are spelled out on pages 9 through 11 of the Proxy document you linked. (Pages 11, 12 &13 of the .pdf doc), to wit;
More Efficient Proxy Process
.
Maryland and Massachusetts have
different proxy requirements, which create significant redundancies
and inefficiencies during a proxy campaign involving multiple funds
domiciled in the two different jurisdictions. For example, each
Trust’s trust agreement, the current organizational document for the
Trust, requires a record date of not more than 60 days prior to a
shareholder meeting, whereas Maryland corporate law requires a
record date of not more than 90 days, nor less than 10 days, prior to
a shareholder meeting. The longer solicitation period available in
Maryland would provide shareholders with more time to consider
and vote on proposals, and it could also result in fewer adjournments
and lower proxy solicitation expenses. In addition, the current trust
agreements of the Trusts require more shareholder votes than would
be required under Maryland law to constitute a quorum (the trust
agreements require a majority of votes entitled to be cast at the
meeting compared to Maryland’s minimum requirement of one-third
of the shares entitled to vote). Because of these differences, it has
been difficult for the T. Rowe Price Funds organized as Maryland
corporations to share the same proxy statement with the T. Rowe
Price Funds organized as Massachusetts business trusts and be part of
the same proxy campaign even though all of the funds are holding a
shareholder meeting at the same location on the same date.
Generally, all of the Maryland Corporations have been included in a
single proxy statement and all of the Massachusetts business trusts
have been included in a separate proxy statement, which mails
approximately 30 days after the proxy statement for the Maryland
Corporations. This has fostered confusion for shareholders who own
shares of T. Rowe Price Funds organized under both Massachusetts
and Maryland law and led to questions regarding the inability to vote
all of their shares at the same time. Each Reorganization will benefit
shareholders by making future complex-wide proxy campaigns for
proposals impacting all of the T. Rowe Price Funds, such as the
election of directors, less confusing to shareholders and more
efficient and less costly to administer.
o
Operational Streamlining
.
The Reorganizations will serve to
standardize and conform the corporate governance of the Funds with
the other funds in the T. Rowe Price family of funds. This
standardization is expected to streamline the administration of the
Funds, which may potentially result in cost savings to T. Rowe Price
and the Funds and their shareholders, and more effective
administration by eliminating differences in governing documents
and controlling law. T. Rowe Price is headquartered in Maryland, the
majority of its staff is located in Maryland, and the overwhelming
majority of the T. Rowe Price Funds are already domiciled in
Maryland. Because T. Rowe Price staff is in Maryland and not
Massachusetts, all organizational documents may be hand delivered
to the appropriate state regulatory agencies (which allows T. Rowe
Price to determine immediately whether the state had any issues
accepting the documents) rather than mailing documents to
Massachusetts regulatory agencies or relying upon outside vendors to
do so, which takes far more time and expense. Over the longer term,
T. Rowe Price believes that the Reorganizations will also result in
potential cost savings for T. Rowe Price, the T. Rowe Price Funds,
and their shareholders. For example, issues arising under state law
could be vetted with one outside law firm specializing in Maryland
law rather than two separate outside experts currently needed to vet
issues under both Maryland and Massachusetts law. Since there are a
smaller number of T. Rowe Price Funds domiciled in Massachusetts
splitting those costs, the Funds could potentially bear a larger cost
than if they were domiciled in Maryland and splitting those costs
with the rest of the T. Rowe Price Funds. In addition, if the
Reorganizations are approved, it would no longer be necessary to pay
fees to an outside vendor to file documents with state regulators on
behalf of the Funds.
o
More Legal Certainty
. The comprehensive body of law in Maryland
may reduce legal uncertainty and risk and provide the Funds’
directors and management with greater certainty and predictability in
managing fund affairs. For example, Maryland law provides
comparatively greater certainty with regard to limiting the liability of
shareholders for obligations of a fund or its directors.
o
Opportunity to Modernize Governing Instruments
.
The Trusts’
organizational documents were all written more than 30 years ago
and, as a result, their governing instruments do not reflect the
current governing framework available to mutual funds registered
under the Investment Company Act of 1940, as amended (the “1940
PAGE 11
Act”). The Reorganizations will have the benefit of eliminating any
outdated provisions, and adding more modern provisions that could
benefit Fund shareholders by increasing flexibility of operations and
governance. For example: (1) the form of Maryland charters that
would apply if the Reorganizations are approved (attached hereto in
Appendix C) provide more flexibility in how a shareholder vote may
be obtained because they permit multiple funds organized under one
corporation to vote together in certain instances, whereas the current
trust agreements of the Trusts only allow the Funds to vote together
if required by law; (2) the Trusts’ organizational documents have
more stringent shareholder voting requirements for reorganizations
and mergers than the current governing framework available to
mutual funds; (3) the form of Maryland charters contain more
modern provisions relating to the requirements for closing a fund
that is a series of a corporation; and (4) Maryland law provides more
flexibility to funds in litigation, as a Maryland corporation can be a
named litigant; in Massachusetts, on the other hand, a lawsuit must
be brought by the trustees, as a business trust cannot bring a lawsuit
directly.
I trust you are a resident of Virginia?
If so and if you are a shareholder of this fund, is it held in a tax qualified account?
Here's the Morningstar report on this fund;
http://www.morningstar.com/funds/XNAS/PRVAX/quote.html
Not bad - Currently yielding 3.15% and averaged 4.41% total return over the last 15 years. Over 80% of the bonds held by the fund are rated "A" or better, 44% rated "AA". Heavily weighted in transportation bonds (23%) with 81% of the portfolio having coupons between 4 and 6%
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