1933 Act File No. 33-36451
1940 Act File No. 811-6158
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
-- --
X Post-Effective Amendment No. 1
THE VIRTUS FUNDS
(Exact Name of Registrant as Specified in Charter)
(412) 288-1900
(Area Code and Telephone Number)
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Address of Principal Executive Offices)
JOHN W. MCGONIGLE, ESQUIRE
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
Copy to:
Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
It is proposed that this filing will become effective on July 10,
1996 pursuant to Rule 485(b).
An indefinite amount of the Registrant's securities has been
registered under the Securities Act of 1933 pursuant to Rule 24f-2 under
The Investment Company Act of 1940. In reliance upon such Rule, no filing
fee is being paid at this time. A Rule 24f-2 notice for the Registrant for
the year ended September 30, 1995 was filed on November 16, 1995.
CROSS REFERENCE SHEET
Pursuant to Item 1(a) of Form N-14 Showing Location in Prospectus of
Information Required by
Form N-14
Item of Part A of Form N-14 and Caption Caption or Location in Prospectus
1. Beginning of Registration Statement
and Outside Front Cover Page of
Prospectus ................ Cross Reference Sheet; Cover Page
2. Beginning and Outside
Back Cover Page of Prospectus Table of Contents
3. Synopsis Information
and Risk Factors .......... Summary; Risk Factors
4. Information About the
Transaction ............... Information About the Reorganization
5. Information About the Registrant Information About Blanchard Funds,
The Virtus Funds, American Equity, and
Large Cap
6. Information About the Company
Being Acquired ............ Information About Blanchard Funds, The
Virtus Funds, American Equity, and Large
Cap
7. Voting Information ........ Voting Information
8. Interest of Certain Persons and Experts Not Applicable
9. Additional Information Required
for Reoffering by Persons Deemed
to be Underwriters ........ Not Applicable
Incorporate by reference pursuant to Rule 411 under the Securities Act of
1933, Parts A and B of Registrant's Initial Registration Statement filed on
Form N-14 on April 16, 1996, in their entirety (File No. 33-36451 and File
No. 811-6158).
PART C - OTHER INFORMATION
Item 15. Indemnification
Indemnification is provided to officers and trustees of the Registrant
pursuant to the Registrant's Declaration of Trust, except where such
indemnification is not permitted by law. However, the Declaration of Trust
does not protect the trustees or officers from liability based on willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office.
Trustees and officers of the Registrant are insured against certain
liabilities, including liabilities arising under the Securities Act of 1933
(the "Act").
Insofar as indemnification for liabilities arising under the Act may
be permitted to trustees, officers, and controlling persons of the
Registrant by the Registrant pursuant to the Declaration of Trust or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by trustees,
officers, or controlling persons of the Registrant in connection with the
successful defense of any act, suit, or proceeding) is asserted by such
trustees, officers, or controlling persons in connection with the shares
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
Insofar as indemnification for liabilities may be permitted pursuant
to Section 17 of the Investment Company Act of 1940 for trustees, officers,
or controlling persons of the Registrant by the Registrant pursuant to the
Declaration of Trust or otherwise, the Registrant is aware of the position
of the Securities and Exchange Commission as set forth in Investment
Company Act Release No. IC-11330. Therefore, the Registrant undertakes
that in addition to complying with the applicable provisions of the
Declaration of Trust or otherwise, in the absence of a final decision on
the merits by a court or other body before which the proceeding was
brought, that an indemnification payment will not be made unless in the
absence of such a decision, a reasonable determination based upon factual
review has been made (i) by a majority vote of a quorum of non-party
trustees who are not interested persons of the Registrant or (ii) by
independent legal counsel in a written opinion that the indemnitee was not
liable for an act of willful misfeasance, bad faith, gross negligence, or
reckless disregard of duties. The Registrant further undertakes that
advancement of expenses incurred in the defense of a proceeding (upon
undertaking for repayment unless it is ultimately determined that
indemnification is appropriate) against an officer, trustee, or controlling
person of the Registrant will not be made absent the fulfillment of at
least one of the following conditions: (i) the indemnitee provides
security for his undertaking; (ii) the Registrant is insured against losses
arising by reason of any lawful advances; or (iii) a majority of a quorum
of disinterested non-party trustees or independent legal counsel in a
written opinion makes a factual determination that there is reason to
believe the indemnitee will be entitled to indemnification.
Item 16. Exhibits
1.1 Conformed Copy of Declaration of Trust of the Registrant (6)
1.2 Copy of Amendment No. 1, dated September 20, 1990, to the Declaration
of Trust (2)
1.3 Copy of Amendment No. 2, dated November 14, 1991, to the Declaration
of Trust (3)
1.4 Conformed Copy of Amendment No. 3, dated October 1, 1992, to the
Declaration of Trust (4)
1.5 Conformed Copy of Amendment No. 4, dated October 1, 1992, to the
Declaration of Trust (6)
1.6 Conformed Copy of Amendment No. 5, dated May 27, 1994, to the
Declaration of Trust (6)
1.7 Conformed Copy of Amendment No. 6, dated July 28, 1994, to the
Declaration of Trust (6)
1.8 Conformed Copy of Amendment No. 7, dated December 25, 1993, to the
Declaration of Trust (6)
1.9 Conformed Copy of Amendment No. 8, dated December 1, 1994, to the
Declaration of Trust (6)
2 Copy of Bylaws of the Registrant (1)
3 Not Applicable
4 Agreement and Plan of Reorganization was included as Appendix A to the
Combined Proxy Statement and Prospectus of the Registration Statement
(9)
5 Not Applicable
6.1 Conformed Copy of Investment Advisory Contract of the Registrant and
Exhibits A-G thereto (6)
6.2 Form of Exhibit H to the present Investment Advisory Contract of the
Registrant to add The Strategic Stock Fund to the existing Investment
Advisory Contract (8)
7.1 Conformed Copy of Distributor's Contract of the Registrant and
Exhibits A-D thereto (6)
7.2 Form of Exhibit E to the Distributor's Contract of the Registrant (6)
8 Not Applicable
9.1 Conformed Copy of Custodian Agreement of the Registrant (5)
9.2 Conformed Copy of Transfer Agency and Service Agreement (Fund
Accounting and Shareholder Recordkeeping) of the Registrant (5)
10.1 Conformed Copy of Distribution Plan of the Registrant and Amendment
No. 1 and Exhibit A thereto, and Amendment No. 2 thereto (6)
10.2 Copy of Rule 12b-1 Agreement of the Registrant and Amendment Nos. 1
and 2 thereto (6)
11 Opinion regarding legality of shares being issued (9)
12 Opinion of Dickstein, Shapiro & Morin, L.L.P. regarding tax
consequences of Reorganization*
13.1 Conformed Copy of Administrative Services Agreement of the Registrant
(6)
13.2 Conformed Copy of previous Administrative Services Agreement of the
Registrant (6)
14.1 Conformed Copy of Consent of Deloitte & Touche LLP, Independent
Auditors (9)
14.2 Conformed Copy of Consent of Price Waterhouse LLP, Independent Public
Accountants (9)
15 Not Applicable
16 Conformed Copy of Power of Attorney (7)
17.1 Copy of Declaration under Rule 24f-2 (9)
17.2 Form of Proxy (9)
* Filed electronically.
(1) Response is incorporated by reference to Registrant's Initial
Registration Statement on Form
N-1A filed August 24, 1990 (File Nos. 33-36451 and 811-6158).
(2) Response is incorporated by reference to Registrant's Pre-Effective
Amendment No. 3 and Amendment No. 3 to its Registration Statement on
Form N-1A filed October 9, 1990 (File Nos. 33-36451 and 811-6158).
(3) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 3 and Amendment No. 6 to its Registration Statement on
Form N-1A filed December 2, 1991 (File Nos. 36451 and 811-6158).
(4) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 5 and Amendment No. 8 to its Registration Statement on
Form N-1A filed November 24, 1993 (File Nos. 36451 and 811-6158).
(5) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 7 and Amendment No. 10 to its Registration Statement on
Form N-1A filed June 20, 1994 (File Nos. 36451 and 811-6158).
(6) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 10 and Amendment No. 13 to its Registration Statement on
Form N-1A filed December 21, 1994 (File Nos. 36451 and 811-6158).
(7) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 12 and Amendment No. 15 to its Registration Statement on
Form N-1A filed May 26, 1995 (File Nos. 36451 and 811-6158).
(8) Response is incorporated by reference to Registrant's Post-Effective
Amendment No. 13 and Amendment No. 16 to its Registration Statement on
Form N-1A filed November 29, 1995 (File Nos. 36451 and 811-6158).
(9) Response is incorporated by reference to Registrant's Initial
Registration Statement on Form
N-14 filed April 16, 1996 (File Nos. 33-36451 and 811-6158).
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public
reoffering of the securities registered through the use of a prospectus
which is a part of this Registration Statement by any person or party who
is deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, 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 a 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 Securities Act
of 1933, 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.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, THE VIRTUS FUNDS, has duly caused this Amendment to its
Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Pittsburgh and Commonwealth of
Pennsylvania, on the 10th day of July, 1996.
THE VIRTUS FUNDS
BY: /s/ C. Grant Anderson
C. Grant Anderson, Assistant Secretary
Attorney in Fact for John F. Donahue
July 10, 1996
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to its Registration Statement has been signed below by the
following persons in the capacities and on the date indicated:
NAME TITLE DATE
By:/s/ C. Grant Anderson
C. Grant Anderson Attorney In Fact July 10, 1996
ASSISTANT SECRETARY For the Persons
Listed Below
NAME TITLE
John F. Donahue * Chairman and Trustee
(Chief Executive Officer)
Edward C. Gonzales * President, Treasurer
(Principal Financial and
Accounting Officer) and
Trustee
Thomas G. Bigley* Trustee
John T. Conroy, Jr.* Trustee
William J. Copeland* Trustee
James E. Dowd* Trustee
Lawrence D. Ellis, M.D.* Trustee
Edward L. Flaherty, Jr.* Trustee
Peter E. Madden* Trustee
Gregor F. Meyer* Trustee
John E. Murray, Jr.* Trustee
Wesley W. Posvar* Trustee
Marjorie P. Smuts* Trustee
* By Power of Attorney
DICKSTEIN, SHAPIRO & MORIN, L.L.P.
2101 L Street N.W.
Washington, D.C. 20037-1526
202-785-9700
June 21, 1996
The Virtus Fund, on behalf of its portfolio,
the Style Manager: Large Cap Fund
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Blanchard Funds, on behalf of its portfolio,
Blanchard American Equity Fund
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Ladies and Gentlemen:
We have acted as special counsel in connection with, and you have requested
our opinion concerning the federal income tax consequences of, a transaction
(the "Reorganization") in which all of the assets of Blanchard American Equity
Fund (the "Acquired Fund"), a portfolio of Blanchard Funds, a Massachusetts
business trust ("Blanchard"), will be acquired by The Virtus Funds, a
Massachusetts business trust ("Virtus"), on behalf of its portfolio, The Style
Manager: Large Cap Fund (the "Acquiring Fund"), in exchange solely for
Investment Shares of Acquiring Fund (the "Acquiring Fund Shares"). The terms
and conditions of this transaction are set forth in an Agreement and Plan of
The Virtus Fund
June 21, 1996
Page 2
Reorganization dated April 12, 1996 between Virtus, on behalf of the Acquired
Fund (the "Agreement"). This opinion is rendered to you pursuant to paragraph
8.5 of the Agreement, and all terms used herein have the meanings assigned to
them in the Agreement.
Both Acquiring Fund and Acquired Fund are open-end, management investment
companies which qualify as regulated investment companies described in Section
851 (a) of the Internal Revenue Code of 1986, as amended (the "Code"). The
Acquired Fund and the Acquiring Fund are engaged in the business of investing in
professionally managed portfolios primarily of equity securities.
On the Closing Date under the Agreement, the Acquired Fund will transfer
its entire investment portfolio to the Acquiring Fund. In exchange, the
Acquiring Fund will transfer, to the Acquired Fund, Acquiring Fund Shares in an
amount equal in value to the assets transferred by the Acquired Fund to the
Acquiring Fund. The Acquired Fund will thereupon liquidate and distribute its
Acquiring Fund Shares pro rata to its shareholders ("Acquired Fund
Shareholders").
We have reviewed and relied upon the representations contained in the
Agreement and in such other documents and instruments as we have deemed
necessary for the purposes of this opinion, and have reviewed the applicable
provisions of the Code, current regulations and administrative rules thereunder
and pertinent case law.
Based upon the foregoing, and assuming that the Reorganization and related
transactions will take place as described in the Agreement, we are of the
opinion that, for federal income tax purposes:
The Virtus Fund
June 21, 1996
Page 3
(a) The transfer of all of the Acquired Fund assets in exchange for the
Acquiring Fund Shares and the distribution of the Acquiring Fund Shares to the
Acquired Fund Shareholders in liquidation of the Acquired Fund will constitute a
"reorganization" within the meaning of Section 368 (a) (1) (C) of the Code;
(b) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the Acquiring
Fund Shares;
(c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund assets to the Acquiring Fund in exchange for the
Acquiring Fund Shares or upon the distribution (whether actual or constructive)
of the Acquiring Fund Shares to Acquired Fund Shareholders;
(d) No gain or loss will be recognized by the Acquired Fund Shareholders
upon the exchange of their Acquired Fund shares for the Acquiring Fund Shares;
(e) The tax basis of the Acquired Fund assets acquired by the Acquiring
Fund will be the same as the tax basis of such assets to the Acquired Fund
immediately prior to the Reorganization;
(f) The tax basis of the Acquiring Fund Shares received by each of the
Acquired Fund Shareholders pursuant to the Reorganization will be the same as
the tax basis of the Acquired Fund shares held by such shareholder immediately
prior to the reorganization;
The Virtus Fund
June 21, 1996
Page 4
(g) The holding period of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the Acquired
Fund; and
(h) The holding period of the assets of the Acquired Fund in the hands of
the Acquiring Fund Shareholder will include the period during which the Acquired
Fund shares exchanged therefor were held by such shareholder (provided the
Acquired Fund shares were held as capital assets on the date of the
Reorganization).
We hereby consent to the filing of a copy of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement
on Form N-14 filed by Virtus in connection with the Reorganization, and to the
references to this firm and this opinion in the Prospectus/Proxy Statement which
is contained in such Registration Statement.
Very truly yours,
/s/ Dickstein, Shapiro & Morin, L.L.P.
