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As filed with the Securities and Exchange Commission on December 8, 2000
Registration No.33-9421/811-5526
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U.S. Securities and Exchange Commission
Washington, DC 20549
FORM N-14
|X| REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ / Pre-Effective Amendment No. ___ / / Post-Effective Amendment No. __
(Check appropriate box or boxes)
Exact Name of Registrant as Specified in Charter:
MUTUAL FUND INVESTMENT TRUST
Area Code and Telephone Number:
1-800-5-CHASE-0
Address of Principal Executive Offices:
1211 Avenue of the Americas
41st Floor
New York, NY 10036
Name and Address of Agent for Service:
LISA HURLEY
BISYS Fund Services, Inc.
3435 Stelzer Road
Columbus, OH 43219
Copies to:
ANDRE W. BREWSTER, ESQ. CYNTHIA G. COBDEN, ESQ.
Howard, Rice, Nemerovski, Canady, Falk & Simpson Thacher & Bartlett
Rabkin, A Professional Corporation 425 Lexington Avenue
Three Embarcadero Center New York, NY 10017-3954
Seventh Floor
San Francisco, CA 94111-4065
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Approximate Date of Proposed Public Offering: As soon as practicable after the
Registration Statement becomes effective under the Securities Act of 1933.
It is proposed that this filing will become effective on January 8, 2001
pursuant to Rule 488 under the Securities Act of 1933.
Calculation of Registration Fee under the Securities Act of 1933: No filing fee
is required because an indefinite number of shares have previously been
registered on Form N-1A (Registration No. 33-9421/811-5526) pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended. The Registrant's
Form 24f-2 for the fiscal year ended December 31, 1999 was filed on March 19,
2000. Pursuant to Rule 429, this Registration Statement relates to the aforesaid
Registration Statement on Form N-1A.
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MUTUAL FUND INVESTMENT TRUST
FORM N-14
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a)
ITEM NO. HEADING
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PART A
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1. Beginning of Registration Statement and Outside Front Cover
Page of Prospectus............................................ Cover Page
2. Beginning and Outside Back Cover Page of Prospectus........... Table of Contents
3. Synopsis and Risk Factors..................................... Summary; Risk Factors
4. Information About the Transaction............................. Summary; Information Relating to
the Proposed Reorganization
5. Information About the Registrant.............................. Summary; Information Relating to
the Proposed Reorganization; Investment
Policies; Additional Information About
Chase Vista H&Q IPO Fund
6. Information About the Company Being Acquired.................. Summary; Information Relating to the
Proposed Reorganization; Investment
Policies; Additional Information About
H&Q IPO Fund
7. Voting Information............................................ Summary; Information Relating to Voting
Matters
8. Interest of Certain Persons and Experts....................... Information Relating to Voting Matters
9. Additional Information Required for Reofferings by Persons
Deemed to be Underwriters..................................... Inapplicable
10. Cover Page ................................................... Statement of Additional Information;
Cover Page
11. Table of Contents............................................. Table of Contents
12. Additional information About the Registrant................... Statement of Additional Information
dated _________ __, 2000*
13. Additional Information about the Company Being Acquired....... Inapplicable
14. Financial Statements.......................................... Financial Statements; Pro Forma
Financial Statements
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PART C
Items 15-17. Information required to be included in Part C is set forth under
the appropriate Item, so numbered, in Part C of this Registration Statement.
* INCORPORATED HEREIN BY REFERENCE THERETO.
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H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST
ONE BUSH STREET
SAN FRANCISCO, CALIFORNIA 94104
________ __, 2000
Dear Shareholder:
A special meeting of the shareholders of H&Q IPO & Emerging Company Fund
("H&Q IPO Fund"), a series of Hambrecht & Quist Fund Trust ("H&Q Trust"), will
be held on February 8, 2001 at 11:00 a.m. (Eastern time). Formal notice of the
meeting appears on the next page, followed by materials regarding the meeting.
At the special meeting (the "Meeting"), shareholders of H&Q IPO Fund will
be asked to consider and vote upon the proposed reorganization of H&Q IPO Fund
into the newly-created Chase Vista H&Q IPO & Emerging Company Fund ("Chase Vista
H&Q IPO Fund") of Mutual Fund Investment Trust ("MFIT") and related matters
(collectively, the "Reorganization"). Chase Vista H&Q IPO Fund will have
substantially similar investment objectives, policies and restrictions as H&Q
IPO Fund, and the day-to-day portfolio management will continue to be performed
by Symphony Asset Management, LLC ("Symphony"). The Reorganization has been
proposed in connection with the recent acquisition of the Hambrecht & Quist
Group, the indirect parent of the investment adviser for H&Q IPO Fund, by an
affiliate of The Chase Manhattan Bank ("Chase"). After the Reorganization, Chase
Vista H&Q IPO Fund will own exactly the same assets H&Q IPO Fund owned
immediately prior to the Reorganization and former shareholders of H&Q IPO Fund
will be shareholders of Chase Vista H&Q IPO Fund. If approval of the
Reorganization is obtained, you will automatically receive shares in the new
Chase Vista H&Q IPO Fund.
After the proposed Reorganization, your investment would be in a
substantially similar fund that is part of a larger fund family, allowing the
resulting fund to take advantage of the operational and administrative
efficiencies that size may offer. H&Q Shareholders may benefit by receiving
improved services from the many experienced professionals associated with
Chase's mutual funds (including outside service providers). This could include
improved compliance, monitoring and administration. H&Q Shareholders may also
benefit from improved shareholder servicing, such as a more convenient service
center and a more informative website. The Chase Vista funds also provide a
broad distribution network, which could enable the Chase Vista H&Q IPO Fund to
attract additional assets more quickly. Finally, the Reorganization would enable
all new shareholders (including holders of Class A shares and Class B shares) of
Chase Vista H&Q IPO Fund to exchange all or part of their investment in Chase
Vista H&Q IPO Fund for an investment in one or more portfolios managed by Chase
- without paying an additional sales load.
The current investment adviser for H&Q IPO Fund is Hambrecht & Quist Fund
Management, LLC ("H&Q Management"), and the sub-adviser for H&Q IPO Fund is
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Symphony. After the proposed Reorganization, the investment adviser for Chase
Vista H&Q IPO Fund would be Chase Fleming Asset Management (USA) Inc. ("CFAM"),
with Symphony acting as sub-adviser to CFAM.
Please see the enclosed Combined Prospectus/Proxy Statement for detailed
information regarding the proposed Reorganization, a comparison of Chase Vista
H&Q IPO Fund and H&Q IPO Fund and a description of MFIT. The costs and expenses
associated with the Reorganization, including costs of soliciting proxies, will
be borne by Chase and not by H&Q IPO Fund, Chase Vista H&Q IPO Fund or any of
their shareholders. Please read the enclosed materials carefully.
The Proposal has been carefully reviewed by the Trustees of H&Q Trust,
which have approved the Proposal.
THE TRUSTEES OF H&Q TRUST RECOMMEND THAT YOU VOTE "FOR" THE PROPOSED
REORGANIZATION.
A proxy card is enclosed for your use in the shareholder meeting. This
card represents shares you held for each class of H&Q IPO Fund as of the record
date, December 15, 2000. IT IS IMPORTANT THAT YOU COMPLETE, SIGN, AND RETURN
YOUR PROXY CARD IN THE ENVELOPE PROVIDED AS SOON AS POSSIBLE. This will ensure
that your shares will be represented at the Meeting to be held on February 8,
2001. You may, of course, attend the meeting in person if you wish, in which
case the proxy can be revoked by you at the Meeting. Attached to this letter is
a list of commonly asked questions. If you have any additional questions on
voting of proxies and/or the meeting agenda, please call us at 1-415-439-3000.
Sincerely,
Sarah Jones
President
SPECIAL NOTE: You may receive a telephone call from us to answer any questions
you may have or to provide assistance in voting. Remember, your vote is
important! Please sign, date and promptly mail your proxy card(s) in the return
envelope provided.
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COMMONLY ASKED QUESTIONS
WHY IS THE REORGANIZATION BEING RECOMMENDED?
The Reorganization is being proposed to increase operational and
administrative efficiencies by bringing the H&Q IPO Fund into a larger fund
family. H&Q Shareholders may benefit by receiving improved services from the
many experienced professionals associated with Chase's mutual funds (including
outside service providers). This could include improved compliance, monitoring
and administration. H&Q Shareholders may also benefit from improved shareholder
servicing, such as a more convenient service center and a more informative
website. The Chase Vista funds also provide a broad distribution network, which
could enable the Chase Vista H&Q IPO Fund to attract additional assets more
quickly. (However, it is important to note that since the H&Q IPO Fund invests
primarily in initial public offerings and other emerging company securities, it
may at times have difficulty identifying sufficient investment opportunities.)
Finally, the Reorganization would enable all shareholders (including holders of
Class A shares and Class B shares) of Chase Vista H&Q IPO Fund to exchange all
or part of their investment in Chase Vista H&Q IPO Fund for an investment in one
or more portfolios managed by Chase - without paying an additional sales load.
IF THE REORGANIZATION IS APPROVED, WHAT WILL HAPPEN?
Under the Reorganization, H&Q IPO Fund would transfer all of its assets
and liabilities to a newly created portfolio of MFIT, and would receive, in
exchange, shares of the new portfolio (which will be called Chase Vista H&Q IPO
Fund). H&Q IPO Fund would then be liquidated and the shares of Chase Vista H&Q
IPO Fund would be distributed to shareholders such as yourself. Holders of
Common Class and Class A shares of H&Q IPO Fund would receive Class A shares of
Chase Vista H&Q IPO Fund (but would not pay a sales load); and holders of Class
B shares of H&Q IPO Fund would receive Class B shares of Chase Vista H&Q IPO
Fund. After the Reorganization, you would own shares in Chase Vista H&Q IPO Fund
rather than H&Q IPO Fund.
The Reorganization would result in the Board of Trustees of MFIT having
oversight of your fund as opposed to the Trustees of H&Q Trust. In addition,
shareholders of Chase Vista H&Q IPO Fund would vote together with shareholders
of all the other portfolios of MFIT in future elections of trustees, approvals
of independent accountants and certain other matters. This would significantly
reduce the strength of your vote in connection with such matters because of the
large number of shareholders in MFIT's other portfolios.
HOW WILL THE ADOPTION OF THIS PROPOSAL AFFECT MY INVESTMENT?
Approval and consummation of the Reorganization would not affect your
economic interest in H&Q IPO Fund's underlying portfolio of assets. You would
merely own shares with an equivalent dollar value in a corresponding investment
portfolio of MFIT rather than of H&Q Trust. You would continue to be able to
purchase or redeem your investment on a daily basis. Also, Chase Vista H&Q IPO
Fund will have substantially similar investment objectives, policies and
restrictions as those of H&Q IPO Fund.
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WILL THERE BE ANY CHANGE IN THE MANAGER OF MY INVESTMENT?
Symphony will manage the day-to-day investment activities of Chase Vista
H&Q IPO Fund, just as it does now for H&Q IPO Fund. In order to achieve
consistency with the other registered investment companies managed by Chase and
its affiliates, Symphony would perform its role as a sub-adviser to Chase
Fleming Asset Management (USA) Inc. ("CFAM") rather than H&Q Management.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
The contractual (pre-waiver) and actual (post-waiver) total expense ratios
for current H&Q Shareholders are anticipated to be the same or less after the
Reorganization. If an increase does occur, Chase has agreed to waive certain
fees to ensure that the actual (post-waiver) total expense ratio generally does
not exceed 1.35% for holders of Common Class and Class A shares of H&Q IPO Fund
and 2.05% for holders of Class B shares of H&Q IPO Fund for at least one year
after the Reorganization. However, if the total asset level for Chase Vista H&Q
IPO Fund is reduced below $150 million during that one-year period, Chase's
agreement to waive such fees will only apply to ensure that such expense ratios
do not exceed 1.60% for holders of Common Class and Class A shares and 2.30% for
holders of Class B shares for the remainder of such period. Under H&Q IPO Fund's
current advisory agreements, H&Q had agreed to waive fees and reimburse expenses
only through December 31, 2000 and only so as to maintain expense ratios of
1.60% for Class A and Common Class shares and 2.30% for Class B shares.
Expenses related to the purchase, redemption and exchange of Chase Vista
H&Q IPO Fund Shares are generally similar to those of H&Q IPO Fund; however,
there are a number of important differences. For example, while holders of Class
A shares will not have to pay a sales load on Class A Shares received in the
Reorganization, they will have to pay sales load (up to 5.75%, depending on the
size of the purchase) on additional Class A Shares that they buy in the future.
In H&Q IPO Fund, the maximum sales load is 5.50%. Holders of Common Class shares
will, however, be able to purchase Class A Shares without paying a load. For
holders of Class B shares, the time period after which Class B Shares convert to
Class A shares if such shares are received in the Reorganization will remain at
five years. However, if such shareholders purchase additional Class B Shares in
the future, the conversion period on such Class B Shares will be eight years.
In addition, the calculation of the contingent deferred sales charge upon the
redemption of Class B Shares will be different. Finally, there are certain
differences in minimum investment requirements.
WHO WILL PAY FOR THE REORGANIZATION?
The cost and expenses associated with the Reorganization, including costs
of soliciting proxies, will be borne by Chase and not by either H&Q IPO Fund or
Chase Vista H&Q IPO Fund (or shareholders of either fund).
HOW WILL SHAREHOLDER SERVICES CHANGE?
Chase Vista H&Q IPO Fund shareholders will be able to obtain fund
information 24 hours a day by using Tele-Vista, MFIT's Voice Response Unit
available at 1-800-5-CHASE-0. Such shareholders will also be able to obtain
fund information on the Chase Vista funds website.
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The transfer agent and distributor of Chase Vista H&Q IPO Fund will be DST
Systems, Inc. and Vista Fund Distributors, Inc., respectively. These entities
currently serve in those capacities for all of MFIT's portfolios.
WHAT IF I DO NOT VOTE OR I VOTE AGAINST THE REORGANIZATION, YET APPROVAL TO THE
REORGANIZATION IS OBTAINED?
The Reorganization will be implemented and you will automatically receive
shares in the new Chase Vista H&Q IPO Fund.
AS A HOLDER OF SHARES OF H&Q IPO FUND, WHAT DO I NEED TO DO?
Please sign, date and mail the proxy card(s) promptly in the enclosed
return envelope as soon as possible after reviewing the enclosed Combined
Prospectus/Proxy Statement. Your vote is important!
MAY I ATTEND THE MEETING IN PERSON?
Yes, you may attend the Meeting in person. If you complete a proxy card
and subsequently attend the Meeting, your proxy can be revoked. To ensure that
your vote is counted, I strongly urge you to mail us your signed, dated and
completed proxy card(s) even if you plan to attend the Meeting.
HOW WILL THE PROPOSED CHASE - J.P. MORGAN MERGER AFFECT MY INVESTMENT?
On September 13, 2000, the parent company of Chase, The Chase Manhattan
Corporation, announced that it has agreed to merge with J.P. Morgan & Co.
Incorporated. The transaction is expected to close in the first quarter of 2001
and is subject to approval by shareholders of both companies, as well as by U.S.
Federal and state and foreign regulatory authorities. The proposed merger is not
expected to have any material adverse effect on shareholders in the new Chase
Vista H&Q IPO Fund or the day-to-day management of the fund.
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H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST
ONE BUSH STREET
SAN FRANCISCO, CALIFORNIA 94104
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY 8, 2001
To the Shareholders of
H&Q IPO & Emerging Company Fund:
NOTICE IS HEREBY GIVEN THAT a Special Meeting of the shareholders
("Shareholders") of H&Q IPO & Emerging Company Fund ("H&Q IPO Fund"), a series
of Hambrecht & Quist Fund Trust ("H&Q Trust"), will be held at the offices of
The Chase Manhattan Bank, 1211 Avenue of the Americas, 41st Floor, New York,
New York, 10036, on February 8, 2001 at 11:00 a.m. (Eastern time), for the
following purposes:
ITEM 1. To consider and act upon a proposal to approve an Agreement and
Plan of Reorganization (the "Reorganization Plan") by and
between H&Q Trust, on behalf of H&Q IPO Fund, and the Mutual
Fund Investment Trust ("MFIT"), on behalf of Chase Vista H&Q
IPO & Emerging Company Fund ("Chase Vista H&Q IPO Fund"), and
the transactions contemplated thereby, including (a) the
transfer of all of the assets and liabilities of H&Q IPO Fund to
Chase Vista H&Q IPO Fund, a newly-created series of MFIT ("Chase
Vista H&Q IPO Fund") in exchange for (i) Class A Shares of Chase
Vista H&Q IPO Fund (the "Class A Shares") and (ii) Class B
Shares of Chase Vista H&Q IPO Fund (the "Class B Shares" and,
together with Class A Shares, the "Chase Vista H&Q IPO Fund
Shares"); and (b) the distribution of such Chase Vista H&Q IPO
Fund Shares to the Shareholders of H&Q IPO Fund in connection
with its liquidation.
ITEM 2. To transact such other business as may properly come before the
Special Meeting or any adjournment(s) thereof.
YOUR H&Q IPO FUND TRUSTEES RECOMMEND THAT YOU VOTE IN FAVOR OF ITEM 1.
The proposed reorganization and related matters are described in the
attached Combined Prospectus/Proxy Statement. Attached as Appendix A to the
Combined Prospectus/Proxy Statement is a copy of the Reorganization Plan.
Shareholders of record as of the close of business on __________ __, 2000
are entitled to notice of, and to vote at, the Special Meeting or any
adjournment(s) thereof.
SHAREHOLDERS ARE REQUESTED TO EXECUTE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE THE ACCOMPANYING PROXY CARD WHICH IS BEING SOLICITED BY THE TRUSTEES OF
H&Q TRUST. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL MEETING. PROXIES
MAY BE REVOKED
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AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO H&Q IPO FUND A WRITTEN
NOTICE OF REVOCATION OR A SUBSEQUENTLY EXECUTED PROXY OR BY ATTENDING THE
SPECIAL MEETING AND VOTING IN PERSON.
Colleen McCoy
Secretary
[____________ __], 2000
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COMBINED PROSPECTUS/PROXY STATEMENT
DATED [_________ __], 2000
ACQUISITION OF THE ASSETS AND LIABILITIES OF
H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST
ONE BUSH STREET
SAN FRANCISCO, CA 94104
(415) 439-3000
BY AND FOR IN EXCHANGE FOR SHARES OF
CHASE VISTA H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NY 10036
(800) 5-CHASE-0
This Combined Prospectus/Proxy Statement relates to the proposed
reorganization of H&Q IPO & Emerging Company Fund ("H&Q IPO Fund") into a
newly-created series of Mutual Fund Investment Trust ("MFIT"). If approved by
the shareholders of H&Q IPO Fund (the "H&Q Shareholders"), the proposed
reorganization would be effected by transferring all of the assets and
liabilities of H&Q IPO Fund, which is currently a series of Hambrecht & Quist
Fund Trust ("H&Q Trust"), to a series of MFIT having substantially similar
investment objectives and policies as H&Q IPO Fund in exchange for shares in
such new series (the "Reorganization"). MFIT is an open-end management
investment company offering shares in several portfolios, and, in most cases,
multiple classes of shares in each such portfolio. The new series of MFIT will
be known as Chase Vista H&Q IPO & Emerging Company Fund ("Chase Vista H&Q IPO
Fund" and, together with H&Q IPO Fund, the "Funds" and, each, a "Fund")).
Under the proposed Reorganization, each H&Q Shareholder would receive
shares (the "Chase Vista H&Q IPO Fund Shares") in Chase Vista H&Q IPO Fund with
a value equal to such H&Q Shareholder's holdings in H&Q IPO Fund. Holders of
Common Class Shares and Class A Shares in H&Q IPO Fund would receive Class A
Shares (the "Class A Shares") in Chase Vista H&Q IPO Fund, and holders of Class
B Shares in H&Q IPO Fund would receive Class B Shares (the "Class B Shares") in
Chase Vista H&Q IPO Fund. As a result of the proposed Reorganization, current
H&Q Shareholders will become shareholders in Chase Vista H&Q IPO Fund (the
"Chase Vista H&Q Shareholders"). H&Q Trust then will be de-registered under the
Investment Company Act of 1940 (the "1940 Act") and dissolved under state law.
MFIT is registered as an open-end management investment company under the
1940 Act and currently has 11 series of mutual fund portfolios. H&Q IPO Fund is
the only portfolio in H&Q Trust. Hambrecht & Quist Fund Management, LLC ("H&Q
Management") currently serves as investment adviser to H&Q IPO Fund, and
Symphony Asset Management, LLC ("Symphony") serves as sub-adviser for H&Q
Management. Pursuant to a recent acquisition of
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Hambrecht & Quist Group, H&Q Management has become a wholly-owned indirect
subsidiary of The Chase Manhattan Corporation ("CMC"), the parent of The Chase
Manhattan Bank ("Chase"). Following the proposed Reorganization, Chase Fleming
Asset Management (USA) Inc. ("CFAM"), an affiliate of Chase, would be the
investment adviser to the newly created Chase Vista H&Q IPO Fund and Symphony
would be the sub-adviser to CFAM. Chase Vista H&Q IPO Fund intends to conduct
investment operations substantially as H&Q IPO Fund conducted its investment
operations, all as described in this Combined Prospectus/Proxy Statement.
The terms and conditions of these transactions are more fully described in
this Combined Prospectus/Proxy Statement and in the Agreement and Plan of
Reorganization (the "Reorganization Plan") between MFIT, on behalf of H&Q IPO
Fund, and H&Q Trust, on behalf of Chase Vista H&Q IPO Fund, attached hereto as
Appendix A.
The Trustees for H&Q Trust are soliciting proxies in connection with a
Special Meeting (the "Meeting") of H&Q Shareholders to be held on February 8,
2001 at 11:00 a.m. Eastern time) at the offices of The Chase Manhattan Bank,
1211 Avenue of the Americas, 41st Floor, New York, New York, 10036, at which
meeting H&Q Shareholders will be asked to consider and approve the proposed
Reorganization Plan and the transactions contemplated by the Reorganization
Plan. This Combined Prospectus/Proxy Statement constitutes the proxy statement
of H&Q IPO Fund for the meeting of H&Q Shareholders and as MFIT's prospectus for
Chase Vista H&Q IPO Fund Shares that have been registered with the Securities
and Exchange Commission (the "SEC") and are to be issued in connection with the
Reorganization.
This Combined Prospectus/Proxy Statement, which should be retained for
future reference, sets forth concisely the information about MFIT that a
prospective investor should know before voting on the Reorganization Plan (and
related transactions). The current prospectus for H&Q IPO Fund (the "H&Q
Prospectus") is incorporated herein by reference. Although shares of the Chase
Vista H&Q IPO Fund are not expected to be registered with the SEC until the
beginning of 2001, a copy of the preliminary prospectus (the "Chase Vista H&Q
IPO Fund Prospectus") for Chase Vista H&Q IPO Fund is incorporated by reference
and is enclosed with this Combined Prospectus/Proxy Statement. A preliminary
statement of additional information dated _______ __, 2000 containing additional
information about Chase Vista H&Q IPO Fund (the "Chase Vista H&Q IPO Fund
Statement of Additional Information") and a statement of additional information
dated _______ __, 2000 regarding the Reorganization (the "Reorganization
Statement of Additional Information" and, together with the Chase Vista H&Q IPO
Fund Statement of Additional Information, the "Statements of Additional
Information") have been filed with the SEC and are incorporated by reference
into this Combined Prospectus/Proxy Statement. Copies of the Statements of
Additional Information may be obtained without charge by writing to either MFIT
or H&Q Trust at its respective address noted above or by calling 1-800-5-CHASE-0
or 1-415-439-3000.
This Combined Prospectus/Proxy Statement is expected to be sent to
Shareholders on or about _______ __, 2000.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
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COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS COMBINED
PROSPECTUS/PROXY STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROSPECTUS/PROXY
STATEMENT AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND,
IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY MFIT OR H&Q TRUST.
INVESTMENTS IN CHASE VISTA H&Q IPO FUND ARE SUBJECT TO RISK - INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. NO SHARES IN CHASE VISTA H&Q IPO FUND ARE BANK
DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, THE CHASE MANHATTAN
BANK OR ANY OF ITS AFFILIATES AND ARE NOT FEDERALLY INSURED BY, OBLIGATIONS OF,
OR OTHERWISE SUPPORTED BY THE U.S. GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
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TABLE OF CONTENTS
PAGE
INTRODUCTION...................................................................5
SUMMARY........................................................................6
COMPARATIVE FEE AND EXPENSE TABLES............................................11
RISK FACTORS..................................................................13
INFORMATION RELATING TO THE PROPOSED REORGANIZATION...........................15
INVESTMENT POLICIES...........................................................20
PURCHASES, REDEMPTIONS AND EXCHANGES..........................................27
DISTRIBUTIONS AND TAXES.......................................................33
COMPARISON OF THE ORGANIZATIONAL STRUCTURE OF H&Q IPO FUND AND
CHASE VISTA H&Q IPO FUND......................................................34
INFORMATION RELATING TO THE ADVISORY AGREEMENTS...............................37
INFORMATION RELATING TO THE MFIT BOARD AND OFFICERS...........................41
INFORMATION RELATING TO VOTING MATTERS........................................45
ADDITIONAL INFORMATION ABOUT MFIT.............................................47
ADDITIONAL INFORMATION ABOUT H&Q IPO FUND.....................................47
FINANCIAL STATEMENTS AND EXPERTS..............................................48
OTHER BUSINESS................................................................48
LITIGATION....................................................................48
SHAREHOLDER INQUIRIES.........................................................48
APPENDIX A - Agreement and Plan of Reorganization..............................1
<PAGE>
INTRODUCTION
This Combined Prospectus/Proxy Statement is being furnished to the
shareholders of H&Q IPO & Emerging Company Fund ("H&Q IPO Fund"), a portfolio of
Hambrecht & Quist Fund Trust ("H&Q Trust"), an open-end management investment
company, in connection with the solicitation by the Trustees (the "H&Q
Trustees") of H&Q Trust of proxies to be used at a Special Meeting of
Shareholders of H&Q IPO Fund to be held on February 8, 2001 at 11:00 a.m.
(Eastern time) at the offices of The Chase Manhattan Bank, 1211 Avenue of the
Americas, 41st Floor, New York, New York, 10036 (together with any adjournments
thereof, the "Meeting"). It is expected that the mailing of this Combined
Prospectus/Proxy Statement will be made on or about ______ __, 2000.
At the Meeting, H&Q IPO Fund shareholders (the "H&Q Shareholders") will
consider and vote upon an Agreement and Plan of Reorganization (the
"Reorganization Plan") dated ________ __, 2000 between H&Q Trust, on behalf of
H&Q IPO Fund, and Mutual Fund Investment Trust ("MFIT"), on behalf of Chase
Vista H&Q IPO & Emerging Company Fund (the "Chase Vista H&Q IPO Fund"), pursuant
to which all of the assets and liabilities of H&Q IPO Fund will be transferred
to Chase Vista H&Q IPO Fund in exchange for shares (the "Chase Vista H&Q IPO
Fund Shares") of Chase Vista H&Q IPO Fund. As a result of this transaction (the
"Reorganization"), H&Q Shareholders will become shareholders of Chase Vista H&Q
IPO Fund and will receive Chase Vista H&Q IPO Fund Shares equal in value to
their holdings in H&Q IPO Fund on the date of the Reorganization. Holders of
Common Class Shares and Class A Shares in H&Q IPO Fund would receive Class A
Shares ("Class A Shares") in Chase Vista H&Q IPO Fund, and holders of Class B
Shares in H&Q IPO Fund would receive Class B Shares ("Class B Shares") in Chase
Vista H&Q IPO Fund. Further information relating to Chase Vista H&Q IPO Fund and
is set forth herein. The proposed Reorganization is occasionally referred to
herein as the "Proposal."
Following the Reorganization, the investment adviser to Chase Vista H&Q IPO
Fund will be Chase Fleming Asset Management (USA) Inc. ("CFAM"), an affiliate of
The Chase Manhattan Bank ("Chase") and the investment sub-adviser to CFAM
(responsible for the day-to-day operations of the portfolio) will be Symphony
Asset Management, LLC ("Symphony"). Symphony currently serves as sub-adviser and
manages the day- to-day operations of H&Q IPO Fund.
THE H&Q TRUSTEES HAVE RECOMMENDED
THAT SHAREHOLDERS VOTE FOR" THE PROPOSAL.
Approval of the Reorganization Plan requires the affirmative vote of H&Q
Shareholders holding a majority of each class of the outstanding shares (the
"H&Q Shares") in H&Q IPO Fund. If the Reorganization is not approved by H&Q
Shareholders of each class of H&Q Shares, the H&Q Trustees will consider other
appropriate courses of action, the Reorganization will not be implemented and
the H&Q Trustees will determine what action H&Q IPO Fund will take.
<PAGE>
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the transactions contemplated thereby,
and is qualified by reference to the more complete information contained
elsewhere in this Combined Prospectus/Proxy Statement, the prospectus (the "H&Q
Prospectus") dated ________ __, 2000 for H&Q IPO Fund, the preliminary
prospectus (the "Chase Vista H&Q IPO Fund Prospectus") dated ________ __, 2000
for Chase Vista H&Q IPO Fund, the Statements of Additional Information, H&Q IPO
Fund's most recent Annual Report to Shareholders, and the Reorganization Plan
attached to this Combined Prospectus/Proxy Statement as Appendix A. H&Q IPO
Fund's most recent Annual Report to Shareholders is enclosed with this Combined
Prospectus/Proxy Statement. Each Statement of Additional Information can be
obtained free of charge by calling 1-415-439-3000 or 1-800-5-CHASE-0 or writing
One Bush Street, San Francisco, CA 94104.
PROPOSED TRANSACTION
GENERAL. Pursuant to the proposed Reorganization Plan, H&Q IPO Fund will
transfer of all of its assets and liabilities to Chase Vista H&Q IPO Fund in
exchange for the Chase Vista H&Q IPO Fund Shares. Prior to the Reorganization,
Chase Vista H&Q IPO Fund will have little or no assets or liabilities. After the
Reorganization, Chase Vista H&Q IPO Fund will have substantially the same assets
and liabilities that H&Q IPO Fund had prior to the Reorganization. Chase Vista
H&Q IPO Fund is a new portfolio of MFIT, an open-end management investment
company offering shares in several portfolios, and, in most cases, multiple
classes of shares in each such portfolio. H&Q IPO Fund is the only existing
portfolio of H&Q Trust, also an open-end management investment company.
Under the proposed Reorganization, each H&Q Shareholder will receive a
number of Chase Vista H&Q IPO Fund Shares with an aggregate net asset value
equal on the date of the exchange to the aggregate net asset value of such
shareholder's H&Q IPO Fund Shares on such date. Holders of Common Class Shares
or Class A Shares in H&Q IPO Fund would receive Class A Shares in Chase Vista
H&Q IPO Fund, and holders of Class B Shares in H&Q IPO Fund would receive Class
B Shares in Chase Vista H&Q IPO Fund. Therefore, following the proposed
Reorganization, H&Q Shareholders will be shareholders of Chase Vista H&Q IPO
Fund. H&Q Trust will then be dissolved under state law and de-registered under
the Investment Company Act of 1940 (the "1940 Act").
INVESTMENT POLICIES. Chase Vista H&Q IPO Fund will have substantially
similar investment objectives, policies and restrictions to H&Q IPO Fund. In
addition, Chase Vista H&Q IPO Fund will have purchase, redemption and dividend
policies similar to H&Q IPO Fund.
COMMON CLASS SALES CHARGES. Holders of Common Class shares in H&Q IPO Fund
receiving Class A Shares in Chase Vista H&Q IPO Fund would not pay a sales load
on shares received in the Reorganization. Those shareholders also would not have
to pay a sales load on additional Class A Shares.
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<PAGE>
CLASS A SALES CHARGES. Holders of Class A shares in H&Q IPO Fund receiving
Class A Shares in Chase Vista H&Q IPO Fund would not pay a sales load on shares
received in the Reorganization, but they would have to pay a sales load on
additional Class A Shares purchased in the future.
CLASS B DEFERRED SALES CHARGE. Holders of Class B shares in H&Q IPO Fund
receiving Class B Shares in Chase Vista H&Q IPO Fund will not pay a sales load
on shares received in the Reorganization nor will the deferred sales charge
change for such shares. However, the deferred sales charge rate and method of
calculation will be different (and, in some cases, higher) for additional Class
B Shares purchased in the future in Chase Vista H&Q IPO Fund.
EXPENSE RATIOS. The contractual (pre-waiver) and actual (post-waiver) total
expense ratios for current H&Q Shareholders are anticipated to be the same or
less after the Reorganization. If an increase does occur, Chase has agreed to
waive certain fees to ensure that the actual (post-waiver) total expense ratio
generally does not exceed 1.35% for holders of Common Class and Class A shares
of H&Q IPO Fund and 2.05% for holders of Class B shares of H&Q IPO Fund for at
least one year after the Reorganization. However, if the total asset level for
Chase Vista H&Q IPO Fund is reduced below $150 million during that one-year
period, Chase's agreement to waive such fees will only apply to ensure that such
expense ratios do not exceed 1.60% for holders of Common Class and Class A
shares and 2.30% for holders of Class B shares for the remainder of such period.
Under H&Q IPO Fund's current advisory agreements, H&Q had agreed to waive fees
and reimburse expenses only through December 31, 2000 and only so as to maintain
expense ratios of 1.60% for Class A and Common Class shares and 2.30% for Class
B shares.
Trustees Approval. Based upon their evaluation of the information presented
to them, and in light of their fiduciary duties under federal and state law, the
H&Q Trustees, including in each case a majority of their members who are not
"interested persons" within the meaning of the 1940 Act, have determined that
the proposed Reorganization is in the best interests of the H&Q IPO Fund's
shareholders and that the interests of such shareholders will not be diluted as
a result of the Reorganization.
INVESTMENT ADVISERS
The investment advisers to H&Q IPO Fund are H&Q Management and Symphony.
H&Q Management is, as a result of a recent acquisition, an affiliate of Chase.
CFAM will serve as investment adviser to Chase Vista H&Q IPO Fund and Symphony
will serve as the sub-investment adviser to CFAM. Symphony, as sub-adviser,
will manage Chase Vista H&Q IPO Fund on a day-to-day basis, including making
investment decisions for the Fund. Ross Sakamoto will continue to be the
portfolio manager for Chase Vista H&Q IPO Fund. Therefore, the same investment
management team at Symphony that manages H&Q IPO Fund immediately prior to the
proposed Reorganization will manage Chase Vista H&Q IPO Fund immediately
following the proposed Reorganization.
-7-
<PAGE>
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed to increase operational and
administrative efficiencies by bringing the Fund into a larger fund family. H&Q
Shareholders may benefit by receiving improved services from the many
experienced professionals associated with Chase's mutual funds (including
outside service providers). This could include improved compliance, monitoring
and administration. H&Q Shareholders may also benefit from improved shareholder
servicing, such as a more convenient service center and a more informative
website. The Chase Vista funds also provide a broad distribution network, which
could enable the Chase Vista H&Q IPO Fund to attract additional assets more
quickly. (However, it is important to note that since the Fund invests primarily
in initial public offerings and other emerging companies, it may at times have
difficulty identifying sufficient investment opportunities.) Finally, the
Reorganization would enable all shareholders (including holders of Class A
shares and Class B shares) of Chase Vista H&Q IPO Fund to exchange all or part
of their investment in Chase Vista H&Q IPO Fund for an investment in one or more
portfolios managed by Chase - without paying an additional sales load.
FEDERAL INCOME TAX CONSEQUENCES
[Howard Rice Nemerovski Canady Falk & Rabkin, A Professional Corporation,
counsel to H&Q IPO Fund, H&Q Management and Chase Securities, Inc. the current
distributor of the H&Q IPO Fund, will issue an opinion (based on certain
assumptions) as of the effective time of the Reorganization that the transaction
will not give rise to the recognition of income, gain or loss for federal income
tax purposes to H&Q IPO Fund, Chase Vista H&Q IPO Fund or their respective
shareholders. A shareholder's holding period and tax basis in the Chase Vista
H&Q IPO Fund Shares will be the same as the holding period and tax cost basis in
such shareholder's shares of H&Q IPO Fund. In addition, the holding period and
tax basis of those assets owned by H&Q IPO Fund transferred to Chase Vista H&Q
IPO Fund will be identical for H&Q IPO Fund. See "Information Relating to the
Proposed Reorganization--Federal Income Tax Consequences."]
INVESTMENT OBJECTIVES AND POLICIES
The investment objective of Chase Vista H&Q IPO Fund will be to seek
capital appreciation. That objective is identical to the objective of H&Q IPO
Fund. H&Q IPO Fund's investment policies and restrictions are substantially
similar to those of Chase Vista H&Q IPO Fund. See "Investment Policies."
PRINCIPAL RISKS OF INVESTING IN CHASE VISTA H&Q IPO FUND
Because of the similarities of investment objectives, policies and
restrictions for H&Q IPO Fund and Chase Vista H&Q IPO Fund, the risks
associated with an investment in H&Q IPO Fund are generally the same as those
associated with an investment in Chase Vista H&Q IPO Fund, as described more
fully below. These investment risks, in general, are those typically
associated with investing in a managed portfolio of equity securities,
including fluctuations in individual stock prices as well as general market
volatility. Investments in IPOs and companies with small capitalizations
offer certain special risks. For example, companies involved in IPOs
-8-
<PAGE>
generally have limited operating histories, and their prospects for future
profitability are uncertain. In addition, Chase Vista H&Q IPO Fund may invest in
securities of foreign issuers and various derivative transactions that entail
unique risks. See "Risk Factors".
CERTAIN ARRANGEMENTS WITH SERVICE PROVIDERS
Vista Fund Distributors, Inc. ("VFD"), a wholly owned, indirect subsidiary
of BISYS Fund Services, will be the distributor for Chase Vista H&Q IPO Fund.
VFD is unaffiliated with Chase and serves as distributor for a number of Chase
Vista portfolios. Chase Securities Inc. ("CSI"), an affiliate of Chase, is the
distributor for H&Q IPO Fund.
PFPC Inc. ("PFPC") serves as administrator, fund accountant and dividend
disbursing and transfer agent for H&Q IPO Fund and will act as administrator and
fund accountant for Chase Vista H&Q IPO Fund. DST Systems, Inc. ("DST") will be
the transfer agent for Chase Vista H&Q IPO Fund.
PFPC Trust Company, Inc. ("PFPC Trust") serves as custodian of H&Q IPO Fund
and will serve as custodian for Chase Vista H&Q IPO Fund on substantially
similar terms and conditions.
PricewaterhouseCoopers LLP ("PwC") serves as both Funds' independent
accountant.
ORGANIZATION
Chase Vista H&Q IPO Fund will be organized as a new series of MFIT, a
Massachusetts business trust. H&Q IPO Fund is organized as a series of H&Q
Trust, a Delaware business trust. For a summary of some of the differences
between a Massachusetts business trust and a Delaware business trust, as well as
other differences between the two Funds' organizational structures, see
"Comparison of H&Q IPO Fund and Chase Vista H&Q IPO Fund's Organizational
Structure".
H&Q Trust is governed by the H&Q Trustees. MFIT is governed by a different
set of trustees (the "MFIT Board"). Because shareholders of Chase Vista H&Q IPO
Fund would vote together with shareholders of all of the other portfolios of
MFIT on certain matters, the ability of shareholders of Chase Vista H&Q IPO Fund
to elect Trustees and to act on certain other corporate matters would not be as
great as that of shareholders of H&Q IPO Fund with respect to H&Q Trust. This
would significantly reduce the strength of each such shareholder's vote in
connection with such matters, because of the large number of shares and
shareholders in MFIT's other portfolios.
PURCHASES, REDEMPTIONS AND EXCHANGES
Procedures for the purchase, redemption and exchange of Chase Vista H&Q IPO
Fund Shares are described under "Purchases, Redemptions and Exchanges". The
procedures are generally similar to those of H&Q IPO Fund; however, there are a
number of important differences. For example, while holders of Class A shares
will not have to pay a sales load on Class A Shares received in the
Reorganization, they will have to pay sales load (up to 5.75%, depending on the
size of the purchase) on additional Class A Shares that they buy in the future.
-9-
<PAGE>
In H&Q IPO Fund, the maximum sales load is 5.50%. Holders of Common Class shares
will, however, be able to purchase Class A Shares without paying a load. For
holders of Class B shares, the time period after which Class B Shares convert to
Class A shares if such shares are received in the Reorganization will remain at
five years. However, if such shareholders purchase additional Class B Shares in
the future, the conversion period on such Class B Shares will be eight years. In
addition, the calculation of the contingent deferred sales charge upon the
redemption of Class B Shares will be different. Finally, there are certain
differences in minimum investment requirements.
-10-
<PAGE>
COMPARATIVE FEE AND EXPENSE TABLES
The tables below show information regarding the expected fees and expenses
for (i) H&Q IPO Fund based on current asset levels and Chase Vista H&Q IPO Fund
based on pro forma asset levels. Under the proposed Reorganization, holders of
Common Class and Class A shares in H&Q IPO Fund would receive Class A Shares in
Chase Vista H&Q IPO Fund and holders of Class B shares in H&Q IPO Fund would
receive Class B Shares in Chase Vista H&Q IPO Fund.
The tables below indicate that the contractual (pre-waiver) and actual
(post-waiver) total expense ratios for current H&Q Shareholders are anticipated
to be the same or less after the Reorganization, assuming that the asset level
for the new Fund does not substantially decrease. If, contrary to expectations,
an increase in expense ratios does occur, Chase has agreed to waive certain fees
to ensure that the actual (post-waiver) total expense ratio generally does not
exceed 1.35% for holders of Common Class and Class A shares of H&Q IPO Fund and
2.05% for holders of Class B shares of H&Q IPO Fund for at least one year after
the Reorganization. However, if the total asset level for Chase Vista H&Q IPO
Fund is reduced below $150 million during that one-year period, Chase's
agreement to waive such fees will only apply to ensure that such expense ratios
do not exceed 1.60% for holders of Common Class and Class A shares and 2.30% for
holders of Class B shares for the remainder such period. Under H&Q IPO Fund's
current advisory agreements, H&Q had agreed to waive fees and reimburse expenses
only through December 31, 2000 and only so as to maintain expense ratios of
1.60% for Class A and Common Class shares and 2.30% for Class B shares.
<TABLE>
<CAPTION>
H&Q IPO Fund
COMMON CLASS A CLASS B
CLASS SHARES SHARES SHARES
<S> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)-
Maximum Sales Charge (Load) when you None 5.50% None
buy shares, shown as % of the offering price
Maximum Deferred Sales Charge - Shown as
a % of lower of original purchase price or None None 5.00%
redemption proceeds
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from assets,
expressed as a percentage of average net assets)
Management Fees 0.65% 0.65% 0.65%
Distribution (12b-1) Fees 0.25% 0.30% 1.00%
Other Expenses# 0.42% 0.32% 0.32%
--------------- ----- ----- -----
Total# 1.32% 1.27% 1.97%
====== ===== ===== =====
</TABLE>
# Expense ratios for the H&Q IPO Fund are based on expenses incurred over the
past fiscal year. However, Other Expenses and Total Operating Expenses have been
restated to reflect current expense arrangements.
-11-
<PAGE>
EXPENSE RATIOS FOR CHASE VISTA H&Q IPO FUND *
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA
CLASS A CLASS B CLASS A CLASS B
SHARES SHARES SHARES SHARES
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment) -
Maximum Sales Charge (Load) when you buy shares, 5.75% None 5.75% None
shown as % of the offering price
Maximum Deferred Sales Charge - Shown as a % of
lower of original purchase price or redemption None 5.00% None 5.00%
proceeds
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from assets,
expressed as a percentage of average net assets)
Management Fees 0.65% 0.65% 0.65% 0.65%
Distribution (12b-1) Fees 0.30% 1.00% 0.30% 1.00%
Other Expenses 0.27% 0.27% 0.27% 0.27%
-------------- ----- ----- ----- -----
Total 1.22% 1.92% 1.22% 1.92%
====== ===== ===== ===== =====
</TABLE>
* Projected percentages based on an aggregate asset level of approximately $306
million
The tables do not reflect charges or credits that investors might incur if
they invest through a financial institution.
EXAMPLE: This Example helps investors compare the cost of investing in H&Q
IPO Fund against the cost of investing in Chase Vista H&Q IPO Fund. The example
assumes:
- the investor invests $10,000;
- the investor reinvests dividends;
- the investor sells all of his or her shares at the end of the period;
- each Fund has a 5% return each year;
- each Fund's asset levels remain substantially unchanged; and
- each Fund's operating expenses are not waived and remain the same as shown
above.
Although actual costs may be higher or lower, based on these assumptions an
investor's cost would be:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 years
------ ------- ------- --------
<S> <C> <C> <C> <C>
H&Q IPO FUND
COMMON CLASS SHARES $[__] $[__] $[__] $[__]
CLASS A SHARES $[__] $[__] $[__] $[__]
CLASS B SHARES $[__] $[__] $[__] $[__]
CHASE VISTA H&Q IPO FUND
CLASS A SHARES $[__] $[__] $[__] $[__]
CLASS B SHARES $[__] $[__] $[__] $[__]
PRO FORMA CHASE VISTA H&Q IPO FUND
CLASS A SHARES $[__] $[__] $[__] $[__]
CLASS B SHARES $[__] $[__] $[__] $[__]
</TABLE>
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<PAGE>
RISK FACTORS
The following discussion highlights the principal risk factors associated
with an investment in Chase Vista H&Q IPO Fund. Chase Vista H&Q IPO Fund has
substantially similar investment objectives, policies and restrictions as H&Q
IPO Fund. Therefore, there should be no material difference between the risk
factors associated with Chase Vista H&Q IPO Fund and H&Q IPO Fund.
All mutual funds carry a certain amount of risk. An investor in Chase Vista
H&Q IPO Fund may lose money on his or her investment in Chase Vista H&Q IPO
Fund. Here are some of the specific risks of investing in Chase Vista H&Q IPO
Fund.
Chase Vista H&Q IPO Fund may not achieve its objective if the advisers'
expectations regarding particular securities or markets are not met.
The value of shares of Chase Vista H&Q IPO Fund will be influenced by
conditions in stock markets as well as the performance of the companies selected
for in Chase Vista H&Q IPO Fund's portfolio.
UNIQUE NATURE OF IPOs. Most IPOs involve a high degree of risk not normally
associated with offerings of more seasoned companies. Companies involved in IPOs
generally have limited operating histories, and their prospects for future
profitability are uncertain. These companies often are engaged in new and
evolving businesses and are particularly vulnerable to competition and to
changes in technology, markets and economic conditions. They may be dependent on
certain key managers and third parties, need more personnel and other resources
to manage growth and require significant additional capital. They may also be
dependent on limited product lines and uncertain property rights and need
regulatory approvals. Investors in IPOs, such as Chase Vista H&Q IPO Fund, can
be affected by substantial dilution in the value of their shares, by sales of
additional shares and by concentration of control in existing management and
principal shareholders. Stock prices of IPOs can also be highly unstable, due to
the absence of a prior public market, the small number of shares available for
trading and limited investor information.
SMALL COMPANIES. To the extent the Chase Vista H&Q IPO Fund invests in
non-IPO equity securities of companies with small capitalizations, it will be
subject to certain risks thereof. The value of an investment in Chase Vista H&Q
IPO Fund is likely to fluctuate more dramatically than an investment in a fund
which invests mostly in larger companies. That's because smaller companies trade
less frequently and in smaller volumes, which may lead to more volatility in the
prices of the securities. They may have limited product lines, markets or
financial resources, and they may depend on a small management group.
MARKET VOLATILITY. Stock markets will fall periodically. As with any
investment whose performance is tied to stock markets, the value of an
investment in Chase Vista H&Q IPO Fund will fluctuate, which means that
investors could lose money.
POLITICAL AND ECONOMIC FACTORS. Many factors can affect stock market
performance. Political and economic news can influence market-wide trends. Other
factors may be ignored by the market as a whole but may cause movements in the
price of one company's stock or the stock
-13-
<PAGE>
of companies in one or more industries. All of these factors may have a greater
impact on IPOs and, therefore, may have a significant impact on Chase Vista H&Q
IPO Fund.
LACK OF QUALITY IPOs. The number or quality of IPOs available for Chase
Vista H&Q IPO Fund to purchase may be inadequate for extended periods of time.
During such periods, Chase Vista H&Q IPO Fund will not be able to implement its
main investment strategy. This could significantly and adversely affect Chase
Vista H&Q IPO Fund's investment return. H&Q IPO Fund was closed to new investors
from [____] to [____] due to the lack of available investment opportunities.
INDUSTRY CONCENTRATION RISKS. The IPO market tends to favor certain
industries from time to time. As a result, the companies in which Chase Vista
H&Q IPO Fund invests at any given time may represent a limited number of
industries, and Chase Vista H&Q IPO Fund's share price may be subject to greater
volatility. Currently, the industry comprised of Internet-related companies is
one of the industries favored by the IPO market.
CONTRACTUAL RESTRICTIONS. Chase Vista H&Q IPO Fund may agree to contractual
restrictions on its resale of certain IPOs. These restrictions, known as
"lock-ups," will typically extend from 30 to 180 days after the initial public
offering. During the period of the lock-up, Chase Vista H&Q IPO Fund will not be
able to sell these securities and the value of these securities may decline as a
result of adverse market movements.
CONFLICT OF INTEREST. The investment adviser may appear to have a conflict
of interest when Chase Vista H&Q IPO Fund purchases IPOs from underwriting
syndicates in which Chase Securities, Inc., the Fund's distributor or any
affiliate of such persons acts as a member or manager Chase Vista H&Q IPO Fund
will not purchase IPOs directly from Chase Securities, Inc. and its affiliates,
and the Fund otherwise intends to conduct these purchases in compliance with
applicable SEC rules.
PRICING RISK. Chase Vista H&Q IPO Fund may be unable to purchase IPOs at
the offering price. The price of IPO shares in the aftermarket may greatly
exceed the offering price, making it more difficult for Chase Vista H&Q IPO Fund
to realize a profit.
TURNOVER COSTS; CAPITAL GAINS. Chase Vista H&Q IPO Fund normally expects to
sell most of its IPO holdings within a year. This turnover of Chase Vista H&Q
IPO Fund's portfolio will increase the Fund's transaction costs. Some gains from
such sales will also be treated as short-term capital gains, taxable as ordinary
income to Chase Vista H&Q IPO Fund's shareholders. Such capital gains are
taxable at higher rates than long-term capital gains. Frequent trading could
also mean higher brokerage commissions and other transaction costs, which could
reduce Chase Vista H&Q IPO Fund's returns.
REDEMPTIONS. Chase Vista H&Q IPO Fund may have to sell stocks at a loss in
order to pay for sales by its shareholders. Sales are more likely to occur when
prices of IPO stocks are declining, and prices of IPO stocks may fall more
rapidly than those of other securities.
-14-
<PAGE>
LIMITED OPERATING HISTORY. Chase Vista H&Q IPO Fund has no operating
history, and Symphony's model has only been previously implemented by one mutual
fund, H&Q IPO Fund, which has been in operation since October, 1999. The model
is based largely on a limited period of past market performance and may fail to
anticipate shifts in market dynamics over time.
RELIANCE ON FINANCIAL DATA. Symphony's model relies on market and other
data complied from other sources, primarily IPO Edge, a leading provider of IPO
information. If this information were to become unavailable or unreliable, Chase
Vista H&Q IPO Fund's investment strategy could be disrupted.
FOREIGN INVESTMENTS. Investments in foreign securities may be riskier than
investments in the U.S. Because foreign securities are usually denominated in
foreign currencies, the value of Chase Vista H&Q IPO Fund's portfolio may be
influenced by currency exchange rates and exchange control regulations. Foreign
securities may be affected by political, social and economic instability. Some
securities may be harder to trade without incurring a loss and may be difficult
to convert into cash. There may be less public information available, differing
settlement procedures, or regulations and standards that don't match U.S.
standards. Some countries may nationalize or expropriate assets or impose
exchange controls. These risks increase when investing in issuers located in
developing countries. BECAUSE H&Q IPO FUND DID NOT INVEST IN THESE INSTRUMENTS,
THIS RISK WAS NOT PRESENT FOR THAT FUND.
In early 1999, the European Monetary Union implemented a new currency
called the "euro". It is possible that the euro could increase volatility in
financial markets, which could have a negative effect on the value of shares of
Chase Vista H&Q IPO Fund.
CONVERTIBLE SECURITIES. The market value of convertible securities tends to
decline as interest rates increase, and increase as interest rates decline.
Their value also tends to change whenever the market value of the underlying
common or preferred stock fluctuates. BECAUSE H&Q IPO FUND DID NOT INVEST IN
THESE INSTRUMENTS, THIS RISK WAS NOT PRESENT FOR THAT FUND.
OTHER INVESTMENTS. If Chase Vista H&Q IPO Fund invests a substantial
portion of its assets in money market instruments, repurchase agreements and
U.S. Government debt, including where Chase Vista H&Q IPO Fund is investing for
temporary defensive purposes, it could reduce the Fund's potential return.
Derivatives may be more risky than other types of investments because they
may respond more to changes in economic conditions than other types of
investments. If they are used for non-hedging purposes, they could cause losses
that exceed Chase Vista H&Q IPO Fund's original investment. IT IS IMPORTANT TO
NOTE THAT CHASE VISTA H&Q IPO FUND IS PERMITTED TO INVEST IN A WIDER VARIETY OF
DERIVATIVES THAN H&Q IPO FUND.
INFORMATION RELATING TO THE PROPOSED REORGANIZATION
GENERAL
The terms and conditions under which the Reorganization may be consummated
are set forth in the Reorganization Plan. Significant provisions of the
Reorganization Plan are summarized below; however, this summary is qualified in
its entirety by reference to the
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<PAGE>
Reorganization Plan, a copy of which is attached as Appendix A to this Combined
Prospectus/Proxy Statement and which is incorporated herein by reference.
DESCRIPTION OF THE REORGANIZATION PLAN
The Reorganization Plan provides that at the Effective Time (as defined in
the Reorganization Plan) of the Reorganization, the assets and liabilities of
H&Q IPO Fund will be transferred to and assumed by Chase Vista H&Q IPO Fund. In
exchange for the transfer of the assets of, and the assumption of the
liabilities of H&Q IPO Fund, MFIT will issue at the Effective Time of the
Reorganization full and fractional (a) Class A Shares in Chase Vista H&Q IPO
Fund equal in aggregate dollar value to the aggregate net asset value of full
and fractional outstanding Common Class Shares and Class A Shares of H&Q IPO
Fund and (b) Class B Shares in Chase Vista H&Q IPO Fund equal in aggregate
dollar value to the aggregate net asset value of full and fractional outstanding
Class B Shares of H&Q IPO Fund, in each case as determined at the valuation time
specified in the Reorganization Plan. The Reorganization Plan provides that H&Q
IPO Fund will declare a dividend or dividends prior to the Effective Time of the
Reorganization which, together with all previous dividends, will have the effect
of distributing to the H&Q Shareholders all undistributed net investment income
earned and net capital gains realized up to and including the Effective Time of
the Reorganization.
Following the transfer of assets to, and the assumption of the liabilities
of H&Q IPO Fund by, Chase Vista H&Q IPO Fund, H&Q IPO Fund will distribute Chase
Vista H&Q IPO Fund Shares received from MFIT to H&Q Shareholders in liquidation
of H&Q IPO Fund. Each H&Q Shareholder at the Effective Time of the
Reorganization will receive an amount of (a) in the case of holders of Common
Class Shares and Class A Shares, Class A Shares and (b) in the case of holders
of Class B Shares, Class B Shares, of Chase Vista H&Q IPO Fund with a total net
asset value equal to the net asset value of their shares of H&Q IPO Fund, plus
the right to receive any dividends or distributions which were declared before
the Effective Time of the Reorganization but that remained unpaid at that time
with respect to the shares of H&Q IPO Fund. After the Reorganization all of the
issued and outstanding shares of H&Q IPO Fund will be canceled on the books of
H&Q IPO Fund and the Fund's stock transfer books will be permanently closed.
Following the Reorganization, the registration of H&Q Trust as an investment
company under the 1940 Act will be terminated, and H&Q Trust will be dissolved
under state law.
Chase Vista H&Q IPO Fund expects to maintain all of the holdings of H&Q IPO
Fund in light of the substantially similar investment policies of Chase Vista
H&Q IPO Fund and the substantially similar strategies of its investment adviser
and sub-adviser.
The Reorganization is subject to a number of conditions, including without
limitation approval of the Reorganization Plan and the transactions contemplated
thereby described in this Combined Prospectus/Proxy Statement by H&Q
Shareholders; the receipt of a legal opinion of Howard Rice Nemerovski Canady
Falk & Rabkin, A Professional Corporation, with respect to certain tax issues,
as more fully described under "Information Relating to the Proposed
Reorganization--Federal Income Tax Consequences"; and the parties' performance
in all material respects of their respective agreements and undertakings in the
Reorganization Plan.
-16-
<PAGE>
Assuming satisfaction of the conditions in the Reorganization Plan, the
Effective Time of the Reorganization will be on [______ __], 2001 or such other
date as is agreed to by the parties.
The expenses of H&Q Trust and MFIT in connection with the Reorganization
will be borne by Chase.
The Reorganization Plan and the Reorganization described herein may be
abandoned at any time prior to the Effective Time of the Reorganization by
either party if a material condition to the performance of such party under the
Reorganization Plan or a material covenant of the other party is not fulfilled
by the date specified in the Reorganization Plan or if there is a material
default or material breach of the Reorganization Plan by the other party. In
addition, either party may terminate the Reorganization Plan if its trustees
determine that proceeding with the Reorganization Plan is not in the best
interests of their Fund's shareholders.
TRUSTEES' CONSIDERATIONS
In its consideration and approval of the Reorganization at meetings held on
May 31, 2000, September 7, 2000 and November 28, 2000, the H&Q Trustees
considered and discussed the future of H&Q IPO Fund and how to best serve the
H&Q Shareholders' interests. The trustees discussed the advantages of
reorganizing H&Q IPO Fund into a portfolio of MFIT. After discussions, it was
decided to pursue the Reorganization with Chase Vista H&Q IPO Fund.
In considering Chase Vista H&Q IPO Fund, the H&Q Trustees noted that
combining the H&Q IPO Fund into MFIT could offer increased administrative and
operational efficiencies. In addition, the H&Q Trustees noted that Chase Vista
H&Q IPO Fund could offer H&Q Shareholders better shareholder services than H&Q
IPO Fund. The Trustees further noted that Chase Vista H&Q IPO Fund would also
offer H&Q Shareholders the ability to diversify their mutual fund holdings as
all Chase Vista H&Q IPO Fund Shareholders (including holders of Class A Shares
and Class B Shares) wishing to invest in other types of funds would be able to
exchange into Chase Vista funds without paying an additional sales charge. The
Trustees also noted that the Chase Vista funds have a broad distribution
network. The Trustees also considered the fee structure of the Class A and Class
B Shares of Chase Vista H&Q IPO Fund and the likely fee increases most H&Q
Shareholders would experience.
In its consideration and approval of the Reorganization, the H&Q Trustees
also considered, among other things: the terms of the Reorganization Plan; the
fact that the Reorganization would constitute a tax-free reorganization; a
comparison of the Funds' historical and projected expense ratios; the commitment
by Chase to reimburse expenses in excess of H&Q IPO Fund's current expense ratio
for one year; [the comparative investment performance of H&Q IPO Fund and other
Chase Vista funds;] the fact that the day-to-day portfolio management would be
unchanged by the Reorganization; the investment advisory and other services to
be supplied by CFAM and Symphony; the management and other fees to be payable by
Chase Vista H&Q IPO Fund; the similarities in the investment objective and
policies of the Funds; the differences in the organizational structures of
funds; the changes in the Trustees, investment adviser, distributor and transfer
agent of H&Q IPO Fund; the changes to H&Q IPO Fund's agreement, plans,
procedures and investment restrictions; the fact that Chase would bear all
expenses of the Reorganization; the other effects of the reorganization on H&Q
IPO Fund and its
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<PAGE>
shareholders; the recommendations of H&Q Management, Symphony and Chase with
respect to the proposed Reorganization; and the alternatives available to H&Q
IPO Fund.
After considering the foregoing factors, together with such other
information as they believed to be relevant, the H&Q Trustees, including the
disinterested Trustees, determined that the proposed Reorganization would be in
the best interests of H&Q Shareholders and that the interests of H&Q
Shareholders would not be diluted as a result of the Reorganization and approved
the Reorganization Plan and directed that it be submitted to H&Q Shareholders
for approval.
THE H&Q TRUSTEES RECOMMEND THAT H&Q SHAREHOLDERS VOTE "FOR" THE REORGANIZATION
PLAN.
The H&Q Trustees have not determined what action H&Q IPO Fund will take in
the event H&Q Shareholders fail to approve the Reorganization Plan or for any
reason the Reorganization is not consummated. In either such event, the Trustees
will consider other appropriate courses of action, including continuing the
operations of H&Q IPO Fund in its present form.
Similarly, at meetings held on September 19, 2000 and October 24, 2000, the
MFIT Board considered the proposed Reorganization. The MFIT Board considered,
among other things: the terms of the Reorganization Plan; the fact that the
Reorganization would permit MFIT Shareholders to exchange into Chase Vista H&Q
IPO Fund; and the fact that the Reorganization would constitute a tax-free
reorganization. Based upon its evaluation of the relevant information provided
to it, and in light of its fiduciary duties under federal and state law, the
MFIT Board, including the disinterested Trustees, determined that (i) the
proposed Reorganization would be in the best interests of the shareholders of
Chase Vista H&Q IPO Fund and (ii) the interests of Chase Vista H&Q IPO Fund's
Shareholders would not be diluted as a result of the Reorganization and approved
the Reorganization Plan.
FEDERAL INCOME TAX CONSEQUENCES
[Consummation of the Reorganization is subject to the condition that
H&Q IPO Fund and MFIT receive an opinion from Howard Rice Nemerovski Canady Falk
& Rabkin, A Professional Corporation to the effect that for federal income tax
purposes: (i) the transfer of all of the assets and liabilities of H&Q IPO Fund
to Chase Vista H&Q IPO Fund in exchange for Chase Vista H&Q IPO Fund Shares and
the liquidating distributions to H&Q Shareholders of Chase Vista H&Q IPO Fund
Shares so received, as described in the Reorganization Plan, will constitute a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and with respect to the Reorganization,
H&Q IPO Fund and Chase Vista H&Q IPO Fund will each be considered "a party to a
reorganization" within the meaning of 368(b) of the Code; (ii) no gain or loss
will be recognized by H&Q IPO Fund as a result of such transaction; (iii) no
gain or loss will be recognized by Chase Vista H&Q IPO Fund as a result of such
transaction; (iv) no gain or loss will be recognized by H&Q Shareholders on the
distribution to them of the Chase Vista H&Q IPO Fund Shares in exchange for
their shares of H&Q IPO Fund; (v) the aggregate basis of Chase Vista H&Q IPO
Fund Shares received by a Shareholder of H&Q IPO Fund will be the same as the
aggregate basis of such H&Q Shareholder's H&Q
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<PAGE>
Shares immediately prior to the Reorganization; (vi) the basis of Chase Vista
H&Q IPO Fund in the assets of H&Q IPO Fund received pursuant to such
transaction will be the same as the basis of such assets in the hands of H&Q
IPO Fund immediately before such transaction; (vii) an H&Q Shareholder's
holding period for Chase Vista H&Q IPO Fund Shares will be determined by
including the period for which H&Q Shareholder held H&Q IPO Fund shares
exchanged therefor, provided that the Shareholder held such shares in H&Q IPO
Fund as a capital asset; and (viii) Chase Vista H&Q IPO Fund's holding period
with respect to the assets received in the Reorganization will include the
period for which such assets were held by H&Q IPO Fund.]
MFIT and H&Q IPO Fund have not sought a tax ruling from the Internal
Revenue Service ("IRS"), but are acting in reliance upon the opinion of counsel
discussed in the previous paragraph. That opinion is not binding on the IRS and
does not preclude the IRS from adopting a contrary position. Shareholders should
consult their own advisers concerning the potential tax consequences to them,
including state and local income taxes.
CAPITALIZATION
Because H&Q IPO Fund will be combined with the newly-created Chase Vista
H&Q IPO Fund in the Reorganization, the total capitalization of Chase Vista H&Q
IPO Fund after the Reorganization is expected to equal the capitalization of H&Q
IPO Fund immediately prior to the Reorganization. The following table sets forth
as of [_________ __], 2000: (i) the capitalization of H&Q IPO Fund; (ii) the
capitalization of Chase Vista H&Q IPO Fund; and (iii) the pro forma
capitalization of Chase Vista H&Q IPO Fund as adjusted to give effect to the
proposed Reorganization. There is, of course, no assurance that the
Reorganization will be consummated. Moreover, if consummated, the capitalization
of H&Q IPO Fund is likely to be different at the Effective Time of the
Reorganization as a result of fluctuations in the value of portfolio securities
and daily share purchase and redemption activity.
<TABLE>
<CAPTION>
CHASE VISTA H&Q PRO FORMA
H&Q IPO FUND IPO FUND COMBINED
------------ --------------- -----------
<S> <C> <C> <C>
Total Net Assets ($)
Common Class [________] - -
Class A [________] [________] [________]
Class B [________] [________] [________]
Shares Outstanding
Common Class [________] - -
Class A [________] [________] [________]
Class B [________] [________] [________]
Net Asset Value Per
Share ($)
Common Class [________] - -
Class A [________] [________] [________]
Class B [________] [________] [________]
</TABLE>
-19-
<PAGE>
INVESTMENT POLICIES
The following discussion summarizes some of the investment policies of
Chase Vista H&Q IPO Fund. Except as noted, Chase Vista H&Q IPO Fund has
substantially similar investment objectives and investment policies as H&Q IPO
Fund.
INVESTMENT OBJECTIVE
Chase Vista H&Q IPO Fund's objective is capital appreciation.
MAIN INVESTMENT STRATEGY
Chase Vista H&Q IPO Fund seeks to achieve its goal by investing, under
normal market conditions, at least 65% of its assets in a diversified portfolio
of common stocks acquired as part of, or within 18 months after, a company's
initial public offering and traded on the New York Stock Exchange, American
Stock Exchange or NASDAQ National Market. The common stocks of these emerging
companies will be referred to generally in this Combined Prospectus/Proxy
Statement as IPOs.
Symphony, the sub-adviser to Chase Vista H&Q IPO Fund, has developed a
quantitative model which tracks historical IPO performance. At the time of an
initial public offering, Symphony will purchase IPO shares that meet certain
minimum quantitative criteria for offering size, issuer market capitalization
and lead underwriter, among other factors. Symphony will attempt to purchase
these shares directly from the underwriters, at the offering price. If shares
cannot be obtained at the offering price, they will be purchased in the
secondary market. For a period of up to 18 months after an initial public
offering of shares, Symphony will also purchase such IPO shares based upon the
above criteria and certain aftermarket criteria, such as analyst ratings, price,
performance, valuation relative to the industry and insider activity. IPO shares
held by Chase Vista H&Q IPO Fund will be sold based upon similar aftermarket
criteria. Chase Vista H&Q IPO Fund normally expects to sell most of its IPO
holdings within a year of purchase. When making investment decisions, the
Symphony will employ qualitative, as well as quantitative, techniques and will
emphasize issuers with growth characteristics.
When Symphony believes that the number or quality of IPOs available for
Chase Vista H&Q IPO Fund investment is inadequate, Symphony intends to invest in
futures contracts or participations based on equity indexes, such as the S&P
500-Registered Trademark-Index, Russell 2000-Registered Trademark- Index or
Wilshire 4500-Registered Trademark- Index. Symphony may also purchase non-IPO
equity securities (including common stocks, preferred stocks, convertible
securities and warrants) issued primarily by companies which have
capitalizations of $1 billion or less at the time of investment. Pending
investment and to provide liquidity for redemptions, Chase Vista H&Q IPO Fund
may also hold its assets in cash and cash equivalent instruments, such as money
market mutual funds, Treasury bills, commercial paper and repurchase agreements.
Chase Vista H&Q IPO Fund's investment in assets other than IPOs will, in normal
circumstances, be limited to 35% of its assets. Chase Vista H&Q IPO Fund may not
achieve its investment objective during periods when it has taken a temporary
defensive position because of adverse market, economic, political or other
conditions.
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<PAGE>
The Chase Vista H&Q IPO Fund may invest up to 20% of its total assets in
foreign securities. It may also invest up to 20% of its total assets in
convertible securities, which generally pay interest or dividends and which can
be converted into common or preferred stock. H&Q IPO FUND HAS NO INVESTMENT
POLICY WITH RESPECT TO SUCH INVESTMENTS.
Although the Chase Vista H&Q IPO Fund intends to invest primarily in equity
securities, under normal market conditions it may invest up to 20% of its total
assets in high quality money market instruments and repurchase agreements. To
temporarily defend its assets, the Chase Vista Small Cap Equity Fund may put any
amount of its assets in these types of investments.
During unusual market conditions, the Chase Vista H&Q IPO Fund may invest
up to 20% of its assets in U.S. Government obligations. H&Q IPO FUND DID NOT
HAVE THIS ABILITY.
The Chase Vista H&Q IPO Fund may invest in derivatives, which are financial
instruments whose value is based on another security, index or exchange rate.
The Chase Vista H&Q IPO Fund may use derivatives to hedge various market risks
or to increase the Chase Vista H&Q IPO Fund's income or gain. IT IS IMPORTANT TO
NOTE THAT THE ONLY DERIVATIVE INSTRUMENTS USED BY H&Q IPO FUND WERE FUTURES
CONTRACTS AND INDEX PARTICIPATIONS. ACCORDINGLY, CHASE VISTA H&Q IPO FUND IS
PERMITTED TO USE A WIDER VARIETY OF DERIVATIVES.
The Chase Vista H&Q IPO Fund may change any of these investment policies
(including its investment objective) without shareholder approval. H&Q IPO FUND
REQUIRES SHAREHOLDER APPROVAL TO CHANGE ITS INVESTMENT OBJECTIVE.
COMPARISON OF INVESTMENT LIMITATIONS
The investment limitations of Chase Vista H&Q IPO Fund and H&Q IPO Fund are
similar. However, the wording of MFIT's investment restrictions differs from
that of the H&Q IPO Fund. The tables below describe the limitations applicable
to each Fund, comparing the two Fund's restrictions.
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<PAGE>
The following fundamental investment limitations of Chase Vista H&Q IPO
Fund and H&Q IPO Fund MAY BE CHANGED ONLY BY A VOTE of a majority of such Fund's
shareholders.
CHASE VISTA H&Q IPO FUND MAY NOT:
- Purchase securities of any issuer (other than securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, or
repurchase agreements secured thereby) if, as a result of such purchase,
25% or more of 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 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.
- Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments but this shall not prevent the
Fund from (i) purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical commodities
or (ii) engaging in forward purchases or sales of foreign currencies or
securities;
ACCORDINGLY, UNLIKE H&Q IPO FUND, CHASE VISTA H&Q IPO FUND IS NOT
PROHIBITED FROM PURCHASING OR SELLING OPTIONS GENERALLY OR FROM ENGAGING IN
FORWARD PURCHASES OR SALES OF FOREIGN CURRENCIES OR SECURITIES.
H&Q IPO FUND MAY NOT:
- Purchase securities (other than securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities) if, as a result of such
purchase, 25% or more of the value of its total assets would be invested in
any industry.
- Purchase or sell commodities or commodity contracts, provided that the Fund
may (1) purchase securities of companies that deal in commodities or
interests therein and (2) purchase or sell futures contracts, options on
future contracts, equity index participations and index participation
contracts.
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<PAGE>
CHASE VISTA H&Q IPO FUND MAY NOT:
- Purchase or sell real estate unless acquired as a result of ownership of
securities or other instruments (but this shall not prevent 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
precluded and investments in real estate limited partnerships constitute
investments in real estate.
- Make loans, except that the Fund may: (i) purchase and hold debt
instruments (including without limitation, bonds, notes, debentures or
other obligations and certificates of deposit, bankers' acceptances and
fixed time deposits) in accordance with its investment objectives and
policies; (ii) enter into repurchase agreements with respect to portfolio
securities; and (iii) lend portfolio securities with a value not in excess
of one-third of the value of its total assets.
ACCORDINGLY, CHASE VISTA H&Q IPO FUND IS NOT PROHIBITED FROM INVESTING IN
LONGER-TERM DEBT SECURITIES.
H&Q IPO FUND MAY NOT:
- Purchase or sell real estate, including interests in real estate limited
partnerships, provided that the Fund may purchase securities of companies
that deal in real estate or interests therein.
- Lend money to any person, except that the Fund may (1) purchase a portion
of an issue of short-term debt securities or similar obligations (including
repurchase agreements) that are distributed publicly or customarily
purchased by institutional investors, and (2) lend its portfolio
securities.
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<PAGE>
CHASE VISTA H&Q IPO FUND MAY NOT:
- Borrow money, except that 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 one-third of its net assets to secure such borrowings. Any borrowings
representing more than 5% of the Fund's total assets must be repaid before
the Fund may make additional investments.
- Underwrite securities issued by other persons except insofar as the Fund
may technically be deemed to be an underwriter under the Securities Act of
1933 in selling a portfolio security.
H&Q IPO FUND MAY NOT:
- Borrow money, except that the Fund may borrow from banks as a temporary
measure to satisfy redemption requests or for extraordinary or emergency
purposes and then only in an amount not to exceed one-third of the value of
its total assets (including the amount borrowed), provided that the Fund
will not purchase securities while borrowings represent more than 5% of its
total assets.
- Pledge, mortgage or hypothecate any of its assets, except that, to secure
allowable borrowings, the Fund may do so with respect to no more than
one-third of the value of its total assets.
- Underwrite securities issued by others, except to the extent it may be
deemed to be an underwriter, under the federal securities laws, in
connection with the disposition of securities from its investment
portfolio.
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<PAGE>
CHASE VISTA H&Q IPO FUND MAY NOT:
- Issue any senior security (as defined in the 1940 Act), except (a) engaging
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) acquiring 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, borrowing
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.
UNLIKE H&Q IPO FUND, Chase Vista H&Q IPO Fund may engage in the activities
described in CLAUSES (a) AND (b) ABOVE
- 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).
THE LIMITATION ON PURCHASING MORE THAN 10% OF THE SECURITIES OF ANY ISSUER
IS APPLIED WITH RESPECT TO ONLY 75% OF CHASE VISTA H&Q IPO FUND'S ASSETS,
AS OPPOSED TO ALL OF H&Q IPO FUND'S ASSETS.
H&Q IPO FUND MAY NOT:
- Issue senior securities, except that the Fund may borrow from banks as a
temporary measure to satisfy redemption requests or for extraordinary or
emergency purposes and then only in an amount not to exceed one-third of
the value of its total assets (including the amount borrowed), provided
that the Fund will not purchase securities while borrowings represent more
than 5% of its total assets.
- As to 75% of its assets, purchase securities of any issuer (other than
obligations of, or guaranteed by, the U.S. government, its agencies or
instrumentalities or investments in other registered investment companies)
if, as a result, more than 5% of the value of its total assets would be
invested in the securities of such issuer.
- Purchase more than 10% of any class of securities of any issuer if, as a
result of such purchase, it would own more than 10% of such issuer's
outstanding voting securities. The definition of "securities" does not
include cash and cash items (including receivables), government securities
and the securities of other investment companies, including private
investment companies and qualified purchaser funds.
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<PAGE>
The following non-fundamental investment limitations of Chase Vista H&Q IPO
Fund and H&Q IPO Fund MAY BE CHANGED WITHOUT ANY VOTE of such Fund's
shareholders.
CHASE VISTA H&Q IPO FUND MAY NOT:
- Write, purchase or sell any put or call option or any combination thereof,
provided that this shall not prevent (i) the writing, purchasing or selling
of puts, calls or combinations thereof with respect to portfolio securities
or (ii) with respect to 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.
UNLIKE H&Q IPO FUND, CHASE VISTA H&Q IPO FUND HAS THE ABILITY TO PURCHASE
PUT AND CALL OPTIONS WITH RESPECT TO ITS PORTFOLIO SECURITIES.
- 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.
UNLIKE H&Q IPO FUND, CHASE VISTA H&Q IPO FUND MAY MAKE SHORT SALES "AGAINST
THE BOX."
- Purchase or sell interests in oil, gas or mineral leases.
- Invest more than 15% of its net assets in illiquid securities.
H&Q IPO FUND MAY NOT:
- Purchase puts, calls, straddles, spreads or any combination thereof.
- Make short sales.
- Purchase securities on margin, except such short-term credits as may be
necessary for the clearance of purchases and sales of securities.
- Purchase or sell interests in oil, gas or other mineral development
programs or leases, although it may invest in companies that own or invest
in such interests or leases.
- Invest more than 15% of its net assets in illiquid securities, including
repurchase agreements with maturities in excess of seven days and
securities subject to contractual restrictions on resale in excess of seven
days.
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<PAGE>
CHASE VISTA H&Q IPO FUND MAY NOT:
- Invest in the securities of other investment companies except to the extent
permitted by applicable Federal securities law; provided, however, that a
Mauritius holding company (a "Mauritius Portfolio Company") will not be
considered an investment company for this purpose.
- CHASE VISTA H&Q IPO FUND DOES NOT HAVE A SIMILAR INVESTMENT RESTRICTION.
H&Q IPO FUND MAY NOT:
- Purchase securities of other investment companies, except as permitted by
the 1940 Act, including any exemptive relief granted by the SEC.
- Invest for the purpose of exercising control or management of another
issuer.
PURCHASES, REDEMPTIONS AND EXCHANGES
GENERAL
Chase Vista H&Q IPO Fund investors will have the ability to diversify their
mutual fund holdings by exchanging their Chase Vista H&Q IPO Fund Shares for
other shares in Chase Vista portfolios without paying additional sales loads.
The Chase Vista funds currently consist of [__] different investment portfolios,
most of which will be available to H&Q Shareholders after the Reorganization.
Holders of Common Class Shares and Class A Shares of H&Q IPO Fund will receive
Class A Shares of Chase Vista H&Q IPO Fund and those holding Class B Shares of
H&Q IPO Fund will receive Class B Shares of Chase Vista H&Q IPO Fund.
SALES CHARGES
There is a sales charge (sometimes called a "load") to buy Class A and
Class B Shares of Chase Vista H&Q IPO Fund. There are also ongoing expenses that
holders of Class A and Class B Shares pay as long as they own their shares, as
more fully explained below.
There are a number of plans and special discounts that can decrease or even
eliminate these sales charges.
RECIPIENTS OF CLASS A SHARES
HOLDERS OF COMMON CLASS SHARES OF H&Q IPO FUND WILL NOT BE REQUIRED TO
PAY A SALES CHARGE, OR "LOAD," ON CLASS A SHARES RECEIVED IN THE REORGANIZATION
OR ON ADDITIONAL CLASS A SHARES PURCHASED IN THE FUTURE IN CHASE VISTA H&Q IPO
FUND.
Holders of Class A shares in H&Q IPO Fund receiving Class A Shares in Chase
Vista H&Q IPO Fund will not pay a sales load on Class A Shares received in the
Reorganization, but will have to pay a sales load on additional Class A Shares
purchased in the future. The sales charge rates are described in the chart
below.
The following chart shows the initial sales charge, or "load", that will be
payable by holders of Class A Shares (other than investors who purchased Common
Class prior to the Reorganization) on new purchases:
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<PAGE>
<TABLE>
<CAPTION>
CHASE VISTA H&Q IPO FUND TOTAL SALES CHARGES AS A PERCENTAGE OF THE:
AMOUNT OF INVESTMENT OFFERING PRICE PER SHARE NET AMOUNT INVESTED
<S> <C> <C>
Less than $100,000 [5.75]% [___]%
$100,000 or greater, but less than $250,000 [___]% [___]%
$250,000 or greater, but less than $500,000 [___]% [___]%
$500,000 or greater, but less than $1,000,000 [___]% [___]%
$1,000,000 or greater None None
</TABLE>
These initial sales charges or "loads" for Chase Vista H&Q IPO Fund are higher
than the sales charges for H&Q IPO Fund. The following chart shows the initial
sales charge that is currently payable by holders of Class A shares of H&Q IPO
Fund.
<TABLE>
<CAPTION>
H&Q IPO FUND TOTAL SALES CHARGES AS A PERCENTAGE OF THE:
AMOUNT OF INVESTMENT OFFERING PRICE PER SHARE NET AMOUNT INVESTED
<S> <C> <C>
Less than $50,000 5.50% 5.82%
$50,000 or greater, but less than $100,000 4.75% 4.99%
$100,000 or greater, but less than $250,000 3.75% 3.90%
$250,000 or greater, but less than $500,000 2.75% 2.83%
$500,000 or greater, but less than $1,000,000 2.00% 2.04%
$1,000,000 or greater None* None*
</TABLE>
* - Purchases of $1 million or more sold within one year of purchase may be
subject to a 1.00% deferred sales charge.
CLASS B SHARES
Class B Shares in both Funds have a deferred sales charge. Purchasers do
not pay any charge when they buy Class B Shares in either Fund, but they may
have to pay a charge when Class B Shares are sold, depending on how long such
shares have been owned at the time of the sale. The deferred sales charge for
both Funds gets lower the longer a shareholder holds her or her shares and
disappears altogether after a certain number of years. However, the two Funds
calculate the deferred sales charge differently, as described below.
HOLDERS OF CLASS B SHARES WILL NOT PAY ANY SALES CHARGE UPON THE OCCURRENCE
OF THE REORGANIZATION AND THE DEFERRED SHARES CHARGE ON SHARES RECEIVED IN THE
REORGANIZATION WILL BE NO DIFFERENT FROM THE SHARES OWNED PRIOR TO THE
REORGANIZATION. HOWEVER, THE DEFERRED SALES CHARGE FOR CLASS B SHARES PURCHASED
AFTER THE REORGANIZATION WILL BE SIGNIFICANTLY DIFFERENT AND COULD RESULT IN
HOLDERS PAYING A HIGHER FEE IF AND WHEN THEY SELL SUCH SHARES.
NEW CLASS B SHARES. The deferred sales charge with respect to Class B
Shares purchased by existing and new investors after the Reorganization (the
"New Class B Shares") will disappear SIX YEARS after such Class B Shares were
purchased and the New Class B Shares will convert to Class A Shares during the
9th year of ownership. For the H&Q IPO Fund, the deferred sales charge
disappeared after five years and the Class B Shares converted to Class A Shares
during the 6th year of ownership.
EXCHANGED CLASS B SHARES. The deferred sales charge with respect to Class B
Shares received in the Reorganization (the "Exchanged Class B Shares") will
disappear FIVE YEARS after the holders originally purchased Class B Shares in
H&Q IPO Fund and will convert to Class A Shares during the 6th year of
ownership. The deferred sales charge for Exchanged Class B Shares, therefore,
would not be changed substantially as a result of the Reorganization.
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<PAGE>
The two schedules for Chase Vista H&Q IPO Fund are shown in the following
table, along with the deferred sales charge schedule for H&Q IPO Fund:
COMPARISON OF DEFERRED SALES CHARGES
<TABLE>
<CAPTION>
YEARS CHASE VISTA H&Q IPO FUND H&Q IPO FUND
HELD NEW CLASS B SHARES EXCHANGED CLASS B SHARES CLASS B SHARES
<S> <C> <C> <C>
1 5% 5% 5%
2 4% 4% 4%
3 3% 3% 3%
4 3% 2% 2%
5 2% 1% 1%
6 1% Convert to Class A Shares Convert to Class A Shares
7 None - -
8 None - -
9 Convert to Class A Shares - -
</TABLE>
MFIT calculates the deferred sales charge from the month a shareholder
purchases his or her shares. MFIT always sells the shares with the lowest
deferred sales charge first. Shares acquired by reinvestment distribution can be
sold without a deferred sales charge. In determining the sales charge on such
Class B Shares, the time period shall refer back to when the Class B Shares of
H&Q IPO Fund were purchased, not when the Class B Shares of Chase Vista H&Q IPO
Fund were received in the Reorganization.
DIVIDEND REINVESTMENTS
There is no initial sales charge or deferred sales charge on shares of
either Fund received on the reinvestment of dividends.
12b-1 FEES
VFD will be the distributor for Chase Vista H&Q IPO Fund, rather than CSI
(which acts as distributor for H&Q IPO Fund). Chase Vista H&Q IPO Fund has
adopted Rule 12b-1 distribution plans under which it pays annual distribution
fees of 0.30% of the average daily net assets attributed to Class A Shares and
1.00% of the average daily net assets attributed to Class B Shares. VFD may
elect to waive these fees. H&Q IPO Fund has a Rule 12b-1 distribution plan under
which it pays annual distribution fees of 0.25% of the average daily net assets
attributed to Common Class Shares, 0.30% of the average daily net assets
attributed to Class A Shares and 1.00% of the average daily net assets
attributed to Class B Shares. Otherwise, the terms of the distribution plans of
the two Funds are substantially similar.
This payment covers such things as compensation for services provided by
broker-dealers and expenses connected with the sale of shares. Payments are not
tied to actual expenses incurred.
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<PAGE>
Because 12b-1 expenses are paid out of Chase Vista H&Q IPO Fund's assets on
an ongoing basis, over time these fees will increase the cost of a shareholder's
investment and may cost more than other types of sales charges, used by other
mutual funds.
PURCHASING CHASE VISTA H&Q IPO FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO PURCHASES OF CHASE VISTA H&Q IPO FUND
THAT YOU MIGHT MAKE AFTER THE Reorganization.
The price shareholders pay for shares in Chase Vista H&Q IPO Fund is the
net asset value per share ("NAV") plus, in the case of Class A Shares, the sales
charge. NAV is the value of everything Chase Vista H&Q IPO Fund owns, minus
everything it owes, divided by the number of shares held by investors. Chase
Vista H&Q IPO Fund generally values its assets at their fair market value, but
may use fair value if market prices are unavailable.
The NAV of each class of shares is generally calculated once each day at
the close of regular trading on the New York Stock Exchange each day Chase Vista
H&Q IPO Fund is accepting purchase orders. A shareholder will pay the next NAV
calculated after the Chase Vista Funds Service Center (the "Center") receives
his or her order in proper form. An order is in proper form only after funds are
converted into federal funds.
The Center accepts purchase orders on any business day that the New York
Stock Exchange is open. If an order is received in proper form by the close of
regular trading on the New York Stock Exchange, it will be processed at that
day's price. If an order is received after the close of regular trading on the
New York Stock Exchange, it will generally be processed at the next day's price.
If a shareholder buys through an agent and not directly from the Center,
the agent could set earlier cut-off times. Each shareholder must provide a
Social Security Number or Taxpayer Identification Number when opening an
account.
Chase Vista H&Q IPO Fund has the right to reject any purchase order.
Chase Vista H&Q IPO Fund accepts investments in the following minimum
denominations:
<TABLE>
<CAPTION>
Type of Account Initial Investment Additional Investments
--------------- ------------------ ----------------------
<S> <C> <C>
Regular $2,500 $100
Systematic Investment Plan $1,000 $100
IRAs $1,000 $100
SEP-IRAs $1,000 $100
Education IRAs $500 $100
</TABLE>
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<PAGE>
The H&Q IPO Fund has the same or higher minimums, except that the minimum
investment for additional investments for retirement or other custodial accounts
is $25.
Checks should be made out to Chase Vista Funds in U.S. dollars. Credit
cards, cash, or checks from a third party will not be accepted. Shares bought by
check may not be sold for 15 calendar days. Shares bought through an Automated
Clearing House cannot be sold until the payment clears. This could take more
than seven business days. Purchase orders will be canceled if a check doesn't
clear and the investor will be responsible for any expenses and losses to Chase
Vista H&Q IPO Fund. Orders by wire will be canceled if the Center doesn't
receive payment by 4:00 p.m. (Eastern time) on the day the shareholder buys.
Shareholders seeking to buy Chase Vista H&Q IPO Fund Shares through an
investment representative or a mutual fund supermarket should instruct their
representative to contact the Fund. Such representatives may charge investors a
fee and may offer additional services, such as special purchase and redemption
programs. Such representative may set different minimum investments and earlier
cut-off times.
A systematic investment plan is available for Chase Vista H&Q IPO Fund
Shares.
SELLING CHASE VISTA H&Q IPO FUND SHARES
THE FOLLOWING DISCUSSION APPLIES TO SALES OF CHASE VISTA H&Q IPO FUND THAT
YOU MIGHT MAKE AFTER THE REORGANIZATION.
Chase Vista H&Q IPO Fund Shares may be sold on any day the Center is open
for trading, either directly to Chase Vista H&Q IPO Fund or through an
investment representative. Chase Vista H&Q IPO Fund Shareholders will receive
the next NAV calculated after the Center accepts his or her sale order, less any
deferred sales charge (in respect of Class B Shares).
Under normal circumstances, if a request is received before the close of
regular trading on the New York Stock Exchange, Chase Vista H&Q IPO Fund will
send the proceeds the same business day. An order to sell shares will not be
accepted if Chase Vista H&Q IPO Fund has not collected payment for the shares.
Chase Vista H&Q IPO Fund may stop accepting orders to sell and may postpone
payments for more than seven days, as federal securities laws permit.
Generally, a check is mailed or proceeds are sent by electronic transfer or
wire for Chase Vista H&Q IPO Fund Shares. However, if a shareholder's address of
record has changed within the 30 days prior to the sale request or if more than
$25,000 of shares is sold by phone, proceeds will be sent only to the bank
account on Chase Vista H&Q IPO Fund's records.
A shareholder will need to have his or her signature guaranteed if he or
she wants payment to be sent to an address other than Chase Vista H&Q IPO Fund's
records. Additional documents or a letter from a surviving joint owner may also
be needed.
A shareholder who purchased through an investment representative, should
contact that representative, who will send the necessary documents to the
Center. The representative might charge a fee for this service.
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<PAGE>
Shareholders may also sell their shares by contacting the Center directly.
Chase Vista H&Q IPO Fund shareholders may contact 1-800-5-CHASE-0.
A systematic withdrawal plan is available for Chase Vista H&Q IPO Fund
Shares.
EXCHANGING CHASE VISTA H&Q IPO FUND SHARES FOR SHARES IN OTHER CHASE VISTA FUNDS
Chase Vista H&Q IPO Fund Shares may currently be exchanged for shares in
certain other Chase Vista funds. For tax purposes, an exchange is treated as a
sale of the shares. This generally will result in a capital gain or loss.
Shareholders should carefully read the prospectus of the fund into which they
want to exchange, which is available by calling 1-800-5-CHASE-0. Shareholders
who exchange must meet any minimum investment requirements and may have to pay a
sales commission under certain circumstances.
The exchange privilege is not a means of short-term trading as this could
increase management cost and affect all shareholders. Each Chase Vista fund
reserves the right to limit the number of exchanges or refuse an exchange. The
exchange privilege also may be terminated. Chase Vista H&Q IPO Fund charges an
administration fee of $5 for each exchange if an investor makes more than 10
exchanges in a year or three in a quarter.
OTHER INFORMATION CONCERNING CHASE VISTA H&Q IPO FUND
Chase Vista H&Q IPO Fund may close an account if the balance falls below
$500. Chase Vista H&Q IPO Fund may also close the account if an investor is in
the Systematic Investment Plan and fails to meet investment minimums over a
12-month period. Before closing the account, 60 days' notice will be given.
Unless a shareholder indicates otherwise on his or her account application,
Chase Vista H&Q IPO Fund is authorized to act on redemption and transfer
instructions received by phone. If someone trades on an account by phone, Chase
Vista H&Q IPO Fund will ask that person to confirm the account registration and
address to make sure they match those in Chase Vista H&Q IPO Fund records. If
they do correspond, Chase Vista H&Q IPO Fund is generally authorized to follow
that person's instructions. Chase Vista H&Q IPO Fund will take all reasonable
precautions to confirm that the instructions are genuine. Investors agree that
they will not hold Chase Vista H&Q IPO Fund liable for any loss or expenses from
any sales request, if it takes reasonable precautions. Chase Vista H&Q IPO Fund
will be liable for any losses to a shareholder from an unauthorized sale or
fraud against such shareholder if Chase Vista H&Q IPO Fund does not follow
reasonable procedures.
It may not always be possible to reach the Center by telephone. This may be
true at times of unusual market changes and shareholder activity. In that event,
shareholders can mail Chase Vista H&Q IPO Fund instructions or contact their
investment representative or agent. Chase Vista H&Q IPO Fund may modify or
cancel the sale of shares by phone without notice.
MFIT has agreements with certain shareholder servicing agents (including
Chase) under which the shareholder servicing agents have agreed to provide
certain support services to their customers. For performing these services, each
shareholder servicing agent receives an annual fee of up to 0.25% of the average
daily net assets of the Chase Vista H&Q IPO Fund Shares held
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<PAGE>
by investors serviced by the shareholder servicing agent.
Chase, CFAM and/or VFD may, at their own expense, make additional payments
to certain selected dealers or other shareholder servicing agents for performing
administrative services for their customers. The amount may be up to an
additional 0.10% annually of the average net assets of the Fund attributable to
Chase Vista H&Q IPO Fund Shares held by customers of those shareholder servicing
agents.
PURSUANT TO H&Q IPO FUND'S DISTRIBUTION PLAN, THAT FUND PAYS ITS
DISTRIBUTOR AT AN ANNUAL RATE OF 0.30% OF THE VALUE OF THE AVERAGE DAILY NET
ASSETS OF CLASS A SHARES, 1.00% OF THE VALUE OF THE AVERAGE DAILY NET ASSETS OF
CLASS B SHARES AND 0.25% OF THE VALUE OF THE AVERAGE DAILY NET ASSETS OF COMMON
CLASS SHARES. THE FEES PAYABLE UNDER THE DISTRIBUTION PLAN ARE USED TO
COMPENSATE THE DISTRIBUTOR FOR ANY EXPENSES INTENDED PRIMARILY TO RESULT IN THE
SALE OF THE H&Q IPO FUND'S SHARES, INCLUDING, BUT NOT LIMITED TO, PAYMENTS THE
DISTRIBUTOR MAKES TO FINANCIAL INTERMEDIARIES (INCLUDING BROKER-DEALERS AND
OTHER THIRD PARTIES), PAYMENTS MADE FOR THE PREPARATION, PRINTING AND
DISTRIBUTING OF ADVERTISING AND SALES LITERATURE AND PAYMENTS MADE FOR PRINTING
AND DISTRIBUTING PROSPECTUSES AND SHAREHOLDER REPORTS TO OTHER THAN EXISTING
SHAREHOLDERS OF THE H&Q IPO FUND. A PORTION OF THESE FEES, NOT TO EXCEED .25% OF
THE AGGREGATE DAILY NET ASSETS ATTRIBUTABLE TO EACH OF THE CLASS A, CLASS B AND
COMMON CLASS SHARES MAY CONSTITUTE A SERVICE FEE USED TO COMPENSATE THE
DISTRIBUTOR FOR EXPENSES INCURRED FOR PERSONAL SERVICES AND/OR THE MAINTENANCE
OF SHAREHOLDER ACCOUNTS. THE FULL AMOUNT OF DISTRIBUTION FEES ARE PAYABLE TO THE
DISTRIBUTOR WHETHER THE ACTUAL EXPENSES ARE IN EXCESS OR LESS THAN SUCH FEES.
Chase Vista H&Q IPO Fund issues multiple classes of shares. Each class may
have different requirements for who may invest, and may have different sales
charges and expense levels. A person who gets compensated for selling Chase
Vista H&Q IPO Fund shares may receive a different amount for each class.
Chase and its affiliates and Chase Vista H&Q IPO Fund and its affiliates,
agents and subagents may share information about shareholders and their accounts
with each other and with others unless this sharing is prohibited by contract.
This information can be used for a variety of purposes, including offering
investment and insurance products to shareholders.
DISTRIBUTIONS AND TAXES
Chase Vista H&Q IPO Fund can earn income and realize capital gain. Chase
Vista H&Q IPO Fund will deduct from these earnings any expenses and then pay to
shareholders the distributions.
Chase Vista H&Q IPO Fund distributes net investment income at least
annually. Net capital gain is distributed annually. You have three options for
your distributions. You may:
- reinvest all of them in additional shares without a sales charge;
- take distributions of net investment income in cash or as a deposit in
a pre-assigned bank account and reinvest distributions of net capital
gain in additional shares; or
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<PAGE>
- take all distributions in cash or as a deposit in a pre-assigned bank
account.
The taxation of dividends will not be affected by the form in which they
are received. Dividends of net investment income are usually taxable as ordinary
income at the federal, state and local levels.
If a Chase Vista H&Q IPO Fund Shareholder receives distributions of net
capital gain, the tax rate will be based on how long Chase Vista H&Q IPO Fund
held a particular asset, not on how long the shareholder owned the shares. If a
shareholder buys shares just before a distribution, he or she will pay tax on
the entire amount of the taxable distribution received, even though the NAV will
be higher on that date because it includes the distribution amount. H&Q IPO Fund
expects that its distributions will consist primarily of capital gains.
Early in each calendar year, Chase Vista H&Q IPO Fund will send
shareholders a notice showing the amount of distributions received in the
preceding year and the tax status of those distributions.
The above is only a general summary of tax implications of investing in
Chase Vista H&Q IPO Fund. Shareholders should consult their tax advisers to see
how investing in Chase Vista H&Q IPO Fund will affect their own tax situation.
COMPARISON OF THE ORGANIZATIONAL STRUCTURE
OF H&Q IPO FUND AND CHASE VISTA H&Q IPO FUND
LEGAL STRUCTURE OF THE FUNDS
The new Chase Vista H&Q IPO Fund has been established as a series of the
MFIT business trust, which is organized under the law of the Commonwealth of
Massachusetts. H&Q IPO Fund is a series of H&Q Trust, which is a business trust
organized under the law of the State of Delaware. As a Massachusetts business
trust, MFIT's operations are governed by MFIT's Declaration of Trust and By-Laws
(the "MFIT Trust Documents") and applicable Massachusetts law rather than by H&Q
IPO Fund's Restated Agreement and Declaration of Trust and By-Laws (the "H&Q
Trust Documents") and applicable Delaware law. Certain differences between the
two domiciles and forms of organization are summarized below, along with
information regarding shareholder provisions in the MFIT Trust Documents. The
operations of Chase Vista H&Q IPO Fund will continue to be subject to the
provisions of the 1940 Act and the rules and regulations thereunder.
TRUSTEES AND OFFICERS OF CHASE VISTA H&Q IPO FUND
Subject to the provisions of the MFIT Trust Documents, the business of
Chase Vista H&Q IPO Fund will be managed by MFIT's trustees, who will serve
indefinite terms and will have all powers necessary or convenient to carry out
their responsibilities. The responsibilities, powers, and fiduciary duties of
the trustees and officers will be substantially the same as those of the
trustees and officers of H&Q Trust.
Information concerning the current trustees and officers of the MFIT Board
is set forth under "Information Concerning the MFIT Board" and officers.
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<PAGE>
CHASE VISTA H&Q IPO FUND SHARES
MFIT has an unlimited number of authorized shares of beneficial interest,
par value $0.001 per share, which may be divided into portfolios or Class and
classes thereof. Chase Vista H&Q IPO Fund is one portfolio of MFIT, and may
issue multiple classes of shares. Each share of a portfolio or class of MFIT
represents an equal proportionate interest in that portfolio or class with each
other share of that portfolio or class. The shares of each portfolio or class of
MFIT participate equally in the earnings, dividends and assets of the particular
portfolio or class. Fractional shares have proportionate rights to full shares.
Expenses of MFIT that are not attributable to a specific portfolio or class will
be allocated to all the portfolios of MFIT in a manner believed by management of
MFIT to be fair and equitable. Generally, shares of each portfolio will be voted
separately, for example, to approve an investment advisory agreement and shares
of each class of each portfolio will be voted separately, for example, to
approve a distribution plan, but shares of all classes vote together, to the
extent required by the 1940 Act, including the election or selection of trustees
and independent accountants. Shareholders in MFIT are entitled to one vote per
share held. SHAREHOLDERS IN H&Q IPO FUND ARE ENTITLED TO ONE VOTE FOR EACH
DOLLAR OF NET ASSET VALUE, AND A PROPORTIONAL FRACTIONAL VOTE FOR EACH
FRACTIONAL DOLLAR OF NET ASSET VALUE, REPRESENTED BY THE SHARES OWNED. MFIT is
not required to hold regular annual meetings of shareholders, but may hold
special meetings from time to time. There are no conversion or preemptive rights
in connection with shares of MFIT.
SHAREHOLDER VOTING RIGHTS
A vacancy in the MFIT Board resulting from the resignation of a Trustee or
otherwise may be filled similarly by a vote of a majority of the remaining
Trustees then in office, subject to the 1940 Act. In addition, Trustees may be
removed from office by a vote of holders of shares representing two-thirds of
the outstanding shares of each portfolio of MFIT at a meeting duly called for
the purpose. A meeting of shareholders shall be held upon the written request of
the holders of shares representing not less than 10% of the outstanding shares
of all MFIT fund entitled to vote on the matters specified in the written
request. Upon written request by the holders of shares representing at least
$25,000 or 1% of the outstanding shares of MFIT stating that such shareholders
wish to communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a Trustee, the
Trustees will within five business days after receipt of such request either
provide a list of shareholders or inform such applicants as to the approximate
number of shareholders and the approximate costs of mailing the request to them.
If the second option is chosen by the Trustees, then the Trustees are generally
obligated, upon written request of the applicants, to mail the requested
materials to all shareholders of record (at the expense of the requesting
shareholders). Except as set forth above, the Trustees may continue to hold
office and may appoint successor Trustees.
Because H&Q IPO Fund was the only portfolio of the H&Q Trust, the
shareholders of H&Q IPO Fund were entitled to elect all of the trustees of H&Q
Trust. Because Chase Vista H&Q IPO Fund will be part of a much larger family of
portfolios, the ability of its shareholders to elect trustees and to take action
with respect to certain other corporate matters will be diluted substantially.
Based on the net asset value of the MFIT funds as of [_________ __, 2000] and
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<PAGE>
net asset value of H&Q IPO Fund as of [_________ __, 2000], former H&Q IPO Fund
shareholders will represent [__]% of MFIT Shareholders after the Reorganization.
SHAREHOLDERS' RIGHTS OF INSPECTION
Under Massachusetts's law and the MFIT Trust Documents, any MFIT
Shareholder may inspect the trust's records, accounts, and books for any
legitimate business purpose. The H&Q Trust Documents provide that H&Q
Shareholders may inspect the books and records of H&Q IPO Fund to the same
extent that a shareholder in a Delaware corporation can inspect such
corporation's books and records. Delaware corporate law permits inspections of a
corporation's stock ledger, list of stockholders and other books and records
upon written demand and during usual hours for business by any shareholder for
any purpose reasonably related to such shareholder's interest as a shareholder.
Inspections may include the corporation's stock ledger, a list of its
stockholders and its other books and records.
SHAREHOLDER LIABILITY
Under Delaware law, H&Q Shareholders are not personally liable for the
obligations of H&Q IPO Fund. The Delaware Business Trust Act provides that a
shareholder of a Delaware business trust is entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under Delaware law. The securities regulators of some states, however,
have indicated that they may decline to apply Delaware law on this point, and it
is conceivable that, notwithstanding current laws, courts in other states may
decline to apply Delaware law on this point. As a result, to the extent that H&Q
IPO Fund or a shareholder will be subject to the jurisdiction of courts in those
states, there is a risk that those courts might not apply Delaware law and could
thereby subject H&Q Shareholders to liability.
Under Massachusetts law, there is a remote possibility, under certain
circumstances, that MFIT Shareholders may be held personally liable as partners
for the obligations of MFIT. Unlike Delaware, Massachusetts has no statutory
provision expressly disclaiming shareholder liability. However, it is generally
believed that a Massachusetts court would limit the liability of shareholders in
a Massachusetts trust to their investment. In addition, the MFIT Trust Documents
disclaim shareholder liability for acts or obligations of MFIT and provide for
indemnification and reimbursement of expenses out of MFIT property for any
shareholder held personally liable for the obligations of MFIT. The MFIT Trust
Documents also provide that MFIT shall maintain appropriate insurance (for
example, fidelity bonding and errors and omissions insurance) for the protection
of MFIT, 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 MFIT itself was unable to meet
its obligations.
LIABILITY OF TRUSTEES
Under the H&Q Trust Documents, so long as any trustee, officer, employee or
agent of the H&Q Trust has acted in good faith and in the reasonable belief that
such person's actions are in the best interests of the H&Q Trust, such person
will be personally liable only for willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the
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<PAGE>
conduct of such person's office. Under the Declaration of Trust, trustees,
officers, employees and agents of the H&Q Trust will generally be indemnified
against liability and against the expenses of litigation incurred by them unless
their conduct is determined to constitute willful misfeasance, bad faith, gross
negligence, or reckless disregard of their duties or unless it has been
determined that they have not acted in good faith in the reasonable belief that
their actions were in the best interests of the H&Q Trust. H&Q Trust may also
advance money for these expenses.
Under the MFIT Trust Documents, the Trustees of MFIT are personally liable
only for bad faith, willful misfeasance, gross negligence or reckless disregard
of their duties as Trustees. Under the MFIT Trust Documents, a Trustee or
officer of MFIT will generally be indemnified against all liability and against
all expenses reasonably incurred or paid by such person in connection with any
claim, action, suit or proceeding in which such person becomes involved as a
party or otherwise by virtue of such person being or having been a Trustee or
officer and against amounts paid or incurred by such person in the settlement
thereof.
The foregoing is only a summary of certain differences between and among
H&Q Trust and MFIT Trust's organizational and governing documents and
Massachusetts and Delaware business trust law. It is not a complete description.
Shareholders should refer to the provisions of these documents and state law
directly for a more thorough comparison. Copies of the Declaration of Trust and
Bylaws of H&Q Trust and MFIT are, or will be, available without charge upon
written request to either H&Q Trust or MFIT.
INFORMATION RELATING TO THE ADVISORY AGREEMENTS
GENERAL INFORMATION
H&Q IPO Fund is currently managed by H&Q Management pursuant to the H&Q
Advisory Agreement dated as of December 8, 1999. H&Q Management has delegated
most of its responsibilities in respect of H&Q IPO Fund to Symphony pursuant to
the H&Q Sub-Advisory Agreement dated as of December 8, 1999 between Symphony and
H&Q Management. As a result, Symphony is responsible for most of the day-to-day
management functions for H&Q IPO Fund.
As discussed above, although Symphony will be responsible for the
day-to-day management of Chase Vista H&Q IPO Fund after the Reorganization, it
is proposed that CFAM serve as investment adviser to Chase Vista H&Q IPO Fund
pursuant to the CFAM Advisory Agreement between CFAM and MFIT, on behalf of
Chase Vista H&Q IPO Fund. In addition, it is proposed that CFAM and Symphony
enter into the Symphony Sub-Advisory Agreement pursuant to which Symphony will
act as investment sub-adviser to CFAM with regard to Chase Vista H&Q IPO Fund.
DESCRIPTION OF CFAM
CFAM is a wholly-owned subsidiary of The Chase Manhattan Corporation, a
registered bank holding company ("CMC"). CFAM is located at 1211 Avenue of the
Americas, 41st Floor, New York, New York 10036.
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DESCRIPTION OF THE CFAM ADVISORY AGREEMENT
Under the CFAM Advisory Agreement, CFAM is responsible for making decisions
with respect to, and placing orders for, all purchases and sales of the
portfolio securities of Chase Vista H&Q IPO Fund. CFAM's responsibilities under
the CFAM Advisory Agreement include supervising H&Q IPO Fund's investments and
maintaining a continuous investment program, placing purchase and sale orders
and paying costs of certain clerical and administrative services involved in
managing and servicing H&Q IPO Fund's investments and complying with regulatory
reporting requirements. CFAM delegates certain of these responsibilities with
respect to Chase Vista H&Q IPO Fund to Symphony. Under the CFAM Advisory
Agreement, CFAM is obligated to furnish employees, office space and facilities
required for operation of Chase Vista H&Q IPO Fund. [The CFAM Advisory Agreement
is substantially similar to the H&Q Advisory Agreement.]
EXPENSES AND ADVISORY FEES. The CFAM Advisory Agreement provides that Chase
Vista H&Q IPO Fund will pay CFAM a monthly advisory fee based upon the net
assets of the Fund, at the annual rate of 0.65% of net assets of Chase Vista H&Q
IPO Fund. CFAM may waive fees from time to time to assist the Fund in
maintaining competitive yields. The H&Q Advisory Agreement requires H&Q to waive
fees and reimburse expenses through December 31, 2000 so as to maintain expense
ratios of 1.60% for Class A and Common Class shares and 2.30% for Class B
shares.
Also, [pursuant to the CFAM Advisory Agreement,] Chase has agreed to waive
certain fees to ensure that the actual (post-waiver) total expense ratio for
Chase Vista H&Q IPO Fund does not exceed 1.35% for holders of Class A Shares and
2.05% for holders of Class B Shares for at least one year after the
Reorganization. However, if the total asset level for Chase Vista H&Q IPO Fund
is reduced below $150 million during that one-year period, Chase's agreement to
waive such fees will only apply to ensure that such expense ratios do not exceed
1.60% for holders of Common Class and Class A shares and 2.30% for holders of
Class B shares for the remainder such period.
Under the CFAM Advisory Agreement, except as indicated above, Chase Vista
H&Q IPO Fund is responsible for its operating expenses including, but not
limited to, taxes; interest; fees (including fees paid to its Trustees who are
not affiliated with Chase or any of their affiliates); fees payable to the SEC,
state securities qualification fees; association membership dues; costs of
preparing and printing prospectuses for regulatory purposes and for distribution
to existing shareholders; advisory and administrative fees; charges of the
custodian and transfer agent; insurance premiums; auditing and legal expenses;
costs of shareholders' reports and shareholder meetings; any extraordinary
expenses; and brokerage fees and commissions, if any, in connection with the
purchase or sale of portfolio securities.
SUBCONTRACTING. CFAM is authorized by the CFAM Advisory Agreement to employ
or associate with such other persons or entities as it believes to be
appropriate to assist it in the performance of its duties. Any such person is
required to be compensated by CFAM, not by MFIT or Chase Vista H&Q IPO Fund, and
to be approved by the shareholders of the Fund as required by the 1940 Act.
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<PAGE>
LIMITATION ON LIABILITY. The CFAM Advisory Agreement provides that Chase
will not be liable for any error of judgment or mistake of law or for any act or
omission or loss suffered by MFIT or Chase Vista H&Q IPO Fund in connection with
the performance of the CFAM Advisory Agreement except a loss resulting from a
breach of fiduciary duty with respect to the receipt of compensation for
services or from willful misfeasance, bad faith, or gross negligence in the
performance of its duties or reckless disregard of its obligations and duties
under the CFAM Advisory Agreement. CFAM would be as fully responsible to MFIT or
Chase Vista H&Q IPO Fund for the acts of any sub-adviser as it is for its own
acts.
DURATION AND TERMINATION. The CFAM Advisory Agreement will remain in effect
for two years and will thereafter continue in effect from year to year with
respect to Chase Vista H&Q IPO Fund only so long as such continuation is
approved at least annually by (i) the MFIT Board or the "Majority Vote" of the
outstanding voting securities of Chase Vista H&Q IPO Fund and (ii) a majority of
those Trustees who are neither parties to the CFAM Advisory Agreement nor
"interested persons", as such terms are defined in the 1940 Act, of any such
party, acting in person at a meeting called for the purpose of voting on such
approval. The CFAM Advisory Agreement will terminate automatically in the event
of its "assignment", as defined in the 1940 Act. In addition, the CFAM Advisory
Agreement is terminable at any time as to Chase Vista H&Q IPO Fund without
penalty by the MFIT Board or by a majority vote of the Fund's outstanding voting
securities upon 60 days' written notice to CFAM, and by CFAM on 60 days' written
notice to MFIT.
DESCRIPTION OF THE SYMPHONY SUB-ADVISORY AGREEMENT
The terms of the Symphony Sub-Advisory Agreement are not materially
different from the H&Q Sub-Advisory Agreement, except that CFAM has replaced H&Q
Management as a party and the Fund with respect to which advice will be given is
Chase Vista H&Q IPO Fund instead of H&Q IPO Fund.
The proposed arrangement between CFAM and Symphony under the Symphony
Sub-Advisory Agreement provides that CFAM will delegate to Symphony portfolio
management duties relating to transactions in the securities held by Chase Vista
H&Q IPO Fund. With respect to the day-to-day management of Chase Vista H&Q IPO
Fund under the Symphony Sub-Advisory Agreement, Symphony would make decisions
concerning, and place all orders for, purchases and sales of securities and help
maintain the records relating to such purchases and sales.
CFAM and Symphony would bear all expenses in connection with the
performance of their respective services under the New Advisory Agreements.
DURATION AND TERMINATION
Unless sooner terminated, the Symphony Agreement will remain in effect for
two years and will thereafter continue for successive one-year periods, provided
that such continuation is specifically approved at least annually by the MFIT
Board, or by the vote of a "majority of the outstanding voting securities" of
Chase Vista H&Q IPO Fund under the Symphony Sub-Advisory Agreement, as such term
is defined under the 1940 Act and, in either case, by a majority of the Trustees
who are not interested persons of Chase Vista H&Q IPO Fund, CFAM
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or Symphony, by vote cast in person at a meeting called for such purposes. The
Symphony Sub-Advisory Agreement is terminable at any time, without penalty, by
vote of the MFIT Board, by CFAM, by the vote of "a majority of the outstanding
voting securities" of Chase Vista H&Q IPO Fund under the Symphony Sub-Advisory
Agreement, or by Symphony, upon 60 days' written notice. The Symphony
Sub-Advisory Agreement will terminate automatically in the event of its
assignment, as defined under the 1940 Act.
SYMPHONY FEE
As compensation for its services, Symphony will receive a fee from CFAM at
the annual rate of 0.375% of Chase Vista H&Q IPO Fund's average net assets. The
fee, which is accrued daily and payable monthly, is calculated for each day by
multiplying the fraction of one over the number of calendar days in the year by
the applicable percentage rate and multiplying this product by the value of the
net assets of Chase Vista H&Q IPO Fund at the close of business on the previous
business day of MFIT. The H&Q Sub-Advisory Agreement provides that Symphony will
waive fees pro rata with any fee waivers granted by H&Q under the H&Q Advisory
Agreement; provided that Symphony's sub-advisory fee shall not be less than an
annual rate of 0.20%. [The Symphony Sub-Advisory Agreement with Chase Vista H&Q
IPO Fund contains a similar pro rata fee waiver provision.]
THIS FEE WILL BE PAID BY CFAM OUT OF THE ADVISORY FEE IT WILL RECEIVE FROM
MFIT FOR CHASE VISTA H&Q IPO FUND AND WILL NOT BE AN ADDITIONAL CHARGE TO THE
FUND.
PORTFOLIO TRANSACTIONS AND BROKERAGE COMMISSIONS
CFAM, as the investment adviser, has responsibilities with respect to Chase
Vista H&Q IPO Fund's portfolio transactions and brokerage arrangements pursuant
to the Fund's policies, subject to the overall authority of the MFIT Board. In
addition, the Symphony Sub-Advisory Agreement will provide that Symphony's
responsibilities with respect to portfolio transactions and brokerage
arrangements will be equivalent to those of CFAM under the CFAM Advisory
Agreement. Accordingly, the description below of CFAM's responsibilities under
the CFAM Advisory Agreement would also apply to Symphony's responsibilities
under the Symphony Sub-Advisory Agreement.
Under the CFAM Advisory Agreement, CFAM, subject to the general supervision
of the MFIT Board, is responsible for the placement of orders for the purchase
and sale of portfolio securities for Chase Vista H&Q IPO Fund with brokers and
dealers selected by CFAM, which may include brokers or dealers affiliated with
CFAM to the extent permitted by the 1940 Act and MFIT's policies and procedures
applicable to the Fund. CFAM shall use its best efforts to seek to execute
portfolio transactions at prices which, under the circumstances, result in total
costs or proceeds being the most favorable to Chase Vista H&Q IPO Fund. In
assessing the best overall terms available for any transaction, CFAM shall
consider all factors it deems relevant, including the breadth of the market in
the security, the price of the security, the financial condition and execution
capability of the broker or dealer, research services provided to CFAM, and the
reasonableness of the commission, if any, both for the specific transaction and
on a continuing basis. In no event shall CFAM be under any duty to obtain the
lowest commission or the best net price for Chase Vista H&Q IPO Fund on any
particular transaction, nor shall CFAM be under any duty to execute any order in
a fashion either preferential to Chase Vista H&Q IPO Fund
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relative to other accounts managed by CFAM or otherwise materially adverse to
such other accounts.
In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to CFAM, Chase Vista H&Q IPO Fund and/or the other
accounts over which CFAM exercises investment discretion. CFAM is authorized to
pay a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for Chase Vista H&Q IPO Fund
which is in excess of the amount of commission another broker or dealer would
have charged for effecting that transaction if CFAM determines in good faith
that the total commission is reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of either that particular transaction or the overall responsibilities of
CFAM with respect to accounts over which it exercises investment discretion.
CFAM shall report to the MFIT Board regarding overall commissions paid by Chase
Vista H&Q IPO Fund and their reasonableness in relation to the benefits to Chase
Vista H&Q IPO Fund.
In executing portfolio transactions for Chase Vista H&Q IPO Fund, CFAM may,
to the extent permitted by applicable laws and regulations, but shall not be
obligated to, aggregate the securities to be sold or purchased with those of
other funds or its other clients if, in CFAM's reasonable judgment, such
aggregation (i) will result in an overall economic benefit to Chase Vista H&Q
IPO Fund, taking into consideration the advantageous selling or purchase price,
brokerage commission and other expenses, and trading requirements, and (ii) is
not inconsistent with the policies set forth in MFIT's registration statement,
this Combined Prospectus/Proxy Statement and the Statement of Additional
Information. In such event, CFAM will allocate the securities so purchased or
sold, and the expenses incurred in the transaction, in an equitable manner,
consistent with its fiduciary obligations to Chase Vista H&Q IPO Fund and such
other clients.
It is possible that certain of the brokerage and research services received
will primarily benefit one or more other investment companies or other accounts
for which CFAM exercises investment discretion. Conversely, MFIT or any of its
portfolios, including Chase Vista H&Q IPO Fund, may be the primary beneficiary
of the brokerage or research services received as a result of portfolio
transactions effected for such other accounts or investment companies.
INFORMATION RELATING TO THE MFIT BOARD AND OFFICERS
OVERSIGHT BY MFIT BOARD
As part of the Reorganization, H&Q Shareholders will become shareholders in
a new fund that is managed by the MFIT Board and not the Trustees of H&Q Trust.
The members of the MFIT Board are different from the Trustees of the H&Q Trust.
Following the Reorganization and the dissolution of the H&Q Trust, the H&Q Trust
will cease to operate.
GENERAL INFORMATION
Set forth below are the current members of the MFIT Board.
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<PAGE>
<TABLE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- ------------------------------------------
<S> <C>
Fergus Reid, III Chairman of MFIT. Chairman and Chief Executive Officer, Lumelite
Corporation, since September 1985; Trustee, Morgan Stanley Funds. Trustee,
H&Q Trust since [______] 2000. Age: 67, Address: 202 June Road, Stamford, CT
06903.
*H. Richard Vartabedian Trustee and President of MFIT. Investment Management Consultant,
formerly, Senior Investment Officer, Division Executive of the
Investment Management Division of The Chase Manhattan Bank, N.A., 1980
through 1991. Age: 64. Address: P.O. Box 296, Beach Road, Hendrick's
Head, Southport, ME 04576.
William J. Armstrong Trustee. Retired; formerly Vice President and Treasurer,
Ingersoll-Rand Company. Age: 58. Address: 49 Aspen Way, Upper Saddle
River, NJ 07458.
John R.H. Blum Trustee. Attorney in private practice; formerly, partner in the law
firm of Richards, O'Neil & Allegaert; Commissioner of Agriculture --
State of Connecticut, 1992-1995. Age: 70. Address: 322 Main Street,
Lakeville, CT 06039.
Roland R. Eppley, Jr. Trustee. Retired; formerly President and Chief Executive Officer,
Eastern States Bankcard Association Inc., (1971-1988); Director, Jenel
Hydraulics, Inc.; Director of The Hanover Funds, Inc. Age: 67.
Address: 105 Coventry Place, Palm Beach Gardens, FL 33418.
Stuart W. Cragin, Jr. Trustee. Retired; formerly President, Fairfield Testing Laboratory,
Inc. He has previously served in a variety of marketing, manufacturing
and general management positions with Union Camp Corp., Trinity Paper
& Plastics Corp., and Conover Industries. Age: 66 Address: 108 Valley
Road, Cos Cob, CT 06807
Joseph J. Harkins Trustee. Retired; formerly Commercial Sector Executive and Executive
Vice President of The Chase Manhattan Bank, N.A. from 1985 through
1989. He has been employed by Chase in numerous capacities and
officers since 1954. Director of Blessings Corporation, Jefferson
Insurance Company of New York, Monticello Insurance Company and
National. Age: 68. Address: 257 Plantation Circle South, Ponte Vedra
Beach, FL 32082.
*Sarah E. Jones Trustee. President and Chief Operating Officer of Chase Mutual Funds
Corp.; formerly Managing Director for the Global Asset Management and
Private Banking Division of The Chase
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<PAGE>
<CAPTION>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
---- ------------------------------------------
<S> <C>
Manhattan Bank. President, H&Q Trust since [______]. Age: 47. Address:
Chase Mutual Funds Corp., 1211 Avenue of the Americas, 41st Floor, New
York, New York 10081.
W.D. MacCallan Trustee. Director of The Adams Express Co. and Petroleum & Resources
Corp. Retired; formerly Chairman of the Board and Chief Executive
Officer of The Adams Express Co. and Petroleum & Resources Corp.;
Director of The Hanover Funds, Inc. and The Hanover Investment Funds,
Inc. Age: 72. Address: 624 East 45th Street, Savannah, GA 31405.
George E. McDavid Trustee. President, Houston Chronicle Publishing Company. Age: 69.
Address: P.O. Box 2558, Houston, TX 77252.
W. Perry Neff Trustee. Retired; Independent Financial Consultant; Director of North
America Life Assurance Co., Petroleum & Resources Corp. and The Adams
Express Co.; Director and Chairman of The Hanover Funds, Inc.;
Director, Chairman and President of The Hanover Investment Funds, Inc.
Age: 72. Address: RR 1 Box 102, Weston, VT 05181.
*Leonard M. Spalding, Jr. Trustee. Chief Executive Officer of Chase Mutual Funds Corp.; formerly
President and Chief Executive Officer of Vista Capital Management;
Chief Investment Executive of The Chase Manhattan Bank. Age: 64.
Address: Chase Mutual Funds Corp., One Chase Manhattan Plaza, Third
Floor, New York, New York 10081.
Richard E. Ten Haken Trustee. Chairman of the Audit Committee. Formerly District
Superintendent of Schools, Monroe No. 2 and Orleans Counties, New
York; Chairman of the Board and President, New York State Teachers'
Retirement System. Age: 65. Address: 4 Barnfield Road, Pittsford, NY
14534.
Irving L. Thode Trustee. Retired; formerly Vice President of Quotron Systems. He has
previously served in a number of executive positions with Control Data
Corp., including President of its Latin American Operations, and
General Manager of its Data Services business. Age: 69. Address: 80
Perkins Road, Greenwich, CT 06830.
</TABLE>
----------
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<PAGE>
NAME PRINCIPAL OCCUPATION AND OTHER INFORMATION
* Asterisks indicate those Trustees that are "Interested Persons" (as defined
in the 1940 Act). Mr. Reid is not an interested person of MFIT's investment
advisers or principal underwriter, but may be deemed an interested person
of MFIT solely by reason of being an officer of MFIT.
Set forth below as to each other executive officer of MFIT is his or her
name, age, principal occupation during the past five years and other
directorships held in public companies.
<TABLE>
<CAPTION>
NAME AND POSITION AGE PRINCIPAL OCCUPATION AND OTHER INFORMATION
----------------- --- ------------------------------------------
<S> <C> <C>
Martin R. Dean 37 Treasurer and Assistant Secretary. Associate Director,
Accounting Services, BISYS Fund Services; formerly Senior
Manager, KPMG Peat Marwick (1987-1994). Address: 3435
Stelzer Road, Columbus, OH 43219.
Lisa Hurley 45 Secretary. Senior Vice President and General Counsel, BISYS
Fund Services; formerly Counsel to Moore Capital Management
and General Counsel to Global Asset Management and Northstar
Investments Management. Address: 90 Park Avenue, New York,
NY 10016
Vicky M. Hayes 37 Assistant Secretary. Vice President and Global Marketing
Manager, Vista Fund Distributors, Inc.; formerly Assistant
Vice President, Alliance Capital Management and held various
positions with J. & W. Seligman & Co. Address: 1211 Avenue
of the Americas, 41st Floor, New York, NY 10081.
Alaina Metz 33 Assistant Secretary. Chief Administrative Officer, BISYS
Fund Services; formerly Supervisor, Blue Sky Department,
Alliance Capital Management L.P. Address: 3435 Stelzer Road,
Columbus, OH 43219.
</TABLE>
The Trustees and officers of MFIT appearing in the tables above also serve
in the same capacities with respect to Mutual Fund Group, Mutual Fund Trust,
Mutual Fund Variable Annuity Trust, Mutual Fund Select Group, Mutual Fund Select
Trust, Capital Growth Portfolio, Growth and Income Portfolio and International
Equity Portfolio.
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<PAGE>
TRANSACTIONS WITH AND REMUNERATION OF TRUSTEES AND OFFICERS
No compensation, direct or otherwise, other than through fees paid to
CFAM, is payable by MFIT to any of its officers or Trustees who are affiliated
with CFAM (or any of its affiliates).
CFAM, Symphony and their respective affiliates have had, and expect in
the future to have, banking and other business transactions in the ordinary
course of business with corporations of which those Trustees who are not
"interested persons" of CFAM or Symphony are directors or officers. Any such
transactions are made on substantially the same terms as those prevailing at the
time for comparable transactions with other persons, including, where
applicable, interest rates, collateral, fees and other charges, and do not
involve more than the normal risk of collectibility (in the case of loans) or
present other unfavorable features.
INFORMATION RELATING TO VOTING MATTERS
GENERAL INFORMATION
This Combined Prospectus/Proxy Statement is being furnished in
connection with the solicitation of proxies by the H&Q Trustees for use at the
Meeting. It is expected that the solicitation of proxies will be primarily by
mail. H&Q IPO Fund's officers and service providers may also solicit proxies by
telephone, facsimile machine, telegraph, the Internet or personal interview. In
addition H&Q IPO Fund may retain the services of professional solicitors to aid
in the solicitation of proxies for a fee. It is anticipated that banks,
brokerage houses and other custodians will be requested on behalf of H&Q IPO
Fund to forward solicitation materials to their principals to obtain
authorizations for the execution of proxies. Any H&Q Shareholder giving a proxy
may revoke it at any time before it is exercised by submitting to H&Q IPO Fund a
written notice of revocation or a subsequently executed proxy or by attending
the Meeting and electing to vote in person.
Only H&Q Shareholders of record at the close of business on [__________
__], 2000 (the "Record Date") will be entitled to vote at the Meeting. On that
date, there were outstanding and entitled to be voted [___________] H&Q Shares,
as follows:
CLASS OF H&Q IPO FUND NUMBER OF SHARES
Common Class Shares [_________]
Class A Shares [_________]
Class B Shares [_________]
The presence in person or by proxy of H&Q Shareholders that own
one-third of the aggregate outstanding H&Q Voting Units will constitute a quorum
for purposes of transacting all business at the Meeting. If a quorum is not
present at the Meeting, sufficient votes in favor of the Reorganization are not
received by the time scheduled for the Meeting, or the H&Q Shareholders
determine to adjourn the Meeting for any other reason, the H&Q Shareholders
present (in person or proxy) may adjourn the Meeting from time to time, without
notice other than announcement at the Meeting. Any such adjournment will require
the affirmative vote of
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<PAGE>
H&Q Shareholders holding a majority of the H&Q Shares present, in person or by
proxy, at the Meeting. The persons named in the Proxy will vote in favor of such
adjournment those H&Q Shares that they are entitled to vote if such adjournment
is necessary to obtain a quorum or if they determine such an adjournment is
desirable for any other reason. Business may be conducted once a quorum is
present and may continue until adjournment of the Meeting notwithstanding the
withdrawal or temporary absence of sufficient H&Q Shares to reduce the number
present to less than a quorum. It will not be necessary to obtain a quorum for
each class of shares to conduct business or vote on an adjournment; however, a
quorum of each class will be necessary to vote on the Reorganization.
PROXIES
All H&Q Shares represented by each properly signed proxy received prior
to the Meeting will be voted at the Meeting. If an H&Q Shareholder specifies how
the proxy is to be voted on any of the business to come before the Meeting, it
will be voted in accordance with such specifications. If an H&Q Shareholder
returns its proxy but no direction is made on the proxy, the proxy will be voted
FOR the Reorganization described in this Combined Prospectus/Proxy Statement.
H&Q Shareholders voting to ABSTAIN on the proposal will be treated as present
for purposes of achieving a quorum and in determining the votes cast on the
proposal, but not as having voted FOR the proposal. A properly signed proxy on
which a broker has indicated that it has no authority to vote on a proposal on
behalf of the beneficial owner (a "broker non-vote") will be treated as present
for purposes of achieving a quorum but will not be counted in determining the
votes cast on the proposal.
A proxy granted by any H&Q Shareholder may be revoked by such H&Q
Shareholder at any time prior to its use by written notice to H&Q 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 as proxies in accordance with their best judgment.
EXPENSES OF PROXY SOLICITATION
Chase, and not H&Q IPO Fund or Chase Vista H&Q IPO Fund, will bear the
cost of solicitation of proxies, including the cost of printing, preparing,
assembling and mailing the Notice of Meeting, Combined Prospectus/Proxy
Statement and form of proxy.
SHAREHOLDER APPROVALS
Approval of the Reorganization Plan requires the affirmative vote of
H&Q Shareholders holding a majority of each class of the H&Q Shares. If the
Reorganization is not approved by H&Q Shareholders of each class of H&Q Shares,
the H&Q Trustees will consider other appropriate courses of action, the
Reorganization will not be implemented and the H&Q Trustees will determine what
action H&Q IPO Fund will take.
INTERESTED PARTIES
On the Record Date, the trustees and officers of H&Q Trust as a group
owned less than 1% of the outstanding shares of H&Q IPO Fund.
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<PAGE>
On the Record Date, the name, address and percentage ownership of the
persons known to the H&Q IPO Fund who owned beneficially more than 5% of any
class of shares of H&Q IPO Fund and the percentage of any class of Chase Vista
H&Q IPO Fund Shares that would be owned by such persons upon consummation of the
Reorganization based upon their holdings on the Record Date are as follows:
<TABLE>
<CAPTION>
PERCENTAGE OF SHARE
CLASS OF CHASE VISTA
PERCENTAGE OF H&Q IPO FUND TO BE
H&Q IPO FUND SHARE NUMBER OF SHARES SHARE CLASS OWNED FOLLOWING
CLASS SHAREHOLDER NAME AND ADDRESS OWNED OWNED REORGANIZATION
------------------- ---------------------------- ---------------- ------------- --------------------
<S> <C> <C> <C> <C>
Common Class [ . ] % of
Shares [ ] [ ] [ ] Class A Shares
-------------------- ----------- -----------
Common Class [ . ] % of
Shares [ ] [ ] [ ] Class A Shares
-------------------- ----------- -----------
[ . ] % of
Class A Shares [ ] [ ] [ ] Class A Shares
-------------------- ----------- -----------
[ . ] % of
Class B Shares [ ] [ ] [ ] Class B Shares
-------------------- ----------- -----------
[ . ] % of
Class B Shares [ ] [ ] [ ] Class B Shares
-------------------- ----------- -----------
</TABLE>
ADDITIONAL INFORMATION ABOUT MFIT
Information about Chase Vista H&Q IPO Fund is included in a preliminary
prospectus that is incorporated by reference herein. Additional information
about MFIT, Chase Vista H&Q IPO Fund and the Reorganization is included in the
preliminary Statement of Additional Information dated [_______ __, ____] and the
Statement of Additional Information related to this Combined Prospectus/Proxy
Statement, each of which has been filed with the SEC and is incorporated herein
by reference. Copies of each Statement of Additional Information may be obtained
without charge by calling 1-800-5-CHASE-0 or 1-415-439-3000. MFIT is subject to
the requirements of the 1940 Act and, in accordance with such requirements,
files reports and other information with the SEC. These materials can be
inspected and copied at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices at 7 World Trade Center, Suite 1300, New York, NY 10048 and 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Branch, Office of Consumer Affairs
and Information Services, Securities and Exchange Commission, Washington, D.C.
20549, at prescribed rates, and is also available on the SEC's web site at
http://www.sec.gov.
ADDITIONAL INFORMATION ABOUT H&Q IPO FUND
Information about H&Q IPO Fund is included in the H&Q Prospectuses
dated September 15, 1999, as supplemented [_______ __], 2000, that is
incorporated by reference herein. Additional information about H&Q IPO Fund is
included in its Statement of Additional Information dated June 26, 2000, and the
Statement of Additional Information dated [_______ __], 2001 related to the
Combined Prospectus/Proxy Statement, which have been filed
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<PAGE>
with the SEC and which are incorporated herein by reference. Copies of each
Statement of Additional Information may be obtained without charge by calling
1-800-5-CHASE-0 or 1-415-439-3000. H&Q Trust is subject to the requirements of
the 1940 Act and, in accordance with such requirements, files reports and other
information with the SEC. These materials can be inspected and copied at the
Public Reference Facilities maintained by the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the SEC's Regional Offices at 7 World Trade
Center, Suite 1300, New York, NY 10048 and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material can also be obtained from the
Public Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
and is also available on the SEC's web site at http://www.sec.gov. After the
consummation of the Reorganization, H&Q Trust will be de-registered under the
1940 Act and will no longer be required to file reports with the SEC.
FINANCIAL STATEMENTS AND EXPERTS
The audited financial statements and notes thereto and financial
highlights of H&Q IPO Fund for the fiscal year ended September 30, 2000, are
incorporated by reference herein and into the Statement of Additional
Information related to this Combined Prospectus/Proxy Statement. The financial
statements and financial highlights for H&Q IPO Fund for the fiscal year ended
September 30, 2000 have been incorporated herein by reference in reliance on the
report of PricewaterhouseCoopers LLP, independent auditors, given on their
authority as experts in auditing and accounting.
Chase Vista H&Q IPO Fund was recently formed and has no assets.
Therefore, as of [_________ __], 2000, Chase Vista H&Q IPO Fund has not prepared
financial statements.
OTHER BUSINESS
The H&Q Trustees know of no other business to be brought before the
Meeting. However, if any other matters come before the Meeting, it is the
intention of the Trustees that proxies that do not contain specific restrictions
to the contrary will be voted on such matters in accordance with the judgment of
the persons named in the enclosed form of proxy.
LITIGATION
Neither H&Q IPO Fund nor MFIT is involved in any litigation which would
have any material adverse effect upon either H&Q IPO Fund or Chase Vista H&Q IPO
Fund.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to H&Q IPO Fund in writing at
the address on the cover page of this Combined Prospectus/Proxy Statement or by
telephoning (415) 439-3000.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE
REQUESTED TO DATE AND SIGN THE ENCLOSED PROXY AND
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<PAGE>
RETURN IT IN THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE
UNITED STATES.
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<PAGE>
APPENDIX A - AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this __th
day of _________, 2000 by Hambrecht & Quist Fund Trust (the "Transferor Trust"),
a Delaware business trust, on behalf of the H&Q IPO & Emerging Company Fund (the
"Transferor Portfolio") and Mutual Fund Investment Trust (the "Acquiring
Trust"), a Massachusetts business trust, on behalf of the Chase Vista H&Q IPO &
Emerging Company Fund (the "Acquiring Portfolio").
WHEREAS, the Trustees of the Transferor Trust have determined that the
transfer of all of the assets and liabilities of the Transferor Portfolio to the
Acquiring Portfolio is in the best interests of the Transferor Portfolio, as
well as the best interests of shareholders of the Transferor Portfolio, and that
the interests of existing shareholders would not be diluted as a result of this
transaction;
WHEREAS, the Board of Trustees of the Acquiring Trust has determined
that the acquisition of all of the assets and liabilities of the Transferor
Portfolio by the Acquiring Portfolio is in the best interests of the Acquiring
Portfolio, as well as the best interests of shareholders of the Acquiring Trust,
and that the interests of existing shareholders would not be diluted as a result
of this transaction;
WHEREAS, the Transferor Trust and the Acquiring Trust intend to provide
for the reorganization of the Transferor Portfolio (the "Reorganization")
through the acquisition by the Acquiring Portfolio of all of the assets, subject
to all of the liabilities, of the Transferor Portfolio in exchange for shares of
beneficial interest, par value $.01 per share, of the Acquiring Portfolio (the
"Acquiring Portfolio Shares"), the liquidation of the Transferor Portfolio and
the distribution to Transferor Portfolio shareholders of such Acquiring
Portfolio Shares, all pursuant to the provisions of Section 368(a)(1) of the
Internal Revenue Code of 1986, as amended (the "Code");
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the Transferor Trust, on behalf of the Transferor Portfolio, and the
Acquiring Trust, on behalf of the Acquiring Portfolio, hereto agree as follows:
1. TRANSFER OF ASSETS OF THE TRANSFEROR PORTFOLIO IN EXCHANGE FOR
THE ACQUIRING PORTFOLIO SHARES AND LIQUIDATION OF THE TRANSFEROR PORTFOLIO
(a) PLAN OF REORGANIZATION.
(i) The Transferor Trust, on behalf of the Transferor
Portfolio, will convey, transfer and deliver to the Acquiring
Portfolio all of the then existing assets of the Transferor
Portfolio (consisting, without limitation, of portfolio securities
and instruments, dividend and interest receivables, cash and other
assets). In consideration thereof, the Acquiring Trust, on behalf
of the Acquiring Portfolio will (A) assume and pay, to the extent
that they exist on or after the Effective Time of the
Reorganization (as defined in Section 1(b)(i) hereof), all of the
obligations and liabilities of the Transferor Portfolio and (B)
issue and deliver
<PAGE>
to the Transferor Portfolio full and fractional shares of
beneficial interest of the Acquiring Portfolio, with respect to
the Acquiring Portfolio equal to that number of full and
fractional Acquiring Portfolio Shares as determined in Section
1(c) hereof. The Acquiring Portfolio Shares issued and delivered
to the Transferor Portfolio shall be of various share classes,
with the amounts of shares of each class to be determined by the
parties. Any shares of capital stock (if any), par value $.001 per
share, of the Transferor Portfolio ("Transferor Portfolio Shares")
held in the treasury of the Transferor Trust at the Effective Time
of the Reorganization shall thereupon be retired. Such
transactions shall take place on the date provided for in Section
1(b) hereof (the "Exchange Date"). All computations for the
Transferor Portfolio and the Acquiring Portfolio shall be
performed by PFPC Trust Company, Inc. (the "Custodian"), as
custodian and pricing agent for the Transferor Portfolio and the
Acquiring Portfolio. The determination of said Custodian shall be
conclusive and binding on all parties in interest.
(ii) As of the Effective Time of the Reorganization, the
Transferor Portfolio will liquidate and distribute pro rata to its
shareholders of record ("Transferor Portfolio shareholders") as of
the Effective Time of the Reorganization the Acquiring Portfolio
Shares received by such Transferor Portfolio pursuant to Section
1(a)(i) in actual or constructive exchange for the shares of the
Transferor Portfolio held by the Transferor Portfolio
shareholders. Such liquidation and distribution will be
accomplished by the transfer of the Acquiring Portfolio Shares
then credited to the account of the Transferor Portfolio on the
books of the Acquiring Portfolio, to open accounts on the share
records of the Acquiring Portfolio in the names of the Transferor
Portfolio shareholders and representing the respective pro rata
number of the Acquiring Portfolio Shares due such shareholders.
The Acquiring Portfolio Shares which are distributed to each
Transferor Portfolio shareholder shall be of the same share class
as the Transferor Portfolio Shares owned by such Transferor
Portfolio shareholder; PROVIDED that the Common Class shareholders
in the Transferor Portfolio shall receive Class A shares in the
Acquiring Portfolio. The Acquiring Portfolio will not issue
certificates representing the Acquiring Portfolio Shares in
connection with such exchange.
(iii) As soon as practicable after the Effective Time of
the Reorganization, the Transferor Trust shall take all the
necessary steps under Delaware law, the Transferor Trust's
Declaration of Trust and any other applicable law to effect a
complete dissolution of the Transferor Portfolio and the
Transferor Trust.
(b) EXCHANGE DATE AND EFFECTIVE TIME OF THE REORGANIZATION.
(i) Subject to the satisfaction of the conditions to the
Reorganization specified in this Plan, the Reorganization shall be
effective as of the close of regularly scheduled trading on the
New York Stock Exchange (the "Effective Time of the
Reorganization") on ________, 2000, and shall be implemented at
the
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Effective Time of the Reorganization or on such later date as may
be agreed upon by the parties (the "Exchange Date").
(ii) All acts taking place on the Exchange Date shall be
deemed to take place simultaneously as of the Effective Time of
the Reorganization unless otherwise provided.
(iii) In the event that on the proposed Exchange Date (A)
the New York Stock Exchange shall be closed to trading or trading
thereon shall be restricted, or (B) trading or the reporting of
trading on said Exchange or elsewhere shall be disrupted so that
accurate valuation of the net assets of the Acquiring Portfolio or
the Transferor Portfolio is impracticable, the Exchange Date shall
be postponed until the first business day after the day when
trading shall have been fully resumed and reporting shall have
been restored.
(iv) On the Exchange Date, portfolio securities of the
Transferor Portfolio shall be transferred by the Custodian to the
accounts of the Acquiring Portfolio duly endorsed in proper form
for transfer, in such condition as to constitute good delivery
thereof in accordance with the custom of brokers, and shall be
accompanied by all necessary federal and state stock transfer
stamps or a check for the appropriate purchase price thereof.
(c) VALUATION.
(i) The net asset value of the shares of the Acquiring
Portfolio and the net value of the assets of the Transferor
Portfolio to be transferred in exchange therefore shall be
determined as of the Effective Time of the Reorganization. The net
asset value of the Acquiring Portfolio Shares shall be computed by
the Custodian in the manner set forth in the Acquiring Trust's
Declaration of Trust or By-laws and then current prospectus and
statement of additional information and shall be computed to not
less than two decimal places. The net value of the assets of the
Transferor Portfolio to be transferred shall be computed by the
Custodian by calculating the value of the assets transferred by
the Transferor Portfolio and by subtracting therefrom the amount
of the liabilities assigned and transferred to the Acquiring
Portfolio, said assets and liabilities to be valued in the manner
set forth in the Transferor Trust's Declaration of Trust or
By-laws and then current prospectus and statement of additional
information.
(ii) The number of Acquiring Portfolio Shares to be
issued (including fractional shares, if any) by the Acquiring
Portfolio in exchange for the Transferor Portfolio's assets shall
be determined by an exchange ratio computed by dividing the net
value of the Transferor Portfolio's assets by the net asset value
per share of the Acquiring Portfolio, both as determined in
accordance with Section 1(c)(i).
(iii) All computations of value shall be made by the
Custodian in accordance with its regular practice as pricing agent
for the Acquiring Portfolio and the Transferor Portfolio.
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2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PORTFOLIO
The Acquiring Trust, on behalf of the Acquiring Portfolio, represents and
warrants as follows:
(d) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a
business trust that is duly organized, validly existing and in
good standing under the laws of the Commonwealth of Massachusetts
and has the power to carry on its business as it is now being
conducted. The Acquiring Portfolio is a validly existing series of
shares of such business trust representing interests therein under
the laws of Massachusetts. The Acquiring Portfolio and the
Acquiring Trust has all necessary federal, state and local
authorization to own all of its properties and assets and to carry
on its business as now being conducted.
(e) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust
is registered under the Investment Company Act of 1940, as amended
(the "Act") as an open-end investment company of the management
type; such registration has not been revoked or rescinded and is
in full force and effect.
(f) CURRENT OFFERING DOCUMENTS. The current preliminary
prospectus and statement of additional information of the
Acquiring Trust with respect to the Acquiring Portfolio, each
dated [_________, 2000], as amended, included in the Acquiring
Trust's registration statement on Form N-1A filed with the
Commission, comply in all material respects with the requirements
of the Securities Act of 1933, as amended (the "Securities Act")
and the Act and do not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
(g) CAPITALIZATION. The Acquiring Trust has an unlimited
number of authorized shares of beneficial interest, par value
$.001 per share, of which as of [________], 2000 there were
outstanding ________ Class A shares and _________ Class B shares
of the Acquiring Portfolio, and no shares of such Acquiring
Portfolio were held in the treasury of the Acquiring Trust. All of
the outstanding shares of the Acquiring Trust have been duly
authorized and are validly issued, fully paid and nonassessable
(except as disclosed in the Acquiring Trust's prospectus and
recognizing that under Massachusetts law, shareholders of a
Acquiring Trust portfolio could, under certain circumstances, be
held personally liable for the obligations of such Acquiring Trust
portfolio). All such shares will, at the Exchange Date, be held by
the shareholders of record of the Acquiring Portfolio as set forth
on the books and records of the Acquiring Trust in the amounts set
forth therein, and as set forth in any list of shareholders of
record provided to the Transferor Portfolio for purposes of the
Reorganization, and no such shareholders of record will have any
preemptive rights to purchase any Acquiring Portfolio shares, and
the Acquiring Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any
Acquiring Portfolio shares (other than as set forth in this Plan),
nor are there outstanding any securities convertible into any
shares of the Acquiring Portfolio (except pursuant to any existing
conversion and exchange privileges described in the current
prospectus and statement of additional
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information of the Acquiring Trust). All of the issued and
outstanding shares of the Acquiring Portfolio have been offered
and sold in compliance in all material respects with applicable
registration requirements of the Securities Act and applicable
state securities laws.
(h) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring
Portfolio Shares to be issued in connection with the
Reorganization will be duly authorized and upon consummation of
the Reorganization will be validly issued, fully paid and
nonassessable (except as disclosed in the Acquiring Portfolio's
prospectus and recognizing that under Massachusetts law,
shareholders of a Acquiring Trust portfolio could, under certain
circumstances, be held personally liable for the obligations of
such portfolio).
(i) AUTHORITY RELATIVE TO THIS PLAN. The Acquiring Trust,
on behalf of the Acquiring Portfolio, has the power to enter into
this Plan and to carry out its obligations hereunder. The
execution and delivery of this Plan and the consummation of the
transactions contemplated hereby have been duly authorized by the
Acquiring Trust's Board of Trustees and no other proceedings by
the Acquiring Trust other than those contemplated under this Plan
are necessary to authorize its officers to effectuate this Plan
and the transactions contemplated hereby. The Acquiring Trust is
not a party to or obligated under any provision of its Declaration
of Trust or By-laws, or under any indenture or contract provision
or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its
execution and performance of this Plan in accordance with its
terms.
(j) LIABILITIES. There are no liabilities of the Acquiring
Portfolio, whether actual or contingent and whether or not
determined or determinable.
(k) LITIGATION. There are no claims, actions, suits or
proceedings pending or, to the knowledge of the Acquiring Trust,
threatened which would materially adversely affect the Acquiring
Trust or the Acquiring Portfolio's assets or business or which
would prevent or hinder consummation of the transactions
contemplated hereby, [there are no facts which would form the
basis for the institution of administrative proceedings against
the Acquiring Trust or the Acquiring Portfolio] and, to the
knowledge of the Acquiring Trust, there are no regulatory
investigations of the Acquiring Trust or the Acquiring Portfolio,
pending or threatened, other than routine inspections and audits.
(l) CONTRACTS. No default exists under any material
contract or other commitment to which the Acquiring Trust, on
behalf of the Acquiring Portfolio, is subject.
(m) NO APPROVALS REQUIRED. Except for the Registration
Statement (as defined in Section 4(a) hereof), an amendment to the
Registration Statement of the Acquiring Trust on Form N-1A,
certain "blue sky" securities law filings and the approval of the
Transferor Portfolio's shareholders (referred to in Section 6(a)
hereof), no consents, approvals, authorizations, registrations or
exemptions under federal or state laws are necessary for the
consummation by the Acquiring Trust of the Reorganization, except
such as have been obtained as of the date hereof.
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<PAGE>
3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR PORTFOLIO
The Transferor Trust, on behalf of the Transferor Portfolio, represents and
warrants as follows:
(n) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a
business trust that is duly organized, validly existing and in
good standing under the laws of the State of Delaware and has the
power to carry on its business as it is now being conducted. The
Transferor Portfolio is a validly existing series of shares of
such business trust representing interests therein under the laws
of the State of Delaware. The Transferor Portfolio and the
Transferor Trust has all necessary federal, state and local
authorization to own all of its properties and assets and to carry
on its business as now being conducted.
(o) REGISTRATION AS INVESTMENT COMPANY. The Transferor
Trust is registered under the Act as an open-end investment
company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
(p) CURRENT OFFERING DOCUMENTS. The current prospectuses
and statement of additional information of the Transferor
Portfolio, dated September 15, 1999 and June 26, 2000,
respectively, included in the Transferor Trust's registration
statement on Form N-1A filed with the Commission, as supplemented
on [_______ __, 200_], comply in all material respects with the
requirements of the Securities Act and the Act and do not contain
an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(q) CAPITALIZATION. The Transferor Trust has an unlimited
number of authorized shares of beneficial interest, par value
$.001 per share, of which as of [__________], 2000 there were
outstanding [_____________] common class shares, [_____________]
Class A shares and [_____________] Class B shares of the
Transferor Portfolio, and no shares of such Transferor Portfolio
were held in the treasury of the Transferor Trust. All of the
outstanding shares of the Transferor Trust have been duly
authorized and are validly issued, fully paid and nonassessable
(except as disclosed in the Transferor Trust's prospectus).
Because the Transferor Trust is an open-end investment company
engaged in the continuous offering and redemption of its shares,
the number of outstanding shares may change prior to the Effective
Time of the Reorganization. All such shares will, at the Exchange
Date, be held by the shareholders of record of the Transferor
Portfolio as set forth on the books and records of the Transferor
Trust in the amounts set forth therein, and as set forth in any
list of shareholders of record provided to the Acquiring Portfolio
for purposes of the Reorganization, and no such shareholders of
record will have any preemptive rights to purchase any Transferor
Portfolio shares, and the Transferor Portfolio does not have
outstanding any options, warrants or other rights to subscribe for
or purchase any Transferor Portfolio shares (other than as set
forth in this Plan), nor are there outstanding any securities
convertible into any shares of the Transferor Portfolio (except
pursuant to any existing conversion and exchange privileges
described in the current prospectus and statement of additional
information of the
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<PAGE>
Transferor Portfolio). All of the Transferor Portfolio's issued
and outstanding shares have been offered and sold in compliance in
all material respects with applicable registration requirements of
the Securities Act and applicable state securities laws.
(r) FINANCIAL STATEMENTS. The financial statements for the
Transferor Trust with respect to the Transferor Portfolio for the
fiscal year ended September 30, 2000, which have been audited by
PricewaterhouseCoopers LLP, fairly present the financial position
of the Transferor Portfolio as of the dates thereof and the
respective results of operations and changes in net assets for
each of the periods indicated in accordance with GAAP.
(s) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust,
on behalf of the Transferor Portfolio, has the power to enter into
this Plan and to carry out its obligations hereunder. The
execution and delivery of this Plan and the consummation of the
transactions contemplated hereby have been duly authorized by the
Transferor Trust's Board of Trustees and no other proceedings by
the Transferor Trust other than those contemplated under this Plan
are necessary to authorize its officers to effectuate this Plan
and the transactions contemplated hereby. The Transferor Trust is
not a party to or obligated under any provision of its Declaration
of Trust or By-laws, or under any indenture or contract provision
or any other commitment or obligation, or subject to any order or
decree, which would be violated by or which would prevent its
execution and performance of this Plan in accordance with its
terms.
(t) LIABILITIES. There are no liabilities of the Transferor
Portfolio, whether actual or contingent and whether or not
determined or determinable, other than liabilities disclosed or
provided for in the Transferor Trust's financial statements with
respect to the Transferor Portfolio and liabilities incurred in
the ordinary course of business subsequent to September 30, 2000
or otherwise previously disclosed to the Transferor Trust with
respect to the Transferor Portfolio, none of which has been
materially adverse to the business, assets or results of
operations of the Transferor Portfolio.
(u) NO MATERIAL ADVERSE CHANGE. Since September 30, 2000,
there has been no material adverse change in the financial
condition, results of operations, business, properties or assets
of the Transferor Portfolio, other than those occurring in the
ordinary course of business (for these purposes, a decline in net
asset value and a decline in net assets due to redemptions do not
constitute a material adverse change).
(v) LITIGATION. There are no claims, actions, suits or
proceedings pending or, to the knowledge of the Transferor Trust,
threatened which would materially adversely affect the Transferor
Trust or the Transferor Portfolio's assets or business or which
would prevent or hinder consummation of the transactions
contemplated hereby, [there are no facts which would form the
basis for the institution of administrative proceedings against
the Transferor Trust or the Transferor Portfolio] and, to the
knowledge of the Transferor Trust, there are no regulatory
investigations of the Transferor Trust or the Transferor
Portfolio, pending or threatened, other than routine inspections
and audits.
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<PAGE>
(w) CONTRACTS. The Transferor Trust, on behalf of the
Transferor Portfolio, is not subject to any contracts or other
commitments (other than this Plan) which will not be terminated
with respect to the Transferor Portfolio without liability to the
Transferor Trust or the Transferor Portfolio as of or prior to the
Effective Time of the Reorganization.
(x) TAXES. The federal income tax returns of the Transferor
Trust with respect to the Transferor Portfolio, and all other
income tax returns required to be filed by the Transferor Trust
with respect to each Transferor Portfolio, have been filed for all
taxable years to and including September 30, [2000], and all taxes
payable pursuant to such returns have been paid. To the knowledge
of the Transferor Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All
federal and other taxes owed by the Transferor Trust with respect
to the Transferor Portfolio have been paid so far as due.
(y) NO APPROVALS REQUIRED. Except for the Registration
Statement (as defined in Section 4(a) hereof) and the approval of
the Transferor Portfolio's shareholders referred to in Section
6(a) hereof, no consents, approvals, authorizations, registrations
or exemptions under federal or state laws are necessary for the
consummation by the Transferor Trust of the Reorganization, except
such as have been obtained as of the date hereof.
4. COVENANTS OF THE ACQUIRING PORTFOLIO
The Acquiring Trust, on behalf of the Acquiring Portfolio, covenants to the
following:
(z) REGISTRATION STATEMENT. On behalf of the Acquiring
Portfolio, the Acquiring Trust shall file or has filed with the
Commission a Registration Statement on Form N-14 (the
"Registration Statement") under the Securities Act relating to the
Acquiring Portfolio Shares issuable hereunder and the proxy
statement of the Transferor Portfolio relating to the meeting of
the Transferor Portfolio's shareholders referred to in Section
5(a) herein. At the time the Registration Statement becomes
effective, the Registration Statement (i) will comply in all
material respects with the provisions of the Securities Act and
the rules and regulations of the Commission thereunder (the
"Regulations") and (ii) will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading; and at the time the Registration Statement becomes
effective, at the time of the Transferor Portfolio shareholders'
meeting referred to in Section 5(a) hereof, and at the Effective
Time of the Reorganization, the prospectus/proxy statement (the
"Prospectus") and statement of additional information (the
"Statement of Additional Information") included therein, as
amended or supplemented by any amendments or supplements filed by
the Acquiring Trust, will not contain an untrue statement of a
material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which
they were made, not misleading.
(aa) COOPERATION IN EFFECTING REORGANIZATION. The
Acquiring Portfolio agrees to use all reasonable efforts to
effectuate the Reorganization, to continue in
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<PAGE>
operation thereafter, and to obtain any necessary regulatory
approvals for the Reorganization. The Acquiring Portfolio shall
furnish such data and information relating to the Acquiring
Portfolio as shall be reasonably requested for inclusion in the
information to be furnished to the Transferor Portfolio
shareholders in connection with the meeting of the Transferor
Portfolio's shareholders for the purpose of acting upon this Plan
and the transactions contemplated herein.
(bb) OPERATIONS IN THE ORDINARY COURSE. Except as
otherwise contemplated by this Plan, of the Acquiring Portfolio
shall conduct its business in the ordinary course until the
consummation of the Reorganization, it being understood that such
ordinary course of business will include the declaration and
payment of customary dividends and distributions.
5. COVENANTS OF THE TRANSFEROR PORTFOLIO
The Transferor Trust, on behalf of the Transferor Portfolio, covenants to the
following:
(cc) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS.
The Transferor Trust shall call and hold a meeting of the
shareholders of the Transferor Portfolio for the purpose of acting
upon this Plan and the transactions contemplated herein.
(dd) REGISTRATION STATEMENT. In connection with the
preparation of the Registration Statement, the Transferor
Portfolio will cooperate with the Acquiring Portfolio and will
furnish to the Acquiring Trust the information relating to the
Transferor Portfolio required by the Securities Act and the
Regulations to be set forth in the Registration Statement
(including the Prospectus and Statement of Additional
Information). At the time the Registration Statement becomes
effective, the Registration Statement, insofar as it relates to
the Transferor Portfolio, (i) will comply in all material respects
with the provisions of the Securities Act and the Regulations and
(ii) will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and at
the time the Registration Statement becomes effective, at the time
of the Transferor Portfolio's shareholders' meeting referred to in
Section 5(a) and at the Effective Time of the Reorganization, the
Prospectus and Statement of Additional Information, as amended or
supplemented by any amendments or supplements filed by the
Acquiring Trust, insofar as they relate to the Transferor
Portfolio, will not contain an untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the representations
and warranties in this subsection shall apply only to statements
in or omissions from the Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in
conformity with information furnished by the Transferor Portfolio
for use in the Registration Statement, Prospectus or Statement of
Additional Information as provided in this Section 5(c).
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<PAGE>
(ee) COOPERATION IN EFFECTING REORGANIZATION. The
Transferor Portfolio agrees to use all reasonable efforts to
effectuate the Reorganization and to obtain any necessary
regulatory approvals for the Reorganization.
(ff) OPERATIONS IN THE ORDINARY COURSE. Except as otherwise
contemplated by this Plan, the Transferor Portfolio shall conduct
its business in the ordinary course until the consummation of the
Reorganization, it being understood that such ordinary course of
business will include the declaration and payment of customary
dividends and distributions.
(gg) STATEMENT OF EARNINGS AND PROFITS. As promptly as
practicable, but in any case within 60 days after the Exchange
Date, the Transferor Trust on behalf of the Transferor Portfolio,
shall prepare a statement of the earnings and profits of the
Transferor Portfolio for federal income tax purposes, and of any
capital loss carryovers and other items that the Acquiring
Portfolio will succeed to and take into account as a result of
Section 381 of the Code.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRANSFEROR
PORTFOLIO
The obligations of the Transferor Trust, on behalf of the
Transferor Portfolio, with respect to the consummation of the Reorganization are
subject to the satisfaction of the following conditions:
(hh) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS.
This Plan and the transactions contemplated by the Reorganization
shall have been approved by the requisite vote of the shares of
the Transferor Portfolio entitled to vote on the matter
("Transferor Shareholder Approval").
(ii) COVENANTS, WARRANTIES AND REPRESENTATIONS. The
Acquiring Portfolio shall have complied with each of its covenants
contained herein and each of the representations and warranties
contained herein shall be true in all material respects as of the
Effective Time of the Reorganization (except as otherwise
contemplated herein).
(jj) REGULATORY APPROVAL. The Registration Statement shall
have been declared effective by the Commission and no stop orders
under the Securities Act pertaining thereto shall have been
issued, and all other approvals, registrations, and exemptions
under federal and state laws considered to be necessary shall have
been obtained (collectively, the "Regulatory Approvals").
(kk) TAX OPINION. The Acquiring Trust shall have received
the opinion of Howard Rice Nemerovski Canady Falk & Rabkin, A
Professional Corporation, dated on or before the Exchange Date,
addressed to and in form and substance satisfactory to the
Acquiring Trust, as to certain of the federal income tax
consequences under the Code of the Reorganization, insofar as it
relates to the Transferor Portfolio and the Acquiring Portfolio,
and to shareholders of each Transferor Portfolio (the "Tax
Opinion"). For purposes of rendering the Tax Opinion, Howard Rice
Nemerovski Canady Falk & Rabkin, A Professional Corporation, may
rely exclusively and without independent
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<PAGE>
verification, as to factual matters, upon the statements made in
this Plan, the Prospectus and Statement of Additional Information,
and upon such other written representations as the President or
Treasurer of each if the Transferor Trust and the Acquiring Trust
will have verified as of the Effective Time of the Reorganization.
[The Tax Opinion will be to the effect that, based on the facts
and assumptions stated therein, for federal income tax purposes:
(i) the Reorganization will constitute a reorganization within the
meaning of section 368(a)(1) of the Code with respect to the
Transferor Portfolio and the Acquiring Portfolio; (ii) no gain or
loss will be recognized by any of the Transferor Portfolio or the
Acquiring Portfolio upon the transfer of all the assets and
liabilities, if any, of the Transferor Portfolio to the Acquiring
Portfolio solely in exchange for shares of the Acquiring Portfolio
or upon the distribution of the shares of the Acquiring Portfolio
to the holders of the shares of the Transferor Portfolio solely in
exchange for all of the shares of the Transferor Portfolio; (iii)
no gain or loss will be recognized by shareholders of the
Transferor Portfolio upon the exchange of shares of such
Transferor Portfolio solely for shares of the Acquiring Portfolio;
(iv) the holding period and tax basis of the shares of the
Acquiring Portfolio received by each holder of shares of the
Transferor Portfolio pursuant to the Reorganization will be the
same as the holding period and tax basis of shares of the
Transferor Portfolio held by the shareholder (provided the shares
of the Transferor Portfolio were held as a capital asset on the
date of the Reorganization) immediately prior to the
Reorganization; and (v) the holding period and tax basis of the
assets of the Transferor Portfolio acquired by the Acquiring
Portfolio will be the same as the holding period and tax basis of
those assets to the Transferor Portfolio immediately prior to the
Reorganization.]
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING
PORTFOLIO
The obligations of the Acquiring Trust, on behalf of the Acquiring Portfolio,
with respect to the consummation of the Reorganization are subject to the
satisfaction of the following conditions:
(ll) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS.
The Transferor Shareholder Approval shall have been obtained.
(mm) COVENANTS, WARRANTIES AND REPRESENTATIONS. The
Transferor Portfolio shall have complied with each of its
covenants contained herein, each of the representations and
warranties contained herein shall be true in all material respects
as of the Effective Time of the Reorganization (except as
otherwise contemplated herein), [and there shall have been no
material adverse change (as described in Section 3(h) in the
financial condition, results of operations, business, properties
or assets of the Transferor Portfolio since September 30, 2000.]
(nn) REGULATORY APPROVAL. The Regulatory Approvals shall
have been obtained.
(oo) DISTRIBUTION OF INCOME AND GAINS. The Transferor
Trust, on behalf of the Transferor Portfolio, shall have
distributed to the shareholders of the Transferor Portfolio all of
the Transferor Portfolio's investment company taxable income
(without
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regard to the deductions for dividends paid) as defined in Section
852(b)(2) of the Code for its taxable year ending on the Exchange
Date and all of its net capital gain as such term is used in
Section 852(b)(3) of the Code, after reduction by any capital loss
carryforward, for its taxable year ending on the Exchange Date.
(pp) TAX OPINION. The Transferor Trust shall have
received the Tax Opinion addressed to and in form and substance
satisfactory to the Transferor Trust,.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(qq) AMENDMENTS. The parties hereto may, by agreement in
writing authorized by the Board of Trustees of each of the
Acquiring Trust and the Transferor Trust amend this Plan at any
time before or after approval hereof by the shareholders of the
Transferor Portfolio, but after such approval, no amendment shall
be made which substantially changes the terms hereof.
(rr) WAIVERS. At any time prior to the Effective Time of
the Reorganization, either the Transferor Portfolio or the
Acquiring Portfolio may by written instrument signed by it (i)
waive any inaccuracies in the representations and warranties made
to it contained herein and (ii) waive compliance with any of the
covenants or conditions made for its benefit contained herein,
except that conditions set forth in Sections 6(c) and 7(d) may not
be waived.
(ss) TERMINATION BY THE TRANSFEROR PORTFOLIO. The
Transferor Trust, on behalf of the Transferor Portfolio, may
terminate this Plan with respect to the Transferor Portfolio at
any time prior to the Effective Time of the Reorganization by
notice to the Acquiring Portfolio, the Acquiring Trust and The
Chase Manhattan Bank if (i) a material condition to the
performance of the Transferor Portfolio hereunder or a material
covenant of the Acquiring Portfolio contained herein shall not be
fulfilled on or before the date specified for the fulfillment
thereof or (ii) a material default or material breach of this Plan
shall be made by the Acquiring Portfolio.
(tt) TERMINATION BY THE ACQUIRING PORTFOLIO. The Acquiring
Trust, on behalf of the Acquiring Portfolio, may terminate this
Plan with respect to the Acquiring Portfolio at any time prior to
the Effective Time of the Reorganization by notice to the
Transferor Portfolio, the Transferor Trust and The Chase Manhattan
Bank if (i) a material condition to the performance of the
Acquiring Portfolio hereunder or a material covenant of the
Transferor Portfolio contained herein shall not be fulfilled on or
before the date specified for the fulfillment thereof or (ii) a
material default or material breach of this Plan shall be made by
the Transferor Portfolio.
(uu) TERMINATION BY EITHER TRUST. This Plan may be
terminated by either the Acquiring Trust or the Transferor Trust
at any time prior to the Effective Time of the Reorganization,
whether before or after approval of this Plan by the shareholders
of the Transferor Portfolio, without liability on the part of any
party hereto, its Trustees, officers or shareholders or The Chase
Manhattan Bank on notice to the other parties in the event
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<PAGE>
that the Board of Trustees of such party determines that
proceeding with this Plan is not in the best interests of the
shareholders of (x) in the case of the Transferor Trust, the
Transferor Portfolio or (y) in the case of the Acquiring Trust,
the Acquiring Portfolio.
(vv) SURVIVAL. No representations, warranties or
covenants in or pursuant to this Plan, except for the provisions
of Section 5(f) and Section 9 of this Plan, shall survive the
Reorganization.
9. EXPENSES
The expenses of the Reorganization will be borne by The Chase Manhattan
Bank. Such expenses include, without limitation, (i) expenses incurred in
connection with the entering into and the carrying out of the provisions of this
Plan; (ii) expenses associated with the preparation and filing of the
Registration Statement; (iii) fees and expenses of preparing and filing such
forms as are necessary under any applicable state securities laws in connection
with the Reorganization; (iv) postage; (v) printing; (vi) accounting fees; (vii)
legal fees, (viii) solicitation costs relating to the Reorganization; (ix) any
insurance coverage provided for the trustees of the Transferor Trust; (x) any
payments for the service providers to the Transferor Portfolio in connection
with the termination of the relationship with such service provider and (ix) any
out-of-pocket post-closing costs incurred by the Transferor Trust in connection
with its dissolution or otherwise.
10. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Plan shall be in writing and shall be given by hand, certified
mail or by facsimile transmission, shall be deemed given when received and shall
be addressed to the parties hereto at their respective addresses listed below or
to such other persons or addresses as the relevant party shall designate as to
itself from time to time in writing delivered in like manner:
if to the Acquiring Trust (for itself or on behalf of the Acquiring Portfolio):
1211 Avenue of the Americas
41st Floor
New York, New York 10036
Attention: [________________]
WITH A COPY TO:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Cynthia G. Cobden, Esq.
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
One Bush Street
San Francisco, California 94104
Attention: [___________________]
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<PAGE>
WITH A COPY TO:
Howard Rice Nemerovski Canady Falk & Rabkin, A Professional
Corporation
Three Embarcadero Center
Seventh Floor
San Francisco, California 94111-4065
Attention: Andre W. Brewster, Esq.
if to The Chase Manhattan Bank:
1211 Avenue of the Americas
41st Floor
New York, New York 10036
Attention: [________________]
WITH A COPY TO:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Cynthia G. Cobden, Esq.
11. RELIANCE
All covenants and agreements made under this Plan shall be deemed to
have been material and relied upon by the Transferor Portfolio, the Transferor
Trust, the Acquiring Portfolio and the Acquiring Trust notwithstanding any
investigation made by such party or on its behalf.
12. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
(ww) The section and paragraph headings contained in this
Plan are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Plan.
(xx) This Plan may be executed in any number of
counterparts, each of which shall be deemed an original.
(yy) This Plan shall be governed by and construed in
accordance with the laws of [the Commonwealth of Massachusetts].
(zz) This Plan shall bind and inure to the benefit of the
Transferor Trust, the Transferor Portfolio, the Acquiring Trust and the
Acquiring Portfolio and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder
shall be made by any party without the written consent of the other
parties. Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, firm or corporation, other
than the parties hereto and their respective successors and assigns,
any rights or remedies under or by reason of this Plan.
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<PAGE>
(aaa) The name "Mutual Fund Investment Trust" is the
designation of the Trustees of the Acquiring Trust under a Declaration
of Trust dated October 1, 1996, as amended, and all persons dealing
with the Acquiring Trust must look solely to the Acquiring Trust's
property for the enforcement of any claims against the Acquiring Trust,
as none of the Trustees, officers, agents and shareholders of the
Acquiring Trust assume any personal liability for obligations entered
into on behalf of the Acquiring Trust. No series of the Acquiring Trust
shall be liable for claims against any other series of the Acquiring
Trust.
(bbb) [H&Q disclaimer]
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Plan as of the
date first above written.
HAMBRECHT & QUIST FUND TRUST
on behalf of the Transferor Portfolio
By:
--------------------------------
Name:
Title:
MUTUAL FUND INVESTMENT TRUST
on behalf of the Acquiring Portfolio
By:
--------------------------------
Name:
Title:
Agreed and acknowledged with respect to Section 9:
THE CHASE MANHATTAN BANK
By:
------------------------------
Name:
Title:
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<PAGE>
H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST
C/O ONE BUSH STREET
SAN FRANCISCO, CA 94104
(415) 439-3000
CHASE VISTA H&Q IPO & EMERGING COMPANY FUND
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NY 10036
(800) 5-CHASE-0
STATEMENT OF ADDITIONAL INFORMATION
(SPECIAL MEETING OF SHAREHOLDERS OF
H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST)
This Statement of Additional Information is not a prospectus but should be
read in conjunction with the Combined Prospectus/Proxy Statement dated
[________ __], 2000 for the Special Meeting of Shareholders of H&Q IPO &
Emerging Company Fund ("H&Q IPO Fund"), a series of Hambrecht & Quist Fund Trust
("H&Q Trust"), to be held on [________ __], 2001. Copies of the Combined
Prospectus/Proxy Statement may be obtained at no charge by calling H&Q IPO Fund
at 1-415-439-3000.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the Combined
Prospectus/Proxy Statement.
Further information about MFIT and Chase Vista H&Q IPO & Emerging Company
Fund is contained in MFIT's Statement of Additional Information dated
[________ __], 2000, which is incorporated herein by reference (the "MFIT
Statement of Additional Information")..
The date of this Statement of Additional Information is [________ __],
2000.
<PAGE>
TABLE OF CONTENTS
PAGE
General Information...........................................................1
Financial Statements..........................................................2
Pro Forma Financial Statements................................................3
i
<PAGE>
GENERAL INFORMATION
The Shareholders of H&Q IPO Fund are being asked to approve or disapprove
an Agreement and Plan of Reorganization (the "Reorganization Plan") dated as of
[________ __], 2000 by and between Mutual Fund Investment Trust ("MFIT"), on
behalf of Chase Vista H&Q IPO Fund, and H&Q Trust, on behalf of H&Q IPO Fund,
and the transactions contemplated thereby. The Reorganization Plan contemplates
the transfer of all of the assets and liabilities of H&Q IPO Fund to Chase Vista
H&Q IPO Fund in exchange for shares issued by MFIT in Chase Vista H&Q IPO Fund
that will have an aggregate net asset value equal to the aggregate net asset
value of the shares of H&Q IPO Fund that are outstanding immediately before the
Effective Time of the Reorganization.
Following the exchange, H&Q IPO Fund will make a liquidating distribution
of Chase Vista H&Q IPO Fund shares to its shareholders, so that (a) a holder of
Common Class or Class A Shares in H&Q IPO Fund will receive Class A Shares of
Chase Vista H&Q IPO Fund and (b) a holder of Class B shares in H&Q Fund will
receive Class B Shares in Chase Vista H&Q IPO Fund, in each case of equal value,
plus the right to receive any unpaid dividends and distributions that were
declared before the Effective Time of the Reorganization. Upon completion of the
Reorganization, H&Q Trust will be dissolved under state law and will de-register
under the 1940 Act.
A Special Meeting of shareholders of H&Q IPO Fund to consider the
Reorganization Plan and the related transaction will be held at the offices of
The Chase Manhattan Bank, 1211 Avenue of the Americas, 41st Floor, New York,
New York, 10036 on February 8, 2001 at 11:00 a.m., (Eastern time). For further
information about the transaction, see the Combined Prospectus/Proxy Statement.
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<PAGE>
FINANCIAL STATEMENTS
The audited financial statements and notes thereto of H&Q IPO Fund
contained in its Annual Report to Shareholders dated September 30, 2000, are
incorporated by reference into this Statement of Additional Information related
to this Combined Prospectus/Proxy Statement. The financial statements and notes
thereto which appear in H&Q IPO Fund's Annual Report to Shareholders have been
audited by PricewaterhouseCoopers LLP, whose report thereon also appears in such
Annual Report and is also incorporated herein by reference. No other parts of
the Annual Report are incorporated herein by reference. The financial statements
and notes thereto for H&Q IPO Fund for the fiscal year ended September 30, 2000
have been incorporated herein by reference in reliance on the report of
PricewaterhouseCoopers LLP, independent auditors, given on their authority as
experts in auditing and accounting.
Chase Vista H&Q IPO Fund was recently formed and has no material assets.
Therefore, as of [_________ __], 2000, Chase Vista H&Q IPO Fund has not prepared
financial statements.
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<PAGE>
PRO FORMA FINANCIAL STATEMENTS
[TO BE INSERTED]
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<PAGE>
FORM N-14
PART C - OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
Reference is hereby made to Article V of the Registrant's Declaration of
Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the Registrant
may indemnify any person who was or is a Trustee, officer or employee of the
Registrant to the maximum extent permitted by law; provided, however, that any
such indemnification (unless ordered by a court) shall be made by the Registrant
only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the proceeding, or (ii) if the required
quorum is not obtainable or, if a quorum of such Trustees so directs, by
independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies for actions
based upon the Investment Company Act of 1940 may be concerned, such payments
will be made only on the following conditions: (i) the advances must be limited
to amounts used, or to be used, for the preparation or presentation of a defense
to the action, including costs connected with the preparation of a settlement;
(ii) advances may be made only upon receipt of a written promise by, or on
behalf of, the recipient to repay that amount of the advance which exceeds that
amount to which it is ultimately determined that he is entitled to receive from
the Registrant by reason of indemnification; and (iii) (a) such promise must be
secured by a surety bond, other suitable insurance or an equivalent form of
security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to trustees, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer or
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<PAGE>
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of it counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS.
1 Declaration of Trust of MFIT. (1)
2 By-laws of MFIT. (1)
3 None
4 Plan of Reorganization filed herewith as Appendix A to the Combined
Prospectus/Proxy Statement.
5 Declaration of Trust and By-laws of MFIT. (1)
6(a) Form of CFAM Advisory Agreement.
6(b) Form of Symphony Sub-Advisory Agreement between Chase Fleming Asset
Management (USA) Inc. and Symphony Asset Management, LLC.
7 Distribution and Sub-Administration Agreement dated August 21,
1995. (6)
8(a) Retirement Plan for Eligible Trustees. (6)
8(b) Deferred Compensation Plan for Eligible Trustees. (6)
9 Form of Custodian Agreement. (1)
10(a) Forms of Rule 12b-1 Distribution Plans including Selected Dealer
Agreements and Shareholder Service Agreements. (1) and (3)
10(b) Form of Rule 12b-1 Distribution Plan (including forms of Selected
Dealer Agreement and Shareholder Servicing Agreement). (6)
-2-
<PAGE>
11 None
12 Opinion and Consent of Howard Rice Nemerovski Canady Falk & Rabkin, A
Professional Corporation as to Tax Consequences.
13(a) Form of Transfer Agency Agreement. (1)
13(b) Form of Shareholder Servicing Agreement. (6)
13(c) Form of Administration Agreement. (6)
14 Consent of PricewaterhouseCoopers LLC
15 None
16 None
17(a) Form of Proxy Card.
17(b)(i) Prospectus for H&Q IPO & Emerging Company Fund (Common Class
Shares) dated [__________ __], 2000, as supplemented through
[_______ __,] 2000.
17(b)(ii) Prospectus for H&Q IPO & Emerging Company Fund (Class A and
Class B Shares) dated September 15, 1999, 2000, as supplemented
through [_______ __,] 2000.
17(b)(iii) Prospectus for H&Q IPO & Emerging Company Fund (Class B Shares)
dated [__________ __], 2000, as supplemented through [_______ __,]
2000.
17(b)(iv) Preliminary Prospectus for Chase Vista H&Q IPO & Emerging
Company Fund (Class A Shares and Class B Shares) dated
[__________], 2000.
17(c) Statement of Additional Information of H&Q Trust.
17(d) Statement of Additional Information of MFIT dated
[_______ __,____]
17(e) Annual Report to Shareholders of H&Q IPO & Emerging Company Fund
dated
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<PAGE>
[__________ __], 2000.
ITEM 17. UNDERTAKINGS.
(1) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is
part of this registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, as amended (the "1933 Act"), the reoffering
prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other
items of the applicable form.
(2) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (1), above, will be filed as part of an amendment to
the registration statement and will not be used until the amendment
is effective, and that, in determining any liability under the 1933
Act, each post-effective amendment shall be deemed to be a new
registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the
initial bona fide offering of them.
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<PAGE>
SIGNATURES
As required by the Securities Act of 1933, this registration statement
has been signed on behalf of the registrant, in the City of New York and the
State of New York, on the [____] day of [________, _____].
MUTUAL FUND INVESTMENT TRUST
Registrant
By:
-------------------------
H. Richard Vartabedian
President
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<PAGE>
As required by the Securities Act of 1933, as amended, this registration
statement has been signed below by the following persons in the capacities and
on the dates indicated.
[_______ __], 2000
-----------------------------------------
Fergus Reid, III
Chairman and Trustee
[_______ __], 2000
-----------------------------------------
H. Richard Vartabedian
President and Trustee
[_______ __], 2000
-----------------------------------------
William J. Armstrong
Trustee
[_______ __], 2000
-----------------------------------------
John R. H. Blum
Trustee
[_______ __], 2000
-----------------------------------------
Stuart W. Cragin, Jr.
Trustee
[_______ __], 2000
-----------------------------------------
Roland R. Eppley, Jr.
Trustee
[_______ __], 2000
-----------------------------------------
Joseph J. Harkins
Trustee
[_______ __], 2000
-----------------------------------------
Sarah E. Jones
Trustee
[_______ __], 2000
-----------------------------------------
W.D. MacCallan
Trustee
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<PAGE>
[_______ __], 2000
-----------------------------------------
George E. McDavid
Trustee
[_______ __], 2000
-----------------------------------------
W. Perry Neff
Trustee
[_______ __], 2000
-----------------------------------------
Leonard M. Spalding, Jr.
Trustee
[_______ __], 2000
-----------------------------------------
Irving L. Thode
Trustee
[_______ __], 2000
-----------------------------------------
Richard E. Ten Haken
Trustee
[_______ __], 2000
-----------------------------------------
Martin R. Dean
Treasurer and Principal
Financial Officer
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<PAGE>
EXHIBITS
ITEM DESCRIPTION
(6) (a) Form of CFAM Advisory Agreement.
(b) Form of Symphony Sub-Advisory Agreement between Chase
Fleming Asset Management (USA) Inc. and Symphony Asset
Management, LLC.
(12) Opinion and Consent of Howard Rice Nemerovski Canady Falk &
Rabkin, A Professional Corporation, as to Tax Consequences.
(14) Consent of PricewaterhouseCoopers LLP.
(17) (a) Form of Proxy Card.
(b)(i) Prospectus for H&Q IPO & Emerging Company Fund (Common
Class Shares) dated [_______ __,] 2000 as supplemented
through [_______ __,] 2000.
(b)(ii) Prospectus for H&Q IPO & Emerging Company Fund (Class A
Shares) dated [_______ __,] 2000 as supplemented
through [_______ __,] 2000.
(b)(iii) Prospectus for H&Q IPO & Emerging Company Fund (Class B
Shares) dated [_______ __,] 2000 as supplemented
through [_______ __,] 2000.
(b)(iv) Preliminary Prospectus for Chase Vista H&Q IPO & Emerging
Company Fund (Class A Shares and Class B Shares)
dated [__________], 2000.
(c) Statement of Additional Information of MFIT dated
[_______ __,] 2000.
(d) Annual Report to Shareholders of H&Q IPO Fund dated
[_______ __,] 2000.
-8-
