisors LLC	Chairman
	(“Seix”)

Andrew S. Atkins	—	—
Vice President

Steve R. Bendrick	—	—
Vice President

Sabrina Bowens	—	—
Vice President

Charles H. Boyt	—	—
Vice President

John C. Brennan	—	—
Vice President

Sheraun Y. Britton-Paris	—	—
Vice President

Matthew B. Carney	—	—
Director


NAME	NAME OF OTHER COMPANY	CONNECTION WITH OTHER COMPANY
David M. Craig	—	—
Director

Dara B. Day	—	—
Associate

Douglas J. Farmer	—	—
Vice President

Alan M. Gayle	—	—
Managing Director

Bradford Anthony Gifford	—	—
Vice President

Diana Hanlin	—	—

C-7


NAME	NAME OF OTHER COMPANY	CONNECTION WITH OTHER COMPANY
Director

James B. Hester	—	—
Associate

Deborah A. Hopkins	—	—
Vice President

Zhigang Jin	—	—
Associate

Jay Karpinsky	—	—
Vice President

Mary S. Kelly	—	—
Vice President

William J. Laplante, Jr.	—	—
Vice President

Matthew D. Lota	—	—
Vice President

Steve Loncar Vice President	SunTrust Bank	Officer

Tina Y. Long	—	—
Vice President

C-8


		CONNECTION WITH
NAME	NAME OF OTHER COMPANY	OTHER COMPANY

Daniella Moiseyev- Cunniffe	—	—
Vice President

Laura B. Newberg	—	—
Vice President

Patrick A. Paparelli	SunTrust Banks, Inc.	Officer
Managing Director/	SunTrust Bank	Officer
Secretary
	Silvant	CCO
	Certium	CCO
	StableRiver	Officer
	Seix	Officer
	Ceredex	Officer
	IronOak	Officer

Gregory L. Phillips	—	—
Director

Sean D. Porrello	—	—
Director

David W. Reidy	—	—
Vice President

Dina E. Romeo	—	—
Vice President

Josie C. Rosson	SunTrust Bank	Officer
Managing Director	Ceredex	CCO
	IronOak	CCO
	Certium	Officer
	StableRiver	CCO
	Silvant	Officer

Sowmdeb Sen	—	—
Vice President

Julia R. Short	—	—
Managing Director

Paul Slakter	—	—
Director

C-9


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Jeffrey P. St. Amand	—	—
Director

John H. Stebbins	SunTrust Banks, Inc.	Officer
Managing Director	SunTrust Bank	Officer
	Ceredex	CFO
	IronOak	CFO
	Silvant	CFO
	Certium	CFO
	StableRiver	CFO
	Seix	Officer

Kimberly Jean Strickland	—	—
Vice President

James Stueve	—	—
Managing Director

Jessica Lacey Thompson Vice President	Certium StableRiver Ceredex IronOak Silvant	Officer Officer Officer Officer Officer

Matthew M. Tollison	—	—
Vice President

William A. Turner Director	Certium StableRiver Seix Ceredex IronOak Silvant	Officer Officer Officer Officer Officer Officer

Joseph Ward	—	—
Vice President

Angela V. Watterson	—	—
Vice President

Elizabeth Wilson	SunTrust Bank	Officer
Managing Director

Kevin D. Wright	—	—
Vice President

C-10

Ceredex Value Advisors LLC (“Ceredex”) serves as the investment subadviser for the Registrant’s Large Cap Value Equity Fund, Mid-Cap Value Equity Fund and the Small Cap Value Equity Fund. The principal address of Ceredex is 300 South Orange Avenue,
Suite 1600, Orlando, Florida 32801.


		CONNECTION WITH
NAME	NAME OF OTHER COMPANY	OTHER COMPANY
Brett Barner	RidgeWorth Capital Management, Inc.	Officer
Managing Director

Charlie Carter	Certium	Officer
Vice President	Seix	Officer
	Silvant	Officer
	IronOak	Officer
	StableRiver	Officer

Rohit Dewan	RidgeWorth Capital Management, Inc.	Officer
Vice President

Jennifer Graff	RidgeWorth Capital Management, Inc.	Officer
Vice President

Nicole Guidry	RidgeWorth Capital Management, Inc.	Associate
Vice President

Hein Hanekom	RidgeWorth Capital Management, Inc.	Associate
Associate

Ashi Parikh	RidgeWorth Capital Management, Inc.	President & CIO
CEO	IronOak	CEO
	Silvant	CEO
	Certium	CEO
	StableRiver	Chairman

Mills Riddick	RidgeWorth Capital Management, Inc.	Officer
President/CIO

Josie Rosson	RidgeWorth Capital Management, Inc.	Managing Director
CCO	SunTrust Bank	Officer
	IronOak	CCO
	Certium	Officer
	StableRiver	CCO
	Silvant	Officer

Cody Smith	RidgeWorth Capital Management, Inc.	Officer
Vice President

C-11


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
John Stebbins	RidgeWorth Capital Management, Inc.	Managing Director
CFO	SunTrust Banks, Inc.	Officer
	SunTrust Bank	Officer
	IronOak	CFO
	Silvant	CFO
	Certium	CFO
	StableRiver	CFO
	Seix	Officer

Don Wordell	RidgeWorth Capital Management, Inc.	Officer
Managing Director

IronOak Advisors LLC (“IronOak”) serves as the investment subadviser for the Registrant’s Large Cap Core Equity Fund and the Mid-Cap Core Equity Fund. The principal address of IronOak is 919 East Main St., Richmond, Virginia 23219


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Charles Arrington	RidgeWorth Capital Management, Inc.	Officer
Director

Frank Ashby	RidgeWorth Capital Management, Inc.	Officer
Vice President

Frances Aylor	RidgeWorth Capital Management, Inc.	Officer
Director

Matthew Laing	RidgeWorth Capital Management, Inc.	Officer
Vice President

Jim Mallory	RidgeWorth Capital Management, Inc.	Officer
Vice President

Jeffrey Markunas	Ceredex	Officer
President/CIO	Silvant	Officer
	Certium	Officer

Thomas O’Neil	RidgeWorth Capital Management, Inc.	Officer
Vice President

Ashi Parikh	RidgeWorth Capital Management, Inc.	President & CIO
CEO	Ceredex	CEO
	Silvant	CEO
	Certium	CEO
	StableRiver	Chairman

C-12


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Josie Rosson	RidgeWorth Capital Management, Inc.	Managing Director
CCO	SunTrust Bank	Officer
	Ceredex	CCO
	Certium	Officer
	StableRiver	CCO
	Silvant	Officer

James Savage	RidgeWorth Capital Management, Inc.	Officer
Director

John Stebbins	RidgeWorth Capital Management, Inc.	Managing Director
CFO	SunTrust Bank, Inc.	Officer
	SunTrust Bank	Officer
	Ceredex	CFO
	Silvant	CFO
	Certium	CFO
	StableRiver	CFO
	Seix	Officer

Silvant Capital Management LLC (“Silvant”) serves as the investment subadviser for the Registrant’s Large Cap Growth Stock Fund, Select Large Cap Growth Stock Fund and Small Cap Growth Stock Fund. The principal address of Silvant is 50 Hurt Plaza, Atlanta, Georgia 30303.


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Brandi Allen	RidgeWorth Capital Management, Inc.	Officer
Director

Christin Armacost	RidgeWorth Capital Management, Inc.	Officer
Director

Michael A. Bain	—	—
Vice President

Sandeep Bhatia	RidgeWorth Capital Management, Inc.	Officer
Director

Brad Erwin	RidgeWorth Capital Management, Inc.	Officer
Director

Jim Foster	RidgeWorth Capital Management, Inc.	Officer
Managing Director

Christopher Guinther	RidgeWorth Capital Management, Inc.	Officer
President/CIO

Randy Loving	RidgeWorth Capital Management, Inc.	Officer
Director

C-13


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Patrick Paparelli	RidgeWorth Capital Management, Inc.	Managing Director
CCO	SunTrust Banks, Inc.	Officer
	SunTrust Bank	Officer
	Certium	CCO
	StableRiver	Officer
	Seix	Officer
	IronOak	Officer

Ashi Parikh	RidgeWorth Capital Management, Inc.	President & CIO
CEO	Ceredex	CEO
	Iron Oak	CEO
	Certium	CEO
	StableRiver	Chairman

James M. Phebus Jr.	SunTrust Bank	Director
Officer

Armond R. Reese	SunTrust Bank	Vice President
Officer

Joe Ransom	RidgeWorth Capital Management, Inc.	Officer
Managing Director

Kristin Ribic	RidgeWorth Capital Management, Inc.	Officer
Director

Michael Sansoterra Managing Director	Certium Seix	Officer Officer
	StableRiver	Officer
	Ceredex	Officer
	IronOak	Officer

Marc Schneidau	RidgeWorth Capital Management, Inc.	Officer
Managing Director

John Stebbins	RidgeWorth Capital Management, Inc.	Managing Director
CFO	SunTrust Banks, Inc.	Officer
	SunTrust Bank	Officer
	Ceredex	CFO
	IronOak	CFO
	Certium	CFO
	Seix	Officer
	StableRiver	CFO

C-14

Certium Asset Management LLC (“Certium”) serves as the investment subadviser for the Registrant’s International Equity Fund, International Equity Index Fund, and the Large Cap Quantitative Equity Fund. The principal address of Certium is 50 Hurt Plaza, Suite 1400, Atlanta, GA 30326.


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Chad Deakins	RidgeWorth Capital Management, Inc.	Officer
President/CEO

Charles East	RidgeWorth Capital Management, Inc.	Officer
Vice President

Risei Goto	RidgeWorth Capital Management, Inc.	Officer
Vice President

Patrick Papparelli	RidgeWorth Capital Management, Inc.	Managing Director
CCO	SunTrust Banks, Inc.	Officer
	SunTrust Bank
	Ceredex
	IronOak
	StableRiver
	Seix
	Silvant

Ashi Parikh	RidgeWorth Capital Management, Inc.	President and CIO
CEO	Ceredex
	IronOak
	Silvant
	StableRiver

Greg Peters	RidgeWorth Capital Management, Inc.	Officer
Vice President

John Stebbins	RidgeWorth Capital Management, Inc.	Managing Director
CFO	SunTrust Banks, Inc.	Officer
	SunTrust Bank
	Ceredex
	IronOak
	Silvant
	StableRiver
	Seix

C-15

Seix Investment Advisors LLC (“Seix”) serves as the investment subadviser for the Registrant’s High Income Fund, Intermediate Bond Fund, Investment Grade Bond Fund, Limited Duration Fund, Limited-Term Federal Mortgage Securities Bond Fund, Seix Floating Rate High Income Fund, Seix High Yield Fund, Strategic Income Fund, Total Return Bond Fund, and U.S. Government Securities Fund. The principal address of Seix is 10 Mountainview Road, Suite C-200, Upper Saddle River, NJ 07458.


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Jeannell Anthony	RidgeWorth Capital Management, Inc.	Associate
Associate

John E. Cashwell, Jr.	—	—
Managing Director

Carlos Catoya	—	—
Vice President

Stacy Culver	—	—
Vice President

William Davis	—	—
Vice President

Christopher DeGaetano	—	—
Vice President

Deirdre Dillon	—	—
CCO

Rebecca Ehrhart	—	—
Vice President

James Fitzpatrick	—	—
Managing Director

Vincent Flanagan	—	—
Vice President

Elena Fyodorova	—	—
Vice President

Michelle Gallo	—	—
Vice President

Leo Goldstein	—	—
Vice President

George Goudelias	—	—
Managing Director

Paul Guevera	RidgeWorth Capital Management, Inc.	Associate
Associate

C-16


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
James Keegan	Seix Structured Products LLC	Manager
CIO

Nathaniel King	—	—
Vice President

Michael Kirkpatrick	—	—
Managing Director

Raymond Kramer	—	—
Vice President

Scott Kupchinsky	—	—
Vice President

Gerard Leen	—	—
Vice President

Charles Leonard	—	—
Managing Director

Carla Leslie	—	—
Managing Director

Biron Lim	—	—
Managing Director

Michael McEachern	—	—
President

Claudia J. McPherson	—	—
Vice President

Sharon Moran	—	—
Vice President

Brian Nold	—	—
Managing Director

Cynthia Panebianco	—	—
Vice President

Brian Reid	—	—
Vice President

Michael Reiger	—	—
Managing Director

C-17


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Christina Seix Chairman	SunTrust Bank SunTrust International Banking Company	Officer Officer

Robert Sherman
CEO

Robin Shulman	—	—
Managing Director

Atul Sibal	—	—
Vice President

Eric Storch	—	—
Managing Director

Perry Troisi	—	—
Managing Director

Ania Wacht	—	—
Vice President

George Way	—	—
CFO

Adrien Webb	—	—
Managing Director

Ellen Welsh	—	—
Managing Director

Thomas Winters	—	—
Managing Director

Jonathan Yozzo	—	—
Vice President

Samuel Zona	—	—
Managing Director

C-18

StableRiver Capital Management LLC (“StableRiver”) serves as the investment subadviser for the Registrant’s Georgia Tax-Exempt Bond Fund, High Grade Municipal Bond Fund, Investment Grade Tax-Exempt Bond Fund, Maryland Municipal Bond Fund, North Carolina Tax-Exempt Bond Fund, Short-Term Bond Fund, Short-Term U.S. Treasury Securities Fund, U.S. Government Securities Ultra-Short Bond Fund, Ultra-Short Bond Fund, Virginia Intermediate Municipal Bond Fund, Institutional Cash Management Money Market Fund, Institutional Municipal Cash Reserve Money Market Fund, Institutional U.S. Government Securities Money Market Fund, Institutional U.S. Treasury Securities Money Market Fund, Prime Quality Money Market Fund, Tax-Exempt Money Market Fund, U.S. Government Securities Money Market Fund, U.S. Treasury Securities Money Market Fund and the Virginia Tax-Free Money Market Fund. The principal address of StableRiver is 50 Hurt Plaza, Suite 1400, Atlanta, GA 30326.


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Matthew Boden	—	—
Director

George Calvert	—	—
Director

Christopher Carter	—	—
Director

Kimberly Cook	RidgeWorth Capital Management, Inc.	Associate
Associate

Robert Corner	—	—
Managing Director

Scott Craig	—	—
Vice President

Colleen Doremus	—	—
Director

Christopher Giglio	—	—
Director

Matt Edelstein	—	—
Vice President

Gregory Hallman	—	—
Vice President

Michael Honshurak	—	—
Director

Mark Kallis	—	—
Director

Hollis D. Linginfelter	—	—
Vice President

Kimberly Maichle	—	—
Director

C-19


		CONNECTION WITH OTHER
NAME	NAME OF OTHER COMPANY	COMPANY
Doug Mitchell	—	—
Vice President

Rick Nelson	—	—
CEO/CIO

Paul Robertson, III President	SunTrust Banks, Inc. SunTrust Bank	Officer Officer

Josie Rosson CCO	SunTrust Bank Ceredex Certium IronOak Silvant	Officer CCO Officer CCO Officer

Ron Schwartz
Managing Director

Michael Sebesta
Managing Director

Dusty Self
Director

Mark Smith	RidgeWorth Capital Management, Inc.	Associate
Associate

Dean Speer
Director

John Stebbins	RidgeWorth Capital Management, Inc.	Managing Director
CFO	SunTrust Banks, Inc.	Officer
	SunTrust Bank
	Ceredex
	IronOak
	Silvant
	StableRiver
	Seix

Chad Stephens	—	—
Managing Director

Sonny Surkin	—	—
Director

J.P. Yarusinski	—	—
Director

Scott Yuschak	RidgeWorth Capital Management, Inc.	Officer
Vice President

Justin Wu	—	—
Vice President

C-20

Zevenbergen Capital Investments LLC (“ZCI”) serves as the investment subadviser for the Registrant’s Aggressive Growth Stock and Emerging Growth Stock Funds. The principal address of ZCI is 601 Union Street, Seattle, Washington 98101.

Other business, profession, vocation, or employment of a substantial nature in which each director or principal officer of the subadviser is or has been, at any time during the last two fiscal years, engaged for his own account or in the capacity of director, officer, employee, partner or trustee are as follows:


		Connection with Other
Name	Name of Other Company	Company
Brooke de Boutray Managing Director, Portfolio Manager	Rivendell Capital Inc. Seattle University	Vice President and Director Member, Department of Finance Advisory Board

Lisa Foley Managing Director, Investment Officer	Rivendell Capital Inc.	Secretary

Leslie Tubbs Managing Director, Portfolio Manager and Chief Compliance Officer	Rivendell Capital Inc.	Treasurer

Nancy A. Zevenbergen President and Chief Investment Officer	Rivendell Capital Inc. Seattle Pacific University Foundation	President and Director Director

Alpha Equity Management LLC (“Alpha Equity”) serves as the investment subadviser for the Registrant’s International Equity 130/30 Fund, the Real Estate 130/30 Fund and the U.S. Equity 130/30 Fund. The principal address of Alpha Equity is 90 State House Square, Suite 1100, Hartford, CT 06103.


		Connection with Other
Name	Name of Other Company	Company
Kevin Means Managing Partner, Chief Investment Officer, Chief Compliance Officer	—	—

Vince Fioramonti Partner, Director of Trading and IT	—	—

Donald Townswick Partner, Director of Research	—	—

Neil Kochen Partner, Chief Risk Officer, Chief Financial Officer	—	—

C-21

ITEM 27. Principal Underwriters:


Item 27(a)		RidgeWorth Distributors LLC (the “Distributor”) acts as principal underwriter for the following investment companies:

RidgeWorth Funds
RidgeWorth Variable Trust

The Distributor is registered with the Securities and Exchange Commission as a broker-dealer and is a member of the Financial Regulatory Authority or “FINRA”. The Distributor has its main address at 10 High Street, Suite 302, Boston, Massachusetts 02110. The Distributor is an indirect wholly-owned subsidiary of Foreside Financial Group LLC.

Item 27(b) Information about the Directors and Officers of the Distributor is as follows:


Name	Address	Position with Underwriter
Mark S. Redman	690 Taylor Road, Gahanna, OH 43230	President and Manager
Jennifer Hoopes	3 Canal Plaza, Portland, ME 04101	Secretary
Linda C. Carley	10 High Street, Boston, MA 02110	Chief Compliance Officer
Wayne A. Rose	10 High Street, Boston, MA 02110	Assistant Chief Compliance Officer
James E. (Ed) Pike	690 Taylor Road, Gahanna, OH 43230	Financial and Operations Principal
Richard J. Berthy	Three Canal Plaza, Portland, ME 04101	Treasurer, Vice President, Assistant Secretary & Manager

Item 27(c) Not applicable.

ITEM 28. Location of Accounts and Records:

Books or other documents required to be maintained by Section 31(a) of the Investment Company Act of 1940, and the rules promulgated thereunder, are maintained as follows:

(a) With respect to Rules 31a-1(a); 31a-1(b)(1); (2)(a) and (b); (3); (6); (8); (12); and 31a-1(d), the required books and records are maintained at the offices of Registrant’s custodians:

SunTrust Bank
303 Peachtree Street, N.E.
Atlanta, GA 30308

Brown Brothers Harriman & Co.
40 Water Street
Boston, MA 02109
(Institutional Cash Management Money Market Fund, International Equity Fund, International Equity Index Fund, Seix Global Strategy Fund, Strategic Income Fund, International Equity 130/30 Fund, Real Estate 130/30 Fund and U.S. Equity 130/30 Fund)

(b) With respect to Rules 31a-1(a); 31a-1(b)(1),(4); (2)(C) and (D); (4); (5); (6); (8); (9); (10); (11); and 31a-1(f), the required books and records are maintained at the offices of Registrant’s administrator:

Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.)
3435 Stelzer Road
Columbus, Ohio 43219

C-22

(c) With respect to Rules 31a-1(b)(5), (6), (9) and (10) and 31a-1(f), the required books and records are maintained at the principal offices of the Registrant’s adviser and subadviser:

RidgeWorth Capital Management, Inc.
50 Hurt Plaza, Suite 1400
Atlanta, Georgia 30303

Alpha Equity Management LLC
90 State House Square
Suite 1100
Hartford, CT 06103

Ceredex Value Advisers LLC
300 South Orange Avenue, Suite 1600
Orlando, FL 32801
(records relating to its function as subadviser)

Certium Asset Management LLC
50 Hurt Plaza, Suite 1400
Atlanta, GA 30303
(records relating to its function as subadviser)

IronOak Advisors LLC
919 East Main Street
Richmond, VA 23219
(records relating to its function as subadviser)

Seix Investment Advisors LLC
10 Mountain View Road
Suite C-200
Upper Saddle River, New Jersey 07458

Silvant Capital Management LLC
50 Hurt Plaza, Suite 1400
Atlanta, GA 30303
(records relating to its function as subadviser)

StableRiver Capital Management LLC
50 Hurt Plaza, Suite 1400
Atlanta, GA 30303
(records relating to its function as subadviser)

Zevenbergen Capital Investments LLC
601 Union Street
Seattle, Washington 98101
(records relating to its function as subadviser)

(d) RidgeWorth Distributors LLC
10 High Street
Boston, MA 02110
(records relating to its function as distributor)

ITEM 29. Management Services: None.

C-23

ITEM 30. Undertakings: None.

C-24

NOTICE

A copy of the Agreement and Declaration of Trust for the Registrant is on file with the Secretary of State of the Commonwealth of Massachusetts and notice is hereby given that this Registration Statement has been executed on behalf of the Registrant by an officer of the Registrant as an officer and by its trustees as trustees and not individually and the obligations of or arising out of this Registration Statement are not binding upon any of the trustees, officers, or shareholders individually but are binding only upon the assets and property of the Registrant.

C-25

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 (the “Securities Act”) and the Investment Company Act of 1940, as amended, RidgeWorth Funds (the “Registrant”) certifies that it meets the requirement for effectiveness of this registration statement under Rule 485(b) of the Securities Act and has duly caused this Post-Effective Amendment No. 78 to the Registrant’s Registration Statement (the “Amendment”) to be signed on its behalf by the undersigned, duly authorized, in the City of Atlanta, State of Georgia on the 12^th day of February, 2009.



	By:	/s/ Julia Short
		Julia R. Short,
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Act, this Amendment has been signed below by the following persons in the capacity and as of the dates indicated.


*		Trustee
Jeffrey M. Biggar

*		Trustee
George C. Guynn

*		Trustee
Sidney E. Harris

*		Trustee
Warren Y. Jobe

*		Trustee
Connie D. McDaniel

*		Trustee
Clarence H. Ridley

*		Trustee
Charles D. Winslow

/s/ Julia Short Julia R. Short		President and Chief Executive Officer

/s/ Martin R. Dean Martin R. Dean		Treasurer and Chief Financial Officer


* By:		/s/ Cynthia Surprise
Cynthia Surprise, pursuant to the powers of attorney filed herewith

C-26

RIDGEWORTH FUNDS
RIDGEWORTH VARIABLE TRUST

POWER OF ATTORNEY

KNOWN ALL MEN BY THESE PRESENTS, that each of the undersigned as trustees of RidgeWorth Funds and RidgeWorth Variable Trust (each, a “Trust”), business trusts organized under the laws of the Commonwealth of Massachusetts, hereby constitutes and appoints Kerry Reilly and Cynthia Surprise, and each of them singly, his or her true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, to sign for him or her and in his or her name, place and stead, and in the capacity indicated below, to sign any and all Registration Statements and all amendments thereto relating to the offering of each Trust’s shares under the provisions of the Investment Company Act of 1940 and/or the Securities Act of 1933, each such Act as amended, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, acting alone, full power and authority to do and perform each and every act and thing requisite or necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, the undersigned have herewith set their names as of the 20^th day of May 2008.


/s/ Jeffrey Biggar				/s/ George C. Guynn

Jeffrey M. Biggar, Trustee				George C. Guynn, Trustee

/s/ Sidney E. Harris				/s/ Warren Y. Jobe

Sidney E. Harris, Trustee				Warren Y. Jobe, Trustee

/s/ Connie McDaniel				/s/ Clarence Ridley

Connie D. McDaniel, Trustee				Clarence H. Ridley, Trustee

/s/ Charles D. Winslow Charles D. Winslow, Trustee

C-27

Exhibit Index


Exhibit		Document

(d)(2)		Amended Schedule A to the Amended and Restated Investment Advisory Agreement dated November 14, 2006, between the Registrant and RidgeWorth Capital Management, Inc.

(d)(5)		Expense Limitation Agreement dated August 1, 2008 among the Registrant, RidgeWorth Capital Management, Inc., Alpha Equity Management LLC and StableRiver Capital Management, LLC.

(d)(6)		Investment Subadvisory Agreement dated December 19, 2008, between RidgeWorth Capital Management, Inc. and Zevenbergen Capital Investments, LLC.

(g)(7)		Form of Amendment to the Custodian Agreement dated February 1, 1994 between the Registrant and SunTrust Bank.

(h)(9)		Form of Amendment dated April 1, 2008 to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services, Ohio, Inc., (formerly, BISYS Fund Services, Ohio, Inc.).

(h)(11)		Form of Amendment to the Master Services Agreement dated July 16, 2004, between the Registrant and Citi Fund Services Ohio, Inc. (formerly, BISYS Fund Services, Ohio, Inc.).

(h)(12)		Form of Shareholder Service Plan and Agreement relating to Corporate Trust Shares.

(h)(14)		Amended and Restated Securities Lending Management Agreement dated January 16, 2009, between the Registrant and Credit Suisse First Boston.

(h)(16)		Form of Amendment dated May 1, 2008 to the Compliance Services Agreement dated October 1, 2004, among the Registrant, RidgeWorth Variable Trust (formerly, STI Classic Variable Trust) and Citi Fund Services, Inc. (formerly,, BISYS Fund Services, Ohio, Inc.).

(i)		Opinion and Consent of Counsel.

(j)		Consent of independent registered public accounting firm.

(p)(2)		Code of Ethics for RidgeWorth Capital Management, Inc., Ceredex Value Advisors LLC, Certium Asset Management LLC, IronOak Advisors LLC, Seix Investment Advisors LLC, Silvant Capital Management LLC and StableRiver Capital Management LLC.

C-28

EX-99.D.2 2 l35361bexv99wdw2.htm EX-99(D)(2) EX-99(d)(2)

Exhibit (d) (2)

SCHEDULE A
TO THE
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
BETWEEN
RIDGEWORTH FUNDS
AND
RIDGEWORTH CAPITAL MANAGEMENT, INC.

Breakpoint Advisory Fee Schedules and Discounts:

Equity and Fixed Income Funds:
First $500 million = None (full fee)
Next $500 million = 5% discount from full fee
Over $1.0 billion = 10% discount from full fee

Money Market Funds:
First $1.0 billion = None (full fee)
Next $1.5 billion = 5% discount from full fee
Next $2.5 billion = 10% discount from full fee
Over $5.0 billion = 20% discount from full fee

Equity Funds


Fund	Fee
Aggressive Growth Stock Fund		1.10	%
Emerging Growth Stock Fund		1.10	%
International Equity Fund		1.15	%
International Equity Index Fund		0.50	%
International Equity 130/30 Fund		1.25	%
Large Cap Core Equity Fund		0.85	%
Large Cap Growth Stock Fund		0.97	%
Large Cap Quantitative Equity Fund		0.85	%
Large Cap Value Equity Fund		0.80	%
Life Vision Aggressive Growth Fund		0.10	%
Life Vision Conservative Fund		0.10	%
Life Vision Growth and Income Fund		0.10	%
Life Vision Moderate Growth Fund		0.10	%
Life Vision Target Date 2015 Fund		0.10	%
Life Vision Target Date 2025 Fund		0.10	%
Life Vision Target Date 2035 Fund		0.10	%
Mid-Cap Core Equity Fund		1.00	%
Mid-Cap Value Equity Fund		1.00	%
Real Estate 130/30 Fund		1.25	%
Select Large Cap Growth Stock Fund		0.85	%
Small Cap Growth Stock Fund		1.15	%
Small Cap Value Equity Fund		1.15	%
U.S. Equity 130/30 Fund		1.10	%

Fixed Income Funds


Fund	Fee
Corporate Bond Fund		0.40	%
High Grade Municipal Bond Fund		0.55	%
High Income Fund		0.60	%
Intermediate Bond Fund		0.25	%
Investment Grade Bond Fund		0.50	%
Investment Grade Tax-Exempt Bond Fund		0.50	%
Limited Duration Fund		0.10	%
Limited-Term Federal Mortgage Securities Fund		0.50	%
Maryland Municipal Bond Fund		0.55	%
North Carolina Tax-Exempt Bond Fund		0.55	%
Seix Floating Rate High Income Fund		0.45	%
Seix Global Strategy Fund		0.60	%
Seix High Yield Fund		0.45	%
Short-Term Bond Fund		0.40	%
Short-Term U.S. Treasury Securities Fund		0.40	%
Total Return Bond Fund		0.25	%
U.S. Government Securities Fund		0.50	%
U.S. Government Securities Ultra-Short Bond Fund		0.20	%
Ultra-Short Bond Fund		0.22	%
Virginia Intermediate Municipal Bond Fund		0.55	%

Money Market Funds


Fund	Fee
Institutional Cash Management Money Market Fund		0.13	%
Institutional Municipal Cash Reserve Money Market Fund		0.15	%
Institutional U.S. Government Securities Money Market Fund		0.15	%
Institutional U.S. Treasury Securities Money Market Fund		0.15	%
Prime Quality Money Market Fund		0.55	%
Tax-Exempt Money Market Fund		0.45	%
U.S. Government Securities Money Market Fund		0.55	%
U.S. Treasury Money Market Fund		0.55	%
Virginia Tax-Free Money Market Fund		0.40	%

February 11, 2009

EX-99.D.5 3 l35361bexv99wdw5.htm EX-99(D)(5) EX-99(d)(5)

Exhibit (d) (5)

EXPENSE LIMITATION AGREEMENT

AGREEMENT made as of the 1st day of August 2008 by and between RidgeWorth Funds (the “Trust”), a Massachusetts business trust, RidgeWorth Capital Management Inc. (the “Adviser”) and each investment subadviser listed on Schedule B (“Subadviser”) with respect to the series of the Trust (the “Funds”) set forth on Schedule B.

The Adviser and each Subadviser hereby agree to waive their fees and reimburse expenses to the extent necessary to limit total operating expenses (excluding taxes, brokerage commissions, substitute dividend expenses on securities sold short, extraordinary expenses and estimated indirect expenses attributable to investments in other investment companies) for Funds set forth on Schedule A to the levels set forth on Schedule A until August 1, 2009. The total advisory fees waived shall be borne 60% by the Adviser and 40% by each Subadviser for all Funds on Schedule A except the International Equity 130/30 Fund, Real Estate 130/30 Fund and U.S. Equity 130/30 Fund, which shall be borne 40% by the Adviser and 60% by the Subadviser.

If at any point before August 1, 2011, it becomes unnecessary for the Adviser or Subadviser to waive fees and make reimbursements for a particular Fund, the Adviser and the Subadviser may retain the difference between the Total Annual Fund Operating Expenses of that Fund and the applicable expense cap to recapture any of its prior waivers or reimbursements.

The Trust acknowledges that the Adviser may engage in brokerage transactions using Fund assets with brokers who agree to pay a portion of the Fund’s expenses, and that the Adviser’s guarantee of Fund expense ratios takes into account these expenses-limiting arrangements.

IN WITNESS WHEREOF, the parties hereto have caused this Expense Limitation Agreement to be executed as of the day and year first written above.


RIDGEWORTH FUNDS		RIDGEWORTH CAPITAL MANAGEMENT, INC.

By:	/s/ Julia Short	By:	/s/ John Stebbins
Name:	Julia Short	Name:	John Stebbins
Title:	President	Title:	Managing Director and CFO

ALPHA EQUITY MANAGEMENT LLC (with respect to the International Equity 130/30 Fund, Real Estate 130/30 Fund and U.S. Equity 130/30 Fund)


By: Name:		/s/ Kevin Means Kevin Means
Title:		Managing Partner

STABLERIVER CAPITAL MANAGEMENT LLC (with respect to the Institutional Cash Management Money Market Fund, the Institutional Municipal Cash Reserve Fund, the Institutional U.S. Government Securities Money Market Fund, the Institutional U.S. Treasury Securities Money Market Fund)


By: Name:		/s/ Paul L. Robertson III Paul L. Robertson III
Title:		President

EXPENSE LIMITATION AGREEMENT
SCHEDULE A


FUND	SHARE CLASS	EXPENSE LIMITATION
International Equity 130/30 Fund	I		1.55	%
	A		1.85	%
	C		2.55	%

Real Estate 130/30 Fund	I		1.45	%
	A		1.75	%
	C		2.45	%

U.S. Equity 130/30 Fund	I		1.30	%
	A		1.60	%
	C		2.30	%

Life Vision Aggressive Growth Fund	I		0.20	%
	A		0.50	%
	B		0.95	%
	C		1.20	%

Life Vision Conservative Growth Fund	I		0.20	%
	A		0.50	%
	B		0.95	%
	C		1.20	%

Life Vision Growth & Income Fund	I		0.20	%
	A		0.50	%
	B		0.95	%
	C		1.20	%

EXPENSE LIMITATION AGREEMENT
SCHEDULE A
(CONTINUED)


FUND	SHARE CLASS	EXPENSE LIMITATION
Life Vision Moderate Growth Fund	I		0.20	%
	A		0.50	%
	B		0.95	%
	C		1.20	%

Life Vision Target Date 2015 Fund	I		0.20	%
	A		0.50	%
	C		1.20	%

Life Vision Target Date 2025 Fund	I		0.20	%
	A		0.50	%
	C		1.20	%

Life Vision Target Date 2035 Fund	I		0.20	%
	A		0.50	%
	C		1.20	%

Institutional Cash Management Money Market Fund	Institutional		0.17	%

Institutional Municipal Cash Reserve Money Market Fund	Institutional		0.20	%

Institutional U.S. Government Securities Money Market Fund	Institutional		0.20	%

Institutional U.S. Treasury Securities Money Market Fund	Institutional		0.20	%

	Corporate Trust		0.45	%

SCHEDULE B


FUND NAME		ADVISER
Life Vision Aggressive Growth Fund		RidgeWorth Capital Management, Inc.
Life Vision Conservative Fund		RidgeWorth Capital Management, Inc.
Life Vision Growth and Income Fund		RidgeWorth Capital Management, Inc.
Life Vision Moderate Growth Fund		RidgeWorth Capital Management, Inc.
Life Vision Target Date 2015 Fund		RidgeWorth Capital Management, Inc.
Life Vision Target Date 2025 Fund		RidgeWorth Capital Management, Inc.
Life Vision Target Date 2035 Fund		RidgeWorth Capital Management, Inc.


FUND NAME		SUBADVISER
International Equity 130/30 Fund		Alpha Equity Management LLC
Real Estate 130/30 Fund		Alpha Equity Management LLC
U.S. Equity 130/30 Fund		Alpha Equity Management LLC
Institutional Cash Management Money Market		StableRiver Capital Management, LLC
Institutional Municipal Cash Reserve Money Market		StableRiver Capital Management, LLC
Institutional U.S. Government Securities Money Market		StableRiver Capital Management, LLC
Institutional U.S. Treasury Securities Money Market		StableRiver Capital Management, LLC

EX-99.D.6 4 l35361bexv99wdw6.htm EX-99(D)(6) EX-99(d)(6)

Exhibit (d) (6)

INVESTMENT SUBADVISORY AGREEMENT

This ADVISORY AGREEMENT made as of the 19^th day of December 2008, between RidgeWorth Capital Management, Inc. (the “Adviser”) and Zevenbergen Capital Investments LLC (the “Subadviser”).

WHEREAS, RidgeWorth Funds (the “Trust”), a Massachusetts business trust, is registered as an open-end management investment company under the Investment Company Act of 1940, as amended (the “1940 Act”); and

WHEREAS, the Adviser has entered into an investment advisory agreement with the Trust (the “Advisory Agreement”) pursuant to which the Adviser acts as investment adviser to the series of the Trust; and

WHEREAS, the Adviser, with the approval of the Trust, desires to retain the Subadviser to provide investment advisory services to the Adviser in connection with the management of the series of the Trust set forth on Schedule A attached hereto (each a “Fund,” and collectively, the “Funds”), as such schedule may be amended by mutual agreement of the parties hereto, and the Subadviser is willing to render such investment advisory services.

		NOW, THEREFORE, the parties hereto agree as follows:

1.		Duties of the Subadviser. Subject to supervision by the Adviser and the Trust’s Board of Trustees, the Subadviser shall manage all of the securities and other assets of each Fund entrusted to it hereunder (the “Assets”), including the purchase, retention and disposition of the Assets in accordance with the Fund’s investment objectives, policies, and restrictions as stated in each Fund’s then current prospectus and statement of additional information, as may be amended or supplemented from time to time (referred to collectively as the “Prospectus”), and subject to the following:

	(a)		The Subadviser will provide investment advisory services to the Fund and shall, in such capacity, determine from time to time what Assets will be purchased, retained, or sold by the Fund, and what portion of the Assets will be invested or held uninvested in cash, subject to the direction of the Adviser and the Board of Trustees of the Trust.

	(b)		In the performance of its duties and obligations under this Agreement, the Subadviser shall act in conformity with the Trust’s Declaration of Trust (as defined herein), the Prospectus, and the instructions and directions of the Adviser and of the Board of Trustees of the Trust and will conform to and comply with the requirements of the 1940 Act, the Internal Revenue Code of 1986 (the “Code”), and all other applicable federal and state laws and regulations, as each is amended from time to time.

	(c)		The Subadviser shall determine the Assets to be purchased or sold by each Fund as provided in subparagraph (a) above and will place orders with or through such persons, brokers or dealers to carry out the policy with respect to brokerage set forth in each Fund’s Prospectus or as the Board of Trustees or the Adviser may direct in writing from time to time, in conformity with all federal securities laws. In executing Fund transactions and selecting brokers or dealers, the Subadviser will use its best efforts to seek on behalf of each Fund the best overall terms available. In assessing the best overall terms available for any transaction, the Subadviser shall consider all factors that it deems relevant, including the breadth of the market in the security, the price of the security, the financial condition and execution capability of the broker or dealer, and the reasonableness of the commission, if any, both for the specific transaction and on a continuing basis. In evaluating the best overall terms available, and in selecting the broker-dealer to execute a particular transaction, the Subadviser may also consider the brokerage and research services provided (as those terms are defined in Section 28(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Consistent with any guidelines established by the Board of Trustees of the Trust and Section 28(e) of the Exchange Act, the Subadviser is authorized to pay to a broker or dealer who provides such brokerage and research services a commission for executing a portfolio transaction for each Fund that is in excess of the amount of commission another broker or dealer would have charged for effecting that transaction if, but only if, the Subadviser determines in good faith that such commission was reasonable in relation to the value of the brokerage and research services provided by such broker or dealer viewed in terms of that particular transaction or in terms of the overall responsibilities of the Subadviser to its

discretionary clients, including the Funds. In addition, the Subadviser is authorized to allocate purchase and sale orders for securities to brokers or dealers (including brokers and dealers that are affiliated with the Adviser, Subadviser, or the Trust’s principal underwriter) if the Subadviser believes that the quality of the transaction and the commission are comparable to what they would be with other qualified firms. In no instance, however, will the Funds’ Assets be purchased from or sold to the Adviser, Subadviser, the Trust’s principal underwriter, or any affiliated person of either the Trust, Adviser, the Subadviser, or the principal underwriter, acting as principal in the transaction, except to the extent permitted by the Securities and Exchange Commission (“SEC”) and the 1940 Act.

	(d)		The Subadviser shall maintain all books and records with respect to transactions involving the Assets required by subparagraphs (b)(5), (b)(6), (b)(7), (b)(9), (b)(10), and (b)(11) and paragraph (f) of Rule 31a-1 under the 1940 Act. The Subadviser shall provide to the Adviser or the Board of Trustees such periodic and special reports, balance sheets or financial information, and such other information with regard to its affairs as the Adviser or Board of Trustees may reasonably request.

			The Subadviser shall keep the books and records relating to the Assets required to be maintained by the Subadviser under this Agreement and shall timely furnish to the Adviser all information relating to the Subadviser’s services under this Agreement needed by the Adviser to keep the other books and records of the Funds required by Rule 31a-1 under the 1940 Act. The Subadviser shall also furnish to the Adviser any other information relating to the Assets that is required to be filed by the Adviser or the Trust with the SEC or sent to shareholders under the 1940 Act (including the rules adopted thereunder) or any exemptive or other relief that the Adviser or the Trust obtains from the SEC. The Subadviser agrees that all records that it maintains on behalf of the Funds are property of the Funds and the Subadviser will surrender promptly to the Funds any of such records upon the Funds’ request; provided, however, that the Subadviser may retain a copy of such records. In addition, for the duration of this Agreement, the Subadviser shall preserve for the periods prescribed by Rule 31a-2 under the 1940 Act any such records as are required to be maintained by it pursuant to this Agreement, and shall transfer said records to any successor subadviser upon the termination of this Agreement (or, if there is no successor subadviser, to the Adviser).

	(e)		The Subadviser shall provide the Funds’ custodian on each business day with information relating to all transactions concerning the Funds’ Assets and shall provide the Adviser with such information upon request by the Adviser.

	(f)		The investment management services provided by the Subadviser under this Agreement are not to be deemed exclusive and the Subadviser shall be free to render similar services to others as long as such services do not impair the services rendered to the Adviser or the Trust.

	(g)		The Subadviser shall promptly notify the Adviser of any financial condition that is likely to impair the Subadviser’s ability to fulfill its commitment under this Agreement.

	(h)		The Subadviser shall not be responsible for reviewing proxy solicitation materials or voting and handling proxies in relation to the securities held as Assets in the Funds. If the Subadviser receives a misdirected proxy, it shall promptly forward such misdirected proxy to the Adviser.

	(i)		In performance of its duties and obligations under this Agreement, the Subadviser shall not consult with any other subadviser to the Funds or a subadviser to a portfolio that is under common control with the Funds concerning the Assets, except as permitted by the policies and procedures of the Funds. The Subadviser shall not provide investment advice to any assets of the Funds other than the Assets.

			Services to be furnished by the Subadviser under this Agreement may be furnished through the medium of any of the Subadviser’s control affiliates, partners, officers or employees.

Duties of the Adviser. The Adviser shall continue to have responsibility for all services to be provided to the Funds pursuant to the Advisory Agreement and shall oversee and review the Subadviser’s performance of its duties under this Agreement; provided, however, that in connection with its management of the Assets, nothing herein shall be construed to relieve the Subadviser of responsibility for compliance with the Trust’s Declaration

of Trust (as defined herein), the Prospectus, the instructions and directions of the Board of Trustees of the Trust, the requirements of the 1940 Act, the Code, and all other applicable federal and state laws and regulations, as each is amended from time to time.

Delivery of documents. The Adviser has furnished the Subadviser with copies of each of the following documents:

	(a)		The Trust’s Agreement and Declaration of Trust, as filed with the Secretary of State of the Commonwealth of Massachusetts (such Agreement and Declaration of Trust, as in effect on the date of this Agreement and as amended from time to time, herein called the “Declaration of Trust”);

	(b)		By-Laws of the Trust as in effect on the date of this Agreement and as amended from time to time; and

	(c)		Prospectus of each Fund.

Compensation to the Subadviser. For the services to be provided by the Subadviser pursuant to this Agreement, the Adviser will pay the Subadviser, and the Subadviser agrees to accept as full compensation therefor, a subadvisory fee at the rate specified in Schedule B attached hereto and made part of this Agreement. The fee will be calculated based on the average daily value of the Assets under the Subadviser’s management and will be paid to the Subadviser quarterly. Except as may otherwise be prohibited by law or regulation (including any then current SEC staff interpretation), the Subadviser may, in its discretion and from time to time, waive a portion of its fee.

5.		Indemnification. The Subadviser shall indemnify and hold harmless the Adviser from and against any and all claims, losses, liabilities, or damages (including reasonable attorney’s fees and other related expenses) howsoever arising from or in connection with the performance of the Subadviser’s obligations under this Agreement; provided, however, that the Subadviser’s obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Adviser, is caused by or is otherwise directly related to the Adviser’s own willful misfeasance, bad faith, or negligence, or to the reckless disregard of its duties under this Agreement.

		The Adviser shall indemnify and hold harmless the Subadviser from and against any and all claims, losses, liabilities, or damages (including reasonable attorney’s fees and other related expenses) howsoever arising from or in connection with the performance of the Adviser’s obligations under this Agreement; provided, however, that the Adviser’s obligation under this Paragraph 5 shall be reduced to the extent that the claim against, or the loss, liability, or damage experienced by the Subadviser, is caused by or is otherwise directly related to the Subadviser’s own willful misfeasance, bad faith, or negligence, or to the reckless disregard of its duties under this Agreement.

Duration and termination. With respect to a Fund, this Agreement shall become effective upon approval by the Trust’s Board of Trustees and its execution by the parties hereto, and approval of the Agreement by a majority of the outstanding voting securities of that Fund. This Agreement shall continue in effect for a period of more than two years from the date hereof only so long as continuance is specifically approved at least annually in conformance with the 1940 Act; provided, however, that this Agreement may be terminated with respect to the Funds (a) by the Funds at any time, without the payment of any penalty, by the vote of a majority of Trustees of the Trust or by the vote of a majority of the outstanding voting securities of the Funds, (b) by the Adviser at any time, without the payment of any penalty, on not more than 60 days nor less than 30 days written notice to the Subadviser, or (c) by the Subadviser at any time, without the payment of any penalty, on 90 days written notice to the Adviser. This Agreement shall terminate automatically and immediately in the event of its assignment or in the event of a termination of the Advisory Agreement with the Trust. As used in this Paragraph 6, the terms “assignment” and “vote of a majority of the outstanding voting securities” shall have the respective meanings set forth in the 1940 Act and the rules and regulations thereunder, subject to such exceptions as may be granted by the SEC under the 1940 Act.

Governing Law. This Agreement shall be governed by the internal laws of the Commonwealth of Massachusetts, without regard to conflict of law principles; provided, however, that nothing herein shall be construed as being inconsistent with the 1940 Act.

Severability. Should any part of this Agreement be held invalid by a court decision, statute, rule or otherwise, the remainder of this Agreement shall not be affected thereby. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors.

Notice: Any notice, advice, or report to be given pursuant to this Agreement shall be deemed sufficient if delivered or mailed by registered, certified, or overnight mail, postage prepaid, and addressed by the party giving notice to the other party at the last address furnished by the other party:


		To the Adviser at:		RidgeWorth Capital Management, Inc.
				50 Hurt Plaza
				Suite 1400
				Atlanta, Georgia 30303
				Attention: Patrick Paparelli

		To the Subadviser at:		Zevenbergen Capital Investments LLC
				601 Union Street
				Suite 4600
				Seattle, Washington 98101
				Attention: Nancy A. Zevenbergen

10.

Non-hire/non-solicitation. The Subadviser hereby agrees that so long as the Subadviser provides services to the Adviser or the Trust and for a period of one year following the date on which the Subadviser ceases to provide services to the Adviser and the Trust, the Subadviser shall not for any reason, directly or indirectly, on the Subadviser’s own behalf or on behalf of others, hire any person employed by the Adviser, whether or not such person is a full-time employee or whether or not any person’s employment is pursuant to a written agreement or is at-will. The Subadviser further agrees that, to the extent that the Subadviser breaches the covenant described in this paragraph, the Adviser shall be entitled to pursue all appropriate remedies in law or equity.

11.

Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to this Agreement’s subject matter. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

In the event the terms of this Agreement are applicable to more than one Fund, the Adviser is entering into this Agreement with the Subadviser on behalf of the respective Funds severally and not jointly, with the express intention that the provisions contained in each numbered paragraph hereof shall be understood as applying separately with respect to each Fund as if contained in separate agreements between the Adviser and Subadviser for each such Fund. In the event that this Agreement is made applicable to any additional Funds by way of a schedule executed subsequent to the date first indicated above, provisions of such schedule shall be deemed to be incorporated into this Agreement as it relates to such Fund so that, for example, the execution date for purposes of Paragraph 6 of this Agreement with respect to such Fund shall be the execution date of the relevant schedule.

12. Miscellaneous.

	(a)		A copy of the Declaration of Trust is on file with the Secretary of State of the Commonwealth of Massachusetts and notice is hereby given that the obligations of this instrument are not binding upon any of the Trustees, officers or shareholders of the Fund or the Trust.

	(b)		Where the effect of a requirement of the 1940 Act reflected in any provision of this Agreement is altered by a rule, regulation, or order of the SEC, whether of special or general application, such provision shall be deemed to incorporate the effect of such rule, regulation, or order.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their officers designated below as of the day and year first written above.


RidgeWorth Capital Management, Inc		Zevenbergen Capital Investments LLC

By:	/s/ John H. Stebbins	By:	/s/ Leslie Tubbs


Name:	John H. Stebbins	Name:	Leslie Tubbs

Title:	Managing Director and CFO	Title:	Managing Partner

SCHEDULE A
TO THE
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
RIDGEWORTH CAPITAL MANAGEMENT, INC.
AND
ZEVENBERGEN CAPITAL INVESTMENTS LLC

AS OF December 19, 2008

RIDGEWORTH FUNDS

Aggressive Growth Stock Fund
Emerging Growth Stock Fund

SCHEDULE B
TO THE
INVESTMENT SUBADVISORY AGREEMENT
BETWEEN
RIDGEWORTH CAPITAL MANAGEMENT, INC.
AND
ZEVENBERGEN CAPITAL INVESTMENTS LLC

AS OF December 19, 2008

Pursuant to Paragraph 4, the Adviser shall pay the Subadviser compensation at an annual rate as follows:

RIDGEWORTH FUNDS


Aggressive Growth Stock Fund		.44% of the average daily value of the assets under the Subadviser’s management, except that for any compensation period during which the Adviser waives any portion of the management fee that the Fund is required to pay, the Adviser will pay to the Subadviser a proportionate amount of the compensation the Adviser receives from the Fund during that compensation period.

		If applicable, the Adviser and Subadviser shall share in fee waivers, reimbursements, fees for services payments and participation payments. The sharing percentage is to be based on the same pro-rata share that the Fund’s Investment Adviser fee is allocated between the Adviser and the Subadviser as mentioned above.

Emerging Growth Stock Fund		.44% of the average daily value of the assets under the Subadviser’s management, except that for any compensation period during which the Adviser waives any portion of the management fee that the Fund is required to pay, the Adviser will pay to the Subadviser a proportionate amount of the compensation the Adviser receives from the Fund during that compensation period.

		If applicable, the Adviser and Subadviser shall share in fee waivers, reimbursements, fees for


		services payments and participation payments. The sharing percentage is to be based on the same pro-rata share that the Fund’s Investment Adviser fee is allocated between the Adviser and the Subadviser as mentioned above.

The management fee will be paid to the Subadviser quarterly.

Agreed and Accepted:


RidgeWorth Capital Management, Inc		Zevenbergen Capital Investments LLC

By:	/s/ John H. Stebbins	By:	/s/ Leslie Tubbs


Name:	John H. Stebbins	Name:	Leslie Tubbs

Title:	Managing Director and CFO	Title:	Managing Director

EX-99.G.7 5 l35361bexv99wgw7.htm EX-99(G)(7) EX-99(g)(7)

Exhibit (g) (7)

SECURITIES LENDING AMENDMENT
TO CUSTODIAN AGREEMENT
RIDGEWORTH FUNDS

THIS AMENDMENT made and entered into as of the ___ day of ___, 2009 by and between RidgeWorth Funds (the “The Trust”), and SunTrust Bank, a Georgia corporation (the “Custodian”).

WITNESSETH:

WHEREAS, the Trust and the Custodian are parties to that certain Custodian Agreement dated as of February 1, 1994, pursuant to which Custodian serves as custodian of certain of the Trust’s property and assets as described therein (the “Custodian Agreement”); and

WHEREAS, The Trust desires to amend the Custodian Agreement to provide for the Trust’s participation in a program whereby securities held by the Custodian in the custody account maintained by the Custodian pursuant to the Custodian Agreement (the “Account”), may be loaned from time to time to borrowers (each such borrower hereinafter a “Borrower” and each such loan of securities to a Borrower hereinafter a “Loan”); and

WHEREAS, The Trust desires to appoint the Credit Suisse, New York Branch (“Credit Suisse”) as its agent for the purpose of lending securities;

NOW, THEREFORE, for and in consideration of the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

The Custodian Agreement is hereby amended by adding the provisions which relate to securities lending attached hereto as Exhibit A.

II.

The securities lending activities authorized by Exhibit A entail the delivery of securities to Borrowers, many of whom may be broker-dealers registered under the Securities Exchange Act of 1934, in return for the Borrower paying the Trust compensation or putting up certain collateral. The Trust understands that such transactions may entail some degree of risk, including, but not limited to, risks of incurring financial loss due to the investment of cash collateral, risks arising from bankruptcy of the Borrower, absence of control over the securities during the period of the Loan, fraud, and operational mistakes and delays. The Trust acknowledges that it alone is responsible for any loss, unless the Trust has reached an agreement with other parties to cover such losses, which may arise from such a Loan, except that Custodian will be liable to the Trust only to the extent specifically provided in Exhibit A. The Trust understands that it has access to the various forms of agreement used in, and other information related to, securities lending, and has made its own judgment that the degree of risk is acceptable. The Trust further understands that the provisions of the Securities Investor Protection Act of 1970 may not protect it with respect to loans pursuant to this program and, therefore, that

the Collateral delivered to the Custodian for the Trust, together with any legal remedies existing under transaction documents and applicable law, may constitute the Trust’s only protection in the event the Borrower fails to return the loan securities.

III.

MISCELLANEOUS

(a)		This Amendment shall be governed by and construed in accordance with the laws of the State of Georgia.

(b)		Except as expressly amended hereby, the Custodian Agreement shall remain in full force and effect in accordance with the terms thereof.

IN RECOGNITION OF THEIR ACCEPTANCE OF THE TERMS AND CONDITIONS OF THIS AMENDMENT, THE TRUST AND THE CUSTODIAN HEREBY EXECUTE THIS AMENDMENT AS A SEALED INSTRUMENT BY THEIR DULY AUTHORIZED REPRESENTATIVES, AS OF THE DAY AND YEAR FIRST ABOVE WRITTEN.


		SunTrust Bank

		By:

		Title:


Attest:

By:

Title:

(SEAL)


		RidgeWorth Funds

		By:

		Title:


Attest:

By:

Title:

(SEAL)

EXHIBIT A

THIRD PARTY SECURITIES LENDING
AUTHORIZATION AGREEMENT

These provisions set forth the terms and conditions under which the Custodian is authorized to act on behalf of the Trust with respect to the lending of certain securities of the Trust held by the Custodian.

Certain capitalized terms used in this Agreement are defined n Section 9.

The Trust and the Custodian, as the parties hereto, hereby agree as follows:

1.		Securities Lending Agent. The Trust has appointed Credit Suisse as its agent (hereinafter “Agent”) to lend Securities from any of the Funds listed in Appendix I attached hereto. Upon the lending of any securities, Credit Suisse will transfer collateral for the loans to Custodian to be deposited in the Collateral Account which will be maintained by the Custodian. Such agent loan shall be subject to the Securities Lending Operating Guidelines (“Operating Guidelines”) and the BBH Co. Third Party Securities Lending Operations document (“Operating Document”), attached hereto as Appendix III and IV, respectively, and made a part hereof.

2.		Collateral Account shall mean one or more accounts established by the Trust with the “Custodian” SunTrust Bank for the purpose of holding Cash Collateral and investments purchased with Cash Collateral and paying expenses related to the lending of securities.

3.		Authorized Persons shall mean any person specified by the Trust on Appendix II hereto (which may be amended from time to time by the Trust giving five days’ prior written notice to Credit Suisse) to give Written Instructions on behalf of the Trust. The Trust hereby authorizes and directs the Custodian to follow Credit Suisse’s Oral or Written Instructions concerning the transfer of Securities to or from the Collateral Account, whether or not such transfer are against receipt of collateral or other payment. The Custodian shall comply with Credit Suisse’s Oral or Written Instructions on the Business Day such instructions are received, provided they are received prior to the Custodian’s deadlines for the same-day processing of such instructions. The Custodian shall be entitled to rely upon any Oral or Written Instructions from Credit Suisse without inquiry, and shall have no duty to monitor any transactions initiated by Credit Suisse in connection herewith.

4.		Custodian’s Responsibility. The responsibilities of the Custodian shall be specified in the Operating Guidelines, the Operating Document and the Amended and Restated Securities Lending Management Agreement. The Custodian and Trust or the Investment Manager for the Trust may also from time to time establish operating procedures which shall be binding on the Custodian. The Custodian shall also be responsible for furnishing to Credit Suisse on each Business Day a report listing all Available Securities then held in the Funds, pending settlement instructions (if any) with respect to such Available Securities,

		and such other reports as the Trust and the Custodian shall agree. The Custodian shall have no responsibility to deliver any Security pursuant to Credit Suisse’s Oral or Written Instructions if such Security is subject to a pending settlement instruction. Any Instruction that fails to conform to such data specifications as the Trust and the Custodian shall agree or which are received after the Custodian’s cut-off times may result in a failed agent loan transaction.

5.		Custodian’s Obligations. Upon transferring any Securities from an Account and until such Securities are returned to the applicable Fund, the Custodian shall have no obligation with respect to such Securities (anything in the Agreement to the contrary notwithstanding), including without limitation, no obligation to (i) collect dividends, income and other distributions, or (ii) perform any corporate action processing. However, Custodian may notify the Trust of rights offerings, shareholder meetings and other information relating to such Securities received by it in the ordinary course of business, but shall have no further obligation with respect thereto, including, without limitation, any responsibility to solicit a response from the Trust with respect to any such corporate action.

6.		Tax Reclaims. The Trust understands and agrees that the Custodian shall not be responsible for any tax reclaims that are due on Securities in an agent loan transaction. It is the responsibility of Credit Suisse to collect any tax benefits that may be due to the Trust in connection with any such agent loan transaction.

7.		Compensation for the Custodian. In exchange for providing the custodial support described herein, for which the Custodian accepts its responsibility, the Trust shall agree to compensate the Custodian according to the Addendum to Section 7 attached hereto.

8.		Recordkeeping and Reports. The Custodian will establish and maintain such records as are reasonable or necessary.

9.		Standard of Care. The Bank shall not be liable with respect to any losses incurred by the Trust in connection with the securities lending program, except to the extent that such losses result from the negligence, reckless disregard, bad faith or willful misconduct of the Bank, or its breach of this Agreement or violation of law or regulation in the performance of its duties under this Agreement.

10.		Definitions. For the purpose hereof:

	(a)		“Available Securities” means the securities of the Trust that are available for Loans pursuant to the Securities Lending Management Agreement, as amended.

	(b)		“Collateral” means collateral delivered by a Borrower to secure its obligations under a Securities Loan Agreement.

	(c)		“Investment Manager” means RidgeWorth Investments and any other entity who has discretionary authority over the investment of the Available Securities to which the provision applies.

	(d)		“Loan” means a loan of Available Securities to a Borrower pursuant to a Securities Borrowing Agreement.

	(e)		“Loaned Security” shall mean any “security” (as defined in the 1934 Act) which is delivered as a Loan under a Securities Borrowing Agreement; provided that, if any new or different security shall be exchanged for any Loaned Security by recapitalization, merger, consolidation, or other corporate action, such new or different security shall, effective upon such exchange, be deemed to become a Loaned Security in substitution for the former Loaned Security for which such exchange was made.

	(f)		“Market Value” of a security means the market value of such security (including, in the case of a Loaned Security that is a debt security, the accrued interest on such security) as determined by Credit Suisse in accordance with the provisions of the applicable Securities Borrowing Agreement. [RW: Confirm whether CS or the Custodian has responsibility for valuing securities in the Collateral Account.]

11.		Amendment and Termination. This Agreement may be amended at any time by mutual agreement in writing by the parties hereto, or terminated by either party by giving thirty (30) day written notice thereof to the other, but such termination shall not affect any liabilities either party may have arising prior to such termination.

12.		Notices. Except as otherwise specifically provided herein, notices under this Agreement may be made orally, in writing, or by any other means mutually acceptable to the parties. If in writing, a notice shall be sufficient if delivered to the party entitled to receive such notices at the following addresses.

If to the Trust:

RidgeWorth Funds
[Insert Address]
Attention:

If to Custodian:

SunTrust Custodian
303 Peachtree Street, N.E.
Atlanta, Georgia 30308
[Attention: Securities Lending Department — Mail Code 3181]

or to such other addresses as either party may furnish the other party by written notice under this section.

Whenever this Agreement permits or requires the Trust to give notice to, direct, or provide information to the Custodian, such notice, direction, or information shall be provided to the Custodian on the Trust’s behalf by an individual designated for such purposes by the Trust in a written notice to the Custodian. (This Agreement shall be considered such a designation of the person executing the Agreement on the Trust’s behalf). After its receipt of such notice of

designation, and until its receipt of a notice revoking such designation, the Custodian shall be fully protected in relying upon the notices, directions, and information given by such designee.

13.		Miscellaneous. This Agreement supersedes any other agreement between the parties concerning loans of securities by the Custodian on behalf of the Trust. This Agreement shall not be assigned by either party without the prior written consent of the other party. Subject to the foregoing, this Agreement shall be binding upon and shall insure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns. This Agreement shall be governed and construed in accordance with applicable federal law and, to the extent not preempted by such federal law, the laws of the State of Georgia.

14.		Modification. This Agreement shall not be modified, except by an instrument in writing signed by the party against whom enforcement is sought.

END

Addendum to Section 7
Compensation for the Custodian

The Trust agrees to compensate the Custodian for performing the duties with respect to the Trust’s securities lending activity as follows:

1.)		For All Custodial Services

		For all deliveries, receipts and other standard custodial services in connection with securities lending, the Custodian’s compensation shall be as set forth in Schedule A of the Custodian Agreement between SunTrust Bank and the RidgeWorth Funds (formerly, STI Classic Funds) originally dated February 1, 1994, and as amended.

2.)		Maintenance of Collateral Account

		For opening and maintenance of each Collateral Account, the Account Maintenance fee of [$1,000 per month] shall be assessed. Custodian’s duties relating to maintenance of the Account would include: a) Provide the cash balance information to the cash manager designated by the Trust; b) Carry out investment transactions in accordance with the cash manager’s written instructions; c) Perform periodic reconciliation of the Account with the records maintained by Credit Suisse; and, d) Make necessary arrangement when the Account is overdrawn (cash outflow exceeds the cash balance in the Account.).

3.)		Monitoring and Reporting of Lending Activity

		For periodically monitoring and reporting certain aspects of securities lending activity including, but not limited to, loan balance to specific borrowers, The Securities Lending Administration fee of [$8,500.00 shall also be assessed monthly]. This [$8,500] fee is a combined total fee for all Funds of the Trust.


		RidgeWorth Funds

		Approved by:

		Date:

		Sun Trust Bank

		Approved by:

		Date:

Appendix I

RidgeWorth Funds:

Aggressive Growth Stock Fund

Emerging Growth Stock Fund

High Income Fund

Intermediate Bond Fund

International Equity Fund

International Equity Index Fund

Investment Grade Bond Fund

Large Cap Core Equity Fund

Large Cap Growth Stock Fund

Large Cap Value Equity Fund

Limited-Term Federal Mortgage Securities Fund

Mid-Cap Core Equity Fund

Mid-Cap Value Equity Fund

SEIX High Yield Fund

Select Large Cap Growth Stock Fund

Short-Term Bond Fund

Short-Term U.S. Treasury Securities Fund

Small Cap Growth Stock Fund

Small Cap Value Equity Fund

Strategic Income Fund

Total Return Bond Fund

U.S. Government Securities Fund

U.S. Government Securities Ultra-Short Bond Fund

Ultra-Short Bond Fund

Appendix II

List of Authorized Persons:


BISYS	RidgeWorth Investments	SunTrust
TBD	Julia Short	Kazuhiro Sekimoto
	Dina Romeo

Appendix III

RidgeWorth Funds Securities Lending Procedures

[To be Inserted by RW]

Appendix IV

BBH & Co. Third Party Securities Lending Operating Document

[To be Inserted by RW]

EX-99.H.9 6 l35361bexv99whw9.htm EX-99(H)(9) EX-99(h)(9)

Exhibit (h)9)

AMENDMENT TO THE MASTER SERVICES AGREEMENT

Amendment made as of April 1, 2008 to the Master Services Agreement dated as of July 14, 2004, as amended (the “Agreement”), by and between the STI Classic Funds, a Massachusetts business trust (the “Trust”) and BISYS Fund Services Ohio, Inc., an Ohio corporation (the “Administrator”).

WITNESSETH:

WHEREAS, the Trust and the Administrator desire to amend the Agreement to reflect the current names of the parties.

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

	1.		The name of the Trust is RidgeWorth Funds.

	2.		The name of the Administrator is Citi Fund Services Ohio, Inc.

	3.		Except as specifically amended hereby, the Agreement remains in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to the Agreement to be signed by their respective duly authorized officers as of the day and year above written.


RIDGEWORTH FUNDS
By:
	Name:	Julia R. Short
	Title:	President

CITI FUND SERVICES OHIO, INC.
By:
	Name:	Fred Naddaff
	Title:	President

EX-99.H.11 7 l35361bexv99whw11.htm EX-99(H)(11) EX-99(h)(11)

Exhibit (h) (11)

AMENDMENT TO
MASTER SERVICES AGREEMENT

AMENDMENT made as of the day of January, 2009, between RIDGEWORTH FUNDS, formerly known as STI Classic Funds, a Massachusetts business trust (the “Trust”) and CITI FUND SERVICES OHIO, INC., an Ohio corporation, formerly known as BISYS Fund Services Ohio, Inc. (“Citi”), to that certain Master Services Agreement, dated July 16, 2004, between the Trust and Citi (as amended pursuant to amendments dated November 18, 2005, May 15, 2007, July 1, 2007, August 21, 2007, May 20, 2008 and as in effect on the date hereof, the “Agreement”). All capitalized terms used but not defined herein shall have the meanings given to them in the Agreement.

WHEREAS, pursuant to the Agreement, Citi performs certain administration, fund accounting and transfer agency services for the investment portfolios of the Trust (individually referred to herein as a “Fund” and collectively as the “Funds”);

WHEREAS, the parties wish for Citi to perform accounting services with respect to certain collateral pool assets owned by the Trust, for additional consideration;

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter contained and for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Trust and Citi hereby agree as follows:

Amendments.

(a)

The following is added to the end of Section 2:

“Notwithstanding anything in the Agreement to the contrary, the parties agree that the accounting services performed by Citi for the collateral pool assets owned by the Trust (the “Collateral Assets”) shall not be subject to Schedule F.

(b)

The following is added to the end of Schedule C:

“(d) Citi shall also perform the following accounting services for the Collateral Assets:

(a)

Citi will keep and maintain the following books and records of the Collateral Assets pursuant to Rule 31a-1 (the “Rule”) under the 1940 Act:

Journals containing an itemized daily record in detail of all purchases and sales of securities, all receipts and disbursements of cash and all other debits and credits, as required by subsection (b)(1) of the Rule;

	2.		General and auxiliary ledgers reflecting all asset, liability, reserve, capital, income and expense accounts, including interest accrued and interest received, as required by subsection (b)(2)(i) of the Rule;

	3.		Separate ledger accounts required by subsection (b)(2)(ii) and (iii) of the Rule; and

	4.		A monthly trial balance of all ledger accounts (except shareholder accounts) as required by subsection (b)(8) of the Rule.

(b)

In addition to the maintenance of the books and records specified above, Citi shall perform the following accounting services for the Collateral Assets:

	1.		Allocate income and expense and calculate the net asset value per share (“NAV”) of the Collateral Assets in accordance with the Valuation Procedures;

	2.		Apply securities pricing information as required or authorized under the terms of the Valuation Procedures, including (A) pricing information from independent pricing services, with respect to securities for which market quotations are readily available, (B) if applicable to the Collateral Assets, fair value pricing information or adjustment factors from Fair Value Information Vendors with respect to securities for which market quotations are not readily available, for which a significant event has occurred following the close of the relevant market but prior to the Collateral Assets’ pricing time, or which are otherwise required to be made subject to a fair value determination under the Valuation Procedures, and (C) prices obtained from the Collateral Assets’ investment adviser or other designee, as approved by the Board;

	3.		Verify and reconcile with the Collateral Assets’ custodian all daily trade activity;

	4.		Compute, as appropriate, the Collateral Assets’ net income and capital gains, dividend payables, dividend factors, 7-day yields, 7-day effective yields, 30-day yields, and weighted average portfolio maturity; (and other yields or standard or non-standard performance information as mutually agreed);

	5.		Review daily the net asset value calculation and dividend factor (if any) for each Fund, check and confirm the net asset values and dividend factors for reasonableness and deviations;

	6.		Report to the Trust the market pricing of securities in the Collateral Assets, with the comparison to the amortized cost basis;

	7.		Determine and report unrealized appreciation and depreciation on securities held in variable net asset value funds;

	8.		Amortize premiums and accrete discounts on fixed income securities purchased at a price other than face value, if requested by the Trust;

	9.		Update fund accounting system to reflect rate changes, as received from the Collateral Assets’ investment adviser, on variable interest rate instruments;

	10.		Post Collateral Assets transactions to appropriate categories;

	11.		Accrue expenses of each Fund according to instructions received from the Trust’s Administrator, and submit changes to accruals and expense items to authorized officers of the Trust (who are not Citi employees) for review and approval;

	12.		Determine the outstanding receivables and payables for all (1) security trades, and (2) income and expense accounts;

	13.		Provide such periodic reports as the parties shall agree upon, as set forth in a separate schedule.

	14.		Provide a representative (in a non-voting capacity) for the Trust’s Pricing Committee, if any; and

	15.		Assist the Trust in identifying instances where market prices are not readily available, or are unreliable, within parameters set forth in the Trust’s Valuation Procedures.

Make available a hard copy of the unaudited financial statements described below, upon request of the Trust. The unaudited financial statements will include the following items:

	A.		Unaudited Statement of Assets and Liabilities,

	B.		Unaudited Statement of Operations,

	C.		Unaudited Statement of Changes in Net Assets, and

	D.		Unaudited Condensed Financial Information

Calculate expense ratio.

	3.		Provide daily cash report.

	4.		Maintain and report security positions and transactions in accounting system.

	5.		Maintain list of failed trades.

	6.		Provide unrealized gain/loss report.”

(c)

The following is added prior to the paragraph entitled, “CPI Adjustment” on Schedule E:

“The Trust shall pay Citi an additional fee .25bp or an annual minimum of $25,000 per year, payable monthly, for accounting services related to the Pool Account.”

(d)

The following is added after the first paragraph of Section 18:

Schedule F shall not apply

2. Representations and Warranties.

(a) The Trust represents (i) that it has full power and authority to enter into and perform this Amendment, (ii) that this Amendment, and all information relating thereto has been presented to and reviewed by the Board of Trustees of the Trust (the “Board”), and (iii) that the Board has approved this Amendment.

(b) Citi represents that it has full power and authority to enter into and perform this Amendment.

3. Miscellaneous.

(a) This Amendment supplements and amends the Agreement. The provisions set forth in this Amendment supersede all prior negotiations, understandings and agreements bearing upon the subject matter covered herein, including any conflicting provisions of the Agreement or any provisions of the Agreement that directly cover or indirectly bear upon matters covered under this Amendment.

(b) Each reference to the Agreement in the Agreement (as it existed prior to this Amendment) and in every other agreement, contract or instrument to which the parties are bound, shall hereafter be construed as a reference to the Agreement as amended by this Amendment. Except as provided in this Amendment, the provisions of the Agreement remain in full force and effect. No amendment or modification to this Amendment shall be valid unless made in writing and executed by both parties hereto.

(c) Paragraph headings in this Amendment are included for convenience only and are not to be used to construe or interpret this Amendment.

(d) This Amendment may be executed in counterparts, each of which shall be an original but all of which, taken together, shall constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed all as of the day and year first above written.


		RIDGEWORTH FUNDS

		By:

		Name:

		Title:

		Date:


		CITI FUND SERVICES OHIO, INC.

		By:

		Name:

		Title:

		Date:

EX-99.H.12 8 l35361bexv99whw12.htm EX-99(H)(12) EX-99(h)(12)

Exhibit (h) (12)

SHAREHOLDER SERVICE PLAN AND AGREEMENT
RidgeWorth Funds
Corporate Trust Shares

RidgeWorth Funds (the “Trust”) is an open-end investment company registered under the Investment Company Act of 1940, as amended, and currently consisting of a number of separately managed portfolios (each a “Fund,” and collectively, the “Funds”). The Trust desires to retain [ ] (“Intermediary”), to itself provide, or to compensate service providers who themselves provide, the services described herein to clients (the “Clients”) who from time to time beneficially own Corporate Trust shares (“Shares”) of any Fund of the Trust. Intermediary is willing to itself provide, or to compensate service providers for providing, such shareholder services in accordance with the terms and conditions of this Agreement.


Section 1.		Intermediary will provide, or will enter into written agreements in the form attached hereto with service providers pursuant to which the service providers will provide, one or more of the following shareholder services to Clients who may from time to time beneficially own Shares:

	(i)	maintaining accounts relating to Clients that invest in Shares;

	(ii)	providing information periodically to Clients showing their positions in Shares;

	(iii)	arranging for bank wires;

	(iv)	responding to Client inquiries relating to the services performed by Intermediary or any service provider;

	(v)	responding to inquiries from Clients concerning their investments in Shares;

	(vi)	forwarding shareholder communications from the Trust (such as proxies, shareholder reports, annual and semi-annual financial statements and dividend, distribution and tax notices) to Clients;

	(vii)	processing purchase, exchange and redemption requests from Clients and placing such orders with the Trust or its service providers;

	(viii)	assisting Clients in changing dividend options, account designations, and addresses;

	(ix)	providing subaccounting services with respect to Shares beneficially owned by Clients;


		(x)		processing dividend payments from the Trust on behalf of Clients; and

		(xi)		providing such other similar services as the Trust may reasonably request to the extent that Intermediary and/or the service provider is permitted to do so under applicable laws or regulations.


Section 2.				Intermediary will provide all office space and equipment, telephone facilities and personnel (which may be part of the space, equipment and facilities currently used in Intermediary’s business, or any personnel employed by Intermediary) as may be reasonably necessary or beneficial in order to fulfill its responsibilities under this Agreement.

Section 3.				Neither Intermediary nor any of its officers, employees, or agents is authorized to make any representations concerning the Trust or the Shares except those contained in the Trust’s then-current prospectus or Statement of Additional Information for the Shares, copies of which will be supplied to Intermediary, or in such supplemental literature or advertising as may be authorized in writing.

Section 4.				For purposes of this Agreement, Intermediary and each service provider will be deemed to be independent contractors, and will have no authority to act as agent for the Trust in any matter or in any respect. By its written acceptance of this Agreement, Intermediary agrees to and does release, indemnify, and hold the Trust harmless from and against any and all direct or indirect liabilities or losses resulting from requests, directions, actions, or inactions of or by Intermediary or its officers, employees, or agents regarding Intermediary’s responsibilities under this Agreement, the provision of the aforementioned services to Clients by Intermediary or any service provider, or the purchase, redemption, transfer, or registration of Shares (or orders relating to the same) by or on behalf of Clients. Intermediary and its officers and employees will, upon request, be available during normal business hours to consult with representatives of the Trust or its designees concerning the performance of Intermediary’s responsibilities under this Agreement.

Section 5.				In consideration of the services and facilities to be provided by Intermediary or any service provider, each Fund that has issued Shares shall pay (or cause to be paid) to Intermediary a fee, as agreed from time to time, at an annual rate of up to 0.25% (twenty-five basis points) of the average net asset value of the Shares of each Fund (the “Fee”), which Fee will be computed daily and paid monthly. In order to avoid a negative yield, it may be necessary for the Fee to be waived. Should investment advisory fee waivers not be sufficient on any given day to avoid a negative yield, Intermediary agrees to waive all or a portion of the Fee paid by the Shares of the Fund necessary to achieve a yield of 0.00% (zero basis points). There is no guarantee that the Shares of the Fund will be able to

avoid a negative yield. The Trust may, in its discretion and without notice, suspend or withdraw the sale of Shares of any Fund, including the sale of Shares to any service provider for the account of any Client or Clients. Intermediary may waive all or any portion of its fee from time to time.


Section 6.				The Trust may enter into other similar servicing agreements with any other person or persons without Intermediary’s consent.

Section 7.				By its written acceptance of this Agreement, Intermediary represents, warrants, and agrees that the services provided by Intermediary under this Agreement will in no event be primarily intended to result in the sale of Shares.

Section 8.				This Agreement will become effective on the date a fully executed copy of this Agreement is received by the Trust or its designee and shall continue until terminated by either party. This Agreement is terminable with respect to the Shares of any Fund, without penalty, at any time by the Trust or by Intermediary upon written notice to the Trust.

Section 9.				All notices and other communications to either the Trust or to Intermediary will be duly given if mailed, telegraphed, telefaxed, or transmitted by similar communications device to the appropriate address stated herein, or to such other address as either party shall so provide the other.

Section 10.				This Agreement will be construed in accordance with the laws of the Commonwealth of Massachusetts and may not be “assigned” by either party thereto as that term is defined in the Investment Company Act of 1940.

Section 11.				References to the “RidgeWorth Funds,” the “Trust,” and the “Trustees” of the Trust refer respectively to the Trust created and the Trustees as trustees, but not individually or personally, acting from time to time under the Declaration of Trust of the Trust dated January 15, 1992 and amended March 31, 2008, a copy of which is on file with the Secretary of State of the Commonwealth of Massachusetts and at the Trust’s principal office. The obligations of the Trust entered into in the name or on behalf thereof by any of the Trustees, officers, representatives, or agents are made not individually, but in such capacities, and are not binding upon any of the Trustees, shareholders, officers, representatives, or agents of the Trust personally. Further, any obligations of the Trust with respect to any one Fund shall not be binding upon any other Fund.

By their signatures, the Trust and Intermediary agree to the terms of this Agreement.


RIDGEWORTH FUNDS		[ ] (INTERMEDIARY)
Attn: President		Address 1
3435 Stelzer Road		Address 1
Columbus, OH 43219		City, State, Zip Code

By:		By:
Name:		Name:
Title:		Title:
Date:		Date:

EX-99.H.14 9 l35361bexv99whw14.htm EX-99(H)(14) EX-99(h)(14)

Exhibit (h) (14)

AMENDED AND RESTATED
SECURITIES LENDING MANAGEMENT AGREEMENT

(Mutual Fund Lenders)

AMENDED AND RESTATED SECURITIES LENDING MANAGEMENT AGREEMENT (this “Agreement”), dated as of January 16, 2009, by and between each of the entities listed on Annex B (each a “Lender”), Credit Suisse, New York Branch (“Manager”) and, solely with respect to Section 9 hereof, SunTrust Bank acting as custodian for Lender.

WHEREAS, Lender and Manager are parties to a certain Securities Lending Management Agreement dated as of March 1, 2005 as amended from time to time (the “Existing Securities Lending Management Agreement”) pursuant to which Lender retained the services of Manager to act as its exclusive agent in lending to certain borrowers securities held in one or more specified accounts of Lender from time to time, and Manager agreed to act as agent of Lender in lending to certain borrowers such securities owned by Lender.

WHEREAS, pursuant to Lender’s redemption of its collateral investment as provided in the Letter Agreement between Manager and Lender dated December 29, 2008, the parties hereto wish to amend the Existing Securities Lending Management Agreement in certain respects as described herein, including, but not limited to, terminating Manager’s appointment to invest Cash Collateral on behalf of Lender, and as so amend and restate the Existing Securities Lending Management Agreement in its entirety.

IN CONSIDERATION OF the mutual representations, warranties and covenants made herein, the parties hereto hereby agree that the Existing Securities Lending Management Agreement shall, subject to the execution and delivery of this Agreement by each of the intended parties hereto, be amended and restated to read in its entirety as follows:

1. DEFINITIONS. Terms used in this Agreement and not otherwise defined herein shall have the meanings ascribed thereto in Annex A.

2. APPOINTMENT AND AUTHORIZATION.

(a) Appointment.

(i) Lender hereby appoints Manager as Lender’s agent for the purpose of providing, and hereby authorizes Manager to provide, the securities lending management services set forth in this Agreement (the “Securities Lending Management Services”), and Manager hereby accepts such appointment subject to the terms and conditions of this Agreement.

(ii) Lender hereby authorizes Manager to engage in such acts as Manager deems necessary or desirable for the performance of the Securities Lending Management Services and Lender hereby appoints Manager as Lender’s attorney-in-fact to execute any documents or instruments deemed by Manager to be necessary or desirable to effect the same (including, without limitation, any applicable Related Agreements). Lender agrees to be bound by each such Related Agreement as if the same were executed and delivered directly by Lender. Upon Lender’s request, Manager shall make available to Lender copies of all such agreements then in effect.

(b) Acknowledgements. Lender hereby acknowledges that it has been fully informed with respect to, consents to, and makes such appointment notwithstanding the following facts and circumstances, which may give rise to a conflict of the interests of Manager with those of Lender: (i) Manager or its affiliates may from time to time act on behalf of (including in a fiduciary capacity), or engage in transactions other than Loans with, Approved Borrowers; (ii) Manager or its affiliates acts as agent for other lenders of securities and in such capacity may make loans which may from time to time preclude Manager from making Loans for, or be on terms more favorable than

those afforded to, Lender; (iii) Manager or its affiliates may from time to time act as borrower with respect to Loans; and (iv) Manager may use any recognized pricing information service in order to perform its valuation responsibilities with respect to Loaned Securities and Loan Collateral; provided, however, that, with respect to Loaned Securities consisting of mortgage-backed securities, Manager may use its internal pricing sources (including its affiliates) to perform such valuation responsibilities.

3. SECURITIES LENDING MANAGEMENT SERVICES.

(a) Operating Guidelines. Manager, Lender and Custodian shall operate in accordance with the Operating Guidelines, as agreed.

(b) Securities Borrowing Agreements. Manager may from time to time in its sole discretion enter into Securities Borrowing Agreements. Subject to the terms and conditions of this Agreement, Manager agrees, as Lender’s agent, to exercise Lender’s rights and remedies under Securities Borrowing Agreements, including, without limitation: (x) marking Loans to the market; and (y) collecting all Loan Collateral, all interest and other distributions payable by Approved Borrowers in respect of Loaned Securities and any Loan Fees and causing the same to be deposited in the Collateral Account or otherwise credited to Lender, as applicable. Manager shall delete any Approved Borrower from the list of Approved Borrowers upon receipt of Written Instructions to do so.

(i) Manager may from time to time negotiate and make Loans for and on behalf of Lender on such terms as Manager determines are commercially reasonable and are set forth herein and in the Securities Borrowing Agreement. All Loans will be made in accordance with the Investment Company Act of 1940, as amended, and the regulations thereunder. Loans shall be subject to oversight by Lender or Lender’s investment manager. Lender shall be bound by the terms of each such Loan as if the same were negotiated and made with the Approved Borrower party thereto directly by Lender on its own behalf. Loans shall generally be terminable on demand in accordance with the terms of the Securities Borrowing Agreement. With the prior consent of Lender, however, Loans may be made on the basis of a reasonably anticipated termination date (“Term Loan”). Manager may terminate any Loan with an Approved Borrower in its reasonable discretion upon obtaining consent from Lender. Notwithstanding the foregoing, Manager shall terminate any such Loan other than a Term Loan, without obtaining consent from Lender, as soon as practicable: (A) after receipt by Manager of a notice of termination of such Loan from such Approved Borrower; (B) after receipt by Manager of Written Instructions to do so; (C) after receipt by Manager of Written Instructions requesting the deletion of such Approved Borrower from the list of Approved Borrowers; and (D) upon the termination of this Agreement. Manager shall equitably allocate securities loans (including Loans) made by it as agent among all lenders for which it acts as agent, and the making of a loan for a lender other than Lender shall not give rise to any obligation on the part of Manager to allocate any portion of such loan to Lender or to make any Loan on behalf of Lender.

(ii) Lender acknowledges and agrees that Lender shall have no voting rights and may not participate in any dividend reinvestment plans with respect to Loaned Securities. It is further acknowledged and agreed that (x) Lender shall be responsible for notifying Manager of any return of Loaned Securities required to enable Lender to exercise any voting rights, participate in any rights offering, warrant or option transaction, or take any other similar action in respect of such Loaned Securities, (y) Manager shall have no obligation to determine when and whether the return of Loaned Securities is required for such purposes and, absent such notice from Lender given on a timely basis, Manager shall have no obligation to make Loaned Securities available to Lender for any such purposes, and (z) upon receipt of such timely notice from Lender, Manager shall use its best efforts to cause the return of Loaned Securities to Lender. Manager shall cause to be credited to Lender the amount of all cash dividends and other cash distributions received from the applicable Approved Borrower on Loaned Securities that are out on Loan on the record date therefor that Lender would have received had the same not been then out on Loan; Manager shall have no obligation to credit such amounts to Lender unless and until Manager receives such cash dividends or cash distributions, but Manager shall use its best efforts to collect payment of such amounts. All non-cash

dividends or distributions, if any, on Loaned Securities shall be deemed to be Loaned Securities. Manager shall maintain records of all dividends and distributions paid to Lender and make such records available to Lender upon request.

(iii) Manager and Lender agree that the Market Value of Loaned Securities of Lender shall not exceed either (i) 50% of the sum of the market value of all securities of Lender and the Market Value of Loan Collateral of Lender or (ii) 33.33% of the market value of all securities of Lender; provided, however, that if on any day the Market Value of Loaned Securities of Lender exceeds the maximum percentage, Manager shall reduce the Loaned Securities of Lender by the amount of such excess no later than the close of business on the following business day. Lender shall notify Manager in writing of any applicable restrictions or limitations regarding any Loanable Securities including, without limitation, the amount of Loanable Securities that may be out on Loan at any time, the type of permissible collateral and restrictions or prohibitions, if any, as to the identity of, and credit exposure limits for, any Approved Borrower.

(iv) It is understood and agreed that (A) the identity of Lender may be disclosed by Manager to an Approved Borrower under a Loan at any time on and after the making of the Loan, (B) all Loans will be transacted by Manager for Lender on a fully disclosed agency basis and (C) Lender shall provide to Manager Lender’s financial statements and such other information as Manager may request.

(d) Collateral. At the making of each Loan, Manager shall require the deposit in the Collateral Account by the applicable Approved Borrower of Loan Collateral in an amount at least equal to the Required Margin Level (the “Required Margin Level”) set forth on Schedule II hereto. Manager shall mark to market all Loans on a daily basis in accordance with Manager’s customs and practices. Lender acknowledges and agrees that Manager may determine not to require the deposit of any additional Loan Collateral if the amount thereof is, in the sole judgment of Manager, not material in relation to the Market Value of the related Loaned Securities, but at no time shall the Loan Collateral be less than 100% of the Market Value of the Loaned Securities. Lender acknowledges and agrees that it shall be obligated to pay, or cause to be paid, a Rebate to Approved Borrowers with respect to Cash Collateral. Manager shall have the right to hold back delivery of related Loan Collateral to the Approved Borrower upon termination of a Loan in an amount at least equal to the declared but unpaid distributions or any other sum due and owing at the time until such distributions or sum are paid in full.

(e) Investment of Cash Collateral.

(i) Lender shall be responsible for investing and reinvesting all or substantially all of the Cash Collateral held from time to time in the Collateral Account. Lender acknowledges and agrees that Manager shall have no liability for any loss, liability, cost or expense related to the Lender’s investment and reinvestment of the Cash Collateral and the proceeds of investments of Cash Collateral held from time to time in the Collateral Account.

(ii) Lender further acknowledges and agrees that any income or gains and losses from investing and reinvesting any Cash Collateral delivered by an Approved Borrower pursuant to the applicable Securities Borrowing Agreement shall be at Lender’s risk and for Lender’s account, and Lender agrees that to the extent any such losses reduce the amount of Cash Collateral required to be returned to an Approved Borrower pursuant to a mark to market or upon the termination of any Loan made on Lender’s behalf (after giving effect to any Rebate), Lender shall, on demand by Manager and in immediately available funds, deposit in the Collateral Account an amount equal to such losses.

(f) Recordkeeping and Reports. Manager shall establish and maintain records reasonably necessary to account for all Loans, Program Income and Manager’s Fees, and shall provide to Lender a report thereof on a monthly basis for the preceding month, all in accordance with Manager’s customs and practices as in effect from time to time. Lender acknowledges that Citi shall provide Manager with the daily amount of Income and Manager shall rely on such daily amounts for purposes of maintaining records and preparing reports for Lender. Lender agrees that Manager shall not be responsible for any errors or omissions in preparing such records and reports due to any inaccurate or incomplete information received from Citi or non-receipt of any required information from Citi.

(g) Exercise of Remedies. Manager shall, in its sole judgment and discretion, determine whether there has been a Borrower Event of Default and exercise on behalf of Lender (and Manager, if applicable) its or their remedies against an Approved Borrower upon the occurrence of a Borrower Event of Default. Manager shall be under no obligation or duty to exercise on behalf of Lender or Manager any specific remedy available to Lender or Manager under a Securities Borrowing Agreement.

4. MANAGER’S COMPENSATION. For the performance of its obligations under this Agreement, Lender shall pay to Manager monthly in arrears the fee (the “Manager’s Fee”) set forth on Schedule II hereto.

5. REPRESENTATIONS, WARRANTIES AND COVENANTS.

(a) Representations and Warranties of Manager. Manager represents and warrants to Lender that:

(i) This Agreement and each other Related Agreement have been duly authorized by it and this Agreement and each other Related Agreement are the legal, valid and binding obligations of Manager, enforceable against Manager in accordance with their terms.

(ii) Neither this Agreement nor any other Related Agreement to which Manager is a party, upon its execution and delivery, does or will violate any statute, regulation, rule, order or judgment binding on Manager or any provision of any of Manager’s organizational documents, or any agreement binding on Manager or affecting Manager’s property.

(iii) The persons executing this Agreement and all other Related Agreements to which Manager is a party have and will be duly and properly authorized to do so.

(iv) Each representation and warranty made by Manager in the Related Agreements is true, correct and complete on the date hereof and will be true, correct and complete on the date each Loan is made and continually throughout the term of this Agreement and each other Related Agreement.

(b) Representations and Warranties of Lender. Lender represents and warrants to Manager that:

(i) Lender has the power and authority to enter into this Agreement and each other Related Agreement to which it is a party. Each of this Agreement and the other Related Agreements to which Lender is a party has been duly authorized by Lender and, upon the execution and delivery hereof and thereof by Lender or Manager, as Lender’s agent is and will be the legal, valid and binding obligation of Lender, enforceable against Lender in accordance with its terms.

(ii) Lender has, or will have at the time of transfer of any Loanable Security, the right to transfer such Loanable Security subject to the terms and conditions hereof, and such Loanable Securities, at the time of each Loan, will be free and clear of any liens, encumbrances or other adverse claims.

(iii) Neither this Agreement nor any other Related Agreement to which Lender is a party, upon its execution and delivery, does or will violate any statute, regulation, rule, order or judgment binding on Lender or any provision of any of Lender’s organizational documents, or any agreement binding on Lender or affecting Lender’s property.

(iv) The person executing this Agreement and all other Related Agreements to which Lender is a party and all Authorized Persons acting on behalf of Lender, have and will be duly and properly authorized to do so.

(v) Lender has not relied on Manager for any tax, accounting, regulatory, legal, financial or investment advice concerning this Agreement, any Related Agreement or any Loans or any investments of Cash Collateral and has made its own determination as to the tax, accounting, regulatory, legal and financial treatment of this Agreement, any Related Agreement and all Loans and all investments of Cash Collateral

and any dividends, distributions or other funds received hereunder or under any Securities Borrowing Agreement.

(vi) Each representation and warranty made by Lender in the Related Agreements is true, correct and complete on the date hereof and will be true, correct and complete on the date each Loan is made and continually throughout the term of this Agreement and each other Related Agreement.

(vii) None of the Loanable Securities are assets of an “employee benefit plan” as defined in the Employee Retirement Income Security Act of 1974, as amended.

(c) Continued Effectiveness of Representations and Warranties. All of the representations and warranties of Manager and Lender made in this Section 5 shall be deemed to be continuing and reaffirmed at the time of the making of each Loan and at all times such Loan is outstanding.

6. BORROWER DEFAULT; GUARANTY BY MANAGER.

(a) If an Approved Borrower fails to return any Loaned Securities when due in accordance with the terms of the applicable Securities Borrowing Agreement (the “Return Date”) due to (i) a Default (as such term is defined in the applicable Securities Borrowing Agreement) of the Approved Borrower as set forth in Section 11.5 (if the applicable Securities Borrowing Agreement is the 1993 version of the Bond Market Association’s Master Securities Loan Agreement) or Section 12.5 (if the applicable Securities Borrowing Agreement is the 2000 version of the Bond Market Association’s Master Securities Loan Agreement) of the applicable Securities Borrowing Agreement, or (ii) an Event of Default (as such term is defined in the applicable Securities Borrowing Agreement) of the Approved Borrower as set forth in Clause 12(D) (if the applicable Securities Borrowing Agreement is the 1995 version of the International Securities Lending Association’s Overseas Securities Lender’s Agreement) or Paragraph 14.1 (if the applicable Securities Borrowing Agreement is the 2000 version of the International Securities Lending Association’s Global Master Securities Lending Agreement) of the applicable Securities Borrowing Agreement, then Manager shall pay to Lender any shortfall amount if the Collateral Value related to such Loaned Securities as of the date determined by Manager in its discretion is less than the Market Value of such Loaned Securities as of the Return Date; provided, however, that such shortfall amount is not due to any diminution in the Collateral Value due to reinvestment risk (which is borne by Lender pursuant to Section 3(e)(ii) of this Agreement).

(b) Upon and to the extent of performance by Manager under Section 6(a) hereof, Manager shall be subrogated to all rights of Lender against the applicable Approved Borrower and Lender shall assign and be deemed to have assigned to Manager, all of such Lender’s rights in, to and against such Approved Borrower in respect of the related Loan. In addition, in the event that Lender receives or is credited with any payment in cash or in-kind from or on behalf of the Approved Borrower in respect of rights to which Manager is subrogated as provided herein, Lender shall promptly remit or pay to Manager the same (or, where applicable, its United States Dollar equivalent). To the extent that any rights or interests to which Manager is subrogated, or which are assigned to Manager, in accordance with this paragraph (b) are reduced or impaired in respect of rights of setoff or defenses relating to Lender, Lender will make appropriate reimbursement to Manager as reasonably determined in good faith by Manager.

(c) Any indemnities provided under Section 6(a) with respect to Loans where any entity that directly, or indirectly through one or more intermediaries, controls Credit Suisse or that is controlled by or is under common control with Credit Suisse is the Approved Borrower shall be deemed to be issued by Credit Suisse acting through its head office in Zurich, Switzerland.

(d) WITHOUT LIMITING THE PROVISIONS OF THIS SECTION 6 OR WAIVER OF ANY RIGHTS GIVEN TO LENDER UNDER ANY SECURITIES BORROWING AGREEMENT, IT IS UNDERSTOOD AND AGREED THAT THE PROVISIONS OF THE SECURITIES INVESTOR PROTECTION ACT OF 1970 MAY NOT PROTECT LENDER WITH RESPECT TO LOANED SECURITIES AND THAT, THEREFORE, THE LOAN COLLATERAL MAY CONSTITUTE THE ONLY SOURCE OF SATISFACTION OF AN APPROVED

BORROWER’S OBLIGATIONS IN THE EVENT SUCH APPROVED BORROWER FAILS TO RETURN THE LOANED SECURITIES.

7. CONCERNING MANAGER.

(a) Liability of Manager. Except as otherwise expressly provided in this Agreement, Manager shall not be liable for any costs, expenses, damages, liabilities or claims (including attorneys’ and accountants’ fees) incurred by Lender, except those costs, expenses, damages, liabilities or claims arising out of the negligence, bad faith or willful misconduct of Manager. Manager shall have no obligation under this Agreement for costs, expenses, damages, liabilities or claims (including attorneys’ and accountants’ fees) which are sustained or incurred by reason of any action, inaction or financial failure by or of a Clearing System or depository or subcustodian, or their nominees, and the successors and assigns of the foregoing (including, without limitation, Custodian holding Loanable Securities, Loan Collateral or other property in connection with this Agreement), or as a result of reliance by Manager upon information provided by any pricing information service. Manager shall have no liability for any loss, liability, cost or expense related to the Lender’s investment and reinvestment of the Cash Collateral and the proceeds of investments of Cash Collateral held from time to time in the Collateral Account. Except as otherwise expressly provided in this Agreement, in no event shall Manager be liable for special, indirect, consequential or punitive damages, or lost profits or loss of business, arising under or in connection with this Agreement or the transactions contemplated hereby, even if previously informed of the possibility of such damages or losses.

(b) Approved Borrowers. Lender shall have responsibility for approving the borrowers, and Manager shall not be liable for any loss or damage suffered as a result of any such approval (other than as provided in Section 6(a)).

(c) Reliance on Instructions. Manager shall be entitled to rely upon any Written Instructions or oral instructions of an Authorized Person or a person believed by Manager to be an Authorized Person received by Manager and believed by Manager to be duly authorized and delivered.

(d) Force Majeure. Manager shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its control, including, without limitation, acts of terrorism, acts of God, earthquakes, fires, floods, wars, civil or military disturbances, market disruptions, sabotage, epidemics, riots, interruptions, loss or malfunctions of utilities, transportation, computer (hardware or software) or communications services, labor disputes, acts of civil or military authority, or governmental actions, or inability to obtain labor, material, equipment, services, or transportation.

(e) Disaster Recovery. Manager acknowledges its responsibility for the backup and recovery procedures for Lender’s data maintained on Manager’s system, as well as the preparation and maintenance of Lender’s data.

8. INDEMNIFICATION OF MANAGER. Lender agrees to indemnify, reimburse and hold Manager harmless from and against any and all costs, expenses, damages, liabilities or claims, including reasonable fees and expenses of counsel and accountants, which Manager may sustain or incur by reason of or as a result of Manager’s acceptance of its appointment under this Agreement or any action taken or omitted by Manager in connection with the performance of its obligations or the exercise of its rights under this Agreement, any Securities Borrowing Agreement and any other Related Agreement; provided that such indemnification shall not extend to liabilities, losses, costs or expenses to the extent that such liabilities, losses, costs or expenses (i) represent Manager’s commercially reasonable operating expenses not incurred in connection with this Agreement, (ii) are found by a final judgment of a court of competent jurisdiction to have resulted from Manager’s own bad faith, willful misconduct or negligence or (iii) result from the performance of Manager’s indemnity obligation under Section 6(a) hereof. Lender’s obligations under this Section 8 shall be continuing obligations of Lender, and its successors and assigns and shall survive the termination of any Loans, this Agreement or any other Related Agreement. Except as otherwise expressly provided in this Agreement, in no event shall Lender be liable for special, indirect, consequential or punitive damages, or lost profits or loss of business, arising under or in connection with this

Agreement or the transactions contemplated hereby, even if previously informed of the possibility of such damages or losses.

9. TRANSFERS FROM SECURITIES ACCOUNT AND COLLATERAL ACCOUNT.

Lender hereby:

(a) Instructs and directs Custodian, and authorizes Manager, to transfer or cause the transfer from the Collateral Account to Manager, to be retained by Manager as payment, any and all amounts due and payable to Manager hereunder, including without limitation, the Manager’s Fee and the amount of any indemnities due under Section 8 hereof provided, however, that such transfer shall be reported to Lender in accordance with Section 3(f).

(b) Instructs and directs Custodian to transfer or cause the transfer from the Securities Account and/or Collateral Account to Manager and/or any Approved Borrower any and all property in such accounts in accordance with written instructions from Manager as may be required under this Agreement. Lender agrees and acknowledges that (i) delivery of a copy of this Agreement to Custodian shall constitute written instructions to Custodian, (ii) Custodian is authorized to rely on such written instructions and (iii) Custodian shall be under no duty to inquire into the validity or accuracy of any such instructions.

(i) In order to secure the performance and payment by Lender of its obligations under this Agreement and to insure reimbursement of Manager by Lender of any funds that may be advanced by Manager or any entity (including affiliates of Manager) on Lender’s behalf, Lender hereby grants to Manager a first priority continuing lien and security interest, free and clear of adverse claims, in and to all the assets now or hereafter held in the Collateral Account, the Securities Account and any property at any time held by an Approved Borrower or Manager for Lender’s benefit or in which Lender may have an interest or in the possession or control of any third party acting on Manager’s behalf. Lender hereby authorizes, directs and instructs Custodian to (x) hold all such accounts and assets in its possession on behalf of Manager and subject to such lien and security interest and (y) comply with any instructions originated by Manager with respect to the Loaned Securities, the Collateral Account, the Securities Account and/or such assets, including instructions directing that such assets be transferred to Manager or its designee, without further consent of Lender. Lender hereby authorizes Custodian to rely on such written instructions and acknowledges and agrees that Custodian shall be under no duty to inquire into the validity or accuracy thereof. In addition, in order to secure the performance and payment by Lender of its obligations under this Agreement and to ensure reimbursement of Lender of any funds that may be advanced by Manager or any entity (including affiliates of Manager) on Lender’s behalf in connection with the transactions contemplated by this Agreement, Lender hereby grants to Manager a first priority continuing lien and security interest, free and clear of adverse claims, in and to all of Lender’s rights at any time in and to the Collateral Account, the Securities Account and all Loaned Securities that have been loaned to an Approved Borrower under the terms of any Securities Borrowing Agreement between Lender and such Approved Borrower. Without in any way limiting the foregoing, Manager shall have the right to set off against and apply any property of Lender now or in the future held or controlled by Manager against or to satisfy any liability of Manager to Lender or any obligation of Lender to Manager. The lien, security interest and right of set off of Manager hereunder shall survive the termination of this Agreement until all amounts due and owing to Manager from Lender shall have been paid in full.

(ii) Lender shall not terminate this Agreement at any time when (x) it owes obligations to Manager or (y) any Approved Borrower owes obligations to Manager in respect of Loans to which Manager has been subrogated, unless in either case effective provisions, which are satisfactory to Manager, have been made to continue in favor of Manager valid and effective first priority security interests, free and clear of adverse claims, in the Securities Account, the Collateral Account and the property contained in each such account.

(iii) Without limitation on the foregoing, the parties acknowledge and agree that Manager has “control” within the meaning of the Uniform Commercial Code as in effect in any applicable jurisdiction of the Collateral Account and the Securities Account and any financial assets and cash held in or credited to the Collateral Account and the Securities Account.

(iv) Manager shall have all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any applicable jurisdiction. In addition, Lender shall have the right to file a financing statement naming Lender as debtor and Manager as secured party covering the foregoing Collateral Account and Securities Account.

(d) Lender’s Obligations Are Full-Recourse. Lender’s obligations hereunder are full recourse and are not in any way limited or subject to the availability or sufficiency of Loan Collateral or Loaned Securities or prior presentment to, or demand of, Custodian or the willingness or ability of Custodian to make any transfer provided for herein.

10. MULTIPLE LENDERS AND LENDER AS BUSINESS TRUST. For any Loan under this Agreement, each reference in the Agreement to Lender shall be deemed a reference solely to the particular Lender to which such Loan relates. In no circumstances shall the rights, obligations or remedies of Manager with respect to a particular Lender constitute a right, obligation or remedy applicable to any other lender. Furthermore, in no circumstances shall the rights, obligations or remedies of a particular Lender with respect to Manager be applicable to any other lender with respect to Manager. With respect to any Lender that is organized as a business trust (or a series thereof), Manager is hereby expressly put on notice of the limitation of liability set forth in the Declaration of Trust or similar instrument of such Lender and agrees that the obligations assumed by such Lender hereunder shall be limited in all cases to that Lender and its assets, and Manager shall not seek satisfaction of any such obligation from the officers, agents, employees, directors, trustees, or shareholders of such Lender.

11. TAXES. Lender shall be responsible for all filings, tax returns and reports on any Loans which are to be made to any authority whether governmental or otherwise and for the payment of all Taxes and, insofar as Manager is under any obligation (whether of a governmental nature or otherwise) to pay the same on Lender’s behalf, Manager may do so out of any moneys or assets of Lender held by Manager, Custodian or provided by Lender. Manager shall promptly notify Lender when Manager pays such amounts on Lender’s behalf. Lender further acknowledges that the tax treatment of any amounts paid by an Approved Borrower in respect of dividends or distributions on Loaned Securities may be different from the tax treatment of such dividends or distributions had the Loaned Securities not been out on Loan to such Approved Borrower, and that Manager shall not be responsible for collecting any payments from Approved Borrower due to a retroactive change in law or rule of any governmental agency regarding the tax treatment of the interest or dividend to which such payment relates.

12. MISCELLANEOUS PROVISIONS.

(a) Transaction Costs. All transaction costs charged by Custodian shall be borne by Lender.

(b) Termination. Subject to Section 9 hereof, this Agreement shall continue unless terminated earlier by either party upon delivery to the other party of a written notice, which shall be delivered no less than 30 days prior to the then effective termination date. On such date of termination (whether on or before its stated term, the “Termination Date”), Manager shall (i) terminate outstanding Loans in accordance with the terms of each applicable Securities Borrowing Agreement and (ii) cease making Loans (however, Manager may continue making Loans if Manager determines, in its sole judgment and discretion, that to do so would facilitate the orderly termination of the Loans), it being understood by Lender that early termination of Loans may result in losses on the liquidation of investments of Cash Collateral, which losses shall be for the account of Lender. Notwithstanding the foregoing, Manager may terminate this Agreement upon 5 days notice in the event of a material financial deterioration of Lender (as determined in Manager’s sole discretion). Manager shall be entitled to receive the Manager’s Fee on the Termination Date, calculated as if such date were the end of the month in which such Termination Date occurs, and all other amounts due and owing to it hereunder. To the extent Manager provides services after the Termination Date in order to provide for the orderly termination of this Agreement, Manager also shall be entitled to receive any Manager’s Fees and all other amounts for the performance of its obligations hereunder after the Termination Date.

Further, to the extent that any Approved Borrower owes obligations to Manager to which Manager has been subrogated, such subrogation rights shall survive the termination of this Agreement. Notwithstanding anything to the contrary herein contained, the terms and conditions of this Agreement shall remain in full force and effect with respect to any Loan remaining outstanding after the Termination Date. In addition, notwithstanding anything to the contrary herein contained, the obligations set forth in Sections 8 and 9 hereof shall survive the termination of this Agreement.

(c) Notices. All notices shall be given to the party entitled to receive such notices at the addresses and telephone numbers set forth on Schedule II hereto and shall be effective only when received.

(d) Entire Agreement; Modification or Amendment. This Agreement constitutes the entire agreement of the parties with respect to this subject matter and supersedes all prior oral or written agreements in regard thereto.

(e) Rights and Remedies Cumulative. The rights and remedies conferred upon the parties hereto shall be cumulative, and the exercise or waiver of any thereof shall not preclude or inhibit the exercise of any additional rights and remedies.

(f) Amendment. Unless otherwise specifically stated in this Agreement, no amendment to, or modification or waiver of, this Agreement, or any provision hereof, shall be valid unless made in writing and signed by all parties hereto.

(g) Assignment. Neither this Agreement nor any Loan nor any interest or obligation in or under this Agreement may be transferred by either party without the prior written consent of the other party (other than pursuant to a consolidation or amalgamation with, or merger into, or transfer of all or substantially all of a party’s assets to, another entity, in each case whose financial condition is not materially worse than the financial condition of the transferring party) and any purported transfer without such consent will be void. Notwithstanding the foregoing, Manager may, without the consent of Lender, delegate to another branch or the head office of Manager any or all of the rights and obligations of the New York Branch of Manager under this Agreement, and (i) the New York Branch shall thereupon be relieved of all such transferred obligations under this Agreement, and (ii) all references to the State of New York or the United States in this Agreement (other than such as regard jurisdiction and governing law) shall be deemed to be references to the jurisdiction in which the principal offices of such other branch or head office, as applicable, are located, provided that such other branch or head office shall expressly assume the performance or observance of every obligation on the part of the New York Branch delegated thereto.

(h) Severability. Should any provision(s) of this Agreement be declared or found to be illegal, unenforceable, ineffective or void, then each party shall be relieved of any obligations contained in such provision(s) and the balance of this Agreement, if capable of performance, shall remain in full force and effect.

(i) Counterparts; Exchange of Facsimile. This Agreement may be executed in one or more counterparts, all of which taken together shall constitute one instrument. This Agreement may be delivered by exchange of facsimile copies of the executed counterparts with the same effect as if the parties had exchanged executed original counterparts.

(j) Governing Law; Consent to Jurisdiction; Process Agent, etc.

(i) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(ii) MANAGER AND LENDER IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY.

(iii) LENDER HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

(iv) TO THE EXTENT, IF ANY, LENDER MAY BE DEEMED TO HAVE OR HEREAFTER ACQUIRES IMMUNITY, ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE, FROM ANY JUDICIAL PROCESS OR PROCEEDING TO ENFORCE THIS AGREEMENT OR TO COLLECT AMOUNTS DUE HEREUNDER (INCLUDING, WITHOUT LIMITATION, ATTACHMENT PROCEEDINGS PRIOR TO JUDGMENT OR IN AID OF EXECUTION) IN ANY JURISDICTION, LENDER HEREBY WAIVES SUCH IMMUNITY AND AGREES NOT TO CLAIM THE SAME.

13. NETWORK ACCESS.

(a) Lender shall use its access to Manager’s computer network, intranet website and other online facilities (collectively, the “System”) only from Manager’s facilities or from Lender’s designated office location set forth on Schedule II hereto, and shall limit such access to Authorized Persons.

(b) Lender further represents and warrants that it shall not access, analyze, evaluate, attack, test, intrude upon, invade, connect with, penetrate, probe, or manipulate the System in any way except as agreed to, in writing, by Manager.

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in its name and behalf by its duly authorized representative as of the date and year first above written.


		RIDGEWORTH FUNDS

		/s/ Julia Short

		Name: Julia Short
		Title: President

		CREDIT SUISSE, NEW YORK BRANCH

		/s/ Gene Gemelli

		Name: Gene P. Gemelli
		Title: Authorized Signatory

		/s/ David Dahill

		Name: Authorized Signatory David Dehill
		Title: Authorized Signatory

		SUNTRUST BANK

		/s/ Kazuhiro Sekimoto

		Name: Kazuhiro Sekimoto
		Title:

ANNEX A TO SECURITIES LENDING MANAGEMENT AGREEMENT

DEFINITIONS

“Approved Borrower” shall mean any entity specified on Schedule I hereto (which may be amended from time to time pursuant to Section 3(b) hereof).

“Authorized Person” shall mean any person specified by Lender on Schedule II hereto (which may be amended from time to time by Lender giving five days’ prior written notice to Manager) to give Written Instructions on behalf of Lender.

“Borrower Event of Default” shall mean, with respect to any Securities Borrowing Agreement, the occurrence of an Event of Default (as defined therein) or Default (as defined therein) entitling Lender to terminate Loans thereunder.

“Cash Collateral” shall mean Loan Collateral in the form of cash denominated in United States Dollars.

“Citi” shall mean Citi Global Transaction Services, Inc.

“Clearing System” shall mean, in the case of U.S. securities, the Depository Trust Company, Participants Trust Company, Government Securities Clearing Corporation and any other securities depository or clearing agency (and their respective successors and nominees) registered with the Securities and Exchange Commission or otherwise authorized to act as a securities depository or clearing agency and, in the case of non-U.S. securities, Euroclear, Clearstream and any other depository or clearing agency generally recognized as acting in such capacity or performing similar services with respect thereto.

“Collateral Account” shall mean one or more accounts established by Lender with SunTrust Bank for the purpose of holding Loan Collateral, investments of Cash Collateral and Loan Fees paid by Approved Borrowers. Collateral Account shall include the RidgeWorth Funds Cash Collateral SMA.

“Collateral Value” shall mean, in respect of any Loan Collateral as of any date of determination, the value (in U.S. Dollars as determined by the Manager in good faith in accordance with its standard procedures) of the Cash Collateral.

“Custodian” shall mean SunTrust Bank and Brown Brothers Harriman & Co., as the case may be.

“Income” shall mean, with respect to an investment of Cash Collateral and the relevant period of calculation, the sum, without duplication, of (i) income realized, (ii) income accrued but not yet paid, and (iii) income accreted with respect to a security purchased at a discount or income amortized with respect to a security purchased at a premium. Income shall be calculated daily by Citi and provided to Manager on a daily basis by Citi.

“Loan” shall mean each loan of a Loanable Security to an Approved Borrower pursuant to a Securities Borrowing Agreement.

“Loan Collateral” shall mean all Cash Collateral delivered by Approved Borrowers as collateral for Loans.

“Loan Fee” shall mean the Loan Fee (as defined in the applicable Securities Borrowing Agreement) payable by an Approved Borrower with respect to any Loan.

“Loanable Security” shall mean each security designated as loanable by Lender.

“Loaned Security” shall mean each security that is the subject of a Loan.

“Manager’s Fee” shall have the meaning set forth in Section 4 hereof.

“Market Value” shall mean, with respect to any Loaned Securities or Loan Collateral at any time of determination, the market value thereof (including, in the case of fixed income securities, accrued and unpaid interest, unless contrary to market practice) at such time as determined in good faith by Manager in accordance with the provisions of the applicable Securities Borrowing Agreement.

“Operating Guidelines” shall mean the agreement or other instrument which sets forth the operating procedures applicable to the Manager, Lender and the applicable Custodian in connection with the Securities Lending Program.

“Program Income” shall mean, with respect to any calendar month, an amount equal to (i) the sum of (x) all gross Income from all investments of Cash Collateral during such month (not including capital gains or losses and after deduction of any fees and expenses (including, without limitation, investment management fees, custody fees or administrative fees) incurred in connection with such Income), plus (y) all Loan Fees paid or payable during such month, minus (ii) all Rebates, if any, paid to Approved Borrowers during such month.

“Rebate” shall mean, with respect to any Loan collateralized by Cash Collateral, the Cash Collateral Fee (as defined in the applicable Securities Borrowing Agreement) payable by Lender to the Approved Borrower under the applicable Securities Borrowing Agreement.

“Related Agreements” shall mean, individually or collectively, as the context may require, the Securities Borrowing Agreements, the Custody Agreement, and all other agreements, documents, instruments and instructions executed by Manager pursuant to Section 2(a) hereof.

“Required Margin Level” shall have the meaning set forth in Section 3(d) hereof.

“Return Date” shall have the meaning set forth in Section 6(a) hereof.

“Securities Account” shall mean each account established and maintained by Lender with the applicable Custodian for the purpose of holding Loanable Securities.

“Securities Borrowing Agreement” shall mean each agreement, and each annex, schedule, and exhibit thereto, entered into by Manager, as Lender’s agent, and an Approved Borrower, setting forth the terms and conditions pursuant to which Lender may from time to time lend Loanable Securities to such Approved Borrower.

“Securities Lending Management Services” shall have the meaning set forth in Section 2(a) hereof.

“Securities Lending Program” shall mean the lending of Loanable Securities to Approved Borrowers hereunder, and all of the other transactions contemplated hereunder and under the Related Agreements.

“Taxes” shall mean all unpaid calls, taxes (including, without limitation, any value added taxes and any stamp taxes), imposts, levies or duties due on any principal, interest, or other payment or distribution, or transfer, in each case payable on or in connection with any Loan, Loanable Security, Loaned Security, Loan Collateral, Rebate or Loan Fee.

“Term Loan” shall have the meaning set forth in Section 3(c)(i) hereof.

“Written Instructions” shall mean written communications actually received by Manager from an Authorized Person, or from a person believed by Manager to be an Authorized Person, by letter, memorandum, telegram, telex, cable, telecopy, facsimile, computer, video (CRT) terminal or other on-line system, or any other method whereby Manager is able to verify the identity of the sender of such communications or the sender is required to provide a password or other identification code.

ANNEX B TO SECURITIES LENDING MANAGEMENT AGREEMENT

List of Lenders


RidgeWorth Funds:
Aggressive Growth Stock Fund
Emerging Growth Stock Fund
High Income Fund
Intermediate Bond Fund
International Equity Fund
International Equity Index Fund
Investment Grade Bond Fund
Large Cap Core Equity Fund
Large Cap Growth Stock Fund
Large Cap Value Equity Fund
Limited-Term Federal Mortgage Securities Fund
Mid-Cap Core Equity Fund
Mid-Cap Value Equity Fund
Seix High Yield Fund
Select Large Cap Growth Stock Fund
Short-Term Bond Fund
Short-Term U.S. Treasury Securities Fund
Small Cap Growth Stock Fund
Small Cap Value Equity Fund
Strategic Income Fund
Total Return Bond Fund
U.S. Government Securities Fund
U.S. Government Securities Ultra-Short Bond Fund
Ultra-Short Bond Fund

SCHEDULE I TO SECURITIES LENDING MANAGEMENT AGREEMENT

List of Approved Borrowers


1.		ABN AMRO Bank N.V., New York Branch
2.		ABN AMRO Incorporated
3.		Banc of America Securities LLC
4.		Barclays Capital Inc.
5.		BNP Paribas Securities Corp.
6.		Calyon Securities (USA) Inc.
7.		Citigroup Global Markets Inc.
8.		Credit Suisse Securities (USA) LLC
9.		Daiwa Securities America Inc.
10.		Deutsche Bank Securities Inc.
11.		Dresdner Kleinwort Securities LLC
12.		Goldman Sachs & Co.
13.		Greenwich Capital Markets Inc.
14.		HSBC Securities (USA) Inc.
15.		Jefferies & Company Inc.
16.		J.P. Morgan Securities, Inc.
17.		Merrill Lynch Government Securities Inc.
18.		Merrill Lynch, Pierce, Fenner & Smith Incorporated
19.		Mizuho Securities USA Inc.
20.		Morgan Stanley & Co., Incorporated
21.		MS Securities Services Inc.
22.		Nomura Securities International Inc.
23.		SG Americas Securities, LLC
24.		Societe Generale, New York Branch
25.		UBS Securities LLC

SCHEDULE II TO SECURITIES LENDING MANAGEMENT AGREEMENT

Manager’s Fee: 15% of Program Income

Required Margin Level: The Required Margin Level for a Loan of any type of Loaned Security shall be an amount equal to the product of (i) the margin percentage specified below with respect to the relevant security type for such Loan and (ii) the Market Value of the Loaned Security (determined as of the date of computation).


Type of Loaned Security	Margin Percentage
U.S. Equity Securities
— initially and thereafter	102	%
U.S. Fixed Income Securities
— initial margin	102	%
— maintenance margin	100	%
International Securities
— initial margin	105	%
— maintenance margin	103	%

List of Authorized Persons:


Citi	RidgeWorth Capital	SunTrust Bank
TBD	Julia Short	Kazuhiro Sekimoto
	Dina Romeo

Contact Information for Notices:

Manager


Credit Suisse, New York Branch	for Legal Notices,	Credit Suisse, New York Branch
One Madison Avenue, 2nd Floor	with a copy to:	One Madison Avenue, 9th Floor
New York, NY 10010-3629		New York, NY 10010-3629

Lender

Citi Global Transaction Services, Inc.
3435 Stelzer Road
Columbus, OH 43219


Attn:		Todd Miller
		Manager
		Tel: 614-470-8776
		Fax: 614-470-8705

EX-99.H.16 10 l35361bexv99whw16.htm EX-99(H)(16) EX-99(h)(16)

Exhibit (h)(16)

FIRST AMENDMENT TO THE COMPLIANCE SERVICES AGREEMENT

This first amendment made as of May 1, 2008 to the Compliance Services Agreement dated as of October 1, 2004 (the “Agreement”), by and among the STI Classic Funds, the STI Classic Variable Trust , each a Massachusetts business trust (each a “Trust”) and BISYS Fund Services Ohio, Inc., an Ohio corporation (“BISYS”).

WITNESSETH:

WHEREAS, each Trust and BISYS desire to amend the Agreement to reflect the current names of the parties.

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:

	1.		STI Classic Funds is hereby called the RidgeWorth Funds.

	2.		STI Classic Variable Trust is hereby called the RidgeWorth Variable Trust.

	3.		BISYS is hereby called Citi Fund Services Ohio, Inc. All references in the Agreement to “BISYS” shall mean “Citi.”

	4.		Except as specifically amended hereby, the Agreement remains in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to the Agreement to be signed by their respective duly authorized officers as of the day and year above written.


RIDGEWORTH FUNDS
By:
	Name:	Julia R. Short
	Title:	President

RIDGEWORTH VARIABLE TRUST
By:
	Name:	Julia R. Short
	Title:	President

CITI FUND SERVICES OHIO, INC.
By:
	Name:	Fred Naddaff
	Title:	President

EX-99.I 11 l35361bexv99wi.htm EX-99(I) EX-99(i)

Exhibit (i)

Morgan, Lewis & Bockius LLP
1111 Pennsylvania Avenue NW
Washington, DC 20004

February 12, 2009

RidgeWorth Funds
101 Federal Street
Boston, MA 02110


Re:		Opinion of Counsel Regarding Post-Effective Amendment No. 78 to the Registration Statement Filed on Form N-1A Under the Securities Act of 1933 (File No. 033-45671)

Ladies and Gentlemen:

We have acted as counsel to the RidgeWorth Funds (the “Trust”), a Massachusetts voluntary association (commonly referred to as a business trust), in connection with the above-referenced registration statement on Form N-1A (as amended, the “Registration Statement”), which relates to the Trust’s units of beneficial interest, with no par value per share (collectively, the “Shares”), of the Intermediate Bond Fund and Total Return Bond Fund. This opinion is being delivered to you in connection with the Trust’s filing of Post-Effective Amendment No. 78 to the Registration Statement (the “Amendment”) to be filed with the U.S. Securities and Exchange Commission pursuant to Rule 485(b) under the Securities Act of 1933 (the “1933 Act”). With your permission, all assumptions and statements of reliance herein have been made without any independent investigation or verification on our part except to the extent otherwise expressly stated, and we express no opinion with respect to the subject matter or accuracy of such assumptions or items relied upon.

In connection with this opinion, we have reviewed, among other things, copies of the following documents:

	(a)		a certificate of the Commonwealth of Massachusetts as to the existence of the Trust;

	(b)		the Trust’s Agreement and Declaration of Trust and all amendments and supplements thereto (the “Declaration of Trust”);

	(c)		a certificate executed by Cynthia Surprise, the Secretary of the Trust, certifying as to, and attaching copies of, the Trust’s Declaration of Trust and Amended and Restated By-Laws (the “By-Laws”), and certain resolutions adopted by the Board of Trustees of the Trust authorizing the issuance of the Shares; and

	(d)		a printer’s proof of the Amendment.

RidgeWorth Funds
February 12, 2009
Page 2

In our capacity as counsel to the Trust, we have examined the originals, or certified, conformed or reproduced copies, of all records, agreements, instruments and documents as we have deemed relevant or necessary as the basis for the opinion hereinafter expressed. In all such examinations, we have assumed the legal capacity of all natural persons executing documents, the genuineness of all signatures, the authenticity of all original or certified copies, and the conformity to original or certified copies of all copies submitted to us as conformed or reproduced copies. As to various questions of fact relevant to such opinion, we have relied upon, and assume the accuracy of, certificates and oral or written statements of public officials and officers or representatives of the Trust. We have assumed that the Amendment, as filed with the U.S. Securities and Exchange Commission, will be in substantially the form of the printer’s proof referred to in paragraph (d) above.

Based upon, and subject to, the limitations set forth herein, we are of the opinion that the Shares, when issued and sold in accordance with the Declaration of Trust and By-Laws, and for the consideration described in the Registration Statement, will be legally issued, fully paid and non-assessable under the laws of the Commonwealth of Massachusetts.

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not concede that we are in the category of persons whose consent is required under Section 7 of the 1933 Act.

Very truly yours,

/s/ Morgan, Lewis & Bockius LLP
Morgan, Lewis & Bockius LLP

EX-99.J 12 l35361bexv99wj.htm EX-99(J) EX-99(j)

Exhibit (j)

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in this Registration Statement on Form N-1A of our report dated May 28, 2008, relating to the financial statements and financial highlights which appear in the March 31, 2008 Annual Reports to Shareholders of RidgeWorth Funds, which are also incorporated by reference into the Registration Statement. We also consent to the references to us under the headings “Financial Highlights”, “Independent Registered Public Accounting Firm” and “Financial Statements” in such Registration Statement.

PricewaterhouseCoopers LLP

Columbus, Ohio
February 12, 2009

EX-99.P.2 13 l35361bexv99wpw2.htm EX-99(P)(2) EX-99(p)(2)

Exhibit (p) (2)

CODE of ETHICS
RidgeWorth Capital Management, Inc.
(effective January 1, 2009)

SECTION 4.0 CODE OF ETHICS

The Firm’s primary responsibility, as a fiduciary, has always been and will continue to be the protection of client assets.

The Firm’s Code of Ethics (the “Code”) is well-established, and is continually re-evaluated for its effectiveness and efficiency as our business lines, client bases, the financial industry and regulatory mandates become more complex. Due to the need to regularly reassess and clarify practices, the contents of these guidelines will be updated as necessary. Because rapid changes in our industry constantly present new ethical and legal issues, no set of guidelines should be considered the absolute last word under all circumstances. Consult your supervisor or Firm Compliance with any questions about interpreting or applying the standards set forth in the Code of Ethics.

All directors, officers, employees and other Access Persons are subject to the Code’s rules and regulations regardless of position, length of employment, area or expertise, etc. The Code is also reflective of SunTrust Banks, Inc. corporate codes and business values, and thus all employees are held to the highest standards of business and personal integrity at all times and without exception. In addition to adhering to the Firm’s Code of Ethics, all employees shall also adhere to the Code of Business Conduct and Ethics of SunTrust Banks, Inc.

The Firm takes great pride in its reputation and is confident that employees will comply with all regulatory and firm specific rules and procedures. The Code is fully supported by senior management and is constantly reinforced through active business and compliance communications and periodic education and training.

4.1 CODE OF ETHICS — ENFORCEMENT

The Chief Compliance Officer is responsible and liable for implementing and supervising policies and procedures. Violations of any regulations, policies and procedures will be addressed and resolved by senior compliance and business management (when deemed appropriate) as quickly as possible.

In addition, the SEC and other regulators require proof that policy or procedure violations carry the appropriate penalty actions. Such actions may include but are not limited to: personal trading restrictions, loss of salary/bonus/general compensation, fines, suspension, termination, criminal and/or civil legal actions.

If the Firm’s Chief Compliance Officer or designee finds that a violation of the Code of Ethics has occurred, he or she may, after determining the seriousness of the infraction, impose one or all of the following:

	•		Verbal Admonishment;

	•		Written acknowledgement from the employee or Access Person that he/she has reviewed, fully understands and agrees to abide by the Code;

	•		Written notice to the employee or Access Person’s Personnel and Compliance files including steps taken to establish full compliance in the future;

	•		Fines and/or reversals of trades, requiring fines or profits be donated to a charity and losses be the responsibility of the employee;

	•		Partial or full restriction on all personal trading. A partial restriction is usually 6 months or more, a full restriction usually results in disallowing the employee from conducting ANY personal trading for the remainder of his or her association with the Firm;

	•		Suspension or termination of employment.

Severity of the violation and any history of non-adherence to the Code will be the basis for a determination of appropriate disciplinary action.

4.2 STANDARD OF CONDUCT

The Chief Executive Officer and senior executives are responsible for setting standards of business ethics and overseeing compliance with these standards. It is every employee’s responsibility to comply with these standards; which include, but are not limited to, the following:

	•		The primary responsibility of each director, officer, employee, and other Access Persons, is to carry out his or her duties in an ethical and diligent manner that is designed to obey all Firm regulations and protect and enhance client relationships. Furthermore, every employee is expected to apply the same principles and moral codes in all personal and social pursuits.

	•		Every employee is responsible for conducting themselves in a manner that will foster regulatory adherence, promote client confidence, and support Firm and personal high ethical standards – avoiding even the appearance of legal or ethical impropriety.

	•		Every employee is responsible to respond in a timely manner to all compliance requests for quarterly and annual documents and certifications and to complete required continuing education by the given deadline.

	•		Portfolio management professionals, as with all investment advisers, owe their clients a duty of undivided loyalty and utmost good faith. The Firm has a fiduciary responsibility to employ reasonable care to avoid misleading clients. The anti-fraud provisions of the Advisers Act make it unlawful for an adviser directly or indirectly to employ any device, scheme or artifice to defraud any client or prospective client.

	•		As a fiduciary, the Firm and its employees will act with the care, skill, prudence and diligence of a similarly-situated prudent man.

	•		The Firm’s communication standard prohibits the use of false, misleading or inaccurate statement in any form of communication with customers or the public, whether written, oral or electronic. In addition:

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	ú		No information contained in any communication should be based on rumor;

	ú		No action taken by any employee should be predicated on rumor;

	ú		Negative comparisons or negative statements about other financial professionals or financial services firms are strictly prohibited; and

	ú		Reference to exaggerated or non-existent services, or the use of enhanced or unofficial titles or credentials, is strictly prohibited.

Firm employees frequently encounter a variety of ethical and legal questions. Answers to these questions should be decided in a manner that is consistent with the Firm’s values. In some instances, the Code of Ethics will only be able to provide a baseline standard for actions, but underpinning these guidelines are the values of the Firm:

	•		Dedication to every client’s success

	•		Trust and personal responsibility in all relationships

4.2.1 Statement of General Fiduciary Principles

In recognition of the trust and confidence placed in the Firm by its Clients and to give effect to the Firm’s belief that its operations should be directed for the benefit of its Clients, the Firm has adopted the following general principles to guide the actions of its directors, officers, employees and other Access Persons.

	•		The interests of Clients must be placed first at all times.

	•		Employees are required to comply with applicable Federal Securities Laws.

	•		This Code of Ethics serves as the Firm’s standards of business conduct and illustrates the fiduciary obligations of its Access Persons.

	•		Access Persons are required to immediately report any violations of this Code to the Firm’s Chief Compliance Officer or his/her designee. Any retaliation for the reporting of violations under this Code will constitute a violation of the Code.

	•		Employees and other Access Persons are prohibited from trading, either personally or on behalf of others, while in possession of material nonpublic information. See Insider Trading Policy Section 4.4.

	•		Market timing abuse in mutual funds is strictly prohibited. Employees and other Access Persons should be aware of, and are required to comply with, the Market timing policies for all mutual funds they invest in.

	•		All personal securities transactions must be conducted consistent with this Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility.

	•		All the Firm’s employees must avoid actions or activities that allow, or appear to allow, any such person to profit or benefit from his or her position with respect to Clients, or that otherwise bring into question the person’s independence or judgment.

	•		This Code does not attempt to identify all possible conflicts of interest. Literal compliance with each of its specific provisions will not shield employees or other Access Persons from liability for personal trading or other conduct which violates a fiduciary duty to Clients.

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4.3 PERSONAL TRADING POLICY

The Firm has confidence in the integrity and good faith of its directors, officers, employees and other Access Persons. However, the Firm recognizes those individuals may have knowledge of present or future portfolio transactions and, in certain instances, the power to influence portfolio transactions made on behalf of one or more of the RidgeWorth Funds and other mutual funds sub-advised by the Firm, common/collective funds, and individually managed accounts, all collectively referred to as (”Clients”). Such knowledge could place those individuals, (if they engage in personal transactions in securities that are eligible for investment by Clients), in a position where their personal interests may conflict with those of the Firm’s Clients.

In view of the foregoing, and in accordance with Rule 204A-1 of the Investment Advisers Act of 1940, and the provisions of rule 17j-1(b)(1) of the Investment Company Act of 1940 (collectively defined as the “1940 Acts”), the Firm has adopted this Code of Ethics and Personal Trading Policy (“Code”). This Code prohibits certain types of personal transactions deemed to create conflicts of interest, or at least the potential for, or the appearance of, such a conflict and establishes reporting requirements and enforcement procedures.

4.3.1 Definitions

For purposes of this policy, the following terms shall be defined as provided.

	(1)		Access Person- each full/part-time employee, director, officer, certain contractors of the Firm, and certain employees of affiliates who are located at Firm’s offices and/or perform most of their job functions on behalf of Firm. ¹

	(2)		Beneficial Ownership- of a security is generally determined in the same manner as it is for purposes of Section 16 of the Securities Exchange Act of 1934. You should consider yourself the Beneficial Owner of any securities in which you have a direct or indirect pecuniary interest; which is the opportunity to profit directly or indirectly from a transaction in securities. Thus, you may be deemed to have Beneficial Ownership of securities held by members of your immediate family sharing the same household (i.e., a spouse and children), or by certain partnerships, trusts, or other arrangements.

	(3)		Blackout Period- a period during which Access Persons may not execute personal transactions because Firm is or may be trading in the same or similar securities. Firm’s Blackout Period is three (3) days and applies to Covered Security transactions. This means no Access Person shall purchase or sell any Covered Security within at least three (3) business days before and after the same security is being purchased or sold by/on behalf of Clients.


¹		reserves the right to determine on a case by case basis when and how employees of affiliates who are located at Firm’s offices may be subject to reporting requirements.

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(4)

Covered Security- any stock, bond, future, investment contract or any other instrument that is considered a “security” under the 1940 Acts. The term “Covered Security” is very broad and includes instruments not ordinarily thought of as “securities,” such as:

	•		Options on securities, indexes and currencies

	•		Investments in limited partnerships

	•		Exchange Traded Funds (ETFs), closed end funds, foreign mutual funds and foreign unit trusts

	•		Private investment funds, hedge funds, and investment clubs

	•		Proprietary mutual funds which are funds managed by the Firm or any other SunTrust Banks Inc. (STI) affiliate. The RidgeWorth Mutual Funds are an example of a proprietary fund.

	•		Non-proprietary mutual funds that are advised or sub-advised by the Firm

Covered Security does not include:

	•		Direct obligations of the U.S. government (e.g., treasury securities)

	•		Bankers’ acceptances, bank certificates of deposit, commercial paper, and high quality short-term debt obligations, including repurchase agreements

	•		Money market funds

	•		Shares of open-end mutual funds other than those that are advised or sub-advised by the Firm

NOTE: Investments not considered Covered Securities do not need to be reported to Firm. However, personal securities accounts which hold or could hold Covered Securities do need to be reported.

	(5)		Holding Period- short term trading in all Covered Securities is prohibited. In general, all securities must be held for a period of thirty (30) days or more. This includes options and futures transactions.

	(6)		Initial Public Offering (IPO) - is an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of Sections 13 or 15(d) of the Securities Exchange Act of 1934.

	(7)		Market Timing- is excessive short-term trading in mutual funds. Such activities can be detrimental to long-term fund shareholders, and consequently, fund companies must maintain policies and procedures to detect and prevent market timing abuses and other short-term trading.

	(8)		Private Placement- an offering of a stock or bond that is exempt from registration under the Securities Act of 1933 pursuant to Section 4(2) or Section 4(6) in the Securities Act of 1933.

	(9)		Review Officer- The employee selected by the Firm to administer this Code.

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4.3.2 Prohibited Purchases and Sales of Securities.

	•		Access Persons are generally prohibited from purchasing and/or acquiring Beneficial Ownership of equity or fixed income securities as part of any Initial Public Offering (IPO).

	•		No Access Person may participate in a block trade with any Client transaction.

	•		Access Persons are prohibited from short term trading that violates the Holding Period.

4.3.3 Pre-clearance of Personal Transactions.

Access Persons are required to pre-clear personal transactions in all Private Placements and in Covered Securities except those as noted below. Pre-clearance requests must be submitted to the Firm’s designated Review Officer prior to proceeding with the transaction. Access Persons are required to pre-clear investments in Private Placements by submitting the Private Placement request form and a copy of the Offering Memorandum associated with the investment to the designated Review Officer. Pre-clearance approvals are valid only for the date pre-clearance is granted. “Good till Cancel” (orders that could remain active beyond a day) are prohibited. In determining whether to grant approval, the Review Officer shall refer to all relevant sections of this Code.

The following personal transactions in Covered Securities are exempt from pre-clearance procedures. This exemption from pre-clearance does not release employees from reporting obligations, Holding Period restrictions or applicable securities laws:

	(1)		De Minimis purchases or sales of 100 shares or fewer of an equity security or $5000 or less of a fixed income security. Note: This exemption does not apply if your ownership exceeds 500 shares or more of the equity position or $25,000 or more of the fixed income position and should not be used as a means to avoid preclearance;

	(2)		Purchases or sales of exchange traded funds [(ETFs) including but not limited to SPDRS, QQQQ, Diamonds, WEBS, XAX,] closed end funds, foreign mutual funds, foreign unit trusts, proprietary mutual funds, or non-proprietary mutual funds advised or sub-advised by the Firm;

	(3)		Purchases or sales of SunTrust Banks, Inc. (STI) Stock including the exercise of STI employee granted stock options;

	(4)		Purchases or sales which are non-volitional on the part of the Access Person, including purchases or sales upon receipt of an exercise notice of puts or calls written by the Access Person and sales from a margin account pursuant to a bona fide margin call; (notification and reporting are required.) Note: Any options exercised at your discretion must follow standard pre-clearance requirements.

	(5)		Purchases effected upon the exercise of rights issued by a security issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer

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4.3.4 Reporting Obligations.

	(1)		Initial and Annual Holdings Reports-Each Access Person shall complete an Initial Holdings Report within 10 days of his or her start date. Thereafter, each Access Person shall complete an Annual Holdings Report due January 30th for all Covered Securities as well as all securities accounts which hold or could hold Covered Securities in which the Access Person has any direct or indirect Beneficial Ownership. This includes the disclosure of accounts held by members of your immediate family sharing the same household (i.e., a spouse and children) etc. Information must be current within 45 days prior to the day the report is submitted.

			Reports to include:

	•		The title and type of security, and as applicable the exchange ticker symbol or CUSIP number, number of shares, and principal amount of each Covered Security in which the Access Person has any direct or indirect Beneficial Ownership;

	•		The name of any broker, dealer or bank with which the Access Person maintains an account in which any securities are held for the direct or indirect benefit of the Access Person; and

	•		The date the Access Person submits the report

(2)

Quarterly Transaction Report-Each Access Person shall report transactions in Covered Securities where beneficial ownership exists within 30 days of each calendar quarter end. Reports to include:

	•		For each Covered Security the date of the transaction, the title, and as applicable its exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares and principal amount;

	•		The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

	•		The transaction price;

	•		The name of the broker, dealer or bank where the transaction was effected;

	•		The date the Access Person submits the report; and

	•		A disclosure of any new account(s) in which the Access Person has Beneficial Ownership

	(3)		Initial and Annual Certifications- Each Access Person must certify initially within 10 days of his or her start date (and annually thereafter) that he or she has read, understands and recognizes that he or she is subject to the Code.

	(4)		Outside Business Activities Certification- Each Access Person must disclose initially within 10 days of his or her start date (and annually thereafter) any outside business activity whether compensation is received or not.

	(5)		Duplicate Statements and Confirmations- Each Access Person must direct their securities firms to supply the Firm with copies of account statements and trade confirmations directly to:

RidgeWorth Capital Management, Inc.
Chief Compliance Officer
P.O. Box 2137
Atlanta, GA 30301
Personal and Confidential

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NOTE: In instances where securities firms are unable to provide duplicate statements (examples may include 401k and stock plan accounts held outside SunTrust and investment club accounts) employees must furnish copies with their Quarterly and Annual reports. Additionally, whenever possible, Firm will establish electronic feeds with securities firms to satisfy the duplicate statements and confirmations requirement.

4.3.5 Exception to Reporting Obligations.

Fully Discretionary or Managed Accounts- Access Persons may have discretionary accounts managed by an external party in which full discretionary authority has been given via a signed legal contract. For this type of account, no communication between the external investment manager and the employee with regard to investment decisions is permitted to occur prior to the investment manager’s execution. Transactions and holdings in these accounts do not need to be reported to Firm. Employees must provide the Review Officer or Chief Compliance Officer designee with a letter signed by the investment manager or other external party confirming that the account is, or will be, fully discretionary, and that the employee has no power to affect or influence investment decisions. In lieu of providing a letter, a signed copy of an Investment Advisory agreement or other legal document will suffice if all applicable points above are covered.

4.3.6 Additional Restrictions, Requirements and Requests for Waivers.

	•		No Access Person shall give or receive any gift or other item except in accordance with the Gifts and Entertainment Policy.

	•		Generally, no Access Person may accept a position as a director or trustee of a publicly-traded company whether or not the position provides compensation in any form. Exceptions to this policy may be available with prior written approval by the Firm (and, if applicable, by the Board of Trustees of the RidgeWorth Funds).

	•		In the event of extended Medical or Military Leave, Access Persons should attempt to notify the Review Officer as reporting deadlines, in many cases, may continue to apply.

	•		Access Persons must contact the Review Officer for any requests of waivers or exceptions to policy. Requests will be reviewed and granted on a case by case basis.

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4.3.7 Review and Enforcement.

	•		The Review Officer shall conduct periodic spot checks to determine that Access Persons are not attempting to knowingly front run Client trading activity by placing personal trades within 3 business days before or after Client trading, also referred to as the Blackout Period.

	•		The Review Officer shall compare personal securities transactions reported pursuant to all sections of this Code with completed portfolio transactions of Clients for the relevant time period to determine whether a violation of this Code may have occurred. Before determining that a violation has been committed by any individual, the Review Officer shall give such individual the opportunity to supply additional explanatory material. Pre-clearance approval does not necessarily mean a trade is not in violation of the Code as the Review Officer does not have prior knowledge of Client trading activity occurring after pre-approval is granted. Conversely, a trade that occurs during the 3 day Blackout Period is not automatically considered a violation. The Review Officer will apply subjective analysis to each transaction to determine whether a trade within the 3 day Blackout Period presents a conflict or the appearance of a conflict with trading on behalf of Clients.

	•		If the Review Officer determines that a material violation of this Code may have occurred, the Review Officer shall submit such written determination, together with the information upon which the Review Officer made the determination and any additional explanatory material provided by the individual, to the Firm’s Chief Compliance Officer or his/her designee.

	•		If the Firm’s Chief Compliance Officer or his/her designee finds that a violation of the Code of Ethics has occurred, he or she may, after determining the seriousness of the infraction, impose one or all of the following:

	ú		Verbal Admonishment;

	ú		Written acknowledgement from the employee or Access Person that he/she has reviewed, fully understands and agrees to abide by the Code;

	ú		Written notice to the employee or Access Person’s Personnel and Compliance files including steps taken to establish full compliance in the future;

	ú		Fines and/or reversals of trades, requiring fines or profits be donated to a charity and losses be the responsibility of the employee;

	ú		Partial or full restriction on all personal trading. A partial restriction is usually 6 months or more, a full restriction usually results in disallowing the employee from conducting ANY personal trading for the remainder of his or her association with the Firm;

	ú		Suspension or termination of employment.

Severity of the violation and any history of non-adherence to the Code will be the basis for a determination of appropriate disciplinary action.

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4.3.8 Records

The Firm shall maintain records in the manner and extent below under the conditions described in Rule 31a-2 under the Investment Company Act and Rule 204-2 of the Investment Advisers Act. As noted below, records shall be maintained in a readily accessible place for at least five years, with the first two years in an office of the Firm:

	•		A copy of each Code that has been in effect at any time during the past five years;

	•		A record of any violation of the Code and of any action taken as a result of such violation for five years from the end of the fiscal year in which the violation occurred;

	•		A record of all written acknowledgments (as required by Rule 204A-1) for each individual who is currently, or within the past five years was an Access Person of the Firm, shall be retained for five years after the individual ceases to be an Access Person.

	•		A record of each report made by an Access Person pursuant to this Code shall be preserved for a period of not less than five years from the end of the last fiscal year in which it was made.

	•		A record of all individuals who have been required to make reports pursuant to this Code shall be preserved for a period of not less than five years from the end of the fiscal year in which it was made.

	•		A record of any decision, and reasons supporting the decision, to approve the acquisition of securities by Access Persons for at least five years after the end of the fiscal year in which the approval is granted.

	•		A copy of each annual report to the Board of Trustees of the RidgeWorth Funds will be maintained for at least five years from the end of the fiscal year in which it was made.

4.4 INSIDER TRADING

Rule 10b5-1 under the Securities Exchange Act of 1934 creates a presumption that an individual aware of material nonpublic information has “used” that information in trading, subject to designated affirmative defenses aimed at showing that the information was not a factor in the trading decision. Rule 10b5-2 defines the type of family or other non-business relationships that give rise to a duty not to “misappropriate” material nonpublic information.

Anyone who is employed by, or performs any duties on behalf of the Firm is subject to these Insider Trading policies.

4.4.1 What is Insider Trading?

Insider trading is seen as an abuse of an insider’s position of trust and confidence, and is harmful to the securities markets resulting in the ordinary investor losing confidence in the market.

Insider trading is prohibited by federal securities regulations so as to maintain the assurance afforded to investors that they are placed on an equal footing and they will be protected against the improper use of insider information.

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Tipping of certain information by a Firm employee to a third party is also prohibited, because the information is given to certain persons and not the public at large.

Normally there are three types of insiders:

	•		True insiders such as research analysts, portfolio managers, and directors;

	•		Quasi insiders such as professional advisers, lawyers, auditors and financial advisers; and

	•		Tippees — those who are given information by an insider.

The information of insiders is that type of information which is likely to affect the price of securities if it were public information. In all cases the necessary material information should be disseminated to the market/public before the insider deal. Otherwise the insider could publish the information and then act immediately before the market could absorb it. Timing is of the essence and enough time should be given to the public before the insider benefits, alone, from such material information.

Sanctions for insiders could be civil or criminal or both. However, normally there must be actual knowledge by the insider that the information is inside information. In other words, insider dealing must be known and deliberate.

There is no limitation as to the securities covered by the insider trading prohibition and therefore applies to all types of securities, whether listed or unlisted.

4.4.2 Policy

In certain instances, it has been observed that there is conflict of duties because trading on insider information is prohibited and at the same time there is a duty to trade to protect the interest of the client. This could emerge in cases where Portfolio Manager, managing a discretionary investment account, becomes aware of unpublished price sensitive information. There may be a conflict between the duty not to trade and the duty to act in the best interests of clients. The prohibition of insider trading is overriding.

It is the Policy of the Firm that all investment decisions regarding the purchase, sale, or retention of publicly traded securities shall be made only on the basis of information available to the general public. No such decision shall be made on the basis of any material inside information concerning securities, which may come into the possession of Firm employees, whether such information is obtained intentionally or unintentionally. No employee may trade either personally or on behalf of others (such as accounts advised by the Firm), in a security with respect to which he or she possesses material, non-public information, nor may such individual communicate material, non-public information to others in violation of the law. Information is material when there is a substantial likelihood that a reasonable investor would consider it important in making his or her investment decisions.

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Employees shall not seek access (either directly or indirectly), to Credit Files, Securities Underwriting Files, or other files of SunTrust Banks, Inc or its affiliates for investment decision purposes. And employees shall also avoid discussion with employees of SunTrust Banks, Inc. or any affiliate concerning publicly held corporations, in meetings or in private, which might lead to a disclosure of material inside information concerning such corporations or securities to Firm employees.

Where employees come into possession of material inside information concerning publicly held securities, this fact shall be made known promptly to the CEO or designee. Appropriate steps shall then be taken to prevent any investment decisions being made on the basis of such information.

These prohibitions do not apply to non-publicly traded securities of closely held corporations, for which the Firm has current or prospective fiduciary or advisory responsibility. In such instances, employees may request access to files of the Bank pertaining to such corporations, but only with the approval of the CEO or designee.

4.4.3 Chinese Wall

The Firm maintains a Chinese wall between the investment advisory (research or portfolio managers) and the firm’s investment banking affiliates. An effective Chinese wall stops confidential information passing from individuals on one side of the wall to individuals on the other side.

All regulations relating to securities markets are very clear regarding the prohibition of insider trading. This clear stand is based on the philosophy of giving equal information to all investors. The Firm will maintain appropriate controls so that insider information does not disseminate throughout or outside of the Firm.

4.4.4 Employee Responsibilities

Because all individuals associated with or performing duties on behalf of the Firm are subject to these Insider Trading policies, each individual is also responsible for the following with respect to thwarting or detecting Insider Trading rule violations:

	•		Read and comply with the policies and procedures stated here.

	•		Make no trades in accounts for individuals having direct or indirect beneficial interest in securities for which material non-public information exists.

	•		Do not disclose any material non-public information to family, friends or clients.

	•		Notify the Chief Compliance Officer when a potential violation of insider trading rules is suspected.

	•		Properly document and submit to Firm Compliance on the appropriate internal forms all outside activities, directorships, and material ownership of a public company.

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4.4.5 Enforcement

The Chief Compliance Officer is responsible for setting forth policies, procedures, monitoring adherence to the rules of insider trading, pre-clearance of employees’ and their dependents’ personal security transactions, and the implementation of the Code of Ethics.

Any director, officer or employee, who trades in securities or communicates any information for trading in securities, in violation of the Insider Trading Rules and/or these polices, shall be subject to disciplinary action by the Firm, which may include ineligibility for future participation in personal security transactions, and possibly termination.

4.5 CONFLICTS OF INTEREST

Out of an agreement between the New York State Attorney General and Merrill Lynch on May 21, 2002, was born the Investment Protection Principles (the “Principles”). Most of the Principles resulted from findings that certain investment firms and stock analysts had conflicts of interests or secret agendas when making investment decisions for clients, and may have given misleading information to investors, including state pension funds.

The conflicts of interest specific to these Principles may arise when money managers handle both public pension funds and corporate 401(k) clients. A conflict can arise when research analysts are reluctant to disclose negative information about their corporate clients, even though withholding the information could adversely affect public pension fund investments. “The evidence revealed that the analysts writing stock reports at times functioned essentially as sales representatives for the firm’s investment bankers, using promises of positive research coverage to bring in new clients and stock offerings,” (Testimony of New York State Attorney General Eliot Spitzer, June 26th, 2002, before the Senate Committee on Commerce, Science and Technology, Subcommittee on Consumer Affairs, Foreign Commerce and Tourism, Hearing on Corporate Governance).

The Principles were designed to keep investment bankers within a broker-dealer from exerting undue influence over research analysts within the same firm, and to discourage prioritization of one type of client over others.

Several states and public pension funds require asset managers to take certain actions and/or certify compliance with the Principles as a condition of being appointed manager of public funds.

4.5.1 Policy

The Firm holds the Investment Protection Principles formulated out of the agreement between Merrill Lynch and Co. and the New York State Attorney General in high regard. The Firm’s adoption of these policies and procedures serves to highlight the ethical structure that has long been encouraged and supported within the Firm.

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4.5.2 Procedures

The Firm operates free of any investment banking conflicts of interest. Following are the safeguards currently in place, reasonably designed to prevent client relationships of an affiliate from influencing investment decisions made by the Firm:

	•		The Firm has no investment banking division.

	•		The Firm does not conduct investment banking services;

	•		The Firm’s research analysts’ compensation has no link to any investment banking business. The Firm’s Finance Department reviews compensation records to determine that compensation is based only on pre-approved calculations and formulae;

	•		No research analyst may participate in efforts to solicit investment banking business of an affiliate. Accordingly, no research analyst may, among other things, participate in any “pitches” for investment banking business to prospective investment banking clients, or have other communications with companies for the purpose of soliciting investment banking business;

	•		No research analyst may be subject to supervision by an affiliate’s investment banking department, and no personnel engaged in investment banking activities may have any influence or control over the compensatory evaluation of a research analyst;

	•		The Firm receives no compensation from any of the recommended subject companies;

	•		Neither the Firm’s Portfolio Managers nor its Research Analysts have access to credit files or systems of any affiliates;

	•		Offices of the Firm are located separately from investment banking affiliates;

	•		The Firm’s Investment Policy Committee, the members of which are all employees of the Firm and all the Firm’s Portfolio Managers make the investment decisions for those accounts for which the Firm has investment discretion;

	•		Securities of certain companies with which the Firm has an affiliation by way of its relationship with SunTrust Banks, Inc., i.e. SunTrust director-related securities, are prohibited from being purchased in accounts for which the Firm has investment discretion (refer to restricted securities policy);

	•		To address material conflicts of interest, as defined by the SEC, involving Firm relationships, the Firm’s Proxy Voting Committee will engage the services of an independent fiduciary voting service to vote any proxies for securities for which the Committee determines a material conflict of interest exists so as to provide shareholders with objective proxy voting;

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4.5.3 Definitions

For purposes of this policy, the following terms shall be defined as provided.

	(1)		Investment banking department - any department or division that performs any investment banking service.

	(2)		Investment banking services - include, without limitation, acting as an underwriter in an offering for the issuer, acting as a financial adviser in a merger or acquisition, providing venture capital, equity lines of credit, or serving as placement agent for the issuer.

	(3)		Research analyst - the associated person who is primarily responsible for the recommendation of a security whether or not any such person has the job title of “research analyst.”

	(4)		Research department - any department or division, whether or not identified as such, that is principally responsible for preparing the substance of a research report or security recommendation.

	(5)		Research report - a written or electronic communication that includes an analysis of equity securities of individual companies or industries, and that provides information reasonably sufficient upon which to base an investment decision.

	(6)		Subject company - the company whose securities are the subject of a research report or a recommendation.

4.5.4 Individual Responsibility

A conflict of interest exists when a Firm employee or officer is involved in activities or relationships which might prevent the proper exercise of his or her duties and obligations to the company.

Circumstances which give the appearance of a conflict of interest should be avoided, or at least carefully examined since the reputation of the company and the individual may be injured by the appearance as well as by the facts.

In addition to adhering to the Firm’s Code of Ethics, all employees shall observe the Code of Business Conduct and Ethics of SunTrust Banks, Inc. which, among other things, states that an employee may not accept employment with an outside company without first obtaining written approval from their manager.

Information obtained through business or work contacts is privileged and confidential. It is not to be used to benefit the employee or other clients. Safeguarding confidential client information is one of the Firm’s primary obligations.

Demands on employee time and commitments that might bring about conflicts of interest should be resolved in favor of the best interests of the Company. Consultation with supervisors and management is appropriate where there may appear to be an issue.

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4.5.5 Outside Directorships and Business Interests

Written approval by the CEO, or his or her designee, is required before any officer or employee may serve as a director or Trustee of any corporation. Any significant interest in a business by an officer or employee of the Firm shall be reported to the CEO by said officer or employee. Furthermore, any employee who accepts such a position outside of the Firm must report this action to the Firm’s Compliance Department using the Outside Activities Report form upon being hired, annually thereafter, and also if an employee is considering a new such position outside of the Firm. Generally, no employee may accept a position as a director or trustee of a publicly-traded company whether or not the position provides compensation in any form. Exceptions to this policy are not permitted without prior written approval by the CEO or CCO.

4.5.6 Competing with Affiliates

No officer or employee of the Firm may take for him or herself an opportunity which belongs to the firm. Whenever the Firm has been seeking a particular business opportunity, or the opportunity has been offered to it, or the Firm’s funds, facilities, or personnel have been used in developing the opportunity, the opportunity rightfully belongs to the Firm and not to officers or employees who may be in a position to direct the opportunity to him or herself or others.

Under no circumstances shall any officer or employee engage in any outside activity for compensation that utilizes any of the services or facilities of the Firm. The specific types of outside activities that may produce a conflict of interest include:

	•		Employment with a company, or personally engaging in any activity, that is in competition with the Firm.

	•		Rendering investment counsel or other advice based upon information, reports, or analyses that are accessed primarily from or through the Firm employment.

	•		Personal use of the Firm equipment, supplies or facilities.

4.5.7 Client Relations

No officer or employee of the Firm or any member of his or her immediate family shall acquire any real, tangible or intangible property of any kind when he or she has knowledge that the Firm, SunTrust, or any present or potential client whose plans have been disclosed, may lease, rent, or acquire said property in the near future.

No officer or employee of the Firm shall act for themselves or disclose to others any material non-public information related to securities that are publicly held. All officers and employees shall conduct themselves in such a manner that transactions for their clients have priority over personal transactions, and personal transactions do not operate adversely to client interest. Officers and employees should act with impartiality with respect to all clients.

Code of Ethics-RidgeWorth Capital Management, Inc. – Effective January 1, 2009 16

The Firm shall not sell, rent or lease to nor purchase, rent or lease from any officer or employee (or member of his or her immediate family) of SunTrust Banks, Inc. and its subsidiaries, any real, tangible, or intangible property of any kind. This shall not apply when the officer or employee is related to the account, by blood or marriage, and there is authority for the transaction in the governing instrument of the account.

4.6 GIFTS AND ENTERTAINMENT

SEC’s Rule 206(4)-3, the general antifraud provisions of the Investment Advisers Act of 1940 (the Act), ERISA and other applicable regulations serve as the premise for this policy on giving and accepting gifts.

4.6.1 Definitions

For purposes of this policy, the following terms shall be defined as provided.

	(1)		Gift - an item given or received as a result of an existing or prospective business relationship. Gifts are not the same as Entertainment, i.e., giving tickets to a sports or theater event where a Firm employee is not present is a gift.

	(2)		Entertainment - a business-related activity or event involving an Outside Party with a Firm employee present, such as theater or sporting tickets, working meals, and other social events.

	(3)		Outside Party - any existing or prospective “business source,” such as a client, vendor, brokerage firm registered representative, consulting firm, the issuer of a portfolio security, etc. Note: Employees of SunTrust Banks, Inc. and/or its affiliates are not considered “Outside Parties.”

	(4)		ERISA Account Official (a/k/a/ “Parties in Interest”) - Plan fiduciaries; (trustee, employer, plan sponsor, plan administrator, investment adviser, investment and administrative committees); also “non fiduciaries,” those who impact plan decisions (attorneys, consultants, actuaries, etc.).

4.6.2 General Policy

This policy applies equally to all parties where payment for a gift or entertainment is either a Firm expense or an employee’s personal expense. Gifts must be nominal in value and reasonable in frequency. Unsolicited promotional material, general in nature and inconsequential in value, (pens, t-shirts, etc.), are permitted if occasional, do not violate this policy, and do not involve the expectation of a commitment of a business transaction.

No policy is able to address every scenario. This is a principle-based policy. Firm employees shall conduct themselves as professionals exercising sound business judgment by weighing the business interest involved against possible public perception when deciding to give or accept gifts.

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Special circumstances may exist where a gift or entertainment request falls outside of guidelines and additional review and consideration is appropriate. Employees shall submit supporting rationale and information to the Firm’s CFO or CCO, or their respective designees, for review and/or approval.

Employees who violate this policy shall be subject to reprimand and possible disciplinary action up to and including termination of employment.

4.6.3 Gifts

Business gifts are designed to foster and promote relationships and goodwill. Conflicts arise when gifts compromise objective and independent business decisions. Even the perception of compromise is damaging to an adviser’s image and integrity.

Giving Gifts - Firm employees must not offer or give gifts which may be viewed as:

	•		overly generous/excessive;

	•		aimed at influencing a decision-making individual or process;

	•		intended to make a recipient feel obligated to provide business or other forms of compensation in return.

Accepting Gifts - Employees shall not accept gifts, favors, or any items of value which may influence their decision-making or obligate them in any fashion. To avoid even the appearance of impropriety, employees shall observe the guidelines below.

As many clients have established policies related to gifts, employees shall obtain and review any client and/or account administration-related guidance prior to any such action being taken.

4.6.4 Guidelines for Giving and Accepting Gifts

Generally, the dollar value limit of gifts given to or received by the same client in any calendar year is $100.

(1)

Usually Permissible to Give or Accept

	•		Promotional items of nominal value (pens, mugs, golf balls, etc).

	•		Prizes won from games of chance (raffles or lottery-style games).

	•		Flowers, gift/fruit baskets, etc., for reasonable and infrequent occasions such as holidays, birthdays, promotions, etc.

	•		Gifts such as merchandise or products valued at $100 or less.

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(2)

Approval of CFO and CCO, or Their Respective Designees, Required Prior to Giving or Accepting

	•		Offers of paid seminar or conference attendance and fees.

	•		Offers of paid transportation, hotel, lodging, etc.

	•		Annual gift amounts in excess of this policy’s amounts.

	•		Firm-paid charitable donations.

(3)

Never Permissible to Give or Accept

	•		Cash, items redeemable for cash, cash equivalents, or securities.

	•		Articles of significant value.

	•		Any item as part of a “quid pro quo” arrangement (i.e., “something for something”).

	•		Gifts which violate any laws and or regulations (Federal, State, Local, ERISA, Taft-Hartley, State Statutes, etc).

	•		Firm-sponsored charitable donations to organizations which are also RidgeWorth Fund mutual fund shareholders (prohibited due to certain unintended tax consequences to the Funds and shareholder).

	•		Gifts to anyone who threatens to or has submitted a complaint about an employee or the Firm. (Notify the CCO, or his/her designee, immediately-see Section 7:13 for client complaints policy.)

	•		Gift which violate a client’s policies, the Firm’s policy, industry standards, laws and or regulations.

4.6.5 Entertainment

Employees are permitted to entertain and to be entertained provided it is not excessive in value or frequency and fosters business relationships with potential or existing Outside Parties (i.e., clients, vendors, brokers, services providers, consultants, etc). The Firm prohibits employees from entertaining as a means of personal gains.

4.6.6 Guidelines for Giving and Accepting Entertainment

(1)

Usually Permissible

	•		Occasional and reasonable business entertainment, such as a breakfast, lunch or dinner.

	•		Theater, or regular sporting event tickets and the like if cost is reasonable.

	•		Golf (greens fees and cart fees).

	•		Invitation to cocktail parties.

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(2)

Requires Prior Approval of CFO and CCO, or Their Respective Designees, on a Case-by-Case Basis

	•		Sponsorship and/or event participation requests.

	•		Tickets to special events, such as a Super Bowl, World Series or Stanley Cup game and the like.

	•		Entertainment beyond (1) day, (i.e. overnight cruises, hunting, or skiing trips).

	•		Single day attendance or participation in a seminar or conference (excluding flight and hotel).

(3)

Never Permissible

	•		Unethical or illegal activity.

	•		Payment of annual golf club membership dues.

	•		Discretionary use of personal property.

	•		Season tickets.

	•		Vacations or other excessive and lavish trips.

4.6.7 Charitable Donations

Personal Donations - Personal, non-reimbursable donations to “charitable organizations”, including those to private schools or colleges and universities, churches, United Way, etc., need not be reported to Firm Compliance.

The stated gift limit of $100 per year per Outside Party does not apply to personal donations to charitable organizations.

Corporate Donations - Firm-sponsored donations to charitable organizations must be approved by the Firm’s CFO and CCO, or their respective designees, prior to giving. Firm employees must contact the Firm Finance Department for proper authorization and procedures when requesting Firm-sponsored charitable contributions.

4.6.8 Employees with Memberships, Licenses and Charter Holders of Industry Associations

Affiliations/memberships with industry organizations may impose additional, more restrictive policies on Firm employees. In the event of policy overlap, the more restrictive policy shall be followed.

FINRA Licensed Employees - Employees with active FINRA licenses are also employees of SunTrust Investment Services, Inc. (STIS), a broker-dealer; and subject to its policies, in addition to this policy.

FINRA Licensed employees must consult the STIS Supervisory Policies and Procedures Manual for complete information and detail or contact their Principal.

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CFA Charter Holders - Charter Holders are subject to additional guidelines and restrictions provided in the CFA Institute Standards of Practice.

Chartered employees must refer to the CFA Institute web site, and published manuals.

4.6.9 Personal Contributions to a Political Entity, Official/Candidate

Pay-to-Play Definition - Public Funds (i.e. public pensions) are administered by elected officials for the benefit of citizens and retirees. Elected officials violate public trust when political contributions influence their selection of advisors for these public assets.

Similarly, advisers seeking to influence the award of public advisory contracts through political contributions violate their fiduciary obligations, as well. This “Pay-to-play” practice is prohibited by the SEC.

Most state laws prohibit the giving or accepting of contributions or gifts between service providers and public fund/plan officials. You must consult the public fund client’s policies/regulations prior to giving or accepting any contributions or gifts.

Employees are prohibited from engaging in “Pay-to-play.”

Personal Contributions to a Political Entity, Official/Candidate - Political contributions must not be made to a particular governmental entity or official/candidate which conducts business with the Firm, and who may be or appear to be in a position to influence the award of business to the Firm.

Personal, non-reimbursable contributions to a particular governmental entity or official/candidate are permitted, and not reportable on your Gifts and Entertainment Log, provided the entity and/or official/candidate have no business relationship with the Firm. In the instance where a business relationship does exist, each contribution must be pre-approved by the Firm CCO, or his/her designee.

4.6.10 Corporate Contributions to a Political Figure or Party

No payments or gifts of any value shall be made to any Outside Party including domestic or international government official or political candidate with the purpose or intent of securing or retaining business for the Firm or influencing decisions on its behalf.

The Federal Election Campaign Act prohibits the Firm from making contributions to US Federal or State political parties, officials, or candidates.

The Foreign Corrupt Practices Act prohibits the Firm from making contributions to political parties or candidates outside the U.S.

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4.6.11 SunTrust Bank Good Government Group

The SunTrust Bank Good Government Group is a voluntary, non-profit, non-partisan, political action committee registered with the Federal Election Commission and the Florida Department of State. Corporations, such as SunTrust are permitted to sponsor “political action committees” which can receive donations from interested individuals and make contributions to political candidates.

All contributions are subject to prohibitions and limitations of the Federal Election Campaign Act.

Contributions by the Firm or its employees to the SunTrust Bank Good Government Group are not required to be recorded on an employee’s Gifts and Entertainment Log.

4.6.12 Regulators

FINRA Rule 2110 and the Investment Advisers Act Rule 206(4) prohibit the giving of any compensation, gifts, gratuities, or entertainment to federal, state or self-regulatory organization’s regulators. Attempts involving SEC agents may be construed as bribery; a violation of federal law.

4.6.13 Mutual Fund Distributors

The use of fund assets (brokerage commissions) as kickbacks to brokers for recommending the RidgeWorth Funds over rival fund groups is strictly prohibited and may be deemed paying for “shelf space,” which is a conflict of interest. Firm employees shall notify the CCO immediately upon learning of the existence of any such arrangements.

Luncheons and nominal logo’d items are permitted to be given during the Firm or RidgeWorth Fund hosted instructional and educational meetings, which may be attended by various RidgeWorth Fund distributors.

4.6.14 Taft-Hartley Union Plan Clients

The Taft-Hartley Act (the “Act”), a/k/a/ Section 302 of the Labor-Management Relations Act regulates multiemployer benefit plans (including multi-employer pension plans), specifically, retirement plans which involve employee contributions where a union/union rep has authority in the administration/management of the plan’s assets.

ERISA (not Section 302) applies if the retirement plan is maintained/administered exclusively by employers or is maintained/administered exclusively by a union, without the use of employee funds.

In the absence of specific direction, Firm employees shall apply ERISA standards in relation to this policy.

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Required Reporting - Gifts and/or entertainment to Taft-Hartley plan officers and/or employees must be identified as such by each Firm employee on their Log. This, along with the steps below, enables the Firm to comply with the Department of Labor’s annual reporting requirements.

Department of Labor’s Annual Reporting Requirements to Taft Hartley Plan Related Parties - Compliance will create a report from information obtained from employee Logs which are reviewed throughout the reporting year. The Firm shall file the appropriate LM-10 Report with the DOL within the filing period if applicable.

De Minimis Exception: Payments to a given union or union official are not reportable if they are de minimis. To meet this standard, the value of all gifts, gratuities or entertainment of a given union official must not exceed $250 in aggregate in a given fiscal year and must be unrelated to the recipient’s status in a union. If the aggregate for the year exceeds $250, all payments become reportable. Therefore, all gifts, gratuities and entertainment during a calendar year must be tracked by the Firm employee.

4.6.15 Non-ERISA State, County, City or Local Government Plans

Most state statutes establish and regulate retirement plans for state employees, and usually include a code of ethics or guidelines (and possible reporting requirements) on gifts and entertainment. Employees must obtain and review a specific state’s statutes prior to gifting or entertainment.

Entertainment and other acts of hospitality toward government or political officials should never compromise or appear to compromise the integrity or reputation of the official or the Firm. When entertainment is extended, it should be with the expectation that it will become a matter of public knowledge.

Non-ERISA State Government Plan — Florida State Statutes 112.313 Standards of Conduct for all public officers and employees of state and municipal agencies

“Public Officer”; any person elected or appointed to hold office in any agency, or advisory board (including trustees of FSS 112, FSS 175, and FSS 185 Retirement Plans).

No public officer shall solicit or accept anything of value, including a gift, food or beverage, tickets to events, plants, or any other similar service or thing having an attributable value which would influence their decision making.

As most neighboring states have similar codes, employees should review the relevant state’s statutes prior to engaging in such practice with any public officer/plan official.

Code of Ethics - RidgeWorth Capital Management, Inc. – Effective January 1, 2009 23

4.6.16 ERISA

ERISA is the federal law which governs the administration and management of qualified retirement plans sponsored by entities in the “Private Industry” (i.e. “for-profit” corporations, partnerships, etc.), and is intended to:

	•		Protect the rights and exclusive benefits of plan participants and plan assets;

	•		Mandate plan fiduciaries to act, manage, control and perform their duties solely in the best interest of plan participants;

	•		Prohibit “self dealing” (i.e. facilitating plan transactions):

In one’s own personal interest;

With “parties in interest” to the plan.

Plans which are not subject to ERISA, but often adopt ERISA or “ERISA-like” standards include:

	•		Public plans, plans established under federal, state, or local government (government entities);

	•		Certain church or church associated plans;

	•		Unfunded excess benefit plans (Private Industry);

	•		Plans solely for workers compensation, unemployment, or disability; and

	•		Plans established outside of the US for non-resident aliens.

“ERISA-Like” Standards

Firm employees must obtain, review, and be familiar with relevant ERISA rules, in particular the prohibited transaction rules, as well as client plan documents or client policies prior to giving or accepting gifts or entertainment in connection with ERISA plan employees or officials. Violating, or causing someone else to violate, ERISA rules is serious and is detrimental to the Firm and to the individual causing the violation.

4.6.17 Gifts and Entertainment Logs

All Firm employees must record all gifts and entertainment involving an Outside Party greater than $100 in value given or accepted on their Gifts and Entertainment Log (the “Log”), located on the RidgeWorth Resource Launchpad site. As a reminder, gifts in aggregate of $100 should not be given to the same client or received from a client in the same year.

Within 30 calendar days of each quarter end, every employee must submit their Logs via the Resource LaunchPad to the Compliance Department. A report must be submitted even when an employee has no gifts or entertainment items to disclose.

Code of Ethics - RidgeWorth Capital Management, Inc. – Effective January 1, 2009 24

Recording Shared Gifts and Entertainment

Gifts of nominal value from outside parties, shared among employees, such as cakes and holiday gift baskets, logo items, etc. do not need to be reported on the log.

Shared entertainment, (meals, transportation, etc.), must be logged by the employees accepting or sharing in the entertainment when their pro-rated share of the entertainment exceeds $100. Any entertainment event hosted by an employee, with a total value in excess of $500, should always be reported on the log.

4.6.18 Review and Enforcement

Compliance shall periodically review Log entries for policy infractions, conflicts of interest, or inappropriate activity.

Compliance may periodically and randomly spot-check employee Logs with completed expense reports to determine that employees are properly recording items on the Log.

Instances of actual or potential abuses or violations shall be escalated to the CCO for review.
Violation of these polices shall be subject to disciplinary action by the Firm.

Code of Ethics - RidgeWorth Capital Management, Inc. – Effective January 1, 2009 25

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