<PAGE>
CHASE VISTA NEW YORK TAX FREE INCOME FUND
A SERIES OF MUTUAL FUND 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 Vista New York Tax Free
Income Fund, a series of Mutual Fund Trust ("MFT"), 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 Vista New York Tax
Free Income Fund into Chase Vista Select New York Intermediate Tax Free Income
Fund, a series of Mutual Fund Select Trust ("MFST") (the "Reorganization").
After the Reorganization, shareholders will hold an interest in Chase Vista
Select New York Intermediate Tax Free Income Fund, which is also advised by The
Chase Manhattan Bank ("Chase"). The investment objective and policies of each of
Chase Vista New York Tax Free Income Fund and Chase Vista Select New York
Intermediate Tax Free Income Fund are similar. MFST is comprised of 4
portfolios, each managed by Chase, consisting of income funds. In connection
with the Reorganization, Chase Vista Select New York Intermediate Tax Free
Income Fund will be renamed "Chase Vista New York Intermediate Tax Free Income
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.
The current investment adviser for both Chase Vista New York Tax Free Income
Fund and Chase Vista Select New York Intermediate Tax Free Income Fund is Chase.
The sub-adviser for each of Chase Vista New York Tax Free Income Fund and Chase
Vista Select New York Intermediate Tax Free Income Fund is Chase Fleming Asset
Management (USA) Inc. ("CFAM"). The two Funds are managed by overlapping
portfolio management teams. After the Reorganization, the portfolio manager for
Chase Vista New York Tax Free Income Fund will continue to actively participate
in the day-to-day investment decisions for your portfolio as co-portfolio
manager of Chase Vista Select New York Intermediate Tax Free Income Fund.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization and a comparison of Chase
Vista New York Tax Free Income Fund and MFT to Chase Vista Select New York
Intermediate Tax Free Income Fund and MFST. The cost and expenses associated
with the Reorganization, including costs of soliciting proxies, will be borne by
Chase and not by Chase Vista New York Tax Free Income Fund, MFT, Chase Vista
Select New York Intermediate Tax Free Income Fund, MFST or their shareholders.
If approval of the Reorganization is obtained, you will automatically
receive shares of Chase Vista Select New York Intermediate Tax Free Income Fund.
The Proposal has been carefully reviewed by the Board of Trustees of MFT,
which has approved the Proposal.
THE BOARD OF TRUSTEES OF MFT 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 1-800-34-VISTA.
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.
PX11-1100
<PAGE>
WHY IS THE REORGANIZATION BEING PROPOSED?
The Reorganization is being proposed to increase operational and
administrative efficiencies by combining two funds which have similar investment
policies and which are managed by overlapping portfolio management teams.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
Under the Reorganization, Chase Vista New York Tax Free Income Fund would
transfer all of its assets and liabilities to Chase Vista Select New York
Intermediate Tax Free Income Fund and would receive, in exchange, shares of
Chase Vista Select New York Intermediate Tax Free Income Fund. Chase Vista New
York Tax Free Income Fund would then be liquidated and the shares of Chase Vista
Select New York Intermediate Tax Free Income Fund would be distributed to
shareholders such as you. After the Reorganization, you would own shares in
Chase Vista Select New York Intermediate Tax Free Income Fund rather than Chase
Vista New York Tax Free Income Fund. Holders of Class A Shares would receive
Class A Shares in Chase Vista Select New York Intermediate Tax Free Income Fund
(but will not pay a sales load) and holders of Class B Shares would receive
Class B Shares in Chase Vista Select New York Intermediate Tax Free Income Fund.
WHAT WILL BE THE EFFECT ON THE INVESTMENT STRATEGIES ASSOCIATED WITH MY
INVESTMENT IF THE PROPOSED CHANGES ARE APPROVED?
Chase Vista Select New York Intermediate Tax Free Income Fund has similar
investment objective and policies to those of Chase Vista New York Tax Free
Income Fund. Chase Vista Select New York Intermediate Tax Free Income Fund
maintains a dollar-weighted average maturity of between three and ten years,
whereas Chase Vista New York Tax Free Income Fund has no restriction on its
portfolio maturity. In addition, unlike Chase Vista New York Tax Free Income
Fund, Chase Vista Select New York Intermediate Tax Free Income Fund is not
permitted to invest in lower-rated securities. Therefore, the Reorganization may
have an 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 New York
Intermediate Tax Free Income Fund than they are for Chase Vista New York Tax
Free Income Fund. If an increase does arise, Chase has contractually agreed to
waive fees payable to it and reimburse expenses so that the total expense ratio
will remain the same for at least one year after the Reorganization.
WILL THERE BE ANY CHANGE IN WHO MANAGES MY INVESTMENT?
The two Funds are managed by overlapping portfolio management teams. After
the Reorganization, the portfolio manager for Chase Vista New York Tax Free
Income Fund will continue to actively participate in the day-to-day investment
decisions for your portfolio as co-portfolio manager of Chase Vista Select New
York Intermediate Tax Free Income 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 Vista New
York Tax Free Income Fund or Chase Vista Select New York Intermediate Tax Free
Income Fund (or shareholders of either fund).
HOW WILL SHAREHOLDER SERVICES CHANGE?
Substantially similar services are available to shareholders of both Chase
Vista New York Tax Free Income Fund and Chase Vista Select New York Intermediate
Tax Free Income 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 New York
Intermediate Tax Free Income Fund.
AS A HOLDER OF SHARES OF CHASE VISTA NEW YORK TAX FREE 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 VISTA NEW YORK TAX FREE INCOME FUND,
A SERIES OF MUTUAL FUND 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 Vista New York Tax Free Income Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of Chase Vista New York Tax Free Income Fund ("Chase Vista New
York Tax Free Income Fund"), a series of Mutual Fund Trust ("MFT"), 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 MFT, on
behalf of Chase Vista New York Tax Free Income Fund, and Mutual Fund
Select Trust ("MFST"), on behalf of Chase Vista Select New York
Intermediate Tax Free Income Fund, and the transactions contemplated
thereby, including (a) the transfer of all of the assets and
liabilities of Chase Vista New York Tax Free Income Fund to Chase
Vista Select New York Intermediate Tax Free Income Fund, a series of
MFST in exchange for Class A Shares ("Class A Shares") and Class B
Shares ("Class B Shares" and together with the Class A Shares, the
"Chase Vista Select New York Intermediate Tax Free Income Fund
Shares") of Chase Vista Select New York Intermediate Tax Free Income
Fund, as applicable; and (b) the distribution of such Chase Vista
Select New York Intermediate Tax Free Income Fund Shares to the
Shareholders of Chase Vista New York Tax Free 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 MFT. 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 VISTA NEW YORK TAX FREE 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 VISTA NEW YORK TAX FREE INCOME FUND,
A SERIES OF MUTUAL FUND TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
(800) 34-VISTA
BY AND IN EXCHANGE FOR SHARES OF
CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX FREE INCOME FUND,
A SERIES OF MUTUAL FUND SELECT TRUST
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 Vista New York Tax Free Income Fund ("Chase Vista New
York Tax Free Income Fund"), a series of Mutual Fund Trust ("MFT"), into Chase
Vista Select New York Intermediate Tax Free Income Fund ("Chase Vista Select New
York Intermediate Tax Free Income Fund"), a series of Mutual Fund Select Trust
("MFST"). If approved by Shareholders, the proposed reorganization would be
effected by transferring all of the assets and liabilities of Chase Vista New
York Tax Free Income Fund, a series of MFT, to Chase Vista Select New York
Intermediate Tax Free Income Fund, a series of MFST having similar investment
objectives and policies as Chase Vista New York Tax Free Income Fund, in
exchange for shares of Chase Vista Select New York Intermediate Tax Free Income
Fund (the "Reorganization"). MFT and MFST 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, Chase Vista Select New York Intermediate Tax Free Income Fund
will be renamed "Chase Vista New York Intermediate Tax Free Income Fund."
Under the proposed Reorganization, each shareholder of Chase Vista New York
Tax Free Income Fund (the "Chase Vista New York Tax Free Income Fund
Shareholders") would receive shares (the "Chase Vista Select New York
Intermediate Tax Free Income Fund Shares") of Chase Vista Select New York
Intermediate Tax Free Income Fund with a value equal to such Chase Vista New
York Tax Free Income Fund Shareholder's holdings in Chase Vista New York Tax
Free Income Fund. Holders of Class A Shares would receive Class A Shares (the
"Class A Shares") in Chase Vista Select New York Intermediate Tax Free Income
Fund and holders of Class B Shares would receive Class B Shares (the "Class B
Shares") in Chase Vista Select New York Intermediate Tax Free Income Fund.
Therefore, as a result of the proposed Reorganization, current Shareholders of
Chase Vista New York Tax Free Income Fund will become shareholders of Chase
Vista Select New York Intermediate Tax Free Income Fund ("Chase Vista Select New
York Intermediate Tax Free Income Fund Shareholders"). In connection with the
Reorganization, Chase Vista Select New York Intermediate Tax Free Income Fund
will implement a new multi-class structure under which it will offer Class A,
Class B and Institutional Class Shares.
MFT 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. MFST is registered as an open-end management
investment company under the 1940 Act and currently has four series of mutual
fund portfolios. The Chase Manhattan Bank ("Chase") currently serves as
investment adviser for both Chase Vista New York Tax Free Income Fund and Chase
Vista Select New York Intermediate Tax Free Income Fund. Chase Fleming Asset
Management (USA) Inc. ("CFAM") serves as sub-adviser for each of Chase Vista New
York Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income Fund. The two Funds are managed by overlapping portfolio management
teams. After the Reorganization, the portfolio manager for Chase Vista New York
Tax Free Income Fund will continue to actively participate in the day-to-day
investment decisions for your portfolio as co-portfolio manager of Chase Vista
Select New York Intermediate Tax Free Income Fund.
<PAGE>
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 MFT, on behalf of Chase Vista
New York Tax Free Income Fund, and MFST, on behalf of Chase Vista Select New
York Intermediate Tax Free Income Fund, attached to this Combined
Prospectus/Proxy Statement as Appendix A.
The Board of Trustees of MFT 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 Vista New York Tax Free 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 Vista New
York Tax Free Income Fund for the meeting of its Shareholders and also
constitutes MFST's prospectus for Chase Vista Select New York Intermediate Tax
Free Income 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 MFT and MFST that a
prospective investor should know before voting on the Proposal. The current
prospectuses for Chase Vista New York Tax Free Income Fund and Chase Vista
Select New York Intermediate Tax Free Income Fund are incorporated herein by
reference and the prospectus for Chase Vista Select New York Intermediate Tax
Free Income Fund is enclosed with this Combined Prospectus/Proxy Statement. A
statement of additional information relating to this Combined Prospectus/Proxy
Statement dated December 1, 2000 (the "Statement of Additional Information")
containing additional information about MFT and MFST 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 MFT at its address noted above or by calling
1-800-34-VISTA.
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 MFT OR MFST.
INVESTMENTS IN CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX FREE INCOME FUND
ARE SUBJECT TO RISK--INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN
CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX FREE INCOME 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
<TABLE>
<CAPTION>
Page
-----
<S> <C>
INTRODUCTION...................................... 1
SUMMARY........................................... 1
RISK FACTORS...................................... 7
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 8
INVESTMENT POLICIES............................... 11
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 13
DISTRIBUTIONS AND TAXES........................... 17
COMPARISON OF CHASE VISTA NEW YORK TAX FREE INCOME
FUND'S AND CHASE VISTA SELECT NEW YORK
INTERMEDIATE TAX FREE INCOME FUND'S ORGANIZATION
STRUCTURES....................................... 18
INFORMATION RELATING TO THE ADVISORY CONTRACTS.... 19
BOARD OF TRUSTEES................................. 23
INFORMATION RELATING TO VOTING MATTERS............ 24
ADDITIONAL INFORMATION ABOUT MFT.................. 26
ADDITIONAL INFORMATION ABOUT MFST................. 26
FINANCIAL STATEMENTS AND EXPERTS.................. 27
OTHER BUSINESS.................................... 27
LITIGATION........................................ 27
SHAREHOLDER INQUIRIES............................. 27
APPENDIX A--AGREEMENT AND PLAN OF
REORGANIZATION................................... A-1
</TABLE>
<PAGE>
INTRODUCTION
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of Chase Vista New York Tax Free Income Fund, a portfolio of Mutual
Fund Trust ("MFT"), an open-end management investment company, in connection
with the solicitation by the Board of Trustees of MFT ("MFT Board") of proxies
to be used at a Special Meeting of Shareholders of Chase Vista New York Tax Free
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 Vista New York Tax Free Income Fund shareholders (the
"Chase Vista New York Tax Free Income Fund Shareholders") will consider and vote
upon the Agreement and Plan of Reorganization (the "Reorganization Plan") dated
October 31, 2000 between MFT, on behalf of Chase Vista New York Tax Free Income
Fund, and MFST, on behalf of Chase Vista Select New York Intermediate Tax Free
Income Fund (the "Chase Vista Select New York Intermediate Tax Free Income
Fund," together with Chase Vista New York Tax Free Income Fund, the "Funds"),
pursuant to which all of the assets and liabilities of Chase Vista New York Tax
Free Income Fund will be transferred to Chase Vista Select New York Intermediate
Tax Free Income Fund in exchange for shares (the "Chase Vista Select New York
Intermediate Tax Free Income Fund Shares") of Chase Vista Select New York
Intermediate Tax Free Income Fund. As a result of this transaction (the
"Reorganization"), Chase Vista New York Tax Free Income Fund Shareholders will
become shareholders of Chase Vista Select New York Intermediate Tax Free Income
Fund and will receive Chase Vista Select New York Intermediate Tax Free Income
Fund Shares equal in value to their holdings in Chase Vista New York Tax Free
Income Fund on the date of the Reorganization. Holders of Class A Shares in
Chase Vista New York Tax Free Income Fund would receive Class A Shares
("Class A Shares") in Chase Vista Select New York Intermediate Tax Free Income
Fund. Holders of Class B Shares in Chase Vista New York Tax Free Income Fund
would receive Class B Shares ("Class B Shares" and, together with the Class A
Shares, "Chase Vista Select New York Intermediate Tax Free Income Fund Shares")
in Chase Vista Select New York Intermediate Tax Free Income Fund. In connection
with the Reorganization, Chase Vista Select New York Intermediate Tax Free
Income Fund will be renamed "Chase Vista New York Intermediate Tax Free Income
Fund." Further information relating to Chase Vista Select New York Intermediate
Tax Free Income Fund is set forth herein. The proposed Reorganization is
occasionally referred to herein as the "Proposal."
THE MFT BOARD HAS RECOMMENDED THAT SHAREHOLDERS
VOTE "FOR" THE PROPOSAL
Approval of the Reorganization Plan by Chase Vista New York Tax Free Income
Fund requires the affirmative vote of the lesser of (i) 67% or more of Chase
Vista New York Tax Free Income Fund Shares present at the Meeting and (ii) more
than 50% of all outstanding Chase Vista New York Tax Free Income Fund Shares. If
the Reorganization Plan is not approved by Chase Vista New York Tax Free Income
Fund Shareholders, the MFT 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 Chase Vista Select New York
Intermediate Tax Free Income Fund Shares, and the Reorganization Plan attached
to this Combined Prospectus/Proxy Statement as Appendix A. Chase Vista Select
New York Intermediate Tax Free Income Fund's Annual Report to Shareholders is
enclosed with this Combined Prospectus/Proxy Statement.
PROPOSED TRANSACTION
Pursuant to the proposed Reorganization Plan, Chase Vista New York Tax Free
Income Fund, an existing series of MFT, will transfer all of its assets and
liabilities to Chase Vista Select New York Intermediate Tax Free Income Fund in
exchange for shares of Chase Vista Select New York Intermediate Tax Free Income
Fund, a series of MFST.
Under the proposed Reorganization, each Chase Vista New York Tax Free Income
Fund Shareholder would receive a number of Chase Vista Select New York
Intermediate Tax Free Income Fund Shares with an aggregate net asset value equal
on the date of the exchange to the aggregate net asset value of such
1
<PAGE>
shareholder's Chase Vista New York Tax Free Income Fund Shares on such date.
Therefore, following the proposed Reorganization, Chase Vista New York Tax Free
Income Fund Shareholders will be Chase Vista Select New York Intermediate Tax
Free Income Fund Shareholders. Chase Vista New York Tax Free Income Fund
Shareholders holding Class A Shares will receive Class A Shares in the
Reorganization, but will not have to pay a sales charge. However, such
Shareholders will have to pay a sales charge if they buy additional Class A
Shares in the future.
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 New York
Intermediate Tax Free Income Fund than they are for Chase Vista New York Tax
Free Income Fund.
Based upon their evaluation of the relevant information presented to them,
including an analysis of the operation of Chase Vista Select New York
Intermediate Tax Free Income Fund both before and after the Reorganization, and
in consideration of the fact that the Reorganization will be tax-free, and in
light of their fiduciary duties under federal and state law, the MFT Board and
the MFST 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 Vista New York Tax Free Income Fund and
Chase Vista Select New York Intermediate Tax Free Income Fund is The Chase
Manhattan Bank ("Chase"). Chase is a wholly-owned subsidiary of The Chase
Manhattan Corporation. In addition, Chase Fleming Asset Management (USA) Inc.
("CFAM"), a wholly-owned subsidiary of Chase, serves as the sub-adviser to both
Funds pursuant to agreements with Chase and manages the Funds on a day-to-day
basis. The two Funds are managed by overlapping portfolio management teams.
After the Reorganization, the portfolio manager for Chase Vista New York Tax
Free Income Fund will continue to actively participate in the day-to-day
investment decisions for your portfolio as co-portfolio manager of Chase Vista
Select New York Intermediate Tax Free Income 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 New York Intermediate Tax Free Income Fund and Chase Vista New York Tax
Free Income Fund.
REASONS FOR THE REORGANIZATION
The MFT Board and MFST Board decided to reorganize Chase Vista New York Tax
Free Income Fund into Chase Vista Select New York Intermediate Tax Free Income
Fund to increase operational and administrative efficiencies, since the two
funds have identical investment objectives and policies and are managed by
overlapping portfolio management teams.
FEDERAL INCOME TAX CONSEQUENCES
Simpson Thacher & Bartlett, counsel to MFT, 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 Vista New York Tax Free
Income Fund, Chase Vista Select New York Intermediate Tax Free Income Fund or
their respective shareholders. The holding period and tax basis of Chase Vista
Select New York Intermediate Tax Free Income Fund Shares will be the same as the
holding period and tax cost basis of the shareholder's shares of Chase Vista New
York Tax Free Income Fund. In addition, the holding period and tax basis of
those assets owned by Chase Vista New York Tax Free Income Fund transferred to
Chase Vista Select New York Intermediate Tax Free Income Fund will be identical
for Chase Vista New York Tax Free Income Fund. See "Information Relating to the
Proposed Reorganization--Federal Income Tax Consequences."
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of both Chase Vista New York Tax Free Income Fund
and Chase Vista Select New York Intermediate Tax Free Income Fund is to provide
monthly dividends which are excluded from gross income and exempt from New York
State and New York City personal income taxes. They also seek to protect the
value of your investment.
The investment policies of Chase Vista New York Tax Free Income Fund and
Chase Vista Select New York Intermediate Tax Free Income Fund are similar. Chase
Vista Select New York Intermediate Tax Free Income Fund maintains a
dollar-weighted average maturity of between three and ten years, whereas Chase
Vista New York Tax Free Income Fund has no restriction on its portfolio
maturity. In addition, unlike Chase
2
<PAGE>
Vista New York Tax Free Income Fund, Chase Vista Select New York Intermediate
Tax Free Income Fund is not permitted to invest in lower-rated securities.
ADDITIONAL TRUST PORTFOLIOS
In addition to Chase Vista Select New York Intermediate Tax Free Income
Fund, MFST currently offers three additional portfolios:
<TABLE>
<S> <C>
Select Intermediate Tax Free Income Fund Select Tax Free Income Fund
Select New Jersey Tax Free Income Fund
</TABLE>
Detailed descriptions of each MFST portfolio can be found in the MFST
prospectuses and Statement of Additional Information. MFST may add or subtract
additional portfolios from time to time in the future.
In addition to Chase Vista New York Tax Free Income Fund, MFT currently
offers 10 additional portfolios:
<TABLE>
<S> <C>
100% U.S. Treasury Securities Money Market Fund Tax Free Money Market Fund
Treasury Plus Money Market Fund New York Tax Free Money Market Fund
Federal Money Market Fund California Tax Free Money Market Fund
U.S. Government Money Market Fund Tax Free Income Fund
Prime Money Market Fund California Intermediate Tax Free Fund
</TABLE>
Detailed descriptions of each MFT portfolio can be found in the MFT
prospectuses and Statement of Additional Information. MFT may add or subtract
portfolios from time to time in the future. However, in connection with other
concurrent reorganizations, it is anticipated that some of these portfolios will
be liquidated.
PRINCIPAL RISKS OF INVESTING IN CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX
FREE INCOME FUND
The following discussion highlights the principal risk factors associated
with an investment in Chase Vista Select New York Intermediate Tax Free Income
Fund. These investment risks, in general, are those typically associated with
investing in a managed portfolio of debt securities. In particular, the value of
debt 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, the Fund will be affected by the financial health of
New York State and its municipalities and public authorities.
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
ADVISORY SERVICES
The investment adviser for both Chase Vista New York Tax Free Income Fund
and Chase Vista Select New York Intermediate Tax Free Income Fund is Chase.
Chase oversees the asset management and administration of both Chase Vista New
York Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income Fund. As compensation for its services, Chase receives a management fee
from each of Chase Vista New York Tax Free Income Fund and Chase Vista Select
New York Intermediate Tax Free Income Fund at an annual rate of 0.30% of their
respective average daily net assets. A portion of the fee generated with respect
to each of the Funds is used to pay CFAM, each Fund's sub-adviser.
Pursuant to the terms of advisory agreements between Chase and MFT and
between Chase and MFST (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 Vista New York Tax Free Income Fund,
subject to the general supervision of the MFT Board, and Chase Vista Select New
York Intermediate Tax Free Income Fund, subject to the general supervision of
the MFST Board. Pursuant to investment sub-advisory agreements between Chase and
CFAM (each, a "Subadvisory Agreement"), Chase delegates certain of these
responsibilities to CFAM with respect to each Fund. For sub-advisory services
rendered to each 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 to Chase Vista Select New York Intermediate Tax Free Income
Fund and Chase Vista New York Tax Free Income 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
New York Intermediate Tax Free Income Fund and Chase Vista New York Tax Free
Income Fund. VFD is unaffiliated with Chase.
3
<PAGE>
Chase serves as administrator, fund accountant and custodian for both Chase
Vista New York Tax Free Income Fund and Chase Vista Select New York Intermediate
Tax Free Income 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
Vista New York Tax Free Income Fund and Chase Vista Select New York Intermediate
Tax Free Income Fund.
PricewaterhouseCoopers LLP ("PwC") serves as both Chase Vista New York Tax
Free Income Fund's and Chase Vista Select New York Intermediate Tax Free Income
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 MFT or MFST engages it to do so.
ORGANIZATION
Each of MFT and MFST is organized as a Massachusetts business trust. Chase
Vista New York Tax Free Income Fund is organized as a series of MFT and Chase
Vista Select New York Intermediate Tax Free Income Fund is organized as a series
of MFST.
PURCHASES, REDEMPTIONS AND EXCHANGES
The procedures for making purchases, redemptions and exchanges of shares of
Chase Vista Select New York Intermediate Tax Free Income Fund are substantially
similar to those with respect to shares of Chase Vista New York Tax Free Income
Fund.
COMPARATIVE FEE AND EXPENSE TABLES
The table below shows (i) information regarding the fees and expenses paid
by each of Chase Vista New York Tax Free Income Fund and Chase Vista Select New
York Intermediate Tax Free Income Fund that reflect current expense arrangements
and (ii) estimated fees and expenses on a pro forma basis for Chase Vista Select
New York Intermediate Tax Free Income Fund after giving effect to the proposed
Reorganization. Under the proposed Reorganization, holders of Class A Shares in
Chase Vista New York Tax Free Income Fund would receive Class A Shares in Chase
Vista Select New York Intermediate Tax Free Income Fund, and holders of Class B
Shares in Chase Vista New York Tax Free Income Fund would receive Class B Shares
in Chase Vista Select New York Intermediate Tax Free Income Fund. SHAREHOLDERS
RECEIVING CLASS A SHARES WILL NOT PAY A SALES LOAD ON SHARES RECEIVED IN THE
REORGANIZATION BUT WILL PAY A LOAD ON ADDITIONAL CLASS A SHARES THEY BUY IN THE
FUTURE. Please note that Chase Vista Select New York Intermediate Tax Free
Income 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.
4
<PAGE>
The table indicates that both contractual (pre-waiver) and actual
(post-waiver) total expense ratios for current holders of Chase Vista New York
Tax Free 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 VISTA NEW YORK
TAX FREE INCOME FUND(A)
------------------------
CLASS A CLASS B
SHARES SHARES
----------- -----------
<S> <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
Maximum Deferred Sales Charge (Load)
Shown As A Lower Of Original Purchase
Price Or Redemption Proceeds None 5.00%
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM FUND
ASSETS)
Management Fees 0.30% 0.30%
Distribution (12b-1) Fees 0.25% 0.75%
Other Expenses 0.79% 0.79%
---- ----
Total Annual Fund Operating Expenses 1.34% 1.84%
==== ====
</TABLE>
<TABLE>
<CAPTION>
CHASE VISTA CHASE VISTA SELECT
SELECT NEW YORK NEW YORK INTERMEDIATE
INTERMEDIATE TAX TAX FREE INCOME FUND
FREE INCOME FUND(B) (COMBINED)(C)
------------------- -----------------------------------
PRO FORMA PRO FORMA PRO FORMA
CLASS A CLASS B INSTITUTIONAL
SHARES SHARES SHARES CLASS 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 None 4.50% None None
Maximum Deferred Sales Charge
(Load) Shown As A Lower Of
Original Purchase Price Or
Redemption Proceeds None None 5.00% 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 None 0.25% 0.75% None
Other Expenses 0.48% 0.63% 0.63% 0.47%
---- ---- ---- ----
Total Annual Fund Operating
Expenses 0.78% 1.18% 1.68% 0.77%
====
Contractual Fee Waivers and
Expense Reimbursements 0.43% 0.04% 0.02%
---- ---- ----
Net Expenses 0.75% 1.64% 0.75%
==== ==== ====
</TABLE>
---------------------
(a) The actual Management Fees for Chase Vista New York Tax Free Income Fund
are expected to be 0.10%, the actual Distribution Fees for Class A shares
are expected to be 0.00%, the actual Other Expenses for Class A and B
shares are expected to be 0.65% and 0.79%, respectively, and Total Annual
Fund Operating Expenses for Class A and B shares are not expected to exceed
0.75% and 1.64%, 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 Other Expenses of Chase Vista Select New York Intermediate Tax
Free Income Fund, prior to the Reorganization, are expected to be 0.45% and
Total Annual Fund Operating Expenses are not
5
<PAGE>
expected to exceed 0.75%. 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.
(c) The actual Distribution fees for Class A shares of Chase Vista Select
Intermediate New York Tax Free Income Fund, subsequent to the
Reorganization, are expected to be 0.00%, the actual Other Expenses for
Class A, B and Institutional Class shares are expected to be 0.45%, 0.59%
and 0.45%, respectively, and Total Annual Fund Operating Expenses for Class
A, B and Institutional Class shares are not expected to exceed 0.75%, 1.64%
and 0.75%, respectively. That is because Chase and some of the other
service providers have contractually agreed not to collect a portion of
their fees and to reimburse others for one year after the Reorganization.
Chase and these other service providers may terminate this arrangement
after the one-year period expires.
The table does not reflect charges or credits which investors might incur if
they invest through a financial institution.
EXAMPLE: This example helps investors compare the cost of investing in the
Funds with the cost of investing in other mutual funds. The example assumes:
- you invest $10,000;
- you sell all of your shares at the end of the period;
- your investment has a 5% return each year; and
- each Fund's operating expenses are not waived and remain the same as shown
above.
Although actual costs may be higher or lower, based upon these assumptions
your costs would be:
If you sell your shares, your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- ----------
<S> <C> <C> <C> <C>
CHASE VISTA NEW YORK TAX FREE
INCOME FUND
CLASS A SHARES* $ 580 $ 855 $ 1,151 $ 1,990
CLASS B SHARES** $ 687 $ 879 $ 1,195 $ 2,028***
CHASE VISTA SELECT NEW YORK
INTERMEDIATE TAX FREE INCOME
FUND $ 79 $ 248 $ 431 $ 960
PRO FORMA CHASE VISTA SELECT
NEW YORK INTERMEDIATE TAX
FREE INCOME FUND
CLASS A SHARES* $ 565 $ 808 $ 1,070 $ 1,817
CLASS A SHARES (WITHOUT
SALES CHARGE) $ 120 $ 375 $ 649 $ 1,432
CLASS B SHARES** $ 671 $ 830 $ 1,113 $ 1,854***
INSTITUTIONAL CLASS SHARES $ 79 $ 246 $ 428 $ 954
</TABLE>
If you don't sell your shares, your costs would be:
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- ----------
<S> <C> <C> <C> <C>
CHASE VISTA NEW YORK TAX FREE
INCOME FUND
CLASS B SHARES $ 187 $ 579 $ 995 $ 2,028***
PRO FORMA CHASE VISTA SELECT
NEW YORK INTERMEDIATE TAX
FREE INCOME FUND
CLASS B SHARES $ 171 $ 530 $ 913 $ 1,854***
</TABLE>
-------------------
* Assumes sales charge is deducted when shares are purchased. Shareholders
who received Class A Shares as a result of the proposed reorganization
will not be charged a sales load.
** Assumes applicable deferred sales charge is deducted when shares are sold.
*** Reflects conversion of Class B Shares to Class A Shares after they have
been owned for eight years.
6
<PAGE>
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in Chase Vista Select New York Intermediate Tax Free Income
Fund. Chase Vista Select New York Intermediate Tax Free Income Fund has
investment policies and investment restrictions similar to Chase Vista New York
Tax Free Income Fund. Therefore, there should be similarities between the risk
factors associated with Chase Vista New York Tax Free Income Fund and Chase
Vista Select New York Intermediate Tax Free 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 New York Intermediate Tax Free Income 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 New York Intermediate Tax Free Income Fund.
The value of fixed income investments 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.
The Fund invests primarily in New York State and its municipalities and
public authorities. A number of municipal issuers, including the State of New
York and New York City, have a history of financial problems. If the state, or
any of the local government bodies, gets into financial trouble, it could have
trouble paying interest and principal. This would hurt the Fund's returns and
its ability to preserve capital and liquidity. If more than 5% of the Fund's
assets are invested in any one municipality, this risk could increase.
Under some circumstances, municipal lease obligations might not pay interest
unless the state or municipal legislature authorizes money for that purpose.
Some securities, including municipal lease obligations, carry additional risks.
For example, they may be difficult to trade or interest payments may be tied to
a specific stream of revenue.
Normally, the Fund may invest up to 20% of its total assets in securities
whose interest is subject to the federal alternative minimum tax. Consult your
tax professional for more information.
Since some municipal obligations may be secured or guaranteed by banks and
other institutions, the risk to the Fund could increase if the banking or
financial sector suffers an economic downturn.
The Fund may invest in municipal obligations backed by foreign institutions.
This could carry more risk than securities backed by U.S. institutions, because
of political or economic instability, the imposition of government controls, or
regulations that don't match U.S. standards.
The value of zero coupon securities, inverse floaters and interest rate caps
tends to fluctuate according to interest rate changes significantly more than
the value of ordinary interest-paying debt securities. The price of a security
with an interest rate cap will be more volatile than a municipal security
without one.
A forward commitment could lose value if the underlying security falls in
value before the settlement date or if the other party fails to meet its
obligation to complete the transaction.
As a general matter, Chase Vista Tax Free Income Fund is permitted to invest
in securities with longer maturities than Chase Vista Select New York
Intermediate Tax Free Income Fund and may also invest in lower-rated securities.
While these instruments do entail certain risks, they also provide an
opportunity to enhance return. As a result, shareholders may receive a lower
return on their investment in Chase Vista Select New York Intermediate Tax Free
Income than they would receive on an investment in Chase Vista New York Tax Free
Income Fund.
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 are significantly more than the Fund's original investment.
The Fund is not diversified. It may invest a greater percentage of its
assets in a particular issuer or group of issuers than a diversified fund would.
That makes the value of its shares more sensitive to economic problems among
those issuing the securities. In addition, more than 25% of the Fund's assets
may be invested in securities that rely on similar projects for their income
stream. As a result, the Fund could be more susceptible to developments that
affect those projects.
7
<PAGE>
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 Vista New York Tax Free Income Fund will be transferred to and assumed by
Chase Vista Select New York Intermediate Tax Free Income Fund. In exchange for
the transfer of the assets, and the assumption of the liabilities, of Chase
Vista New York Tax Free Income Fund, MFST will issue at the Effective Time of
the Reorganization full and fractional (a) Class A Shares of Chase Vista Select
New York Intermediate Tax Free Income Fund equal in aggregate dollar value to
the aggregate net asset value of full and fractional outstanding Class A Shares
of Chase Vista New York Tax Free Income Fund and (b) Class B Shares of Chase
Vista Select New York Intermediate Tax Free Income Fund equal in aggregate
dollar value to the aggregate net asset value of full and fractional outstanding
Class B Shares of Chase Vista New York Tax Free Income Fund, in each case as
determined at the valuation time specified in the Reorganization Plan. The
Reorganization Plan provides that Chase Vista New York Tax Free Income Fund will
declare a dividend or dividends prior to the Effective Time of the
Reorganization which, together with all previous dividends, will have the effect
of distributing to Chase Vista New York Tax Free 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 Vista New York Tax Free Income Fund by Chase Vista Select New York
Intermediate Tax Free Income Fund, Chase Vista New York Tax Free Income Fund
will distribute Chase Vista Select New York Intermediate Tax Free Income Fund
Shares received from MFST to Chase Vista New York Tax Free Income Fund
Shareholders in liquidation of Chase Vista New York Tax Free Income Fund. Each
Chase Vista New York Tax Free Income Fund Shareholder at the Effective Time of
the Reorganization will receive an amount of Class A Shares or Class B Shares,
as the case may be, with a total net asset value equal to the net asset value of
their Chase Vista New York Tax Free 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 Vista New York Tax Free Income Fund.
Because of the differences in the investment policies of Chase Vista Select
New York Intermediate Tax Free Income Fund and Chase Vista New York Tax Free
Income Fund, Chase Vista New York Tax Free Income Fund expects to dispose of a
portion of its portfolio investments prior to the Reorganization.
After the Reorganization, all of the issued and outstanding shares of Chase
Vista New York Tax Free Income Fund Shares will be canceled on the books of
Chase Vista New York Tax Free Income Fund and the stock transfer books of Chase
Vista New York Tax Free 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
Chase Vista New York Tax Free 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 Vista New York Tax Free Income Fund and Chase Vista
Select New York Intermediate Tax Free Income 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
8
<PAGE>
trustees determine that proceeding with the Reorganization Plan is not in the
best interests of their fund's shareholders.
BOARD CONSIDERATIONS
In its consideration and approval of the Reorganization at meetings held on
September 19, 2000 and October 24, 2000, the MFT Board considered and discussed
the future of Chase Vista New York Tax Free Income Fund and how to best serve
Chase Vista New York Tax Free Income Fund Shareholders' interests. The Trustees
discussed the size of Chase Vista New York Tax Free Income Fund's investment
portfolio (approximately $81 million as of August 31, 2000) and the increasing
advantages of reorganizing Chase Vista New York Tax Free Income Fund into Chase
Vista Select New York Intermediate Tax Free Income Fund. The Trustees reviewed
the Proposal. After discussions, it was decided to pursue the Reorganization
with Chase Vista Select New York Intermediate Tax Free Income Fund.
In considering the Reorganization, the Trustees noted that all Chase Vista
Select New York Intermediate Tax Free Income 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 MFT 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 Vista
New York Tax Free Income Fund and Chase Vista Select New York Intermediate Tax
Free Income Fund; the effect of such Reorganization on Chase Vista New York Tax
Free Income Fund and its shareholders; the fact that the day-to-day portfolio
management would be similar after the Reorganization; the investment advisory
services supplied by Chase and its affiliates; the management and other fees
payable by Chase Vista Select New York Intermediate Tax Free Income Fund; the
similarities and differences in the investment objective and policies of the
Funds; the opportunity to combine Chase Vista New York Tax Free Income Fund with
Chase Vista Select New York Intermediate Tax Free Income Fund in an effort to
realize operational and administrative efficiencies; the recommendations of
Chase with respect to the proposed Reorganization; the fact that all costs and
expenses of the organization will be borne by Chase; and the fact that the
Reorganization would constitute a tax-free reorganization.
After considering the foregoing factors, together with such information as
they believed to be relevant, the MFT Board determined that the proposed
Reorganization is in the best interests of Chase Vista New York Tax Free Income
Fund and that the interests of Chase Vista New York Tax Free 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 Chase Vista New York Tax Free Income Fund Shareholders for approval.
The MFST Board considered the proposed Reorganization from the perspective
of Chase Vista Select New York Intermediate Tax Free Income Fund. The MFST Board
considered, among other things: the terms of the Reorganization Plan; the
opportunity to combine the two Funds in an effort to realize operational and
administrative efficiencies; the fact that all costs and expenses of the
organization will be borne by Chase; and the fact that the Reorganization would
constitute a tax-free reorganization. Based upon its evaluation of the relevant
information provided to it, and in light of its fiduciary duties under federal
and state law, the MFST Board determined that the proposed Reorganization is in
the best interests of the shareholders of Chase Vista Select New York
Intermediate Tax Free Income Fund and the interests of Chase Vista Select New
York Intermediate Tax Free Income 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 MFST Board approved the
Reorganization Plan.
THE MFT BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL.
The MFT Board has not determined what action Chase Vista New York Tax Free
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 MFT
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 Vista New York Tax Free Income Fund to Chase Vista Select
New York Intermediate Tax Free Income Fund in exchange for Chase Vista Select
New York Intermediate Tax Free
9
<PAGE>
Income Fund Shares and the liquidating distributions to Shareholders of Chase
Vista Select New York Intermediate Tax Free Income 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 Vista New York Tax
Free Income Fund and Chase Vista Select New York Intermediate Tax Free Income
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
Vista New York Tax Free Income Fund as a result of such transaction; (iii) no
gain or loss will be recognized by Chase Vista Select New York Intermediate Tax
Free Income Fund as a result of such transaction; (iv) no gain or loss will be
recognized by Chase Vista New York Tax Free Income Fund Shareholders on the
distribution to Chase Vista New York Tax Free Income Fund Shareholders of the
Chase Vista Select New York Intermediate Tax Free Income Fund Shares in exchange
for their Chase Vista New York Tax Free Income Fund Shares; (v) the aggregate
basis of Shares of Chase Vista Select New York Intermediate Tax Free Income Fund
received by a Shareholder of Chase Vista New York Tax Free Income Fund will be
the same as the aggregate basis of such Chase Vista New York Tax Free Income
Fund Shareholder's Chase Vista New York Tax Free Income Fund Shares immediately
prior to the Reorganization; (vi) the basis of Chase Vista Select New York
Intermediate Tax Free Income Fund in the assets of Chase Vista New York Tax Free
Income Fund received pursuant to such transaction will be the same as the basis
of such assets in the hands of Chase Vista New York Tax Free Income Fund
immediately before such transaction; (vii) a Chase Vista New York Tax Free
Income Fund Shareholder's holding period for Chase Vista Select New York
Intermediate Tax Free Income Fund Shares will be determined by including the
period for which each Chase Vista New York Tax Free Income Fund Shareholder held
Chase Vista New York Tax Free Income Fund Shares exchanged therefor, provided
that the Shareholder held such Shares in Chase Vista New York Tax Free Income
Fund Shares as a capital asset; and (viii) Chase Vista Select New York
Intermediate Tax Free Income 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 Vista New York Tax Free Income Fund.
MFT 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 Vista New York Tax Free Income Fund will be combined with
Chase Vista Select New York Intermediate Tax Free Income Fund in the
Reorganization, the total capitalization of Chase Vista Select New York
Intermediate Tax Free Income Fund after the Reorganization is expected to be
greater than the current capitalization of Chase Vista New York Tax Free Income
Fund. The following table sets forth as of August 31, 2000: (i) the
capitalization of Chase Vista New York Tax Free Income Fund; (ii) the
capitalization of Chase Vista Select New York Intermediate Tax Free Income Fund;
and (iii) the pro forma capitalization of Chase Vista Select New York
Intermediate Tax Free Income Fund as adjusted to give effect to the proposed
Reorganization. There is, of course, no assurance that the Reorganization will
be consummated. Moreover, if consummated, the capitalizations of Chase Vista
Select New York Intermediate Tax Free Income Fund and Chase Vista New York Tax
Free Income 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 New York Intermediate Tax Free Income Fund
currently has one class of shares. In connection with the
10
<PAGE>
Reorganization, this class will be renamed "Institutional Class" and the
Class A and Class B share classes will be introduced.
<TABLE>
<CAPTION>
CHASE VISTA CHASE VISTA SELECT
NEW YORK TAX FREE NEW YORK INTERMEDIATE PRO FORMA
INCOME FUND TAX FREE INCOME FUND COMBINED
----------------- --------------------- ------------
<S> <C> <C> <C>
Total Net Assets
Class A Shares................... $71,013,244 $ -- $ 71,013,244
Class B Shares................... 12,445,650 -- 12,445,650
Institutional Class Shares....... -- 276,578,522 276,578,522
----------- ------------ ------------
Total........................ $83,458,894 $276,578,522 $360,037,416
=========== ============ ============
Shares Outstanding
Class A Shares................... 6,236,697 -- 10,130,277
Class B Shares................... 1,095,479 -- 1,775,414
Institutional Class Shares....... -- 39,467,795 39,467,795
----------- ------------ ------------
Total........................ 7,332,176 39,467,795 51,373,486
=========== ============ ============
Net Asset Value Per Share
Class A Shares................... $ 11.39 -- $ 7.01
Class B Shares................... $ 11.36 -- $ 7.01
Institutional Class Shares....... -- $ 7.01 $ 7.01
</TABLE>
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of Chase
Vista Select New York Intermediate Tax Free Income Fund. Chase Vista Select New
York Intermediate Tax Free Income Fund has similar investment policies as Chase
Vista New York Tax Free 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 New
York Intermediate Tax Free Income Fund, which are incorporated herein by
reference.
OBJECTIVE
Each Fund seeks to provide monthly dividends that are excluded from gross
income and are exempt from New York State and New York City personal income
taxes.
MAIN INVESTMENT STRATEGY
As a fundamental policy, Chase Vista Select New York Intermediate Tax Free
Income Fund normally invests at least 80% of its net assets in New York
municipal obligations whose interest payments are:
- excluded from gross income and exempt from New York State and New York
City income taxes
- excluded from the federal alternative minimum tax on individuals
New York municipal obligations are those issued by New York State, its
political subsidiaries, as well as Puerto Rico, other U.S. territories and their
political subdivisions.
Chase Vista Select New York Intermediate Tax Free Income Fund invests in
securities that are rated as investment grade by Moody's Investors
Service, Inc., Standard & Poor's Corporation or Fitch Investors Service Inc. It
may also invest in unrated securities which the advisers believe are of
comparable quality. CHASE VISTA NEW YORK TAX FREE INCOME FUND MAY INVEST UP TO
25% OF ITS TOTAL ASSETS IN LOWER-RATED HIGH YIELD SECURITIES (JUNK BONDS).
Chase Vista Select New York Intermediate Tax Free Income Fund may also
invest in derivatives, inverse floaters and interest rate caps, zero coupon
securities and forward commitments. These instruments may be used to increase
the Fund's income or gain. Derivatives, which are financial instruments whose
value is based on another security, index or exchange rate, might also be used
to hedge various market risks.
Chase Vista Select New York Intermediate Tax Free Income Fund seeks to
develop an appropriate portfolio by comparing, among other factors, credit
quality, yields and call provisions of different municipal issuers, and
examining structural changes along the yield curve in an effort to maximize
investment returns while minimizing risk.
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The average dollar-weighted maturity of Chase Vista Select New York
Intermediate Tax Free Income Fund's portfolio will be between three and 10
years. THERE IS NO RESTRICTION ON THE MATURITY OF CHASE VISTA NEW YORK TAX FREE
INCOME FUND'S PORTFOLIO OR ON ANY INDIVIDUAL SECURITY IN THE PORTFOLIO.
Under normal market conditions, Chase Vista Select New York Intermediate Tax
Free Income Fund reserves the right to invest up to 20% of its total assets in
securities that pay interest subject to federal income tax, the federal
alternative minimum tax on individuals or New York State and New York City
personal income taxes. To temporarily defend the value of its assets during
unusual market conditions, the Fund may exceed this limit.
No more than 25% of total assets may be invested in any one industry, other
than governments and public authorities.
Chase Vista Select New York Intermediate Tax Free Income Fund may invest in
money market funds so that it can easily convert investments into cash without
losing a significant amount of money in the process.
Chase Vista Select New York Intermediate Tax Free Income Fund may also
invest in municipal lease obligations. These allow the Fund to participate in
municipal lease agreements and installment purchase contracts.
Chase Vista Select New York Intermediate Tax Free Income Fund may invest up
to 25% of its total assets in municipal lease obligations backed by letters of
credit or guarantees from U.S. and foreign banks and other foreign institutions.
There may be times when there are not enough securities available to meet
Chase Vista Select New York Intermediate Tax Free Income Fund's needs. On these
occasions, the Fund may invest in repurchase agreements or Treasury securities
that may be subject to federal income tax.
Chase Vista Select New York Intermediate Tax Free Income Fund may change any
of its non-fundamental investment policies without shareholder approval.
INVESTMENT RESTRICTIONS
Chase Vista Select New York Intermediate Tax Free Income Fund and Chase
Vista New York Tax Free 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, and
(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
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<PAGE>
or securities of companies engaged in the real estate business). Investments
by either Fund in securities backed by mortgages on real estate or in
marketable securities of companies engaged in such activities are not hereby
precluded;
(6) issue any senior security (as defined in the 1940 Act), except that
(a) each Fund may engage in transactions that may result in the issuance of
senior securities to the extent permitted under applicable regulations and
interpretations of the 1940 Act or an exemptive order; (b) each Fund may
acquire other securities, the acquisition of which may result in the
issuance of a senior security, to the extent permitted under applicable
regulations or interpretations of the 1940 Act; and (c) subject to the
restrictions set forth above, each Fund may borrow money as authorized by
the 1940 Act; and
(7) underwrite securities issued by other persons except insofar as a Fund may
technically be deemed to be an underwriter under the Securities Act of 1933
in selling a portfolio security.
In addition, as a matter of fundamental policy, notwithstanding any other
investment policy or restriction, each Fund may seek to achieve its investment
objective by investing all of its investable assets in another investment
company having substantially the same investment objective and policies as that
Fund. For purposes of investment restriction (5) above, real estate includes
real estate limited partnerships. For purposes of investment restriction
(3) above, industrial development bonds, where the payment of principal and
interest is the ultimate responsibility of companies within the same industry,
are grouped together as an "industry." Investment restriction (3) above,
however, is not applicable to investments by either Fund in municipal
obligations where the issuer is regarded as a state, city, municipality or other
public authority since such entities are not members of any "industry."
Supranational organizations are collectively considered to be members of a
single "industry" for purposes of restriction (3) above.
In addition, each Fund is subject to the following nonfundamental investment
restrictions which may be changed without shareholder approval:
(1) Each Fund may not, with respect to 50% 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 New York Intermediate Tax Free Income Fund are similar to those of
Chase Vista New York Tax Free Income Fund. Please note that Chase Vista Select
New York Intermediate Tax Free Income 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.
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<PAGE>
SALES CHARGES
There is normally a sales charge (sometimes called a "load") to buy Class A
and Class B Shares of Chase Vista Select New York Intermediate Tax Free Income
Fund. There are also ongoing charges that holders of Class A and Class B Shares
pay as long as they own their shares, as more fully explained below.
Shareholders holding Class A Shares of Chase Vista New York Tax Free Income
Fund will receive Class A Shares of Chase Vista Select New York Intermediate Tax
Free Income Fund in the Reorganization but will not have to pay a sales charge.
However, such Shareholders will have to pay a sales charge if they buy
additional Class A Shares in the future. Shareholders holding Class B Shares of
Chase Vista New York Tax Free Income Fund will receive Class B Shares of Chase
Vista Select New York Intermediate Tax Free Income Fund in the Reorganization,
but the holding period used to determine the applicable sales charges on the
Class B Shares received in the Reorganization, as well as to determine the
conversion of Class B Shares received in the Reorganization, will be calculated
by reference to when such Shareholders acquired their Class B Shares of Chase
Vista New York Tax Free Income Fund.
There are a number of plans and special discounts which can decrease or even
eliminate these charges.
CLASS A SHARES
Class A Shares have an initial sales charge that is deducted directly from
the money you invest. As the table shows, the charge is lower the more you
invest. The public offering price of Class A Shares is the net asset value plus
the initial sales charge. Net asset value is the value of everything the Fund
owns, minus everything it owes, divided by the number of shares held by
investors. The Fund receives the net asset value.
The following chart shows the sales charges for Class A Shares.
<TABLE>
<CAPTION>
TOTAL SALES CHARGE
--------------------------
AS % OF THE AS % OF
OFFERING PRICE NET AMOUNT
AMOUNT OF INVESTMENT PER SHARE INVESTED
-------------------- -------------- ----------
<S> <C> <C>
LESS THAN $100,000 4.50% 4.71%
$100,000 BUT UNDER $250,000 3.75% 3.90%
$250,000 BUT UNDER $500,000 2.50% 2.56%
$500,000 BUT UNDER $1 MILLION 2.00% 2.04%
</TABLE>
There is no sales charge for investments of $1 million or more.
CLASS B SHARES
Class B Shares have a deferred sales charge that is deducted directly from
your assets when you sell your shares. It's a percentage of the original
purchase price or the current value of the shares, whichever is lower. As the
table shows, the deferred sales charge gets lower the longer you hold the shares
and disappears altogether after six years. Class B shares automatically convert
into Class A shares at the beginning of the ninth year after you bought them.
<TABLE>
<CAPTION>
DEFERRED
YEAR SALES CHARGE
---- ----------------
<S> <C>
1 5%
2 4%
3 3%
4 3%
5 2%
6 1%
7 NONE
8 NONE
</TABLE>
We calculate the deferred sales charge from the month you buy your shares.
We always sell the shares with the lowest deferred sales charge first. Shares
acquired by reinvestment distribution can be sold without a deferred sales
charge.
12b-1 FEES
VFD is the distributor for Chase Vista Select New York Intermediate Tax Free
Income Fund and Chase Vista New York Tax Free Income Fund. Chase Vista Select
New York Intermediate Tax Free Income Fund
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<PAGE>
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 and a Rule 12b-1 distribution plan for Class B
Shares under which it will pay annual distribution fees of up to 0.75% of the
average daily net assets attributable to Class B Shares. Similar 12b-1
distribution plans (with annual distribution fees of up to 0.25% and 0.75%) are
currently in effect for Class A Shares and Class B Shares of Chase Vista New
York Tax Free 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 New York
Intermediate Tax Free Income 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.
BUYING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF CHASE VISTA SELECT NEW YORK
INTERMEDIATE TAX FREE INCOME FUND SHARES THAT YOU MIGHT MAKE AFTER THE
REORGANIZATION AND REFLECTS THE NEW CLASS STRUCTURE.
The price shareholders pay for their shares is based on the net asset value
per share ("NAV"). NAV is the value of everything the Fund owns, minus
everything it owes, divided by the number of shares held by investors. The Fund
generally values its assets at fair market values but may use fair value if
market prices are unavailable.
The NAV of each class of the Fund's shares is generally calculated once each
day at the close of regular trading on the New York Stock Exchange each day the
Fund is accepting purchase orders. A shareholder will pay the public offering
price which is based on the next NAV calculated after the Chase Vista Funds
Service Center (the "Center") receives that shareholder's order in proper form.
An order is in proper form only after funds are converted into federal funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange, it will be processed at that
day's price and the purchaser will be entitled to all dividends declared on that
day. If an order is received after the close of regular trading on the New York
Stock Exchange, it will generally be processed at the next day's price. If a
purchaser pays by check for Fund shares before the close of regular trading on
the New York Stock Exchange, it will generally be processed the next day the
Fund is open for business.
If a shareholder buys through an agent and not directly from the Center, the
agent could set earlier cut-off times. Each shareholder must provide a Social
Security Number or Taxpayer Identification Number when opening an account.
The Fund has the right to reject any purchase order.
For Class A Shares and Class B 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 or Class B 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 and Class B
Shares.
SELLING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF CHASE VISTA SELECT NEW YORK
INTERMEDIATE TAX FREE INCOME FUND SHARES THAT YOU MIGHT MAKE AFTER THE
REORGANIZATION AND REFLECTS THE NEW CLASS STRUCTURE.
15
<PAGE>
Shares of the Fund may be sold on any day the Center is open for trading,
either directly to the Fund or through an investment representative.
Shareholders of the Fund will receive the next NAV calculated after the Center
accepts his or her sale order, less any applicable sales charges.
Under normal circumstances, if a request is received before the close of
regular trading on the New York Stock Exchange, the Fund will send the proceeds
the same business day. An order to sell shares will not be accepted if the Fund
has not collected payment for the shares. The Fund may stop accepting orders to
sell and may postpone payments for more than seven days, as federal securities
laws permit.
Generally, proceeds are sent by electronic transfer or wire for Class A
Shares and Class B Shares. However, if a shareholder's address of record has
changed within the 30 days prior to the sale request or if more than $25,000 of
shares is sold by phone, proceeds will be sent only to the bank account on the
Fund's records.
For Class A Shares and Class B 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 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 and Class B shareholders may contact 1-800-34-VISTA.
A systematic withdrawal plan is available for Class A and Class B Shares.
EXCHANGING FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO EXCHANGES OF CHASE VISTA SELECT NEW YORK
INTERMEDIATE TAX FREE INCOME 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 MFST. 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 NEW YORK INTERMEDIATE TAX FREE
INCOME FUND
For Class A Shares and Class B Shares, Chase Vista Select New York
Intermediate Tax Free Income Fund may close an account if the balance falls
below $500. Chase Vista Select New York Intermediate Tax Free Income 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. 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.
MFST 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
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<PAGE>
average daily net assets of the Class A Shares and Class B Shares held by
investors serviced by the shareholder servicing agent. MFT HAS SIMILAR
AGREEMENTS WITH SHAREHOLDER SERVICING AGENTS. ACCORDINGLY, CHASE VISTA NEW YORK
TAX FREE INCOME FUND ALSO PAYS SHAREHOLDER SERVICING FEES OF 0.25%.
Chase and/or VFD may, at their own expense, make additional payments to
certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers. The amount may be up to an
additional 0.10% annually of the average net assets of the fund attributable to
shares of the Fund held by customers of those shareholder servicing agents.
Chase Vista Select New York Intermediate Tax Free Income 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 New York Intermediate Tax Free
Income Fund and Chase Vista New York Tax Free Income Fund.
DISTRIBUTIONS AND TAXES
Each Fund can earn income and realize capital gain. Each Fund will deduct
from these earnings any expenses and then pay to shareholders the distributions.
Each Fund declares dividends on a daily basis and distributes any net
investment income and tax-exempt interest 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. Dividends of tax-exempt interest income are
not subject to federal income taxes but will generally be subject to state and
local taxes. However, for each Fund, New York residents will not have to pay New
York State or New York City personal income taxes on tax-exempt income from New
York municipal obligations. 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
tax-exempt 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.
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<PAGE>
COMPARISON OF CHASE VISTA NEW YORK TAX FREE INCOME FUND'S
AND CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX FREE INCOME
FUND'S ORGANIZATION STRUCTURES
There are no differences in the organizational structure of Chase Vista New
York Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income Fund. Set forth below are descriptions of the structure, voting rights,
shareholder liability and the liability of Trustees.
STRUCTURE OF CHASE VISTA NEW YORK TAX FREE INCOME FUND
Chase Vista New York Tax Free Income Fund is organized as a series of MFT,
which is organized under the law of the Commonwealth of Massachusetts. As a
Massachusetts business trust, MFT's operations are governed by MFT's Declaration
of Trust and By-Laws (the "MFT Trust Documents") and applicable Massachusetts
law. The operations of Chase Vista New York Tax Free Income Fund are also
subject to the provisions of the 1940 Act and the rules and regulations
thereunder.
STRUCTURE OF CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX FREE INCOME FUND
Chase Vista Select New York Intermediate Tax Free Income Fund is organized
as a series of MFST, which is organized under the law of the Commonwealth of
Massachusetts. As a Massachusetts business trust, MFST's operations are governed
by MFST's Declaration of Trust and By-Laws (the "MFST Trust Documents") and
applicable Massachusetts law. The operations of Chase Vista Select New York
Intermediate Tax Free Income 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
Vista New York Tax Free Income Fund is managed by the Trustees of MFT and the
business of Chase Vista Select New York Intermediate Tax Free Income Fund is
managed by the Trustees of MFST, who serve indefinite terms and have all powers
necessary or convenient to carry out their responsibilities. The Trustees and
officers of MFT and MFST are identical.
Information concerning the current Trustees of the MFT Board and the MFST
Board is set forth later in this document.
SHARES OF FUNDS
Each of MFT and MFST 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 MFT or MFST participate equally in the earnings,
dividends and assets of the particular portfolio or class. Fractional shares
have proportionate rights to full shares. Expenses of MFT or MFST 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 MFT nor MFST 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 MFT or MFST.
SHAREHOLDER VOTING RIGHTS
A vacancy in the Board of either MFT or MFST 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
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<PAGE>
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 MFT or MFST could, under
certain circumstances, be held personally liable as partners for the obligations
of that trust. However, the Declaration of Trust of each of MFT and MFST
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 MFT and MFST also provides that the trust
shall maintain appropriate insurance (for example, fidelity bonding and errors
and omissions insurance) for the protection of that trust, its shareholders,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the trust itself was unable to meet its obligations.
LIABILITY OF DIRECTORS AND TRUSTEES
Under the Declaration of Trust of each of MFT and MFST, 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 MFT and MFST, 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 MFT and MFST are available without charge upon
written request to that trust.
INFORMATION RELATING TO THE ADVISORY CONTRACTS
GENERAL INFORMATION
As noted above, Chase Vista New York Tax Free Income Fund and Chase Vista
Select New York Intermediate Tax Free Income Fund are both managed by Chase
pursuant to the Advisory Agreements. Under an Advisory Agreement, Chase has
delegated most of its responsibilities with respect to each Fund to CFAM
pursuant to Subadvisory Agreements between Chase and CFAM. As a result, CFAM is
responsible for most of the day-to-day management functions for each Fund. The
two Funds are managed by overlapping portfolio management teams. After the
Reorganization, the portfolio manager for Chase Vista New York Tax Free Income
Fund will continue to actively participate in the day-to-day investment
decisions for your portfolio as co-portfolio manager of Chase Vista Select New
York Intermediate Tax Free Income 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
New York Intermediate Tax Free Income Fund and Chase Vista New York Tax Free
Income 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
19
<PAGE>
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 New York
Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income 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 Vista New York Tax Free Income Fund and Chase Vista Select New York
Intermediate Tax Free Income 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 0.30% for Chase Vista New York Tax Free Income Fund
and 0.30% for Chase Vista Select New York Intermediate Tax Free Income Fund.
Chase may waive fees from time to time to assist the Funds in maintaining
competitive yields.
Under each Advisory Agreement, except as indicated above, each Fund is
responsible for its operating expenses including, but not limited to, taxes;
interest; fees (including fees paid to its Trustees who are not affiliated with
Chase or any of their affiliates); fees payable to the SEC; state securities
qualification fees; association membership dues; costs of preparing and printing
prospectuses for regulatory purposes and for distribution to existing
shareholders; advisory and administrative fees; charges of the custodian and
transfer agent; insurance premiums; auditing and legal expenses; costs of
shareholders' reports and shareholder meetings; any extraordinary expenses; and
brokerage fees and commissions, if any, in connection with the purchase or sale
of portfolio securities.
For the fiscal year ended August 31, 2000, Chase accrued management fees and
management fee waivers of approximately $270,000 and $145,000, respectively, for
Chase Vista New York Tax Free Income Fund. For the fiscal year ended August 31,
2000, Chase accrued management fees and management fee waivers of approximately
$854,000 and $174,000, respectively, for Chase Vista Select New York
Intermediate Tax Free Income 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 MFT, MFST 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 MFT, MFST
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 Vista New York Tax Free Income Fund or Chase
Vista Select New York Intermediate Tax Free Income 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 MFT or MFST, 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 MFT or MFST 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 MFT or MFST, 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 each Subadvisory Agreement, Chase delegates to CFAM portfolio
management duties. With respect to the day-to-day management of Chase Vista New
York Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income Fund, CFAM makes decisions concerning, and places all
20
<PAGE>
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 New
York Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income Fund under applicable laws and are under the common control of Chase;
PROVIDED that (i) all persons, when providing services under each 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 each Subadvisory Agreement.
As investment adviser, Chase oversees the management of Chase Vista New York
Tax Free Income Fund and Chase Vista Select New York Intermediate Tax Free
Income Fund under each Subadvisory Agreement, and, subject to the general
supervision of the MFT Board or the MFST Board, as the case may be, 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 such Fund would be
managed. From the fee paid by Chase Vista New York Tax Free Income Fund and
Chase Vista Select New York Intermediate Tax Free Income Fund under the Advisory
Agreement to Chase, Chase bears responsibility for payment of subadvisory fees
to CFAM. Therefore, neither Chase Vista New York Tax Free Income Fund or Chase
Vista Select New York Intermediate Tax Free Income Fund bears any increase in
advisory fee rates resulting from its Subadvisory Agreement. Each 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. Each Subadvisory Agreement will continue for
successive one-year periods, provided that such continuation is specifically
approved at least annually (i) by the MFT Board or the MFST Board, as the case
may be, or by a majority of the outstanding voting securities of the relevant
Fund and, in each case, (ii) by a majority of the Trustees who are not
interested persons of the Fund, Chase or CFAM, by vote cast in person at a
meeting called for such purposes. Each Subadvisory Agreement is terminable at
any time, without penalty, by vote of the MFT Board or the MFST Board, as the
case may be, by Chase by the majority of the outstanding voting securities of
Chase Vista New York Tax Free Income Fund or Chase Vista Select New York
Intermediate Tax Free Income Fund, as the case may be, 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
each 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 New York Tax Free
Income Fund or Chase Vista Select New York Intermediate Tax Free Income Fund, as
the case may be, at the close of business on the previous business day of MFT or
MFST.
For the fiscal year ended August 31, 2000, Chase paid subadvisory fees to
CFAM of approximately $427,000 and $125,000 with respect to Chase Vista Select
New York Intermediate Tax Free Income Fund and Chase Vista New York Tax Free
Income Fund, respectively. THESE FEES WERE PAID BY CHASE OUT OF THE ADVISORY FEE
IT RECEIVED FOR EACH OF CHASE VISTA SELECT NEW YORK INTERMEDIATE TAX FREE INCOME
FUND AND CHASE VISTA NEW YORK TAX FREE INCOME FUND AND WERE NOT ADDITIONAL
CHARGES TO THE FUNDS.
PORTFOLIO MANAGER
Pamela Hunter, Managing Director and Head of Tax Exempt Investments at
Chase, is responsible for the day-to-day management of Chase Vista New York Tax
Free Income Fund. Ms. Hunter and Richard Taormina, Municipal Portfolio Manager
and Analyst at Chase, are responsible for the day-to-day management of Chase
Vista Select New York Intermediate Tax Free Income Fund. Mr. Taormina joined
Chase in 1997. Before joining Chase, he was a Senior Municipal Bond Trader at
the Vanguard Group of Investment Companies, beginning in 1990.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
Chase, as the investment adviser to both Chase Vista New York Tax Free
Income Fund and Chase Vista Select New York Intermediate Tax Free Income Fund,
has responsibilities with respect to each Fund's portfolio transactions and
brokerage arrangements pursuant to the Fund's policies, subject to the overall
21
<PAGE>
authority of either the MFT or MFST Board, as the case may be. In addition, the
Subadvisory Agreements with CFAM currently provide 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 each 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 Vista New York Tax
Free Income Fund and Chase Vista Select New York Intermediate Tax Free Income
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 MFT
Board or the MFST 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 Vista New York Tax Free Income
Fund or Chase Vista Select New York Intermediate Tax Free Income Fund, Chase
may, to the extent permitted by applicable laws and regulations, but shall not
be obligated to, aggregate the securities to be sold or purchased with those of
other funds or its other clients if, in Chase's reasonable judgment, such
aggregation (i) will result in an overall economic benefit to such fund, taking
into consideration the advantageous selling or purchase price, brokerage
commission and other expenses, and trading requirements, and (ii) is not
inconsistent with the policies set forth in MFT's or MFST'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, MFT or any of its
portfolios, including Chase Vista New York Tax Free Income Fund and MFST or any
of its portfolios, including Chase Vista Select New York Intermediate Tax Free
Income 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.
22
<PAGE>
BOARD OF TRUSTEES
The Trustees for MFT and MFST are identical. Set forth below are the current
members of the MFT Board and MFST Board.
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- ------------------------------------------
<S> <C>
Fergus Reid, III Chairman of the Trust. Chairman and Chief
Executive Officer, Lumelite Corporation, since
September 1985; Trustee, Morgan Stanley Funds.
Age: 67. Address: 202 June Road, Stamford, CT
06903.
*H. Richard Vartabedian Trustee and President of the Trust. Investment
Management Consultant, formerly, Senior Investment
Officer, Division Executive of the Investment
Management Division of The Chase Manhattan Bank,
N.A., 1980 through 1991. Age: 64.
Address: P.O. Box 296, Beach Road, Hendrick's
Head, Southport, ME 04576.
William J. Armstrong Trustee. Consultant, Eduneering, Inc.; formerly
Vice President and Treasurer, Ingersoll-Rand
Company. Age: 58. Address: 287 Hampshire Ridge,
Park Ridge, NJ 07656.
John R.H. Blum Trustee. Attorney in private practice; formerly,
partner in the law firm of Richards, O'Neil &
Allegaert; Commissioner of Agriculture--State of
Connecticut, 1992-1995. Age: 70. Address: 322
Main Street, Lakeville, CT 06039.
Roland R. Eppley, Jr. Trustee. Retired; formerly President and Chief
Executive Officer, Eastern States Bankcard
Association Inc., (1971-1988); Director, Janel
Hydraulics, Inc.; Director of The Hanover
Funds, Inc. Age: 67. Address: 105 Coventry Place,
Palm Beach Gardens, FL 33418.
Stuart W. Cragin, Jr. Trustee. Retired; formerly President, Fairfield
Testing Laboratory, Inc. He has previously served
in a variety of marketing, manufacturing and
general management positions with Union Camp
Corp., Trinity Paper & Plastics Corp., and Conover
Industries. Age: 66. Address: 108 Valley Road,
Cos Cob, CT 06807.
Joseph J. Harkins Trustee. Retired; formerly Commercial Sector
Executive and Executive Vice President of The
Chase Manhattan Bank, N.A. from 1985 through 1990.
He had been employed by Chase in numerous
capacities and offices from 1954 through 1990.
Director of Jefferson Insurance Company of New
York and Monticello Insurance Company. Age: 69.
Address: 257 Plantation Circle South, Ponte Vedra
Beach, FL 32082.
*Sarah E. Jones Trustee. President and Chief Operating Officer of
Chase Mutual Funds Corp.; formerly Managing
Director for the Global Asset Management and
Private Banking Division of The Chase Manhattan
Bank. Age: 47. Address: Chase Mutual Funds Corp.,
1211 Avenue of the Americas, 41st Floor, New York,
New York 10081.
W.D. MacCallan Trustee. Director of The Adams Express Co. and
Petroleum & Resources Corp. Retired; formerly
Chairman of the Board and Chief Executive Officer
of The Adams Express Co. and Petroleum & Resources
Corp.; Director of The Hanover Funds, Inc. and The
Hanover Investment Funds, Inc. Age: 72.
Address: 624 East 45th Street, Savannah, GA 31405.
George E. McDavid Trustee. President, Houston Chronicle Publishing
Company. Age: 69. Address: P.O. Box 2558,
Houston, TX 77252.
W. Perry Neff Trustee. Retired; Independent Financial
Consultant; Director of Petroleum & Resources
Corp. and The Adams Express Co. Age: 73. Address:
RR 1 Box 102, Weston, VT 05181.
*Leonard M. Spalding, Jr. Trustee. Retired; formerly Chief Executive Officer
of Chase Mutual Funds Corp.; formerly President
and Chief Executive Officer of Vista Capital
Management; Chief Investment Executive of The
Chase Manhattan Bank. Age: 64. Address: 2025
Lincoln Park Road, Springfield, KY 40069.
Richard E. Ten Haken Trustee. Chairman of the Audit Committee. Formerly
District Superintendent of Schools, Monroe No. 2
and Orleans Counties, New York; Chairman of the
Board and President, New York State Teachers'
Retirement System. Age: 65. Address: 4 Barnfield
Road, Pittsford, NY 14534.
Irving L. Thode Trustee. Retired; formerly Vice President of
Quotron Systems. He has previously served in a
number of executive positions with Control Data
Corp., including President of its Latin American
Operations, and General Manager of its Data
Services business. Age: 69. Address: 80 Perkins
Road, Greenwich, CT 06830.
</TABLE>
------------------------
* Asterisks indicate those Trustees that are "Interested Persons" (as defined
in the 1940 Act). Mr. Reid is not an interested person of the Trust's
investment advisers or principal underwriter, but may be deemed an
interested person of either Trust solely by reason of being an officer of
either Trust.
23
<PAGE>
The executive officers of MFT and MFST are identical. Set forth below as to
each executive officer of MFT and MFST 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 MFT and MFST appearing in the tables above also
serve in the same capacities with respect to Mutual Fund Group, Mutual Fund
Variable Annuity Trust, Mutual Fund Investment Trust, Mutual Fund Select Group,
Capital Growth Portfolio, Growth and Income Portfolio and International Equity
Portfolio (these entities, together with MFT and MFST, 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 MFT or MFST to any of its officers or Trustees who
are affiliated with Chase or CFAM (or any of their affiliates). Those Trustees
who are not affiliated with Chase or its affiliates will be paid an annual fee
plus a fee for each meeting of the Board of Trustees or any committee thereof
that such Trustee attends, together with reimbursement for reasonable expenses
incurred in attending such meetings. Chase, CFAM and their affiliates have had,
and expect in the future to have, banking and other business transactions in the
ordinary course of business with corporations of which those Trustees who are
not "interested persons" of Chase or CFAM are directors or officers. Any such
transactions are made on substantially the same terms as those prevailing at the
time for comparable transactions with other persons, including, where
applicable, interest rates, collateral, fees and other charges, and do not
involve more than the normal risk of collectibility (in the case of loans) or
present other unfavorable features.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in connection
with the solicitation of proxies by the MFT Board for use at the Meeting. It is
expected that the solicitation of proxies will be primarily by mail. MFT's
officers and service providers may also solicit proxies by telephone, facsimile
machine, telegraph, the Internet or personal interview. In addition, MFT 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 MFT to forward solicitation materials
to their principals to obtain authorizations for the execution of proxies. Any
Chase Vista New York Tax Free Income Fund Shareholder giving a proxy may revoke
it at any time before it is exercised by submitting to MFT a written notice of
revocation or a subsequently executed proxy or by attending the Meeting and
electing to vote in person.
Only Chase Vista New York Tax Free 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 7,482,186.27 Chase
Vista New York Tax Free 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 Vista New York Tax Free Income Fund Shares will constitute
a quorum for purposes of transacting all business at
24
<PAGE>
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 Chase Vista New York Tax Free Income Fund Shareholders determine to adjourn
the Meeting for any other reason, Chase Vista New York Tax Free 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 Vista New York Tax Free
Income Fund Shareholders holding a majority of Chase Vista New York Tax Free
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 Vista New
York Tax Free 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 Vista
New York Tax Free 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 Vista New York Tax Free Income Fund Shares represented by each
properly signed proxy received prior to the Meeting will be voted at the
Meeting. If a Chase Vista New York Tax Free 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 Vista New
York Tax Free 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 Vista New York Tax Free 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 Vista New York Tax Free Income Fund Shareholder
may be revoked by such Chase Vista New York Tax Free Income Fund Shareholder at
any time prior to its use by written notice to MFT, 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 Vista New York Tax Free Income Fund or Chase Vista
Select New York Intermediate Tax Free Income 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 MFT by
personal interview, by telephone or by telegraph without additional remuneration
thereof. Professional solicitors may also be retained.
SHAREHOLDER APPROVALS
Approval of the Reorganization Plan (and the transactions contemplated
thereby) requires the affirmative vote of the lesser of (i) 67% or more of Chase
Vista New York Tax Free Income Fund Shares present at the Meeting and (ii) more
than 50% of all outstanding Chase Vista New York Tax Free Income Fund Shares. In
tallying Chase Vista New York Tax Free 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 Vista New York Tax
Free Income Fund as a group owned less than 1% of the outstanding shares of
Chase Vista New York Tax Free Income Fund. On the Record Date, the name, address
and percentage ownership of the persons who owned of record more than 5% of the
shares of Chase Vista New York Tax Free Income Fund and the percentage of shares
of
25
<PAGE>
Chase Vista Select New York Intermediate Tax Free Income 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 CHASE
PERCENTAGE OF CHASE VISTA SELECT NEW YORK
VISTA NEW YORK TAX INTERMEDIATE TAX FREE
AMOUNT OF FREE INCOME FUND INCOME FUND SHARES
SHARES SHARES OWNED ON OWNED UPON
NAME AND ADDRESS OWNED RECORD DATE CONSUMMATION
----------------------------------- ---------- ------------------- ---------------------
<S> <C> <C> <C>
None None None None
</TABLE>
At November 10, 2000, the Trustees and officers of MFST as a group owned
less than 1% of the outstanding shares of Chase Vista Select New York
Intermediate Tax Free Income Fund. At November 10, 2000, the name, address and
share ownership of the persons who owned of record more than 5% of the shares of
Chase Vista Select New York Intermediate Tax Free Income Fund and the percentage
of shares that would be owned by such person upon consummation of the
Reorganization based upon their holdings at November 10, 2000 were as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF PERCENTAGE OF
FUND SHARES FUND SHARES
AMOUNT OF OWNED ON OWNED UPON
NAME AND ADDRESS SHARES OWNED RECORD DATE CONSUMMATION
----------------------------------- --------------- ------------- --------------
<S> <C> <C> <C>
Balsa & Co. Rebate Account 17,157,990.9880 43.41% 36.50%
Mutal Funds Unit 16 HCB 340
P.O. Box 2558
Houston, TX 77252-2258
Penlin & Co. 15,986,380.5060 40.45% 34.01%
Rebate Account
C/O The Chase Manhattan Bank
Attn MUT FDS/T-C
P.O. Box 31412
Rochester, NY 14063-1412
Liva & Company 4,014,481.6560 10.16% 8.54%
Rebate Account
C/O Chase Manhattan Bank N/A
Attn Mutual Fund Operations
P.O. Box 31412
Rochester, NY 14063-1412
</TABLE>
ADDITIONAL INFORMATION ABOUT MFT
Information about Chase Vista New York Tax Free Income Fund is included in
the Prospectus dated December 29, 1999, which is incorporated by reference
herein. Additional information about Chase Vista New York Tax Free Income Fund
is also included in
26
<PAGE>
MFT's Statement of Additional Information dated December 29, 1999, 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 1-800-34-VISTA. MFT is subject to the requirements of the 1940 Act and,
in accordance with such requirements, files reports and other information with
the SEC. These materials can be inspected and copied at the Public Reference
Facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the SEC's Regional Offices at 7 World Trade Center, Suite 1300,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
and is also available on the SEC's web site at http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT MFST
Information about Chase Vista Select New York Intermediate Tax Free Income
Fund is included in the Prospectus dated December 29, 1999, which is
incorporated by reference and enclosed herein. Additional information about
Chase Vista Select New York Intermediate Tax Free Income Fund is also included
in MFST's Statement of Additional Information dated December 29, 1999, 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 1-800-34-VISTA. MFST is subject to the requirements of the 1940 Act and,
in accordance with such requirements, files reports and other information with
the SEC. These materials can be inspected and copied at the Public Reference
Facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549, and at the SEC's Regional Offices at 7 World Trade Center, Suite 1300,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
and are also available on the SEC's web site at http://www.sec.gov.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements and financial highlights and notes thereto
of Chase Vista New York Tax Free Income Fund and Chase Vista Select New York
Intermediate Tax Free Income Fund for the fiscal year ended August 31, 2000 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 Vista New York Tax Free
Income Fund and Chase Vista Select New York Intermediate Tax Free Income 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 MFT 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 MFT 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 MFT nor MFST is involved in any litigation that would have any
material adverse effect upon either Chase Vista New York Tax Free Income Fund or
Chase Vista Select New York Intermediate Tax Free Income Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to MFT in writing at the address on
the cover page of this Combined Prospectus/Proxy Statement or by telephoning
1-800-34-VISTA.
* * *
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 Trust (the "Transferor Trust"), a
Massachusetts business trust, on behalf of Chase Vista New York Tax Free Income
Fund (the "Transferor Portfolio") and Mutual Fund Select Trust (the "Acquiring
Trust") and Chase Vista Select New York Intermediate Tax Free Income 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 Class A share classes in exchange for Class A Shares of the
Transferor Portfolio and the Class B share class in exchange for Class B 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 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 Class A shares shall be determined by an exchange ratio computed by
dividing the net value of the Transferor Portfolio's assets attributable to
Class A 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). The
number of Class B 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
Class B shares shall be determined by an exchange ratio computed by dividing the
net value of the Transferor Portfolio's assets attributable to Class B shares by
the net asset value per share of the Class B shares of the Acquiring Portfolio,
both as determined in accordance with Section 1(c)(i).
(iii) All computations of value shall be made by the Custodian in
accordance with its regular practice as pricing agent for the Acquiring
Portfolio and the Transferor Portfolio.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING TRUST
The Acquiring Trust represents and warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. Each of the
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Acquiring Portfolio and the Acquiring Trust have all necessary federal, state
and local authorization to own all of its properties and assets and to carry on
its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectus and statement of
additional information of the Acquiring Trust, as amended, included in the
Acquiring Trust's registration statement on Form N-1A filed with the Securities
and Exchange Commission, comply in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act") and the Act and
do not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest, par value $.001 per share, of which as
of August 31, 2000 there were outstanding 39,467,795 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 August 31,
2000, which have been audited by PricewaterhouseCoopers LLP, 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 August 31, 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 August 31, 2000, 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).
(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,
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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 August 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 6,236,697 Class A shares and 1,095,479
Class B Shares, 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
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.
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(e) FINANCIAL STATEMENTS. The financial statements for the Transferor Trust
with respect to the Transferor Portfolio for the fiscal year ended August 31,
2000, which have been audited by PricewaterhouseCoopers LLP, 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 August 31, 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 August 31, 2000, 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 August 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.
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
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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 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
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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
August 31, 2000.
(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 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
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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 August 31,
2000.
(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 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.
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(e) TERMINATION BY THE TRANSFEROR TRUST. This Plan may be terminated by the
Transferor Trust at any time prior to the Effective Time of the Reorganization,
whether before or after approval of this Plan by the shareholders of the
Transferor Portfolio, without liability on the part of any party hereto, its
Trustees, officers or shareholders or The Chase Manhattan Bank on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the
Transferor Portfolio.
(f) TERMINATION BY THE ACQUIRING TRUST. This Plan may be terminated by the
Acquiring Trust at any time prior to the Effective Time of the Reorganization,
whether before or after approval of this Plan by the shareholders of the
Transferor Portfolio, without liability on the part of any party hereto, its
Trustees, officers or shareholders or The Chase Manhattan Bank on notice to the
other parties in the event that the Board of Trustees determines that proceeding
with this Plan is not in the best interests of the shareholders of the Acquiring
Portfolio.
(g) SURVIVAL. No representations, warranties or covenants in or pursuant to
this Plan, except for the provisions of Section 5(f) and Section 9 of this Plan,
shall survive the Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by The Chase Manhattan
Bank. Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees;
(vii) legal fees; and (viii) solicitation costs relating to the Reorganization.
In addition, Chase will waive fees payable to it or reimburse expenses to the
extent necessary such that the actual (post-waiver) total expense ratios of the
Acquiring Portfolio are not higher than those of the Transferor Portfolio as set
forth in the Registration Statement for a period of one year after the Exchange
Date.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Transferor Trust (for itself or on behalf of the Transferor Portfolio)
or the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio):
1211 Avenue of the Americas
41st Floor
New York, New York 10036
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Cynthia G. Cobden, Esq.
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to have
been material and relied upon by the Transferor Trust and the Acquiring Trust
notwithstanding any investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(a) The section and paragraph headings contained in this Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Plan.
(b) This Plan may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with the laws of
the Commonwealth of Massachusetts.
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(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 Trust" is the designation of its Trustees under a
Declaration of Trust dated February 1, 1994, 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 Trust" is the designation of its Trustees
under a Declaration of Trust dated October 1, 1996, as amended, and all persons
dealing with the Acquiring Trust must look solely to the Acquiring Trust's
property for the enforcement of any claims against the Acquiring Trust, as
neither the Acquiring Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Acquiring
Trust. No series of the Acquiring Trust shall be liable for claims against any
other series of the Acquiring Trust.
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the date first
above written.
MUTUAL FUND TRUST
on behalf of Chase Vista New York Tax
Free Income Fund
By:
________________________________________
Name:
Title:
MUTUAL FUND SELECT TRUST
on behalf of Chase Vista Select New
York Intermediate Tax Free Income Fund
By:
________________________________________
Name:
Title:
Agreed and acknowledged with respect to Section 9:
THE CHASE MANHATTAN BANK
By: ________________________________________
Name:
Title:
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