<PAGE>
As filed with the Securities and Exchange Commission on January 17, 2001
Registration No. 33-9421/811-5526
--------------------------------------------------------------------------------
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. |X| Post-Effective Amendment No. 1
(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.
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.
<PAGE>
MUTUAL FUND INVESTMENT TRUST
FORM N-14
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(a)
ITEM NO. HEADING
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<TABLE>
<CAPTION>
PART A
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<S> <C>
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
PART B
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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
January 17, 2001
13. Additional Information about the Company
Being Acquired ................................................... Inapplicable
14. Financial Statements ............................................. Financial Statements
</TABLE>
PART C
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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.
<PAGE>
H&Q IPO & EMERGING COMPANY FUND
A SERIES OF MUTUAL FUND INVESTMENT TRUST
1211 AVENUE OF THE AMERICAS
41ST FLOOR
NEW YORK, NEW YORK 10036
January 17, 2001
Dear Shareholder:
At Chase H&Q, our most valuable asset is you, our trusted mutual fund
shareholder, and we are always looking for ways to help you reach your
investment goals.
As part of our commitment to you, the H&Q IPO & Emerging Company Fund's
Trustees are recommending a proposed reorganization of the Fund into the Chase
Vista Funds family. If approved by shareholders, the Trustee's believe
shareholders will benefit from this reorganization by incorporating the Fund
into the larger Chase Vista Funds family, which includes the award winning Chase
Vista shareholder services center.
For your review, we have included proxy materials and other important
information about your Trustees' recommendation. The Trustees are recommending
shareholders approve the reorganization. Please read all of the information
carefully and sign and return the enclosed proxy card as soon as possible. A
postage-paid envelope is enclosed for your convenience.
On February 15, 2001, we will hold a special shareholder's meeting to
consider the Trustee's recommendation. You are welcome to attend this meeting,
but many of our shareholders prefer to vote by proxy. You may also call toll
free or vote online using the website address and phone number on the enclosed
proxy card. Your vote is extremely important to us, regardless of the number of
shares you own.
As always, do not hesitate to call at the Chase H&Q Service Center at
1-877-613-7975 should you have any questions. We appreciate your trust and we
look forward to serving your investment needs for many years to come.
Sincerely,
/s/ Sarah E. Jones
Sarah E. Jones
President
PLEASE REVIEW THE ENCLOSED COMBINED PROSPECTUS/PROXY STATEMENT ENCLOSED WITH
THIS LETTER.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OF, OR GUARANTEED OR ENDORSED BY,
THE CHASE MANHATTAN BANK. THE SHARES ARE NOT INSURED BY THE FDIC, FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. INVESTMENTS IN MUTUAL FUNDS
INVOLVE RISK, INCLUDING POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
<PAGE>
H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST
ONE BUSH STREET
SAN FRANCISCO, CALIFORNIA 94104
January 17, 2001
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 15, 2001 at 11:00 a.m. (Eastern time). Formal notice of the
meeting appears on the following pages, 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. In addition, Chase has
agreed to limit expenses paid by the new Fund for one year. H&Q Shareholders may
also benefit from improved shareholder servicing, such as a more convenient
service center and a more informative website. The Chase 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 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
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.
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THE TRUSTEES OF H&Q TRUST RECOMMEND THAT YOU VOTE "FOR" THE PROPOSED
REORGANIZATION.
A proxy card or cards are enclosed for your use in the shareholder meeting.
These cards represent 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 CARDS 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 15, 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
1-877-613-7975.
Sincerely,
/s/ Sarah E. Jones
Sarah E. 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.
<PAGE>
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. In addition, Chase has agreed to limit expenses paid by the
new Fund for one year. 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.
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 CFAM rather than
H&Q Management.
HOW WILL THE FEES AND EXPENSES ASSOCIATED WITH MY INVESTMENT BE AFFECTED?
The pre-waiver total expense ratios for current H&Q Shareholders are
anticipated to be lower after the Reorganization. In addition, Chase has agreed
to ensure that the post-waiver total expense ratios generally do not exceed
1.35% for holders of Class A shares of Chase Vista H&Q IPO Fund and 2.05% for
holders of Class B shares of Chase Vista H&Q IPO Fund for at least one year
after the Reorganization. However, if the total net assets for Chase Vista H&Q
IPO Fund are reduced below $150 million during that one-year period, Chase has
agreed only to ensure that such expense ratios do not exceed 1.60% for holders
of 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 is not
required to limit any expenses. As of December 29, 2000, H&Q IPO Fund had
approximately $227 million in net assets.
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
<PAGE>
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 additional 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. 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 CHASE--J.P. MORGAN MERGER AFFECT MY INVESTMENT?
The parent company of Chase, The Chase Manhattan Corporation, recently
merged with J.P. Morgan & Co. Incorporated to form J.P. Morgan Chase & Co. The
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.
<PAGE>
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 15, 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 15, 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 exchange
for all outstanding shares of H&Q IPO Fund.
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 December 15, 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 OR CARDS THAT ARE BEING SOLICITED BY THE
TRUSTEES OF H&Q TRUST. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE SPECIAL
MEETING. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY
SUBMITTING TO 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
January 17, 2001
<PAGE>
COMBINED PROSPECTUS/PROXY STATEMENT
DATED JANUARY 17, 2001
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
BY AND 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 an acquisition of Hambrecht & Quist Group, H&Q
Management became a wholly-owned indirect subsidiary of J.P. Morgan Chase & Co.
("J.P. Morgan Chase") (formerly The Chase Manhattan Corporation), 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 15,
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
<PAGE>
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 prospectuses for H&Q IPO Fund (the "H&Q
Prospectus") and the current Statement of Additional Information for H&Q IPO
Fund (the "H&Q Statement of Additional Information") are 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 January 17, 2001 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 January 17, 2001
regarding the Reorganization (the "Reorganization Statement of Additional
Information" and, together with the Chase Vista H&Q IPO Fund Statement of
Additional Information and the H&Q 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 1-877-613-7975.
This Combined Prospectus/Proxy Statement is expected to be sent to
Shareholders on or about January 17, 2001.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS COMBINED PROSPECTUS/PROXY STATEMENT. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED 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.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
INTRODUCTION...................................... 1
SUMMARY........................................... 1
COMPARATIVE FEE AND EXPENSE TABLES................ 4
RISK FACTORS...................................... 6
INFORMATION RELATING TO THE PROPOSED
REORGANIZATION................................... 8
INVESTMENT POLICIES............................... 10
PURCHASES, REDEMPTIONS AND EXCHANGES.............. 15
DISTRIBUTIONS AND TAXES........................... 19
COMPARISON OF THE ORGANIZATIONAL STRUCTURE OF H&Q
IPO FUND AND CHASE VISTA H&Q IPO FUND............ 19
INFORMATION RELATING TO THE ADVISORY AGREEMENTS... 22
INFORMATION RELATING TO THE MFIT BOARD AND
OFFICERS......................................... 24
INFORMATION RELATING TO VOTING MATTERS............ 26
ADDITIONAL INFORMATION ABOUT MFIT................. 28
ADDITIONAL INFORMATION ABOUT H&Q IPO FUND......... 28
FINANCIAL STATEMENTS AND EXPERTS.................. 29
OTHER BUSINESS.................................... 29
LITIGATION........................................ 29
SHAREHOLDER INQUIRIES............................. 29
APPENDIX A--AGREEMENT AND PLAN OF
REORGANIZATION................................... A-1
</TABLE>
<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 15, 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 January 17, 2001.
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") to be signed by 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 is
set forth herein. The proposed Reorganization is occasionally referred to herein
as the "Proposal."
THE H&Q TRUSTEES HAVE RECOMMENDED THAT SHAREHOLDERS
VOTE "FOR" 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.
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 holders
of each class of H&Q Shares, the Reorganization will not be implemented and the
H&Q Trustees will consider other appropriate courses of action.
SUMMARY
The following is a summary of certain information relating to the proposed
Reorganization, the parties thereto and the transactions contemplated thereby,
and is qualified by reference to the more complete information contained
elsewhere in this Combined Prospectus/Proxy Statement, the H&Q Prospectus, the
Chase Vista H&Q IPO Fund Prospectus, 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 1-877-613-7975 or 1-800-5-CHASE-0 or
writing 1211 Avenue of the Americas, 41st Floor, New York, New York, 10036.
PROPOSED TRANSACTION
GENERAL. Pursuant to the proposed Reorganization Plan, H&Q IPO Fund will
transfer 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 no assets or liabilities. After the
Reorganization, Chase Vista H&Q IPO Fund will have 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.
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<PAGE>
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 de-registered under the Investment Company Act of
1940 (the "1940 Act") and dissolved under state law.
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 purchased in the future.
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 (which
may be higher) on additional Class A Shares purchased in the future.
CLASS B DEFERRED SALES CHARGES. 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 will be
different (and, in some cases, higher) and the conversion period will be longer
for additional Class B Shares purchased in the future in Chase Vista H&Q IPO
Fund.
EXPENSE RATIOS. The pre-waiver total expense ratios for current H&Q
Shareholders are anticipated to be lower after the Reorganization. In addition,
Chase has agreed to ensure that the post-waiver total expense ratios generally
do not exceed 1.35% for holders of Class A shares of Chase Vista H&Q IPO Fund
and 2.05% for holders of Class B shares of Chase Vista H&Q IPO Fund for at least
one year after the Reorganization. However, if the total net assets for Chase
Vista H&Q IPO Fund are reduced below $150 million during that one-year period,
Chase has agreed only to ensure that such expense ratios do not exceed 1.60% for
holders of 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
is not required to limit any expenses. As of December 29, 2000, H&Q IPO Fund had
approximately $227 million in net assets.
TRUSTEES' APPROVAL. Based upon their evaluation of the information presented
to them, 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 portfolio
manager 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.
REASONS FOR THE REORGANIZATION
The Reorganization is being proposed to increase operational and
administrative efficiencies by bringing 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. In addition, Chase has agreed to limit expenses paid by the
new Fund for one year. H&Q Shareholders may also benefit from improved
shareholder servicing, such as a more convenient service center and a more
informative website. The Chase funds also provide a broad distribution network,
which could enable the Chase Vista H&Q IPO
2
<PAGE>
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 factual
representations and assumptions) as of the effective time of the Reorganization
that (i) the exchange 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; (ii) an exchanging 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 basis in such shareholder's shares of H&Q IPO Fund
(provided such shares were held as a capital asset on the date of the
Reorganization); and (iii) the holding period and tax basis of those assets
transferred to Chase Vista H&Q IPO Fund pursuant to the Reorganization will be
the same as the holding period and tax basis of such assets immediately prior to
the Reorganization in the hands of 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 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
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 on substantially similar terms and
conditions. 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 for 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.
3
<PAGE>
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"). After the Reorganization, your investment
will be governed by 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 a 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 for 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.
COMPARATIVE FEE AND EXPENSE TABLES
The tables below show information regarding the expected fees and expenses
for 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 pre-waiver total expense ratios for
current H&Q Shareholders are anticipated to be lower after the Reorganization,
assuming that the asset level for the new Fund does not substantially decrease.
In addition, Chase has agreed to ensure that the post-waiver total expense ratio
generally does not exceed 1.35% for holders of Class A shares of Chase Vista H&Q
IPO Fund and 2.05% for holders of Class B shares of Chase Vista H&Q IPO Fund for
at least one year after the Reorganization. However, if the total net assets for
Chase Vista H&Q IPO Fund are reduced below $150 million during that one-year
period, Chase has agreed only to ensure that such expense ratios do not exceed
1.60% for holders of Class A shares and 2.30% for holders of Class B shares for
the remainder such period. Under H&Q IPO
4
<PAGE>
Fund's current advisory agreements, H&Q is not required to limit any expenses.
As of December 29, 2000, H&Q IPO Fund had approximately $227 million in net
assets.
<TABLE>
<CAPTION>
EXPENSE RATIOS FOR 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 buy shares, shown as a
percentage of the offering price None 5.50% None
Maximum Deferred Sales Charge when
you sell shares, shown as a
percentage of lower of original
purchase price or redemption
proceeds None None 5.00%
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM
ASSETS, SHOWN 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# 0.37% 0.27% 0.27%
---- ---- ----
Total# 1.27% 1.22% 1.92%
==== ==== ====
</TABLE>
---------------------
# Expense ratios for H&Q IPO Fund are based on expenses incurred over the
past fiscal year. However, Other Expenses and Total Expenses have been
restated to reflect asset levels of approximately $227 million in the Fund
as of December 29, 2000. Net assets for the fiscal year ended September 30,
2000 were $464 million and average asset levels were significantly higher
than current asset levels. Without restating the other expenses, the total
expense ratios would have been 1.21% for the Common Class shares, 1.20% for
the Class A shares and 1.91% for the Class B shares.
<TABLE>
<CAPTION>
EXPENSE RATIOS FOR CHASE
VISTA H&Q IPO FUND
------------------------
PRO FORMA PRO FORMA
CLASS A CLASS B
SHARES SHARES
----------- -----------
<S> <C> <C>
SHAREHOLDER FEES
(FEES PAID DIRECTLY FROM YOUR
INVESTMENT)
Maximum Sales Charge (Load) when you buy
shares, shown as a percentage of the
offering price 5.75% None
Maximum Deferred Sales Charge when you
sell shares, shown as a percentage of
lower of original purchase price or
redemption proceeds None 5.00%
ANNUAL FUND OPERATING EXPENSES
(EXPENSES THAT ARE DEDUCTED FROM
ASSETS, SHOWN AS A PERCENTAGE OF
AVERAGE NET ASSETS)
Management Fees 0.65% 0.65%
Distribution (12b-1) Fees 0.30% 1.00%
Other Expenses* 0.27% 0.27%
----- -----
Total* 1.22% 1.92%
===== =====
</TABLE>
---------------------
* Projected percentages based on an aggregate asset level of approximately
$227 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 to 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.
5
<PAGE>
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
IF YOU SELL YOUR SHARES
COMMON CLASS SHARES $129 $403 $ 697 $1,534
CLASS A SHARES $667 $916 $1,183 $1,946
CLASS B SHARES $695 $903 $1,237 $2,243
IF YOU DON'T SELL YOUR
SHARES
CLASS B SHARES $195 $603 $1,037 $2,243
PRO FORMA CHASE VISTA H&Q IPO
FUND
IF YOU SELL YOUR SHARES
CLASS A SHARES $692 $940 $1,207 $1,967
CLASS B SHARES $695 $903 $1,237 $2,243
IF YOU DON'T SELL YOUR
SHARES
CLASS B SHARES $195 $603 $1,037 $2,243
</TABLE>
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 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 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.
6
<PAGE>
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.
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 affiliates of the Fund's investment adviser act as a member
or manager. Chase Vista H&Q IPO Fund will not purchase IPOs directly from such
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. Such capital gains
generally 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.
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.
7
<PAGE>
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 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.
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
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 effectiveness of this Combined Prospectus/Proxy Statement and
any other documents filed with the SEC; 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. Assuming satisfaction of the conditions
in the Reorganization Plan, the Effective Time of the Reorganization will be on
February 26, 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.
8
<PAGE>
TRUSTEES' CONSIDERATIONS
In its consideration of the Reorganization at meetings held on May 31, 2000,
September 7, 2000 and November 28, 2000, the H&Q Trustees 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 discussion, 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 funds without paying an additional sales charge. The
Trustees also noted that the Chase 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 continuation of certain existing distribution
arrangements with the H&Q Shareholders.
In its consideration of the Reorganization, the H&Q Trustees also
considered, among other things: the terms of the Reorganization Plan; the
opinion to be issued concerning the tax-free nature of the Reorganization; a
comparison of the Funds' historical and projected expense ratios; the commitment
by Chase to limit certain expenses for one year; 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 the 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 agreements, 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 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 their 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 their present form.
Similarly, at meetings held on September 19, 2000, October 24, 2000 and
December 5, 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 opinion to be issued concerning the tax-free
nature of the 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 the proposed Reorganization would be in the best interests of the future
shareholders of Chase Vista H&Q IPO Fund and 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
9
<PAGE>
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 solely 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 IPO Fund shares held 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 the Reorganization will be the same as the
basis of such assets in the hands of H&Q IPO Fund immediately prior to the
Reorganization; (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 such 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 on the date of
the Reorganization; 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 based on certain factual
representations and assumptions, including, but not limited to, the assumption
that the Reorganization will be consummated in accordance with the provisions
set forth in the Reorganization Plan, which if not correct may adversely affect
the reliability of the opinion. That opinion also is not binding on the IRS and
does not preclude the IRS from adopting a contrary position. H&Q 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 December 15, 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..................... 221,624,118 -- --
Class A.......................... 20,025,633 0 241,649,751
Class B.......................... 14,009,629 0 14,009,629
Shares Outstanding
Common Class .................... 28,726,632 -- --
Class A.......................... 2,594,464 0 31,321,096
Class B.......................... 1,828,874 0 1,828,874
Net Asset Value Per Share ($)
Common Class .................... 7.71 -- --
Class A.......................... 7.72 -- 7.72
Class B.......................... 7.66 -- 7.66
</TABLE>
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.
10
<PAGE>
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, 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.
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 H&Q IPO 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. PENDING INVESTMENT AND TO PROVIDE LIQUIDITY FOR
REDEMPTIONS, 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. H&Q IPO FUND'S INVESTMENT IN ASSETS OTHER THAN IPOS
WILL, IN NORMAL CIRCUMSTANCES, BE LIMITED TO 35% OF ITS ASSETS.
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 ARE 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.
11
<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.
<TABLE>
<CAPTION>
CHASE VISTA H&Q IPO FUND MAY NOT: H&Q IPO FUND MAY NOT:
--------------------------------- ---------------------
<S> <C>
- Purchase securities of any issuer (other than - Purchase securities (other than securities
securities issued or guaranteed by the U.S. issued or guaranteed by the U.S. government,
government, its agencies or its agencies or instrumentalities) if, as a
instrumentalities, or repurchase agreements result of such purchase, 25% or more of the
secured thereby) if, as a result of such value of its total assets would be invested
purchase, 25% or more of the Fund's total in any industry.
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 - Purchase or sell commodities or commodity
acquired as a result of ownership of contracts, provided that the Fund may
securities or other instruments but this (1) purchase securities of companies that
shall not prevent the Fund from deal in commodities or interests therein and
(i) purchasing or selling options and futures (2) purchase or sell futures contracts,
contracts or from investing in securities or options on future contracts, equity index
other instruments backed by physical participations and index participation
commodities or (ii) engaging in forward contracts.
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.
- Purchase or sell real estate unless acquired - Purchase or sell real estate, including
as a result of ownership of securities or interests in real estate limited
other instruments (but this shall not prevent partnerships, provided that the Fund may
the Fund from investing in securities or purchase securities of companies that deal in
other instruments backed by real estate or real estate or interests therein.
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: - Lend money to any person, except that the
(i) purchase and hold debt instruments Fund may (1) purchase a portion of an issue
(including without limitation, bonds, notes, of short- term debt securities or similar
debentures or other obligations and obligations (including repurchase agreements)
certificates of deposit, bankers' acceptances that are distributed publicly or customarily
and fixed time deposits) in accordance with purchased by institutional investors, and
its investment objectives and policies; (2) lend its portfolio securities.
(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.
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
CHASE VISTA H&Q IPO FUND MAY NOT: H&Q IPO FUND MAY NOT:
--------------------------------- ---------------------
<S> <C>
- Borrow money, except that the Fund may borrow - Borrow money, except that the Fund may borrow
money for temporary or emergency purposes, or from banks as a temporary measure to satisfy
by engaging in reverse repurchase redemption requests or for extraordinary or
transactions, in an amount not exceeding emergency purposes and then only in an amount
33 1/3% of the value of its total assets at not to exceed one-third of the value of its
the time when the loan is made and may total assets (including the amount borrowed),
pledge, mortgage or hypothecate no more than provided that the Fund will not purchase
one-third of its net assets to secure such securities while borrowings represent more
borrowings. Any borrowings representing more than 5% of its total assets.
than 5% of the Fund's total assets must be
repaid before the Fund may make additional
investments.
- 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 other persons - Underwrite securities issued by others,
except insofar as the Fund may technically be except to the extent it may be deemed to be
deemed to be an underwriter under the an underwriter, under the federal securities
Securities Act of 1933 in selling a portfolio laws, in connection with the disposition of
security. securities from its investment portfolio.
- Issue any senior security (as defined in the - Issue senior securities, except that the Fund
1940 Act), except (a) engaging in may borrow from banks as a temporary measure
transactions that may result in the issuance to satisfy redemption requests or for
of senior securities to the extent permitted extraordinary or emergency purposes and then
under applicable regulations and only in an amount not to exceed one-third of
interpretations of the 1940 Act or an the value of its total assets (including the
exemptive order; (b) acquiring other amount borrowed), provided that the Fund will
securities, the acquisition of which may not purchase securities while borrowings
result in the issuance of a senior security, represent more than 5% of its total assets.
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 ABOVE.
- With respect to 75% of its assets, hold more - As to 75% of its assets, purchase securities
than 10% of the outstanding voting securities of any issuer (other than obligations of, or
of any issuer or invest more than 5% of its guaranteed by, the U.S. government, its
assets in the securities of any one issuer agencies or instrumentalities or investments
(other than obligations of the U.S. in other registered investment companies) if,
Government, its agencies and as a result, more than 5% of the value of its
instrumentalities). total assets would be invested in the
securities of such issuer.
THE LIMITATION ON PURCHASING MORE THAN 10% OF
THE SECURITIES OF ANY ISSUER IS APPLIED WITH - Purchase more than 10% of any class of
RESPECT TO ONLY 75% OF CHASE VISTA H&Q IPO securities of any issuer if, as a result of
FUND'S ASSETS, AS OPPOSED TO ALL OF H&Q IPO such purchase, it would own more than 10% of
FUND'S ASSETS. 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.
</TABLE>
13
<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.
<TABLE>
<CAPTION>
CHASE VISTA H&Q IPO FUND MAY NOT: H&Q IPO FUND MAY NOT:
--------------------------------- ---------------------
<S> <C>
- Write, purchase or sell any put or call - Purchase puts, calls, straddles, spreads or
option or any combination thereof, provided any combination thereof.
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 - Make short sales.
short
sales "against the box," or purchase securities
on margin except for short-term credits - Purchase securities on margin, except such
necessary for clearance of portfolio short- term credits as may be necessary for
transactions, provided that this restriction the clearance of purchases and sales of
will not be applied to limit the use of securities.
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 - Purchase or sell interests in oil, gas or
mineral leases. 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 - Invest more than 15% of its net assets in
illiquid securities. 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.
- Invest in the securities of other investment - Purchase securities of other investment
companies except to the extent permitted by companies, except as permitted by the 1940
applicable Federal securities law; provided, Act, including any exemptive relief granted
however, that a Mauritius holding company (a by the SEC.
"Mauritius Portfolio Company") will not be
considered an investment company for this
purpose.
- CHASE VISTA H&Q IPO FUND DOES NOT HAVE A - Invest for the purpose of exercising control
SIMILAR INVESTMENT RESTRICTION. or management of another issuer.
</TABLE>
14
<PAGE>
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 57 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 holders of 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 receiving Class A Shares in
Chase Vista 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
in Chase Vista H&Q IPO Fund purchased in the future.
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, as follows:
<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% 6.10%
$100,000 or greater, but less than
$250,000 3.75% 3.90%
$250,000 or greater, but less than
$500,000 2.50% 2.56%
$500,000 or greater, but less than
$1,000,000 2.00% 2.04%
$1,000,000 or greater None None
</TABLE>
These initial sales charges or "loads" for Chase Vista H&Q IPO Fund are
sometimes 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>
---------------------
* Investments of $1 million or more sold within one year of purchase may be
subject to a 1.00% deferred sales charge.
RECIPIENTS OF 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 his 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.
15
<PAGE>
HOLDERS OF CLASS B SHARES OF H&Q IPO FUND RECEIVING CLASS B SHARES IN CHASE
VISTA H&Q IPO FUND WILL NOT PAY ANY SALES CHARGE UPON THE REORGANIZATION AND THE
DEFERRED SHARES CHARGE ON CLASS B SHARES RECEIVED IN THE REORGANIZATION WILL BE
NO DIFFERENT FROM THAT ON 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 at the
beginning of 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 at the beginning of the 6TH YEAR of ownership.
RECEIVED CLASS B SHARES. The deferred sales charge with respect to Class B
Shares received in the Reorganization (the "Received 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 at the beginning of the 6TH YEAR
of ownership. The deferred sales charge for Received Class B Shares, therefore,
would not be changed as a result of the Reorganization. In determining the sales
charge on such received Class B Shares, the time period will 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.
The two deferred sales charge 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:
<TABLE>
<CAPTION>
COMPARISON OF DEFERRED SALES CHARGES
-------------------------------------------------------------------------------
CHASE VISTA H&Q IPO FUND H&Q IPO FUND
YEARS ---------------------------------------------------- -------------------------
HELD NEW CLASS B SHARES RECEIVED 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. When you redeem 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.
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.
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.
16
<PAGE>
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>
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 SHARES
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
17
<PAGE>
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.
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.
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.
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.
18
<PAGE>
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 and loss.
Chase Vista H&Q IPO Fund will deduct from these earnings any expenses and then
pay to shareholders distributions of net investment income and net capital gain.
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
- 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 (including any net short-term
capital gain) 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 excess of long-term capital gains over short-term capital
losses and loss carryforwards), they will be taxable as long-term capital gain
without regard to 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 any 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.
19
<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 series 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 (except that certain classes of shares with
contingent deferred sales charges may automatically convert to shares without
such charges after the expiration of a holding period (such as Class B Shares in
Chase Vista H&Q IPO Fund, which automatically convert to Class A Shares after a
nine-year holding period).
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 funds 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. Other than as described in the
following paragraph, there are no material differences between the two Fund's
voting rights.
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 DECEMBER 15, 2000 AND NET
ASSET VALUE OF H&Q IPO FUND AS OF DECEMBER 15, 2000, FORMER H&Q IPO FUND
SHAREHOLDERS WILL REPRESENT APPROXIMATELY 3% 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.
20
<PAGE>
SHAREHOLDER LIABILITY
Generally, Delaware business trust shareholders are not personally liable
for obligations of the Delaware business trust under Delaware law. The Delaware
Business Trust Act (Delaware Act) provides that shareholders of a Delaware
business trust are entitled to the same limitations on liability extended to
shareholders of private for-profit corporations. The H&Q Trust Declaration of
Trust expressly provides that the Trust has been organized under the Delaware
Act and that the Declaration of Trust is to be governed by Delaware law. It is
nevertheless possible that a Delaware business trust, such as the Trust, might
become party to an action in another state whose courts refused to apply
Delaware law, in which case the Trust's shareholders could be subject to persona
liability. To guard against this risk, the H&Q Trust Declaration of Trust
(i) contains an express disclaimer of shareholder liability for acts or
obligations of the Trust and provides that notice of such disclaimer may be
given in each agreement, obligation and instrument entered into or executed by
the Trust or its Trustees, (ii) provides for the indemnification out of Trust
property (from the applicable series of the Trust) of a shareholder held
personally liable solely by reason of the shareholder's having been a
shareholder and (iii) provides that the Trust will, upon request, assume the
defense of any claim made against such shareholder for any act or obligation of
the applicable series of the Trust and satisfy any judgement thereon. Thus, the
risk of a Trust shareholder incurring financial loss beyond his or her
investment because of shareholder liability is limited to circumstances in which
all of the following factors are present: (1) a court refuses to apply Delaware
law; (2) the liability arose under tort law or, if not, no contractual
limitation of liability was in effect; and (3) the Trust itself would be unable
to meet its obligations. In light of Delaware law, the nature of the Trust's
business and the nature of its assets, the risk of personal liability to the H&Q
IPO Fund shareholder is remote.
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 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 available without charge upon written request to either H&Q
Trust or MFIT.
21
<PAGE>
INFORMATION RELATING TO THE ADVISORY AGREEMENTS
GENERAL INFORMATION
H&Q IPO Fund is currently managed by H&Q Management pursuant to the
Investment Advisory and Administration Agreement (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
Investment 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.
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 Investment
Advisory Agreement (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 Investment Sub-Advisory Agreement (the "Symphony
Sub-Advisory Agreement") with Symphony, 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 J.P. Morgan Chase & Co., a registered
bank holding company ("J.P. Morgan Chase"). CFAM is located at 1211 Avenue of
the Americas, 41st Floor, New York,
New York 10036.
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 and is required to waive fees to ensure that the
post-waiver total expense ratios for the Chase Vista H&Q IPO Fund generally do
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 net
assets for Chase Vista H&Q IPO Fund are reduced below $150 million during that
one-year period, Chase has agreed only 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 is not required to limit any expenses.
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.
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
22
<PAGE>
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. The H&Q Advisory Agreement is scheduled to terminate on
December 8, 2001, unless extended pursuant to the terms thereof.
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 Sub-Advisory
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 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 (x) 0.35% of Chase Vista H&Q IPO Fund's average
daily net assets not in excess of $100 million and (y) 0.375% of Chase Vista H&Q
IPO Fund's average daily net assets in excess of $100 million. 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.
23
<PAGE>
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 similar 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 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.
24
<PAGE>
GENERAL INFORMATION
Set forth below are the current members of the MFIT Board.
<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 May 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. Consultant, Eduneering, Inc.; formerly
Vice President and Treasurer, Ingersoll-Rand
Company. Age: 58. Address: 287 Hampshire Ridge,
Park Ridge, NJ 07656.
John R.H. Blum Trustee. Attorney in private practice; formerly,
partner in the law firm of Richards, O'Neil &
Allegaert; Commissioner of Agriculture--State of
Connecticut, 1992-1995. Age: 70. Address: 322 Main
Street, Lakeville, CT 06039.
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.
Roland R. Eppley, Jr. Trustee. Retired; formerly President and Chief
Executive Officer, Eastern States Bankcard
Association Inc., (1971-1988); Director, Janel
Hydraulics, Inc.; Director of The Hanover
Funds, Inc. Age: 67. Address: 105 Coventry Place,
Palm Beach Gardens, FL 33418.
Joseph J. Harkins Trustee. Retired; formerly Commercial Sector
Executive and Executive Vice President of The
Chase Manhattan Bank, N.A. from 1985 through 1990.
He has been employed by Chase in numerous
capacities and offices from 1954 through 1990.
Director of Jefferson Insurance Company of New
York and Monticello Insurance Company. Age: 69.
Address: 257 Plantation Circle South, Ponte Vedra
Beach, FL 32082.
*Sarah E. Jones Trustee. President and Chief Operating Officer of
Chase Mutual Funds Corp.; formerly Managing
Director for the Global Asset Management and
Private Banking Division of The Chase Manhattan
Bank. President, H&Q Trust, since May 2000. Age:
47. Address: Chase Mutual Funds Corp., 1211 Avenue
of the Americas, 41st Floor, New York, New
York 10081.
W.D. MacCallan Trustee. Director of The Adams Express Co. and
Petroleum & Resources Corp. Retired; formerly
Chairman of the Board and Chief Executive Officer
of The Adams Express Co. and Petroleum & Resources
Corp.; Director of The Hanover Funds, Inc. and The
Hanover Investment Funds, Inc. Age: 72. Address:
624 East 45th Street, Savannah, GA 31405.
George E. McDavid Trustee. President, Houston Chronicle Publishing
Company. Age: 69. Address: P.O. Box 2558,
Houston, TX 77252.
W. Perry Neff Trustee. Retired; Independent Financial
Consultant; Director of Petroleum & Resources
Corp. and The Adams Express Co. Age: 73. Address:
RR 1 Box 102, Weston, VT 05181.
*Leonard M. Spalding, Jr. Trustee. Retired; formerly Chief Executive Officer
of Chase Mutual Funds Corp.; formerly President
and Chief Executive Officer of Vista Capital
Management; Chief Investment Executive of The
Chase Manhattan Bank. Age: 64. Address: 2025
Lincoln Park Road, Springfield, KY 40069.
Richard E. Ten Haken Trustee. Chairman of the Audit Committee. Formerly
District Superintendent of Schools, Monroe No. 2
and Orleans Counties, New York; Chairman of the
Board and President, New York State Teachers'
Retirement System. Age: 65. Address: 4 Barnfield
Road, Pittsford, NY 14534.
Irving L. Thode Trustee. Retired; formerly Vice President of
Quotron Systems. He has previously served in a
number of executive positions with Control Data
Corp., including President of its Latin American
Operations, and General Manager of its Data
Services business. Age: 69. Address: 80 Perkins
Road, Greenwich, CT 06830.
</TABLE>
------------------------
* Asterisks indicate those Trustees that are "Interested Persons" (as defined
in the 1940 Act). Mr. Reid is not an interested person of 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.
25
<PAGE>
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.
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 December 15,
2000 (the "Record Date") will be entitled to vote at the Meeting. On that date,
there were outstanding and entitled to be voted 33,149,970 H&Q Shares, as
follows:
<TABLE>
<CAPTION>
CLASS OF H&Q IPO FUND NUMBER OF SHARES
--------------------- ----------------
<S> <C>
Common Class Shares............................... 28,726,632
Class A Shares.................................... 2,594,464
Class B Shares.................................... 1,828,874
</TABLE>
26
<PAGE>
The presence in person or by proxy of H&Q Shareholders that own one-third in
aggregate of a class of outstanding H&Q Shares will constitute a quorum for such
class with respect to the Reorganization. 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 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. 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 each class of H&Q Shares, the Reorganization
will not be implemented and the H&Q Trustees will consider other appropriate
courses of action.
Approval of the Reorganization Plan by a class of H&Q Shares shall entail
adoption of the Board of Trustees for MFIT; of each of the CFAM Advisory
Agreement and the Symphony Sub-Advisory Agreement; of the Chase Vista H&Q IPO
Fund's Rule 12b-1 distribution plans; and of the Chase Vista H&Q IPO Fund's
fundamental investment policies.
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.
On the Record Date, the name, address and percentage ownership of the
persons known to the H&Q IPO Fund who owned of record or beneficially more than
5% of any class of shares of H&Q IPO Fund and
27
<PAGE>
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 SHAREHOLDER NAME NUMBER OF SHARES SHARE CLASS OWNED FOLLOWING
CLASS AND ADDRESS OWNED OWNED REORGANIZATION
------------------- ------------------------------ ----------------- ------------- --------------------
<C> <S> <C> <C> <C>
Common Charles Schwab & Co Inc. 27,583,876.703 96.026% 96.026%
Class Shares FBO Schwab Customers
ATTN Mutual Fund,
101 Montgomery St,
San Francisco, CA 94104
Class A Shares Lewco Securities Corp. 970,400.745 37.365% 37.365%
FBO A C H50-651236-7-01
34 Exchange Place 4th Floor
Jersey City, NJ 07311
Class A Shares Lewco Securities Corp. 144,317.437 5.557% 5.557%
FBO A C H10-683742-1-01
34 Exchange Place 4th Floor
Jersey City, NJ 07311
Class A Shares Lewco Securities Corp. 143,967.563 5.543% 5.543%
FBO A C H50-651237-5-01
34 Exchange Place 4th Floor
Jersey City, NJ 07311
Class B Shares None -- -- --
</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 January 17, 2001 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 1-877-613-7975. MFIT is subject to
the requirements of the 1940 Act and, in accordance with such requirements,
files reports and other information with the SEC. These materials can be
inspected and copied at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's Regional
Offices at 7 World Trade Center, Suite 1300, New York, New York 10048 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such
material can also be obtained from the Public Reference Branch, Office of
Consumer Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, at prescribed rates, and is also available on the SEC's
web site at http://www.sec.gov.
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 April 25, 2000, that are 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 January 17, 2001 related to the Combined
Prospectus/Proxy Statement, which have been filed 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
1-877-613-7975. 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, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates,
and is also available on the SEC's web site at
28
<PAGE>
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 from the Annual Report for H&Q IPO
Fund. 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 January 17, 2001, 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 1-877-613-7975.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
29
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Plan") made this st day of
, 2001 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 in exchange solely for shares of 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 the
existing shareholders of the Transferor Portfolio 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 in exchange solely for shares of the Acquiring
Portfolio is in the best interests of the Acquiring Portfolio, as well as the
best interests of the future 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 in such a manner as to qualify as a reorganization within
the meaning 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 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. 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 (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
and the shares of the Transferor Portfolio shall be cancelled. 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
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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 Exchange Date, 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 February 26, 2001, and shall be implemented at the
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.
2. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING PORTFOLIO
The Acquiring Trust, on behalf of the Acquiring Portfolio, represents and
warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Acquiring Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the Commonwealth of Massachusetts and has the power to carry on its business as
it is now being conducted. The Acquiring Portfolio is a validly existing series
of shares of such business trust representing interests therein under the laws
of Massachusetts. The Acquiring
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Portfolio and the Acquiring Trust have all necessary federal, state and local
authorization to own all of their properties and assets and to carry on its
business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Acquiring Trust is registered
under the Investment Company Act of 1940, as amended (the "Act") as an open-end
investment company of the management type; such registration has not been
revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current preliminary prospectus and
statement of additional information of the Acquiring Trust with respect to the
Acquiring Portfolio, each dated January 17, 2001, 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.
(d) CAPITALIZATION. The Acquiring Trust has an unlimited number of
authorized shares of beneficial interest, par value $.001 per share, of which as
of the date hereof there were outstanding no Class A shares and no 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 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.
(e) 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).
(f) 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.
(g) LIABILITIES. There are no liabilities of the Acquiring Portfolio,
whether actual or contingent and whether or not determined or determinable.
(h) 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, 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.
(i) CONTRACTS. No default exists under any material contract or other
commitment to which the Acquiring Trust, on behalf of the Acquiring Portfolio,
is subject.
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(j) 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.
(k) REGULATED INVESTMENT COMPANY. The Acquiring Portfolio currently is, and
will continue to be prior to, at and after the Exchange Date, qualified as a
regulated investment company within the meaning of Section 851 of the Code.
3. REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR PORTFOLIO
The Transferor Trust, on behalf of the Transferor Portfolio, represents and
warrants as follows:
(a) ORGANIZATION, EXISTENCE, ETC. The Transferor Trust is a business trust
that is duly organized, validly existing and in good standing under the laws of
the 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 have all
necessary federal, state and local authorization to own all of their properties
and assets and to carry on its business as now being conducted.
(b) REGISTRATION AS INVESTMENT COMPANY. The Transferor Trust is registered
under the Act as an open-end investment company of the management type; such
registration has not been revoked or rescinded and is in full force and effect.
(c) CURRENT OFFERING DOCUMENTS. The current prospectuses and statement of
additional information of the Transferor Portfolio, dated September 15, 1999 and
June 26, 2000, respectively, as supplemented through November 28, 2000, as filed
with the Commission, comply in all material respects with the requirements of
the Securities Act and the Act and do not contain an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) CAPITALIZATION. The Transferor Trust has an unlimited number of
authorized shares of beneficial interest, par value $.001 per share, of which as
of December 15, 2000 there were outstanding 28,726,632 Common Class shares,
2,594,464 Class A shares and 1,828,874 Class B shares of the
TransferorPortfolio, 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 and
recognizing that under Delaware law, shareholders of a Transferor Trust
portfolio could, under certain circumstances, be held personally liable for the
obligations of such Transferor Trust portfolio). Because the Transferor Trust is
an open-end investment company engaged in the continuous offering and redemption
of its shares, the number of outstanding shares may change prior to the
Effective Time of the Reorganization. All such shares will, at the Exchange
Date, be held by the shareholders of record of the Transferor Portfolio as set
forth on the books and records of the Transferor Trust in the amounts set forth
therein, and as set forth in any list of shareholders of record provided to the
Acquiring Portfolio for purposes of the Reorganization, and no such shareholders
of record will have any preemptive rights to purchase any Transferor Portfolio
shares, and the Transferor Portfolio does not have outstanding any options,
warrants or other rights to subscribe for or purchase any Transferor Portfolio
shares (other than 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 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.
(e) 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.
(f) AUTHORITY RELATIVE TO THIS PLAN. The Transferor Trust, on behalf of the
Transferor Portfolio, has the power to enter into this Plan and to carry out its
obligations hereunder. The execution and delivery of this
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Plan and the consummation of the transactions contemplated hereby have been duly
authorized by the Transferor Trust's Board of Trustees and no other proceedings
by the Transferor Trust other than those contemplated under this Plan are
necessary to authorize its officers to effectuate this Plan and the transactions
contemplated hereby. The Transferor Trust is not a party to or obligated under
any provision of its Declaration of Trust or By-laws, or under any indenture or
contract provision or any other commitment or obligation, or subject to any
order or decree, which would be violated by or which would prevent its execution
and performance of this Plan in accordance with its terms.
(g) LIABILITIES. There are no liabilities of the Transferor Portfolio,
whether actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Transferor Trust's
financial statements with respect to the Transferor Portfolio and liabilities
incurred in the ordinary course of business subsequent to September 30, 2000 or
otherwise previously disclosed to the Transferor Trust with respect to the
Transferor Portfolio.
(h) 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).
(i) 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, and, to the knowledge of the Transferor Trust, there are no
regulatory investigations of the Transferor Trust or the Transferor Portfolio,
pending or threatened, other than routine inspections and audits.
(j) CONTRACTS. The Transferor Trust, on behalf of the Transferor Portfolio,
is not subject to any contracts or other commitments (other than this Plan)
which will not be terminated with respect to the Transferor Portfolio without
liability to the Transferor Trust or the Transferor Portfolio as of or prior to
the Effective Time of the Reorganization, except the Transfer Agency Services
Agreement and related fee waiver with PFPC Inc. dated October 28, 1999.
(k) TAXES. The federal income tax returns of the Transferor Trust with
respect to the Transferor Portfolio, and all other income tax returns required
to be filed by the Transferor Trust with respect to the Transferor Portfolio,
have been filed, and all taxes payable pursuant to such returns have been paid.
To the knowledge of the Transferor Trust, no such return is under audit and no
assessment has been asserted in respect of any such return. All federal and
other taxes owed by the Transferor Trust with respect to the Transferor
Portfolio have been paid so far as due.
(l) NO APPROVALS REQUIRED. Except for the Registration Statement (as
defined in Section 4(a) hereof) and the approval of the Transferor Portfolio's
shareholders referred to in Section 6(a) hereof, no consents, approvals,
authorizations, registrations or exemptions under federal or state laws are
necessary for the consummation by the Transferor Trust of the Reorganization,
except such as have been obtained as of the date hereof and such as may be
required for the dissolution of the Transferor Portfolio and the Transferor
Trust.
(m) REGULATED INVESTMENT COMPANY. The Transferor Portfolio currently is, and
will continue to be prior to and at the Exchange Date, qualified as a regulated
investment company within the meaning of Section 851 of the Code.
4. COVENANTS OF THE ACQUIRING PORTFOLIO
The Acquiring Trust, on behalf of the Acquiring Portfolio, covenants to the
following:
(a) 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
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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.
(b) COOPERATION IN EFFECTING REORGANIZATION. The Acquiring Portfolio agrees
to use all reasonable efforts to effectuate the Reorganization, to continue in
operation thereafter, and to obtain any necessary regulatory approvals for the
Reorganization. The Acquiring 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.
5. COVENANTS OF THE TRANSFEROR PORTFOLIO
The Transferor Trust, on behalf of the Transferor Portfolio, covenants to the
following:
(a) MEETING OF THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Trust shall call and hold a meeting of the shareholders of the Transferor
Portfolio for the purpose of acting upon this Plan and the transactions
contemplated herein.
(b) 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).
(c) 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.
(d) 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.
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:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. This Plan and the
transactions contemplated by the Reorganization shall have been approved by the
requisite vote of the shares of the Transferor Portfolio entitled to vote on the
matter ("Transferor Shareholder Approval").
(b) COVENANTS, WARRANTIES AND REPRESENTATIONS. The Acquiring 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).
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(c) Regulatory Approval. The Registration Statement shall have been declared
effective by the Commission and no stop orders under the Securities Act
pertaining thereto shall have been issued, and all other approvals,
registrations, and exemptions under federal and state laws considered to be
necessary shall have been obtained (collectively, the "Regulatory Approvals").
(d) TAX OPINION. The Transferor Trust shall have received the opinion of
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 Transferor Trust, as to certain of the federal income tax
consequences under the Code of the Reorganization, insofar as they relate to the
Transferor Portfolio and the Acquiring Portfolio, and to shareholders of the
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 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 of 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 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:
(a) APPROVAL BY THE TRANSFEROR PORTFOLIO'S SHAREHOLDERS. The Transferor
Shareholder Approval shall have been obtained.
(b) 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).
(c) REGULATORY APPROVAL. The Regulatory Approvals shall have been obtained.
(d) TAX OPINION. The Acquiring Trust shall have received the Tax Opinion
addressed to and in form and substance satisfactory to the Acquiring Trust.
8. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS
(a) AMENDMENTS. The parties hereto may, by agreement in writing authorized
by the Board of Trustees 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.
(b) 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(c) may not be waived.
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(c) 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.
(d) 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.
(e) 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 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.
(f) SURVIVAL. No representations, warranties or covenants in or pursuant to
this Plan, except for the provisions of 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 to any service providers to the Transferor Portfolio in
connection with the termination of the relationship with such service provider;
and (xi) any out-of-pocket post-closing costs incurred by the Transferor Trust
in connection with its dissolution or otherwise in connection with the Plan.
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
WITH A COPY TO:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Cynthia G. Cobden, Esq.
A-8
<PAGE>
if to the Transferor Trust (for itself or on behalf of the Transferor
Portfolio):
One Bush Street
San Francisco, California 94104
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
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
(a) The section and paragraph headings contained in this Plan are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
(b) This Plan may be executed in any number of counterparts, each of which
shall be deemed an original.
(c) This Plan shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts.
(d) This Plan shall bind and inure to the benefit of the Transferor Trust,
the Transferor Portfolio, the Acquiring Trust and the Acquiring Portfolio and
their respective successors and assigns, but no assignment or transfer hereof or
of any rights or obligations hereunder shall be made by any party without the
written consent of the other parties. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person, firm or
corporation, other than the parties hereto and their respective successors and
assigns, any rights or remedies under or by reason of this Plan.
(e) The name "Mutual Fund Investment Trust" is the designation of 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.
(f) The name "Hambrecht & Quist Fund Trust" is the designation of the
Trustees of the Transferor Trust under a Declaration of Trust dated June 7,
1999, as amended, and all persons dealing with the Transferor Trust must look
solely to the Transferor Trust's property for the enforcement of any claims
against the Transferor Trust, as none of the Trustees, officers, agents and
shareholders of the Transferor Trust assume any personal liability for
obligations entered into on behalf of the Transferor Trust. No series of the
Transferor Trust shall be liable for claims against any other series of the
Transferor Trust.
A-9
<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:
A-10
<PAGE>
FORM N-14
PART B-ADDITIONAL INFORMATION
-------------------------------
H&Q IPO & EMERGING COMPANY FUND,
A SERIES OF HAMBRECHT & QUIST FUND TRUST
C/O ONE BUSH STREET
SAN FRANCISCO, CA 94104
(877) 613-7975
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 January
17, 2001 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 February 15, 2001. Copies of the Combined Prospectus/Proxy
Statement may be obtained at no charge by calling H&Q IPO Fund at
1-877-613-7975.
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 preliminary Statement of Additional Information
dated January 17, 2001, which is incorporated herein by reference (the "MFIT
Statement of Additional Information").
The date of this Statement of Additional Information is January 17, 2001.
<PAGE>
TABLE OF CONTENTS
Page
----
General Information............................................................1
Financial Statements...........................................................2
<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") to be 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 15, 2001 at 11:00 a.m. (Eastern time). For further
information about the transaction, see the Combined Prospectus/Proxy Statement.
<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 assets. Therefore,
as of December 31, 2000, Chase Vista H&Q IPO Fund has not prepared financial
statements.
<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
<PAGE>
(other than the payment by the Registrant of expenses incurred or paid by a
trustee, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such trustee,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of 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 Form of 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 Investment Advisory Agreement between Mutual Fund
Investment Trust and Chase Fleming Asset Management (USA) Inc.
6(b) Form of Investment Sub-Advisory Agreement.
7 Distribution and Sub-Administration Agreement.
8(a) Retirement Plan for Eligible Trustees. (1)
8(b) Deferred Compensation Plan for Eligible
Trustees. (1)
9 Form of Custodian Services Agreement.
10(a) Mutual Fund Investment Trust--Rule 18f-3 Multi-Class Plan.
10(b) Mutual Fund Investment Trust--Class A Shares Plan for Payment of
Certain Expenses for Distribution on Shareholder Servicing
Assistance.
10(c) Class "B" Share Distribution Plan of Mutual Fund Investment Trust
11 None
12 Form of Opinion and Consent of Howard Rice
Nemerovski Canady Falk & Rabkin, A
Professional Corporation, as to tax consequences.
<PAGE>
13(a) Form of Transfer Agency Agreement. (1)
13(b) Form of Administration and Accounting Services Agreement.
14 Consent of Independent Accountants.
15 None
16 None
17(a) Forms of Proxy Card.
17(b)(i) Prospectus for H&Q IPO & Emerging Company
Fund (Common Class Shares) dated September
15, 1999, as supplemented through November
28, 2000.
17(b)(ii) Prospectus for H&Q IPO & Emerging Company
Fund Adviser Class (Class A and Class B Shares)
dated September 15, 1999, as supplemented through
November 28, 2000.
17(b)(iii) Preliminary Prospectus for Chase Vista H&Q
IPO & Emerging Company Fund (Class A Shares
and Class B Shares) dated January 17, 2001.
17(c) Statement of Additional Information of H&Q
IPO & Emerging Company Fund, dated June 26,
2000, as supplemented November 28, 2000.
17(d) Preliminary Statement of Additional Information
of Chase Vista H&Q IPO & Emerging Company Fund
dated January 17, 2001.
17(e) Annual Report to Shareholders of H&Q IPO &
Emerging Company Fund for the fiscal year ended
September 30, 2000.
(1) Previously filed with the Commission on
December 30, 1997.
ITEM 17. UNDERTAKINGS.
<PAGE>
(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.
<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 17th day of January, 2001.
MUTUAL FUND INVESTMENT TRUST
Registrant
BY: /s/ H. RICHARD VARTABEDIAN
H. Richard Vartabedian
President
<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.
January 17, 2001
/s/ FERGUS REID III
Fergus Reid, III
Chairman and Trustee
January 17, 2001
/s/ H. RICHARD VARTABEDIAN
H. Richard Vartabedian
President and Trustee
January 17, 2001
/s/ WILLIAM J. ARMSTRONG
William J. Armstrong
Trustee
January 17, 2001
/s/ JOHN R. H. BLUM
John R. H. Blum
Trustee
January 17, 2001
/s/ STUART W. CRAGIN, JR.
Stuart W. Cragin, Jr.
Trustee
January 17, 2001
/s/ ROLAND R. EPPLEY, JR.
Roland R. Eppley, Jr.
Trustee
January 17, 2001
/s/ JOSEPH J. HARKINS
Joseph J. Harkins
Trustee
January 17, 2001
/s/ SARAH E. JONES
Sarah E. Jones
Trustee
January 17, 2001
/s/ W.D. MACCALLAN
W.D. MacCallan
Trustee
<PAGE>
January 17, 2001
/s/ GEORGE E. MCDAVID
George E. McDavid
Trustee
January 17, 2001
/s/ W. PERRY NEFF
W. Perry Neff
Trustee
January 17, 2001
/s/ LEONARD M. SPALDING, JR.
Leonard M. Spalding, Jr.
Trustee
January 17, 2001
/s/ IRVING L. THODE
Irving L. Thode
Trustee
January 17, 2001
/s/ RICHARD E. TEN HAKEN
Richard E. Ten Haken
Trustee
January 17, 2001
/s/ MARTIN R. DEAN
Martin R. Dean
Treasurer and Principal
Financial Officer
<PAGE>
EXHIBITS INDEX
ITEM DESCRIPTION
---- -----------
6(a) Form of Investment Advisory Agreement between Mutual Fund
Investment Trust and Chase Fleming Asset Management (USA) Inc.
6(b) Form of Investment Sub-Advisory Agreement.
7 Distribution and Sub-Administration Agreement.
9 Form of Custodian Services Agreement.
10(a) Mutual Fund Investment Trust--Rule 18f-3 Multi-Class Plan.
10(b) Mutual Fund Investment Trust--Class A Shares Plan for Payment of
Certain Expenses for Distribution on Shareholder Servicing
Assistance.
10(c) Class "B" Share Distribution Plan of Mutual Fund Investment Trust
12 Opinion and Consent of Howard Rice Nemerovski Canady Falk
& Rabkin, A Professional Corporation, as to Tax Consequences.
13(b) Form of Administration and Accounting Services Agreement.
14 Consent of Independent Accountants.
17(a)(i) Form of Proxy Card for Common Class Shares.
17(a)(ii) Form of Proxy Card for Class A Shares.
17(a)(iii) Form of Proxy Card for Class B Shares.
17(b)(i) Prospectus for H&Q IPO & Emerging Company Fund (Common
Class Shares) dated September 15, 1999, as supplemented
through December 28, 2000.
17(b)(ii) Prospectus for H&Q IPO & Emerging Company Fund Adviser Class
(Class A and Class B Shares) dated September 15, 1999 as
supplemented through December 28, 2000.
17(b)(iii) Preliminary Prospectus for Chase Vista H&Q IPO & Emerging
Company Fund (Class A Shares and Class B Shares) dated
January 17, 2001.
17(c) Statement of Additional Information of H&Q IPO & Emerging
Company Fund dated June 26, 2000, as supplemented
November 28, 2000.
<PAGE>
17(d) Preliminary Statement of Additional Information of Chase Vista
H&Q IPO & Emerging Company Fund dated January 17, 2001.
17(e) Annual Report to Shareholders of H&Q IPO Fund for the fiscal
year ended September 30, 2000.
