<PAGE>
As filed with the Securities and Exchange Commission on October 25, 2000
Registration No. 333-13317/811-7843
U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. ___ Post-Effective Amendment No___
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
MUTUAL FUND SELECT GROUP
Area Code and Telephone Number:
1-800-62-CHASE
Address of Principal Executive Offices:
1211 Avenue of the Americas
41st Floor
New York, NY 10036
Name and Address of Agent for Service:
LISA HURLEY
BISYS Fund
Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
Copies to:
CYNTHIA G. COBDEN, ESQ.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017-3954
Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on November 27, 2000
pursuant to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 333-13317/811-7843) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended October 31, 1999 was filed on January 19,
2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
<PAGE>
MUTUAL FUND SELECT GROUP
FORM N-14
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A)
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ITEM NO. HEADING
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PART A
1. Beginning of Registration Statement and Outside Front
Cover Page of Prospectus.......................................... Cover Page
2. Beginning and Outside Back Cover Page
of Prospectus..................................................... Table of Contents
3. Synopsis and Risk Factors......................................... Summary; Risk Factors
4. Information About the Transaction................................. Summary; Information Relating to the Proposed
Conversion
5. Information About the Registrant.................................. Summary; Information Relating to the Proposed
Reorganization; Investment Policies; Additional
Information About Chase Vista Select Bond Fund
6. Information About the Company Being Acquired...................... Summary; Information Relating to the Proposed
Reorganization; Investment Policies; Additional
Information About Chase Income Fund
7. Voting Information................................................ Summary; Information Relating to Voting Matters
8. Interest of Certain Persons and Experts........................... Information Relating to Voting Matters
9. Additional Information Required for Reoffering by
Persons Deemed to be Underwriters................................. Inapplicable
PART B
10. Cover Page........................................................ Statement of Additional Information; Cover Page
11. Table of Contents................................................. Table of Contents
12. Additional Information............................................ Statement of Additional Information dated
December 29, 1999
13. Additional Information About the Company Being Acquired........... Inapplicable
14. Financial Statements.............................................. Financial Statements; Pro Forma Financial Statements
</TABLE>
PART C
Items 15-17. Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Registration Statement.
-i-
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CHASE INCOME 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 Income 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 Income Fund into
Chase Vista Select Bond Fund, a series of Mutual Fund Select Group ("MFSG") (the
"Reorganization"). After the Reorganization, shareholders will hold an interest
in Chase Vista Select Bond Fund, which is also advised by The Chase Manhattan
Bank ("Chase"). The investment objective and policies for Chase Income Fund are
similar to those of Chase Vista Select 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 Bond Fund will be renamed
["Chase Bond Fund."]
After the proposed Reorganization, your investment would be in a larger
combined fund with similar investment policies, allowing the resulting fund to
take advantage of the operational and administrative efficiencies that size
offers.
Chase Vista Select Bond Fund has also entered into a plan of reorganization
with Chase Vista Bond Fund, a series of Mutual Fund Group with identical
investment objectives and policies to Chase Vista Select Bond Fund. If that
reorganization (the "Vista Reorganization") is approved by the shareholders of
Chase Vista Bond Fund and certain other conditions are met, Chase Vista Bond
Fund will be reorganized into Chase Vista Select Bond Fund. The terms of the
Vista Reorganization are similar to the terms of the Reorganization you are
being asked to consider. If both reorganizations are approved, your investment
would be in a larger combined fund containing the assets of all three funds.
The current investment adviser for both Chase Income Fund and Chase Vista
Select Bond Fund is Chase. The sub-adviser for Chase Vista Select Bond Fund is
Chase Fleming Asset Management (USA) Inc. ("CFAM"). There is no sub-adviser for
Chase Income 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.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization, the Vista Reorganization and
a comparison of Chase Income Fund and MFIT to Chase Vista Select Bond Fund and
MFSG. The cost and expenses associated with the Reorganization, including costs
of soliciting proxies, will be borne by Chase and not by Chase Income Fund,
MFIT, Chase Vista Select Bond Fund, MFSG or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares of Chase Vista Select 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.
<PAGE>
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed to increase operational and
administrative efficiencies by combining two funds which have 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 Income Fund would transfer all of its assets
and liabilities to Chase Vista Select Bond Fund and would receive, in exchange,
shares of Chase Vista Select Bond Fund. Chase Income Fund would then be
liquidated and the shares of Chase Vista Select Bond Fund would be distributed
to shareholders such as you. After the Reorganization, you would own shares in
Chase Vista Select Bond Fund rather than Chase Income Fund. Holders of Investor
Class Shares would receive Class A Shares in Chase Vista Select Bond Fund and
holders of Premier Class Shares would receive Institutional Class Shares in
Chase Vista Select Bond Fund.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
Chase Vista Select Bond Fund has similar investment objectives and policies
to those of the Chase Income Fund. However, Chase Vista Select Bond Fund must
invest at least 65% of its total assets in debt securities with at least an "A"
rating, whereas Chase Income Fund is not required to invest a certain percentage
of its assets in "A" rated securities. Neither Fund may invest in debt
securities below investment grade. Also, Chase Income Fund may invest up to 30%
of its total assets in foreign securities, whereas Chase Vista Select Bond Fund
is not limited to a certain percentage of investments in foreign securities.
Chase Income Fund has an average portfolio maturity of between 5 and 15 years,
and its securities will usually have a maturity of greater than one year.
Conversely, there is no restriction on the maturity of Chase Vista Select Bond
Fund's portfolio or on any individual security in the portfolio. 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 actual (or post-waiver) total expense
ratios are expected to be the same or less for Chase Vista Select Bond Fund than
they are for the Chase Income Fund. If an increase does arise, Chase has
committed 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 Income Fund also manages Chase Vista Select 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 Income Fund
or Chase Vista Select Bond Fund (or shareholders of either fund).
HOW WILL SHAREHOLDER SERVICES CHANGE?
Substantially similar services are available to shareholders of both Chase
Income Fund and Chase Vista Select 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 Bond Fund.
HOW WOULD THE PROPOSED VISTA REORGANIZATION AFFECT MY INVESTMENT IF IT IS
APPROVED BY THE SHAREHOLDERS OF CHASE VISTA BOND FUND?
If the Vista Reorganization is approved and certain other conditions are
met, the assets and liabilities of Chase Vista Bond Fund would become the assets
of Chase Vista Select Bond Fund, and the shareholders of Chase Income Fund would
receive shares of Chase Vista Select Bond Fund. Therefore, if both
reorganizations are approved, your investment would be in a larger fund that
contains the assets of all three funds. There can be no assurance that the Vista
Reorganization will be consummated.
<PAGE>
AS A HOLDER OF SHARES OF CHASE INCOME 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 INCOME 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 Income Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of Chase Income Fund ("Chase Income 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 Income Fund, and Mutual Fund Select Group ("MFSG"), on
behalf of Chase Vista Select Bond Fund, and the transactions
contemplated thereby, including (a) the transfer of all of the assets
and liabilities of Chase Income Fund to Chase Vista Select Bond Fund,
a series of MFSG in exchange for (i) Class A Shares of Chase Vista
Select Bond Fund (the "Class A Shares") and (ii) Institutional
Class Shares of Chase Vista Select Bond Fund ("Institutional
Class Shares" and together with the Class A Shares, the "Chase Vista
Select Bond Fund Shares"), as applicable; and (b) the distribution of
such Chase Vista Select Bond Fund Shares to the Shareholders of Chase
Income 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 INCOME 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 INCOME 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 BOND FUND,
A SERIES OF MUTUAL FUND SELECT GROUP
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
(800) 62-CHASE
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of Chase Income Fund ("Chase Income Fund"), a series of Mutual
Fund Investment Trust ("MFIT"), into Chase Vista Select Bond Fund ("Chase Vista
Select 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 Income Fund, which is a series of
MFIT, to Chase Vista Select Bond Fund, a series of MFSG having similar
investment objectives and policies to those of Chase Income Fund, in exchange
for shares of Chase Vista Select Bond Fund (the "Reorganization"). MFIT and MFSG
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 Bond
Fund will be renamed ["Chase Bond Fund."]
Under the proposed Reorganization, each shareholder of Chase Income Fund
(the "Chase Income Fund Shareholders") would receive shares (the "Chase Vista
Select Bond Fund Shares") of Chase Vista Select Bond Fund with a value equal to
such Chase Income Fund Shareholder's holdings in Chase Income Fund. Holders of
Investor Class Shares would receive Class A Shares (the "Class A Shares") in
Chase Vista Select Bond Fund and holders of Premier Class Shares would receive
Institutional Class Shares (the "Institutional Class Shares") in Chase Vista
Select Bond Fund. Therefore, as a result of the proposed Reorganization, current
Chase Income Fund Shareholders will become shareholders of Chase Vista Select
Bond Fund ("Chase Vista Select Bond Fund Shareholders"). In connection with the
Reorganization, Chase Vista Select Bond Fund will implement a new multi-class
structure under which it will offer Class A, Class B and Institutional
Class Shares.
Chase Vista Select Bond Fund has also entered into a plan of reorganization
with Chase Vista Bond Fund, a series of Mutual Fund Group with identical
investment objectives and policies to Chase Vista Select Bond Fund. If that
reorganization (the "Vista Reorganization") is approved by the shareholders of
Chase Vista Bond Fund and certain other conditions are met, Chase Vista Select
Bond Fund would also acquire the assets and liabilities of Chase Vista Bond Fund
in exchange for Chase Vista Select Bond Fund Shares. The terms of the Vista
Reorganization are similar to the terms of the Reorganization you are being
asked to consider. If both reorganizations are approved, your investment would
be in a larger combined fund containing the assets of all three funds. There can
be no assurance that the Vista Reorganization will be consummated.
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 Income Fund and Chase Vista Select Bond Fund. Chase
Fleming Asset Management (USA) Inc. ("CFAM") serves as sub-adviser for Chase
Vista Select Bond Fund. There is no sub-adviser for Chase Income Fund. 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
<PAGE>
portfolio. Prior to August 1, 2000, Chase Bank of Texas, N.A. ("Chase Texas")
was the sub-adviser for Chase Income Fund and employed the same portfolio
management team as CFAM. On August 1, 2000, Chase Texas became 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 MFIT, on behalf of Chase
Income Fund, and MFSG, on behalf of Chase Vista Select 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 Income 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 Income Fund for the meeting of its Shareholders and
also constitutes MFSG's prospectus for Chase Vista Select 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 Income Fund and Chase Vista Select Bond Fund are
incorporated herein by reference and are 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 OR MFSG.
INVESTMENTS IN CHASE VISTA SELECT BOND FUND ARE SUBJECT TO RISK--INCLUDING
THE POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN CHASE VISTA SELECT 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.
<PAGE>
TABLE OF CONTENTS
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Page
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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........................... 16
COMPARISON OF CHASE INCOME FUND'S AND CHASE VISTA
SELECT BOND FUND'S ORGANIZATION STRUCTURES....... 16
INFORMATION RELATING TO THE ADVISORY CONTRACTS.... 18
BOARD OF TRUSTEES................................. 21
INFORMATION RELATING TO VOTING MATTERS............ 23
ADDITIONAL INFORMATION ABOUT MFIT................. 24
ADDITIONAL INFORMATION ABOUT MFSG................. 24
FINANCIAL STATEMENTS AND EXPERTS.................. 25
OTHER BUSINESS.................................... 25
LITIGATION........................................ 25
SHAREHOLDER INQUIRIES............................. 25
</TABLE>
<PAGE>
INTRODUCTION
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of Chase Income 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 (the "MFIT Board") of proxies to
be used at a Special Meeting of Shareholders of Chase Income 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 Income Fund shareholders (the "Chase Income Fund
Shareholders") will consider and vote upon the Agreement and Plan of
Reorganization (the "Reorganization Plan") dated October 31, 2000 between MFIT,
on behalf of Chase Income Fund, and MFSG, on behalf of Chase Vista Select Bond
Fund ("Chase Vista Select Bond Fund," together with Chase Income Fund, the
"Funds"), pursuant to which all of the assets and liabilities of Chase Income
Fund will be transferred to Chase Vista Select Bond Fund in exchange for Shares
("Chase Vista Select Bond Fund Shares") of Chase Vista Select Bond Fund. As a
result of this transaction (the "Reorganization"), Chase Income Fund
Shareholders will become shareholders of Chase Vista Select Bond Fund and will
receive Chase Vista Select Bond Fund Shares equal in value to their holdings in
Chase Income Fund on the date of the Reorganization. Holders of Investor
Class Shares in Chase Income Fund would receive Class A Shares ("Class A
Shares") in Chase Vista Select Bond Fund and holders of Premier Class Shares in
Chase Income Fund would receive Institutional Class Shares ("Institutional
Class Shares") in Chase Vista Select Bond Fund. In connection with the
Reorganization, Chase Vista Select Bond Fund will be renamed ["Chase
Bond Fund."] Further information relating to Chase Vista Select 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 Income Fund requires the
affirmative vote of the lesser of (i) 67% or more of the Chase Income Fund
Shares present at the Meeting and (ii) more than 50% of all outstanding Chase
Income Fund Shares. If the Reorganization Plan is not approved by Chase Income
Fund Shareholders, the MFG 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 Bond
Fund Shares, and the Reorganization Plan attached to this Combined
Prospectus/Proxy Statement as Appendix A. Chase Income Fund's and Chase Vista
Select Bond Fund's Semi-Annual Reports to Shareholders and their Annual Reports
to Shareholders are enclosed with this Combined Prospectus/Proxy Statement.
PROPOSED TRANSACTION
Pursuant to the proposed Reorganization Plan, Chase Income Fund, an existing
series of MFIT, will transfer all of its assets and liabilities to Chase Vista
Select Bond Fund in exchange for shares of Chase Vista Select Bond Fund, a
series of MFSG.
Under the proposed Reorganization, each Chase Income Fund Shareholder would
receive a number of Chase Vista Select 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 Income Fund Shares on such date. Therefore,
following the proposed Reorganization, Chase Income Fund Shareholders will be
Chase Vista Select Bond Fund Shareholders.
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; and the fact that the
Reorganization would constitute a tax-free reorganization.
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of Chase Vista Select Bond Fund both
before and after the Reorganization, and in consideration
1
<PAGE>
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 Income Fund and Chase Vista Select 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-investment adviser to Chase Vista Select Bond Fund pursuant to an agreement
with Chase and manages the Fund on a day-to-day basis. There is no
sub-investment adviser to Chase Income Fund. The same portfolio management team
which manages the Chase Income Fund manages and will continue to manage the
Chase Vista Select Bond Fund. Prior to August 1, 2000, Chase Bank of
Texas, N.A. ("Chase Texas") was the sub-adviser for Chase Income Fund and
employed the same portfolio management team as CFAM. On August 1, 2000, Chase
Texas became 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 Bond Fund and Chase Income Fund.
REASONS FOR THE REORGANIZATION
The MFIT Board and MFSG Board decided to reorganize Chase Income Fund into
Chase Vista Select Bond Fund to increase operational and administrative
efficiencies, since the two funds have similar objectives and policies and are
managed by the same portfolio management team. In addition, Chase Income Fund
Shareholders will have a greater variety of investment opportunities available
since they can exchange Chase Vista Select 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.
VISTA REORGANIZATION
Chase Vista Select Bond Fund has also entered into a plan of reorganization
with Chase Vista Bond Fund, a series of Mutual Fund Group. If that
reorganization (the "Vista Reorganization") is approved by the shareholders of
Chase Vista Bond Fund and certain other conditions are met, Chase Vista Select
Bond Fund would also acquire the assets and liabilities of Chase Vista Bond Fund
in exchange for Chase Vista Select Bond Fund Shares. The terms of the Vista
Reorganization are similar to the terms of the Reorganization you are being
asked to consider. If both reorganizations are approved, your investment would
be in a larger combined fund containing the assets of all three funds. There can
be no assurance that the Vista Reorganization will be consummated.
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 Income Fund, Chase Vista
Select Bond Fund or their respective shareholders. The holding period and tax
basis of Chase Vista Select Bond Fund Shares will be the same as the holding
period and tax cost basis of the shareholder's shares of Chase Income Fund. In
addition, the holding period and tax basis of those assets owned by Chase Income
Fund transferred to Chase Vista Select Bond Fund will be identical for Chase
Income Fund. See "Information Relating to the Proposed Reorganization -- Federal
Income Tax Consequences."
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of Chase Vista Select Bond Fund is to provide as
high a level of income as is consistent with reasonable risk. Similarly, the
investment objective of Chase Income Fund is to invest in securities that earn a
high level of current income, while also considering safety of principal.
The investment policies of Chase Vista Select Bond Fund are similar to those
of Chase Income Fund. However, there are certain important differences. Chase
Vista Select Bond Fund invests mainly in investment grade corporate bonds as
well as other debt securities. Under normal market conditions, Chase Vista
Select Bond Fund will invest at least 65% of its total assets in debt securities
with at least an "A" rating or the equivalent from Moody's Investors
Service, Inc., Standard & Poor's Corporation, or Fitch Investor's Service Inc.
These include unrated securities of comparable quality. Under normal market
conditions, Chase Income
2
<PAGE>
Fund will invest at least 70% of its total assets in debt securities, but is not
required to invest a set percentage of its assets in "A" rated securities.
Chase Vista Select Bond Fund may make substantial investments in foreign
debt securities. On the other hand, Chase Income Fund may only invest up to 30%
of its total assets in foreign securities.
There is no restriction on the maturity of Chase Vista Select Bond Fund's
portfolio or on any individual security in the portfolio. On the other hand, the
average portfolio maturity of Chase Income Fund is between five and 15 years and
portfolio securities usually will have a maturity of greater than one year.
ADDITIONAL TRUST PORTFOLIOS
In addition to Chase Vista Select Bond Fund, MFSG currently offers nine
additional portfolios:
<TABLE>
<S> <C>
Select Balanced Fund Select Large Cap Growth Fund
Select Equity Income Fund Select New Growth Opportunities Fund
Select Intermediate Bond Fund Select Short Term Bond Fund
Select International Equity Fund Select Small Cap Value Fund
Select 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
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 Income Fund, MFIT currently offers ten additional
portfolios:
<TABLE>
<S> <C>
Balanced Fund Intermediate Bond 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.
PRINCIPAL RISKS OF INVESTING IN CHASE VISTA SELECT BOND FUND
The following discussion highlights the principal risk factors associated
with an investment in Chase Vista Select Bond Fund. These investment risks, in
general, are those typically associated with investing in a managed portfolio of
debt securities. In particular, 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 fixed-income securities tends to fall when
prevailing interest rates rise. This drop in value could be worse if a fund is
investing in debt securities with longer maturities. In addition, investments in
mortgage-related securities could lead the value of a fund to change more often
and to a greater degree than if the fund did not buy mortgage-related
securities. In addition, the Fund may invest a substantial portion of its assets
in foreign investments, which are subject to certain special risks.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for both Chase Income Fund and Chase Vista Select
Bond Fund is Chase. Chase oversees the asset management and administration of
both Chase Income Fund and Chase Vista Select Bond Fund. As compensation for its
services, Chase receives a management fee from each of Chase Income Fund and
Chase Vista Select 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 Bond Fund is used to pay CFAM, the 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 Income Fund, subject to the general
supervision of the MFIT Board, and Chase Vista Select Bond Fund, subject to the
general supervision of the MFSG Board. Pursuant to an investment sub-advisory
agreements between Chase and CFAM (the "Subadvisory Agreement"), Chase delegates
certain of these responsibilities to CFAM with respect to Chase
3
<PAGE>
Vista Select Bond Fund. For sub-advisory services rendered to Chase Vista Select
Bond Fund, CFAM is entitled to receive from Chase an annual fee of 0.15% of the
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 Chase Vista Select Bond Fund.
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
Bond Fund. CFD Fund Distributors, Inc. ("CFD"), another wholly-owned indirect
subsidiary of BISYS, is the distributor for Chase Income Fund. VFD and CFD are
unaffiliated with Chase. [In connection with the Reorganization, VFD will change
its name to Chase Fund Distributors, Inc.]
Chase serves as administrator, fund accountant and custodian for both Chase
Income Fund and Chase Vista Select 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 Income Fund and Chase Vista Select Bond Fund.
PricewaterhouseCoopers LLP ("PwC") serves as both Chase Income Fund's and
Chase Vista Select 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
Income Fund is organized as a series of MFIT and Chase Vista Select 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 Bond Fund are similar to those with respect to shares of
Chase Income Fund.
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses paid
by each of Chase Income Fund and Chase Vista Select Bond Fund that reflect
current expense arrangements, (ii) estimated fees and expenses on a pro forma
basis for Chase Vista Select Bond Fund after giving effect to the proposed
Reorganization but without giving effect to the proposed Vista Reorganization
and (iii) estimated fees and expenses on a pro forma basis for Chase Vista
Select Bond Fund after giving effect to both the proposed Reorganization and the
proposed Vista Reorganization. Under the proposed Reorganization, holders of
Investor Class Shares in Chase Income Fund would receive Class A Shares in Chase
Vista Select Bond Fund, and holders of Premier Class Shares in Chase Income Fund
would receive Institutional Class Shares in Chase Vista Select 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 actual
(post-waiver) total expense ratios for current holders of Chase Income Fund are
anticipated to be the same 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 INCOME FUND(a)
---------------------------- CHASE VISTA
INVESTOR PREMIER SELECT BOND
CLASS SHARES CLASS SHARES FUND SHARES
------------- ------------- -----------
<S> <C> <C> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR
INVESTMENT) None None None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM
FUND ASSETS)
Management Fees 0.50% 0.50% 0.30%
Distribution (12b-1) Fees 0.25% None None
Other Expenses 0.67% 0.42% 0.45%
Total Annual Fund Operating
Expenses 1.42% 0.92% 0.75%
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
CHASE VISTA SELECT BOND FUND(b)
----------------------------------------------------
PRO FORMA WITHOUT VISTA PRO FORMA WITH VISTA
REORGANIZATION REORGANIZATION
-------------------------- ------------------------
INSTITUTIONAL INSTITUTIONAL
CLASS A CLASS CLASS A CLASS
SHARES SHARES SHARES SHARES
----------- ------------- --------- -------------
<S> <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 4.50% None 4.50% None
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED
FROM FUND ASSETS)
Management Fees 0.30% 0.30% 0.30% 0.30%
Distribution (12b-1) Fees 0.25% None 0.25% None
Other Expenses 0.63% 0.45% 0.63% 0.45%
Total Annual Fund Operating
Expenses 1.18% 0.75% 1.18% 0.75%
</TABLE>
(a) The actual Management Fees for Chase Income Fund are expected to be 0.33%,
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 Bond
Fund, subsequent to the Reorganization (both with and without the Vista
Reorganization), are expected to be 0.00%, the actual Other Expenses for
Class A and Institutional Class shares are expected to be 0.45% and 0.30%,
respectively, and Total Annual Fund Operating Expenses for Class A and
Institutional Class shares are not expected to exceed 0.75% and 0.60%,
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.
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;
- your investment has a 5% return each year; and
- each Fund's operating expenses are not waived and remain the same as shown
above.
5
<PAGE>
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 INCOME FUND
INVESTOR CLASS SHARES $ 145 $ 449 $ 776 $ 1,702
PREMIER CLASS SHARES $ 94 $ 293 $ 509 $ 1,131
CHASE VISTA SELECT BOND FUND $ 77 $ 240 $ 417 $ 930
PRO FORMA CHASE VISTA SELECT
BOND FUND WITHOUT VISTA
REORGANIZATION
CLASS A SHARES* $ 565 $ 808 $ 1,070 $ 1,817
CLASS A SHARES (WITHOUT
SALES CHARGE) $ 120 $ 375 $ 649 $ 1,432
INSTITUTIONAL CLASS SHARES $ 77 $ 240 $ 417 $ 930
PRO FORMA CHASE VISTA SELECT
BOND FUND WITH VISTA
REORGANIZATION
CLASS A SHARES* $ 565 $ 808 $ 1,070 $ 1,817
CLASS A SHARES (WITHOUT
SALES CHARGE) $ 120 $ 375 $ 649 $ 1,432
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 Bond Fund. Chase Vista Select Bond Fund
has investment policies and investment restrictions similar to Chase Income
Fund. Therefore, there should be similarities between the risk factors
associated with Chase Vista Select Bond Fund and Chase Income 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 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 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, the
value of mortgage-related securities with prepayment features may not increase
as much as other fixed-income securities when interest rates fall.
6
<PAGE>
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 is
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.
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 securities may be riskier than investments in the
U.S. 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.
If the interest rate on floating and variable rate securities falls, the
Fund's yield may decline and it may lose the opportunity for capital
appreciation.
Dollar rolls, forward commitments and repurchase agreements involve some
risk to the Fund if the other party does not live up to its part of 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 Income Fund will be transferred to and assumed by Chase Vista Select Bond
Fund. In exchange for the transfer of the assets, and the assumption of the
liabilities, of Chase Income Fund, MFSG will issue at the Effective Time of the
Reorganization full and fractional (a) Class A Shares of Chase Vista Select Bond
Fund equal in aggregate dollar value to the aggregate net asset value of full
and fractional outstanding Class A Shares of Chase Income Fund, and
(b) Institutional Class Shares of Chase Vista Select Bond Fund equal in
aggregate dollar value to the aggregate net asset value of full and fractional
outstanding Premier Class Shares of Chase Income Fund, in each case as
determined at the valuation time specified in the Reorganization Plan. The
Reorganization Plan provides that Chase Income Fund will declare a dividend or
dividends prior to the Effective Time of the
7
<PAGE>
Reorganization which, together with all previous dividends, will have the effect
of distributing to the Chase Income 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 Income Fund by Chase Vista Select Bond Fund, Chase Income Fund will
distribute Chase Vista Select Bond Fund Shares received from MFSG to the Chase
Income Fund Shareholders in liquidation of Chase Income Fund. Each Chase Income
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 equal to the net asset value of their Chase Income 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 Income Fund.
Chase Vista Select Bond Fund expects to maintain most of the portfolio
investments of Chase Vista Bond Fund in light of the similar investment policies
of Chase Income Fund and the strategies of its investment adviser.
After the Reorganization all of the issued and outstanding shares of Chase
Income Fund Shares will be canceled on the books of Chase Income Fund and the
stock transfer books of Chase Income 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 Income 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 Income Fund and Chase Vista Select 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
October 24, 2000, the MFIT Board considered and discussed the future of Chase
Income Fund and how to best serve the Chase Income Fund Shareholders' interests.
The Trustees discussed the size of Chase Income Fund's investment portfolio
(approximately $64 million as of August 31, 2000) and the increasing advantages
of reorganizing Chase Income Fund into Chase Vista Select Bond Fund. The
Trustees reviewed the Proposal. After discussions, it was decided to pursue the
Reorganization with Chase Vista Select Bond Fund.
In considering the Reorganization, the Trustees noted that all Chase Vista
Select 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 Income Fund and Chase Vista Select
Bond Fund; the effect of such Reorganization on Chase Income 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 Bond Fund; the similarities and differences in the investment objective
and policies of the Funds; the opportunity to combine Chase Income Fund with
Chase Vista Select Bond Fund in an effort to realize operational and
administrative efficiencies; the recommendations of Chase with respect to the
proposed Reorganization; and the fact that the Reorganization would constitute a
tax-free reorganization.
8
<PAGE>
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 Income Fund and that the
interests of the Chase Income 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 Income Fund Shareholders for
approval.
The MFSG Board considered the proposed Reorganization from the perspective
of Chase Vista Select 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; 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
(i) the proposed Reorganization is in the best interests of the shareholders of
Chase Vista Select Bond Fund and (ii) the interests of Chase Vista Select 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 Income 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 Income Fund to Chase Vista Select Bond Fund in exchange for
Chase Vista Select Bond Fund Shares and the liquidating distributions to
Shareholders of Chase Vista Select 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 Income Fund and Chase Vista Select
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 Income Fund as a result of such transaction; (iii) no gain or loss will
be recognized by Chase Vista Select Bond Fund as a result of such transaction;
(iv) no gain or loss will be recognized by the Chase Income Fund Shareholders on
the distribution to Chase Income Fund Shareholders of the Chase Vista Select
Bond Fund Shares in exchange for their Chase Income Fund Shares; (v) the
aggregate basis of Shares of Chase Vista Select Bond Fund received by a
Shareholder of Chase Income Fund will be the same as the aggregate basis of such
Chase Income Fund Shareholder's Chase Income Fund Shares immediately prior to
the Reorganization; (vi) the basis of Chase Vista Select Bond Fund in the assets
of Chase Income Fund received pursuant to such transaction will be the same as
the basis of such assets in the hands of Chase Income Fund immediately before
such transaction; (vii) a Chase Income Fund Shareholder's holding period for
Chase Vista Select Bond Fund Shares will be determined by including the period
for which each Chase Income Fund Shareholder held Chase Income Fund Shares
exchanged therefor, provided that the Shareholder held such Shares in Chase
Income Fund Shares as a capital asset; and (viii) Chase Vista Select 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 Income 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 Income Fund will be combined with Chase Vista Select Bond Fund
in the Reorganization, the total capitalization of Chase Vista Select Bond Fund
after the Reorganization is expected to be greater than the current
capitalization of Chase Income Fund. Also, if the Vista Reorganization is
approved, the total capitalization of Chase Vista Select Bond Fund will be even
greater. The following table sets forth as of [August 31], 2000: (i) the
capitalization of Chase Income Fund; (ii) the capitalization of Chase Vista
Select Bond Fund; (iii) the pro forma capitalization of Chase Vista Select Bond
9
<PAGE>
Fund as adjusted to give effect to the proposed Reorganization but not the
proposed Vista Reorganization; and (iv) the pro forma capitalization of Chase
Vista Select Bond Fund as adjusted to give effect to both the proposed
Reorganization and the proposed Vista Reorganization. There is, of course, no
assurance that the Reorganization and/or the Vista Reorganization will be
consummated. Moreover, if consummated, the capitalizations of Chase Vista Select
Bond Fund, Chase Income Fund and Chase Vista 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. Please note that Chase Vista
Select Bond Fund currently has one class of shares. In connection with the
Reorganization, this class will be renamed "Institutional Class" and the
Class A and Class B share classes will be introduced.
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
CHASE COMBINED COMBINED
CHASE INCOME VISTA SELECT WITHOUT VISTA WITH VISTA
FUND BOND FUND REORGANIZATION REORGANIZATION
------------ ------------ -------------- --------------
<S> <C> <C> <C> <C>
Total Net Assets
Class A Shares $ -- $ -- $ 1,010,468 $ 30,483,246
Class B Shares -- -- -- 3,724,204
Institutional Class Shares -- 584,139,760 646,677,583 661,651,936
Investor Class Shares 1,010,468 -- -- --
Premier Class Shares 62,537,823 -- -- --
----------- ------------ ------------ ------------
$63,548,291 $584,139,760 $647,688,051 $695,859,386
=========== ============ ============ ============
Shares Outstanding
Class A Shares -- -- 26,619 803,036
Class B Shares -- -- -- 98,109
Institutional Class Shares -- 15,388,596 17,036,062 17,430,539
Investor Class Shares 53,532 -- -- --
Premier Class Shares 3,317,130 -- -- --
----------- ------------ ------------ ------------
3,370,662 15,388,596 17,062,681 18,331,684
=========== ============ ============ ============
Net Asset Value Per Share
Class A Shares -- -- $37.96 $37.96
Class B Shares -- -- -- $37.96
Institutional Class Shares -- $37.96 $37.96 $37.96
Investor Class Shares $18.88 -- -- --
Premier Class Shares $18.85 -- -- --
</TABLE>
INFORMATION RELATING TO VISTA REORGANIZATION
The terms and conditions under which the Vista Reorganization may be
consummated are set forth in the Vista Reorganization Plan, which is similar to
the Reorganization Plan you are considering. Under the Vista Reorganization,
holders of Class A Shares of Chase Vista Bond Fund will receive Class A Shares
of Chase Vista Select Bond Fund, holders of Class B Shares of Chase Vista Bond
Fund will receive Class B Shares of Chase Vista Select Bond Fund, and holders of
Institutional Class shares of Chase Vista Bond Fund will receive Institutional
Class shares of Chase Vista Select Bond Fund.
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of Chase
Vista Select Bond Fund. Chase Vista Select Bond Fund has similar investment
policies to Chase Income Fund; however certain important differences are
described below. This section is qualified in its entirety by the discussion in
the Prospectus and Statement of Additional Information of Chase Vista Select
Bond Fund, which are incorporated herein by reference.
OBJECTIVE
Chase Vista Select Bond Fund seeks to provide investors with as high a level
of income as is consistent with reasonable risk.
MAIN INVESTMENT STRATEGY
Chase Vista Select Bond Fund invests mainly in investment grade corporate
bonds as well as other debt securities. Under normal market conditions, Chase
Vista Select Bond Fund will invest at least 65% of its
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total assets in debt securities with at least an "A" rating or the equivalent
from Moody's Investors Service, Inc., Standard & Poor's Corporation, or Fitch
Investor's Service Inc. These include unrated securities of comparable quality.
UNDER NORMAL MARKET CONDITIONS, CHASE INCOME FUND WILL INVEST AT LEAST 70% OF
ITS TOTAL ASSETS IN BONDS AND NOTES OF DOMESTIC AND FOREIGN ISSUERS, U.S.
GOVERNMENT SECURITIES AND MORTGAGE-RELATED SECURITIES. THERE IS NO REQUIREMENT
TO MAINTAIN A CERTAIN PERCENTAGE OF ASSETS IN "A" RATED SECURITIES.
As with Chase Vista Select Bond Fund, all of Chase Income Fund's investments
must be investment grade, which means a rating of Baa or higher by Moody's
Investors Service, Inc., BBB or higher by Standard & Poor's Corporation, or the
equivalent by another national rating organization or unrated securities of
comparable quality.
Chase Vista Select Bond Fund may make substantial investments in foreign
debt securities, including securities of issuers in developing countries, as
long as they meet Chase Vista Select Bond Fund's credit quality standards. ON
THE OTHER HAND, CHASE INCOME FUND MAY ONLY INVEST UP TO 30% OF ITS TOTAL ASSETS
IN FOREIGN SECURITIES. For both Funds, these investments may include debt
securities issued or guaranteed by foreign governments and international
organizations such as The World Bank.
There is no restriction on the maturity of Chase Vista Select Bond Fund's
portfolio or on any individual security in the portfolio. The advisers will
change the actual maturities according to changes in the market. THE AVERAGE
PORTFOLIO MATURITY OF CHASE INCOME FUND IS BETWEEN FIVE AND 15 YEARS. WHEN CHASE
INCOME FUND PURCHASES FIXED INCOME SECURITIES, THEY USUALLY WILL HAVE A MATURITY
OF GREATER THAN ONE YEAR.
Chase Vista Select Bond Fund develops an appropriate portfolio strategy by
selecting among various sectors (for example, corporate bonds, U.S. government
debt, mortgage-backed securities or asset-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 Chase Vista Select Bond Fund's
investments across a variety of sectors to maximize diversification and
liquidity. The advisers also actively manage the duration of Chase Vista Select
Bond 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 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 Bond Fund's
overall investment strategy. Yield curves show the relationship between yields
on similar debt securities with different maturities. Chase Vista Select Bond
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 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 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 Bond Fund may enter into "dollar rolls," in which Chase
Vista Select Bond 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 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
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investment, exchange rate or index. Chase Vista Select Bond Fund may use
derivatives to hedge various market risks or to increase Chase Vista Select Bond
Fund's income or gain.
To temporarily defend its assets, Chase Vista Select Bond Fund may put any
amount of its assets in high quality money market instruments and repurchase
agreements.
Chase Vista Select Bond Fund may change any of these investment policies
(including its investment objective) without shareholder approval.
INVESTMENT RESTRICTIONS
Chase Vista Select Bond Fund and Chase Income 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, 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
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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.
PURCHASES, REDEMPTIONS AND EXCHANGES
The procedures for purchases, redemptions and exchanges of shares of Chase
Vista Select Bond Fund are similar to those of Chase Income Fund. Please note
that Chase Vista Select Bond Fund currently has one class of shares. In
connection with the Reorganization, this class will be renamed "Institutional
Class" and the Class A and Class B share classes 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 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 Income 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 Bond Fund, rather than CFD
(which acts as distributor for Chase Income Fund). Chase Vista Select Bond Fund
will adopt a Rule 12b-1 distribution plan for Class A Shares under which it will
pay 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 Income 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 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 Bond Fund or Premier Class Shares of Chase Income Fund.
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BUYING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF CHASE VISTA SELECT BOND
FUND SHARES THAT YOU MIGHT MAKE AFTER THE REORGANIZATION AND REFLECTS THE NEW
CLASS STRUCTURE.
The price shareholders pay for their shares is 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 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.
Chase Vista Select Bond Fund's minimum initial investment and eligibility
requirements will be waived for shareholders of Chase Income Fund who receive
Chase Vista Select 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 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.
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
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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 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 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 BOND FUND
For Class A Shares, Chase Vista Select Bond Fund may close an account if the
balance falls below $500. Chase Vista Select 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 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 will receive 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 INCOME
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.
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Chase Vista Select 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 Bond Fund, rather than CFD
(which acts as distributor for Chase Income Fund). [Please note that it is
intended that VFD will change its name to Chase Fund
Distributors, Inc. in connection with the Reorganization.]
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 on a daily basis 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.
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 INCOME FUND'S
AND CHASE VISTA SELECT BOND FUND'S
ORGANIZATION STRUCTURES
There are no differences in the organizational structure of Chase Income
Fund and Chase Vista Select Bond Fund. Set forth below are descriptions of the
structure, voting rights, shareholder liability and the liability of Trustees.
STRUCTURE OF THE CHASE INCOME FUND
Chase Income 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 Income Fund are also subject to the provisions of the 1940 Act and the
rules and regulations thereunder.
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STRUCTURE OF THE CHASE VISTA SELECT BOND FUND
Chase Vista Select 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 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
Income Fund is managed by MFIT's Trustees and the business of Chase Vista Select
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. 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.
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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 Income Fund and Chase Vista Select 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 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 Bond Fund. However, the same portfolio management team is responsible for
the day-to-day management for both Chase Income Fund and Chase Vista Select Bond
Fund. 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 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 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 Income Fund and Chase Vista Select 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 Income Fund and
0.30% for the Chase Vista Select 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.
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<PAGE>
For the twelve months ended April 30, 2000, Chase accrued management fees
management fee waivers of approximately $330,000 and $126,000, respectively, for
Chase Income Fund. For the twelve months ended April 30, 2000, Chase accrued
management fees and management fee waivers of approximately $1,829,000 and
$982,000, respectively, for Chase Vista Select 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, or a Fund 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 Income Fund or Chase Vista Select 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 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 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 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
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 Bond Fund would be managed. From the
fee paid by Chase Vista Select Bond Fund under the Advisory Agreement to Chase,
Chase bears responsibility for payment of subadvisory fees to CFAM. Therefore,
Chase Vista Select 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 Bond Fund and, in each case,
(ii) by a
19
<PAGE>
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 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 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 Bond Fund at the close of business on the previous business
day of MFSG.
For the twelve months ended April 30, 2000, Chase paid subadvisory fees to
CFAM of approximately $847,000 with respect to Chase Vista Select Bond Fund.
THIS FEE WAS PAID BY CHASE OUT OF THE ADVISORY FEE IT RECEIVED FOR CHASE VISTA
SELECT BOND FUND AND WAS NOT AN ADDITIONAL CHARGE TO THE FUND.
PORTFOLIO MANAGER
Timothy Neumann, Head of Taxable Core Investment Group at Chase, and Andrew
Russell, Vice President and Portfolio Manager at Chase, are responsible for the
management of Chase Income Fund and Chase Vista Select Bond Fund.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Chase, as the investment adviser to both Chase Income Fund and Chase Vista
Select 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 Agreements.
Accordingly, the description below of Chase's responsibilities under each
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 Income Fund and
Chase Vista Select 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 Income Fund or Chase Vista
Select 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
20
<PAGE>
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 Income Fund and MFSG or any of its portfolios,
including Chase Vista Select 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.
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. Retired; 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, Jenel
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 1989.
He had been employed by Chase in numerous
capacities and offices from 1954 through 1989.
Director of Blessings Corporation, Jefferson
Insurance Company of New York, Monticello
Insurance Company and National. Age: 68. 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 North America Life
Assurance Co., Petroleum & Resources Corp. and The
Adams Express Co.; Director and Chairman of The
Hanover Funds, Inc.; Director, Chairman and
President of The Hanover Investment Funds, Inc.
Age: 72. Address: RR 1 Box 102, Weston, VT 05181.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- ------------------------------------------
<S> <C>
*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.
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.
22
<PAGE>
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 Income 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 Income 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 [____________] Chase Income 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 Income 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 Income Fund Shareholders determine to
adjourn the Meeting for any other reason, the Chase Income 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 Income Fund Shareholders holding a majority of the
Chase Income 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
Income 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 Income 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 Income Fund Shares represented by each properly signed proxy
received prior to the Meeting will be voted at the Meeting. If a Chase Income
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 Income 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 Income 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 Income Fund Shareholder may be revoked by such
Chase Income 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 Income Fund or Chase Vista Select 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.
23
<PAGE>
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 Income Fund Shares present at the Meeting and (ii) more than 50% of all
outstanding Chase Income Fund Shares. In tallying Chase Income 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 Income Fund as a
group owned less than 1% of the outstanding shares of Chase Income Fund. On the
Record Date, the name, address and percentage ownership of the persons who owned
beneficially more than 5% of any class or series of shares of Chase Income Fund
and the percentage of any class or series of shares of Chase Vista Select 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 CLASS OF
AMOUNT OF CHASE INCOME FUND CHASE VISTA SELECT BOND
CHASE INCOME SHARES SHARES OWNED ON FUND OWNED UPON
FUND NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
--------------------- ------------------------------ ---------- ------------------ -----------------------
<C> <S> <C> <C> <C>
</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 Bond Fund.
At November 10, 2000 the name, address and share ownership of the persons
who owned beneficially more than 5% of any class of Chase Vista Select 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>
CLASS AND PERCENTAGE OF PERCENTAGE OF
CHASE VISTA AMOUNT OF PERCENTAGE OF FUND SHARES CLASS OWNED
SELECT BOND SHARES CLASS OWNED ON OWNED ON UPON
FUND NAME AND ADDRESS OWNED RECORD DATE RECORD DATE CONSUMMATION
--------------------- ------------------------- ---------- --------------- ------------- --------------
<C> <S> <C> <C> <C> <C>
</TABLE>
ADDITIONAL INFORMATION ABOUT MFIT
Information about Chase Income Fund is included in the Prospectus dated
April 30, 2000, which is incorporated by reference and enclosed herein.
Additional information about Chase Income 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, NY 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.
ADDITIONAL INFORMATION ABOUT MFSG
Information about Chase Vista Select 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 Bond Fund is also included in
MFSG's Statement of Additional Information dated February 28, 2000 which
24
<PAGE>
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, NY 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 Income Fund for the six-month period ended June 30, 2000 and
Chase Vista Select Bond Fund for the six-month period ended April 30, 2000 and
the audited financial statements and financial highlights and notes thereto of
Chase Income Fund for the fiscal year ended December 31, 1999 and Chase Vista
Select 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 Income Fund and Chase Vista Select 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 Income Fund or Chase Vista Select 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.
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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 Income Fund (the
"Transferor Portfolio") and Mutual Fund Select Group (the "Acquiring Trust") and
the Chase Vista Select 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 Invetsor 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 15,388,596 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 53,532 Investor Class shares and
3,317,130 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
A-7
<PAGE>
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
A-8
<PAGE>
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.
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.
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.
A-9
<PAGE>
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.
A-10
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first
above written.
MUTUAL FUND INVESTMENT TRUST
on behalf of Chase Income Fund
By:
________________________________________
Name:
Title:
MUTUAL FUND SELECT GROUP
on behalf of Chase Vista Select Bond
Fund
By:
________________________________________
Name:
Title:
Agreed and acknowledged with respect to Section 9:
THE CHASE MANHATTAN BANK
By: ________________________________________
Name:
Title:
A-11
<PAGE>
[LOGO]
STATEMENT OF
ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS
OF
CHASE INCOME FUND,
A SERIES OF MUTUAL FUND INVESTMENT
TRUST)
CHASE INCOME FUND,
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS 41ST FLOOR NEW YORK, NY 10036
(800) 5-CHASE-0
CHASE VISTA SELECT BOND FUND,
A SERIES OF MUTUAL FUND SELECT GROUP
1211 AVENUE OF THE AMERICAS 41ST FLOOR NEW YORK, NY 10036
(800) 62-CHASE
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Prospectus/Proxy Statement dated
[December 1,] 2000 for the Special Meeting of Shareholders of Chase Income Fund
("Chase Income Fund"), a series of Mutual Fund Investment Trust ("MFIT"), to be
held on January 26, 2001. Copies of the Combined Prospectus/Proxy Statement may
be obtained at no charge by calling Chase Income Fund at 1-800-34-VISTA.
Unless otherwise indicated, capitalized terms used herein and not otherwise
defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about Chase Vista Select Bond Fund is contained in
MFSG's Statement of Additional Information dated February 28, 2000 which is
incorporated herein by reference.
The date of this Statement of Additional Information is [December 1,] 2000.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS PAGE
<S> <C>
--------------------------------------------------------
General Information............................... 3
Financial Statements.............................. 4
Pro Forma Financial Statements.................... 5
</TABLE>
2
<PAGE>
GENERAL INFORMATION
The Shareholders of Chase Income Fund are being asked to consider and vote
on one proposal.
With respect to an Agreement and Plan of Reorganization (the "Reorganization
Plan") dated as of October 31, 2000 by and between MFIT, on behalf of Chase
Income Fund, and MFSG, on behalf of Chase Vista Select Bond Fund, and the
transactions contemplated thereby. The Reorganization Plan contemplates the
transfer of all of the assets and liabilities of Chase Income Fund to Chase
Vista Select Bond Fund in exchange for shares issued by MFSG in Chase Vista
Select Bond Fund that will have an aggregate net asset value equal to the
aggregate net asset value of the shares of Chase Income Fund that are
outstanding immediately before the Effective Time of the Reorganization.
Following the exchange, Chase Income Fund will make a liquidating
distribution of Chase Vista Select Bond Fund shares to its Shareholders, so that
(a) a holder of Investor Class Shares in Chase Income Fund will receive Class A
Shares of Chase Vista Select Bond Fund and (b) a holder of Premier Class shares
in Chase Income Fund will receive Institutional Class Shares of Chase Vista
Select Bond Fund, in each case of equal value, plus the right to receive any
unpaid dividends and distributions that were declared before the Effective Time
of the Reorganization.
A Special Meeting of Shareholders of Chase Income Fund to consider the
proposals and the related transaction 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 further information
about the transaction, see the Combined Prospectus/Proxy Statement.
3
<PAGE>
FINANCIAL STATEMENTS
The unaudited financial statements and notes thereto of Chase Income Fund
contained in its Semi-Annual Report to Shareholders dated June 30, 2000 and the
audited financial statements and notes thereto of Chase Income Fund contained in
its Annual Report to Shareholders dated December 31, 1999 are incorporated by
reference into this Statement of Additional Information related to this Combined
Prospectus/Proxy Statement. The unaudited financial statements and notes thereto
of Chase Vista Select Bond Fund contained in its Semi-Annual Report to
Shareholders dated April 30, 2000 and the audited financial statements and notes
thereto of Chase Vista Select Bond Fund contained in its Annual Report to
Shareholders dated October 31, 1999 are incorporated by reference into this
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement. The financial statements and notes thereto which appear in each of
Chase Income Fund's and Chase Vista Select Bond Fund's Annual Report to
Shareholders have been audited by PricewaterhouseCoopers LLP, whose reports
thereon also appear in such Annual Reports and are also incorporated herein by
reference. No other parts of the Semi-Annual or Annual Reports are incorporated
herein by reference. The financial statements and notes thereto for Chase Income
Fund for the fiscal year ended December 31, 1999 and for Chase Vista Select Bond
Fund for the fiscal year ended October 31, 1999 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.
4
<PAGE>
PRO FORMA FINANCIAL STATEMENTS
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------------------ ------------------------------------------------
CHASE VISTA CHASE CHASE VISTA CHASE
SELECT BOND VISTA BOND CHASE INCOME PRO FORMA SELECT BOND VISTA BOND CHASE INCOME PRO FORMA
FUND FUND FUND COMBINED FUND FUND FUND COMBINED
---- ---- ---- -------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--97.2%
U.S. TREASURY SECURITIES--16.8%
U.S. Treasury Notes &
Bonds,
6.25%, 08/15/23 $ 100 $ 100 $ 100 $ 100
7.13%, 02/15/23 7,500 $ 750 $1,000 9,250 8,278 $ 828 $ 1,104 10,210
7.63%, 02/15/25 13,000 1,200 1,500 15,700 15,273 1,410 1,762 18,445
8.13%, 08/15/19 49,000 4,500 5,300 58,800 58,877 5,407 6,368 70,652
11.25%, 02/15/15 10,000 800 1,000 11,800 14,631 1,170 1,463 17,264
-------- ------- ------- --------
TOTAL U.S. TREASURY SECURITIES
(COST $97,061, $8,700,
$10,556 AND $116,317,
RESPECTIVELY) 97,159 8,815 10,697 116,671
-------- ------- ------- --------
U.S. GOVERNMENT AGENCY SECURITIES--6.2%
Federal Home Loan Bank,
6.38%, 08/15/06 15,000 1,500 1,750 18,250 14,246 1,425 1,662 17,333
Federal National Mortgage
Association,
6.00%, 05/15/08 15,000 1,500 16,500 13,814 1,381 15,195
7.25%, 01/15/10 10,000 1,000 11,000 9,970 997 10,967
-------- ------- ------- --------
TOTAL U.S. GOVERNMENT AGENCY SECURITIES
(COST $39,188, $3,919,
$1,730 AND $44,837,
RESPECTIVELY) 38,030 3,803 1,662 43,495
-------- ------- ------- --------
FOREIGN GOVERNMENT SECURITIES--1.3%
Quebec Province (Canada),
6.50%, 01/17/06
(COST $7,604, $736, $736
AND $9,076,
RESPECTIVELY) 7,750 750 750 9,250 7,364 713 712 8,789
CORPORATE NOTES & BONDS--33.1%
AEROSPACE--1.1%
Raytheon Co., #, 7.90%,
03/01/03 6,700 600 700 8,000 6,584 590 688 7,862
AUTOMOTIVE--2.8%
Ford Motor Credit Co.,
6.25%, 12/08/05 1,000 1,000 928 928
6.70%, 07/16/04 7,400 700 8,100 7,117 673 7,790
7.38%, 10/28/09 9,435 750 900 11,085 9,120 725 870 10,715
-------- ------- ------- --------
16,237 1,398 1,798 19,433
-------- ------- ------- --------
BANKING--2.4%
Bank of America Corp.,
7.80%, 02/15/10 7,700 700 800 9,200 7,646 695 795 9,136
</TABLE>
See notes to pro forma financial statements.
5
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------------------ ------------------------------------------------
CHASE VISTA CHASE CHASE VISTA CHASE
SELECT BOND VISTA BOND CHASE INCOME PRO FORMA SELECT BOND VISTA BOND CHASE INCOME PRO FORMA
FUND FUND FUND COMBINED FUND FUND FUND COMBINED
---- ---- ---- -------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CORPORATE NOTES--CONTINUED
Korea Development Bank
(South Korea), 6.50%,
11/15/02 $ 6,722 $ 650 $ 700 $ 8,072 $ 6,444 $ 623 $ 671 $ 7,738
-------- ------- ------- --------
14,090 1,318 1,466 16,874
-------- ------- ------- --------
BROADCASTING/CABLE--0.9%
Comcast Corp.,10.25%,
10/15/01 5,500 500 6,000 5,689 517 6,206
DIVERSIFIED--0.7%
Textron, Inc., 6.38%,
07/15/04 4,265 375 500 5,140 4,061 357 477 4,895
FINANCIAL SERVICES--3.4%
Associates Corp. of North
America, FRN, 6.24%,
06/14/01 2,050 2,000 4,050 2,051 2,000 4,051
Lehman Brothers Holdings
Inc., 6.63%, 02/05/06 7,750 750 750 9,250 7,300 706 706 8,712
MTN, FRN, 6.38%, 09/04/01 9,885 1,000 10,885 9,884 1,000 10,884
-------- ------- ------- --------
19,235 706 3,706 23,647
-------- ------- ------- --------
INSURANCE--1.0%
Conseco, Inc., 8.50%,
10/15/02 9,270 900 1,000 11,170 5,840 567 630 7,037
MULTI-MEDIA--1.6%
Time Warner Inc., 6.63%,
05/15/29 10,770 1,000 1,100 12,870 8,945 831 914 10,690
OIL & GAS--6.0%
Amerada Hess Corp.,
7.88%, 10/01/29 13,850 1,350 1,500 16,700 12,935 1,261 1,401 15,597
PEMEX Finance LTD (Cayman
Islands), #, 9.03%,
02/15/11 5,620 480 540 6,640 5,680 485 546 6,711
Valero Energy Corp., #,
6.75%, 12/15/02 10,200 1,000 1,000 12,200 9,878 968 968 11,814
YPF Sociedad Anonima
(Argentina), 7.25%,
03/15/03 6,500 700 800 8,000 6,191 667 762 7,620
-------- ------- ------- --------
34,684 3,381 3,677 41,742
-------- ------- ------- --------
PACKAGING--0.9%
Tenneco Packaging, Inc.,
8.00%, 04/15/07 5,175 500 500 6,175 5,141 482 497 6,120
PIPELINES--1.7%
EL Paso Energy Corp.,
6.75%, 05/15/09 10,475 1,000 1,200 12,675 9,438 901 1,081 11,420
RETAILING--2.4%
SAKS Inc., 7.25%,
12/01/04 7,500 700 800 9,000 6,741 629 719 8,089
Wal-Mart Stores, Inc.,
6.88%, 08/10/09 7,540 750 850 9,140 7,237 720 816 8,773
-------- ------- ------- --------
13,978 1,349 1,535 16,862
-------- ------- ------- --------
TELECOMMUNICATIONS--4.3%
Metronet Communications
Corp. (Canada), SUB,
0.00%, 06/15/08 5,550 450 550 6,550 4,429 359 439 5,227
Sprint Capital Corp.,
6.88%, 11/15/28 8,450 800 900 10,150 7,380 699 785 8,864
</TABLE>
See notes to pro forma financial statements.
6
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------------------ ------------------------------------------------
CHASE VISTA CHASE CHASE VISTA CHASE
SELECT BOND VISTA BOND CHASE INCOME PRO FORMA SELECT BOND VISTA BOND CHASE INCOME PRO FORMA
FUND FUND FUND COMBINED FUND FUND FUND COMBINED
---- ---- ---- -------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CORPORATE NOTES--CONTINUED
U.S. West Capital
Funding, Inc., 6.25%,
07/15/05 $ 5,575 $ 500 $ 600 $ 6,675 $ 5,218 $ 468 $ 562 $ 6,248
Vodafone AirTouch PLC
(United Kingdom), #,
7.63%, 02/15/05 8,000 750 800 9,550 7,963 746 796 9,505
-------- ------- ------- --------
24,990 2,272 2,582 29,844
-------- ------- ------- --------
UTILITIES--3.9%
Cilcorp Inc., 8.70%,
10/15/09 6,000 600 650 7,250 5,999 600 650 7,249
Empresa Nacional de
Electricidad SA
(Chile), Ser. B, 8.50%,
04/01/09 6,000 600 600 7,200 5,858 586 586 7,030
Israel Electric Corp.
(Israel), MTN, #,7.75%,
12/15/27 4,650 450 500 5,600 4,016 389 431 4,836
TXU Eastern Funding
(United Kingdom),
6.15%, 05/15/02 6,815 750 750 8,315 6,582 724 724 8,030
-------- ------- ------- --------
22,455 2,299 2,391 27,145
-------- ------- ------- --------
TOTAL CORPORATE NOTES & BONDS
(COST $198,013, $17,090,
$22,601 AND $237,704,
RESPECTIVELY) 191,367 16,451 21,959 229,777
-------- ------- ------- --------
RESIDENTIAL MORTGAGE BACKED SECURITIES--34.3%
COLLATERALIZED MORTGAGE OBLIGATIONS--1.8%
Federal National Mortgage
Association,
Ser. 1993-250,
Class A, 6.15%,
09/25/16 2,036 2,036 2,011 2,011
Ser. 1999-17,
Class PC, 6.00%,
12/25/22 10,000 1,000 11,000 9,381 938 10,319
-------- ------- --------
11,392 938 12,330
-------- ------- --------
MORTGAGE BACKED PASS-THROUGH SECURITIES--32.5%
Federal National Mortgage
Association,
Pool 252093, 6.50%,
11/01/28 12,699 3,221 15,920 11,862 3,007 14,869
Pool 252339, 6.00%,
02/01/29 11,444 1,176 12,620 10,360 1,065 11,425
Pool 252435, 6.00%,
05/01/14 2,310 231 2,541 2,164 216 2,380
Pool 253033, 7.00%,
02/01/15 1,377 1,377 1,344 1,344
Pool 253036, 7.00%,
02/01/30 2,925 2,925 2,798 2,798
Pool 303784, 7.00%,
03/01/11 3,856 386 4,242 3,767 377 4,144
Pool 323633, 7.00%,
03/01/29 25,317 2,467 27,784 24,224 2,359 26,583
Pool 323645, 7.50%,
03/01/29 22,867 2,287 25,154 22,417 2,242 24,659
Pool 323688, 7.50%,
03/01/29 4,642 580 5,222 4,551 569 5,120
Pool 323714, 7.00%,
04/01/14 6,575 706 7,281 6,421 689 7,110
Pool 484753, 6.50%,
03/01/29 9,232 594 9,826 8,624 555 9,179
Pool 490445, 6.00%,
03/01/29 10,847 1,085 2,465 14,397 9,820 982 2,232 13,034
Pool 494272, 6.50%,
04/01/29 11,828 1,252 13,080 11,048 1,170 12,218
</TABLE>
See notes to pro forma financial statements.
7
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------------------ ------------------------------------------------
CHASE VISTA CHASE CHASE VISTA CHASE
SELECT BOND VISTA BOND CHASE INCOME PRO FORMA SELECT BOND VISTA BOND CHASE INCOME PRO FORMA
FUND FUND FUND COMBINED FUND FUND FUND COMBINED
---- ---- ---- -------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
RESIDENTIAL MORTGAGE BACKED SECURITIES--CONTINUED
Pool 503599, 6.50%,
06/01/29 $ 4,870 $2,980 $ 7,850 $ 4,544 $ 2,781 $ 7,325
Pool 523193, 7.50%,
11/01/29 3,392 3,392 3,320 3,320
Pool 534064, 8.00%,
03/01/30 9,197 $ 824 1,000 11,021 9,183 $ 823 998 11,004
Pool 535052, 6.00%,
11/01/19 22,778 2,181 24,959 21,326 2,042 23,368
Pool 535054, 6.50%,
11/01/14 2,641 2,641 2,527 2,527
Government National
Mortgage Association,
Pool 487224, 6.50%,
05/15/29 14,825 1,290 1,640 17,755 13,885 1,208 1,536 16,629
Pool 510285, 7.00%,
08/15/29 12,394 1,075 1,550 15,019 11,917 1,034 1,490 14,441
Pool 527141, 8.00%,
03/15/30 10,060 825 1,150 12,035 10,079 827 1,154 12,060
-------- ------- ------- --------
186,192 17,995 21,350 225,537
-------- ------- ------- --------
TOTAL RESIDENTIAL
MORTGAGE BACKED
SECURITIES
(COST $204,866, $19,728,
$21,717 AND $246,311,
RESPECTIVELY) 197,584 18,933 21,350 237,867
-------- ------- ------- --------
COMMERCIAL MORTGAGE BACKED SECURITIES--0.5%
Nationslink Funding Corp., Ser. 1999-SL, Class A2, 6.10%, 12/10/01
(COST $3,225, $650, $0
AND $3,875,
RESPECTIVELY) 3,225 650 3,875 3,163 638 3,801
ASSET BACKED SECURITIES--5.0%
MBNA Master Credit Card
Trust,
Ser. 1999-J, Class A,
7.00%, 02/15/12 7,500 750 900 9,150 7,277 728 873 8,878
Ser. 1999-M, Class B,
6.80%, 04/16/07 8,300 800 800 9,900 8,039 775 775 9,589
Nomura CBO LTD, Ser.
1997-1, Class A2, FRN,
#, 6.67%, 05/15/09 6,500 500 7,000 5,987 461 6,448
Residential Asset
Securities Corp.,
Ser. 1999-KS4,
Class AI3, 6.94%,
04/25/25 750 750 734 734
Residential Funding
Mortgage Securities II,
Ser. 2000-HI1,
Class AI4, 7.79%,
01/25/14 7,500 750 850 9,100 7,434 743 843 9,020
-------- ------- ------- --------
TOTAL ASSET BACKED SECURITIES
(COST $29,828, $2,798,
$3,278 AND $35,904,
RESPECTIVELY) 28,737 2,707 3,225 34,669
-------- ------- ------- --------
TOTAL LONG-TERM INVESTMENTS
(COST $579,785, $53,621,
$60,618 AND $694,024,
RESPECTIVELY) 563,404 52,060 59,605 675,069
-------- ------- ------- --------
SHORT-TERM INVESTMENTS--2.2%
U.S. TREASURY SECURITY--0.3%
U.S. Treasury Bill,
5.46%, 06/08/00 @
(COST $1,989, $199, $0
AND $2,188,
RESPECTIVELY) 2,000 200 2,200 1,989 199 2,188
</TABLE>
See notes to pro forma financial statements.
8
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------------------ ------------------------------------------------
CHASE VISTA CHASE CHASE VISTA CHASE
SELECT BOND VISTA BOND CHASE INCOME PRO FORMA SELECT BOND VISTA BOND CHASE INCOME PRO FORMA
FUND FUND FUND COMBINED FUND FUND FUND COMBINED
---- ---- ---- -------- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
REPURCHASE AGREEMENT--1.3%
Greenwich Capital Markets
Inc., 5.80%, due
05/01/00 (Dated
04/28/00, Proceeds
$8,309, $365, $0 and
$8,674, respectively,
Fully collateralized by
U.S. Treasury or
Government Agency
securities)
(COST $8,305, $365, $0
AND $8,670,
RESPECTIVELY) $ 8,305 $ 365 $ 8,670 $ 8,305 $ 365 $ 8,670
U.S. GOVERNMENT AGENCY SECURITY--0.6%
Federal Home Loan Bank,
DN, 5.87%, 05/01/00
(COST $0, $0, $4,262 AND
$4,262, RESPECTIVELY) $4,263 4,263 $ 4,262 4,262
-------- ------- ------- --------
TOTAL SHORT-TERM INVESTMENTS
(COST $10,294, $564,
$4,262 AND $15,120,
RESPECTIVELY) 10,294 564 4,262 15,120
-------- ------- ------- --------
TOTAL INVESTMENTS--99.4%
(COST $590,079, $54,185,
$64,880 AND $709,144,
RESPECTIVELY) $573,698 $52,624 $63,867 $690,189
======== ======= ======= ========
</TABLE>
See notes to pro forma financial statements.
9
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
CHASE VISTA SELECT BOND FUND FUTURES OUTSTANDING
<TABLE>
<CAPTION>
UNREALIZED
NUMBER ORIGINAL NOTIONAL NOTIONAL APPRECIATION/
OF VALUE VALUE AT (DEPRECIATION)
CONTRACTS DESCRIPTION EXPIRATION DATE (USD) 04/30/00 (USD) (USD)
--------- ----------- --------------- ----- -------------- -----
<C> <S> <C> <C> <C> <C>
SHORT FUTURES OUTSTANDING
10 Year U.S. Treasury
200 Notes June, 2000 $19,381 $19,391 $(10)
5 Year U.S. Treasury
400 Notes June, 2000 39,315 39,031 284
2 Year U.S. Treasury
300 Notes June, 2000 59,499 59,170 329
</TABLE>
CHASE VISTA BOND FUND FUTURES OUTSTANDING
<TABLE>
<CAPTION>
UNREALIZED
NUMBER ORIGINAL NOTIONAL NOTIONAL APPRECIATION/
OF VALUE VALUE AT (DEPRECIATION)
CONTRACTS DESCRIPTION EXPIRATION DATE (USD) 04/30/00 (USD) (USD)
--------- ----------- --------------- ----- -------------- -----
<C> <S> <C> <C> <C> <C>
SHORT FUTURES OUTSTANDING
10 Year U.S. Treasury
20 Notes June, 2000 $ 1,938 $ 1,939 $ (1)
5 Year U.S. Treasury
40 Notes June, 2000 3,931 3,903 28
2 Year U.S. Treasury
30 Notes June, 2000 5,950 5,917 33
</TABLE>
PRO FORMA COMBINED FUTURES OUTSTANDING
<TABLE>
<CAPTION>
UNREALIZED
NUMBER ORIGINAL NOTIONAL NOTIONAL APPRECIATION/
OF VALUE VALUE AT (DEPRECIATION)
CONTRACTS DESCRIPTION EXPIRATION DATE (USD) 04/30/00 (USD) (USD)
--------- ----------- --------------- ----- -------------- -----
<C> <S> <C> <C> <C> <C>
SHORT FUTURES OUTSTANDING
10 Year U.S. Treasury
220 Notes June, 2000 $21,319 $21,330 $(11)
5 Year U.S. Treasury
440 Notes June 2000 43,246 42,934 312
2 Year U.S. Treasury
330 Notes June 2000 65,449 65,087 362
</TABLE>
INDEX:
# -- Security may only be sold to qualified institutional buyers.
@ -- All or a portion of this security is segregated for futures.
DN -- Discount Note. The rate shown is the effective yield at the time of
purchase.
FRN -- Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at April 30, 2000.
MTN -- Medium Term Note.
SUB -- Step-up Bond. The maturity date shown is the earlier of the call date or
the maturity date; the rate shown is the rate in effect at April 30,
2000.
See notes to pro forma financial statements.
10
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CHASE VISTA CHASE VISTA CHASE
SELECT BOND BOND INCOME PRO FORMA PRO FORMA
FUND FUND FUND ADJUSTMENTS COMBINED
----------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS:
Investment securities,
at value $573,698 $52,624 $63,867 $ -- $690,189
Cash 348 -- 4 1(a) 353
Other assets 23 1 -- -- 24
Receivables:
Interest and
dividends 7,171 672 706 -- 8,549
Variation margin on
futures contracts 71 8 -- -- 79
Fund shares sold 404 9 -- -- 413
Expense reimbursement
from Distributor -- -- 1 (1)(a) --
-------- ------- ------- ------- --------
Total Assets 581,715 53,314 64,578 -- 699,607
-------- ------- ------- ------- --------
LIABILITIES:
Payables:
Investment securities
purchased 634 -- -- -- 634
Fund shares redeemed 306 5 -- -- 311
Dividends 3,065 98 338 -- 3,501
Accrued liabilities:
Investment advisory
fees 144 -- 16 -- 160
Administration fees 72 2 8 -- 82
Shareholder servicing
fees 120 5 -- -- 125
Distribution fees -- 6 -- -- 6
Custodian fees 39 18 12 -- 69
Other 139 87 47 -- 273
-------- ------- ------- ------- --------
Total Liabilities 4,519 221 421 -- 5,161
-------- ------- ------- ------- --------
NET ASSETS:
Paid in capital 618,984 57,504 68,297 -- 744,785
Accumulated
undistributed
(distributions in
excess of) net
investment income (175) 13 24 -- (138)
Accumulated net
realized loss on
investments and
futures transactions (25,835) (2,923) (3,151) -- (31,909)
Net unrealized
depreciation of
investments and
futures contracts (15,778) (1,501) (1,013) -- (18,292)
-------- ------- ------- ------- --------
Net Assets $577,196 $53,093 $64,157 $ -- $694,446
======== ======= ======= ======= ========
Shares of beneficial
interest outstanding
($.001 par value;
unlimited number of
shares authorized):
Class A Shares -- 3,023 -- (2,221)(b)
21(c) 823
Class B Shares -- 365 -- (268)(b) 97
Class I Shares 15,437 1,964 -- (1,444)(b)
1,694(c) 17,651
Premier Class Shares -- -- 3,415 (3,415)(c) --
Investor Class Shares -- -- 43 (43)(c) --
Net Asset Value:
Class A Shares (and
redemption price) -- $ 9.92 -- -- $ 37.39
Class B Shares* -- $ 9.96 -- -- $ 37.39
Class I Shares (and
redemption price) $ 37.39 $ 9.91 -- -- $ 37.39
Premier Class Shares
(and redemption
price) -- -- $ 18.55 -- --
Investor Class Shares
(and redemption
price) -- -- $ 18.57 -- --
Class A Maximum Public
Offering Price Per
Share (net asset value
per share/95.50%) -- $ 10.39 -- -- $ 39.15
======== ======= ======= ======= ========
Cost of investments $590,079 $54,185 $64,880 $ -- $709,144
======== ======= ======= ======= ========
</TABLE>
* Redemption price may be reduced by contingent deferred sales charge.
(a) Reflects payment of amounts owed by the Distibutor prior to the
Reorganization.
(b) Reflects the difference between total additional shares to be issued (see
Note 2) and current Chase Vista Bond Fund shares outstanding.
(c) Represents the difference between total additional shares to be issued (see
Note 2) and current Chase Income Fund shares outstanding.
See notes to pro forma financial statements.
11
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITH VISTA REORGANIZATION
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
CHASE VISTA CHASE VISTA CHASE
SELECT BOND BOND INCOME PRO FORMA* PRO FORMA
FUND FUND FUND ADJUSTMENTS COMBINED
----------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME: $ 39,870 $ 4,008 $ 4,215 $ -- $ 48,093
-------- ------- ------- ------- --------
EXPENSES:
Investment advisory
fees 1,829 182 330 (132)(a) 2,209
Administration fees 916 90 98 -- 1,104
Shareholder servicing
fees 495 151 -- 1,195(a)(d) 1,841
Distribution fees -- 120 1 -- 121
Custodian fees 108 95 64 (96)(b) 171
Printing and postage 30 27 31 (20)(b) 68
Professional fees 49 31 32 (60)(b) 52
Registration expenses 12 29 18 (20)(b) 39
Transfer agent fees 14 84 50 (39)(b) 109
Trustees' fees 30 2 2 -- 34
Other 51 10 14 -- 75
-------- ------- ------- ------- --------
Total expenses 3,534 821 640 828 5,823
-------- ------- ------- ------- --------
Less amounts waived 1,490 370 127 (746)(a)(e)
(36)(c) 1,205
Less earnings credits 17 17 -- -- 34
Less expense
reimbursements -- -- 18 -- 18
-------- ------- ------- ------- --------
Net expenses 2,027 434 495 1,610 4,566
-------- ------- ------- ------- --------
Net investment
income 37,843 3,574 3,720 (1,610) 43,527
-------- ------- ------- ------- --------
REALIZED AND UNREALIZED
GAIN (LOSS) ON
INVESTMENTS:
Net realized loss on:
Investments (24,365) (2,595) (3,136) -- (30,096)
Futures transactions (1,715) (212) -- -- (1,927)
Change in net
unrealized
appreciation/
depreciation of:
Investments (12,499) (1,026) (815) -- (14,340)
Futures transactions 957 107 -- -- 1,064
-------- ------- ------- ------- --------
Net realized and
unrealized loss on
investments (37,622) (3,726) (3,951) -- (45,299)
-------- ------- ------- ------- --------
Net increase (decrease)
in net assets from
operations $ 221 $ (152) $ (231) $(1,610) $ (1,772)
======== ======= ======= ======= ========
</TABLE>
(a) Reflects adjustment to investment advisory fees, administration fees,
shareholder servicing fees, distribution fees and/or related waivers based
on the surviving Fund's revised fee schedule.
(b) Reduction reflects the estimated benefit of combining operations.
(c) Reflects reduction of custody waivers consistent with estimated reduction
of custody expenses.
(d) Chase Income Fund did not charge shareholder servicing fees during the
twelve months ended April 30, 2000. Chase Vista Select Bond Fund did not
charge shareholder servicing fees from the period May 1, 1999 to
January 2, 2000.
(e) Waivers reflected in the historical statement amounts do not reflect
current expense arrangements or waivers. During the twelve months ended
April 30, 2000, Chase Vista Select Bond Fund waived substantial investment
advisory fees and administration fees. Chase Vista Bond Fund waived
substantial investment advisory fees, administration fees, shareholder
servicing fees and distribution fees, and Chase Income Fund waived
substantial advisory fees. Those waivers have since been discontinued or
significantly reduced.
* Reflects the annualization of increased fee levels introduced during the
financial period shown.
See notes to pro forma financial statements.
12
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------ ------------------------------------
CHASE VISTA CHASE VISTA
SELECT BOND CHASE INCOME PRO FORMA SELECT BOND CHASE INCOME PRO FORMA
FUND FUND COMBINED FUND FUND COMBINED
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
LONG-TERM INVESTMENTS--97.2%
U.S. TREASURY SECURITIES--16.8%
U.S. Treasury Notes &
Bonds,
6.25%, 08/15/23 $ 100 $ 100 $ 100 $ 100
7.13%, 02/15/23 7,500 $1,000 8,500 8,278 $ 1,104 9,382
7.63%, 02/15/25 13,000 1,500 14,500 15,273 1,762 17,035
8.13%, 08/15/19 49,000 5,300 54,300 58,877 6,368 65,245
11.25%, 02/15/15 10,000 1,000 11,000 14,631 1,463 16,094
-------- ------- --------
TOTAL U.S. TREASURY
SECURITIES
(COST $97,061, $10,556
AND $107,617,
RESPECTIVELY) 97,159 10,697 107,856
-------- ------- --------
U.S. GOVERNMENT AGENCY SECURITIES--6.2%
Federal Home Loan Bank,
6.38%, 08/15/06 15,000 1,750 16,750 14,246 1,662 15,908
Federal National Mortgage
Association,
6.00%, 05/15/08 15,000 15,000 13,814 13,814
7.25%, 01/15/10 10,000 10,000 9,970 9,970
-------- ------- --------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES
(COST $39,188, $1,730 AND
$40,918, RESPECTIVELY) 38,030 1,662 39,692
-------- ------- --------
FOREIGN GOVERNMENT SECURITIES--1.3%
Quebec Province (Canada),
6.50%, 01/17/06 7,750 750 8,500 7,364 712 8,076
(COST $7,604, $736 AND
$8,340, RESPECTIVELY)
CORPORATE NOTES & BONDS--33.1%
AEROSPACE--1.1%
Raytheon Co., #, 7.90%,
03/01/03 6,700 700 7,400 6,584 688 7,272
AUTOMOTIVE--2.8%
Ford Motor Credit Co.,
6.25%, 12/08/05 1,000 1,000 928 928
6.70%, 07/16/04 7,400 7,400 7,117 7,117
7.38%, 10/28/09 9,435 900 10,335 9,120 870 9,990
-------- ------- --------
16,237 1,798 18,035
-------- ------- --------
</TABLE>
See notes to pro forma financial statements.
13
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------ ------------------------------------
CHASE VISTA CHASE VISTA
SELECT BOND CHASE INCOME PRO FORMA SELECT BOND CHASE INCOME PRO FORMA
FUND FUND COMBINED FUND FUND COMBINED
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
CORPORATE NOTES--CONTINUED
BANKING--2.4%
Bank of America Corp.,
7.80%, 02/15/10 $ 7,700 $ 800 $ 8,500 $ 7,646 $ 795 $ 8,441
Korea Development Bank
(South Korea), 6.50%,
11/15/02 6,722 700 7,422 6,444 671 7,115
-------- ------- --------
14,090 1,466 15,556
-------- ------- --------
BROADCASTING/CABLE--0.9%
Comcast Corp.,10.25%,
10/15/01 5,500 500 6,000 5,689 517 6,206
DIVERSIFIED--0.7%
Textron, Inc., 6.38%,
07/15/04 4,265 500 4,765 4,061 477 4,538
FINANCIAL SERVICES--3.4%
Associates Corp. of North
America, FRN, 6.24%,
06/14/01 2,050 2,000 4,050 2,051 2,000 4,051
Lehman Brothers Holdings
Inc.,
6.63%, 02/05/06 7,750 750 8,500 7,300 706 8,006
MTN, FRN,6.38%,
09/04/01 9,885 1,000 10,885 9,884 1,000 10,884
-------- ------- --------
19,235 3,706 22,941
-------- ------- --------
INSURANCE--1.0%
Conseco, Inc., 8.50%,
10/15/02 9,270 1,000 10,270 5,840 630 6,470
MULTI-MEDIA--1.6%
Time Warner Inc., 6.63%,
05/15/29 10,770 1,100 11,870 8,945 914 9,859
OIL & GAS--6.0%
Amerada Hess Corp.,
7.88%, 10/01/29 13,850 1,500 15,350 12,935 1,401 14,336
PEMEX Finance LTD (Cayman
Islands), #, 9.03%,
02/15/11 5,620 540 6,160 5,680 546 6,226
Valero Energy Corp., #,
6.75%, 12/15/02 10,200 1,000 11,200 9,878 968 10,846
YPF Sociedad Anonima
(Argentina), 7.25%,
03/15/03 6,500 800 7,300 6,191 762 6,953
-------- ------- --------
34,684 3,677 38,361
-------- ------- --------
PACKAGING--0.9%
Tenneco Packaging, Inc.,
8.00%, 04/15/07 5,175 500 5,675 5,141 497 5,638
PIPELINES--1.7%
EL Paso Energy Corp.,
6.75%, 05/15/09 10,475 1,200 11,675 9,438 1,081 10,519
</TABLE>
See notes to pro forma financial statements.
14
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------ ------------------------------------
CHASE VISTA CHASE VISTA
SELECT BOND CHASE INCOME PRO FORMA SELECT BOND CHASE INCOME PRO FORMA
FUND FUND COMBINED FUND FUND COMBINED
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
CORPORATE NOTES--CONTINUED
RETAILING--2.4%
SAKS Inc., 7.25%,
12/01/04 $ 7,500 $ 800 $ 8,300 $ 6,741 $ 719 $ 7,460
Wal-Mart Stores, Inc.,
6.88%, 08/10/09 7,540 850 8,390 7,237 816 8,053
-------- ------- --------
13,978 1,535 15,513
-------- ------- --------
TELECOMMUNICATIONS--4.3%
Metronet Communications
Corp. (Canada), SUB,
0.00%, 06/15/08 5,550 550 6,100 4,429 439 4,868
Sprint Capital Corp.,
6.88%, 11/15/28 8,450 900 9,350 7,380 785 8,165
U.S. West Capital
Funding, Inc., 6.25%,
07/15/05 5,575 600 6,175 5,218 562 5,780
Vodafone AirTouch PLC
(United Kingdom), #,
7.63%, 02/15/05 8,000 800 8,800 7,963 796 8,759
-------- ------- --------
24,990 2,582 27,572
-------- ------- --------
UTILITIES--3.9%
Cilcorp Inc., 8.70%,
10/15/09 6,000 650 6,650 5,999 650 6,649
Empresa Nacional de
Electricidad SA
(Chile), Ser. B, 8.50%,
04/01/09 6,000 600 6,600 5,858 586 6,444
Israel Electric Corp.
(Israel), MTN, #,7.75%,
12/15/27 4,650 500 5,150 4,016 431 4,447
TXU Eastern Funding
(United Kingdom),
6.15%, 05/15/02 6,815 750 7,565 6,582 724 7,306
-------- ------- --------
22,455 2,391 24,846
-------- ------- --------
TOTAL CORPORATE NOTES &
BONDS
(COST $198,013, $22,601
AND $220,614,
RESPECTIVELY) 191,367 21,959 213,326
-------- ------- --------
RESIDENTIAL MORTGAGE BACKED SECURITIES--34.3%
COLLATERALIZED MORTGAGE OBLIGATIONS--1.8%
Federal National Mortgage
Association,
Ser. 1993-250,
Class A, 6.15%,
09/25/16 2,036 2,036 2,011 2,011
Ser. 1999-17,
Class PC, 6.00%,
12/25/22 10,000 10,000 9,381 9,381
-------- --------
11,392 11,392
-------- --------
MORTGAGE BACKED PASS-THROUGH SECURITIES--32.5%
Federal National Mortgage
Association,
Pool 252093, 6.50%,
11/01/28 12,699 12,699 11,862 11,862
Pool 252339, 6.00%,
02/01/29 11,444 11,444 10,360 10,360
</TABLE>
See notes to pro forma financial statements.
15
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------ ------------------------------------
CHASE VISTA CHASE VISTA
SELECT BOND CHASE INCOME PRO FORMA SELECT BOND CHASE INCOME PRO FORMA
FUND FUND COMBINED FUND FUND COMBINED
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
RESIDENTIAL MORTGAGE BACKED SECURITIES--CONTINUED
Pool 252435, 6.00%,
05/01/14 $ 2,310 $ 2,310 $ 2,164 $ 2,164
Pool 253033, 7.00%,
02/01/15 $1,377 1,377 $ 1,344 1,344
Pool 253036, 7.00%,
02/01/30 2,925 2,925 2,798 2,798
Pool 303784, 7.00%,
03/01/11 3,856 3,856 3,767 3,767
Pool 323633, 7.00%,
03/01/29 25,317 25,317 24,224 24,224
Pool 323645, 7.50%,
03/01/29 22,867 22,867 22,417 22,417
Pool 323688, 7.50%,
03/01/29 4,642 4,642 4,551 4,551
Pool 323714, 7.00%,
04/01/14 6,575 6,575 6,421 6,421
Pool 484753, 6.50%,
03/01/29 9,232 9,232 8,624 8,624
Pool 490445, 6.00%,
03/01/29 10,847 2,465 13,312 9,820 2,232 12,052
Pool 494272, 6.50%,
04/01/29 11,828 1,252 13,080 11,048 1,170 12,218
Pool 503599, 6.50%,
06/01/29 4,870 2,980 7,850 4,544 2,781 7,325
Pool 523193, 7.50%,
11/01/29 3,392 3,392 3,320 3,320
Pool 534064, 8.00%,
03/01/30 9,197 1,000 10,197 9,183 998 10,181
Pool 535052, 6.00%,
11/01/19 22,778 22,778 21,326 21,326
Pool 535054, 6.50%,
11/01/14 2,641 2,641 2,527 2,527
Government National
Mortgage Association,
Pool 487224, 6.50%,
05/15/29 14,825 1,640 16,465 13,885 1,536 15,421
Pool 510285, 7.00%,
08/15/29 12,394 1,550 13,944 11,917 1,490 13,407
Pool 527141, 8.00%,
03/15/30 10,060 1,150 11,210 10,079 1,154 11,233
-------- ------- --------
186,192 21,350 207,542
-------- ------- --------
TOTAL RESIDENTIAL
MORTGAGE BACKED
SECURITIES
(COST $204,866, $21,717
AND $226,583,
RESPECTIVELY) 197,584 21,350 218,934
-------- ------- --------
COMMERCIAL MORTGAGE BACKED SECURITIES--0.5%
Nationslink Funding
Corp., Ser. 1999-SL,
Class A2, 6.10%,
12/10/01 3,225 3,225 3,163 3,163
(COST $3,225, $0 AND
$3,225, RESPECTIVELY)
ASSET BACKED SECURITIES--5.0%
MBNA Master Credit Card
Trust,
Ser. 1999-J, Class A,
7.00%, 02/15/12 7,500 900 8,400 7,277 873 8,150
</TABLE>
See notes to pro forma financial statements.
16
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT MARKET VALUE
------------------------------------ ------------------------------------
CHASE VISTA CHASE VISTA
SELECT BOND CHASE INCOME PRO FORMA SELECT BOND CHASE INCOME PRO FORMA
FUND FUND COMBINED FUND FUND COMBINED
---- ---- -------- ---- ---- --------
<S> <C> <C> <C> <C> <C> <C>
ASSET BACKED SECURITIES--CONTINUED
Ser. 1999-M, Class B,
6.80%, 04/16/07 $ 8,300 $ 800 $ 9,100 $ 8,039 $ 775 $ 8,814
Nomura CBO LTD, Ser.
1997-1, Class A2, FRN,
#, 6.67%, 05/15/09 6,500 6,500 5,987 5,987
Residential Asset
Securities Corp., Ser.
1999-KS4, Class AI3,
6.94%, 04/25/25 750 750 734 734
Residential Funding
Mortgage Securities II,
Ser. 2000-HI1,
Class AI4, 7.79%,
01/25/14 7,500 850 8,350 7,434 843 8,277
-------- ------- --------
TOTAL ASSET BACKED
SECURITIES
(COST $29,828, $3,278 AND
$33,106, RESPECTIVELY) 28,737 3,225 31,962
-------- ------- --------
TOTAL LONG-TERM
INVESTMENTS
(COST $579,785, $60,618
AND $640,403,
RESPECTIVELY) 563,404 59,605 623,009
-------- ------- --------
SHORT-TERM INVESTMENTS--2.2%
U.S. TREASURY SECURITY--0.3%
U.S. Treasury Bill,
5.46%, 06/08/00 @
(COST $1,989, $0 AND
$1,989, RESPECTIVELY) 2,000 2,000 1,989 1,989
REPURCHASE AGREEMENT--1.3%
Greenwich Capital Markets
Inc., 5.80%, due 05/01/00
(Dated 04/28/00, Proceeds
$8,309, $0 and $8,309,
respectively, Fully
collateralized by U.S.
Treasury or Government
Agency securities)
(COST $8,305, $0 AND
$8,305, RESPECTIVELY) 8,305 8,305 8,305 8,305
U.S. GOVERNMENT AGENCY SECURITY--0.6%
Federal Home Loan Bank,
DN, 5.87%, 05/01/00
(COST $0, $4,262 AND
$4,262, RESPECTIVELY) 4,263 4,263 4,262 4,262
-------- ------- --------
TOTAL SHORT-TERM
INVESTMENTS
(COST $10,294, $4,262 AND
$14,556, RESPECTIVELY) 10,294 4,262 14,556
-------- ------- --------
TOTAL INVESTMENTS--99.4%
(COST $590,079, $64,880
AND $654,959,
RESPECTIVELY) $573,698 $63,867 $637,565
======== ======= ========
</TABLE>
See notes to pro forma financial statements.
17
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PROFORMA COMBINING SCHEDULE OF PORTFOLIO INVESTMENTS
APRIL 30, 2000 (UNAUDITED) (CONTINUED)
(AMOUNTS IN THOUSANDS)
CHASE VISTA SELECT BOND FUND FUTURES OUTSTANDING
<TABLE>
<CAPTION>
UNREALIZED
NUMBER ORIGINAL NOTIONAL NOTIONAL APPRECIATION/
OF VALUE VALUE AT (DEPRECIATION)
CONTRACTS DESCRIPTION EXPIRATION DATE (USD) 04/30/00 (USD) (USD)
--------- ----------- --------------- ----- -------------- -----
<C> <S> <C> <C> <C> <C>
SHORT FUTURES OUTSTANDING
10 Year U.S. Treasury
200 Notes June, 2000 $19,381 $19,391 $(10)
5 Year U.S. Treasury
400 Notes June, 2000 39,315 39,031 284
2 Year U.S. Treasury
300 Notes June, 2000 59,499 59,170 329
</TABLE>
PRO FORMA COMBINED FUTURES OUTSTANDING
<TABLE>
<CAPTION>
UNREALIZED
NUMBER ORIGINAL NOTIONAL NOTIONAL APPRECIATION/
OF VALUE VALUE AT (DEPRECIATION)
CONTRACTS DESCRIPTION EXPIRATION DATE (USD) 04/30/00 (USD) (USD)
--------- ----------- --------------- ----- -------------- -----
<C> <S> <C> <C> <C> <C>
SHORT FUTURES OUTSTANDING
10 Year U.S. Treasury
200 Notes June, 2000 $19,381 $19,391 $(10)
5 Year U.S. Treasury
400 Notes June, 2000 39,315 39,031 284
2 Year U.S. Treasury
300 Notes June, 2000 59,499 59,170 329
</TABLE>
INDEX:
# -- Security may only be sold to qualified institutional buyers.
@ -- All or a portion of this security is segregated for futures.
DN -- Discount Note. The rate shown is the effective yield at the time of
purchase.
FRN -- Floating Rate Note. The maturity date is the actual maturity date; the
rate shown is the rate in effect at April 30, 2000.
MTN -- Medium Term Note.
SUB -- Step-up Bond. The maturity date shown is the earlier of the call date or
the maturity date; the rate shown is the rate in effect at April 30,
2000.
See notes to pro forma financial statements.
18
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PRO FORMA COMBINING STATEMENT OF ASSETS AND LIABILITIES
APRIL 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
CHASE VISTA CHASE
SELECT BOND INCOME PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS COMBINED
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at
value $573,698 $63,867 $ -- $637,565
Cash 348 4 1(a) 353
Other assets 23 -- -- 23
Receivables:
Interest and dividends 7,171 706 -- 7,877
Variation margin on
futures contracts 71 -- -- 71
Fund shares sold 404 -- -- 404
Expense reimbursement from
Distributor -- 1 (1)(a) --
-------- ------- ------ --------
Total Assets 581,715 64,578 -- 646,293
-------- ------- ------ --------
LIABILITIES:
Payables:
Investment securities
purchased 634 -- -- 634
Fund shares redeemed 306 -- -- 306
Dividends 3,065 338 -- 3,403
Accrued liabilities:
Investment advisory fees 144 16 -- 160
Administration fees 72 8 -- 80
Shareholder servicing fees 120 -- -- 120
Custodian fees 39 12 -- 51
Other 139 47 -- 186
-------- ------- ------ --------
Total Liabilities 4,519 421 -- 4,940
-------- ------- ------ --------
NET ASSETS:
Paid in capital 618,984 68,297 -- 687,281
Accumulated undistributed
(distributions in excess
of) net investment income (175) 24 -- (151)
Accumulated net realized
loss on investments and
futures transactions (25,835) (3,151) -- (28,986)
Net unrealized depreciation
of investments and futures
contracts (15,778) (1,013) -- (16,791)
-------- ------- ------ --------
Net Assets $577,196 $64,157 $ -- $641,353
======== ======= ====== ========
Shares of beneficial interest
outstanding ($.001 par value;
unlimited number of shares
authorized):
Class A Shares -- -- 21(b) 21
Class I Shares 15,437 -- 1,694(b) 17,131
Premier Class Shares -- 3,415 (3,415)(b) --
Investor Class Shares -- 43 (43)(b) --
Net Asset Value:
Class A Shares (and
redemption price) -- -- -- $ 37.39
Class I Shares (and
redemption price) $ 37.39 -- -- $ 37.39
Premier Class Shares (and
redemption price) -- $ 18.55 -- --
Investor Class Shares (and
redemption price) -- $ 18.57 -- --
Class A Maximum Public
Offering Price Per Share
(net asset value per
share/95.50%) -- -- -- $ 39.15
======== ======= ====== ========
Cost of investments $590,079 $64,880 $ -- $654,959
======== ======= ====== ========
</TABLE>
(a) Reflects payment of amounts owed by the Distibutor prior to the
Reorganization.
(b) Represents the difference between total additional shares to be issued (see
Note 2) and current Chase Income Fund shares outstanding.
See notes to pro forma financial statements.
19
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
WITHOUT VISTA REORGANIZATION
PRO FORMA COMBINING STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDED APRIL 30, 2000 (UNAUDITED)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
CHASE VISTA CHASE
SELECT BOND INCOME PRO FORMA* PRO FORMA
FUND FUND ADJUSTMENTS COMBINED
----------- -------- ----------- ---------
<S> <C> <C> <C> <C>
INTEREST INCOME: $ 39,870 $ 4,215 $ -- $ 44,085
-------- ------- ------- --------
EXPENSES:
Investment advisory fees 1,829 330 (132)(a) 2,027
Administration fees 916 98 -- 1,014
Shareholder servicing fees 495 -- 1,194(a)(d) 1,689
Distribution fees -- 1 -- 1
Custodian fees 108 64 (51)(b) 121
Printing and postage 30 31 (10)(b) 51
Professional fees 49 32 (30)(b) 51
Registration expenses 12 18 (10)(b) 20
Transfer agent fees 14 50 (26)(b) 38
Trustees' fees 30 2 -- 32
Other 51 14 -- 65
-------- ------- ------- --------
Total expenses 3,534 640 935 5,109
-------- ------- ------- --------
Less amounts waived 1,490 127 (566)(a)(e)
(36)(c) 1,015
Less earnings credits 17 -- -- 17
Less expense reimbursements -- 18 -- 18
-------- ------- ------- --------
Net expenses 2,027 495 1,537 4,059
-------- ------- ------- --------
Net investment income 37,843 3,720 (1,537) 40,026
-------- ------- ------- --------
REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on:
Investments (24,365) (3,136) -- (27,501)
Futures transactions (1,715) -- -- (1,715)
Change in net unrealized
appreciation/depreciation
of:
Investments (12,499) (815) -- (13,314)
Futures transactions 957 -- -- 957
-------- ------- ------- --------
Net realized and unrealized
loss on investments (37,622) (3,951) -- (41,573)
-------- ------- ------- --------
Net decrease in net assets
from operations $ 221 $ (231) $(1,537) $ (1,547)
======== ======= ======= ========
</TABLE>
(a) Reflects adjustment to investment advisory fees, administration fees,
shareholder servicing fees, distribution fees and/or related waivers based
on the surviving Fund's revised fee schedule.
(b) Reduction reflects the estimated benefit of combining operations.
(c) Reflects reduction of custody waivers consistent with estimated reduction
of custody expenses.
(d) Chase Income Fund did not charge shareholder servicing fees during the
twelve months ended April 30, 2000. Chase Vista Select Bond Fund did not
charge shareholder servicing fees from the period May 1, 1999 to
January 2, 2000.
(e) Waivers reflected in the historical statement amounts do not reflect
current expense arrangements or waivers. During the twelve months ended
April 30, 2000, Chase Vista Select Bond Fund waived substantial investment
advisory fees and administration fees. Chase Income Fund waived substantial
investment advisory fees. Those waivers have since been discontinued or
significantly reduced.
* Reflects the annualization of increased fee levels introduced during the
financial period shown.
See notes to pro forma financial statements.
20
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF COMBINATION:
The Pro Forma Combining Statement of Assets and Liabilities, Statement of
Operations and Schedule of Portfolio Investments ("Pro Forma Statements")
reflect the accounts of Chase Vista Select Bond Fund ("CVSBF"), Chase Vista Bond
Fund ("CVBF") and Chase Income Fund ("CIF") as if the proposed reorganization
occurred as of and for the twelve months ended April 30, 2000.
The Pro Forma Statements give effect to the proposed transfer of all assets and
liabilities of CVBF ("Vista Reorganization") and CIF ("Chase Income
Reorganization") in exchange for shares in CVSBF. The Pro Forma Statements
reflect that shareholders of CVBF may approve the Reorganization while
shareholders of CIF do not, and vice versa. The Pro Forma Statements should be
read in conjunction with the historical financial statements of each Fund which
have been incorporated by reference in their respective Statement of Additional
Information.
2. SHARES OF BENEFICIAL INTEREST:
Immediately prior to the reorganization, existing shares of CVSBF would be
renamed Institutional Class Shares and CVSBF would commence offering Class A
Shares and Class B Shares. The net asset values per share for Class A and B
Shares at the commencement of offering would be identical to the closing net
asset value per share for the Institutional Class Shares immediately prior to
the reorganization.
Under the proposed reorganization, each shareholder of CVBF and CIF would
receive shares of CVSBF with a value equal to their holding in CVBF and CIF,
respectively. Holders of Class A Shares in CVBF would receive Class A Shares in
CVSBF, holders of Class B Shares in CVBF would receive Class B Shares in CVSBF
and holders of Institutional Class Shares in CVBF would receive Institutional
Class Shares in CVSBF. Holders of Investor Class Shares in CIF would receive
Class A Shares in CVSBF and holders of Premier Class Shares in CIF would receive
Institutional Class Shares in CVSBF. Therefore, as a result of the proposed
reorganization, current shareholders of CVBF and CIF will become shareholders of
CVSBF.
The pro forma net asset value per share assumes the issuance of additional
shares of CVSBF which would have been issued on April 30, 2000 in connection
with the proposed reorganization. The amount of additional shares assumed to be
issued was calculated based on the April 30, 2000 net assets of CVBF and CIF and
the net asset values per share of CVSBF.
<TABLE>
A CLASS B CLASS INSTITUTIONAL
SHARES SHARES CLASS SHARES
<S> <C> <C> <C>
Additional Shares Issued 823,633 97,245 2,214,841
Net Assets April 30, 2000 CVBF $29,998,611 $3,636,953 $19,456,860
Net Assets April 30, 2000 CIF $802,833 -- $63,354,705
Net Asset Value Per Share CVSBF $37.39 $37.39 $37.39
</TABLE>
21
<PAGE>
CHASE VISTA SELECT BOND FUND/CHASE INCOME FUND
NOTES TO PRO FORMA FINANCIAL STATEMENTS--CONTINUED
(UNAUDITED)
<TABLE>
A CLASS INSTITUTIONAL
WITHOUT VISTA REORGANIZATION SHARES CLASS SHARES
<S> <C> <C>
Additional Shares Issued 21,471 1,694,401
Net Assets April 30, 2000 CIF $802,833 $63,354,705
Net Asset Value Per Share CVSBF $37.39 $37.39
</TABLE>
<TABLE>
A CLASS B CLASS INSTITUTIONAL
WITHOUT CHASE INCOME REORGANIZATION SHARES SHARES CLASS SHARES
<S> <C> <C> <C>
Additional Shares Issued 802,162 97,245 520,440
Net Assets April 30, 2000 CVBF $29,998,611 $3,636,953 $19,456,860
Net Asset Value Per Share CVSBF $37.39 $37.39 $37.39
</TABLE>
3. PRO FORMA OPERATIONS:
The Pro Forma Statement of Operations assumes similar rates of gross investment
income for the investments of each Fund. Accordingly, the combined gross
investment income is equal to the sum of each Fund's gross investment income.
Certain expenses have been adjusted to reflect the expected expenses of the
combined entity. The pro forma investment advisory, administration, shareholder
servicing and distribution fees of the combined Fund and/or the related waivers
are based on the fee schedule in effect for CVSBF at the combined level of
average net assets for the twelve months ended April 30, 2000. The Pro Forma
Statement of Operations does not include the effect of any realized gains or
losses, or transaction fees incurred in connection with the realignment of the
portfolio.
22
<PAGE>
FORM N-14
PART C - OTHER INFORMATION
Item 15. Indemnification.
---------------
Reference is hereby made to Article V of the Registrant's Declaration of
Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the Registrant
may indemnify any person who was or is a Trustee, officer or employee of the
Registrant to the maximum extent permitted by law; provided, however, that any
such indemnification (unless ordered by a court) shall be made by the Registrant
only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the proceeding, or (ii) if the required
quorum is not obtainable or, if a quorum of such Trustees so directs, by
independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies for actions
based upon the Investment Company Act of 1940 may be concerned, such payments
will be made only on the following conditions: (i) the advances must be limited
to amounts used, or to be used, for the preparation or presentation of a defense
to the action, including costs connected with the preparation of a settlement;
(ii) advances may be made only upon receipt of a written promise by, or on
behalf of, the recipient to repay that amount of the advance which exceeds that
amount to which it is ultimately determined that he is entitled to receive from
the Registrant by reason of indemnification; and (iii) (a) such promise must be
secured by a surety bond, other suitable insurance or an equivalent form of
security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to Trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and
Part C-1
<PAGE>
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a Trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such Trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. Exhibits.
---------------
1 Declaration of Trust. (1)
2 By-laws. (1)
3 None
4 Plan of Reorganization filed herewith as Appendix A to the Combined
Prospectus/Proxy Statement.
5 Declaration of Trust and By-laws. (1)
6(a) Form of Investment Advisory Agreement. (1)
6(b) Form of Investment Sub-Advisory Agreement between The Chase
Manhattan Bank and Chase Asset Management, Inc. (1)
7 Distribution and Sub-Administration Agreement. (1)
8(a) Retirement Plan for Eligible Trustees. (2)
8(b) Deferred Compensation Plan for Eligible Trustees. (2)
9 Form of Custodian Agreement. (1)
10 None
Part C-2
<PAGE>
11 None
12 Opinion and Consent of Simpson Thacher & Bartlett as to Tax
Consequences. (4)
13(a) Form of Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (1)
13(c) Form of Administration Agreement. (1)
14 Consent of PricewaterhouseCoopers LLP. (3)
15 None
16 None
17(a) Form of Proxy Card. (3)
17(b) Prospectus for Chase Vista Select Bond Fund. (3)
17(c) Prospectus for Chase Income Fund. (3)
17(d) Statement of Additional Information of MFSG. (3)
17(e) Statement of Additional Information of MFIT. (3)
17(f) Annual Report to Shareholders of Chase Vista Select Bond Fund
dated October 31, 1999. (3)
17(g) Annual Report to Shareholders of Chase Income Fund dated December 31,
1999. (3)
17(h) Semi-Annual Report to Shareholders of Chase Vista Select Bond Fund
dated April 30, 2000. (3)
17(i) Semi-Annual Report to Shareholders of Chase Income Fund dated June
30, 2000. (3)
(1) Filed as an Exhibit to the Registration Statement on Form N-1A on
October 2, 1996.
(2) Filed as an Exhibit to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A on November 15, 1996.
Part C-3
<PAGE>
(3) Filed herewith.
(4) To be filed by amendment.
Item 17. Undertakings.
---------------
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, as
amended (the "1933 Act"), the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by persons who
may be deemed underwriters, in addition to the information called for by the
other items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1), above, will be filed as part of an amendment to the
registration statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
Part C-4
<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement has
been signed on behalf of the registrant, in the City of New York and the State
of New York, on the 25th day of October, 2000.
MUTUAL FUND SELECT GROUP
Registrant
By: /s/ H. Richard Vartabedian
---------------------------------
H. Richard Vartabedian
President
As required by the Securities Act of 1933, as amended, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
<TABLE>
<S> <C> <C>
* Chairman and Trustee October 25, 2000
--------------------------------------------
Fergus Reid, III
/s/ H. Richard Vartabedian President and Trustee October 25, 2000
--------------------------------------------
H. Richard Vartabedian
* Trustee October 25, 2000
--------------------------------------------
William J. Armstrong
* Trustee October 25, 2000
--------------------------------------------
John R. H. Blum
* Trustee October 25, 2000
--------------------------------------------
Stuart W. Cragin, Jr.
* Trustee October 25, 2000
--------------------------------------------
Roland R. Eppley, Jr.
* Trustee October 25, 2000
--------------------------------------------
Joseph J. Harkins
<PAGE>
* Trustee October 25, 2000
--------------------------------------------
Sarah E. Jones
* Trustee October 25, 2000
--------------------------------------------
W.D. MacCallan
* Trustee October 25, 2000
--------------------------------------------
George E. McDavid
* Trustee October 25, 2000
--------------------------------------------
W. Perry Neff
* Trustee October 25, 2000
--------------------------------------------
Leonard M. Spalding, Jr.
* Trustee October 25, 2000
--------------------------------------------
Irv Thode
* Trustee October 25, 2000
--------------------------------------------
Richard E. Ten Haken
-------------------------------------------- Treasurer and October 25, 2000
Martin R. Dean Principal Financial Officer
/s/ H. Richard Vartabedian Attorney in Fact October 25, 2000
--------------------------------------------
H. Richard Vartabedian
</TABLE>
<PAGE>
EXHIBITS
ITEM DESCRIPTION
(14) Consent of PricewaterhouseCoopers LLP.
(17) (a) Form of Proxy Card.
(b) Prospectus for Chase Vista Select Bond Fund.
(c) Prospectus for Chase Income Fund.
(d) Statement of Additional Information of MFSG.
(e) Statement of Additional Information of MFIT.
(f) Annual Report to Shareholders of Chase Vista Select Bond Fund dated
October 31, 1999.
(g) Annual Report to Shareholders of Chase Income Fund dated December 31,
1999.
(h) Semi-Annual Report to Shareholders of Chase Vista Select Bond Fund
dated April 30, 2000.
(i) Semi-Annual Report to Shareholders of Chase Income Fund dated June 30,
2000.
