<PAGE>
CHASE INTERMEDIATE TERM BOND FUND
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
December 1, 2000
Dear Shareholder:
A special meeting of the shareholders of Chase Intermediate Term Bond Fund,
a series of Mutual Fund Investment Trust ("MFIT"), will be held on January 26,
2001 at 9:00 a.m., Eastern time. Formal notice of the meeting appears on the
next page, followed by materials regarding the meeting.
At the special meeting (the "Meeting"), shareholders will be asked to
consider and vote upon the proposed reorganization of Chase Intermediate Term
Bond Fund into Chase Vista Select Intermediate Bond Fund, a series of Mutual
Fund Select Group ("MFSG") (the "Reorganization"). After the Reorganization,
shareholders will hold an interest in Chase Vista Select Intermediate Bond Fund,
which is also advised by The Chase Manhattan Bank ("Chase"). The investment
objective and policies for Chase Vista Select Intermediate Bond Fund are
substantially similar to those of Chase Intermediate Term Bond Fund. MFSG is
comprised of 10 portfolios, each managed by Chase, consisting of income and
equity funds. In connection with the Reorganization, Chase Vista Select
Intermediate Bond Fund will be renamed "Chase Vista Intermediate Bond Fund."
After the proposed Reorganization, your investment would be in a larger
combined fund with substantially similar investment policies, allowing the
resulting fund to take advantage of the operational and administrative
efficiencies that size offers.
The current investment adviser for both Chase Intermediate Term Bond Fund
and Chase Vista Select Intermediate Bond Fund is Chase. The sub-adviser for
Chase Vista Select Intermediate Bond Fund is Chase Fleming Asset Management
(USA) Inc. ("CFAM"). Chase Intermediate Term Bond Fund has no sub-adviser;
however, the two Funds are managed by the same portfolio management team. After
the Reorganization, this team will continue to be responsible for the day-to-day
investment decisions for your portfolio.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization and a comparison of Chase
Vista Select Intermediate Bond Fund and MFSG to Chase Intermediate Term Bond
Fund and MFIT. The cost and expenses associated with the Reorganization,
including costs of soliciting proxies, will be borne by Chase and not by Chase
Intermediate Term Bond Fund, MFIT, Chase Vista Select Intermediate Bond Fund,
MFSG or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares of Chase Vista Select Intermediate Bond Fund.
The Proposal has been carefully reviewed by the Board of Trustees of MFIT,
which has approved the Proposal.
THE BOARD OF TRUSTEES OF MFIT UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
PROPOSED REORGANIZATION.
Attached to this letter is a list of commonly asked questions. If you have
any additional questions on voting of proxies and/or the meeting agenda, please
call us at 1-800-5-CHASE-0.
A proxy card is enclosed for your use in the shareholder meeting. This card
represents shares you held as of the record date, November 10, 2000. IT IS
IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN YOUR PROXY CARD IN THE ENVELOPE
PROVIDED AS SOON AS POSSIBLE. This will ensure that your shares will be
represented at the Meeting to be held on January 26, 2001.
Please read the enclosed materials carefully. You may, of course, attend the
meeting in person if you wish, in which case the proxy can be revoked by you at
the Meeting.
Sincerely,
/s/ Fergus Reid
Fergus Reid
Chairman
SPECIAL NOTE: You may receive a telephone call from us to answer any
questions you may have or to provide assistance in voting. Remember, your vote
is important! Please sign, date and promptly mail your proxy card(s) in the
return envelope provided.
PX8-1100
<PAGE>
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed to increase operational and
administrative efficiencies by combining two funds which have substantially
similar investment policies and which are managed by the same portfolio
management team.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
Under the Reorganization, Chase Intermediate Term Bond Fund would transfer
all of its assets and liabilities to Chase Vista Select Intermediate Bond Fund
and would receive, in exchange, shares of Chase Vista Select Intermediate Bond
Fund. Chase Intermediate Term Bond Fund would then be liquidated and the shares
of Chase Vista Select Intermediate Bond Fund would be distributed to
shareholders such as you. After the Reorganization, you would own shares in
Chase Vista Select Intermediate Bond Fund rather than Chase Intermediate Term
Bond Fund. Holders of Investor Class Shares would receive Class A Shares in
Chase Vista Select Intermediate Bond Fund (but will not pay a sales load) and
holders of Premier Class Shares would receive Institutional Class Shares in
Chase Vista Select Intermediate Bond Fund.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
Chase Vista Select Intermediate Bond Fund has a substantially similar
investment objective and investment policies to that of Chase Intermediate Term
Bond Fund. The principal differences in investment policies between the two
Funds are that Chase Vista Select Intermediate Bond Fund is required to invest
65% of its total assets in investment-grade debt securities (as opposed to 70%
for Chase Intermediate Term Bond Fund) and that Chase Intermediate Term Fund is
subject to a 30% limit on its investments in foreign debt securities. Therefore,
the Reorganization is not intended to have any immediate significant impact on
the investment strategy implemented in respect of your investment.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
The contractual (or pre-waiver) and, if applicable, actual (or post-waiver)
total expense ratios are expected to be the same or less for Chase Vista Select
Intermediate Bond Fund than they are for Chase Intermediate Term Bond Fund. If
an increase does arise, Chase has contractually agreed to waive fees payable to
it and reimburse expenses so that the total expense ratio will remain the same
for at least one year after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
The same portfolio management team which manages the day-to-day investment
activities of Chase Intermediate Term Bond Fund also manages Chase Vista Select
Intermediate Bond Fund.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs of
soliciting proxies, will be borne by Chase and not by either Chase Intermediate
Term Bond Fund or Chase Vista Select Intermediate Bond Fund (or shareholders of
either fund).
HOW WILL SHAREHOLDER SERVICES CHANGE?
Substantially similar services are available to shareholders of both Chase
Intermediate Term Bond Fund and Chase Vista Select Intermediate Bond Fund. You
would continue to be able to purchase or redeem your investment on a daily
basis.
WHAT IF I DO NOT VOTE OR VOTE AGAINST THE REORGANIZATION, YET APPROVAL OF THE
REORGANIZATION IS OBTAINED?
You will automatically receive shares in Chase Vista Select Intermediate
Bond Fund.
AS A HOLDER OF SHARES OF CHASE INTERMEDIATE TERM BOND FUND, WHAT DO I NEED TO
DO?
Please read the enclosed Combined Prospectus/Proxy Statement and vote. Your
vote is important! Accordingly, please sign, date and mail the proxy
card(s) promptly in the enclosed return envelope as soon as possible after
reviewing the enclosed Combined Prospectus/Proxy Statement.
MAY I ATTEND THE MEETING IN PERSON?
Yes, you may attend the Meeting in person. If you complete a proxy card and
subsequently attend the Meeting, your proxy can be revoked. Therefore, to ensure
that your vote is counted, we strongly urge you to mail us your signed, dated
and completed proxy card(s) even if you plan to attend the Meeting.
<PAGE>
CHASE INTERMEDIATE TERM BOND FUND,
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JANUARY 26, 2001
To the Shareholders of Chase Intermediate Term Bond Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of Chase Intermediate Term Bond Fund ("Chase Intermediate Term
Bond Fund"), a series of Mutual Fund Investment Trust ("MFIT"), will be held at
the offices of The Chase Manhattan Bank, One Chase Square, Third Floor Garden
Room, Rochester, New York 14643 on January 26, 2001 at 9:00 a.m., Eastern time,
for the following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and Plan
of Reorganization (the "Reorganization Plan") by and between MFIT, on
behalf of Chase Intermediate Term Bond Fund, and Mutual Fund Select
Group ("MFSG"), on behalf of Chase Vista Select Intermediate Bond
Fund, and the transactions contemplated thereby, including (a) the
transfer of all of the assets and liabilities of Chase Intermediate
Term Bond Fund to Chase Vista Select Intermediate Bond Fund, a series
of MFSG ("Chase Vista Select Intermediate Bond Fund") in exchange for
(i) Class A Shares of Chase Vista Select Intermediate Bond Fund (the
"Class A Shares") and (ii) Institutional Class Shares of Chase Vista
Select Intermediate Bond Fund ("Institutional Class Shares" and
together with the Class A Shares, the "Chase Vista Select Intermediate
Bond Fund Shares"), as applicable; and (b) the distribution of such
Chase Vista Select Intermediate Bond Fund Shares to the Shareholders
of Chase Intermediate Term Bond Fund in connection with its
liquidation.
ITEM 2. To transact such other business as may properly come before the
Special Meeting or any adjournment(s) thereof.
YOUR FUND TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ITEM 1.
The proposal is described in the attached Combined Prospectus/Proxy
Statement. Attached as Appendix A to the Combined Prospectus/Proxy Statement is
a copy of the Reorganization Plan.
Shareholders of record as of the close of business on November 10, 2000 are
entitled to notice of, and to vote at, the Special Meeting or any
adjournment(s) thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE BOARD OF
TRUSTEES OF MFIT. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING.
PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO
CHASE INTERMEDIATE TERM BOND FUND A WRITTEN NOTICE OF REVOCATION OR A
SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE SPECIAL MEETING AND VOTING IN
PERSON.
/s/ Lisa M. Hurley
Lisa M. Hurley
Secretary
December 1, 2000
<PAGE>
COMBINED PROSPECTUS/PROXY STATEMENT
DATED DECEMBER 1, 2000
ACQUISITION OF THE ASSETS AND LIABILITIES OF
CHASE INTERMEDIATE TERM BOND FUND,
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
(800) 5-CHASE-0
BY AND IN EXCHANGE FOR SHARES OF
CHASE VISTA SELECT INTERMEDIATE BOND FUND,
A SERIES OF MUTUAL FUND SELECT GROUP
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
(800) 34-VISTA
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of Chase Intermediate Term Bond Fund ("Chase Intermediate Term
Bond Fund"), a series of Mutual Fund Investment Trust ("MFIT"), into Chase Vista
Select Intermediate Bond Fund ("Chase Vista Select Intermediate Bond Fund"), a
series of Mutual Fund Select Group ("MFSG"). If approved by Shareholders, the
proposed reorganization would be effected by transferring all of the assets and
liabilities of Chase Intermediate Term Bond Fund, which is a series of MFIT, to
Chase Vista Select Intermediate Bond Fund, a series of MFSG having substantially
similar investment objectives and policies as Chase Intermediate Term Bond Fund,
in exchange for shares of Chase Vista Select Intermediate Bond Fund (the
"Reorganization"). MFSG and MFIT are both open-end management investment
companies offering shares in several portfolios, and, in most cases, multiple
classes of shares in each such portfolio. In connection with the Reorganization,
the Chase Vista Select Intermediate Bond Fund will be renamed "Chase
Vista Intermediate Bond Fund."
Under the proposed Reorganization, each shareholder of Chase Intermediate
Term Bond Fund (the "Chase Intermediate Term Bond Fund Shareholders") would
receive Shares (the "Chase Vista Select Intermediate Bond Fund Shares") of Chase
Vista Select Intermediate Bond Fund with a value equal to such Chase
Intermediate Term Bond Fund Shareholder's holdings in Chase Intermediate Term
Bond Fund. Holders of Investor Class Shares would receive Class A Shares (the
"Class A Shares") in Chase Vista Select Intermediate Bond Fund and holders of
the Premier Class Shares would receive Institutional Class Shares (the
"Institutional Class Shares") in Chase Vista Select Intermediate Bond Fund.
Therefore, as a result of the proposed Reorganization, current Shareholders of
Chase Intermediate Term Bond Fund will become shareholders of Chase Vista Select
Intermediate Bond Fund ("Chase Vista Select Intermediate Bond Fund
Shareholders"). In connection with the Reorganization, Chase Vista Select
Intermediate Bond Fund will implement a multi-class structure under which it
will offer Class A and Institutional Class Shares.
MFIT is registered as an open-end management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act") and currently has 11
series of mutual fund portfolios. MFSG is registered as an open-end management
investment company under the 1940 Act and currently has 10 series of mutual fund
portfolios. The Chase Manhattan Bank ("Chase") currently serves as investment
adviser for both Chase Intermediate Term Bond Fund and Chase Vista Select
Intermediate Bond Fund. Chase Fleming Asset Management (USA) Inc. ("CFAM")
serves as sub-adviser for Chase Vista Select Intermediate Bond Fund. There is no
sub-adviser for Chase Intermediate Term Bond Fund; however, the two Funds are
managed by the same portfolio management team. After the Reorganization, this
team will continue to be responsible for the day-to-day investment decisions for
your portfolio. Prior to August 1, 2000, Chase Bank of Texas, N.A. ("Chase
Texas") was the sub-adviser for Chase Intermediate Term Bond Fund and employed
the same portfolio management team as CFAM. On August 1, 2000, Chase Texas
became a part of Chase through an unrelated reorganization.
The terms and conditions of these transactions are more fully described in
this Combined Prospectus/ Proxy Statement and in the Agreement and Plan of
Reorganization (the "Reorganization Plan") between
<PAGE>
MFIT, on behalf of Chase Intermediate Term Bond Fund, and MFSG, on behalf of
Chase Vista Select Intermediate Bond Fund, attached to this Combined
Prospectus/Proxy Statement as Appendix A.
The Board of Trustees of MFIT is soliciting proxies in connection with a
Special Meeting (the "Meeting") of Shareholders to be held on January 26, 2001
at 9:00 a.m., Eastern time, at the offices of The Chase Manhattan Bank, One
Chase Square, Third Floor Garden Room, Rochester, New York 14643, at which
meeting shareholders in Chase Intermediate Term Bond Fund will be asked to
consider and approve the proposed Reorganization Plan and certain transactions
contemplated by the Reorganization Plan. This Combined Prospectus/Proxy
Statement constitutes the proxy statement of Chase Intermediate Term Bond Fund
for the meeting of its Shareholders and also constitutes MFSG's prospectus for
Chase Vista Select Intermediate Bond Fund Shares that have been registered with
the Securities and Exchange Commission (the "Commission") and are to be issued
in connection with the Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFIT and MFSG that
a prospective investor should know before voting on the Proposal. The current
prospectuses for Chase Intermediate Term Bond Fund and Chase Vista Select
Intermediate Bond Fund are incorporated herein by reference and the prospectus
for Chase Vista Select Intermediate Bond Fund is enclosed with this Combined
Prospectus/Proxy Statement. A statement of additional information relating to
this Combined Prospectus/Proxy Statement dated December 1, 2000 (the "Statement
of Additional Information") containing additional information about MFIT and
MFSG has been filed with the Commission and is incorporated by reference into
this Combined Prospectus/Proxy Statement. A copy of the Statement of Additional
Information may be obtained without charge by writing to MFIT at its address
noted above or by calling 1-800-5-CHASE-0.
This Combined Prospectus/Proxy Statement is expected to first be sent to
shareholders on or about December 1, 2000.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY STATEMENT/
PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY MFIT.
INVESTMENTS IN CHASE VISTA SELECT INTERMEDIATE BOND FUND ARE SUBJECT TO
RISK--INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN CHASE VISTA SELECT
INTERMEDIATE BOND FUND ARE BANK DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, THE CHASE MANHATTAN BANK OR ANY OF ITS AFFILIATES AND ARE NOT
FEDERALLY INSURED BY, OBLIGATIONS OF, OR OTHERWISE SUPPORTED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY.
ii
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
-----
<S> <C>
INTRODUCTION...................................... 1
SUMMARY........................................... 1
RISK FACTORS...................................... 6
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 7
INVESTMENT POLICIES............................... 10
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 13
DISTRIBUTIONS AND TAXES........................... 15
COMPARISON OF CHASE INTERMEDIATE TERM BOND FUND'S
AND CHASE VISTA SELECT INTERMEDIATE BOND FUND'S
ORGANIZATION STRUCTURES.......................... 16
INFORMATION RELATING TO THE ADVISORY CONTRACTS.... 17
BOARD OF TRUSTEES................................. 21
INFORMATION RELATING TO VOTING MATTERS............ 22
ADDITIONAL INFORMATION ABOUT MFIT................. 24
ADDITIONAL INFORMATION ABOUT MFSG................. 25
FINANCIAL STATEMENTS AND EXPERTS.................. 25
OTHER BUSINESS.................................... 25
LITIGATION........................................ 25
SHAREHOLDER INQUIRIES............................. 25
APPENDIX A--AGREEMENT AND PLAN OF
REORGANIZATION.................................. A-1
</TABLE>
iii
<PAGE>
INTRODUCTION
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of Chase Intermediate Term Bond Fund, a portfolio of Mutual Fund
Investment Trust ("MFIT"), an open-end management investment company, in
connection with the solicitation by the Board of Trustees of MFIT ("MFIT Board")
of proxies to be used at a Special Meeting of Shareholders of Chase Intermediate
Term Bond Fund to be held on January 26, 2001 at 9:00 a.m., Eastern time, at the
offices of The Chase Manhattan Bank, One Chase Square, Third Floor Garden Room,
Rochester, New York 14643, (together with any adjournments thereof, the
"Meeting"). It is expected that the mailing of this Combined Prospectus/Proxy
Statement will be made on or about December 1, 2000.
At the Meeting, Chase Intermediate Term Bond Fund shareholders (the "Chase
Intermediate Term Bond Fund Shareholders") will consider and vote upon an
Agreement and Plan of Reorganization (the "Reorganization Plan") dated October
31, 2000 between MFIT, on behalf of Chase Intermediate Term Bond Fund, and MFSG,
on behalf of Chase Vista Select Intermediate Bond Fund ("Chase Vista Select
Intermediate Bond Fund," together with Chase Intermediate Term Bond Fund, the
"Funds"), pursuant to which all of the assets and liabilities of Chase
Intermediate Term Bond Fund will be transferred to Chase Vista Select
Intermediate Bond Fund in exchange for shares (the "Chase Vista Select
Intermediate Bond Fund Shares") of Chase Vista Select Intermediate Bond Fund. As
a result of this transaction (the "Reorganization"), Chase Intermediate Term
Bond Fund Shareholders will become shareholders of Chase Vista Select
Intermediate Bond Fund and will receive Chase Vista Select Intermediate Bond
Fund Shares equal in value to their holdings in Chase Intermediate Term Bond
Fund on the date of the Reorganization. Holders of Investor Class Shares in
Chase Intermediate Term Bond Fund would receive Class A Shares ("Class A
Shares") in Chase Vista Select Intermediate Bond Fund and holders of Premier
Class Shares in Chase Intermediate Term Bond Fund would receive Institutional
Class Shares ("Institutional Class Shares") in Chase Vista Select Intermediate
Bond Fund. In connection with the Reorganization, Chase Vista Select
Intermediate Bond Fund will be renamed "Chase Vista Intermediate Bond Fund."
Further information relating to Chase Vista Select Intermediate Bond Fund is set
forth herein. The proposed Reorganization is occasionally referred to herein as
the "Proposal."
THE MFIT BOARD HAS RECOMMENDED THAT SHAREHOLDERS
VOTE "FOR" THE PROPOSAL
Approval of the Reorganization Plan by Chase Intermediate Term Bond Fund
requires the affirmative vote of the lesser of (i) 67% or more of the Chase
Intermediate Term Bond Fund Shares present at the Meeting and (ii) more than 50%
of all outstanding Chase Intermediate Term Bond Fund Shares. If the
Reorganization Plan is not approved by Chase Intermediate Term Bond Fund
Shareholders, the MFIT Board will consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the transactions contemplated thereby,
and is qualified by reference to the more complete information contained
elsewhere in this Combined Prospectus/Proxy Statement, the Prospectus and
Statement of Additional Information in respect of the Chase Vista Select
Intermediate Bond Fund Shares, and the Reorganization Plan attached to this
Combined Prospectus/Proxy Statement as Appendix A. Chase Vista Select
Intermediate Bond Fund's Semi-Annual Report to Shareholders and Annual Report to
Shareholders are enclosed with this Combined Prospectus/Proxy Statement.
PROPOSED TRANSACTION
Pursuant to the proposed Reorganization Plan, Chase Intermediate Term Bond
Fund, an existing series of MFIT, will transfer all of its assets and
liabilities to Chase Vista Select Intermediate Bond Fund in exchange for shares
of Chase Vista Select Intermediate Bond Fund, a series of MFSG.
Under the proposed Reorganization, each Chase Intermediate Term Bond Fund
Shareholder would receive a number of Chase Vista Select Intermediate Bond Fund
Shares with an aggregate net asset value equal on the date of the exchange to
the aggregate net asset value of such shareholder's Chase Intermediate Term Bond
Fund Shares on such date. Therefore, following the proposed Reorganization,
Chase Intermediate Term Bond Fund Shareholders will be Chase Vista Select
Intermediate Bond Fund Shareholders. Chase Intermediate Term Bond Fund
Shareholders holding Investor Class Shares will receive
1
<PAGE>
Class A Shares in the Reorganization, but will not have to pay a sales charge.
In addition, such Shareholders will not have to pay a sales charge if they buy
additional Class A Shares in the future.
The contractual (or pre-waiver) and, if applicable, actual (or post-waiver)
total expense ratios are expected to be the same or less for Chase Vista Select
Intermediate Bond Fund than they are for Chase Intermediate Term Bond Fund.
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of Chase Vista Select Intermediate Bond
Fund both before and after the Reorganization, and in consideration of the fact
that the Reorganization will be tax-free, and in light of their fiduciary duties
under federal and state law, the MFIT Board and the MFSG Board, including a
majority of each Board's members who are not "interested persons" within the
meaning of the 1940 Act, have each determined that the proposed Reorganization
is in the best interests of each Fund's respective shareholders and that the
interests of such shareholders will not be diluted as a result of such
Reorganization.
INVESTMENT ADVISERS
The investment adviser to both Chase Intermediate Term Bond Fund and Chase
Vista Select Intermediate Bond Fund is The Chase Manhattan Bank ("Chase"). Chase
is a wholly-owned subsidiary of The Chase Manhattan Corporation. In addition,
Chase Fleming Asset Management (USA) Inc. ("CFAM"), a wholly-owned subsidiary of
Chase, serves as the sub-adviser to Chase Vista Select Intermediate Bond Fund
pursuant to an agreement with Chase and manages Chase Vista Select Intermediate
Bond Fund on a day-to-day basis. The same portfolio management team which
manages Chase Intermediate Term Bond Fund manages and will continue to manage
Chase Vista Select Intermediate Bond Fund. Prior to August 1, 2000, Chase Bank
of Texas, N.A. ("Chase Texas") was the sub-adviser for Chase Intermediate Term
Bond Fund and employed the same portfolio management team as CFAM. On August 1,
2000, Chase Texas became a part of Chase through an unrelated reorganization. It
is anticipated that during the first quarter of 2001, Chase will transfer its
investment advisory business to CFAM and, thereafter, CFAM will be the sole
investment adviser to Chase Vista Select Intermediate Bond Fund and Chase
Intermediate Term Bond Fund.
REASONS FOR THE REORGANIZATION
The MFIT Board decided to reorganize Chase Intermediate Term Bond Fund into
Chase Vista Select Intermediate Bond Fund to increase operational and
administrative efficiencies, since the two funds have substantially similar
investment objectives and policies and are managed by the same portfolio
management team. In addition, Chase Intermediate Term Bond Fund Shareholders
will have a greater variety of investment opportunities available since they can
exchange Chase Vista Select Intermediate Bond Fund Shares for shares in other
Chase Vista funds at net asset value, subject to certain restrictions described
in this Combined Prospectus/Proxy Statement.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett, counsel to MFIT, will issue an opinion (based on
certain assumptions) as of the effective time of the Reorganization to the
effect that the transaction will not give rise to the recognition of income,
gain or loss for federal income tax purposes to Chase Intermediate Term Bond
Fund, Chase Vista Select Intermediate Bond Fund or their respective
shareholders. The holding period and tax basis of Chase Vista Select
Intermediate Bond Fund Shares will be the same as the holding period and tax
cost basis of the shareholder's shares of Chase Intermediate Term Bond Fund. In
addition, the holding period and tax basis of those assets owned by Chase
Intermediate Term Bond Fund transferred to Chase Vista Select Intermediate Bond
Fund will be identical for Chase Intermediate Term Bond Fund. See "Information
Relating to the Proposed Reorganization--Federal Income Tax Consequences."
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of Chase Vista Select Intermediate Bond Fund is to
seek as high a level of income as possible as is consistent with reasonable
risk, whereas the investment objective of Chase Intermediate Term Bond Fund is
to invest in securities that earn current income while also considering
stability of principal.
The investment policies of the Chase Intermediate Term Bond Fund and the
Chase Vista Select Intermediate Bond Fund are substantially similar. The Chase
Vista Select Intermediate Bond Fund is required to normally invest at least 65%
of its total assets in a broad range of investment grade-debt securities as
opposed to 70% for the Chase Intermediate Term Bond Fund. In addition, Chase
Intermediate Term Bond Fund may invest up to 30% of its total assets in foreign
debt securities, while Chase Vista Select Intermediate Bond Fund is not subject
to any such percentage limitation.
2
<PAGE>
ADDITIONAL TRUST PORTFOLIOS
In addition to Chase Intermediate Term Bond Fund, MFIT currently offers ten
additional portfolios:
<TABLE>
<S> <C>
Balanced Fund Income Fund
Core Equity Fund Money Market Fund
Equity Growth Fund Short-Intermediate Term U.S. Government Securities Fund
Equity Growth Fund II Small Capitalization Fund
Equity Income Fund U.S. Government Securities Fund
</TABLE>
Detailed descriptions of each MFIT portfolio can be found in the MFIT
prospectuses and Statement of Additional Information. MFIT may add or subtract
additional portfolios from time to time in the future. However, in connection
with other concurrent reorganizations, it is anticipated that some of these
portfolios will be liquidated.
In addition to Chase Vista Select Intermediate Bond Fund, MFSG currently
offers 9 additional portfolios:
<TABLE>
<S> <C>
Balanced Fund Large Cap Growth Fund
Bond Fund New Growth Opportunities Fund
Equity Income Fund Short-Term Bond Fund
International Equity Fund Small Cap Value Fund
Large Cap Equity Fund
</TABLE>
Detailed descriptions of each MFSG portfolio can be found in the MFSG
prospectuses and Statement of Additional Information. MFSG may add or subtract
portfolios from time to time in the future. However, in connection with other
concurrent reorganizations, it is anticipated that some of these portfolios will
be liquidated.
PRINCIPAL RISKS OF INVESTING IN CHASE VISTA SELECT INTERMEDIATE BOND FUND
The following discussion highlights the principal risk factors associated
with an investment in Chase Vista Select Intermediate Bond Fund. Chase Vista
Select Intermediate Bond Fund experiences the risks of investing in fixed income
securities and the value of shares of the Fund will be influenced by the
performance and credit quality of the companies selected for the Fund's
portfolio. The value of the Fund's fixed income securities tends to fall when
prevailing interest rates rise. When the Fund invests in mortgage-related
securities, the value of the Fund could change more often and to a greater
degree than if it did not buy mortgage-related securities. In addition, the Fund
may invest a substantial portion of its assets in foreign securities, which are
subject to certain special risks.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for both Chase Intermediate Term Bond Fund and Chase
Vista Select Intermediate Bond Fund is Chase. Chase oversees the asset
management and administration of both Chase Intermediate Term Bond Fund and
Chase Vista Select Intermediate Bond Fund. As compensation for its services,
Chase receives a management fee from each of Chase Intermediate Term Bond Fund
and Chase Vista Select Intermediate Bond Fund at an annual rate of 0.50% and
0.30%, respectively, of their respective average daily net assets. A portion of
the fee generated with respect to Chase Vista Select Intermediate Bond Fund is
used to pay CFAM, Chase Vista Select Intermediate Bond Fund's sub-adviser.
Pursuant to the terms of advisory agreements between Chase and MFIT and
between Chase and MFSG (each, an "Advisory Agreement"), Chase is responsible for
making decisions with respect to, and placing orders for, all purchases and
sales of the portfolio securities of Chase Intermediate Term Bond Fund, subject
to the general supervision of the MFIT Board, and Chase Vista Select
Intermediate Bond Fund, subject to the general supervision of the MFSG Board.
Pursuant to an investment sub-advisory agreement between Chase and CFAM (the
"Subadvisory Agreement"), Chase delegates certain of these responsibilities to
CFAM with respect to Chase Vista Select Intermediate Bond Fund. For the
investment sub-advisory services rendered to Chase Vista Select Intermediate
Bond Fund and Chase, CFAM is entitled to receive from Chase an annual fee of
0.15% of Chase Vista Select Intermediate Bond Fund's average net assets.
It is anticipated that during the first quarter of 2001, Chase will transfer
its investment advisory business to CFAM and, thereafter, CFAM will be the sole
investment adviser to Chase Vista Select Intermediate Bond Fund and Chase
Intermediate Term Bond Fund.
3
<PAGE>
OTHER SERVICES
Vista Fund Distributors, Inc. ("VFD"), a wholly-owned, indirect subsidiary
of BISYS Fund Services, Inc. ("BISYS") is the distributor for Chase Vista Select
Intermediate Bond Fund. CFD Fund Distributors, Inc. ("CFD"), another
wholly-owned indirect subsidiary of BISYS, is the distributor for Chase
Intermediate Term Bond Fund. VFD and CFD are unaffiliated with Chase.
Chase serves as administrator, fund accountant and custodian for both Chase
Intermediate Term Bond Fund and Chase Vista Select Intermediate Bond Fund. The
services provided by Chase include day-to-day maintenance of certain books and
records, calculation of the offering price of the shares and preparation of
reports. In its role as custodian, Chase is responsible for the daily
safekeeping of securities and cash held by both Chase Intermediate Term Bond
Fund and Chase Vista Select Intermediate Bond Fund.
PricewaterhouseCoopers LLP ("PwC") serves as both Chase Intermediate Term
Bond Fund's and Chase Vista Select Intermediate Bond Fund's independent
accountants, auditing and reporting on the annual financial statements of each
Fund and preparing each Fund's federal income tax returns. PwC also performs
other professional accounting, auditing, tax and advisory services when MFIT or
MFSG engages it to do so.
ORGANIZATION
Each of MFIT and MFSG is organized as a Massachusetts business trust. Chase
Intermediate Term Bond Fund is organized as a series of MFIT and Chase Vista
Select Intermediate Bond Fund is organized as a series of MFSG.
PURCHASES, REDEMPTIONS AND EXCHANGES
The procedures for making purchases, redemptions and exchanges of shares of
Chase Vista Select Intermediate Bond Fund are substantially similar to those
with respect to shares of Chase Intermediate Term Bond Fund.
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses paid
by each of Chase Intermediate Term Bond Fund and Chase Vista Select Intermediate
Bond Fund that reflect current expense arrangements, and (ii) estimated fees and
expenses on a pro forma basis for Chase Vista Select Intermediate Bond Fund
after giving effect to the proposed Reorganization. Under the proposed
Reorganization, holders of Investor Class Shares in Chase Intermediate Term Bond
Fund would receive Class A Shares in Chase Vista Select Intermediate Bond Fund
and holders of Premier Class Shares in Chase Intermediate Term Bond Fund would
receive Institutional Class Shares in Chase Vista Select Intermediate Bond Fund.
SHAREHOLDERS RECEIVING CLASS A SHARES WILL NOT PAY A SALES LOAD ON SHARES
RECEIVED IN THE REORGANIZATION OR ON ADDITIONAL CLASS A SHARES THEY BUY IN THE
FUTURE.
The table indicates that both contractual (pre-waiver) and, if applicable,
actual (post-waiver) total expense ratios for current Chase Intermediate Term
Bond Fund Shareholders are anticipated to be the same
4
<PAGE>
or less following the Reorganization. In addition, Chase has agreed to waive
certain fees and/or reimburse certain expenses to ensure that actual total
operating expenses do not increase for at least one year.
<TABLE>
<CAPTION>
CHASE VISTA CHASE VISTA
CHASE SELECT SELECT INTERMEDIATE
INTERMEDIATE TERM INTERMEDIATE BOND FUND
BOND FUND(A) BOND FUND (COMBINED)(B)
------------------ ------------- ------------------------
PRO FORMA
INVESTOR PREMIER PRO FORMA INSTITUTIONAL
CLASS CLASS INSTITUTIONAL CLASS A CLASS
SHARES SHARES SHARES SHARES SHARES
-------- -------- ------------- --------- -------------
<S> <C> <C> <C> <C> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY
FROM YOUR INVESTMENT)
Maximum Sales
Charge (Load) When
You Buy Shares,
Shown As % Of The
Offering Price. None None None 4.50% None
ANNUAL FUND OPERATING
EXPENSES
(EXPENSES THAT ARE
DEDUCTED FROM FUND
ASSETS)
Management Fees 0.50% 0.50% 0.30% 0.30% 0.30%
Distribution (12b-1) Fees 0.25% None None 0.25% None
Other Expenses 0.68% 0.43% 0.45% 0.85% 0.45%
---- ---- ---- ---- ----
Total Annual Fund
Operating Expenses 1.43% 0.93% 0.75% 1.40% 0.75%
==== ==== ====
Contractual Fee Waivers
and Expense
Reimbursements 0.50% N.A.
---- ----
Net Expenses 0.90% 0.75%
==== ====
</TABLE>
---------------------
(a) The actual Management Fees for Chase Intermediate Term Bond Fund are
expected to be 0.32%, the actual Distribution Fees for Investor Class
shares are expected to be 0.00%, and Total Annual Fund Operating Expenses
for Investor and Premier Class shares are not expected to exceed 1.00% and
0.75%, respectively. That is because Chase and some of the other service
providers have volunteered not to collect a portion of their fees and to
reimburse others. Chase and these other service providers may terminate
this arrangement at any time.
(b) The actual Distribution fees for Class A shares of Chase Vista Select
Intermediate Bond Fund, subsequent to the Reorganization, are expected to
be 0.00%, the actual Other Expenses for Class A shares are expected to be
0.60% and Total Annual Fund Operating Expenses for Class A shares are not
expected to exceed 0.90%. That is because Chase and some of the other
service providers have contractually agreed not to collect a portion of
their fees and to reimburse others for one year after the Reorganization.
Chase and these other service providers may terminate this arrangement
after the one-year period expires.
The table does not reflect charges or credits which investors might incur if
they invest through a financial institution.
EXAMPLE: This example helps investors compare the cost of investing in the
Funds with the cost of investing in other mutual funds. The example assumes:
- you invest $10,000;
- you sell all of your shares at the end of the period;
5
<PAGE>
- your investment has a 5% return each year; and
- each Fund's operating expenses are not waived and remain the same as shown
above.
Although actual costs may be higher or lower, based upon these assumptions
your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C> <C>
CHASE INTERMEDIATE TERM BOND
FUND
INVESTOR CLASS SHARES $ 146 $ 452 $ 782 $ 1,713
PREMIER CLASS SHARES $ 95 $ 296 $ 515 $ 1,143
CHASE VISTA SELECT
INTERMEDIATE
BOND FUND $ 77 $ 240 $ 417 $ 930
PRO FORMA CHASE VISTA SELECT
INTERMEDIATE
BOND FUND
CLASS A SHARES* $ 586 $ 873 $ 1,181 $ 2,054
CLASS A SHARES (WITHOUT
SALES CHARGE) $ 143 $ 443 $ 766 $ 1,680
INSTITUTIONAL CLASS SHARES $ 77 $ 240 $ 417 $ 930
</TABLE>
-------------------
* Assumes sales charge is deducted when shares are purchased. Shareholders
who receive Class A Shares as a result of the proposed reorganization will
not be charged a sales load.
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in Chase Vista Select Intermediate Bond Fund. Chase Vista
Select Intermediate Bond Fund has investment policies and investment
restrictions substantially similar to Chase Intermediate Term Bond Fund.
Therefore, there should be no material difference between the risk factors
associated with Chase Vista Select Intermediate Bond Fund and Chase Intermediate
Term Bond Fund. This discussion is qualified in its entirety by the more
extensive discussion of risk factors set forth in the Prospectus and Statement
of Additional Information of Chase Vista Select Intermediate Bond Fund, which
are incorporated herein by reference.
All mutual funds carry a certain amount of risk. You may lose money on your
investment in the Fund. Here are some specific risks of investing in Chase Vista
Select Intermediate Bond Fund.
The Fund may not achieve its objective if the advisers' expectations
regarding particular securities or markets are not met.
The value of fixed income investments such as bonds tends to fall when
prevailing interest rates rise. Such a drop in value could be worse if the Fund
invests a larger portion of its assets in debt securities with longer
maturities. That's because long-term debt securities are more sensitive to
interest rate changes than other fixed-income securities. Note that conversely
the value of fixed income investments tends to increase when prevailing interest
rates fall.
When the Fund invests in mortgage-related securities, the value of the Fund
could change more often and to a greater degree than if it did not buy
mortgage-backed securities. That's because the prepayment features on some
mortgage-related securities make them more sensitive to interest rate changes.
Mortgage-related securities are subject to scheduled and unscheduled principal
payments as property owners pay down or prepay their mortgages. As these
payments are received, they must be reinvested when interest rates may be lower
than on the original mortgage security. When interest rates are rising, the
value of fixed-income securities with prepayment features are likely to decrease
as much or more than securities without prepayment features. In addition, while
the value of fixed-income securities will generally increase when interest rates
decline, the value of mortgage-related securities with prepayment features may
not increase as much as securities without prepayment features.
Collateral mortgage obligations are issued in multiple classes, and each
class may have its own interest rate and/or final payment date. A class with an
earlier final payment date may have certain preferences in receiving principal
payments or earning interest. As a result, the value of some classes in which
the Fund invests may be more volatile and may be subject to higher risk of
nonpayment.
The value of interest-only and principal-only mortgage backed securities are
more volatile than other types of mortgage-related securities. That's because
they are very sensitive not only to changes in interest rates, but also to the
rate of prepayments. A rapid or unexpected increase in prepayments can
significantly depress the price of interest-only securities, while a rapid or
unexpected decrease could have the same effect on principal-only securities. In
addition, these instruments may be illiquid.
6
<PAGE>
Certain securities which the Fund may hold, such as stripped obligations and
zero coupon securities, are more sensitive to changes in interest rates than
ordinary interest-paying securities. As a result, they may be more volatile than
other types of investments.
Investments in foreign issuers may be riskier than investments in the United
States. They may be affected by political, social and economic instability. Some
securities may be harder to trade without incurring a loss and may be difficult
to convert into cash. There may be less public information available, differing
settlement procedures, or regulations and standards that don't match U.S.
standards. Some countries may nationalize or expropriate assets or impose
exchange controls. If the fund were to invest in a security which is not
denominated in U.S. dollars, it also would be subject to currency exchange risk.
These risks increase when investing in issuers located in developing countries.
The Fund's performance will depend on the credit quality of its investments.
Securities which are rated Baa by Moody's or BBB by S&P may have fewer
protective provisions and are generally more risky than higher rated securities.
The issuer may have trouble making principal and interest payments when
difficult economic conditions exist.
Some asset-backed securities may have additional risk because they may
receive little or no collateral protection from the underlying assets.
Because the interest rate changes on floating and variable rate securities,
the Fund's yield may decline and it may lose the opportunity for capital
appreciation when interest rates decline.
Dollar rolls, forward commitments and repurchase agreements involve some
risk to the Fund if the other party does not live up to its obligations under
the agreement.
Derivatives may be more risky than other types of investments because they
may respond more to changes in economic conditions than other types of
investments. If they are used for non-hedging purposes, they could cause losses
that exceed the Fund's original investment.
If the Fund departs from its investment policies during temporary defensive
periods, it may not achieve its investment objective.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Plan. Significant provisions of the
Reorganization Plan are summarized below; however, this summary is qualified in
its entirety by reference to the Reorganization Plan, a copy of which is
attached as Appendix A to this Combined Prospectus/Proxy Statement and which is
incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
The Reorganization Plan provides that at the Effective Time (as defined in
the Reorganization Plan) of the Reorganization, the assets and liabilities of
Chase Intermediate Term Bond Fund will be transferred to and assumed by Chase
Vista Select Intermediate Bond Fund. In exchange for the transfer of the assets,
and the assumption of the liabilities, of Chase Intermediate Term Bond Fund,
MFSG will issue at the Effective Time of the Reorganization full and fractional
(a) Class A Shares of Chase Vista Select Intermediate Bond Fund equal in
aggregate dollar value to the aggregate net asset value of full and fractional
outstanding Investor Class Shares of Chase Intermediate Term Bond Fund and
(b) Institutional Class Shares of Chase Vista Select Intermediate Bond Fund
equal in aggregate dollar value to the aggregate net asset value of full and
fractional outstanding Premier Class Shares of Chase Intermediate Term Bond
Fund, in each case as determined at the valuation time specified in the
Reorganization Plan. The Reorganization Plan provides that Chase Intermediate
Term Bond Fund will declare a dividend or dividends prior to the Effective Time
of the Reorganization which, together with all previous dividends, will have the
effect of distributing to the Chase Intermediate Term Bond Fund Shareholders all
undistributed net investment income earned and net capital gains realized up to
and including the Effective Time of the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of Chase Intermediate Term Bond Fund by Chase Vista Select Intermediate Bond
Fund, Chase Intermediate Term Bond Fund will distribute Chase Vista Select
Intermediate Bond Fund Shares received from MFSG to the Chase Intermediate Term
Bond Fund Shareholders in liquidation of Chase Intermediate Term Bond Fund. Each
Chase Intermediate Term Bond Fund Shareholder at the Effective Time of the
Reorganization will receive an amount of Class A Shares or Institutional
Class Shares, as the case may be, with a total net asset value
7
<PAGE>
equal to the net asset value of their Chase Intermediate Term Bond Fund Shares
plus the right to receive any dividends or distributions which were declared
before the Effective Time of the Reorganization but that remained unpaid at that
time with respect to the shares of Chase Intermediate Term Bond Fund.
Chase Vista Select Intermediate Bond Fund expects to maintain most of the
portfolio investments of Chase Intermediate Term Bond Fund in light of the
substantially similar investment policies of Chase Vista Select Intermediate
Bond Fund and the strategies of its investment adviser.
After the Reorganization, all of the issued and outstanding shares of Chase
Intermediate Term Bond Fund Shares will be canceled on the books of Chase
Intermediate Term Bond Fund and the stock transfer books of Chase Intermediate
Term Bond Fund will be permanently closed.
The Reorganization is subject to a number of conditions, including without
limitation: approval of the Reorganization Plan and the transactions
contemplated thereby described in this Combined Prospectus/Proxy Statement by
the Chase Intermediate Term Bond Fund Shareholders; the receipt of a legal
opinion from Simpson Thacher & Bartlett with respect to certain tax issues, as
more fully described in "Federal Income Tax Consequences" below; and the
parties' performance in all material respects of their respective agreements and
undertakings in the Reorganization Plan. Assuming satisfaction of the conditions
in the Reorganization Plan, the Effective Time of the Reorganization will be on
February 19, 2001 or such other date as is agreed to by the parties.
The expenses of Chase Intermediate Term Bond Fund and Chase Vista Select
Intermediate Bond Fund in connection with the Reorganization will be borne by
Chase.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their fund's shareholders.
BOARD CONSIDERATIONS
In its consideration and approval of the Reorganization at meetings held on
September 19, 2000 and October 24, 2000, the MFIT Board considered and discussed
the future of Chase Intermediate Term Bond Fund and how to best serve the Chase
Intermediate Term Bond Fund Shareholders' interests. The Trustees discussed the
size of Chase Intermediate Term Bond Fund's investment portfolio (approximately
$51 million as of August 31, 2000) and the increasing advantages of reorganizing
Chase Intermediate Term Bond Fund into Chase Vista Select Intermediate Bond
Fund. The Trustees reviewed the Proposal. After discussions, it was decided to
pursue the Reorganization with Chase Vista Select Intermediate Bond Fund.
In considering the Reorganization, the Trustees noted that all Chase Vista
Select Intermediate Bond Fund Shareholders wishing to invest in other types of
funds would be able to exchange into other Chase Vista funds without being
charged a front-end sales charge. In its consideration and approval of the
Reorganization, the MFIT Board considered, among other things: the terms of the
Reorganization Plan; a comparison of each fund's historical and projected
expense ratios; the comparative investment performance of Chase Intermediate
Term Bond Fund and Chase Vista Select Intermediate Bond Fund; the effect of such
Reorganization on Chase Intermediate Term Bond Fund and its shareholders; the
fact that the day-to-day portfolio management would be unchanged by the
Reorganization; the investment advisory services supplied by Chase and its
affiliates; the management and other fees payable by Chase Vista Select
Intermediate Bond Fund; the similarities and differences in the investment
objective and policies of the Funds; the opportunity to combine Chase
Intermediate Term Bond Fund with Chase Vista Select Intermediate Bond Fund in an
effort to realize operational and administrative efficiencies; the
recommendations of Chase with respect to the proposed Reorganization; the fact
that all costs and expenses of the Reorganization will be borne by Chase; and
the fact that the Reorganization would constitute a tax-free reorganization.
After considering the foregoing factors, together with such information as
they believed to be relevant, the MFIT Board determined that the proposed
Reorganization is in the best interests of Chase Intermediate Term Bond Fund and
that the interests of the Chase Intermediate Term Bond Fund Shareholders would
not be diluted as a result of the Reorganization and approved the Reorganization
Plan and directed that the Reorganization Plan be submitted to the Chase
Intermediate Term Bond Fund Shareholders for approval.
8
<PAGE>
The MFSG Board considered the proposed Reorganization from the perspective
of Chase Vista Select Intermediate Bond Fund. The MFSG Board considered, among
other things: the terms of the Reorganization Plan; the opportunity to combine
the two Funds in an effort to realize operational and administrative
efficiencies; the fact that all costs and expenses of the Reorganization will be
borne by Chase; and the fact that the Reorganization would constitute a tax-free
reorganization. Based upon its evaluation of the relevant information provided
to it, and in light of its fiduciary duties under federal and state law, the
MFSG Board determined that the proposed Reorganization is in the best interests
of the shareholders of Chase Vista Select Intermediate Bond Fund and the
interests of Chase Vista Select Intermediate Bond Fund's Shareholders would not
be diluted as a result of the Reorganization.
After considering the foregoing factors, together with such other
information as it believed to be relevant, the MFSG Board approved the
Reorganization Plan.
THE MFIT BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
The MFIT Board has not determined what action Chase Intermediate Term Bond
Fund will take in the event shareholders fail to approve the Reorganization Plan
or for any reason the Reorganization is not consummated. In either such event,
the Board will consider other appropriate courses of action.
FEDERAL INCOME TAX CONSEQUENCES
Consummation of the Reorganization is subject to the condition that MFIT
receive an opinion from Simpson Thacher & Bartlett to the effect that for
federal income tax purposes: (i) the transfer of all of the assets and
liabilities of Chase Intermediate Term Bond Fund to Chase Vista Select
Intermediate Bond Fund in exchange for Chase Vista Select Intermediate Bond Fund
Shares and the liquidating distributions to Shareholders of Chase Vista Select
Intermediate Bond Fund Shares so received, as described in the Reorganization
Plan, will constitute a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"), and with respect to
the Reorganization, Chase Intermediate Term Bond Fund and Chase Vista Select
Intermediate Bond Fund will each be considered "a party to a reorganization"
within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be
recognized by Chase Intermediate Term Bond Fund as a result of such transaction;
(iii) no gain or loss will be recognized by Chase Vista Select Intermediate Bond
Fund as a result of such transaction; (iv) no gain or loss will be recognized by
the Chase Intermediate Term Bond Fund Shareholders on the distribution to Chase
Intermediate Term Bond Fund Shareholders of the Chase Vista Select Intermediate
Bond Fund Shares in exchange for their Chase Intermediate Term Bond Fund Shares;
(v) the aggregate basis of Shares of Chase Vista Select Intermediate Bond Fund
received by a Shareholder of Chase Intermediate Term Bond Fund will be the same
as the aggregate basis of such Chase Intermediate Term Bond Fund Shareholder's
Chase Intermediate Term Bond Fund Shares immediately prior to the
Reorganization; (vi) the basis of Chase Vista Select Intermediate Bond Fund in
the assets of Chase Intermediate Term Bond Fund received pursuant to such
transaction will be the same as the basis of such assets in the hands of Chase
Intermediate Term Bond Fund immediately before such transaction; (vii) a Chase
Intermediate Term Bond Fund Shareholder's holding period for Chase Vista Select
Intermediate Bond Fund Shares will be determined by including the period for
which each Chase Intermediate Term Bond Fund Shareholder held Chase Intermediate
Term Bond Fund Shares exchanged therefor, provided that the Shareholder held
such Shares in Chase Intermediate Term Bond Fund Shares as a capital asset; and
(viii) Chase Vista Select Intermediate Bond Fund's holding period with respect
to the assets received in the Reorganization will include the period for which
such assets were held by Chase Intermediate Term Bond Fund.
MFIT has not sought a tax ruling from the Internal Revenue Service (the
"IRS"), but is acting in reliance upon the opinion of counsel discussed in the
previous paragraph. That opinion is not binding on the IRS and does not preclude
the IRS from adopting a contrary position. Shareholders should consult their own
advisers concerning the potential tax consequences to them, including state and
local income taxes.
CAPITALIZATION
Because Chase Intermediate Term Bond Fund will be combined with Chase Vista
Select Intermediate Bond Fund in the Reorganization, the total capitalization of
Chase Vista Select Intermediate Bond Fund after the Reorganization is expected
to be greater than the current capitalization of Chase Intermediate Term Bond
Fund. The following table sets forth as of August 31, 2000: (i) the
capitalization of Chase Intermediate Term Bond Fund; (ii) the capitalization of
Chase Vista Select Intermediate Bond Fund; and (iii) the pro forma
capitalization of Chase Vista Select Intermediate Bond Fund as adjusted to give
effect to the proposed Reorganization. There is, of course, no assurance that
the Reorganization will be consummated. Moreover, if consummated, the
capitalizations of Chase Vista Select Intermediate Bond Fund
9
<PAGE>
and Chase Intermediate Term Bond Fund are likely to be different at the
Effective Time of the Reorganization as a result of fluctuations in the value of
portfolio securities of each Fund and daily share purchase and redemption
activity in each fund.
<TABLE>
<CAPTION>
CHASE INTERMEDIATE TERM CHASE VISTA SELECT PRO FORMA
BOND FUND INTERMEDIATE BOND FUND COMBINED
----------------------- ---------------------- ----------------
<S> <C> <C> <C>
Total Net Assets
Class A Shares $-- $ -- $ 1,338,860
Institutional Class Shares -- 381,062,993 430,467,231
Investor Class Shares 1,338,860 -- --
Premier Class Shares 49,404,238 -- --
----------- ------------ ------------
Total $50,743,098 $381,062,993 $431,806,091
=========== ============ ============
Shares Outstanding
Class A Shares -- -- 139,030
Institutional Class Shares -- 39,566,893 44,697,136
Investor Class Shares 109,472 -- --
Premier Class Shares 4,039,072 -- --
----------- ------------ ------------
Total 4,148,544 39,566,893 44,836,166
=========== ============ ============
Net Asset Value Per Share
Class A Shares -- -- $9.63
Institutional Class Shares -- $9.63 $9.63
Investor Class Shares $12.23 -- --
Premier Class Shares $12.23 -- --
</TABLE>
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of Chase
Vista Select Intermediate Bond Fund. Except as noted below, Chase Vista Select
Intermediate Bond Fund has identical investment policies to Chase Intermediate
Term Bond Fund. This section is qualified in its entirety by the discussion in
the Prospectus and Statement of Additional Information of Chase Vista Select
Intermediate Bond Fund, which are incorporated herein by reference.
OBJECTIVE
The investment objective of Chase Vista Select Intermediate Bond Fund is to
seek as high a level of income as possible as is consistent with reasonable
risk. THE INVESTMENT OBJECTIVE OF CHASE INTERMEDIATE TERM BOND FUND IS TO INVEST
IN SECURITIES THAT EARN CURRENT INCOME WHILE ALSO CONSIDERING STABILITY OF
PRINCIPAL.
MAIN INVESTMENT STRATEGY
Chase Vista Select Intermediate Bond Fund seeks to achieve its objective by
focusing on a broad range of fixed income securities. Under normal market
condition, the Fund will invest at least 65% of its total assets in a broad
range of investment-grade debt securities. These include debt securities issued
by the U.S. Government and its agencies and authorities, investment-grade
corporate bonds and other fixed income securities. CHASE INTERMEDIATE TERM BOND
FUND INVESTS AT LEAST 70% OF ITS TOTAL ASSETS IN BONDS AND NOTES OF DOMESTIC AND
FOREIGN ISSUERS, U.S. GOVERNMENT SECURITIES AND MORTGAGE-RELATED SECURITIES.
Chase Vista Select Intermediate Bond Fund's dollar weighted average maturity
is between three and 10 years.
Chase Vista Select Intermediate Bond Fund may make substantial investments
in foreign debt securities, including securities of issuers in developing
countries, as long as they meet the Fund's credit quality standards. CHASE
INTERMEDIATE TERM BOND FUND MAY INVEST UP TO 30% OF ITS TOTAL ASSETS IN FOREIGN
DEBT SECURITIES.
Chase Vista Select Intermediate Bond Fund develops an appropriate portfolio
strategy by selecting among various sectors (for example, corporate bonds, U.S.
government debt, mortgage-backed securities) and securities. When making these
selections, the advisers use a relative value investment approach as well as
extensive analyses of the securities' creditworthiness and structures. The
advisers seek to spread the Fund's investments across a variety of sectors to
maximize diversification and liquidity. The advisers also actively manage the
duration of the Fund's portfolio.
In determining if a sector or security is relatively undervalued, the
advisers look to whether different sectors and securities are appropriately
priced given their risk characteristics and the fundamental (such as
10
<PAGE>
economic growth or inflation outlook) and technical (such as supply and demand)
factors in the market at any point in time. The advisers may change the emphasis
that they place on each of these factors from time to time. In addition,
research plays an important role in the advisers' relative value investment
process. The research effort incorporates both fundamental and quantitative
analysis.
In determining whether to sell a debt security, the advisers will use the
same type of analysis that they use in buying debt securities in order to
determine whether the debt security is still undervalued. This may include
selling those securities which have appreciated to meet their target valuations.
The frequency of yield curve shifts over the last few years has made yield
curve strategies an important dimension of Chase Vista Select Intermediate Bond
Fund's overall investment strategy. Yield curves show the relationship between
yields on similar debt securities with different maturities. The Fund may seek
gains by investing in anticipation of yield curve movements.
The advisers consider several factors when choosing investments, including
current yield, preservation of original investment, maturity, credit quality,
ease of buying and selling and yield to maturity. The advisers will adjust the
portfolio as market conditions change.
Chase Vista Select Intermediate Bond Fund may invest in floating rate
securities, whose interest rates adjust automatically whenever a specified
interest rate changes, and in variable rate securities, whose interest rates are
changed periodically.
Chase Vista Select Intermediate Bond Fund may invest in mortgage-related
securities issued by governmental entities and private issuers. These may
include investments in collateralized mortgage obligations and principal-only
and interest-only stripped mortgage-backed securities.
Chase Vista Select Intermediate Bond Fund may enter into "dollar rolls," in
which the Fund sells mortgage-backed securities and at the same time contracts
to buy back very similar securities on a future date. It may also buy
asset-backed securities. These receive a stream of income from a particular
asset, such as credit card receivables.
Chase Vista Select Intermediate Bond Fund may also invest in high quality,
short-term money market instruments, repurchase agreements and derivatives,
which are financial instruments whose value is based on another security, index
or exchange rate. The Fund may use derivatives to hedge various market risks or
to increase the Fund's income or gain.
To temporarily defend its assets, Chase Vista Select Intermediate Bond Fund
may put any amount of its assets in high quality money market instruments and
repurchase agreements.
Chase Vista Select Intermediate Bond Fund may change any of these investment
policies (including its investment objective) without shareholder approval.
INVESTMENT RESTRICTIONS
Chase Vista Select Intermediate Bond Fund and Chase Intermediate Term Bond
Fund have each adopted the following investment restrictions which may not be
changed without approval by a "majority of the outstanding shares" of a Fund
which means the vote of the lesser of (i) 67% or more of the shares of a Fund
present at a meeting, if the holders of more than 50% of the outstanding shares
of a Fund are present or represented by proxy, or (ii) more than 50% of the
outstanding shares of a Fund.
Neither Fund may:
(1) borrow money, except that each Fund may borrow money for temporary or
emergency purposes, or by engaging in reverse repurchase transactions, in an
amount not exceeding 33 1/3% of the value of its total assets at the time
when the loan is made and may pledge, mortgage or hypothecate no more than
1/3 of its net assets to secure such borrowings. Any borrowings representing
more than 5% of a Fund's total assets must be repaid before the Fund may
make additional investments;
(2) make loans, except that each Fund may: (i) purchase and hold debt
instruments (including without limitation, bonds, notes, debentures or other
obligations and certificates of deposit, bankers' acceptances and fixed time
deposits) in accordance with its investment objectives and policies;
(ii) enter into repurchase agreements with respect to portfolio securities;
and (iii) lend portfolio securities with a value not in excess of one-third
of the value of its total assets;
(3) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or repurchase agreements secured thereby) if, as a
result,
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more than 25% of a Fund's total assets would be invested in the securities
of companies whose principal business activities are in the same industry;
(4) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments but this shall not prevent
either Fund from (i) purchasing or selling options and futures contracts or
from investing in securities or other instruments backed by physical
commodities or (ii) engaging in forward purchases or sales of foreign
currencies or securities;
(5) 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 backed by real estate or
securities of companies engaged in the real estate business). Investments by
either Fund in securities backed by mortgages on real estate or in
marketable securities of companies engaged in such activities are not hereby
precluded;
(6) issue any senior security (as defined in the 1940 Act), except that
(a) each Fund may engage in transactions that may result in the issuance of
senior securities to the extent permitted under applicable regulations and
interpretations of the 1940 Act or an exemptive order; (b) each Fund may
acquire other securities, the acquisition of which may result in the
issuance of a senior security, to the extent permitted under applicable
regulations or interpretations of the 1940 Act; and (c) subject to the
restrictions set forth above, each Fund may borrow money as authorized by
the 1940 Act; and
(7) underwrite securities issued by other persons except insofar as a Fund may
technically be deemed to be an underwriter under the Securities Act of 1933
in selling a portfolio security.
In addition, as a matter of fundamental policy, notwithstanding any other
investment policy or restriction, each Fund may seek to achieve its investment
objective by investing all of its investable assets in another investment
company having substantially the same investment objective and policies as that
Fund. For purposes of investment restriction (5) above, real estate includes
real estate limited partnerships. For purposes of investment restriction
(3) above, industrial development bonds, where the payment of principal and
interest is the ultimate responsibility of companies within the same industry,
are grouped together as an "industry." Investment restriction (3) above,
however, is not applicable to investments by either Fund in municipal
obligations where the issuer is regarded as a state, city, municipality or other
public authority since such entities are not members of any "industry."
Supranational organizations are collectively considered to be members of a
single "industry" for purposes of restriction (3) above.
In addition, each Fund is subject to the following nonfundamental investment
restrictions which may be changed without shareholder approval:
(1) Each Fund may not, with respect to 75% of its assets, hold more than 10% of
the outstanding voting securities of any issuer or invest more than 5% of
its assets in the securities of any one issuer (other than obligations of
the U.S. Government, its agencies and instrumentalities).
(2) Each Fund may not make short sales of securities, other than short sales
"against the box," or purchase securities on margin except for short-term
credits necessary for clearance of portfolio transactions, provided that
this restriction will not be applied to limit the use of options, futures
contracts and related options, in the manner otherwise permitted by the
investment restrictions, policies and investment program of a Fund. The
Funds have no current intention of making short sales against the box.
(3) Each Fund may not purchase or sell interests in oil, gas or mineral leases.
(4) Each Fund may not invest more than 15% of its net assets in illiquid
securities.
(5) Each Fund may not write, purchase or sell any put or call option or any
combination thereof.
(6) Each Fund may invest up to 5% of its total assets in the securities of any
one investment company, but may not own more than 3% of the securities of
any one investment company or invest more than 10% of its total assets in
the securities of other investment companies.
For purposes of investment restriction (4) above, illiquid securities
includes securities restricted as to resale unless they are determined to be
readily marketable in accordance with procedures established by the Board of
Trustees.
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PURCHASES, REDEMPTIONS AND EXCHANGES
The procedures for purchases, redemptions and exchanges of shares of Chase
Vista Select Intermediate Bond Fund are similar to those of Chase Intermediate
Term Bond Fund. Please note that Chase Vista Select Intermediate Bond Fund
currently has one class of shares. In connection with the Reorganization, this
class will be renamed "Institutional Class" and the Class A share class will be
introduced. The following discussion reflects the new class structure.
SALES CHARGES
There is normally a sales charge (sometimes called a "load") to buy Class A
Shares of Chase Vista Select Intermediate Bond Fund. There are also ongoing
charges that holders of Class A Shares pay as long as they own their shares, as
more fully explained below. There is no sales charge to buy Institutional
Class Shares.
Chase Intermediate Term Bond Fund Shareholders holding Investor
Class Shares will receive Class A Shares in the Reorganization but will not have
to pay a sales charge. In addition, such Shareholders will not have to pay a
sales charge if they buy additional Class A Shares in the future.
12b-1 FEES
VFD is the distributor for Chase Vista Select Intermediate Bond Fund, rather
than CFD (which acts as distributor for Chase Intermediate Term Bond Fund).
Chase Vista Select Intermediate Bond Fund has adopted a Rule 12b-1 distribution
plan for Class A Shares under which it pays annual distribution fees of up to
0.25% of the average daily net assets attributable to Class A Shares. A similar
12b-1 distribution plan (with annual distribution fees of up to 0.25%) is
currently in effect for Investor Class Shares of Chase Intermediate Term Bond
Fund.
This payment covers such things as compensation for services provided by
broker-dealers and expenses connected with the sale of shares. Payments are not
tied to actual expenses incurred.
Because 12b-1 expenses are paid out of Chase Vista Select Intermediate Bond
Fund's assets on an ongoing basis, over time these fees will increase the cost
of a shareholder's investment and may cost more than other types of sales
charges, used by other mutual funds.
There is no Rule 12b-1 distribution plan for Institutional Class Shares of
Chase Vista Select Intermediate Bond Fund or Premier Class Shares of Chase
Intermediate Term Bond Fund.
BUYING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF CHASE VISTA SELECT
INTERMEDIATE BOND FUND SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION AND
REFLECTS THE NEW CLASS STRUCTURE.
The price shareholders pay for their shares is based on the net asset value
per share ("NAV"). NAV is the value of everything the Fund owns, minus
everything it owes, divided by the number of shares held by investors. The Fund
generally values its assets at fair market values but may use fair value if
market prices are unavailable.
The NAV of each class of the Fund's shares is generally calculated once each
day at the close of regular trading on the New York Stock Exchange each day the
Fund is accepting purchase orders. A shareholder will pay the public offering
price which is based on the next NAV calculated after the Chase Vista Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after funds are converted into federal funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange, it will be processed at that
day's price and the purchaser will be entitled to all dividends declared on that
day. If an order is received after the close of regular trading on the New York
Stock Exchange, it will generally be processed at the next day's price. If a
purchaser pays by check for Fund shares before the close of regular trading on
the New York Stock Exchange, it will generally be processed the next day the
Fund is open for business.
If a shareholder buys through an agent and not directly from the Center, the
agent could set earlier cut-off times. Each shareholder must provide a Social
Security Number or Taxpayer Identification Number when opening an account.
The Fund has the right to reject any purchase order.
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Chase Vista Select Intermediate Bond Fund's minimum initial investment and
eligibility requirements will be waived for shareholders of Chase Intermediate
Term Bond Fund who receive Chase Vista Select Intermediate Bond Fund Shares in
the Reorganization.
All purchases of Institutional Class Shares of the Fund must be paid for by
federal funds wire. They may be purchased only through financial service firms,
such as broker-dealers and banks that have an agreement with the Fund.
For Class A Shares, checks should be made out to Chase Vista Funds in U.S.
dollars. Credit cards, cash, or checks from a third party will not be accepted.
Shares bought by check may not be sold for 15 calendar days. Shares bought
through an Automated Clearing House cannot be sold until the payment clears.
This could take more than seven business days. Purchase orders will be canceled
if a check does not clear and the investor will be responsible for any expenses
and losses to the Fund. Orders by wire will be canceled if the Center does not
receive payment by 4:00 p.m., Eastern time, on the day the shareholder buys.
Shareholders seeking to buy Class A Shares through an investment
representative should instruct their representative to contact the Fund. Such
representatives may charge investors a fee and may offer additional services,
such as special purchase and redemption programs, "sweep" programs, cash
advances and redemption checks. Such representative may set different minimum
investments and earlier cut-off times.
A systematic investment plan is available for Class A Shares.
SELLING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF CHASE VISTA SELECT INTERMEDIATE
BOND FUND SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE
NEW CLASS STRUCTURE.
Shares of the Fund may be sold on any day the Center is open for trading,
either directly to the Fund or through an investment representative.
Shareholders of the Fund will receive the next NAV calculated after the Center
accepts his or her sale order, less any applicable sales charges.
Under normal circumstances, if a request is received before the close of
regular trading on the New York Stock Exchange, the Fund will send the proceeds
the same business day. An order to sell shares will not be accepted if the Fund
has not collected payment for the shares. The Fund may stop accepting orders to
sell and may postpone payments for more than seven days, as federal securities
laws permit.
Generally, proceeds are sent by electronic transfer or wire for Class A
Shares and by wire only for Institutional Class Shares. However, for Class A, if
a shareholder's address of record has changed within the 30 days prior to the
sale request or if more than $25,000 of shares is sold by phone, proceeds will
be sent only to the bank account on the Fund's records.
For Class A Shares, a shareholder will need to have his or her signature
guaranteed if he or she wants payment to be sent to an address other than the
one in the Fund's records. Additional documents or a letter from a surviving
joint owner may also be needed.
A shareholder who purchased through an investment representative, or in the
case of Institutional Class Shares, through a financial service firm, should
contact that representative, who will send the necessary documents to the
Center. The representative might charge a fee for this service.
Shareholders may also sell their shares by contacting the Center directly.
Class A shareholders may contact 1-800-34-VISTA while Institutional
Class shareholders may contact 1-800-62-CHASE.
A systematic withdrawal plan is available for Class A Shares.
EXCHANGING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF CHASE VISTA SELECT
INTERMEDIATE BOND FUND SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION.
Shares of the Fund may be exchanged for shares in certain other Chase Vista
Funds.
For tax purposes, an exchange is treated as a sale of those shares.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange. Shareholders who exchange must meet any minimum investment
requirements and may have to pay a sales commission.
The exchange privilege is not a means of short-term trading as this could
increase management cost and affect all shareholders of MFSG. The Fund reserves
the right to limit the number of exchanges or refuse an
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exchange. Each exchange privilege may also be terminated. The Fund charges an
administration fee of $5 for each exchange if an investor makes more than 10
exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING CHASE VISTA SELECT INTERMEDIATE BOND FUND
For Class A Shares, Chase Vista Select Intermediate Bond Fund may close an
account if the balance falls below $500. Chase Vista Select Intermediate Bond
Fund may also close the account if an investor is in the Systematic Investment
Plan and fails to meet investment minimums over a 12-month period. For
Institutional Class Shares, Chase Vista Select Intermediate Bond Fund may close
an account if the balance falls below $1,000,000 because the investor has sold
Shares. At least 60 days' notice will be given before closing the account.
Unless a shareholder indicates otherwise on his or her account application,
the Fund is authorized to act on redemption and transfer instructions received
by phone. If someone trades on an account by phone, the Fund will ask that
person to confirm the account registration and address to make sure they match
those in the Fund records. If they do correspond, the Fund is generally
authorized to follow that person's instructions. The Fund will take all
reasonable precautions to confirm that the instructions are genuine. Investors
agree that they will not hold the Fund liable for any loss or expenses from any
sales request, if the Fund takes reasonable precautions. The Fund will be liable
for any losses to a shareholder from an unauthorized sale or fraud against such
shareholder if the Fund does not follow reasonable procedures.
It may not always be possible to reach the Center by telephone. This may be
true at times of unusual market changes and shareholder activity. In that event,
shareholders can mail instructions to the Fund or contact their investment
representative or agent. The Fund may modify or cancel the sale of shares by
phone without notice.
MFSG will enter into agreements with certain shareholder servicing agents
(including Chase) under which the shareholder servicing agents will agree to
provide certain support services to their customers. For performing these
services, each shareholder servicing agent receives an annual fee of up to 0.25%
of the average daily net assets of the Class A Shares held by investors serviced
by the shareholder servicing agent. It has already entered into such agreements
with respect to Institutional Class Shares. MFIT DOES NOT HAVE SIMILAR
AGREEMENTS WITH SHAREHOLDER SERVICING AGENTS. ACCORDINGLY, CHASE INTERMEDIATE
TERM BOND FUND DOES NOT PAY SHAREHOLDER SERVICING FEES.
Chase and/or VFD may, at their own expense, make additional payments to
certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers. The amount may be up to an
additional 0.10% annually of the average net assets of the fund attributable to
shares of the Fund held by customers of those shareholder servicing agents.
Chase Vista Select Intermediate Bond Fund issues multiple classes of shares.
Each class may have different requirements for who may invest, and may have
different sales charges and expense levels. A person who gets compensated for
selling Fund shares may receive a different amount for each class.
Chase and its affiliates and the Funds and their affiliates, agents and
subagents may share information about shareholders and their accounts with each
other and with others unless this sharing is prohibited by contract. This
information can be used for a variety of purposes, including offering investment
and insurance products to shareholders.
VFD is the distributor for Chase Vista Select Intermediate Bond Fund, rather
than CFD (which acts as distributor for Chase Intermediate Term Bond Fund).
DISTRIBUTIONS AND TAXES
Each Fund can earn income and realize capital gain. Each Fund will deduct
from these earnings any expenses and then pay to shareholders the distributions.
Each Fund declares dividends daily and distributes any net investment income
at least monthly. Net capital gain is distributed annually. You have three
options for your distributions. You may:
- reinvest all of them in additional Fund shares without a sales charge;
- take distributions of net investment income in cash or as a deposit in a
pre-assigned bank account and reinvest distributions of net capital gain
in additional shares; or
- take all distributions in cash or as a deposit in a pre-assigned bank
account.
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If you don't select an option when you open your account, we'll reinvest all
distributions. If your distributions are reinvested, they will be in the form of
shares of the same class. The taxation of dividends won't be affected by the
form in which you receive them.
Dividends of net investment income are usually taxable as ordinary income at
the federal, state and local levels. The state or municipality where you live
may not charge you state and local taxes on tax-exempt interest earned on
certain bonds.
Dividends earned on bonds issued by the U.S. government and its agencies may
also be exempt from some types of state and local taxes.
If you receive distributions of net capital gain, the tax rate will be based
on how long a Fund held a particular asset, not on how long you have owned your
shares. If you buy shares just before a distribution, you will pay tax on the
entire amount of the taxable distribution you receive, even though the NAV will
be higher on that date because it includes the distribution amount.
Each Fund expects that its distributions will consist primarily of ordinary
income.
Early in each calendar year, each Fund will send its shareholders a notice
showing the amount of distributions received in the preceding year and the tax
status of those distributions.
The above is only a general summary of tax implications of investing in
these Funds. Shareholders should consult their tax advisors to see how investing
in the Funds will affect their own tax situation.
COMPARISON OF CHASE INTERMEDIATE TERM BOND FUND'S
AND CHASE VISTA SELECT INTERMEDIATE BOND FUND'S
ORGANIZATION STRUCTURES
There are no differences in the organizational structure of Chase
Intermediate Term Bond Fund and Chase Vista Select Intermediate Bond Fund. Set
forth below are descriptions of the structure, voting rights, shareholder
liability and the liability of Trustees.
STRUCTURE OF THE CHASE INTERMEDIATE TERM BOND FUND
Chase Intermediate Term Bond Fund is organized as a series of MFIT, which is
organized under the law of the Commonwealth of Massachusetts. As a Massachusetts
business trust, MFIT's operations are governed by MFIT's Declaration of Trust
and By-Laws (the "MFIT Trust Documents") and applicable Massachusetts law. The
operations of Chase Intermediate Term Bond Fund are also subject to the
provisions of the 1940 Act and the rules and regulations thereunder.
STRUCTURE OF THE CHASE VISTA SELECT INTERMEDIATE BOND FUND
Chase Vista Select Intermediate Bond Fund is organized as a series of MFSG,
which is organized under the law of the Commonwealth of Massachusetts. As a
Massachusetts business trust, MFSG's operations are governed by MFSG's
Declaration of Trust and By-Laws (the "MFSG Trust Documents") and applicable
Massachusetts law. The operations of Chase Vista Select Intermediate Bond Fund
are also subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
TRUSTEES AND OFFICERS
Subject to the provisions of the Trust Documents, the business of Chase
Intermediate Term Bond Fund is managed by MFIT's Trustees and the business of
Chase Vista Select Intermediate Bond Fund is managed by MFSG's Trustees, who
serve indefinite terms and have all powers necessary or convenient to carry out
their responsibilities. The Trustees and officers of MFIT and MFSG are
identical.
Information concerning the current Trustees of the MFIT Board and the MFSG
Board is set forth later in this document.
SHARES OF FUNDS
Each of MFIT and MFSG is a trust with an unlimited number of authorized
shares of beneficial interest, par value $0.001 per share, which may be divided
into portfolios or series and classes thereof. Each Fund is one portfolio of a
trust, and may issue multiple classes of shares. Each share of a portfolio or
class of a trust represents an equal proportionate interest in that portfolio or
class with each other share of that portfolio or class. The shares of each
portfolio or class of either MFIT or MFSG participate equally in the earnings,
dividends and assets of the particular portfolio or class. Fractional shares
have proportionate rights to full shares. Expenses of MFIT or MFSG that are not
attributable to a specific portfolio or class will be allocated to all the
portfolios of that trust in a manner believed by its management to be fair and
equitable.
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Generally, shares of each portfolio will be voted separately, for example, to
approve an investment advisory agreement and shares of each class of each
portfolio will be voted separately, for example, to approve a distribution plan,
but shares of all series and classes vote together, to the extent required by
the 1940 Act, including the election or selection of Trustees and independent
accountants. Neither MFIT nor MFSG is required to hold regular annual meetings
of shareholders, but may hold special meetings from time to time. There are no
conversion or preemptive rights in connection with shares of either MFIT or
MFSG.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFIT or MFSG resulting from the resignation
of a Trustee or otherwise may be filled similarly by a vote of a majority of the
remaining Trustees then in office, subject to the 1940 Act. In addition,
Trustees may be removed from office by a vote of holders of shares representing
two-thirds of the outstanding shares of each portfolio of that trust at a
meeting duly called for the purpose. A meeting of shareholders shall be held
upon the written request of the holders of shares representing not less than 10%
of the outstanding shares entitled to vote on the matters specified in the
written request. Upon written request by the holders of shares representing at
least $25,000 or 1% of the outstanding shares of that trust stating that such
shareholders wish to communicate with the other shareholders for the purpose of
obtaining the signatures necessary to demand a meeting to consider removal of a
Trustee, the Trustees will, within five business days after receipt of such
request, either provide a list of shareholders or inform such applicants as to
the approximate number of shareholders and the approximate costs of mailing the
request to them. If the second option is chosen by the Trustees, then the
Trustees are generally obligated, upon written request of the applicants, to
mail the requested materials to all shareholders of record (at the expense of
the requesting shareholders). Except as set forth above, the Trustees may
continue to hold office and may appoint successor Trustees.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of either MFIT or MFSG could, under
certain circumstances, be held personally liable as partners for the obligations
of that trust. However, the Declaration of Trust of each of MFIT and MFSG
disclaims shareholder liability for acts or obligations of that trust and
provides for indemnification and reimbursement of expenses out of trust property
for any shareholder held personally liable for the obligations of that trust.
The Declaration of Trust of each of MFIT and MFSG also provides that the trust
shall maintain appropriate insurance (for example, fidelity bonding and errors
and omissions insurance) for the protection of that trust, its shareholders,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the trust itself was unable to meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFIT and MFSG, the Trustees of
that trust are personally liable only for bad faith, willful misfeasance, gross
negligence or reckless disregard of their duties as Trustees. Under the
Declaration of Trust of each of MFIT and MFSG, a Trustee or officer will
generally be indemnified against all liability and against all expenses
reasonably incurred or paid by such person in connection with any claim, action,
suit or proceeding in which such person becomes involved as a party or otherwise
by virtue of such person being or having been a Trustee or officer and against
amounts paid or incurred by such person in the settlement thereof.
The foregoing is only a summary of certain organizational and governing
documents and Massachusetts business trust law. It is not a complete
description. Shareholders should refer to the provisions of these documents and
state law directly for a more thorough comparison. Copies of the Declaration of
Trust and Bylaws of each of MFIT and MFSG are available without charge upon
written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS
GENERAL INFORMATION
As noted above, Chase Intermediate Term Bond Fund and Chase Vista Select
Intermediate Bond Fund are both managed by Chase pursuant to the Advisory
Agreements. Chase has delegated most of its responsibilities with respect to
Chase Vista Select Intermediate Bond Fund to CFAM pursuant to a Subadvisory
Agreement between Chase and CFAM. As a result, CFAM is responsible for most of
the day-to-day management functions for Chase Vista Select Intermediate Bond
Fund. However, the same portfolio management team is responsible for the
day-to-day management functions for both Chase Intermediate Term Bond Fund and
Chase Vista Select Intermediate Bond Fund. It is anticipated that during the
first quarter of
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2001, Chase will transfer its investment advisory business to CFAM and,
thereafter, CFAM will be the sole investment adviser to Chase Vista Select
Intermediate Bond Fund and Chase Intermediate Term Bond Fund.
DESCRIPTION OF CHASE
Chase is an indirect wholly-owned subsidiary of The Chase Manhattan
Corporation, a registered bank holding company ("CMC"). Chase's principal
executive offices are located at 270 Park Avenue, New York, New York 10017.
Chase is a New York State chartered bank that provides commercial banking and
trust services. As of June 30, 2000, Chase and certain of its affiliates
provided investment management services with respect to assets of approximately
$250 billion. CMC's principal executive offices are located at 270 Park Avenue,
New York, New York 10017. On September 13, 2000, CMC and J.P. Morgan & Co.
Incorporated announced that they have agreed to merge. The transaction is
expected to close in the first quarter of 2001 and is subject to approval by
shareholders of both companies, as well as by U.S. Federal and state and foreign
regulatory authorities.
Under each Advisory Agreement, Chase is responsible for making decisions
with respect to, and placing orders for, all purchases and sales of the
portfolio securities of the Funds. Chase's responsibilities under each Advisory
Agreement including supervising the Funds' investments and maintaining a
continuous investment program, placing purchase and sale orders and paying costs
of certain clerical and administrative services involved in managing and
servicing the Funds' investments and complying with regulatory reporting
requirements. Chase delegates certain of these responsibilities with respect to
Chase Vista Select Intermediate Bond Fund to CFAM. Under each Advisory
Agreement, Chase is obligated to furnish employees, office space and facilities
required for operation of the Funds.
EXPENSES AND ADVISORY FEES. Each Advisory Agreement provides that each of
Chase Intermediate Term Bond Fund and Chase Vista Select Intermediate Bond Fund,
as the case may be, will pay Chase a monthly advisory fee based upon the average
daily net assets of such Fund. The annual rate of the advisory fee is 0.50% for
the Chase Intermediate Term Bond Fund and 0.30% for the Chase Vista Select
Intermediate Bond Fund. Chase may waive fees from time to time to assist the
Funds in maintaining competitive yields.
Under each Advisory Agreement, except as indicated above, each Fund is
responsible for its operating expenses including, but not limited to, taxes;
interest; fees (including fees paid to its Trustees who are not affiliated with
Chase or any of their affiliates); fees payable to the SEC; state securities
qualification fees; association membership dues; costs of preparing and printing
prospectuses for regulatory purposes and for distribution to existing
shareholders; advisory and administrative fees; charges of the custodian and
transfer agent; insurance premiums; auditing and legal expenses; costs of
shareholders' reports and shareholder meetings; any extraordinary expenses; and
brokerage fees and commissions, if any, in connection with the purchase or sale
of portfolio securities.
For the twelve months ended April 30, 2000, Chase accrued management fees
and management fee waivers of approximately $194,000 and $144,000, respectively,
for Chase Intermediate Term Bond Fund. For the twelve months ended April 30,
2000, Chase accrued management fees and management fee waivers of approximately
$1,129,000 and $598,000, respectively, for Chase Vista Select Intermediate Bond
Fund.
SUBCONTRACTING. Chase is authorized by each Advisory Agreement to employ or
associate with such other persons or entities as it believes to be appropriate
to assist it in the performance of its duties. Any such person is required to be
compensated by Chase, not by the Trusts or the relevant Fund, and to be approved
by the shareholders of that Fund as required by the 1940 Act.
LIMITATION ON LIABILITY. Each Advisory Agreement provides that Chase will not
be liable for any error of judgment or mistake of law or for any act or omission
or loss suffered by MFIT, MFSG or either Fund, as the case may be, in connection
with the performance of that Advisory Agreement except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or from willful misfeasance, bad faith, or gross negligence in the
performance of its duties or reckless disregard of its obligations and duties
under the Advisory Agreement. Chase would be as fully responsible to MFIT, MFSG
or either Fund, as the case may be, for the acts of any sub-adviser as it is for
its own acts.
DURATION AND TERMINATION. Each Advisory Agreement continues in effect from
year to year with respect to Chase Intermediate Term Bond Fund or Chase Vista
Select Intermediate Bond Fund, as the case may be, only so long as such
continuation is approved at least annually by (i) the Board of Trustees of
either MFIT or MFSG, as the case may be, or the majority vote of the outstanding
voting securities of such Fund, and (ii) a majority of those Trustees who are
neither parties to that Advisory Agreement nor "interested persons," as defined
in the 1940 Act, of any such party, acting in person at a meeting called for the
purpose
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of voting on such approval. Each Advisory Agreement will terminate automatically
in the event of its "assignment," as defined in the 1940 Act. In addition, each
Advisory Agreement is terminable at any time as to either Fund without penalty
by either the MFIT or MFSG Board, as the case may be, or by vote of the majority
vote of such Fund's outstanding voting securities upon 60 days' written notice
to Chase, and by Chase on 60 days' written notice to MFIT or MFSG, as the case
may be.
DESCRIPTION OF CFAM
CFAM is a wholly-owned subsidiary of Chase. CFAM is located at 1211 Avenue
of the Americas, 41st Floor, New York, New York 10036.
DESCRIPTION OF THE SUBADVISORY AGREEMENT
Pursuant to the Subadvisory Agreement, Chase delegates to CFAM portfolio
management duties. With respect to the day-to-day management of Chase Vista
Select Intermediate Bond Fund, CFAM makes decisions concerning, and places all
orders for, purchases and sales of securities and helps maintain the records
relating to such purchases and sales. CFAM may, in its discretion, provide such
services through its own employees or the employees of one or more affiliated
companies that are qualified to act as an investment adviser to Chase Vista
Select Intermediate Bond Fund under applicable laws and are under the common
control of Chase; PROVIDED that (i) all persons, when providing services under
the Subadvisory Agreement, are functioning as part of an organized group of
persons, and (ii) such organized group of persons is managed at all times by
authorized officers of CFAM.
Chase and CFAM bear all expenses in connection with the performance of their
respective services under the Subadvisory Agreement.
As investment adviser, Chase oversees the management of Chase Vista Select
Intermediate Bond Fund under the Subadvisory Agreement, and, subject to the
general supervision of the MFSG Board, makes recommendations and provides
guidelines to CFAM based on general economic trends and macroeconomic factors.
Among the recommendations that may be provided by Chase to CFAM are guidelines
and benchmarks against which Chase Vista Select Intermediate Bond Fund would be
managed. From the fee paid by Chase Vista Select Intermediate Bond Fund under
the Advisory Agreement to Chase, Chase bears responsibility for payment of
subadvisory fees to CFAM. Therefore, Chase Vista Select Intermediate Bond Fund
does not bear any increase in advisory fee rates resulting from the Subadvisory
Agreement. The Subadvisory Agreement provides that CFAM is entitled to receive
from Chase, out of its advisory fee, a monthly management fee as disclosed below
under "Subadvisory Fee."
DURATION AND TERMINATION. The Subadvisory Agreement will continue for
successive one-year periods, provided that such continuation is specifically
approved at least annually (i) by the MFSG Board, or by a majority of the
outstanding voting securities of Chase Vista Select Intermediate Bond Fund and,
in each case, (ii) by a majority of the Trustees who are not interested persons
of the Fund, Chase or CFAM, by vote cast in person at a meeting called for such
purposes. The Subadvisory Agreement is terminable at any time, without penalty,
by vote of the MFSG Board, by Chase by the majority of the outstanding voting
securities of Chase Vista Select Intermediate Bond Fund, or by CFAM upon 60
days' written notice. The Subadvisory Agreement will terminate automatically in
the event of its assignment, as defined under the 1940 Act.
SUBADVISORY FEE. As compensation for its services, CFAM receives a fee from
Chase. The fee is at the annual rate of 0.15% of the average daily net assets of
Chase Vista Select Intermediate Bond Fund. The fee, which is accrued daily and
payable monthly, is calculated for each day by multiplying the fraction of one
over the number of calendar days in the year by the 0.15% annual subadvisory fee
percentage rate and multiplying this product by the value of the net assets of
Chase Vista Select Intermediate Bond Fund at the close of business on the
previous business day of MFSG.
For the twelve months ended April 30, 2000, Chase paid approximately
$531,000 in subadvisory fees to CFAM. THIS FEE WAS PAID BY CHASE OUT OF THE
ADVISORY FEE IT RECEIVED FOR CHASE VISTA SELECT INTERMEDIATE BOND FUND AND WAS
NOT AN ADDITIONAL CHARGE TO THE FUND.
PORTFOLIO MANAGER
Leonard Lovito, a Vice President and Senior Portfolio Manager at Chase, and
Timothy Neumann, Head of the Taxable Core Investment Group at Chase, are
responsible for the day-to-day management of the Fund.
19
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Chase, as the investment adviser to both Chase Intermediate Term Bond Fund
and Chase Vista Select Intermediate Bond Fund, has responsibilities with respect
to each Fund's portfolio transactions and brokerage arrangements pursuant to the
Fund's policies, subject to the overall authority of either the MFIT or MFSG
Board, as the case may be. In addition, the Subadvisory Agreement with CFAM
currently provides that CFAM's responsibilities with respect to portfolio
transactions and brokerage arrangements will be equivalent to those of Chase
under the Advisory Agreement. Accordingly, the description below of Chase's
responsibilities under the Advisory Agreement would also apply to the
subadviser's responsibilities under the Subadvisory Agreement.
Under each Advisory Agreement, Chase, subject to the general supervision of
the applicable Board, is responsible for the placement of orders for the
purchase and sale of portfolio securities for each of Chase Intermediate Term
Bond Fund and Chase Vista Select Intermediate Bond Fund with brokers and dealers
selected by Chase. These brokers and dealers may include brokers or dealers
affiliated with Chase to the extent permitted by the 1940 Act and that trust's
policies and procedures applicable to the Funds. Chase shall use its best
efforts to seek to execute portfolio transactions at prices which, under the
circumstances, result in total costs or proceeds being the most favorable to
such Fund. In assessing the best overall terms available for any transaction,
Chase shall consider all factors 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, research services provided to
Chase, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In no event shall Chase be under any duty
to obtain the lowest commission or the best net price for a Fund on any
particular transaction, nor shall Chase be under any duty to execute any order
in a fashion either preferential to such Fund relative to other accounts managed
by Chase or otherwise materially adverse to such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to Chase, a Fund and/or the other accounts over which
Chase exercises investment discretion. Chase is authorized to pay a broker or
dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for a Fund which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if Chase determines in good faith that the total commission is
reasonable in relation to the value of the brokerage and research services
provided by such broker or dealer, viewed in terms of either that particular
transaction or the overall responsibilities of Chase with respect to accounts
over which it exercises investment discretion. Chase shall report to the MFIT
Board or the MFSG Board, as the case may be, regarding overall commissions paid
by a Fund and their reasonableness in relation to the benefits to such Fund.
In executing portfolio transactions for Chase Intermediate Term Bond Fund or
Chase Vista Select Intermediate Bond Fund, Chase may, to the extent permitted by
applicable laws and regulations, but shall not be obligated to, aggregate the
securities to be sold or purchased with those of other funds or its other
clients if, in Chase's reasonable judgment, such aggregation (i) will result in
an overall economic benefit to such fund, taking into consideration the
advantageous selling or purchase price, brokerage commission and other expenses,
and trading requirements, and (ii) is not inconsistent with the policies set
forth in MFIT's or MFSG's registration statement, as the case may be, and such
Fund's Prospectus and Statement of Additional Information. In such event, Chase
will allocate the securities so purchased or sold, and the expenses incurred in
the transaction, in an equitable manner, consistent with its fiduciary
obligations to such Fund and such other clients.
It is possible that certain of the brokerage and research services received
will primarily benefit one or more other investment companies or other accounts
for which Chase exercises investment discretion. Conversely, MFIT or any of its
portfolios, including Chase Intermediate Term Bond Fund and MFSG or any of its
portfolios, including Chase Vista Select Intermediate Bond Fund, may be the
primary beneficiary of the brokerage or research services received as a result
of portfolio transactions effected for such other accounts or investment
companies.
20
<PAGE>
BOARD OF TRUSTEES
The Trustees for MFIT and MFSG are identical. Set forth below are the
current members of the MFIT Board and the MFSG Board.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- ------------------------------------------
<S> <C>
Fergus Reid, III Chairman of the Trust. Chairman and Chief
Executive Officer, Lumelite Corporation, since
September 1985; Trustee, Morgan Stanley Funds.
Age: 67. Address: 202 June Road, Stamford, CT
06903.
*H. Richard Vartabedian Trustee and President of the Trust. Investment
Management Consultant, formerly, Senior Investment
Officer, Division Executive of the Investment
Management Division of The Chase Manhattan Bank,
N.A., 1980 through 1991. Age: 64. Address:
P.O. Box 296, Beach Road, Hendrick's Head,
Southport, ME 04576.
William J. Armstrong Trustee. Consultant, Eduneering, Inc.; formerly
Vice President and Treasurer, Ingersoll-Rand
Company. Age: 58. Address: 287 Hampshire Ridge,
Park Ridge, NJ 07656.
John R.H. Blum Trustee. Attorney in private practice; formerly,
partner in the law firm of Richards, O'Neil &
Allegaert; Commissioner of Agriculture -- State of
Connecticut, 1992-1995. Age: 70. Address: 322 Main
Street, Lakeville, CT 06039.
Roland R. Eppley, Jr. Trustee. Retired; formerly President and Chief
Executive Officer, Eastern States Bankcard
Association Inc., (1971-1988); Director, Janel
Hydraulics, Inc.; Director of The Hanover
Funds, Inc. Age: 67. Address: 105 Coventry Place,
Palm Beach Gardens, FL 33418.
Stuart W. Cragin, Jr. Trustee. Retired; formerly President, Fairfield
Testing Laboratory, Inc. He has previously served
in a variety of marketing, manufacturing and
general management positions with Union Camp
Corp., Trinity Paper & Plastics Corp., and Conover
Industries. Age: 66. Address: 108 Valley Road, Cos
Cob, CT 06807.
Joseph J. Harkins Trustee. Retired; formerly Commercial Sector
Executive and Executive Vice President of The
Chase Manhattan Bank, N.A. from 1985 through 1990.
He had been employed by Chase in numerous
capacities and offices from 1954 through 1990.
Director of Jefferson Insurance Company of New
York and Monticello Insurance Company. Age: 69.
Address: 257 Plantation Circle South, Ponte Vedra
Beach, FL 32082.
*Sarah E. Jones Trustee. President and Chief Operating Officer of
Chase Mutual Funds Corp.; formerly Managing
Director for the Global Asset Management and
Private Banking Division of The Chase Manhattan
Bank. Age: 47. Address: Chase Mutual Funds Corp.,
1211 Avenue of the Americas, 41st Floor, New York,
New York 10081.
W.D. MacCallan Trustee. Director of The Adams Express Co. and
Petroleum & Resources Corp. Retired; formerly
Chairman of the Board and Chief Executive Officer
of The Adams Express Co. and Petroleum & Resources
Corp.; Director of The Hanover Funds, Inc. and The
Hanover Investment Funds, Inc. Age: 72. Address:
624 East 45th Street, Savannah, GA 31405.
George E. McDavid Trustee. President, Houston Chronicle Publishing
Company. Age: 69. Address: P.O. Box 2558,
Houston, TX 77252.
W. Perry Neff Trustee. Retired; Independent Financial
Consultant; Director of Petroleum & Resources
Corp. and The Adams Express Co. Age: 73. Address:
RR 1 Box 102, Weston, VT 05181.
*Leonard M. Spalding, Jr. Trustee. Retired; formerly Chief Executive Officer
of Chase Mutual Funds Corp.; formerly President
and Chief Executive Officer of Vista Capital
Management; Chief Investment Executive of The
Chase Manhattan Bank. Age: 64. Address: 2025
Lincoln Park Road, Springfield, KY 40069.
Richard E. Ten Haken Trustee. Chairman of the Audit Committee. Formerly
District Superintendent of Schools, Monroe No. 2
and Orleans Counties, New York; Chairman of the
Board and President, New York State Teachers'
Retirement System. Age: 65. Address: 4 Barnfield
Road, Pittsford, NY 14534.
Irving L. Thode Trustee. Retired; formerly Vice President of
Quotron Systems. He has previously served in a
number of executive positions with Control Data
Corp., including President of its Latin American
Operations, and General Manager of its Data
Services business. Age: 69. Address: 80 Perkins
Road, Greenwich, CT 06830.
</TABLE>
------------------------
* Asterisks indicate those Trustees that are "Interested Persons" (as defined
in the 1940 Act). Mr. Reid is not an interested person of the Trust's
investment advisers or principal underwriter, but may be deemed an
interested person of either Trust solely by reason of being an officer of
either Trust.
21
<PAGE>
The executive officers of MFIT and MFSG are identical. Set forth below as to
each executive officer of MFIT and MFSG is his or her name, age, principal
occupation during the past five years and other directorships held in public
companies.
<TABLE>
<CAPTION>
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
----------------- --- ------------------------------------------
<S> <C> <C>
Martin R. Dean 37 Treasurer and Assistant Secretary. Vice
President, Administration Services, BISYS
Fund Services, Inc.; formerly Senior
Manager, KPMG Peat Marwick (1987-1994).
Address: 3435 Stelzer Road, Columbus, OH
43219.
Lisa Hurley 45 Secretary. Senior Vice President and
General Counsel, BISYS Fund
Services, Inc.; formerly Counsel to Moore
Capital Management and General Counsel to
Global Asset Management and Northstar
Investments Management. Address: 90 Park
Avenue, New York, NY 10016.
Vicky M. Hayes 37 Assistant Secretary. Vice President and
Global Marketing Manager, Vista Fund
Distributors, Inc.; formerly Assistant
Vice President, Alliance Capital
Management and held various positions with
J. & W. Seligman & Co. Address: 1211
Avenue of the Americas, 41st Floor, New
York, NY 10081.
Alaina Metz 33 Assistant Secretary. Chief Administrative
Officer, BISYS Fund Services, Inc.;
formerly Supervisor, Blue Sky Department,
Alliance Capital Management L.P. Address:
3435 Stelzer Road, Columbus, OH 43219.
</TABLE>
The Trustees and officers of MFIT and MFSG appearing in the tables above
also serve in the same capacities with respect to Mutual Fund Trust, Mutual Fund
Variable Annuity Trust, Mutual Fund Group, Mutual Fund Select Trust, Capital
Growth Portfolio, Growth and Income Portfolio and International Equity Portfolio
(these entities, together with MFIT and MFSG, are referred to as the "Chase
Vista Funds").
TRANSACTIONS WITH AND REMUNERATION OF TRUSTEES AND OFFICERS
No compensation, direct or otherwise, other than through fees paid to Chase
or CFAM, is payable by either MFIT or MFSG to any of its officers or Trustees
who are affiliated with Chase or CFAM (or any of their affiliates). Those
Trustees who are not affiliated with Chase or its affiliates will be paid an
annual fee plus a fee for each meeting of the Board of Trustees or any committee
thereof that such Trustee attends, together with reimbursement for reasonable
expenses incurred in attending such meetings. Chase, CFAM and their affiliates
have had, and expect in the future to have, banking and other business
transactions in the ordinary course of business with corporations of which those
Trustees who are not "interested persons" of Chase or CFAM are directors or
officers. Any such transactions are made on substantially the same terms as
those prevailing at the time for comparable transactions with other persons,
including, where applicable, interest rates, collateral, fees and other charges,
and do not involve more than the normal risk of collectibility (in the case of
loans) or present other unfavorable features.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the MFIT Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. MFIT's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition, MFIT may
retain the services of professional solicitors to aid in the solicitation of
proxies for a fee. It is anticipated that banks, brokerage houses and other
custodians will be requested on behalf of MFIT to forward solicitation materials
to their principals to obtain authorizations for the execution of proxies. Any
Chase Intermediate Term Bond Fund Shareholder giving a proxy may revoke it at
any time before it is exercised by submitting to MFIT a written notice of
revocation or a subsequently executed proxy or by attending the Meeting and
electing to vote in person.
Only Chase Intermediate Term Bond Fund Shareholders of record at the close
of business on November 10, 2000 will be entitled to vote at the Meeting. On
that date, there were outstanding and entitled to be voted 3,660,880.27 Chase
Intermediate Term Bond Fund Shares. Each share or fraction thereof is entitled
to one vote or fraction thereof.
The presence in person or by proxy of Shareholders that own a majority of
the outstanding Chase Intermediate Term Bond Fund Shares will constitute a
quorum for purposes of transacting all business at the Meeting. If a quorum is
not present at the Meeting, sufficient votes in favor of the proposals are not
received by the time scheduled for the Meeting, or the Chase Intermediate Term
Bond Fund Shareholders
22
<PAGE>
determine to adjourn the Meeting for any other reason, the Chase Intermediate
Term Bond Fund Shareholders present (in person or proxy) may adjourn the Meeting
from time to time, without notice other than announcement at the Meeting. Any
such adjournment will require the affirmative vote of Chase Intermediate Term
Bond Fund Shareholders holding a majority of the Chase Intermediate Term Bond
Fund Shares present, in person or by proxy, at the Meeting. The persons named in
the Proxy will vote in favor of such adjournment those Chase Intermediate Term
Bond Fund Shares that they are entitled to vote if such adjournment is necessary
to obtain a quorum or if they determine such an adjournment is desirable for any
other reason. Business may be conducted once a quorum is present and may
continue until adjournment of the Meeting notwithstanding the withdrawal or
temporary absence of sufficient Chase Intermediate Term Bond Fund Shares to
reduce the number present to less than a quorum. If the accompanying proxy is
executed and returned in time for the Meeting, the shares covered thereby will
be voted in accordance with the proxy on all matters that may properly come
before the meeting (or any adjournment thereof).
PROXIES
All Chase Intermediate Term Bond Fund Shares represented by each properly
signed proxy received prior to the Meeting will be voted at the Meeting. If a
Chase Intermediate Term Bond Fund Shareholder specifies how the proxy is to be
voted on any of the business to come before the Meeting, it will be voted in
accordance with such specifications. If a Chase Intermediate Term Bond Fund
Shareholder returns its proxy but no direction is made on the proxy, the proxy
will be voted FOR the Proposal described in this Combined Prospectus/Proxy
Statement. Chase Intermediate Term Bond Fund Shareholders voting to ABSTAIN on
the Proposal will be treated as present for purposes of achieving a quorum and
in determining the votes cast on the Proposal, but not as having voted FOR the
Proposal. A properly signed proxy on which a broker has indicated that it has no
authority to vote on the Proposal on behalf of the beneficial owner (a 'broker
non-vote') will be treated as present for purposes of achieving a quorum but
will not be counted in determining the votes cast on the Proposal.
A proxy granted by any Chase Intermediate Term Bond Fund Shareholder may be
revoked by such Chase Intermediate Term Bond Fund Shareholder at any time prior
to its use by written notice to MFIT, by submission of a later dated Proxy or by
voting in person at the Meeting. If any other matters come before the Meeting,
Proxies will be voted by the persons named as proxies in accordance with their
best judgment.
EXPENSES OF PROXY SOLICITATION
Chase, and not Chase Intermediate Term Bond Fund or Chase Vista Select
Intermediate Bond Fund (or shareholders of either fund), will bear the cost of
solicitation of proxies, including the cost of printing, preparing, assembling
and mailing the Notice of Meeting, Combined Prospectus/Proxy Statement and form
of proxy. In addition to solicitations by mail, proxies may also be solicited by
officers and regular employees of MFIT by personal interview, by telephone or by
telegraph without additional remuneration thereof. Professional solicitors may
also be retained.
SHAREHOLDER APPROVALS
Approval of the Reorganization Plan (and the transactions contemplated
thereby) requires the affirmative vote of the lesser of (i) 67% or more of the
Chase Intermediate Term Bond Fund Shares present at the Meeting and (ii) more
than 50% of all outstanding Chase Intermediate Term Bond Fund Shares. In
tallying Chase Intermediate Term Bond Fund Shareholder votes, abstentions and
broker non-votes (i.e., proxies sent in by brokers and other nominees that
cannot be voted on a proposal because instructions have not been received from
the beneficial owners) will be counted for purposes of determining whether or
not a quorum is present for purposes of convening the Meeting. Abstentions and
broker non-votes will be considered to be a vote against each proposal.
INTERESTED PARTIES
On the Record Date, the Trustees and officers of Chase Intermediate Term
Bond Fund as a group owned less than 1% of the outstanding shares of Chase
Intermediate Term Bond Fund. On the Record Date, the name, address and
percentage ownership of the persons who owned of record more than 5% of the
shares of Chase Intermediate Term Bond Fund and the percentage of shares of
Chase Vista Select
23
<PAGE>
Intermediate Bond Fund that would be owned by such persons upon consummation of
the Reorganization based upon their holdings at November 10, 2000 are as
follows:
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
CHASE CHASE VISTA SELECT
INTERMEDIATE TERM INTERMEDIATE BOND
AMOUNT OF BOND FUND SHARES FUND SHARES
SHARES OWNED ON RECORD OWNED UPON
NAME AND ADDRESS OWNED DATE CONSUMMATION
----------------------------------- ------------ ----------------- ------------------
<S> <C> <C> <C>
First Union National Bank Cust
564,775.4640 15.43% 1.28%
U/A for Matlack Systems Inc. PPL
A/C 1546002456
1525 West WT Harris Blvd.
Charlotte, NC 28262-8522
</TABLE>
At November 10, 2000, the Trustees and officers of MFSG as a group owned
less than 1% of the outstanding shares of Chase Vista Select Intermediate Bond
Fund. At November 10, 2000, the name, address and share ownership of the persons
who owned of record more than 5% of the shares of Chase Vista Select
Intermediate Bond Fund and the percentage of shares that would be owned by such
person upon consummation of the Reorganization based upon their holdings at
November 10, 2000 were as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
FUND SHARES FUND SHARES
AMOUNT OF OWNED ON OWNED UPON
NAME AND ADDRESS SHARES OWNED RECORD DATE CONSUMMATION
----------------------------------- --------------- ------------- --------------
<S> <C> <C> <C>
Balsa & Co. Rebate Account
19,187,695.5640 47.62% 43.65%
Mutual Funds Unit 16 HCB 340
P.O. Box 2558
Houston, TX 77252-2258
Penlin & Co.
18,159,907.9830 45.07% 41.31%
Rebate Account
C/O The Chase Manhattan Bank
Attn MUT FDS/T-C
P.O. Box 31412
Rochester, NY 14603-1412
Liva & Company
2,152,725.3960 5.34% 4.89%
Rebate Account
C/O Chase Manhattan Bank
Attn Mutual Fund Operations
P.O. Box 31412
Rochester, NY 14603-1412
</TABLE>
ADDITIONAL INFORMATION ABOUT MFIT
Information about Chase Intermediate Term Bond Fund is included in the
Prospectus dated April 30, 2000, which is incorporated by reference herein.
Additional information about Chase Intermediate Term Bond Fund is also included
in MFIT's Statement of Additional Information dated April 30, 2000, which has
been filed with the SEC and which is incorporated herein by reference. Copies of
the Statement of Additional Information may be obtained without charge by
calling 1-800-5-CHASE-0. MFIT is subject to the requirements of the 1940 Act
and, in accordance with such requirements, files reports and other information
with the SEC. These materials can be inspected and copied at the Public
Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's Regional Offices at 7 World Trade
Center, Suite 1300, New York, New York 10048 and 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates, and is also available on the SEC's web site at
http://www.sec.gov.
24
<PAGE>
ADDITIONAL INFORMATION ABOUT MFSG
Information about Chase Vista Select Intermediate Bond Fund is included in
the Prospectus dated February 28, 2000, which is incorporated by reference and
enclosed herein. Additional information about Chase Vista Select Intermediate
Bond Fund is also included in MFSG's Statement of Additional Information dated
February 28, 2000, which has been filed with the SEC and which is incorporated
herein by reference. Copies of the Statement of Additional Information may be
obtained without charge by calling 1-800-62-CHASE. MFSG is subject to the
requirements of the 1940 Act and, in accordance with such requirements, files
reports and other information with the SEC. These materials can be inspected and
copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's Regional Offices at 7
World Trade Center, Suite 1300, New York, New York 10048 and 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates, and are also available on the SEC's web site at
http://www.sec.gov.
FINANCIAL STATEMENTS AND EXPERTS
The unaudited financial statements and financial highlights and notes
thereto of Chase Intermediate Term Bond Fund for the six-month period ended
June 30, 2000 and Chase Vista Select Intermediate Bond Fund for the six-month
period ended April 30, 2000 and the audited financial statements and financial
highlights and notes thereto of Chase Intermediate Term Bond Fund for the fiscal
year ended December 31, 1999 and Chase Vista Select Intermediate Bond Fund for
the fiscal year ended October 31, 1999, are incorporated by reference herein and
into the Statement of Additional Information related to this Combined
Prospectus/Proxy Statement. The audited financial statements and financial
highlights for Chase Intermediate Term Bond Fund and Chase Vista Select
Intermediate Bond Fund have been incorporated herein by reference in reliance on
the report of PricewaterhouseCoopers LLP, independent accountants, given on
their authority as experts in auditing and accounting.
OTHER BUSINESS
The MFIT Board knows of no other business to be brought before the Meeting.
However, if any other matters come before the Meeting, it is the intention of
the MFIT Board that proxies that do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
LITIGATION
Neither MFIT nor MFSG is involved in any litigation that would have any
material adverse effect upon either Chase Intermediate Term Bond Fund or Chase
Vista Select Intermediate Bond Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to MFIT in writing at the address on
the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-5-CHASE-0.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED
TO DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
25
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this 31st day of
October, 2000 by and between Mutual Fund Investment Trust (the "Transferor
Trust"), a Massachusetts business trust, on behalf of the Chase Intermediate
Term Bond Fund (the "Transferor Portfolio") and Mutual Fund Select Group (the
"Acquiring Trust") and the Chase Vista Select Intermediate Bond Fund (the
"Acquiring Portfolio").
WHEREAS, the Board of Trustees of each of the Transferor Trust and the
Acquiring Trust has determined that the transfer of all of the assets and
liabilities of the Transferor Portfolio to the Acquiring Portfolio is in the
best interests of the Transferor Portfolio and the Acquiring Portfolio, as well
as the best interests of shareholders of the Transferor Portfolio and the
Acquiring Portfolio, and that the interests of existing shareholders would not
be diluted as a result of this transaction;
WHEREAS, each of the Transferor Trust and the Acquiring Trust intends to
provide for the reorganization of the Transferor Portfolio (the
"Reorganization") through the acquisition by the Acquiring Portfolio of all of
the assets, subject to all of the liabilities, of the Transferor Portfolio in
exchange for shares of beneficial interest, par value $.001 per share, of the
Acquiring Portfolio (the "Acquiring Portfolio Shares"), the liquidation of the
Transferor Portfolio and the distribution to Transferor Portfolio shareholders
of such Acquiring Portfolio Shares, all pursuant to the provisions of
Section 368(a)(1) of the Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR THE ACQUIRING
PORTFOLIO SHARES AND LIQUIDATION OF THE TRANSFEROR PORTFOLIO
(a) PLAN OF REORGANIZATION.
(i) The Transferor Trust on behalf of the Transferor Portfolio listed
above, will convey, transfer and deliver to the Acquiring Portfolio all of the
then existing assets of the Transferor Portfolio (consisting, without
limitation, of portfolio securities and instruments, dividend and interest
receivables, cash and other assets). In consideration thereof, the Acquiring
Trust on behalf of the Acquiring Portfolio will (A) assume and pay, to the
extent that they exist on or after the Effective Time of the Reorganization (as
defined in Section 1(b)(i) hereof), all of the obligations and liabilities of
the Transferor Portfolio and (B) issue and deliver to the Transferor Portfolio
full and fractional shares of beneficial interest of the Acquiring Portfolio,
with respect to the Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section 1(c) hereof. The
Acquiring Portfolio Shares issued and delivered to the Transferor Portfolio
shall be of the Institutional Class share class, in exchange for Premier
Class Shares of the Transferor Portfolio, and the Class A share class, in
exchange for Investor Class Shares of the Transferor Portfolio, with the amounts
of shares of each class to be determined by the parties. Any shares of capital
stock (if any), par value $.001 per share, of the Transferor Portfolio
("Transferor Portfolio Shares") held in the treasury of the Transferor Trust at
the Effective Time of the Reorganization shall thereupon be retired. Such
transactions shall take place on the date provided for in Section 1(b) hereof
(the "Exchange Date"). All computations for the Transferor Portfolio and the
Acquiring Portfolio shall be performed by The Chase Manhattan Bank (the
"Custodian"), as custodian and pricing agent for the Transferor Portfolio and
the Acquiring Portfolio. The determination of said Custodian shall be conclusive
and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, the Transferor Trust
will liquidate and distribute pro rata to its shareholders of record
("Transferor Portfolio Shareholders") as of the Effective Time of the
Reorganization the Acquiring Portfolio Shares received by such Transferor
Portfolio pursuant to Section 1(a)(i) in actual or constructive exchange for the
shares of the Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be accomplished by the
transfer of the Acquiring Portfolio Shares then credited to the account of each
Transferor Portfolio on the books of the Acquiring Portfolio, to open accounts
on the share records of the Acquiring Portfolio in the names of the Transferor
Portfolio shareholders and representing the respective pro rata number of the
Acquiring Portfolio Shares due such shareholders. The Acquiring Portfolio will
not issue certificates representing the Acquiring Portfolio Shares in connection
with such exchange.
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(iii) As soon as practicable after the Effective Time of the
Reorganization, the Transferor Trust shall take all the necessary steps under
Massachusetts law, the Transferor Trust's Declaration of Trust and any other
applicable law to effect a complete dissolution of the Transferor Portfolio.
(b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION.
(i) Subject to the satisfaction of the conditions to the Reorganization
specified in this Plan, the Reorganization shall occur as of the close of
regularly scheduled trading on the New York Stock Exchange (the "Effective Time
of the Reorganization") on February 19, 2001, or such later date as may be
agreed upon by the parties (the "Exchange Date").
(ii) All acts taking place on the Exchange Date shall be deemed to take
place simultaneously as of the Effective Time of the Reorganization unless
otherwise provided.
(iii) In the event that on the proposed Exchange Date (A) the New York
Stock Exchange shall be closed to trading or trading thereon shall be
restricted, or (B) trading or the reporting of trading on said Exchange or
elsewhere shall be disrupted so that accurate valuation of the net assets of the
Acquiring Portfolio or the Transferor Portfolio is impracticable, the Exchange
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
(iv) On the Exchange Date, portfolio securities of the Transferor
Portfolio shall be transferred by the Custodian to the accounts of the Acquiring
Portfolio duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the custom of brokers, and
shall be accompanied by all necessary federal and state stock transfer stamps or
a check for the appropriate purchase price thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring Portfolio and the
net value of the assets of the Transferor Portfolio to be transferred in
exchange therefore shall be determined as of the Effective Time of the
Reorganization. The net asset value of the Acquiring Portfolio Shares shall be
computed by the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and statement of
additional information and shall be computed to not less than two decimal
places. The net value of the assets of the Transferor Portfolio to be
transferred shall be computed by the Custodian by calculating the value of the
assets transferred by the Transferor Portfolio and by subtracting therefrom the
amount of the liabilities assigned and transferred to the Acquiring Portfolio,
said assets and liabilities to be valued in the manner set forth in the
Transferor Trust's Declaration of Trust or By-laws and then current prospectus
and statement of additional information.
(ii) The number of Institutional Class shares of the Acquiring Portfolio
Shares to be issued (including fractional shares, if any) by the Acquiring
Portfolio in exchange for the Transferor Portfolio's assets attributable to the
Transferor Portfolio's Premier Class shares shall be determined by an exchange
ratio computed by dividing the net value of the Transferor Portfolio's assets
attributable to Premier Class shares by the net asset value per share of the
Institutional Class shares of the Acquiring Portfolio, both as determined in
accordance with Section 1(c)(i). The number of Class A shares of the Acquiring
Portfolio Shares to be issued (including fractional shares, if any) by the
Acquiring Portfolio in exchange for the Transferor Portfolio's assets
attributable to the Transferor Portfolio's Investor Class shares shall be
determined by an exchange ratio computed by dividing the net value of the
Transferor Portfolio's assets attributable to Investor Class shares by the net
asset value per share of the Class A shares of the Acquiring Portfolio, both as
determined in accordance with Section 1(c)(i).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of the
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Acquiring Portfolio and the Acquiring Trust have all necessary federal, state
and local authorization to own all of its properties and assets and to carry on
its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration statement on Form N-1A filed with the Securities
and Exchange Commission, comply in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act") and the Act and
do not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest, par value $.001 per share, of which as
of August 31, 2000 there were outstanding 39,566,893 shares of the Acquiring
Portfolio, and no shares of such Portfolio were held in the treasury of the
Acquiring Trust. All of the outstanding shares of the Acquiring Trust have been
duly authorized and are validly issued, fully paid and nonassessable (except as
disclosed in the Acquiring Trust's prospectus and recognizing that under
Massachusetts law, shareholders of an Acquiring Trust portfolio could, under
certain circumstances, be held personally liable for the obligations of such
Acquiring Trust portfolio). Because the Acquiring Trust is an open-end
investment company engaged in the continuous offering and redemption of its
shares, the number of outstanding shares may change prior to the Effective Time
of the Reorganization. All of the issued and outstanding shares of the Acquiring
Portfolio have been offered and sold in compliance in all material respects with
applicable registration requirements of the Securities Act and applicable state
securities laws.
(e) FINANCIAL STATEMENTS. The financial statements of the Acquiring Trust
with respect to the Acquiring Portfolio for the fiscal year ended October 31,
1999, which have been audited by PricewaterhouseCoopers LLP, the financial
statements of the Acquiring Trust with respect to the Acquiring Portfolio for
the fiscal year ended October 31, 2000, when such statements are available, and
the unaudited financial statements of the Acquiring Trust with respect to the
Acquiring Portfolio for the six months ended April 30, 2000 fairly present the
financial position of the Acquiring Portfolio as of the dates thereof and the
respective results of operations and changes in net assets for each of the
periods indicated in accordance with generally accepted accounting principles
("GAAP").
(f) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Portfolio Shares
to be issued in connection with the Reorganization will be duly authorized and
upon consummation of the Reorganization will be validly issued, fully paid and
nonassessable (except as disclosed in the Trust's prospectus and recognizing
that under Massachusetts law, shareholders of an Acquiring Trust portfolio
could, under certain circumstances, be held personally liable for the
obligations of such portfolio).
(g) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust, on behalf of the
Acquiring Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Acquiring Trust's Board of Trustees and no other proceedings by the
Acquiring Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Acquiring Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(h) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Acquiring Trust's
financial statements with respect to the Acquiring Portfolio and liabilities
incurred in the ordinary course of business subsequent to April 30, 2000 or
otherwise previously disclosed to the Acquiring Trust with respect to the
Acquiring Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Acquiring Portfolio.
(i) NO MATERIAL ADVERSE CHANGE. Since October 31, 1999, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Acquiring Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
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(j) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Acquiring Trust, threatened which would adversely
affect the Acquiring Trust or the Acquiring Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Acquiring Trust or the Acquiring
Portfolio and, to the knowledge of the Acquiring Trust, there are no regulatory
investigations of the Acquiring Trust or the Acquiring Portfolio, pending or
threatened, other than routine inspections and audits.
(k) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
(l) TAXES. The federal income tax returns of the Acquiring Trust with
respect to the Acquiring Portfolio, and all other income tax returns required to
be filed by the Acquiring Trust with respect to the Acquiring Portfolio, have
been filed for all taxable years to and including October 31, 1999, and all
taxes payable pursuant to such returns have been paid. To the knowledge of the
Acquiring Trust, no such return is under audit and no assessment has been
asserted in respect of any such return. All federal and other taxes owed by the
Acquiring Trust with respect to the Acquiring Portfolio have been paid so far as
due.
(m) NO APPROVALS REQUIRED. Except for the Registration Statement (as defined
in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders (referred to in Section 6(a) hereof), no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Acquiring Trust of the Reorganization,
except such as have been obtained as of the date hereof.
3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR TRUST
The Transferor Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Transferor Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of Transferor Portfolio and the Transferor Trust has all
necessary federal, state and local authorization to own all of its properties
and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is registered
under the Act as an open-end investment company of the management type; such
registration has not been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Transferor Trust, as amended, included in the
Transferor Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements of the
Securities Act and the Act and do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest, par value $.001 per share, of which as
of August 31, 2000 there were outstanding 109,472 Investor Class shares and
4,039,072 Premier Class shares of the Transferor Portfolio, and no shares of
such Portfolio were held in the treasury of the Transferor Trust. All of the
outstanding shares of the Transferor Trust have been duly authorized and are
validly issued, fully paid and nonassessable (except as disclosed in the
Transferor Trust's prospectus and recognizing that under Massachusetts law,
shareholders of a Trust portfolio could, under certain circumstances, be held
personally liable for the obligations of such Trust portfolio). Because the
Transferor Trust is an open-end investment company engaged in the continuous
offering and redemption of its shares, the number of outstanding shares may
change prior to the Effective Time of the Reorganization. All such shares will,
at the Exchange Date, be held by the shareholders of record of the Transferor
Portfolio as set forth on the books and records of the Transferor Trust in the
amounts set forth therein, and as set forth in any list of shareholders of
record provided to the Acquiring Portfolio for purposes of the Reorganization,
and no such shareholders of record will have any preemptive rights to purchase
any Transferor Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Transferor Portfolio shares (other than any existing dividend reinvestment
plans of the Transferor Portfolio or as set forth in this Plan), nor are there
outstanding any securities convertible into any shares of the Transferor
Portfolio (except pursuant to any existing exchange privileges described in the
current prospectus and statement of additional information of
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the Transferor Trust). All of the Transferor Portfolio's issued and outstanding
shares have been offered and sold in compliance in all material respects with
applicable registration requirements of the Securities Act and applicable state
securities laws.
(e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust
with respect to the Transferor Portfolio for the fiscal year ended December 31,
1999, which have been audited by PricewaterhouseCoopers LLP, and the unaudited
financial statements for the Trust with respect to the Transferor Portfolio for
the six months ended June 30, 2000 fairly present the financial position of the
Transferor Portfolio as of the dates thereof and the respective results of
operations and changes in net assets for each of the periods indicated in
accordance with GAAP.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the
Transferor Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this Plan and the
consummation of the transactions contemplated hereby have been duly authorized
by the Transferor Trust's Board of Trustees and no other proceedings by the
Transferor Trust other than those contemplated under this Plan are necessary to
authorize its officers to effectuate this Plan and the transactions contemplated
hereby. The Transferor Trust is not a party to or obligated under any provision
of its Declaration of Trust or By-laws, or under any indenture or contract
provision or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its execution and
performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
Financial Statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to June 30, 2000 or
otherwise previously disclosed to the Transferor Trust with respect to the
Transferor Portfolio, none of which has been materially adverse to the business,
assets or results of operations of the Transferor Portfolio.
(h) NO MATERIAL ADVERSE CHANGE. Since December 31, 1999, there has been no
material adverse change in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio, other than those
occurring in the ordinary course of business (for these purposes, a decline in
net asset value and a decline in net assets due to redemptions do not constitute
a material adverse change).
(i) LITIGATION. There are no claims, actions, suits or proceedings pending
or, to the knowledge of the Transferor Trust, threatened which would adversely
affect the Transferor Trust or the Transferor Portfolio's assets or business or
which would prevent or hinder consummation of the transactions contemplated
hereby, there are no facts which would form the basis for the institution of
administrative proceedings against the Transferor Trust or the Transferor
Portfolio and, to the knowledge of the Transferor Trust, there are no regulatory
investigations of the Transferor Trust or the Transferor Portfolio, pending or
threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor Portfolio,
is not subject to any contracts or other commitments (other than this Plan)
which will not be terminated with respect to the Transferor Portfolio without
liability to the Transferor Trust or the Transferor Portfolio as of or prior to
the Effective Time of the Reorganization.
(k) TAXES. The federal income tax returns of the Transferor Trust with
respect to the Transferor Portfolio, and all other income tax returns required
to be filed by the Transferor Trust with respect to each Transferor Portfolio,
have been filed for all taxable years to and including December 31, 1999, and
all taxes payable pursuant to such returns have been paid. To the knowledge of
the Transferor Trust, no such return is under audit and no assessment has been
asserted in respect of any such return. All federal and other taxes owed by the
Transferor Trust with respect to the Transferor Portfolio have been paid so far
as due.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof.
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4. COVENANTS OF THE ACQUIRING TRUST
The Acquiring Trust covenants to the following:
(a) REGISTRATION STATEMENT. On behalf of the Acquiring Portfolio, the
Acquiring Trust shall file with the Commission a Registration Statement on Form
N-14 (the "Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy statement of the
Transferor Portfolio relating to the meeting of the Transferor Portfolio's
shareholders referred to in Section 5(a) herein. At the time the Registration
Statement becomes effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and the rules and
regulations of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes effective, at the
time of the Transferor Portfolio shareholders' meeting referred to in
Section 5(a) hereof, and at the Effective Time of the Reorganization, the
prospectus/proxy statement (the "Prospectus") and statement of additional
information (the "Statement of Additional Information") included therein, as
amended or supplemented by any amendments or supplements filed by the Trust,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Trust agrees to
use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring Trust shall furnish such data and information
relating to the Acquiring Trust as shall be reasonably requested for inclusion
in the information to be furnished to the Transferor Portfolio shareholders in
connection with the meeting of the Transferor Portfolio's shareholders for the
purpose of acting upon this Plan and the transactions contemplated herein.
(c) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Acquiring Trust shall conduct the business of the Transferor
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
5. COVENANTS OF THE TRANSFEROR TRUST
The Transferor Trust covenants to the following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Trust shall call and hold a meeting of the shareholders of the Transferor
Portfolio for the purpose of acting upon this Plan and the transactions
contemplated herein.
(b) PORTFOLIO SECURITIES. With respect to the assets to be transferred in
accordance with Section 1(a), the Transferor Portfolio's assets shall consist of
all property and assets of any nature whatsoever, including, without limitation,
all cash, cash equivalents, securities, claims and receivables (including
dividend and interest receivables) owned, and any deferred or prepaid expenses
shown as an asset on the Trust's books. At least five (5) business days prior to
the Exchange Date, the Transferor Portfolio will provide the Trust, for the
benefit of the Acquiring Portfolio, with a list of its assets and a list of its
stated liabilities. The Transferor Portfolio shall have the right to sell any of
the securities or other assets shown on the list of assets prior to the Exchange
Date but will not, without the prior approval of the Trust, on behalf of the
Acquiring Portfolio, acquire any additional securities other than securities
which the Acquiring Portfolio is permitted to purchase, pursuant to its
investment objective and policies or otherwise (taking into consideration its
own portfolio composition as of such date). In the event that the Transferor
Portfolio holds any investments that the Acquiring Portfolio would not be
permitted to hold, the Transferor Portfolio will dispose of such securities
prior to the Exchange Date to the extent practicable, to the extent permitted by
its investment objective and policies and to the extent that its shareholders
would not be materially affected in an adverse manner by such a disposition. In
addition, the Trust will prepare and deliver immediately prior to the Effective
Time of the Reorganization, a Statement of Assets and Liabilities of the
Transferor Portfolio, prepared in accordance with GAAP (each, a "Schedule"). All
securities to be listed in the Schedule for the Transferor Portfolio as of the
Effective Time of the Reorganization will be owned by the Transferor Portfolio
free and clear of any liens, claims, charges, options and encumbrances, except
as indicated in such Schedule, and, except as so indicated, none of such
securities is or, after the Reorganization as contemplated hereby, will be
subject to any restrictions, legal or contractual, on the disposition thereof
(including restrictions as to the public
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offering or sale thereof under the Securities Act) and, except as so indicated,
all such securities are or will be readily marketable.
(c) REGISTRATION STATEMENT. In connection with the preparation of the
Registration Statement, the Transferor Trust will cooperate with the Acquiring
Trust and will furnish to the Acquiring Trust the information relating to the
Transferor Portfolio required by the Securities Act and the Regulations to be
set forth in the Registration Statement (including the Prospectus and Statement
of Additional Information). At the time the Registration Statement becomes
effective, the Registration Statement, insofar as it relates to the Transferor
Portfolio, (i) will comply in all material respects with the provisions of the
Securities Act and the Regulations and (ii) will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading; and at the
time the Registration Statement becomes effective, at the time of the Transferor
Portfolio's shareholders' meeting referred to in Section 5(a) and at the
Effective Time of the Reorganization, the Prospectus and Statement of Additional
Information, as amended or supplemented by any amendments or supplements filed
by the Transferor Trust, insofar as they relate to the Transferor Portfolio,
will not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the representations and warranties in this subsection shall apply only to
statements in or omissions from the Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in conformity with
information furnished by the Transferor Portfolio for use in the registration
statement, prospectus or statement of additional information as provided in this
Section 5(c).
(d) COOPERATION IN EFFECTING REORGANIZATION. The Transferor Trust agrees to
use all reasonable efforts to effectuate the Reorganization and to obtain any
necessary regulatory approvals for the Reorganization.
(e) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise contemplated by
this Plan, the Transferor Trust shall conduct the business of the Transferor
Portfolio in the ordinary course until the consummation of the Reorganization,
it being understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions.
(f) STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in
any case within 60 days after the Exchange Date, the Transferor Trust on behalf
of the Transferor Portfolio, shall prepare a statement of the earnings and
profits of the Transferor Portfolio for federal income tax purposes, and of any
capital loss carryovers and other items that the Acquiring Portfolio will
succeed to and take into account as a result of Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR TRUST
The obligations of the Transferor Portfolio with respect to the consummation of
the Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and the
transactions contemplated by the Reorganization shall have been approved by the
requisite vote of the shares of the Transferor Portfolio entitled to vote on the
matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 2(i)) in the financial condition, results of operations,
business, properties or assets of each of the Acquiring Portfolio since
October 31, 1999.
(c) REGULATORY APPROVAL. The Registration Statement shall have been
declared effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the opinion of
Simpson Thacher & Bartlett, dated on or before the Exchange Date, addressed to
and in form and substance satisfactory to the Transferor Trust, as to certain of
the federal income tax consequences under the Code of the Reorganization,
insofar as it relates to the Transferor Portfolio and the Acquiring Portfolio,
and to shareholders of each Transferor Portfolio (the "Tax Opinion"). For
purposes of rendering the Tax Opinion, Simpson Thacher & Bartlett may rely
exclusively and without independent verification, as to factual matters, upon
the statements made in this
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Plan, the Prospectus and Statement of Additional Information, and upon such
other written representations as the President or Treasurer of the Transferor
Trust will have verified as of the Effective Time of the Reorganization. The Tax
Opinion will be to the effect that, based on the facts and assumptions stated
therein, for federal income tax purposes: (i) the Reorganization will constitute
a reorganization within the meaning of section 368(a)(1) of the Code with
respect to the Transferor Portfolio and the Acquiring Portfolio; (ii) no gain or
loss will be recognized by any of the Transferor Portfolio or the Acquiring
Portfolio upon the transfer of all the assets and liabilities, if any, of the
Transferor Portfolio to the Acquiring Portfolio solely in exchange for shares of
the Acquiring Portfolio or upon the distribution of the shares of the Acquiring
Portfolio to the holders of the shares of the Transferor Portfolio solely in
exchange for all of the shares of the Transferor Portfolio; (iii) no gain or
loss will be recognized by shareholders of the Transferor Portfolio upon the
exchange of shares of such Transferor Portfolio solely for shares of the
Acquiring Portfolio; (iv) the holding period and tax basis of the shares of the
Acquiring Portfolio received by each holder of shares of the Transferor
Portfolio pursuant to the Reorganization will be the same as the holding period
and tax basis of shares of the Transferor Portfolio held by the shareholder
(provided the shares of the Transferor Portfolio were held as a capital asset on
the date of the Reorganization) immediately prior to the Reorganization; and
(v) the holding period and tax basis of the assets of the Transferor Portfolio
acquired by the Acquiring Portfolio will be the same as the holding period and
tax basis of those assets to the Transferor Portfolio immediately prior to the
Reorganization.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING TRUST
The obligations of the Acquiring Trust with respect to the consummation of the
Reorganization are subject to the satisfaction of the following conditions:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Shareholder Approval shall have been obtained.
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Transferor Trust shall
have complied with each of its covenants contained herein, each of the
representations and warranties contained herein shall be true in all material
respects as of the Effective Time of the Reorganization (except as otherwise
contemplated herein), and there shall have been no material adverse change (as
described in Section 3(h)) in the financial condition, results of operations,
business, properties or assets of the Transferor Portfolio since December 31,
1999.
(c) PORTFOLIO SECURITIES. All securities to be acquired by the Acquiring
Portfolio in the Reorganization shall have been approved for acquisition by The
Chase Manhattan Bank, in its capacity as investment adviser to the Acquiring
Portfolio, as consistent with the investment policies of the Acquiring
Portfolio.
(d) REGULATORY APPROVAL. The Regulatory Approvals shall have been obtained.
(e) DISTRIBUTION OF INCOME AND GAINS. The Transferor Trust on behalf of the
Transferor Portfolio shall have distributed to the shareholders of the
Transferor Portfolio all of the Transferor Portfolio's investment company
taxable income (without regard to the deductions for dividends paid) as defined
in Section 852(b)(2) of the Code for its taxable year ending on the Exchange
Date and all of its net capital gain as such term is used in
Section 852(b)(3) of the Code, after reduction by any capital loss carry
forward, for its taxable year ending on the Exchange Date.
(f) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing authorized
by the Board of Trustees amend this Plan at any time before or after approval
hereof by the shareholders of the Transferor Portfolio, but after such approval,
no amendment shall be made which substantially changes the terms hereof.
(b) WAIVERS. At any time prior to the Effective Time of the Reorganization,
either the Transferor Trust or the Acquiring Trust may by written instrument
signed by it (i) waive any inaccuracies in the representations and warranties
made to it contained herein and (ii) waive compliance with any of the covenants
or conditions made for its benefit contained herein, except that conditions set
forth in Sections 6(c) and 7(d) may not be waived.
(c) TERMINATION BY THE TRANSFEROR TRUST. The Transferor Trust, on behalf of
the Transferor Portfolio, may terminate this Plan with respect to the Transferor
Portfolio at any time prior to the Effective Time of the
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Reorganization by notice to the Acquiring Portfolio and The Chase Manhattan Bank
if (i) a material condition to the performance of the Transferor Trust hereunder
or a material covenant of the Acquiring Trust contained herein shall not be
fulfilled on or before the date specified for the fulfillment thereof or (ii) a
material default or material breach of this Plan shall be made by the Acquiring
Trust.
(d) TERMINATION BY THE ACQUIRING TRUST. The Acquiring Trust, on behalf of
the Acquiring Portfolio, may terminate this Plan with respect to the Acquiring
Portfolio at any time prior to the Effective Time of the Reorganization by
notice to the Transferor Trust and The Chase Manhattan Bank if (i) a material
condition to the performance of the Acquiring Trust hereunder or a material
covenant of the Transferor Trust contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a material default
or material breach of this Plan shall be made by the Transferor Trust.
(e) TERMINATION BY THE TRANSFEROR TRUST. This Plan may be terminated by the
Transferor Trust at any time prior to the Effective Time of the Reorganization,
whether before or after approval of this Plan by the shareholders of the
Transferor Portfolio, without liability on the part of any party hereto, its
Trustees, officers or shareholders or The Chase Manhattan Bank on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the
Transferor Portfolio.
(f) TERMINATION BY THE ACQUIRING TRUST. This Plan may be terminated by the
Acquiring Trust at any time prior to the Effective Time of the Reorganization,
whether before or after approval of this Plan by the shareholders of the
Transferor Portfolio, without liability on the part of any party hereto, its
Trustees, officers or shareholders or The Chase Manhattan Bank on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the Acquiring
Portfolio.
(g) SURVIVAL. No representations, warranties or covenants in or pursuant to
this Plan, except for the provisions of Section 5(f) and Section 9 of this Plan,
shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by The Chase Manhattan
Bank. Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees;
(vii) legal fees; and (viii) solicitation costs relating to the Reorganization.
In addition, Chase will waive fees payable to it or reimburse expenses to the
extent necessary such that the actual (post-waiver) total expense ratios of the
Acquiring Portfolio are not higher than those of the Transferor Portfolio as set
forth in the Registration Statement for a period of one year after the Exchange
Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Transferor Trust (for itself or on behalf of the Transferor Portfolio)
or the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio):
1211 Avenue of the Americas
41st Floor
New York, New York 10036
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Cynthia G. Cobden, Esq.
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<PAGE>
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to have
been material and relied upon by the Transferor Trust and the Acquiring Trust
notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Plan.
(b) This Plan may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts.
(d) This Plan shall bind and inure to the benefit of the Transferor Trust, the
Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio and their
respective successors and assigns, but no assignment or transfer hereof or of
any rights or obligations hereunder shall be made by any party without the
written consent of the other parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this Plan.
(e) The name "Mutual Fund Investment Trust" is the designation of its Trustees
under a Declaration of Trust dated October 1, 1997, as amended, and all persons
dealing with the Transferor Trust must look solely to the Transferor Trust's
property for the enforcement of any claims against the Transferor Trust, as
neither the Transferor Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Transferor
Trust. No series of the Transferor Trust shall be liable for claims against any
other series of the Transferor Trust.
(f) The name "Mutual Fund Select Group" is the designation of its Trustees
under a Declaration of Trust dated October 1, 1996, as amended, and all persons
dealing with the Acquiring Trust must look solely to the Acquiring Trust's
property for the enforcement of any claims against the Acquiring Trust, as
neither the Acquiring Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Acquiring
Trust. No series of the Acquiring Trust shall be liable for claims against any
other series of the Acquiring Trust.
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first
above written.
MUTUAL FUND INVESTMENT TRUST
on behalf of Chase Intermediate Term
Bond Fund
By:
________________________________________
Name:
Title:
MUTUAL FUND SELECT GROUP
on behalf of Chase Vista Select
Intermediate Bond Fund
By:
________________________________________
Name:
Title:
Agreed and acknowledged with respect to Section 9:
THE CHASE MANHATTAN BANK
By: ________________________________________
Name:
Title:
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