As filed with the Securities and Exchange Commission on March 27, 1998
File Nos.: 811-07959
333-42505
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFFECTIVE AMENDMENT NO. 2
ADVISORS SERIES TRUST
(Exact Name of Registrant as Specified in Charter)
(602) 952-1100
(Registrant's Telephone Number, Including Area Code)
4455 E. Camelback Road, Suite 261E
Phoenix, AZ 85018
(Address of Principal Executive Offices)
ROBERT H. WADSWORTH
Advisors Series Trust
4455 E. Camelback Road, Suite 261E
Phoenix, AZ 85018
(Name and Address of Agent for Service)
Copy to:
Julie Allecta, Esq.
Kelvin Leung, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street
San Francisco, California 94104
Approximate Date of Proposed Public Offering: As soon as practicable after this
Registration Statement becomes effective. This Registration Statement shall
hereafter become effective in accordance with the provisions of Section 8(a) of
the Securities Act of 1933, as amended, or until the registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
No filing fee is required under the Securities Act of 1933, as amended, because
an indefinite number of shares of beneficial interest, with par value $0.01 per
share, has previously been registered pursuant to Rule 24f-2 under the
Investment Company Act of 1940, as amended. The Registrant has not yet filed a
Rule 24f-2 Notice.
<PAGE>
CROSS REFERENCE SHEET
Form N-14 Part A, Item Location in Prospectus/Proxy Statement
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1 Front Cover; Cross Reference
2 Table of Contents
3 Introduction; Description of the Proposed
Reorganization; Comparison of the Funds; Risk
Factors
4 Introduction, The Transaction, The Proposal,
Description of the Proposed Reorganization
5, 6 The Transaction, Comparison of the Funds; Risk
Factors; Further Information About the Fund
and the Acquiring Fund
7 Shares and Voting; Vote Required
8 Not Applicable
Form N-14 Part B, Item Location in Statement of Additional Information
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10 Cover Page
11 Table of Contents
12 Incorporation of Documents by Reference in
Statement of Additional Information
13 Not Applicable
14 Incorporation of Documents by Reference in
Statement of Additional Information
Form N-14 Part C
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Information required to be included in Part C is set forth under the appropriate
item, so numbered, in Part C of Form N-14.
<PAGE>
THE FOLLOWING ITEMS ARE HEREBY INCORPORATED BY REFERENCE:
From Post-Effective Amendment No. 15 of Advisors Series Trust, filed December
16, 1997 (SEC File No. 33-17391):
Prospectus for Van Deventer & Hoch American Value Fund, dated December
16, 1997
Statement of Additional Information for Van Deventer & Hoch American
Value Fund, dated December 16, 1997
From Post-Effective Amendment No. 50 of Mutual Fund Group, filed February 28,
1998 (SEC File No. 33-14196):
Prospectus for Vista American Value Fund (with other funds of Mutual
Fund Group), dated February 28, 1998
As previously sent to shareholders of the Vista American Value Fund and filed
with the SEC pursuant to Rule 30b2-1:
Annual Report for the Vista American Value Fund for the fiscal year
ended October 31, 1997, as contained in the Annual Report for Mutual
Fund Group dated as of and for the periods ended October 31, 1997.
<PAGE>
-----------------------------------------
PART A
-----------------------------------------
<PAGE>
MUTUAL FUND GROUP
CHASE VISTA SERVICE CENTER
P.O. Box 419392
(800) 34-VISTA
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
OF
CHASE VISTA AMERICAN VALUE FUND
TO BE HELD APRIL 23, 1998
To the Shareholders of Chase Vista American Value Fund:
NOTICE IS HEREBY GIVEN that a special meeting (the "Meeting")
of shareholders of Chase Vista American Value Fund (the "Fund"), a series of
Mutual Fund Group, will be held at the offices of The Chase Manhattan Bank, One
Chase Manhattan Plaza, Third Floor, New York, New York 10081 on April 23, 1998,
at 10:00 a.m., local time, for the following purposes:
1. To approve or disapprove a proposed reorganization of
the Fund into Van Deventer & Hoch American Value
Fund, a series of Advisors Series Trust.
2. To transact such other business as may properly come
before the Meeting or any adjournment(s) thereof.
Only shareholders of record at the close of business on March
27, 1998 (the "Record Date"), will be entitled to notice of and to vote at the
Meeting or any adjournment thereof.
By Order of the Board of Trustees
-------------------------
Richard Baxt, Secretary
April 3, 1998
YOUR VOTE IS IMPORTANT REGARDLESS OF HOW MANY
SHARES YOU OWNED ON THE RECORD DATE.
-------------------
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY FORM, DATE AND
SIGN IT, AND RETURN IT IN THE PRE-ADDRESSED ENVELOPE PROVIDED. NO POSTAGE IS
NECESSARY IF MAILED IN THE UNITED STATES. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE OF FURTHER SOLICITATION, WE REQUEST YOUR COOPERATION IN MAILING YOUR
PROXY PROMPTLY.
<PAGE>
MUTUAL FUND GROUP
Chase Vista American Value Fund
and
ADVISORS SERIES TRUST
Van Deventer & Hoch American Value Fund
COMBINED PROXY STATEMENT AND PROSPECTUS
---------------------------------------
DATED: April 3, 1998
This document, which includes a Notice of Special Meeting of
Shareholders, a Combined Proxy Statement and Prospectus and a form of Proxy, is
being furnished in connection with the solicitation of proxies by the Board of
Trustees (the "Board of Trustees") of Mutual Fund Group (the "Trust") for use at
the Special Meeting (the "Meeting") of shareholders of the Chase Vista American
Value Fund (the "Fund"), a separate series of the Trust, to be held on April 23,
1998.
At the Meeting, the shareholders of the Fund will be asked to vote on
the approval or disapproval of a proposed reorganization (the "Reorganization")
of the Fund into Van Deventer & Hoch American Value Fund (the "Acquiring Fund"),
a series of Advisors Series Trust ("AST Trust"). The Reorganization will include
(i) the transfer of all of the assets and liabilities of the Fund to the
Acquiring Fund in exchange for shares of the Acquiring Fund (the "Acquiring Fund
Shares") of equivalent value to the assets and liabilities transferred, (ii) the
pro rata distribution of such Acquiring Fund Shares to shareholders of record of
the Fund as of the effective date of the Reorganization (the "Effective Date")
in full redemption of such shareholders' shares in the Fund, and (iii) the
immediate liquidation and termination of the Fund. As a result of the
Reorganization, each shareholder of the Fund as of the Effective Date will hold
Acquiring Fund Shares having the same aggregate net asset value as the shares of
the Fund held by such shareholder immediately before consummation of the
Reorganization. Counsel to the Acquiring Fund will issue an opinion to the
effect that for federal income tax purposes, the Reorganization will be treated
as a tax-free reorganization that will not cause the Fund's shareholders to
recognize a gain or loss for federal income tax purposes. See Section II.A.3
below.
Both the Trust and AST Trust are open-end management investment
companies. The investment objective of the Fund is to seek to maximize total
return, consisting of capital appreciation (both realized and unrealized) and
income, by investing primarily in the equity securities of well-established U.S.
companies (i.e., companies with at least a five-year operating history) which,
in the opinion of the Fund's advisers, are undervalued by the market. The
Acquiring Fund has an identical investment objective.
The principal executive offices of the Trust are located at The Chase
Manhattan Bank, One Chase Manhattan Plaza, Third Floor, New York, New York 10081
(telephone: (800) 34-VISTA). The principal executive offices of AST Trust are
located at 4455 E. Camelback Road, Suite 261E, Phoenix, Arizona 85018
(telephone: (602) 952-8520).
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This Combined Proxy Statement and Prospectus sets forth concisely the
information that a shareholder of the Fund should know before voting on the
proposal. It should be read and retained for future reference.
The Acquiring Fund is a new series of AST Trust. The registration
statement for the Acquiring Fund (which includes the Prospectus and the
Statement of Additional Information for the Acquiring Fund dated December 16,
1997) was initially filed with the Securities and Exchange Commission (the
"SEC") on October 1, 1997, and is now effective. The Prospectus and the
Statement of Additional Information for the Acquiring Fund both dated December
16, 1997, the Prospectus for the Fund dated February 27, 1998, the combined
Statement of Additional Information relating to the Fund (as well as certain
other mutual funds in the Chase Vista Funds) dated February 27, 1998, and the
Statement of Additional Information relating to this Combined Proxy Statement
and Prospectus of even date herewith, are on file with the SEC and are
incorporated by this reference herein. The Prospectus of the Acquiring Fund
dated December 16, 1997, and a copy of the Prospectus of the Fund dated February
27, 1998 accompanies this document. The Statement of Additional Information of
the Acquiring Fund dated December 16, 1997, is available without charge by
writing to Van Deventer & Hoch at 800 North Brand Blvd., Suite 300, Glendale,
California 91203 or by calling (818) 247-5330. The Statement of Additional
Information of the Fund (as well as certain other Chase Vista Funds) dated
February 27, 1998 and the Statement of Additional Information relating to this
Combined Proxy Statement and Prospectus of even date herewith, are available
without charge by writing to the Trust at Vista Service Center, P.O. Box 419392,
Kansas City, MO 64141, or by calling (800) 34-VISTA.
The Annual Report to Shareholders of the Fund for the fiscal year ended
October 31, 1997, containing audited financial statements of the Fund previously
has been mailed to each shareholder entitled to vote at the Meeting. Additional
copies of that Annual Report available without charge by writing or calling the
Trust at its address and telephone number listed above. The Acquiring Fund is a
new series of AST Trust and has not commenced operation. Therefore, no Annual
Report to Shareholders of the Acquiring Fund is available. It is expected that
this Combined Proxy Statement and Prospectus will be mailed to shareholders on
or about April 3, 1998.
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 PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INVESTMENTS IN THE FUND AND THE ACQUIRING FUND ARE NOT BANK DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, THE CHASE MANHATTAN BANK OR ANY OF
ITS AFFILIATES AND ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY
OTHER
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<PAGE>
GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL FUNDS INVOLVE RISK, INCLUDING THE
POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
I. INTRODUCTION......................................................................................6
A. THE TRANSACTION.....................................................................6
B. THE PROPOSAL........................................................................7
C. SHARES AND VOTING...................................................................8
II. THE PROPOSAL:
APPROVAL OF THE PROPOSED REORGANIZATION.....................................................10
A. DESCRIPTION OF THE PROPOSED REORGANIZATION.........................................10
1. The Reorganization........................................................10
2. Effect of the Reorganization..............................................11
3. Federal Income Tax Consequences...........................................11
4. Description of the Acquiring Fund Shares..................................12
5. Capitalization............................................................12
B. COMPARISON OF THE FUNDS............................................................12
1. Investment Objectives and Policies........................................12
2. Investment Restrictions...................................................13
3. Comparative Summary of Investor Costs.....................................16
4. Comparative Performance Information.......................................17
5. Advisory Fees, Sub-Advisory Fees and Other Expenses.......................18
6. Distribution and Shareholder Services.....................................18
7. Distribution Plans........................................................19
8. Administration, Custody, Fund Accounting and
Transfer Agency Services..............................................19
9. Shareholder Servicing Agents..............................................20
10. Purchase Procedures.......................................................21
11. Redemption and Exchange Procedures........................................22
12. Income Dividends, Capital Gains Distributions and Taxes...................22
13. Portfolio Transactions and Brokerage Commissions..........................23
14. Shareholders' Rights......................................................23
C. RISK FACTORS.......................................................................24
D. RECOMMENDATION OF THE BOARD OF TRUSTEES............................................24
1. The Legal Framework.......................................................24
2. The Trustees' Considerations..............................................25
E. DISSENTERS' RIGHTS OF APPRAISAL....................................................26
F. FURTHER INFORMATION ABOUT THE FUND AND THE ACQUIRING
FUND...............................................................................27
G. VOTE REQUIRED......................................................................27
III. MISCELLANEOUS ISSUES............................................................................28
A. OTHER BUSINESS.....................................................................28
B. NEXT MEETING OF SHAREHOLDERS.......................................................28
C. LEGAL MATTERS......................................................................28
D. EXPERTS............................................................................28
</TABLE>
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<PAGE>
I. INTRODUCTION
A. THE TRANSACTION
The Meeting has been called for the purpose of allowing shareholders to
consider and vote on a proposal which relates to a recent business transaction
involving Van Deventer & Hoch ("VDH"), the investment sub-adviser to the Fund.
Currently, VDH is 50% owned by VDH Holdings (which in turn is owned by the
Fund's management team). The other 50% of VDH is owned by CBC Holding
(California) Inc., a subsidiary of The Chase Manhattan Corporation, a bank
holding company that also owns The Chase Manhattan Bank, the Fund's investment
adviser ("Chase"). Through VDH's relationship with Chase, the Fund has been part
of the Chase Vista Funds and a series of Mutual Fund Group, a Massachusetts
business trust.
Pursuant to a Purchase Agreement dated as of October 6, 1997, The Chase
Manhattan Corporation, through its subsidiary CBC Holding (California) Inc.,
agreed to sell its 50% interest in VDH to Crestline Capital Partners L.P.
("Crestline"), which is a Delaware limited partnership whose sole general
partner is PLT Capital Partners, Inc., a Delaware corporation. PLT Capital
Partners, Inc. is a wholly-owned subsidiary of PLT Holdings, Inc., a Delaware
corporation that also holds all the outstanding limited partnership interests of
Crestline. PLT Holdings, Inc. is a holding company whose subsidiaries include,
among others, Putnam, Lovell & Thornton, Inc., a Delaware corporation and an
investment banking firm that focuses on the financial services sector with a
special emphasis on the asset management industry ("Putnam, Lovell"). The other
50% interest in VDH which is held by the Fund's management team is not affected
by this transaction. For purposes of this Combined Proxy Statement and
Prospectus, the transaction is called the "Sale." The Sale closed on December
31, 1997. After the Sale, key members of the VDH portfolio management team,
including Richard Trautwein, have continued to be responsible for managing the
day-to-day affairs of VDH, which will be the adviser to the Acquiring Fund after
the Reorganization.
Van Deventer & Hoch is no longer affiliated with Chase. Given this
change in ownership of VDH, as well as the current ownership base of the Fund,
Chase and the Trustees believe that the Reorganization of the Fund into a new
investment company portfolio having VDH as its investment adviser is in the best
interests of the shareholders of the Fund, rather than for the Fund to continue
to be a part of the Chase Vista Funds.
In light of the foregoing considerations and the other considerations
described herein, the Board of Trustees have considered and approved the
Reorganization of the Fund into a newly created portfolio of AST Trust, a
Delaware business trust organized on October 3, 1996, with thirteen effective
series and one series that is not yet effective, which has all the necessary
service providers in place and would be in a position to service the Fund and
its shareholders without interruption as soon as practicable following
consummation of the Sale. Giving effect to a commitment by VDH to waive fees
payable to it and/or reimburse expenses, the Acquiring Fund will have a lower
expense ratio than the Fund from the consummation of the Reorganization (which
is expected to occur in April 1998) through May 6, 1998. After that date, VDH
has committed to waive fees and/or reimburse expenses for the two year period
commencing upon
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<PAGE>
consummation of the Reorganization to the extent necessary to prevent the
expense ratio of the Acquiring Fund (based on estimated expenses for the current
fiscal year) from exceeding the Fund's current expense ratio (based on expenses
incurred in the most recent fiscal year, after giving effect to any waivers
and/or reimbursements by Chase). The Reorganization will be accomplished by
transferring all of the assets and liabilities of the Fund to a new shell series
(called "Van Deventer & Hoch American Value Fund" and referred to herein as the
"Acquiring Fund") of AST Trust with the result that the existing shareholders of
the Fund will become, after the Reorganization, the shareholders of the Van
Deventer & Hoch American Value Fund (as defined above, the "Acquiring Fund"), a
series of AST Trust. The net asset value per share of the Acquiring Fund and the
number of shares owned by each Acquiring Fund shareholder will be the same on
the date of the Reorganization as the net asset value per share of the Fund and
the number of shares owned on that date by the Fund's shareholders.
D. F. King & Co., Inc., a proxy solicitation firm, has been retained to
assist in the solicitation of the proxy vote. The expenses of retaining D. F.
King & Co., Inc., will be borne by Chase and/or VDH. D. F. King & Co., Inc., may
call shareholders to ask if they would be willing to have their votes recorded
by telephone. The telephone voting procedure is designed to authenticate
shareholders' identities, to allow shareholders to authorize the voting of their
shares in accordance with their instructions and to confirm that their
instructions have been recorded properly. The Acquired Fund and the Acquiring
Fund have been advised by counsel that these procedures are consistent with the
requirements of applicable law. A shareholder voting by telephone would be asked
for his or her social security number or other identifying information and would
be given an opportunity to authorize proxies to vote his or her shares in
accordance with his or her instructions. To insure that the shareholder's
instructions have been recorded correctly, he or she will receive a confirmation
of such instructions in the mail. The confirmation is a replica of the proxy
card but with marks indicating how the shareholder voted along with a special
toll-free number which will be available in the event the shareholder wishes to
change or revoke the vote. Although a shareholder's vote may be taken by
telephone, each shareholder will receive a copy of this proxy statement and may
vote by mail using the enclose proxy card.
The cost of the Reorganization and of the Meeting and solicitation of
proxies therefor, including the cost of copying, printing and mailing of proxy
materials, will be borne by Chase and/or VDH and not by either the Fund or the
Acquiring Fund. In addition to solicitations by mail, proxies may also be
solicited by officers of the Trust or VDH, without special compensation, by
telephone, telegram or otherwise.
B. THE PROPOSAL
At the Meeting, the shareholders of the Fund will be asked to approve
the proposed Reorganization of the Fund into the Acquiring Fund. The
Reorganization will include the transfer of all of the assets and liabilities of
the Fund to the Acquiring Fund in exchange for shares of the Acquiring Fund of
equivalent value, the pro rata distribution of such Acquiring Fund Shares to the
shareholders of the Fund in full redemption of such shareholders' shares in the
Fund, and the immediate liquidation and termination of the Fund.
The Fund and the Acquiring Fund (collectively, the "Funds") have
identical investment objectives and policies. The investment objective of the
Fund is to seek to maximize total return, consisting of capital appreciation
(both realized and unrealized) and income, by investing primarily in the equity
securities of well-established U.S. companies (i.e., companies with at least a
five-year operating history) which, in the opinion of the Fund's advisers, are
undervalued by the market.
Investments in the Funds are subject to substantially similar risks.
See Section II.C. below.
The purchase and redemption arrangements of the Funds are substantially
identical. The Acquiring Fund and the Fund have different distribution and
exchange arrangements which are more fully discussed in Section II.B. below.
Shareholders should note that if the Reorganization is consummated,
shareholders of the Fund will no longer be able to exchange their Fund shares
into shares of another Chase Vista
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<PAGE>
Fund or enjoy any of the other shareholder privileges associated with being a
shareholder of a Chase Vista Fund.
The investment adviser to the Fund is The Chase Manhattan Bank and the
sub-adviser to the Fund is Van Deventer & Hoch. Van Deventer & Hoch also serves
as investment adviser to the Acquiring Fund, which does not have a sub-adviser.
As discussed below, the Board of Trustees of the Trust believes that the
proposed Reorganization is in the best interests of the Fund and its
shareholders, and that the interests of existing shareholders of the Fund will
not be diluted as a result of the proposed Reorganization. See Section II.D.
below.
C. SHARES AND VOTING
The Trust is a Massachusetts business trust and is registered with the
SEC as an open-end management investment company. The Trust currently has
eighteen operating series, or funds, outstanding, including the Fund. Each
series or fund has its own investment objective and policies and operates
independently for purposes of investments, dividends, other distributions and
redemptions. The Fund has only one class of shares. The Acquiring Fund also has
designated only one class of shares. The Fund's shareholders will receive shares
of the Acquiring Fund in exchange for their Fund shares if the Reorganization is
approved and consummated. Similar to the structure of the Fund, the Acquiring
Fund will have a plan of distribution pursuant to Rule 12b-1 as promulgated
under the Investment Company Act of 1940, as amended (the "1940 Act").
Each share of the Fund, or fraction thereof, is entitled to one vote or
corresponding fraction thereof at the Meeting. At the close of business on March
27, 1998 (the "Record Date"), the record date for the determination of
shareholders entitled to vote at the Meeting, there were _________________
shares outstanding held by _____ record holders (including omnibus accounts
representing multiple underlying beneficial owners).
All shares represented by each properly signed proxy received prior to
the Meeting will be voted at the Meeting. If a shareholder specifies how the
proxy is to be voted on any business properly to come before the Meeting, it
will be voted in accordance with such instruction. A proxy may be revoked by a
shareholder at any time prior to its use by written notice to the Trust, 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 therein as proxies in accordance with such persons' best judgment.
The holders of a majority of outstanding shares entitled to vote
present in person or by proxy will constitute a quorum. When a quorum is
present, approval of the proposal will require the affirmative vote of the
lesser of (i) 67% of the shares represented at the Meeting if more than 50% of
the outstanding shares is represented, or (ii) shares representing more than 50%
of the Fund's outstanding shares. The Meeting may be adjourned from time to time
by a majority of the votes properly cast upon the question of adjourning a
Meeting to another date and time, whether or not a quorum is present, and the
Meeting may be held as adjourned without further notice. The persons named in
the proxy will vote in favor of such adjournment those shares which they
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<PAGE>
are entitled to vote if such adjournment is necessary to obtain a quorum or to
obtain a favorable vote on any proposal.
All proxies voted, including abstentions and broker non-votes, will be
counted toward establishing a quorum. Approval of the Reorganization will occur
only if a sufficient number of votes are cast FOR that proposal. Accordingly,
abstentions and broker non-votes have the effect of a negative vote on the
proposal.
As of the Record Date, the Fund's shareholders of record and (to the
Trust's knowledge) beneficial owners who owned more than five percent of the
Fund's shares are as follows:
Percentage of the Fund's
Shareholder Outstanding Shares
----------- ------------------
[Chemical Bank NY
Investment Services Dept.
270 Park Ave 31st Fl.
New York, NY 10017-2014] [to come]
[Chemical Bank
Custodian For the IRA of
Donald F. Grannis
100 No. San Rafael Ave.
Pasadena, CA 91105] [to come]
The Acquiring Fund currently does not have any public shareholders.
Currently, First Fund Distributors, Inc. holds all the outstanding shares of the
Acquiring Fund.
The officers and trustees of the Trust, as a group, owned of record and
beneficially less than one percent of the outstanding voting securities of the
Fund and the Acquiring Fund, respectively, as of the Record Date.
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<PAGE>
II. THE PROPOSAL:
APPROVAL OF THE PROPOSED REORGANIZATION
A. DESCRIPTION OF THE PROPOSED REORGANIZATION
1. The Reorganization
------------------
If the Reorganization is approved, on the Effective Date the Acquiring
Fund will acquire the assets and liabilities of the Fund, and will issue to the
Fund the number of Acquiring Fund Shares determined by dividing the value of the
Fund's assets and liabilities so transferred by the net asset value of one
Acquiring Fund Share. The assets and liabilities of the Fund and the net asset
value of the Acquiring Fund will be calculated at the close of business on the
date immediately preceding the Effective Date (the "Valuation Date") in
accordance with the Funds' valuation procedures described in their respective
Prospectuses (in the case of the Acquiring Fund, the Prospectus dated December
16, 1997, and, in the case of the Fund, the Prospectus dated February 27, 1998).
Contemporaneously with that asset transfer, the Fund will distribute the
Acquiring Fund Shares it receives pro rata to each remaining shareholder of the
Fund based on the percentage of the outstanding shares of the Fund held of
record by that shareholder on the Valuation Date. For example, on October 31,
1997, the value of the aggregate net assets of the Fund was approximately
$11,577,427, the total number of outstanding Fund shares was 737,783, and the
net asset value of each Acquiring Fund Share was $15.69. Therefore, if the
Effective Date had been October 31, 1997, the Acquiring Fund would have issued a
total of 737,783 Acquiring Fund Shares to the Fund, and the Fund would then have
redeemed each of its then outstanding shares in exchange for one Acquiring Fund
Share.
This distribution of the Acquiring Fund Shares by the Fund to its
shareholders in full redemption of such shareholders' Fund shares will be
accomplished by the establishment of book accounts on the Acquiring Fund's share
records in the name of the respective shareholders of the Fund, representing the
respective pro rata numbers of Acquiring Fund Shares deliverable to the Fund
shareholders. Fractional shares will be carried to the third decimal place.
Certificates evidencing the Acquiring Fund Shares will not be issued to the
Fund's shareholders.
Immediately following the Fund's pro rata liquidating distribution of
the Acquiring Fund Shares to the Fund shareholders, the Fund will liquidate and
terminate.
Consummation of the Reorganization is subject to approval by the
shareholders of the Fund and the satisfaction of certain other conditions. The
Reorganization may be abandoned at any time before the Effective Date upon the
vote of either a majority of the Board of Trustees or a majority of the board of
trustees of AST Trust.
Chase and/or VDH will pay all costs and expenses of the Reorganization,
including those associated with the Meeting, the copying, printing and
distribution of this Combined Proxy Statement and Prospectus, and the
solicitation of proxies for the Meeting.
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<PAGE>
The above is a summary of the Reorganization. The summary does not
purport to be a complete description of the terms of the Reorganization, which
are set forth in the Agreement and Plan of Reorganization attached as Exhibit A
to this document.
2. Effect of the Reorganization
----------------------------
If the Reorganization is approved and completed, shareholders of the
Fund as of the Effective Date will become shareholders of the Acquiring Fund,
which will acquire the net assets of the Fund. The net asset value of the
Acquiring Fund Shares held by each shareholder of the Fund immediately after
consummation of the Reorganization will be equivalent to the net asset value of
the Fund Shares held by that shareholder immediately before consummation of the
Reorganization.
On or before the Effective Date the Fund intends to distribute all of
its then remaining net investment income and realized capital gain.
VDH, the current sub-adviser to the Fund, will, after the
Reorganization, be the investment adviser for the Acquiring Fund and therefore
will be the investment adviser for the Fund's assets after the Reorganization.
Chase will cease to have any relationship with the operation of the Fund (in its
reconstituted form as the Acquiring Fund). Also, after the Reorganization, First
Fund Distributors, Inc. will be distributor of the Acquiring Fund's shares
instead of Vista Fund Distributors, Inc., the distributor of shares of the Fund.
It is, however, expected that the Acquiring Fund will be managed in accordance
with its existing investment objective and policies, which are identical to that
of the Fund.
3. Federal Income Tax Consequences
-------------------------------
As a condition to the closing of the Reorganization, the Fund and the
Acquiring Fund must receive a favorable opinion from Paul, Hastings, Janofsky &
Walker LLP, counsel to the Acquiring Fund, substantially to the effect that, for
federal income tax purposes: (a) The transfer by the Fund of substantially all
of its assets to the Acquiring Fund solely in exchange for the Acquiring Fund
Shares, as described above, is a reorganization within the meaning of Section
368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the "Code"); (b)
no gain or loss is recognized by the Fund upon the transfer of substantially all
of its assets to the Acquiring Fund in exchange solely for shares of the
Acquiring Fund Shares; (c) no gain or loss is recognized by the Acquiring Fund
on receipt of the Fund assets in exchange for the Acquiring Fund Shares; (d) the
basis of the assets of the Fund in the hands of the Acquiring Fund is, in each
instance, the same as the basis of those assets in the hands of the Fund
immediately prior to the transaction; (e) the holding period of the Fund's
assets in the hands of the Acquiring Fund includes the period during which the
assets were held by the Fund; (f) no gain or loss is recognized to the
shareholders of the Fund upon the receipt of the Acquiring Fund Shares solely in
exchange for the Fund's shares; (g) the basis of the Acquiring Fund Shares
received by the Fund shareholders is, in each instance, the same as the basis of
the Fund shares surrendered in exchange therefor; and (h) the holding period of
the Acquiring Fund Shares received by the Fund shareholders includes the holding
period during which shares of the Fund surrendered and exchanged therefor
-10-
<PAGE>
was held, provided that such shares were held as a capital asset in the hands of
the Fund shareholders on the date of the exchange. The Trust does not intend to
seek a private letter ruling from the Internal Revenue Service with respect to
the tax effects of the Reorganization.
4. Description of the Acquiring Fund Shares
----------------------------------------
Each Acquiring Fund Share issued to Fund shareholders pursuant to the
Reorganization will be duly authorized, validly issued, fully paid and
nonassessable when issued, will be transferable without restriction and will
have no preemptive or conversion rights. Each Acquiring Fund Share will
represent an equal interest in the assets of the Acquiring Fund. The Acquiring
Fund Shares will be sold and redeemed based upon the net asset value of the
Acquiring Fund next determined after receipt of the purchase or redemption
request, as described in the Acquiring Fund's Prospectus.
5. Capitalization
--------------
The capitalization of the Funds as of October 31, 1997, and their pro
forma combined capitalization as of that date after giving effect to the
proposed Reorganization are as follows:
<TABLE>
<CAPTION>
(Unaudited) (Unaudited)
Acquiring Acquired Pro Forma
Fund Fund Combined
-------------------------------------------------
<S> <C> <C> <C>
Aggregate net assets.................................. $0** $11,577,427 $11,577,427
Shares outstanding*................................... 0** 737,783 737,783
Net asset value per share............................. 0** $15.69 $15.69
- ------------------------------------------------------
</TABLE>
* Each Fund is authorized to issue an indefinite number of shares.
** The Acquiring Fund is a new series of Advisors Series Trust. It has not
commenced operation and currently has no assets and no shares
outstanding.
B. COMPARISON OF THE FUNDS
A brief comparison of the Funds is set forth below. See Section II.F.
for more information.
1. Investment Objectives and Policies
----------------------------------
The Fund / The Acquiring Fund. The investment objective of the Fund is
to seek to maximize total return, consisting of capital appreciation (both
realized and unrealized) and income, by investing primarily in the equity
securities of well-established U.S. companies (i.e., companies with at least a
five-year operating history) which, in the opinion of the Fund's advisers, are
undervalued by the market.
-11-
<PAGE>
The equity securities in which the Fund invests generally consist of
common stock, preferred stock and securities convertible into or exchangeable
for common or preferred stock. Under normal market conditions, at least 65% of
the value of the Fund's total assets will be invested in the equity securities
of U.S. companies. The Fund may invest in companies without regard to market
capitalization, although it generally does not expect to invest in companies
with market capitalizations of less than $200 million. The securities in which
the Fund invests are expected to be either listed on an exchange or traded in an
over-the-counter market.
In selecting investments for the Fund, its advisers generally seek
companies which they believe exhibit characteristics of financial soundness and
are undervalued by the market. In seeking to identify financially sound
companies, the Fund's advisers look for companies with strongly capitalized
balance sheets, an ability to generate substantial cash flow, relatively low
levels of leverage, an ability to meet debt service requirements and a history
of paying dividends. In seeking to identify undervalued companies, the advisers
look for companies with substantial tangible assets such as land, timber, oil
and other natural resources, or important brand names, patents, franchises or
other intangible assets which may have greater value than what is reflected in
the company's financial statements. The Fund's advisers will often select
investments for the Fund which are considered to be unattractive by other
investors or are unpopular with the financial press.
Although the Fund invests primarily in equity securities, it may invest
up to 25% of the value of its total assets in high quality, short-term money
market instruments, repurchase agreements and cash.
The Acquiring Fund has the identical investment objective and policies.
2. Investment Restrictions
-----------------------
Both the Acquiring Fund and the Fund have identical fundamental
investment restrictions which cannot be changed without the affirmative vote of
a majority of each Fund's outstanding voting securities as defined in the 1940
Act. Neither the Acquiring Fund nor the Fund may:
(1) borrow money, except that each of the Acquiring Fund and the 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 the Acquiring Fund or the Fund's total
assets must be repaid before the Acquiring Fund or the Fund, as the case may be,
may make additional investments;
(2) make loans, except that each of the Acquiring Fund and the Fund
may: (a) purchase and hold debt instruments (including without limitation,
bonds, notes, debentures or other obligations and certificates of deposit,
banker' acceptances and fixed time deposits) in accordance with its investment
objectives and policies; (b) enter into repurchase agreements with
-12-
<PAGE>
respect to portfolio securities; and (c) 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 the Acquiring Fund or the Fund's total assets would be invested
in the securities of companies whose principal business activities are in the
same industry. Notwithstanding the foregoing, with respect to the Acquiring Fund
or the Fund's permissible futures and options transactions in U.S. Government
securities, positions in such options and futures shall not be subject to this
restriction;
(4) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments but this shall not prevent the
Acquiring Fund or the Fund from (a) purchasing or selling options and futures
contracts or from investing in securities or other instruments backed by
physical commodities or (b) 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 the
Acquiring Fund or the Fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real estate
business). Investments by the 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 of the Acquiring Fund and the 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 of the Acquiring Fund and the 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 of the Acquiring
and the Fund may borrow money as authorized by the 1940 Act. For purposes of
this restriction, collateral arrangements with respect to permissible options
and futures transactions, including deposits of initial and variation margin,
are not considered to be the issuance of a senior security;
(7) underwrite securities issued by other persons except insofar as the
Acquiring Fund or the Fund may technically be deemed to be an underwriter under
the Securities Act of 1933 in selling a portfolio security; or
(8) with respect to 75% of its assets, hold more than 10% of the
outstanding voting securities of any issuer or invest more than 5% of its assets
in the securities of any one issuer (other than obligations of the U.S.
Government, its agencies and instrumentalities).
In addition, as a matter of fundamental policy, notwithstanding any
other investment policy or restriction, each of the Acquiring Fund and the Fund
may seek to achieve its investment objective by investing all of its investable
assets in another investment company having
-13-
<PAGE>
substantially the same investment objective and policies as the 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 the Fund in municipal obligations (other than industrial
development bonds) where the issuer is regarded as a state, city, municipality
or other public authority since such entities are not members of an "industry."
Supranational organizations are collectively considered to be members of a
single "industry" for purposes of restriction (3) above.
In addition, each of the Acquiring Fund and the Fund is subject to the
following non-fundamental restrictions which may be changed without shareholder
approval:
(1) Each of the Acquiring Fund and the 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 the
Fund.
(2) Each of the Acquiring Fund and the Fund may not purchase or sell
interests in oil, gas or mineral leases.
(3) Each of the Acquiring Fund and the Fund may not invest more than
15% of its net assets in illiquid securities.
(4) Each of the Acquiring Fund and the Fund may not write, purchase or
sell any put or call option or any combination thereof, provided that this shall
not prevent (a) the writing, purchasing or selling of puts, calls or
combinations thereof with respect to portfolio securities; or (b) with respect
to the Acquiring Fund or the Fund's permissible futures and options
transactions, the writing, purchasing, ownership, holding or selling of futures
and options positions or of puts, calls or combinations thereof with respect to
futures.
(5) Except as specified above, each of the Acquiring Fund and the 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.
-14-
<PAGE>
3. Comparative Summary of Investor Costs
-------------------------------------
The following table summarizes the costs of investing in the Fund,
based on expenses incurred in the most recent fiscal year, and in the Acquiring
Fund, based on estimated expenses for the current fiscal year.
<TABLE>
<CAPTION>
Chase Vista American Van Deventer & Hoch
Value Fund American Value Fund
---------- -------------------
(pro forma)
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES:
Maximum Sales Charge Imposed on Purchases (as a
percentage of offering price) None None
Sales Charge Imposed on Dividend Reinvestments None None
Maximum Contingent Deferred Sales Charge None None
Redemption Fees None None
Exchange Fees None None
ANNUAL OPERATING EXPENSES:
(as a percentage of average net assets)
Investment Advisory Fee (after estimated waiver) 0.10%* 0.00%**
12b-1 Fee (after estimated waiver) 0.00%* 0.00%**
Shareholder Servicing Fee (after estimated waiver) 0.10%* 0.00%**
Other Expenses 1.12%* 1.05%**
Total Fund Operating Expenses (after fee waiver) 1.32%* 1.05%**
</TABLE>
* Reflects current waiver arrangements to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the Investment Advisory Fee, 12b-1 Fee, Shareholder Servicing
Fee and Other Expenses would be 0.70%, 0.25%, 0.25% and 1.12%,
respectively, and Total Fund Operating Expenses would be 2.32%.
According to the current prospectus, Chase has agreed to waive fees
payable to it and/or reimburse expenses until May 6, 1998, to the
extent necessary to prevent annualized Total Fund Operating Expenses
from exceeding 2.18% of average net assets during such period. Van
Deventer & Hoch, by reason of its separate fee waivers, has maintained
the Total Fund Operating Expenses at 1.32%. The Chase Vista American
Value Fund does not have any unamortized organization costs. All of the
organizational expenses for the Fund have been paid for by Chase and/or
the Fund's former adviser during the course of a prior reorganization.
** Reflects projected waiver arrangement to maintain Total Fund Operating
Expenses at the levels indicated in the table above. Absent such
waivers, the Investment Advisory Fee, 12b-1 Fee, Shareholder Servicing
Fee and Other Expenses are estimated to be 0.70%, 0.25%, 0.25% and
1.05%, respectively, and Total Fund Operating Expenses would be 2.25%.
VDH has agreed to waive fees payable to it and/or reimburse expenses
for the balance of 1998, to the extent necessary to prevent annualized
Total Fund Operating Expenses from exceeding 1.05% of average net
assets during such period. VDH has further agreed to waive fees and
reimburse expenses following that period until at least the year 2000,
to the extent necessary to prevent the Acquiring Fund's expense ratio
from exceeding 1.32% during such additional period.
-15-
<PAGE>
Example
- -------
Assume, hypothetically, that each Fund's annual return is 5% and that
its operating expenses are as set forth above, an investor buying $1,000 of a
Fund's and the Acquiring Fund's shares would have paid the following total
expenses upon redeeming such shares:
1 Year 3 Years
Chase Vista American Value Fund $13 $42
Van Deventer & Hoch American $11 $33
Value Fund
The above example is to show the effect of expenses. This example does not
represent past or future expenses or return. Actual expenses and returns may
vary.
4. Comparative Performance Information
-----------------------------------
The table below indicates the average annual total return (with capital
gains and all dividends and distributions reinvested) for the Fund during the
periods ending October 31, 1997. The Acquiring Fund is a new series that is not
yet in operation. Therefore, no performance information is available.
Average Annual Total Return
---------------------------
One Year(1) Since Inception(2)
----------- ------------------
Chase Vista American Value 21.67% 21.72%
Fund(3)
Van Deventer & Hoch N/A N/A
American Value Fund
Additional performance information on the Fund may be found in its 1997 Annual
Report to Shareholders.
- -------------------------
(1) Reflects return for the one-year period ended October 31, 1997.
(2) Reflects return since inception on February 3, 1995, through October
31, 1997. Date of Fund inception for the Fund is the date of inception
of the Fund's predecessor fund. The Fund commenced operations as part
of the Trust on May 6, 1996.
(3) Performance for the Chase Vista American Value Fund includes the
performance of its predecessor fund for periods prior to the
consummation of the reorganization of the Hanover Chase Vista American
Value Fund into the Chase Vista American Value Fund. Performance
presented for the Fund is based on the
-16-
<PAGE>
historical expenses and performance of a single class of shares of its
predecessor fund and for the period from fund inception through May 6,
1996, does not reflect the Fund's distribution, service and/or other
expenses that an investor would incur as a holder of such class of the
Fund.
5. Advisory Fees, Sub-Advisory Fees and Other Expenses
---------------------------------------------------
The total advisory fees are identical between the Fund and the
Acquiring Fund. Currently, The Chase Manhattan Bank (as defined above, "Chase")
serves as investment adviser to the Fund pursuant to an Investment Advisory
Agreement between the Trust and Chase dated May 6, 1996. VDH serves as the
sub-adviser to the Fund pursuant to an Investment Subadvisory Agreement between
VDH and Chase dated May 6, 1996. The Fund has agreed to pay Chase an annual
advisory fee (accrued daily and paid monthly) calculated at an annualized rate
of 0.70% of the Fund's average daily net assets. Chase in turn has agreed to pay
VDH out of the advisory fees VDH's sub-advisory fees which is calculated at an
annualized rate of 0.35% of the Fund's average daily net assets.
After the Sale, VDH will serve as investment adviser to the Acquiring
Fund pursuant to an Investment Advisory Agreement. The Acquiring Fund will agree
to pay VDH an annual advisory fee (accrued daily and paid monthly) calculated at
an annualized rate of 0.70% of the Acquiring Fund's average daily net assets.
The Acquiring Fund does not have any investment sub-adviser.
The expense ratio of the Acquiring Fund (which, because of certain
voluntary waivers by VDH, is comprised of only the administrative and other
operating expenses of the Acquiring Fund) is expected to be lower than the
expense ratio of the Fund for the balance of 1998 (1.05% for the Acquiring Fund
as compared to 1.32% for the Fund). After that period and until at least the
year 2000, VDH has agreed, with respect to the Acquiring Fund, to waive fees
and/or reimburse expenses such that the expense ratio of the Acquiring Fund
(based on estimated expenses for the current fiscal year) will be no higher than
the Fund's expense ratio (based on expenses incurred in the most recent fiscal
year, after giving effect to any waivers and/or reimbursements by Chase). Absent
the fee waiver, the Acquiring Fund's total operating expenses would be 2.25%.
For the period ended October 31, 1997, Chase was entitled to receive
advisory fees of $75,380 from the Fund, of which, $66,883 of advisory fees were
waived by Chase.
6. Distribution and Shareholder Services
-------------------------------------
Vista Fund Distributors, Inc., a subsidiary of The BISYS Group, Inc.
(which is unaffiliated with Chase), has served as distributor of the Fund's
shares since May 6, 1996. First Fund Distributors, Inc., an affiliate of the
Acquiring Fund's administrator -- Investment Company Administration Corporation
(which is not affiliated with either Chase, VDH or Putnam, Lovell) will serve as
distributor of the Acquiring Fund.
-17-
<PAGE>
The Acquiring Fund shares to be issued in the Reorganization will be
subject to an identical sales charge structure as that currently in place for
the Fund. No sales charge is imposed by either the Fund or the Acquiring Fund on
reinvestment of dividends or capital gains distributions.
7. Distribution Plans
------------------
The Trust has adopted a Rule 12b-1 distribution plan for the Fund's
shares, which provides for the payment of distribution fees at annual rates of
up to 0.25% of the average daily net assets attributable to the shares of the
Fund. Payments under the distribution plans shall be used to compensate or
reimburse the Fund's distributor and broker-dealers for services provided and
expenses incurred in connection with the sale of the Fund's shares, and are not
tied to the amount of actual expenses incurred. Payments may be used to
compensate broker-dealers with trail or maintenance commissions at an annual
rate of up to 0.25% of the average daily net asset value of shares invested in
the Fund by customers of these broker-dealers. Trail or maintenance commissions
are paid to broker-dealers beginning the 13th month following the purchase of
shares by their customers. Promotional activities for the sale of the Fund's
shares will be conducted generally by the Chase Vista Funds, and activities
intended to promote the Fund's shares may also benefit other Chase Vista Funds.
The Acquiring Fund has also adopted a distribution plan pursuant to
Rule 12b-1 (the "Acquiring Fund Plan"). The Acquiring Fund Plan provides that
the Acquiring Fund may pay for distribution and related expenses at an annual
rate of up to 0.25% of the Acquiring Fund's average net assets to VDH as
Distribution Coordinator. Expenses permitted to be paid by the Acquiring Fund
under the Acquiring Fund Plan include: preparation, printing and mailing of
prospectuses; shareholder reports such as semi-annual and annual report,
performance reports and newsletters; sales literature and other promotional
material to prospective investors; direct mail solicitation; advertising; public
relations; compensation of sales personnel; advisors or other third parties for
the assistance with respect to the distribution of the Acquiring Fund's shares;
payments to financial intermediaries for shareholder support; administrative and
accounting services with respect to the shareholders of the Acquiring Fund; and
such other expenses as may be approved from time to time by the Board of
Trustees of the AST Trust.
8. Administration, Custody, Fund Accounting and Transfer Agency
--------------------------------------------------------------
Services
--------
Pursuant to an Administration Agreement (the "Administration
Agreement") between AST Trust and Investment Company Administration Corporation
("ICAC"), ICAC would act as administrator for AST Trust and provide various
administrative services including (but not limited to) arranging for the
maintenance of certain books and records of the Acquiring Fund, preparing and
mailing certain documents in connection with tax and disclosure obligations,
preparing agendas and supporting documentation for, and minutes of, meetings of
AST Trust Board of Trustees and meetings of shareholders and coordinating all
relationships between the Acquiring Fund and its other service providers.
-18-
<PAGE>
The administration services provided to AST Trust pursuant to the
Administration Agreement are similar in scope to the administration services
provided to the Trust pursuant to its existing administration agreement with
Chase and its existing distribution and sub-administration agreement with Vista
Fund Distributors, Inc.
Pursuant to a Custody Agreement (the "Custody Agreement") between AST
Trust and Star Bank, N.A. ("Star Bank"), Star Bank would act as custodian of the
portfolio securities, cash and other property of the Acquiring Fund. Pursuant to
the Trust's existing custody agreement with Chase, Chase also provides
accounting and certain recordkeeping services for the Trust's portfolios. The
terms of the portions of the Custody Agreement relating to custodial services
are similar to the terms of the Trust's existing custodian agreement with Chase.
Pursuant to a Fund Accounting Service Agreement (the "Fund Accounting
Agreement") between AST Trust and American Data Services, Inc. ("ADS"), ADS
would provide fund accounting services to the Acquiring Fund. Chase provides
such services to the Trust under the Trust's custody agreement. The fund
accounting services provided by ADS under the Fund Accounting Agreement are
similar in scope to the fund accounting services provided by Chase under its
custody agreement with the Trust.
Pursuant to a Transfer Agency Agreement (the "Transfer Agency
Agreement") between AST Trust and ADS, ADS would act as the transfer agent and
dividend disbursing agent for the Acquiring Fund. The services provided under
the Transfer Agency Agreements are similar to those provided under the Trust's
existing transfer agency agreement.
9. Shareholder Servicing Agents
----------------------------
Both the Trust and AST Trust have entered into shareholder servicing
agreements with certain shareholder servicing agents (including Chase, in the
case of the Fund and VDH, in the case of the Acquiring Fund) under which the
shareholder servicing agents have agreed to provide certain support services to
their customers who beneficially own shares of the applicable Fund. These
services include assisting with purchase and redemption transactions,
maintaining shareholder accounts and records, furnishing customer statements,
transmitting shareholder reports and communications to customers and other
similar shareholder liaison services. For performing these services, each
shareholder servicing agent receives an annual fee of up to 0.25% of the average
daily net assets of shares of the Fund or the Acquiring Fund, as the case may
be, held by investors for whom the shareholder servicing agent maintains a
servicing relationship. Shareholder servicing agents may subcontract with other
parties for the provision of shareholder support services.
Under both the Acquiring Fund and the Fund's arrangement, shareholder
servicing agents may offer additional services to their customers, such as
pre-authorized or systematic purchase and redemption plans. Each shareholder
servicing agent may establish its own terms and conditions, including
limitations on the amounts of subsequent transactions, with respect to such
services. Certain shareholder servicing agents may (although they are not
required by the Trusts to do so) credit to the accounts of their customers from
whom they are already receiving other fees an amount not exceeding such other
-19-
<PAGE>
fees or the fees for their services as shareholder servicing agents.
Chase and/or Vista Fund Distributors, Inc. (in the case of the Fund)
and VDH and/or First Fund Distributors, Inc. (in the case of the Acquiring Fund)
may from time to time, at their own expense out of compensation retained by them
from the applicable Fund or other sources available to them, make additional
payments to certain selected dealers or other shareholder servicing agents for
performing administrative services for their customers. These services include
maintaining account records, processing orders to purchase, redeem and exchange
Fund shares and responding to certain customer inquiries. The amount of such
compensation 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 such
shareholder servicing agents. Such compensation does not represent an additional
expense to the Fund or its shareholders, since it will be paid by Chase and/or
Vista Fund Distributors, Inc. (in the case of the Fund) and VDH and/or First
Fund Distributors, Inc. (in the case of the Acquiring Fund).
In the case of the Fund, for shareholders that bank with Chase, Chase
may aggregate investments in the Chase Vista Funds with balances held in Chase
bank accounts for purposes of determining eligibility for certain bank
privileges that are based on specified minimum balance requirements, such as
reduced or no fees for certain banking services or preferred rates on loans and
deposits. Such benefits will no longer be available after the Reorganization.
10. Purchase Procedures
-------------------
The Fund generally requires a minimum initial investment of $2,500 for
regular accounts or $1,000 for IRAs, SEP-IRAs and the Systematic Investment
Plan, and minimum subsequent investments of $100 or more. The Acquiring Fund has
identical minimum purchase requirements.
The Fund's shares are purchased at the public offering price, which is
based on the net asset value next determined after the Chase Vista Service
Center receives a shareholder's order in proper form. In most cases, in order to
receive that day's public offering price, the Chase Vista Service Center must
receive a shareholder's order in proper form before the close of regular trading
on the New York Stock Exchange. If a shareholder buys shares through his or her
investment representative, the representative must receive the shareholder's
order before the close of regular trading on the New York Stock Exchange to
receive that day's public offering price. The Acquiring Fund shares are
purchased using a similar method. To eliminate the need for safekeeping, neither
the Fund nor the Acquiring Fund will issue share certificates.
Both Funds have automatic investment plans under which selected amounts
are electronically withdrawn from shareholders' accounts with banks and are
applied to purchase shares of the Funds. Both Funds provide for three methods to
purchase shares -- through an investment representative, through the Fund's
Distributor, and through the Systematic Investment Plan.
-20-
<PAGE>
11. Redemption and Exchange Procedures
----------------------------------
Shareholders of both Funds may redeem their shares at the net asset
value next determined after receipt of a written redemption request or a
telephone redemption order without the imposition of any fee or other charge.
Each Fund may involuntarily redeem a shareholder's shares if at such
time the aggregate net asset value of the shares in a shareholder's account is
less than $500 due to redemptions or if a shareholder purchase through the
Systematic Investment Plan and fail to meet the applicable Fund's investment
minimum within a twelve month period. In the event of any such redemption, a
shareholder will receive at least 60 days' notice prior to the redemption.
The Fund's shareholders may currently exchange their shares for Class A
shares of certain other Vista funds at net asset value plus any applicable sales
charge beginning 15 days after purchase. Shares of the Acquiring Fund, however,
may not be exchanged into shares of any Vista fund or of any other series of the
AST Trust.
12. Income Dividends, Capital Gains Distributions and Taxes
-------------------------------------------------------
Each of the Fund and the Acquiring Fund distributes substantially all
of its net investment income and net capital gains to shareholders each year.
Both Funds currently intend to distribute at least annually any net investment
income and any net realized capital gains. Both Funds also have identical
distribution options. Shareholders of each of the Acquiring Fund and the Fund
may choose from three distribution options: (1) reinvest all distributions in
additional Fund shares without a sales charge; (2) receive distributions from
net investment income in cash or by ACH to a pre-established bank account while
reinvesting capital gains distributions in additional shares without a sales
charge; or (3) receive all distributions in cash or by ACH. Shareholders of each
of the Fund or the Acquiring Fund can change his or her distribution option by
notifying the transfer agent in writing. If a shareholder does not select an
option when the shareholder open his or her account, all distributions will be
reinvested. All distributions not paid in cash or by ACH will be reinvested in
shares of the applicable Fund. Shareholders will also receive a statement
confirming reinvestment of distributions in additional applicable Fund shares
promptly following the quarter in which the reinvestment occurs.
Each Fund intends to qualify as a separate "regulated investment
company" under Subchapter M of the Code for federal income tax purposes and to
meet all other requirements that are necessary for it (but not its shareholders)
to pay no federal taxes on income and capital gains paid to shareholders in the
form of dividends. In order to accomplish this goal, each Fund must, among other
things, distribute substantially all of its ordinary income and net capital
gains on a current basis and maintain a portfolio of investments which satisfies
certain diversification criteria.
-21-
<PAGE>
13. Portfolio Transactions and Brokerage Commissions
------------------------------------------------
In the case of the Fund, VDH is responsible for decisions to buy and
sell securities, broker-dealer selection, and negotiation of commission rates
through its capacity as sub-adviser. In placing orders for the Fund's portfolio
transactions, VDH will use its best efforts to seek to execute portfolio
transactions in a manner which, under the circumstances, result in total costs
or proceeds being the most favorable to the Fund. In assessing the best overall
terms available for any transaction, VDH considers 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 VDH, and the reasonableness of the
commissions, if any, both for the specific transaction and on a continuing
basis. VDH is not required to obtain the lowest commission or the best net price
for the Fund on any particular transaction, and are not required to execute any
order in a fashion either preferential to the Fund relative to other accounts
they manage or otherwise materially adverse to any other accounts. After the
Sale, VDH will manage the Acquiring Fund's portfolio transactions in a similar
manner.
14. Shareholders' Rights
--------------------
The Trust is a Massachusetts business trust. Because the Fund is a
series of the Trust, its operations are governed by the Trust's Declaration of
Trust and By-laws and applicable Massachusetts law. AST Trust is a Delaware
business trust. Because the Acquiring Fund is a series of AST Trust, its
operations are governed by AST Trust's Agreement and Declaration of Trust and
By-laws and applicable Delaware law.
Under Delaware law, trustees and shareholders of a business trust are
generally afforded by statute the same limited liability as their corporate
counterparts and are permitted liberal indemnifications. However, some states do
not recognize the liability limitation provided by Delaware law. Under
Massachusetts law, shareholders of the Fund could, under certain circumstances,
be held personally liable as partners for the obligations of the Trust. However,
the Trust's Declaration of Trust disclaims shareholder liability for acts or
obligations of the Trust and provides for indemnification and reimbursement of
expenses out of Trust property for any shareholder held personally liable for
the obligations of the Trust. The Trust's Declaration of Trust also provides
that the Trust shall maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of the 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. AST Trust, however, as a Delaware business trust, may provide more
protection in this regard because of the clearer statutory protection afforded
to shareholders.
The Funds normally will not hold meetings of shareholders except as
required under the 1940 Act and Massachusetts law (in the case of the Fund) or
Delaware law (in the case of the Acquiring Fund). However, with respect to each
of the Fund and the Acquiring Fund, a meeting of shareholders shall be held upon
the written request of the holders of shares representing not
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less than 10% of the outstanding shares entitled to vote on the matters
specified in the written request.
Shareholders of each Fund have no preemptive, conversion or
subscription rights. The shares of each Fund have non-cumulative voting rights,
with each shareholder of that Fund entitled to one vote for each full share of
that Fund (and a fractional vote for each fractional share) held in the
shareholder's name on the books of that Fund as of the record date for the
action in question. On any matter submitted to a vote of shareholders, shares of
each Fund will be voted by that Fund's shareholders individually when the matter
affects the specific interest of that Fund only, such as approval of that Fund's
investment management arrangements. The shares of all the Funds will be voted in
the aggregate on other matters, such as the election of trustees and
ratification of the Board of Trustees' selection of the Funds' independent
accountants.
C. RISK FACTORS
The Acquiring Fund's portfolio, like that of the Fund, is subject to
the general risks and considerations associated with equity investing. In
addition, some of the securities which both the Acquiring Fund and the Fund may
invest may be of smaller companies. The securities of smaller companies often
trade less frequently and in more limited volume, and may be subject to more
abrupt or erratic price movements, than securities of larger, more established
companies. Such companies may have limited product lines, markets or financial
resources, or may depend on a limited management group.
D. RECOMMENDATION OF THE BOARD OF TRUSTEES
In response to the circumstances described above, the Board of Trustees
of the Trust, after due consideration, has unanimously approved the proposed
Reorganization, subject to approval by shareholders. The Board of Trustees also
unanimously recommends that shareholders vote for the adoption of the Proposal.
1. The Legal Framework
-------------------
The Trustees, after reviewing the terms of the proposed Reorganization,
concluded the proposed Reorganization to be in the best interest of the
shareholders of the Fund. In addition, because the proposed Reorganization, if
consummated, would be made in connection with the Sale of VDH, the Trustees also
reviewed the terms of the Sale and the proposed Reorganization, including the
terms of the investment advisory agreement between the Acquiring Fund and VDH,
in the context of Section 15 of the Investment Company Act of 1940, as amended
(the "1940 Act").
Pursuant to Section 15 of the 1940 Act, each investment advisory
agreement (including each investment subadvisory agreement) between the Fund and
its adviser or sub-adviser terminates automatically upon its assignment. An
assignment will occur if, among other events, there is a sale of a controlling
interest in the sub-investment advisor. The sale of The Chase
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Manhattan Corporation's interest in VDH to Crestline, therefore, causes an
assignment of the existing investment subadvisory agreement and triggered its
automatic termination.
The Purchase Agreement commits both VDH and Putnam, Lovell to comply
with the requirements of Section 15(f) of the 1940 Act. Section 15(f) of the
1940 Act allows an investment adviser or an affiliated person of such investment
adviser to receive any amount or benefit in connection with a change of control
of an investment adviser provided certain conditions are met. These conditions
require that: (i) for a period of three years after the transaction, at least 75
percent of the investment company's directors must not be "interested persons"
(as defined in the 1940 Act) of the successor adviser or the predecessor
adviser, and (ii) an "unfair burden" must not be imposed on the investment
company as a result of the transaction or any express or implied terms,
conditions, or understandings applicable thereto. An "unfair burden" includes
any arrangement during the two-year period after the transaction whereby the
investment adviser (or its predecessor or successor) or any interested person of
such investment adviser receives or is entitled to receive any compensation,
directly or indirectly from the investment company or its security holders other
than bona fide ordinary compensation as principal underwriter of the investment
company or compensation for bona fide investment advisory or other services.
In light of the provisions of Section 15(f), VDH has agreed to waive
fees and reimburse expenses until at least the year 2000 for the Acquiring Fund
to the extent necessary to prevent the expense ratio from exceeding the Fund's
present level (1.32%). In addition, VDH has agreed to waive fees and/or to
reimburse expenses for the balance of 1998, to the extent necessary to prevent
the expense ratio for the Acquiring Fund from exceeding 1.05% of average net
assets during such period.
The proposed Reorganization, if approved by the Fund's shareholders,
will close as soon as practicable, subject to the satisfaction or certain
conditions thereto. The investment advisory agreement between the Acquiring Fund
and VDH will remain in effect for an initial term of up to two years and will
continue in effect thereafter for successive periods if and so long as such
continuance is specifically approved annually by (a) the Board of Trustees or
(b) a majority vote of the Acquiring Fund's shareholders, provided that in
either event, the continuance also is approved by a majority of the trustees who
are not "interested persons" by vote cast in person at a meeting called for the
purpose of voting on such approval.
2. The Trustees' Considerations
----------------------------
The transactions contemplated by the Sale and the related
Reorganization were presented to the Board of Trustees of the Fund for
consideration at its October 22, 1997 Board of Trustees meeting. The Board of
Trustees, including a majority of the Trustees who are not interested persons
(the "independent Trustees") voted to approve the proposed Reorganization. The
independent Trustees retained their own counsel to assist them in evaluating the
transaction and the various proposals. The Board of Trustees concluded
unanimously that the Proposal set forth in this proxy statement is in the best
interests of the Fund and its shareholders and would not result in the dilution
of such shareholders' interests.
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In determining whether to recommend approval of the Reorganization to
shareholders of the Fund, the Board of Trustees (including the independent
Trustees, with the advice and assistance of independent legal counsel), made an
inquiry into a number of matters and considered the following factors, among
others: (i) the compatibility of investment objectives, policies and
restrictions of the Fund and the Acquiring Fund, (ii) the capabilities of VDH
and other service providers to the Acquiring Fund, (iii) the nature of the
Fund's existing shareholder base, (iv) expense ratios and available information
regarding the fees and expenses of the Fund, the Acquiring Fund as well as
similar funds, (v) portfolio transaction policies of the Fund and the Acquiring
Fund, (vi) the terms and conditions of the Reorganization and whether the
Reorganization would result in dilution of shareholder interests, (vii) costs
incurred by the Fund and Acquiring Fund as a result of the Reorganization,
(viii) tax consequences of the Reorganization and (ix) possible alternatives to
the Reorganization.
In reaching the decision to approve the Reorganization and to recommend
that the shareholders of the Fund vote to approve the Reorganization, the Board
of Trustees, including the independent Trustees, unanimously concluded that the
participation of the Fund in the Reorganization is in the best interests of the
Fund's shareholders and would not result in the dilution of such shareholders'
interests. Their conclusion was based on a number of factors, including the
following:
(1) The investment objective, policies and restrictions of the
Fund and the Acquiring Fund will be identical.
(2) VDH will continue to be responsible for providing
day-to-day investment management services to the Fund following
consummation of the Reorganization, which the Trustees believe to be
important to the Fund's existing shareholder base.
(3) VDH has agreed to waive fees payable to it and/or
reimburse the Acquiring Fund for expenses in excess of fixed expense
caps for a period of at least two years from the consummation of the
Reorganization.
(4) Chase and VDH have agreed that they and/or their
affiliates will pay all costs and expenses of the Reorganization.
E. DISSENTERS' RIGHTS OF APPRAISAL
Shareholders of the Fund who object to the proposed Reorganization will
not be entitled to any "dissenters' rights" under Massachusetts law. However,
such shareholders have the right at any time up to the Effective Date to redeem
shares of the Fund at net asset value or to exchange such shares for shares of
the other funds offered by the Trust without charge. After the Reorganization,
such shareholders will hold shares of the Acquiring Fund, which may also be
redeemed at net asset value in accordance with the procedures described in the
Acquiring Fund's Prospectus dated December 16, 1997, subject to the forward
pricing requirements of Rule 22c-1 under the 1940 Act.
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F. FURTHER INFORMATION ABOUT THE FUND AND THE ACQUIRING FUND
Further information about the Fund is contained in its current
Prospectus dated February 27, 1998 and the Statement of Additional Information
dated February 27, 1998, which are incorporated herein by reference. Further
information about the Acquiring Fund is contained in its Prospectus dated
December 16, 1997, and the Statement of Additional Information dated December
16, 1997. Documents that relate to the Fund are available, without charge, by
writing to the Chase Vista Service Center at P.O. Box 419392, Kansas City, MO
64141 or by calling (800) 34-VISTA. Copies of the Fund's prospectus and the
Acquiring Fund's Prospectus also accompany this Combined Proxy Statement and
Prospectus.
The Trust is subject to the informational requirements of the
Securities and Exchange Act of 1934 and the 1940 Act, and in accordance
therewith files reports, proxy materials and other information with the SEC.
Such reports, proxy materials and other information can be inspected and copied
at the Public Reference Room maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's regional offices at 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite
1300, New York, New York 10048. Copies of such materials can be obtained at
prescribed rates from the Public Reference Branch, Office of Consumer Affairs
and Information Services, of the SEC, Washington, D.C. 20549.
G. VOTE REQUIRED
Approval of the proposed Reorganization requires the affirmative vote
of the holders of a majority of the total number of the Fund's shares
outstanding on the Record Date. If the shareholders of the Fund do not approve
the proposed Reorganization, or if the Reorganization is not consummated for any
other reason, then the Board of Trustees will take such further action as it
deems to be in the best interest of the Fund and its shareholders subject to
approval by the shareholders of the Fund if required by applicable law.
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III. MISCELLANEOUS ISSUES
A. OTHER BUSINESS
The Board of Trustees of the Trust knows of no other business to be
brought before the Meeting. However, if any other matters come before the
Meeting, it is the Board of Trustees's intention that proxies which 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.
B. NEXT MEETING OF SHAREHOLDERS
The Trust is not required and does not intend to hold annual or other
periodic meetings of shareholders except as required by the 1940 Act. If the
Reorganization is not consummated, the next meeting of the shareholders of the
Fund will be held at such time as the Board of Trustees may determine or at such
time as may be legally required. Any shareholder proposal intended to be
presented at such meeting must be received by the Trust at its office at a
reasonable time before the meeting, as determined by the Board of Trustees, to
be included in the Trust's proxy statement and form of proxy relating to such
meeting, and must satisfy all other legal requirements.
C. LEGAL MATTERS
Certain legal matters in connection with the issuance of the Acquiring
Fund Shares will be passed upon for the Trust by Paul, Hastings, Janofsky &
Walker LLP.
D. EXPERTS
The financial statements of the Chase Vista American Value Fund
incorporated in this Prospectus by reference to the Annual Report to
Shareholders for the year ended October 31, 1997, have been so incorporated in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE
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EXHIBIT A
Agreement and Plan of Reorganization
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AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made as of this 31st day of December, 1997, by and between Advisors Series
Trust ("AST"), a Delaware business trust, for itself and on behalf of the Van
Deventer & Hoch American Value Fund (the "Acquiring Fund"), a series of AST, and
Mutual Fund Group ("MFG"), a Massachusetts business trust, for itself and on
behalf of the American Value Fund (the "Acquired Fund"), a series of MFG. Other
than the Acquiring Fund and the Acquired Fund, no other series of AST and MFG,
respectively, is a party to this Agreement.
In accordance with the terms and conditions set forth in this
Agreement, the parties desire that all of the assets of the Acquired Fund be
transferred to the Acquiring Fund, and that the Acquiring Fund assume the
Assumed Liabilities (as defined in paragraph 1.3) of the Acquired Fund, in
exchange for shares of the Acquiring Fund ("Acquiring Fund Shares"), and that
such Acquiring Fund Shares be distributed immediately after the Closing, as
defined in this Agreement, by the Acquired Fund to its shareholders in
liquidation of the Acquired Fund. This Agreement is intended to be and is
adopted as a plan of reorganization and liquidation within the meaning of
Section 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the
"Code").
In consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
1. REORGANIZATION OF ACQUIRED FUND
1.1 Subject to the terms and conditions herein set forth, and on
the basis of the representations and warranties contained herein, the Acquired
Fund shall assign, deliver and otherwise transfer its assets as set forth in
paragraph 1.2 (the "Fund Assets") to the Acquiring Fund and the Acquiring Fund
shall assume the Assumed Liabilities. The Acquiring Fund shall, as consideration
therefor, on the Closing Date (as defined in paragraph 3.1), deliver to the
Acquired Fund full and fractional Acquiring Fund Shares, the number of which
shall be determined by dividing (a) the value of the Acquired Fund Assets, net
of the Acquired Fund's Assumed Liabilities, computed in the manner and as of the
time and date set forth in paragraph 2.1, by (b) the net asset value of one
share of the Acquiring Fund computed in the manner and as of the time and date
set forth in paragraph 2.2. Such transfer, delivery and assumption shall take
place at the closing provided for in paragraph 3.1 (hereinafter sometimes
referred to as the "Closing"). Immediately following the Closing, the Acquired
Fund shall distribute the
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Acquiring Fund Shares to the shareholders of the Acquired Fund in liquidation of
the Acquired Fund as provided in paragraph 1.4 hereof. Such transactions are
hereinafter sometimes collectively referred to as the "Reorganization."
1.2 (a) With respect to the Acquired Fund, the Fund 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 by the Acquired Fund, and
any prepaid expenses shown as an asset on the Acquired Fund's books on the
Closing Date.
(b) Before the Closing Date, the Acquired Fund will provide
the Acquiring Fund with information regarding its assets and its known
liabilities. The Acquired Fund reserves the right to sell or otherwise dispose
of any of the securities or other assets shown on the list of the Acquired
Fund's Assets prior to the Closing Date but will not, without the prior approval
of the Acquiring Fund, acquire any additional securities other than securities
which the Acquiring Fund is permitted to purchase in accordance with its stated
investment objective and policies.
1.3 The Acquired Fund will endeavor to discharge all of its known
liabilities and obligations prior to the Closing Date. The Acquiring Fund will
assume all liabilities and obligations reflected on an unaudited statement of
assets and liabilities of the Acquired Fund prepared by the Administrator of the
Acquired Fund as of the Applicable Valuation Date (as defined in paragraph 2.1),
in accordance with generally accepted accounting principles consistently applied
from the prior audited period ("Stated Liabilities") as well as all contingent
liabilities and obligations of the Acquired Fund, whether known or unknown,
accrued or unaccrued (such liabilities and obligations, together with the
Acquired Fund's Stated Liabilities, being referred to herein as the "Assumed
Liabilities"). The Acquiring Fund shall assume only the Assumed Liabilities of
the Acquired Fund, and no other liabilities or obligations, whether absolute or
contingent, known or unknown, accrued or unaccrued.
1.4 Immediately following the Closing, the Acquired Fund will
distribute the Acquiring Fund Shares received by the Acquired Fund pursuant to
paragraph 1.1 pro rata to its shareholders of record determined as of the close
of business on the Closing Date ("Acquired Fund Investors") in complete
liquidation of the Acquired Fund. Such distribution will be accomplished by an
instruction, signed by an appropriate officer of AST, to transfer the Acquiring
Fund Shares then credited to the Acquired Fund's account on the books of the
Acquiring Fund to open accounts on the books of the Acquiring Fund established
and maintained by the Acquiring Fund's transfer agent in the names of record of
the Acquired Fund Investors and representing the respective pro rata number of
shares of the Acquiring Fund due such Acquired Fund Investor. All issued and
outstanding shares of the Acquired Fund will be canceled simultaneously
therewith on the Acquired Fund's books, and any outstanding share certificates
representing interests in the Acquired Fund will represent only the right to
receive such number of Acquiring Fund Shares after the Closing as determined in
accordance with paragraph 1.1.
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<PAGE>
1.5 If any request shall be made for a change of the registration
of shares of the Acquiring Fund to another person from the account of the
stockholder in which name the shares are registered in the records of the
Acquired Fund, it shall be a condition of such registration of shares that there
be furnished to the Acquiring Fund an instrument of transfer properly endorsed,
accompanied by appropriate signature guarantees and otherwise in proper form for
transfer and that the person requesting such registration shall pay to the
Acquiring Fund any transfer or other taxes required by reason of such
registration or establish to the reasonable satisfaction of the Acquiring Fund
that such tax has been paid or is not applicable.
1.6 Following the transfer of assets by the Acquired Fund to the
Acquiring Fund, the assumption of the Assumed Liabilities by the Acquiring Fund,
and the distribution by the Acquired Fund of the Acquiring Fund Shares received
by it pursuant to paragraph 1.4, the Administrator of the Acquired Fund shall
terminate the qualification, classification and registration of the Acquired
Fund with all appropriate federal and state agencies. Any reporting or other
responsibility of the Acquired Fund is and shall remain the responsibility of
the Acquired Fund and its Administrator up to and including the date on which
the Acquired Fund is terminated and deregistered, subject to any reporting or
other obligations described in paragraph 4.9.
2. VALUATION
2.1 The value of the Acquired Fund's Assets shall be the value of
such assets computed as of the time at which its net asset value is calculated
pursuant to the valuation procedures set forth in the Acquired Fund's then
current Prospectus and Statement of Additional Information (which are identical
to the valuation procedures to be utilized by the Acquiring Fund) on the
business day immediately preceding the Closing Date, or at such time on such
earlier or later date as may mutually be agreed upon in writing among the
parties hereto (such time and date being herein called the "Applicable Valuation
Date").
2.2 The net asset value of each share of the Acquiring Fund shall
be the net asset value per share computed on the Applicable Valuation Date,
using the market valuation procedures set forth in the Acquiring Fund's then
current Prospectus and Statement of Additional Information.
2.3 All computations of value contemplated by this Article 2 shall
be made by the Acquired Fund's Custodian in accordance with its regular practice
as pricing agent. The Acquired Fund shall cause its Administrator to deliver a
copy of its valuation report to the Acquiring Fund at the Closing. In the event
that the value of a security in the Acquired Fund's portfolio as determined in
accordance with the valuation procedures of the Acquired Fund differs from the
value of such security as determined in accordance with the valuation procedures
of the Acquiring Fund, the Acquired Fund's Custodian shall make a final
determination as to the value
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of such security.
3. CLOSING(S) AND CLOSING DATE
3.1 The Closing for the Reorganization shall occur on April 30,
1998 and/or on such other date(s) as may be mutually agreed upon in writing by
the parties hereto (each, a "Closing Date"). The Closing(s) shall be held at the
offices of Simpson Thacher & Bartlett, 425 Lexington Avenue, New York, New York
10017, or at such other location as is mutually agreeable to the parties hereto.
All acts taking place at the Closing(s) shall be deemed to take place
simultaneously as of 10:00 a.m., local time on the Closing Date unless otherwise
provided.
3.2 The Acquiring Fund's custodian shall deliver at the Closing a
certificate of an authorized officer stating that: (a) the Fund Assets have been
delivered in proper form to the Acquiring Fund on the Closing Date and (b) all
necessary taxes including all applicable federal and state stock transfer
stamps, if any, have been paid, or provision for payment shall have been made,
by the Acquired Fund in conjunction with the delivery of portfolio securities.
3.3 Notwithstanding anything herein to the contrary, in the event
that on the Applicable Valuation 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 such exchange or elsewhere shall be disrupted so that,
in the judgment of either AST or MFG, accurate appraisal of the value of the net
assets of the Acquiring Fund or the Acquired Fund is impracticable, the
Applicable Valuation Date shall be postponed until the first business day after
the day when trading shall have been fully resumed without restriction or
disruption and reporting shall have been restored.
4. COVENANTS WITH RESPECT TO THE ACQUIRING FUND AND THE ACQUIRED FUND
4.1 With respect to the Acquired Fund, MFG has called or will call
a meeting of Acquired Fund shareholders to consider and act upon this Agreement
and to take all other actions reasonably necessary to obtain the approval of the
transactions contemplated herein, including approval for the Acquired Fund's
liquidating distribution of Acquiring Fund Shares contemplated hereby, and for
MFG to terminate the Acquired Fund's qualification, classification and
registration if requisite approvals are obtained with respect to the Acquired
Fund. MFG, on behalf of the Acquired Fund, shall prepare the notice of meeting,
form of proxy and combined proxy statement and prospectus (collectively, "Proxy
Materials") to be used in connection with such meeting.
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4.2 MFG, on behalf of the Acquired Fund, covenants that the
Acquiring Fund Shares to be issued hereunder are not being acquired for the
purpose of making any distribution thereof, other than in accordance with the
terms of this Agreement.
4.3 MFG, on behalf of the Acquired Fund, will assist the Acquiring
Fund in obtaining such information as the Acquiring Fund reasonably requests
concerning the beneficial ownership of shares of the Acquired Fund.
4.4 Subject to the provisions hereof, AST, on its own behalf and
on behalf of the Acquiring Fund and MFG, on its own behalf and on behalf of the
Acquired Fund, will take, or cause to be taken, all actions, and do, or cause to
be done, all things reasonably necessary, proper or advisable to consummate and
make effective the transactions contemplated herein.
4.5 MFG, on behalf of the Acquired Fund, shall furnish to the
Acquiring Fund on the Closing Date, a final statement of the total amount of the
Acquired Fund's assets and liabilities as of the Closing Date.
4.6 AST, on behalf of the Acquiring Fund, has prepared and filed,
or will prepare and file, with the Securities and Exchange Commission (the
"SEC") an amendment to its registration statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") and the Investment Company
Act of 1940, as amended (the "1940 Act"), relating to the Acquiring Fund Shares.
4.7 AST, on behalf of the Acquiring Fund, has prepared and filed,
or will prepare and file, with the SEC a registration statement on Form N-14
under the 1933 Act, relating to the Acquiring Fund Shares (the "N-14
Registration Statement") which shall include Proxy Materials to be used in
connection with the shareholders' meeting. Each of MFG and AST have cooperated
and shall continue to cooperate with the other, and have furnished and shall
continue to furnish the other with the information relating to itself, and
respectively, the Acquired Fund and the Acquiring Fund, that is required by the
1933 Act, the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
1940 Act and the rules and regulations thereunder, to be included in the N-14
Registration Statement.
4.8 As soon after the Closing Date as is reasonably practicable,
MFG, on behalf of the Acquired Fund: (a) shall prepare and file all federal and
other tax returns and reports of the Acquired Fund required by law to be filed
with respect to all periods ending on or before the Closing Date but not
theretofore filed and (b) shall pay all federal and other taxes shown as due
thereon and/or all federal and other taxes that were unpaid as of the Closing
Date.
4.9 Following the transfer of assets by the Acquired Fund to the
Acquiring Fund and the assumption of the Assumed Liabilities of the Acquired
Fund in exchange for Acquiring Fund Shares as contemplated herein, MFG will file
any final regulatory reports, including but not
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limited to any Form N-SAR and Rule 24f-2 filings with respect to the Acquired
Fund, after the Closing Date but prior to the date of any applicable statutory
or regulatory deadlines and also will take all other steps as are necessary and
proper to effect the termination or declassification of the Acquired Fund in
accordance with the laws of the Commonwealth of Massachusetts and other
applicable requirements.
4.10 The investment objective and policies of the Acquiring Fund
will conform with the descriptions thereof contained in the preliminary
Prospectus and Statement of Additional Information presented to the Board of
Trustees of MFG (the "MFG Trustees").
5. REPRESENTATIONS AND WARRANTIES
5.1 AST, on behalf of the Acquiring Fund, represents and warrants
to MFG and the Acquired Fund as follows:
(a) AST was duly created pursuant to its Agreement and
Declaration of Trust by its Trustees (the "AST Trustees") then in office for the
purpose of acting as a management investment company under the 1940 Act and is
validly existing and in good standing under the laws of the State of Delaware.
The Acquiring Fund is a validly existing series of AST representing interests
therein under the laws of Delaware and the Agreement and Declaration of Trust
directs the AST Trustees to manage the affairs of AST and grants them all powers
necessary or desirable to carry out such responsibility, including administering
AST's business as currently conducted by AST and as described in the current
Prospectuses of AST. AST is registered as an investment company classified as an
open-end management company, under the 1940 Act and its registration with the
SEC as an investment company is in full force and effect. AST 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) The N-14 Registration Statement conforms or will
conform, at all times up to and including the Closing Date, in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act and the
regulations thereunder and do not include or will not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(c) The Acquiring Fund is not in violation of, and the
execution, delivery and performance of this Agreement by AST for itself and on
behalf of the Acquiring Fund does not and will not (i) violate AST's Agreement
and Declaration of Trust or By-Laws, or (ii) result in a breach or violation of,
or constitute a default under, any material agreement or material instrument, to
which AST is a party or by which its properties or assets are bound;
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(d) Except as previously disclosed in writing to the
Acquired Fund, no litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to AST's
knowledge, threatened against AST or its business, the Acquiring Fund or any of
its properties or assets, which, if adversely determined, would materially and
adversely affect AST or the Acquiring Fund's financial condition or the conduct
of their business, AST knows of no facts that might form the basis for the
institution of any such proceeding or investigation, and the Acquiring Fund is
not a party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects, or is
reasonably likely to materially and adversely affect, its business or its
ability to consummate the transactions contemplated herein;
(e) All issued and outstanding shares, including shares
to be issued in connection with the Reorganization, of the Acquiring Fund will,
as of the Closing Date, be duly authorized and validly issued and outstanding,
fully paid and nonassessable, the shares of each class of the Acquiring Fund
issued and outstanding prior to the Closing Date were offered and sold in
compliance with the applicable registration requirements, or exemptions
therefrom, of the 1933 Act, and all applicable state securities laws, and the
regulations thereunder, and the Acquiring Fund does not have outstanding any
option, warrants or other rights to subscribe for or purchase any of its shares
nor is there outstanding any security convertible into any of its shares;
(f) The execution, delivery and performance of this
Agreement on behalf of the Acquiring Fund will have been duly authorized prior
to the Closing Date by all necessary action on the part of AST, the AST Trustees
and the Acquiring Fund, and this Agreement will constitute a valid and binding
obligation of AST and the Acquiring Fund enforceable in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general applicability relating
to or affecting creditors, rights and to general equity principles;
(g) From the effective date of the N-14 Registration
Statement through the time of the meeting of the Acquired Fund shareholders and
on the Closing Date, any written information furnished by AST for use in the
N-14 Registration Statement or any other materials provided in connection with
the Reorganization does not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the information
provided not misleading; and
(h) No governmental consents, approvals, authorizations
or filings are required under the 1933 Act, the 1934 Act, the 1940 Act or
Delaware law for the execution of this Agreement by AST, for itself and on
behalf of the Acquiring Fund, or the performance of the Agreement by AST for
itself and on behalf of the Acquiring Fund, except for such consents, approvals,
authorizations and filings as have been made or received, and except for such
consents, approvals, authorizations and filings as may be required subsequent to
the Closing Date.
7
<PAGE>
(i) Each of (1) of the preliminary prospectus (in the form
sent to shareholders of the Fund) and preliminary Statement of Additional
Information (in the form made available to shareholders of the Fund) of AST with
respect to the Acquiring Fund, and included in AST's registration statement on
Form N-1A as filed with the Commission, (2) the final prospectus and Statement
of Additional Information of AST with respect to the Acquiring Fund, to be
included in AST's registration statement on Form N-1A as filed with the
Commission, and (3) any registration statement on Form N-1A of AST filed with
the Commission in connection with this Reorganization, will comply in all
material respects with the requirements of the 1933 Act and the 1940 Act and
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.
5.2 MFG, on behalf of the Acquired Fund, represents and warrants
to AST and the Acquiring Fund as follows:
(a) MFG was duly created pursuant to its Declaration of
Trust by the MFG Trustees then in office for the purpose of acting as a
management investment company under the 1940 Act and is validly existing and in
good standing under the laws of the Commonwealth of Massachusetts, and the
Declaration of Trust directs the MFG Trustees to manage the affairs of MFG and
grants them all powers necessary or desirable to carry out such responsibility,
including administering MFG's business as currently conducted by MFG and as
described in the current Prospectuses of MFG. MFG is registered as an investment
company classified as an open-end management company, under the 1940 Act and its
registration with the SEC as an investment company is in full force and effect;
(b) All of the issued and outstanding shares of the
Acquired Fund have been offered and sold in compliance in all material respects
with applicable registration requirements of the 1933 Act and state securities
laws; all issued and outstanding shares of each class of the Acquired Fund are,
and on the Closing Date will be, duly authorized and validly issued and
outstanding, and fully paid and non-assessable, and the Acquired Fund does not
have outstanding any options, warrants or other rights to subscribe for or
purchase any of its shares, nor is there outstanding any security convertible
into any of its shares;
(c) The Acquired Fund is not in violation of, and the
execution, delivery and performance of this Agreement by MFG for itself and on
behalf of the Acquired Fund does not and will not (i) violate MFG's Declaration
of Trust or By-Laws, or (ii) result in a breach or violation of, or constitute a
default under, any material agreement or material instrument to which MFG is a
party or by its properties or assets are bound;
(d) Except as previously disclosed in writing to the
Acquiring Fund, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to MFG's
knowledge, threatened against the Acquired Fund or any
8
<PAGE>
of its properties or assets which, if adversely determined, would materially and
adversely affect the Acquired Fund's financial condition or the conduct of its
business, MFG knows of no facts that might form the basis for the institution of
any such proceeding or investigation, and the Acquired Fund is not a party to or
subject to the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects, or is, reasonably
likely to materially and adversely affect, its business or its ability to
consummate the transactions contemplated herein;
(e) The Statement of Assets and Liabilities, Statements
of Operations and Statements of Changes in Net Assets of the Acquired Fund as of
and for the period ended October 31, 1997, audited by Price Waterhouse LLP
(copies of which have been or will be furnished to the Acquiring Fund) fairly
present, in all material respects, the Acquired Fund's financial condition as of
such date and its results of operations for such period in accordance with
generally accepted accounting principles consistently applied, and as of such
date there were no liabilities of the Acquired Fund (contingent or otherwise)
known to MFG that were not disclosed therein but that would be required to be
disclosed therein in accordance with generally accepted accounting principles;
(f) Since the date of the most recent audited financial
statements, there has not been any material adverse change in the Acquired
Fund's financial condition, assets, liabilities or business, other than changes
occurring in the ordinary course of business, or any incurrence by the Acquired
Fund of indebtedness maturing more than one year from the date such indebtedness
was incurred, except as otherwise disclosed in writing to and accepted by the
Acquiring Fund, prior to the Closing Date (for the purposes of this
subparagraph, neither a decline in the Acquired Fund's net asset value per share
nor a decrease in the Acquired Fund's size due to redemptions shall be deemed to
constitute a material adverse change);
(g) All federal and other tax returns and reports of MFG
and the Acquired Fund required by law to be filed on or before the Closing Date
shall have been filed, and all taxes owed by MFG or the Acquired Fund shall have
been paid so far as due, and to the best of MFG's knowledge, no such return is
currently under audit and no assessment has been asserted with respect to any
such return;
(h) For each full and partial taxable year from its
inception through the Closing Date, the Acquired Fund has qualified as a
separate regulated investment company under the Code and has taken all necessary
and required actions to maintain such status;
(i) At the Closing Date, the Acquired Fund will have good
and marketable title to the Fund Assets and full right, power and authority to
assign, deliver and otherwise transfer such Fund Assets hereunder, and upon
delivery and payment for such Fund Assets as contemplated herein, the Acquiring
Fund will acquire good and marketable title thereto, subject to no restrictions
on the ownership or transfer thereof other than such restrictions as might arise
9
<PAGE>
under the 1933 Act;
(j) The execution, delivery and performance of this
Agreement on behalf of the Acquired Fund will have been duly authorized prior to
the Closing Date by all necessary action on the part of MFG, the MFG Trustees
and the Acquired Fund, and this Agreement will constitute a valid and binding
obligation of MFG and the Acquired Fund enforceable in accordance with its
terms, subject as to enforcement, to bankruptcy, insolvency, reorganization,
arrangement, moratorium and other similar laws of general applicability relating
to or affecting creditors, rights and to general equity principles;
(k) From the effective date of the N-14 Registration
Statement, through the time of the meeting of the Acquired Fund Investors, and
on the Closing Date, the Proxy Materials: (i) will comply in all material
respects with the applicable provisions of the 1933 Act, the 1934 Act and the
1940 Act and the regulations thereunder and (ii) do not contain any 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
as of such dates and times, any written information furnished by MFG, on behalf
of the Acquired Fund, for use in the N-14 Registration Statement or in any other
manner that may be necessary in connection with the transactions contemplated
hereby does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the information provided not misleading;
provided, that the representations and warranties made by MFG in this subsection
shall not apply to statements in or omissions from the N-14 Registration
Statement made in reliance upon and in conformity with information provided by
AST for use therein; and
(l) No governmental consents, approvals, authorizations
or filings are required under the 1933 Act, the 1934 Act, the 1940 Act or
Massachusetts law for the execution of this Agreement by MFG, for itself and on
behalf of the Acquired Fund, or the performance of the Agreement by MFG for
itself and on behalf of the Acquired Fund, except for such consents, approvals,
authorizations and filings as have been made or received, and except for such
consents, approvals, authorizations and filings as may be required subsequent to
the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED FUND
The obligations of MFG to consummate the Reorganization with respect to
the Acquired Fund shall be subject to the performance by AST, for itself and on
behalf of the Acquiring Fund, of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions with respect to the Acquiring Fund:
6.1 All representations and warranties of AST contained herein
shall be true and correct in all material respects as of the date hereof and,
except as they may be affected by the
10
<PAGE>
transactions contemplated herein, as of the Closing Date with the same force and
effect as if made on and as of the Closing Date.
6.2 AST, on behalf of the Acquiring Fund, shall have delivered to
the Acquired Fund at the Closing a certificate executed on behalf of the
Acquiring Fund by AST's President, Secretary or Assistant Secretary in form and
substance reasonably satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that, to the best of such officer's knowledge and
belief, the factual representations and warranties of AST with respect to the
Acquiring Fund made herein are true and correct in all material respects at and
as of the Closing Date, except as they may be affected by the transactions
contemplated herein, and as to such other matters as the Acquired Fund shall
reasonably request.
6.3 As of the Closing Date, there shall have been no material
change in the investment objective, policies and restrictions nor any material
change in the investment management fees, fee levels payable pursuant to the
12b-1 plan of distribution, other fees payable for services provided to the
Acquiring Fund, fee waiver or expense reimbursement undertakings, or sales loads
of the Acquiring Fund from those fee amounts, undertakings and sales load
amounts described in the Prospectus of the Acquiring Fund delivered to the
Acquired Fund pursuant to paragraph 4.1 and in the N-14 Registration Statement.
6.4 The Acquired Fund shall have received at the Closing a
favorable opinion of Paul, Hastings, Janofsky & Walker LLP, counsel to AST,
dated as of the Closing Date, in a form reasonably satisfactory to the Acquired
Fund, substantially to the effect that:
(a) AST is a duly registered, open-end, management investment
company, and its registration with the SEC as an investment company under the
1940 Act is in full force and effect and the Acquiring Fund is a validly
existing series of AST; (b) AST is a business trust duly created pursuant to its
Agreement and Declaration of Trust, is validly existing and in good standing
under the laws of the State of Delaware, and the Agreement and Declaration of
Trust directs the AST Trustees to manage the affairs of AST and grants them all
powers necessary or desirable to carry out such responsibility, including
administering the Acquiring Fund's business as described in the current
Prospectus of the Fund; (c) the Acquiring Fund is a validly established separate
series of AST; (d) this Agreement has been duly authorized, executed and
delivered by AST on behalf of the Acquiring Fund and, assuming due
authorization, execution and delivery of this Agreement on behalf of the
Acquired Fund, is a valid and binding obligation of AST, enforceable against AST
in accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization, arrangement, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles; (e) the Acquiring Fund Shares to be issued to the Acquired
Fund and then distributed to the Acquired Fund Investors pursuant to this
Agreement are duly registered under the 1933 Act on the appropriate form, and
are duly authorized and upon such issuance will be validly issued and
outstanding, fully paid and non-assessable; (f) an amendment to the Registration
Statement of
11
<PAGE>
AST has been filed with the SEC with respect to the Acquiring Fund and has
become effective and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or threatened; and (g) to such
counsel's knowledge, no consent, approval, order or other authorization of any
federal or Delaware state court or administrative or regulatory agency is
required for AST to enter into this Agreement or to carry out its terms that had
not already been obtained, other than where the failure to obtain such consent,
approval or authorization would not have a material adverse effect on the
operations of AST.
6.5 The initial shareholder and the Board of Trustees (including
the disinterested Trustees) of the Acquiring Fund have approved the adoption of
a distribution plan pursuant to Rule 12b-1 as promulgated under the 1940 Act and
an investment advisory agreement between Van Deventer & Hoch and AST with
respect to the Acquiring Fund, both in the forms as presented to the MFG
Trustees.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND
The obligations of AST to consummate the Reorganization with respect to
the Acquiring Fund shall be subject to the performance by MFG of all the
obligations to be performed by it hereunder, with respect to the Acquired Fund,
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of MFG with respect to the
Acquired Fund contained herein shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date, with the
same force and effect as if made on and as of the Closing Date.
7.2 MFG, on behalf of the Acquired Fund, shall have delivered to
the Acquiring Fund at the Closing a certificate executed on behalf of the
Acquired Fund, by MFG's President, Secretary or Assistant Secretary, in form and
substance reasonably satisfactory to the Acquiring Fund and dated as of the
Closing Date, to the effect that the representations and warranties of MFG with
respect to the Acquired Fund made herein are true and correct at and as of the
Closing Date, except as they may be affected by the transactions contemplated
herein and as to such other matters as the Acquiring Fund shall reasonably
request.
7.3 With respect to the Acquired Fund, the Board of Trustees of
MFG shall have determined that the Reorganization is in the best interests of
the Acquired Fund and shall have made all the determinations required by Rule
17a-8 under the 1940 Act.
12
<PAGE>
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND.
The obligations of the Acquiring Fund and of the Acquired Fund herein
are each subject to the further conditions that on or before the Closing Date
with respect to the Acquiring Fund and the Acquired Fund:
8.1 This Agreement and the transactions contemplated herein shall
have been approved by the requisite vote of the holders of the outstanding
shares of the Acquired Fund in accordance with the provisions of MFG's
Declaration of Trust and the requirements of the 1940 Act, and certified copies
of the resolutions evidencing such approval shall have been delivered to the
Acquiring Fund.
8.2 On the Closing Date, no action, suit or other proceeding shall
be pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or any of the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders,
approvals and permits of federal, state and local regulatory authorities
(including, without limitation, those of the SEC) deemed necessary by AST, on
behalf of the Acquiring Fund, or MFG, on behalf of the Acquired Fund, to permit
consummation, in all material respects, of the transactions contemplated herein
shall have been obtained, except where failure to obtain any such consent, order
or permit would not, in the opinion of the party asserting that the condition to
closing has not been satisfied, involve a risk of a material adverse effect on
the assets or properties of the Acquiring Fund or the Acquired Fund.
8.4 The post-effective amendment to the registration statement of
AST registering shares of the Acquiring Fund and the N-14 Registration Statement
shall have become effective under the 1933 Act, no stop orders suspending the
effectiveness thereof shall have been issued and, to the best knowledge of the
parties hereto, no investigation or proceeding for that purpose shall have been
instituted or be pending, threatened or contemplated under the 1933 Act.
8.5 The Acquired Fund shall have declared and paid a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to the Acquired Fund's shareholders substantially all of
the Acquired Fund's investment company taxable income for all taxable years
ending on or prior to the Closing Date (computed without regard to any deduction
for dividends paid) and substantially all of its net capital gain realized in
all taxable years ending on or prior to the Closing Date (after reduction for
any capital loss carryover).
8.6 AST and MFG shall have received the opinion of Paul, Hastings,
Janofsky & Walker LLP addressed to both the Acquiring Fund and the Acquired Fund
(and based on customary representation certificates from AST and MFG, the
Acquiring Fund and the Acquired
13
<PAGE>
Fund) substantially to the effect that, for federal income tax purposes:
(a) The transfer by the Fund of substantially all of its
assets to the Acquiring Fund solely in exchange for the Acquiring Fund Shares,
as described above, is a reorganization within the meaning of Section
368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the "Code"); (b)
no gain or loss is recognized by the Fund upon the transfer of substantially all
of its assets to the Acquiring Fund in exchange solely for shares of the
Acquiring Fund Shares; (c) no gain or loss is recognized by the Acquiring Fund
on receipt of the Fund assets in exchange for the Acquiring Fund Shares; (d) the
basis of the assets of the Fund in the hands of the Acquiring Fund is, in each
instance, the same as the basis of those assets in the hands of the Fund
immediately prior to the transaction; (e) the holding period of the Fund's
assets in the hands of the Acquiring Fund includes the period during which the
assets were held by the Fund; (f) no gain or loss is recognized to the
shareholders of the Fund upon the receipt of the Acquiring Fund Shares solely in
exchange for the Fund's shares; (g) the basis of the Acquiring Fund Shares
received by the Fund shareholders is, in each instance, the same as the basis of
the Fund shares surrendered in exchange therefor; (h) the holding period of the
Acquiring Fund Shares received by the Fundshareholders includes the holding
period during which shares of the Fund surrendered and exchanged therefor was
held, provided that such shares were held as a capital asset in the hands of the
Fund shareholders on the date of the exchange.
Notwithstanding anything herein to the contrary, neither the Acquiring
Fund nor the Acquired Fund may waive the condition set forth in this paragraph
8.6.
9. EXPENSES
9.1 The expenses of entering into and carrying out the provisions
of this Agreement and the Reorganization will be borne by Van Deventer and Hoch
and/or The Chase Manhattan Corporation, whether or not the Reorganization is
consummated.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement between the
parties and supersedes any prior or contemporaneous understanding or arrangement
with respect to the subject matter hereof.
10.2 The representations, warranties and covenants contained in
this Agreement or in any document delivered pursuant hereto or in connection
herewith shall survive the consummation of the transactions contemplated herein.
14
<PAGE>
11. TERMINATION
11.1 This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time before the Closing by either
the Acquiring Fund or the Acquired Fund.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of MFG,
acting on behalf of the Acquired Fund and the authorized officers of AST, acting
on behalf of the Acquiring Fund; provided, however, that following the meeting
of the shareholders of the Acquired Fund, no such amendment may have the effect
of changing the provisions for determining the number of shares of the Acquiring
Fund to be issued to the Acquired Fund Investors under this Agreement to the
detriment of such Acquired Fund Investors, or otherwise materially and adversely
affecting the Acquired Fund, without the Acquired Fund obtaining the Acquired
Fund Investors' further approval except that nothing in this paragraph 12 shall
be construed to prohibit the Acquiring Fund and the Acquired Fund from amending
this Agreement to change the Closing Date or Applicable Valuation Date by mutual
agreement.
13. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by prepaid
telegraph, telecopy, certified mail or overnight express courier addressed to:
For AST, on behalf of itself and the Acquiring Fund:
Richard A. Snyders
President
Van Deventer & Hoch
800 North Brand Blvd., Suite 300
Glendale, California 91203
With copies to:
Julie Allecta, Esq. and
Kelvin K. Leung, Esq.
Paul, Hastings, Janofsky & Walker LLP
345 California Street, 28th Floor
San Francisco, California 94104
15
<PAGE>
For MFG, on behalf of itself and the Acquired Fund:
Colleen McCoy
The Chase Manhattan Corporation
One Chase Square, Tower 7
Rochester, New York 14643
With copies to:
Robert Kaner, Esq.
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3954
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF
LIABILITY
14.1 The article and paragraph headings contained herein are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to Articles, paragraphs,
subparagraphs or Exhibits shall be construed as referring to Articles,
paragraphs or subparagraphs hereof or Exhibits hereto, respectively. Whenever
the terms "hereto", "hereunder", "herein" or "hereof" are used in this
Agreement, they shall be construed as referring to this entire Agreement, rather
than to any individual Article, paragraph, subparagraph or sentence.
14.2 This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
14.4 This Agreement shall bind and inure to the benefit of the
parties hereto 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
Agreement.
14.5 AST acknowledges the following limitation of liability:
16
<PAGE>
The terms "Mutual Fund Group" and "MFG Trustees" refer, respectively,
to the trust created and the MFG Trustees, as trustees but not individually or
personally, acting from time to time under the Declaration of Trust, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of State of the State of Massachusetts, such reference being inclusive
of any and all amendments thereto so filed or hereafter filed. The obligations
of "Mutual Fund Group" entered into in the name or on behalf thereof by any of
the MFG Trustees, representatives or agents are made not individually, but in
such capacities and are not binding upon any of the MFG Trustees, shareholders
or representatives of the Trust personally, but bind only the assets of MFG, and
all persons dealing with MFG or the Acquired Fund must look solely to the assets
of MFG or the Acquired Fund for the enforcement of any claims against MFG or the
Acquired Fund.
17
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed by its authorized officer, and attested by its
Secretary.
Mutual Fund Group
for itself and on behalf of
Chase Vista American Value Fund
By: ___________________
Title: ___________________
Advisors Series Trust
for itself and on behalf of
Van Deventer & Hoch
American Value Fund
By: ___________________
Title: ___________________
Accepted and agreed as to Section 9:
VAN DEVENTER & HOCH
- ----------------------------
Title:
THE CHASE MANHATTAN CORPORATION
- ----------------------------
Title:
18
<PAGE>
PROXY
FOR SPECIAL MEETING OF SHAREHOLDERS OF
CHASE VISTA AMERICAN VALUE FUND
ON APRIL 23, 1998
The undersigned hereby appoints Vickie Preston and Colleen McCoy, or
each of them, proxies for the undersigned, with full power of substitution, to
represent the undersigned and to vote all of the shares of Chase Vista American
Value Fund (the "Fund") of Mutual Fund Group (the "Trust") which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the Fund to be
held on April 23, 1998, and at any adjournment thereof.
1. To approve a reorganization of the Fund into Van Deventer &
Hoch American Value Fund (the "Acquiring Fund"), a series of
Advisors Series Trust, which provides for (i) the transfer of
all of the net assets of the Fund to the Acquiring Fund, a
series of the Advisors Series Trust, in exchange for shares of
the Acquiring Fund of equivalent value, (ii) the pro rata
distribution of such shares of the Acquiring Fund to the
shareholders of the Fund in full redemption of such
shareholders' shares in the Fund, and (iii) the immediate
liquidation and termination of the Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
And, in their discretion, to transact any other business that may
lawfully come before the Meeting or any adjournment(s) thereof.
-1-
<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES AND
WILL BE VOTED AS DIRECTED HEREIN. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL.
Dated:___________________________
----------------------------------------
Signature of Shareholder
----------------------------------------
Signature of Shareholder
When shares are registered jointly in the names of two or more persons, ALL such
persons must sign. Signature(s) must correspond exactly with the name(s) the
shares are registered under. Please sign, date and return promptly in the
enclosed envelope.
-2-
<PAGE>
-----------------------------------------
PART B
-----------------------------------------
<PAGE>
MUTUAL FUND GROUP
CHASE VISTA AMERICAN VALUE FUND
___
One Chase Manhattan Plaza, Third Floor
New York, New York 10081
1-800-34-VISTA
______
STATEMENT OF ADDITIONAL INFORMATION
DATED APRIL 3, 1998
FOR REGISTRATION STATEMENT ON FORM N-14
This Statement of Additional Information is not a prospectus
and should be read in conjunction with the Combined Proxy Statement and
Prospectus dated April 3, 1998, which has been filed by Advisors Series Trust
("AST Trust") in connection with a Special Meeting of Shareholders of the Chase
Vista American Value Fund (the "Fund") of Mutual Fund Group (the "Trust") that
has been called to vote on an Agreement and Plan of Reorganization (and the
transactions contemplated thereby). Copies of the Combined Proxy Statement and
Prospectus may be obtained at no charge by writing Mutual Fund Group at the
address indicated above or by calling toll-free 1-800- 34-VISTA.
Unless otherwise indicated, capitalized terms used herein and
not otherwise defined have the same meanings as are given to them in the
Combined Proxy Statement and Prospectus.
Further information about the Trust, the Fund, Advisors Series
Trust ("AST Trust") and the Van Deventer & Hoch American Value Fund (the
"Acquiring Fund") is contained in the Fund's Prospectus dated February 27, 1998
, the Acquiring Fund's Prospectus dated December 16, 1997, and the Annual Report
of the Fund for the fiscal year ended October 31, 1997. The Fund's Statement of
Additional Information (which includes other series of the Chase Vista Funds),
dated February 27, 1998, and the Acquiring Fund's Statement of Additional
Information dated December 16, 1997, are incorporated by reference in this
Statement of Additional Information and is available without charge by calling
Van Deventer & Hoch at (818) 247-5330.
Pro-forma financial statements are attached hereto as Exhibit A.
TABLE OF CONTENTS
Page
----
General Information......................................................... B-2
Exhibit A .................................................................. B-3
B-1
<PAGE>
GENERAL INFORMATION
The shareholders of the Fund are being asked to approve a form
of Agreement and Plan of Reorganization (the "Plan") combining the Fund into the
Acquiring Fund (and the transactions contemplated thereby). The Plan
contemplates the transfer of all of the assets of the Fund as of the Effective
Date to the Acquiring Fund, and the assumption by the Acquiring Fund of the
liabilities of the Fund, in exchange for shares of the Acquiring Fund.
Immediately after the Effective Date, the Fund will distribute to its
shareholders of record as of the close of business on the Effective Date the
shares of the Acquiring Fund received. The shares of the Acquiring Fund that
will be issued for distribution to the Fund's Shareholders will have an
aggregate net asset value equal to the aggregate net asset value of the shares
of the Fund held as of the Closing Date. The Trust will then take all necessary
steps to terminate the qualification, registration and classification of the
Fund. All issued and outstanding shares of the Fund will be canceled on the
Fund's books. Shares of the Acquiring Fund will be represented only by book
entries; no share certificates will be issued.
A Special Meeting of the Fund's shareholders to consider the
transaction will be held at the offices of The Chase Manhattan Bank, One Chase
Manhattan Plaza, Third Floor, New York, NY 10081 on April 23, 1998, at 10 a.m.,
local time.
For further information about the transaction, see the
Combined Proxy Statement and Prospectus. For further information about the Trust
and the Fund, see the Fund's Statement of Additional Information, dated February
27, 1998, which is available without charge by calling the Trust at
1-800-34-VISTA. For further information about the AST Trust and the Acquiring
Fund, see the Acquiring Fund's Statement of Additional Information, dated
December 16, 1997, which is available without charge by calling the AST Trust at
(602) 952-8520.
B-2
<PAGE>
Exhibit A
---------
VD&H American Value Fund
Pro Forma Portfolio of Investments October 31, 1997
Shares Issuer $ Value
- --------------------------------------------------------------------------------
Common Stock -- 89.0%
---------------------
Aerospace -- 2.3%
5,000 Raytheon Co. 271,250
-------
Agricultural Production/Services -- 2.4%
12,600 Archer-Daniels-Midland Co. 280,350
-------
Automotive - 1.9%
7,000 Genuine Parts Co. 219,187
-------
Banking -- 6.8%
4,270 Banc One Corp. 222,574
2,800 BankAmerica Corp. 200,200
4,000 H.F. Ahmanson & Co. 236,000
1,200 J.P. Morgan & Company, Inc. 131,700
-------
790,474
-------
Computers Software -- 2.0%
6,000 Electronic Data Systems Corp. 232,125
-------
Computers/Computer Hardware -- 1.1%
2,000 Hewlett-Packard Co. 123,375
-------
Consumer Products -- 2.0%
7,500 Fleetwood Enterprises, Inc. 227,344
-------
Diversified - 4.7%
3,400 Cognizant Corp. 133,237
4,500 Fluor Corp. 185,063
5,000 Tenneco Inc. 224,688
-------
542,988
-------
Electronics/Electrical Equipment -- 5.7%
10,000 EG&G, Inc. 206,875
4,000 Motorola, Inc. 247,000
B-3
<PAGE>
VD&H American Value Fund
Pro Forma Portfolio of Investments October 31, 1997
Shares Issuer $ Value
- --------------------------------------------------------------------------------
4,000 Tecumseh Products Co., Class A 207,500
-------
661,375
-------
Environmental Services -- 1.4%
7,000 Waste Management Inc. 163,625
-------
Financial Services -- 2.7%
6,400 Federal National Mortgage Association 310,000
-------
Health Care/Health Care Services -- 1.1%
4,400 Bard (C.R.), Inc. 122,100
-------
Insurance -- 5.5%
5,000 Allstate Corp. 414,687
4,800 Safeco Corp. 228,600
-------
643,287
-------
Manufacturing -- 3.7%
6,500 ITT Industries, Inc. 205,156
8,200 Zero Corp. 220,375
-------
425,531
-------
Metals/Mining -- 1.3%
7,400 Cyprus Amax Minerals Co. 154,937
-------
Oil & Gas -- 10.3%
2,400 Atlantic Richfield Co., (ARCO) 197,550
10,000 Enron Oil & Gas Co. 210,625
9,500 Occidental Petroleum Corp. 264,813
5,600 Phillips Petroleum Co. 270,900
10,000 Union Pacific Resources Group, Inc. 246,250
-------
1,190,138
---------
Paper/Forest Products -- 8.9%
11,500 Longview Fibre Co. 182,563
15,000 Louisiana-Pacific Corp. 315,000
5,000 Potlatch Corp. 249,375
3,000 St. Joe Paper Co. 285,750
-------
1,032,688
---------
B-4
<PAGE>
VD&H American Value Fund
Pro Forma Portfolio of Investments October 31, 1997
Shares Issuer $ Value
- --------------------------------------------------------------------------------
Pharmaceuticals -- 2.3%
3,000 Merck & Company, Inc. 267,750
-------
Printing & Publishing -- 1.9%
4,000 Tribune Co. 220,500
-------
Real Estate Investment Trust -- 2.3%
9,674 BRE Properties, Inc., Class A 265,430
-------
Retailing -- 9.1%
7,000 Albertson's, Inc. 258,125
4,000 Dayton-Hudson Corp. 251,250
4,600 Dillards, Inc., Class A 176,525
10,000 SUPERVALU, Inc. 366,250
-------
1,052,150
---------
Shipping/Transportation -- 1.7%
6,000 Norfolk Southern Corp. 192,750
-------
Telecommunications -- 2.5%
6,000 AT&T Corp. 293,625
-------
Tire & Rubber -- 2.2%
4,000 Goodyear Tire & Rubber, Inc. 250,500
-------
Utilities -- 1.5%
8,000 Central & South West Corp. 172,500
-------
Wholesaling -- 1.7%
7,200 Reliance Steel & Aluminum Co. 197,550
-------
- --------------------------------------------------------------------------------
Total Common Stock (Cost $7,731,397) 10,303,529
- --------------------------------------------------------------------------------
Principal Amount
Corporate Notes & Bonds FRN -- 3.2%
B-5
<PAGE>
VD&H American Value Fund
Pro Forma Portfolio of Investments October 31, 1997
Shares Issuer $ Value
- --------------------------------------------------------------------------------
Financial Services -- 3.2%
$370,500 Ford Motor Credit Corp. 5.50%, 11/04/97 (Cost 370,330
-------
- --------------------------------------------------------------------------------
Total Long-Term Investments - (Cost $8,101,727) 10,673,859
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Short-Term Investments -- 8.3%
- --------------------------------------------------------------------------------
Commercial Paper -- 3.2%
------------------------
368,400 General Electric Capital Corp., 5.52%, 11/12/97 367,779
-------
U.S. Treasury Securities -- 5.1%
--------------------------------
U.S. Treasury Bills
263,000 4.53%, 11/20/97 262,371
13,000 4.60%, 11,20/97 12,968
48,000 4.75%, 11/20/97 47,880
273,000 4.77%, 11/20/97 272,313
-------
595,532
-------
- --------------------------------------------------------------------------------
Total Short-Term Investments-- (Cost $963,311) 963,311
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Investments 100.5%-- (Cost $9,065,038) $11,637,170
- --------------------------------------------------------------------------------
FRN = Floating Rate Notes: the maturity date shown is the next interest reset
date; the rate shown is the rate in effect at October 31, 1997.
See notes to financial statements.
B-6
<PAGE>
VD&H American Value Fund
Pro Forma Statement of Assets and Liabilities October 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Pro
Vista Forma
American Adjust- Pro Forma
Value Fund ments Combined
---------- ----- --------
<S> <C> <C> <C>
ASSETS:
Investment securities, at value (Note 1) $11,637,170 $ 0 $11,637,170
Cash 575 0 575
Receivables:
Interest and Dividends 10,687 0 10,687
Fund Shares Sold 10,000 (203) 10,000
Other assets 203 (203) 0
----------- ----------- -----------
Total assets 11,658,635 (203) 11,658,432
----------- ----------- -----------
LIABILITIES:
Accrued liabilities: (Note 2)
Administration fees 1,533 (1,533) 0
Distribution fees 102 (102) 0
Investment advisory fees 1,022 (1,022) 0
Shareholder servicing fees 920 (920) 0
Custodian 7,264 (7,264) 0
Other 70,367 10,638 81,005
----------- ----------- -----------
Total Liabilities 81,208 (203) 81,005
----------- ----------- -----------
NET ASSETS:
Paid in capital 7,566,673 0 7,566,673
Accumulated undistributed net investment income 143,569 0 143,569
Accumulated undistributed net realized gain (loss) on 1,295,053 0 1,295,053
investment transactions
Net unrealized appreciation/depreciation of investments 2,572,132 0 2,572,132
----------- ----------- -----------
Net Assets: $11,577,427 0 $11,577,427
----------- ----------- -----------
Shares of beneficial interest outstanding ($.001 par value;
unlimited number of shares authorized):
Shares 737,783 0 737,783
Shares:
Net asset value, redemption price and Maximum $ 15.69 0 $ 15.69
offering price per share
Cost of Investments $ 9,065,038 $ 0 $ 9,065,038
*Net assets/shares outstanding
See notes to financial statements
</TABLE>
B-7
<PAGE>
VD&H American Value Fund
Pro Forma Statements of Operations
For the year ended October 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Pro Forma
Van Deventer
Vista & Hoch
American Pro Forma American
Value Fund Adjustments Fund
---------- ----------- ----
<S> <C> <C> <C>
INVESTMENT INCOME:
Dividend $ 238,493 $ 0 $ 238,493
Interest 64,864 0 64,864
---------- ---------- ----------
Total investment income 303,357 0 303,357
---------- ---------- ----------
EXPENSES: (Note 2)
Administrative fees 16,153 (16,153) (a) 0
Distribution fees 26,921 0 26,921
Investment Advisory fees 75,380 0 75,380
Shareholder servicing fees 26,921 0 26,921
Custodian fees 16,895 (16,895) (b) 0
Printing and postage 6,059 (6,059) (b) 0
Professional fees 18,602 (18,602) (b) 0
Registration fees 40,624 (40,624) (b) 0
Transfer agent fees 23,373 (23,373) (b) 0
Trustees fees and expenses 538 (538) (b) 0
Other 12,480 100,581 (b) 113,061
---------- ---------- ----------
Total Expenses 263,946 (21,663) 242,283
---------- ---------- ----------
Less amounts waived (Note 121,801 7,421 (c) 129,222
---------- ---------- ----------
Net expenses 142,145 (29,084) 113,061
---------- ---------- ----------
Net investment income 161,212 29,084 190,296
---------- ---------- ----------
REALIZED AND UNREALIZED GAIN ON
INVESTMENTS:
Net realized gain on investments 1,299,496 0 500,892
Change in net unrealized appreciation on investments 600,844 0 716,130
---------- ---------- ----------
Net realized and unrealized gain on investments 1,900,340 0 1,217,022
---------- ---------- ----------
Net increase in net assets from operations $2,061,552 $ 29,084 $1,407,318
========== ========== ==========
</TABLE>
See notes to financial statements.
(a) Reflects adjustments for fees which were previously being charged and are no
longer being charged.
(b) Reflects the management agreement to charge 1.05% from which management will
pay all operating expenses of the fund.
(c) Reflects management agreement to waive all management fees until May 6,
1998.
B-8
<PAGE>
Van Deventer & Hoch American Value Fund
Notes to the Pro-Forma Financial Statements
1. Basis of presentation
The Pro Forma Portfolio of Investments, Statement of Assets and
Liabilities and Statement of Operations ( "Pro forma Statements" ) reflect the
accounts of the Chase Vista American Value Portfolio at October 31, 1997 and for
the year then ended.
The Pro Forma Statements give effect to the proposed transfer of all
assets and liabilities of the Chase Vista American Value Portfolio to the Van
Deventer & Hoch American Value Portfolio in exchange for shares of such Van
Deventer & Hoch Portfolio.
The Pro Forma Statements should be read in conjunction with the
historical financial statements of the Portfolio included in the Statement of
Additional Information.
2. Shares of Beneficial Interest
The pro forma net asset value per share and shares outstanding
assume the issuance of additional shares of the Van Deventer & Hoch American
Value Fund on October 31, 1997 in connection with the proposed reorganization,
the additional shares (737,783) to be issued for the Chase Vista American Value
Fund were based on the October 31, 1997 net assets ($11,577,427) of the Chase
Vista Portfolio and the net asset value per share of such Fund ($15.69).
3. Pro Forma Operating Expenses
The Pro Forma Statements of Operations assume similar rates of gross
investment income for the investments of the Van Deventer & Hoch American Value
Portfolio. Accordingly, the gross investment income is equal to the Chase Vista
American Value Portfolio's gross investment income. Certain expenses have been
adjusted to reflect the expected expenses of the Van Deventer & Hoch American
Value Fund more closely. Pro forma operating expenses included the actual
expenses of the Chase Vista Portfolio adjusted for certain items which are
factually supportable. For the Van Deventer & Hoch American Value Portfolio, all
management fees are expected to be waived by the
B-9
<PAGE>
Shareholder Servicing Agent, The Distributor, and the Advisor, and the
Portfolio's expenses are adjusted to reflect expected waivers.
B-10
<PAGE>
-----------------------------------------
PART C
-----------------------------------------
<PAGE>
MUTUAL FUND GROUP
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION
The response to this item is incorporated by reference to Item 27 of
Part C of Post-Effective Amendment No. 32, filed December 28, 1995 ("Amendment
No. 32"), to the Registrant's Registration Statement on Form N-1A, filed May 11,
1987, Registration Statement No. 33-14196 (the "Registration Statement").
ITEM 16. EXHIBITS
Exhibit No.
1 Declaration of Trust, as amended. (1)
2 By-laws, as amended. (1)
3 None.
4 Form of Agreement and Plan of Reorganization (filed herewith as
Exhibit A to Prospectus/Proxy Statement).
5 Specimen share certificate. (3)
6 Investment Advisory Agreement (2)
7 Distribution Agreement. (2)
8 None.
9 Custodian Agreement. (3)
10 Rule 12b-1 Distribution Plan. (4)
11 Opinion of Counsel regarding legality of issuance of shares and
other matters. (5)
12 Opinion of Counsel on tax matters. (5)
13(a) Administration Agreement with Investment Company Administration
Corporation. (2)
13(b) Fund Accounting Service Agreement. (2)
13(c) Transfer Agency and Service Agreement. (2)
14(a) Consent of Price Waterhouse LLP, Independent Accountants. (5)
14(b) Consent of McGladrey & Pullen, LLP, Independent Accountants. (5)
15 Inapplicable.
16 Power of Attorney (6)
(1) Previously filed with the Registration Statement on Form N-1A (File
No. 333-17391) on December 6, 1996, and incorporated herein by this reference.
<PAGE>
(2) Previously filed with Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (File No. 333-17391) on January 29, 1997,
and incorporated herein by this reference.
(3) Previously filed with Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A (File No. 333-17391) on February 28, 1997,
and incorporated herein by this reference.
(4) Previously filed with Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A (File No. 333-17391) on May 1, 1997, and
incorporated herein by this reference.
(5) Filed herewith.
(6) Previously filed with Registration Statement on Form N-14 (File
Nos. 811-07959, 333-42505) on December 17, 1997.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use a prospectus which is a
part of this Registration Statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act, the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(b) The undersigned Registrant agrees that every prospectus that is
filed under paragraph (a) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is effective,
and that, in determining any liability under the 1933 Act, each post-effective
amendment shall be deemed to be a new registration statement for the securities
offered therein, and the offering of the securities at that time shall be deemed
to be the initial bona fide offering of them.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 940, as amended, the Registrant has
duly caused this Pre-Effective Amendment to the Registration Statement on Form
N-14 to be signed on its behalf by the undersigned, thereunto duly authorized,
in the City of Phoenix and the State of Arizona on the 25th day of March, 1998.
ADVISORS SERIES TRUST
By /s/ Eric M. Banhazl*
-----------------------
Eric M. Banhazl
President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement on Form N-14 has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Eric M. Banhazl* President, Principal Financial
- --------------------------- and Accounting Officer, and Trustee
Eric M. Banhazl
/s/ Walter E. Auch Sr.* Trustee
- ---------------------------
Walter E. Auch, Sr.
/s/ Donald E. O'Connor* Trustee
- ---------------------------
Donald E. O'Connor
/s/ George T. Wofford III* Trustee
- ---------------------------
George T. Wofford III
* /s/ Robert H. Wadsworth
- ---------------------------
By: Robert H. Wadsworth
Attorney in Fact
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER EXHIBIT
- ---------------- ------------------------------------------------------------
11 Opinion of Counsel regarding legality of issuance of shares
and other matters.
12 Form of Opinion of Counsel regarding tax matters.
14(a) Consent of Price Waterhouse LLP, Independent Accountants.
14(b) Consent of McGladrey & Pullen, LLP, Independent Accountants.
Exhibit 11
Opinion of Counsel
regarding legality of issuance of shares
and other matters.
<PAGE>
[PAUL, HASTINGS, JANOFSKY & WALKER LLP LETTERHEAD]
March 11, 1998
(415) 835-1600 27361.84176
Advisors Series Trust
2025 East Financial Way, Suite 101
Glendora, CA 91741
Re: Van Deventer & Hoch American Value Fund opinion
Ladies and Gentlemen:
We have acted as counsel to Advisors Series Trust, a Delaware business
trust (the "Trust"), in connection with a Post-Effective Amendment to the
Trust's Registration Statement filed on Form N-1A with the Securities and
Exchange Commission (the "Post-Effective Amendment") and the Registration
Statement filed on Form N-14 with the Securities and Exchange Commission (the
"Proxy Statement/Prospectus") and relating to the issuance by the Trust of an
indefinite number of $0.01 par value shares of beneficial interest (the
"Shares") of one series of the Trust: Van Deventer & Hoch American Value Fund
(the "Fund").
In connection with this opinion, we have assumed the authenticity of
all records, documents and instruments submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all records, documents and instruments submitted
to us as copies. We have based our opinion upon our review of the following
records, documents and instruments:
(a) the Trust's Certificate of Trust as filed with the Secretary
of State of Delaware on October 3, 1996, certified to us as in
effect on the date hereof;
1
<PAGE>
PAUL, HASTINGS, JANOFSKY & WALKER LLP
(b) the Trust's Agreement and Declaration of Trust dated October
3, 1996 (the "Trust Instrument"), certified to us by an
officer of the Trust as being true and complete and in effect
on the date hereof;
(c) the Bylaws of the Trust certified to us by an officer of the
Trust as being true and complete and in effect on the date
hereof;
(d) resolutions of the Trustees of the Trust adopted at a meeting
on December 5, 1997, authorizing the establishment of the Fund
and the issuance of the Shares;
(e) the Post-Effective Amendment;
(f) the Proxy Statement/Prospectus; and
(g) a certificate of an officer of the Trust concerning certain
factual matters relevant to this opinion.
In rendering our opinion below, we have not conducted an independent
examination of the books and records of the Trust for the purpose of determining
whether all of the Shares were fully paid prior to their issuance and do not
believe it to be our obligation to do so.
Our opinion below is limited to the federal law of the United States of
America and the business trust law of the State of Delaware. We are not licensed
to practice law in the State of Delaware, and we have based our opinion below
solely on our review of Chapter 38 of Title 12 of the Delaware Code (the
"Delaware Business Trust Act") and the case law interpreting such Chapter as
reported in Delaware Laws Annotated (CSC The United States Corporation Company,
April 1997) as updated on Lexis on March 6, 1998. We have not undertaken a
review of other Delaware law or of any administrative or court decisions in
connection with rendering this opinion. We disclaim any opinion as to any law
other than that of the United States of America and the business trust law of
the State of Delaware as described above, and we disclaim any opinion as to any
statute, rule, regulation, ordinance, order or other promulgation of any
regional or local governmental authority.
Based on the foregoing and our examination of such questions of law as
we have deemed necessary and appropriate for the purpose of this opinion, and
assuming that (i) all of the Shares will be issued and sold for cash at the
per-share public offering price on the date of their issuance in accordance with
statements in the Trust's Prospectus included in the Post-Effective Amendment
and in accordance with the Trust Instrument, (ii) all consideration for the
Shares will be actually received by the Trust, and (iii) all applicable
securities laws will be complied with, then it is our opinion that, when issued
and sold by the Trust, the Shares will be legally issued, fully paid and
nonassessable.
2
<PAGE>
PAUL, HASTINGS, JANOFSKY & WALKER LLP LETTERHEAD
This opinion is rendered to you in connection with the Post-Effective
Amendment and the Proxy Statement/Prospectus and is solely for your benefit.
This opinion may not be relied upon by you for any other purpose or relied upon
by any other person, firm, corporation or other entity for any purpose, without
our prior written consent. We disclaim any obligation to advise you of any
developments in areas covered by this opinion that occur after the date of this
opinion.
Sincerely yours,
/s/ PAUL, HASTINGS, JANOFSKY & WALKER LLP
3
Exhibit 12
Form of Opinion of Counsel
Regarding Tax Matters.
<PAGE>
FORM OF OPINION
LAW OFFICES OF
PAUL, HASTINGS, JANOFSKY & WALKER LLP
345 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104-2635
TELEPHONE (415) 835-1600
FACSIMILE (415) 217-5333
INTERNET www.phjw.com
[April __, 1998]
(415) 835-1600 27361.84176
Van Deventer & Hoch American Value Fund
800 North Brand Blvd., Suite 300
Glendale, California 91203
Vista American Value Fund
c/o Colleen McCoy
The Chase Manhattan Corporation
One Chase Square, Tower 7
Rochester, New York 14643
Re: Reorganization of Van Deventer & Hoch American Value Fund and Vista
American Value Fund
Ladies and Gentlemen:
You have requested our opinion as counsel for Advisors Series Trust, a Delaware
business trust ("AST"), with respect to certain Federal income tax matters in
connection with the reorganization by and between Van Deventer & Hoch American
Value Fund, a series of AST ("Acquiring Fund") and Vista American Value Fund
("Acquired Fund"), a series of Mutual Fund Group ("MFG"), whereby (i) Acquired
Fund will transfer substantially all of its assets to Acquiring Fund in exchange
solely for voting shares of Acquiring Fund, (ii) Acquired Fund will distribute,
in complete liquidation, such shares to the shareholders of Acquired Fund in
exchange for their shares in Acquiring Fund and (iii) Acquired Fund will
dissolve as soon as practicable thereafter. This opinion is rendered in
connection with the transaction described in the Agreement and Plan of
Reorganization dated December 31, 1997, by and between Acquiring Fund and
Acquired Fund (the "Reorganization Agreement"), and adopts the applicable
defined terms therein, which Reorganization Agreement is substantially the same
as the Agreement and Plan of Reorganization attached to the Combined Proxy
Statement and Prospectus dated April 3, 1998, as Appendix A. This letter and the
opinions expressed herein are for delivery to Acquiring Fund and Acquired Fund
and may be relied upon only by Acquiring Fund and Acquired Fund and by the
shareholders of Acquiring Fund and Acquired Fund. This opinion also may be
disclosed by Acquiring Fund, Acquired Fund or any such shareholder in connection
with an audit or other administrative proceeding before the Internal Revenue
Service (the "Service") affecting Acquiring Fund, Acquired Fund or such
shareholder or in connection with any judicial proceeding relating to the
Federal, state or local tax liability of Acquiring Fund, Acquired Fund or any
such shareholder.
For purposes of this opinion we have assumed the truth and accuracy of the
following facts:
o AST was duly organized under the laws of the State of Delaware, and is
validly existing and in good standing under the laws of that State. AST is
duly registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as an open-end management investment company.
o Acquiring Fund is a new series of AST duly established under the law of the
State of Delaware, and is validly existing under the laws of that State.
Acquiring Fund has only one class of stock, none of which is issued.
Acquiring Fund has an registered an indefinite number of shares of voting
Capital Stock, par value $0.01 per share, of which no shares are currently
outstanding.
2
<PAGE>
o MFG was duly organized under the laws of the State of Massachusetts, and is
validly existing and in good standing under the laws of that State. MFG is
duly registered under the 1940 Act, as an open-end management investment
company.
o Acquired Fund is a series of MFG duly established under the laws of the
State of Massachusetts, and is validly existing under the laws of that
State. Acquired Fund has only one class of stock, which is widely held. All
Acquired Fund shares sold have been sold pursuant to an effective
Registration Statement of the Company filed under the Securities Act of
1933, as amended (the "1933 Act"), except for any shares sold pursuant to
an applicable exemption thereunder. Acquired Fund has an indefinite number
of shares of voting Capital Stock, par value $0.001 per share, of which
737,783 shares were outstanding as October 31, 1997, and each outstanding
share of Acquired Fund is fully paid, non-assessable, fully transferable
and has full voting rights. The shares of Capital Stock of Acquiring Fund
issued pursuant to the Reorganization Agreement will be fully paid,
non-assessable, freely transferable and have full voting rights.
For valid business purposes, the following transaction will take place in
accordance with the laws of the State of Delaware and pursuant to the
Reorganization Agreement:
(a) On the date of the closing (the "Closing Date"), Acquired Fund will
transfer to Acquiring Fund substantially all of the property, assets
and goodwill of Acquiring Fund solely in exchange for that number of
Acquiring Fund shares of beneficial interest calculated by dividing
the aggregate value of Acquired Fund's assets by the net asset value
per share of Acquiring Fund, all such values determined as set forth
in Section 1.1 of the Reorganization Agreement and the assumption by
Acquiring Fund of the liabilities of Acquired Fund.
(b) Acquired Fund will distribute, in complete liquidation, all Acquiring
Fund shares to the shareholders of Acquired Fund in proportion to
their respective interests in Acquired Fund.
(c) Acquired Fund will wind up and dissolve as soon as practicable
thereafter.
In rendering the opinions stated below, we have examined and relied upon the
following, assuming the truth and accuracy of any statements contained therein:
(1) The Reorganization Agreement.
(2) The Combined Proxy Statement and Prospectus of MFG and AST dated April
3, 1998.
(3) AST's Registration Statement on Form N-14 as filed with the Securities
and Exchange Commission on March 27, 1998.
(4) The Statement of Additional Information of MFG and AST, dated December
15, 1997.
3
<PAGE>
(5) Such other documents, records and instruments as we have deemed
necessary in order to enable us to render the opinions referred to in
this letter.
For purposes of rendering the opinions stated below, we have in addition relied
upon the following representations by AST on behalf of Acquiring Fund and by MFG
on behalf of Acquired Fund, as applicable:
(A) The fair market value of the shares of Acquiring Fund received by the
shareholders of Acquired Fund will be approximately equal to the fair
market value of Acquired Fund shares surrendered in the exchange. The
shareholders of Acquired Fund will receive no consideration other than
Acquiring Fund shares in exchange for their Acquired Fund shares.
(B) There is no plan or intention by the shareholders of Acquired Fund who
owns 5% or more of Acquired Fund shares, and to the best of the
knowledge of the management of the Acquired Fund or MFG, there is no
plan or intention on the part of any shareholders of Acquired Fund to
sell, exchange, or otherwise dispose of a number of Acquiring Fund
shares received in the transaction that would reduce Acquired Fund
shareholders' ownership of Acquiring Fund shares to a number of shares
having a value, as of the date of the transaction, of less than 50% of
the value of all of the formerly outstanding shares of Acquired Fund
as of the same date. For purposes of this representation, shares of
Acquired Fund exchanged for cash or other property, surrendered by
dissenters, or exchanged for cash in lieu of fractional shares of
Acquiring Fund, have been treated as outstanding shares of Acquired
Fund on the date of the transaction. Further, in making this
representation, the Acquired Fund and MFG have considered both shares
of Acquired Fund and shares of Acquiring Fund that were sold,
redeemed, or otherwise disposed of by the shareholders of Acquired
Fund (except for shares which were required to be redeemed by Acquired
Fund or Acquiring Fund in the ordinary course of their respective
businesses as series of an investment company).
(C) Acquiring Fund will acquire at least 90% of the fair market value of
the net assets and at least 70% of the fair market value of the gross
assets held by Acquired Fund immediately prior to the transaction. For
purposes of this representation, amounts used by Acquired Fund to pay
its reorganization expenses, amounts paid by Acquired Fund to
shareholders who receive cash or other property, and all redemptions
and distributions (except for distributions and redemptions occurring
in the ordinary course of Acquired Fund's business as a management
investment company) made by Acquired Fund immediately preceding the
transfer have been included as assets of Acquired Fund held
immediately prior to the transaction.
(D) Acquiring Fund has no plan or intention to reacquire any of its shares
issued in the transaction.
4
<PAGE>
(E) Acquiring Fund has no plan or intention to sell or otherwise dispose
of any of the assets of Acquired Fund acquired in the transaction,
except for dispositions made in the ordinary course of its business as
a series of an investment company.
(F) In pursuance of the plan of reorganization, Acquired Fund will
distribute as soon as practicable the shares of Acquiring Fund it
receives in the transaction.
(G) The liabilities of Acquired Fund assumed by Acquiring Fund and the
liabilities to which the transferred assets of Acquired Fund are
subject were incurred by Acquired Fund in the ordinary course of its
business and do not exceed the adjusted tax basis of the assets
transferred to the Acquired Fund.
(H) Acquired Fund has continued its historic business enterprise in a
substantially unchanged manner.
(I) Following the transaction, Acquiring Fund will continue the historic
business of Acquired Fund or use a significant portion of Acquired
Fund's historic business assets in a business.
(J) At the time of the transaction, Acquiring Fund did not have
outstanding any warrants, options, convertible securities, or any
other type of right pursuant to which any person could acquire stock
in Acquiring Fund that, if exercised or converted, would affect the
Acquired Fund shareholder's acquisition or retention of control of
Acquiring Fund, as defined in Section 368(a)(2)(H) of the Internal
Revenue Code of 1986, as amended (the "Code").
(K) There is no indebtedness existing between Acquired Fund and Acquiring
Fund that was issued, acquired, or will be settled at a discount.
(L) Acquired Fund and Acquiring Fund have been at all times prior to the
Closing Date, and will be at the Closing Date, regulated investment
companies as defined in Section 851 of the Code.
(M) Acquiring Fund does not own, directly or indirectly, nor has it owned
during the past five years, directly or indirectly, any shares of
Acquired Fund.
(N) Acquired Fund's shareholders will be in control (within the meaning of
Section 368(a)(2)(H) of the Code) of Acquiring Fund immediately after
the transfer.
(O) The fair market value of the assets of Acquired Fund transferred to
Acquiring Fund will equal or exceed the sum of the liabilities assumed
by Acquiring Fund, plus the amount of liabilities, if any, to which
the transferred assets are subject.
5
<PAGE>
(P) Acquired Fund is not under the jurisdiction of a court in a case under
Title 11 of the United States Code or a receivership, foreclosure, or
similar proceeding in a Federal or state court.
(Q) Acquiring Fund and Acquired Fund met the requirements of a regulated
investment company as defined in Section 368(a)(2)(F)(i) and (ii) of
the Code.
Our opinions set forth in this letter are based upon the Code, regulations of
the Treasury Department, published administrative announcements and rulings of
the Service and court decisions, all as of the date of this letter. Based on the
foregoing facts and representations, and provided that the transaction will take
place in accordance with the terms of the Reorganization Agreement, and further
provided that Acquired Fund distributes its remaining assets as soon as
practicable, we are of the opinion that:
1. The acquisition by Acquiring Fund of substantially all of the assets
of Acquired Fund solely in exchange for voting shares of Acquiring
Fund, followed by both the distribution by Acquired Fund to its
shareholders of such shares, in complete liquidation of Acquired Fund,
and the dissolution of Acquired Fund, as described above, will be a
reorganization within the meaning of Section 368(a)(1)(D) of the Code.
Acquired Fund and Acquiring Fund will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code.
2. No gain or loss will be recognized by Acquired Fund upon the transfer
of substantially all its assets to Acquiring Fund in exchange solely
for voting shares of Acquiring Fund and the assumption by Acquiring
Fund of Acquired Fund's liabilities pursuant to Sections 361(a) and
357(a) of the Code.
3. No gain or loss will be recognized by Acquiring Fund upon the receipt
of substantially all of the assets of Acquired Fund in exchange solely
for voting shares of Acquiring Fund pursuant to Section 1032(a) of the
Code.
4. Provided that the shareholders of Acquired Fund receive solely
Acquiring Fund shares in exchange for Acquired Fund shares, no gain or
loss will be recognized by shareholders of Acquired Fund pursuant to
Section 354(a) of the Code.
5. The basis of the assets of Acquired Fund received by Acquiring Fund
will be the same as the basis of such assets to Acquired Fund
immediately prior to the exchange pursuant to Section 362(b) of the
Code.
6. The basis of the shares of Acquiring Fund received by shareholders of
Acquired Fund will be the same as the basis of the shares of Acquired
Fund surrendered in exchange therefor pursuant to Section 358(a)(1) of
the Code.
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7. The holding period of the assets of Acquired Fund received by
Acquiring Fund will include the period during which such assets were
held by Acquired Fund pursuant to Section 1223(2) of the Code.
8. The holding period of the shares of Acquiring Fund received by the
shareholders of Acquired Fund will include the holding period of the
shares of Acquired Fund surrendered in exchange therefor, provided
that the shares of Acquired Fund were held as a capital asset on the
date of the exchange, pursuant to Section 1223(1) of the Code.
The opinions set forth above represent our conclusions as to the application of
Federal income tax law existing as of the date of this letter to the
transactions described in the Proxy Statement, and we can give no assurance that
legislative enactments, administrative changes or court decisions may not be
forthcoming which would require modifications or revocations of our opinions
expressed herein. Moreover, there can be no assurance that positions contrary to
our opinions will not be taken by the Service, or that a court considering the
issues would not hold contrary to such opinions. Further, all the opinions set
forth above represent our conclusions based upon the documents and facts
referred to above. Any material amendments to such documents or changes in any
significant facts would affect the opinions referred to herein. Although we have
made such inquiries and performed such investigation as we have deemed necessary
to fulfill our professional responsibilities, we have not undertaken an
independent investigation of the facts referred to in this letter.
We express no opinion as to any Federal income tax issue or other matter except
those set forth above.
Sincerely yours,
7
Exhibit 14(a)
Consent of Price Waterhouse, LLP,
Independent Accountants.
<PAGE>
Consent Of Independent Auditors
We hereby consent to the incorporation by reference in the Combined Proxy
Statement and Prospectus and the Statement of Additional Information
constituting parts of this registration statement on Form N-14 (the
"Registration Statement") of our report dated December 17, 1997 relating to the
financial statements and selected per share data and ratios for a share of
beneficial interest outstanding appearing int eh October 31, 1997 Annual Report
to Shareholders of Vista American Value Fund (one of the portfolios constituting
Mutual Fund Group) (the "Report"), which is also incorporated by references into
the Registration Statement. We also consent to the reference to us under the
heading "Experts" in the Combined Proxy Statmenet and Prospectus. We also
consent to the incorporation by refernece of the Report in the Prospectus and
the Statement of Additional Information constituting parts of Post Effective
Amendment No. 50 to the registration statement on Form N-1A of Mutual Fund
Group, which are incorporated by reference in the Registration Statement.
PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York
March 26, 1998
Exhibit 14(b)
Consent of McGladrey & Pullen, LLP
Independent Accountants.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the reference to our firm in the Statement of Additional
Information included as part of the Combined Proxy Statement and Prospectus of
Vista American Value Fund, a series of Mutual Fund Group and Van Deventer & Hoch
American Value Fund, a series of Advisors Series Trust being filed on Form N-14
McGLADREY & PULLEN, LLP
New York, New York
March 25, 1998
