As filed with the Securities and Exchange Commission on December 28, 1995
File No. 811-8358
Registration No. 33-75250
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |X|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 4 |X|
and
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Post-Effective Amendment No. 4 |X|
_______________________________________
MUTUAL FUND TRUST
(Exact Name of Registrant as Specified in Charter)
125 West 55th Street
New York, New York 10019
__________________________________________________
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 492-1600
Copy to:
Ann Bergin Carl Frischling, Esq.
Mutual Fund Trust Kramer, Levin, et. al.
125 West 55th Street 919 Third Avenue
New York, New York 10019 New York, New York 10022
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(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
|_| immediately upon filing pursuant to |_| on ( ) pursuant to
paragraph (b) paragraph (b)
|_| 60 days after filing pursuant to |_| on ( ) pursuant to
paragraph (a)(1) paragraph (a)(1)
|X| 75 days after filing pursuant to |_| on ( ) pursuant to
paragraph (a)(2) paragraph (a)(2) rule 485.
If appropriate, check the following box:
|_| this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
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The Registrant has registered an indefinite number or amount of its shares of
common stock for each of its three series of shares under the Securities Act of
1933 pursuant to Rule 24f-2 under the Investment Company Act of 1940 on July 18,
1994 and the Rule 24f-2 Notice for the Registrant's fiscal year ended August 31,
1995 was filed on October 21, 1995.
<PAGE>
CROSS-REFERENCE SHEET
(Pursuant to Rule 404 showing location in each form of Prospectus of the
responses to the Items in Part A and location in each form of Prospectus and the
Statement of Additional Information of the responses to the Items in Part B of
Form N-1A).
VISTA SHARES
VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
* * * * * * * * * * * * * * * * * * * *
VISTA PREMIER SHARES
VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
* * * * * * * * * * * * * * * * * * * *
VISTA INSTITUTIONAL SHARES
VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
* * * * * * * * * * * * * * * * * * * *
Item Number Statement of
Form N-1A, Additional
Part A Prospectus Caption Information Caption
1 Front Cover Page *
2(a) Expense Summary *
(b) Not Applicable *
3(a) Financial Highlights *
(b) Not Applicable *
(c) Yield and Performance Information *
4(a) Investment Objective and Policies; *
Additional Information on Investment
Policies, Techniques and Risk Factors
(c) Investment Objective and Policies *
5(a) Management of the Fund(s) *
(b) Management of the Fund(s) - The *
Adviser; Back Cover Page
(c) Management of the Fund(s) - The *
Administrator; Shareholder Servicing
Agents, Transfer Agent and Custodian
(d) Shareholder Servicing Agents, *
Transfer Agent and Custodian -
Transfer Agent and Custodian; Back
Cover Page
(e) Other Information Concerning Shares *
of the Fund(s) - Expenses
(f) Financial Highlights *
-i-
<PAGE>
Item Number Statement of
Form N-1A, Additional
Part A Prospectus Caption Information Caption
5A.(a-b) Not Applicable *
6(a) Other Information Concerning Shares
of the Fund(s) - Description of Shares,
Voting Rights and Liabilities *
(b) Not Applicable *
(c) Not Applicable *
(d) Not Applicable *
(e) Shareholder Servicing Agents, *
Transfer Agent and Custodian -
Shareholder Servicing Agents
(f) Other Information Concerning Shares *
of the Fund(s) - Net Income and
Dividends
(g) Tax Matters Tax Matters
7(a) Purchase and Redemptions of Shares - *
Purchases; Back Cover Page
(b) Purchases and Redemptions of Shares *
- Purchases; Other Information
Concerning Shares of the Fund(s) -
Net Asset Value; Shareholder
Servicing Agents, Transfer Agent and
Custodian - Shareholder Servicing
Agents
(c) Not Applicable *
(d) Shareholder Servicing Agents, *
Transfer Agent and Custodian -
Shareholder of Servicing Agents
(e) Purchases and Redemptions of Shares *
- Distribution Plan and Distribution
and Sub-Administration Agreement
(f) Other Information Concerning Shares Management of the
of the Fund(s) - Distribution Plans and Fund(s) - Distributor -
Distribution and Sub-Administration - Distribution Plan
Agreement
8(a) Purchases and Redemptions of Shares *
- Redemptions
(b) Purchases and Redemptions of Shares *
- Redemptions
(c) Not Applicable *
(d) Not Applicable *
9 Not Applicable *
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<PAGE>
VISTA(sm) 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
------ ------------------ -------------------
10 * Front Cover Page
11 * Front Cover Page
12 * Not Applicable
13 Investment Objective and Investment Objective,
Policies Policies and Restrictions
14 * Management of the Fund(s)
- Trustees and Officers
15(a) * Not Applicable
(b) * Not Applicable
(c) * Management of the Fund(s)
16(a) Management of the Fund(s)-Adviser Management of the Fund(s)-
Adviser
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<PAGE>
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
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(b) Management of the Fund(s)-Adviser Management of the Fund(s)-
Adviser
(c) Other Information Concerning Management of the Fund(s)-
Shares of the Fund(s) - Expenses Administrator
(d) Management of the Fund(s)- Management of the Fund(s)-
Administrator Administrator
(e) * Not Applicable
(f) Purchases and Redemptions of Shares- Management of the Fund(s)-
Distribution Plan and Distribution Distributor
and Sub-Administration Agreement
(g) * Not Applicable
(h) * Management of the Fund(s)-
Shareholder Servicing
Agents, Transfer Agent and
Custodian; Independent
Accountants; Back Cover
Page
(i) * Not Applicable
17 Investment Objectives and Policies Investment Objectives,
Policies and Restrictions -
Portfolio Transactions
18 Other Information Concerning Shares General Information
of the Fund(s)-Description of Shares of Shares, Voting Rights
Voting Rights and Liabilities and Liabilities
19(a) Purchases and Redemptions of Shares *
(b) Other Information Concerning Shares Determination of Net Asset
of the Fund(s) - Net Asset Value; Value
Purchases and Redemptions of Shares
-iv-
<PAGE>
Item Number
Form N-1A, Statement of Additional
Part B Prospectus Caption Information Caption
------ ------------------ -------------------
(c) * Not Applicable
20 Tax Matters Tax Matters
21(a) * Management of the Fund(s)-
Distributor
(b) * Management of the Fund(s)-
Distributor
(c) * Not Applicable
22 * Performance Information -
Yield Quotations
23 * Not Applicable
Part C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Registration Statement.
<PAGE>
PART A
<PAGE>
VISTA(sm) 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
VISTA SHARES PROSPECTUS -- ___________, 1996
Mutual Fund Trust (the "Trust") is an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on February 4, 1994, presently consisting of ___ separate series
("Funds"). Under a multi-class distribution system, the money market funds may
be offered through three separate classes of shares (the "Shares"). The Vista
Shares described in and offered pursuant to this Prospectus are offered through
the Vista 100% U.S. Treasury Securities Money Market Fund (the "Vista Shares").
The Premier Shares of the Fund are offered only to institutional clients and are
sold under a separate prospectus. The Institutional Shares of the Fund are also
sold under a separate prospectus available only to qualified institutional
investors making an initial investment of at least $1,000,000.
THE VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND's (the "100%
U.S. Treasury Fund" or the "Fund") investment objective is to seek maximum
current income consistent with maximum safety of principal and maintenance of
liquidity. The Fund seeks to achieve its objectives by investing solely in
obligations issued by the U.S. Treasury, including U.S. Treasury bills, bonds
and notes, which differ principally only in their interest rates, maturities and
dates of issuance. The Fund does not purchase securities issued or guaranteed by
agencies or instrumentalities of the U.S. Government, nor does it enter
repurchase agreements. Because the Fund invests exclusively in direct Unites
States Treasury Obligations, investors may benefit from income tax exclusions
and exemptions that are available in certain states and localities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Chase Manhattan Bank, N.A. ("Chase") is the investment adviser
(the "Adviser"), custodian (the "Custodian"), administrator (the
"Administrator") and Shareholder Servicing Agent for the 100% U.S. Treasury
Fund. Chase Asset Management, Inc. is the investment sub-adviser ("CAM Inc." or
the "Sub-Adviser") for the 100% U.S. Treasury Fund.
Vista Broker-Dealer Services, Inc. ("VBDS") is the Fund's distributor
and is unaffiliated with Chase. Investment in the Fund is subject to risk --
including possible loss of principal. Shares of the Fund are not bank deposits
or obligations of, or guaranteed or endorsed by, The Chase Manhattan Bank, N.A.
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.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share. Prospective investors should
carefully consider the risks associated with an investment in the Fund. For a
further discussion on the risks associated with an investment in the Fund, see
"Investment Objectives and Policies" in this Prospectus. There can be no
assurance that the Fund will achieve its investment objectives.
The Vista Shares are continuously offered for sale without a sales load
through VBDS, the Fund's distributor (the "Distributor"), to customers of a
financial institution, such as a federal or state-chartered bank, trust company
or savings and loan association with which the Trust has entered into a
shareholder servicing agreement (collectively, "Shareholder Servicing Agents")
or securities brokers or certain financial institutions which have entered into
Selected Dealer Agreements with the Distributor. The Vista Shares have a
distribution plan and may incur distribution expenses, at an annual rate, not to
exceed a specified percentage of its average daily net assets. An investor
should obtain from his Shareholder Servicing Agent, if appropriate, and should
read in conjunction with this Prospectus, the materials provided by the
Shareholder Servicing Agent describing the procedures under which Vista Shares
may be purchased and redeemed through such Shareholder Servicing
<PAGE>
Agent. Shares may be redeemed by shareholders at the net asset value next
determined on any Fund Business Day as hereinafter defined.
This Prospectus sets forth concisely information concerning the Fund
and its Vista Shares that a prospective investor ought to know before investing.
A Statement of Additional Information dated _____ , 1996 containing more
detailed information about the Fund has been filed with the Securities and
Exchange Commission and is incorporated into this Prospectus by reference. An
investor may obtain a copy of the Statement of Additional Information for the
Vista Shares without charge by contacting his Shareholder Servicing Agent, the
Distributor or the Fund.
Investors should read this Prospectus and retain it for future
reference.
For information about the Vista Shares, simply call the Vista Service
Center at 1-800-34-VISTA.
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<PAGE>
EXPENSE SUMMARY
The following table provides (i) a summary of the aggregate annual operating
expenses of the Fund, as a percentage of average net assets of the Fund, and
(ii) an example illustrating the dollar cost of such expenses on a $1,000
investment in shares of the Fund.
Vista
Shares
Annual Fund Operating Expenses
(as a percentage of average net assets)
Investment Advisory Fee............................... .10%
Rule 12b-1 Distribution Plan Fee................................. .10%
Administrative Fee............................................... .05%
Other Expenses
Sub-Administration Fee................................ .05%
Shareholder Servicing Fee +........................... .17%
Other Operating Expenses++............................ .12%
Total Fund Operating Expenses .59%
Example:
You would pay the following expenses on a $1,000 investment in a Fund, assuming
(1) 5% annual return and (2) redemption at the end of:
1 year........................................$
3 years.......................................$
5 years.......................................$
10 years......................................$
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+ Shareholder Servicing Agents may provide various services to their
customers and charge additional fees for these services. The
Shareholder Servicing and Fund Servicing Fees include fees for
activities in connection with serving as liaison for holders of Vista
Shares and in providing personal services to such shareholders as well
as other ministerial and servicing activities. Fees for the activities
in connection with serving as liaison to, and providing personal
services to, holders of Vista Shares will not exceed the NASD's
maximum fee of 0.25% for these types of activities. The other
ministerial and servicing activities provided for the Fund include:
assisting in processing purchase and redemption transactions;
transmitting and receiving funds in connection with purchase and
redemption orders; preparing and providing periodic statements showing
account balances; and preparing and transmitting proxy statements and
other periodic reports and communications from the Trust to customers.
++ A shareholder may incur a $10.00 charge for certain wire
redemptions.
The expense summary is intended to assist investors in understanding
the various costs and expenses that a shareholder in the Vista Shares class of
shares of the Fund will bear directly or indirectly. The expense summary shows
the investment advisory fee, distribution fee, administrative fee,
sub-administration fee and shareholder servicing agent fee expected to be
incurred by the Vista Shares class of shares of each Fund.
As a result of the distribution fees, long-term investors may pay more
than the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers, Inc. ("NASD"). More complete
descriptions of each Class of shares' expenses, including any fee waivers, are
set forth herein or in the prospectus for such class of Shares.
- 3 -
<PAGE>
The "Example" set forth above should not be considered a representation
of future expenses of Vista Shares of the Fund; actual expenses may be greater
or less than those shown.
FINANCIAL HIGHLIGHTS
The table set forth below provides selected per share data and ratios
for one share outstanding throughout the period shown for The Hanover 100% U.S.
Treasury Securities Money Market Fund, the predecessor to the Fund (the
"Predecessor Fund"). This information is supplemented by financial statements
and accompanying notes appearing in the Predecessor Fund's Annual Report to
Shareholders for the fiscal year ended November 30, 1994, which is incorporated
by reference into the Statement of Additional Information. The financial
statements and notes, as well as the financial information set forth in the
tables set forth below have been audited by KPMG Peat Marwick LLP, independent
accountants, whose report thereon is also included in the Annual Report to
Shareholders. Shareholders can obtain a copy of this report by contacting the
Fund or their Shareholder Servicing Agent.
<TABLE>
<CAPTION>
THE HANOVER 100% U.S. TREASURY FUND
Year Ended November 30 Period Ended
1995 1994 1993 1992 November 30, 1994
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD....................... $ $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------
Income from Investment Operations:
Net Investment Income............................ 0.033 0.026 0.033 0.021
----- ----- ----- -----
Less Distributions:
Dividends from net investment income............. (0.033) (0.026) (0.033) (0.021)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD............................ $ $1.000 $1.000 $1.000 $1.000
====== ====== ====== ======
TOTAL RETURN**............................................ 3.32% 2.62% 3.33% 2.58%
Ratios/Supplemental Data
Net Assets, End of Period (in thousands)......... $ $1,024,125 $873,631 $383,688 $141,875
Ratio of Expenses to Average Net Assets++......... 0.59% 0.58% 0.55% 0.45%+
Ratio of Net Investment Income to Average
Net Assets++.................................... 3.26% 2.58% 3.28% 5.02%+
</TABLE>
- ----------------------
* Commencement of operations July 1, 1991.
** Total return computed for the period.
+ Annualized.
++ Ratios before effect of waivers were 0.62%, 0.61%, 0.67%, and 0.75%
annualized, respectively.
- 4 -
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing securities pursuant to Rule 2a-7 under the Investment Company Act of
1940, as amended (the "1940 Act"), certain requirements of which are summarized
as follows. In accordance with Rule 2a-7, the Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 397 days or less and invest only in
U.S. dollar denominated securities determined in accordance with procedures
established by the Board of Trustees to present minimal credit risks and which
are rated in one of the two highest rating categories for debt obligations by at
least two nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated only by one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees.
The Fund's investment objective is to seek maximum current income consistent
with maximum safety of principal and maintenance of liquidity. The Fund seeks to
achieve its objective by investing in obligations issued by the U.S. Treasury,
including U.S. Treasury bills, bonds and notes, which differ principally only in
their interest rates, maturities and dates of issuance. The Fund does not
purchase securities issued or guaranteed by agencies or instrumentalities of the
United States Government, nor does it enter into repurchase agreements. The
dollar weighted average maturity of the Fund will be 90 days or less. Although
the Fund seeks to be fully invested, at times it may hold uninvested cash
reserves, which would adversely affect its yield.
Interest on United States Treasury obligations is exempt from state and
local income taxes under federal law; the interest is not exempt from federal
income tax. However, shareholders of the 100% U.S. Treasury Fund do not directly
receive interest on United States Treasury obligations, but rather receive
dividends from the 100% U.S. Treasury Fund that are derived from such interest.
Although many states allow the character of the 100% U.S. Treasury Fund's income
to pass through to its shareholders, certain states do not, so that
distributions from the 100% U.S. Treasury Fund derived from interest that is
exempt from state and local income taxes when received directly by a taxpayer
may not be exempt from such taxes when earned as a dividend by a shareholder of
the 100% U.S. Treasury Fund. Shareholders of the 100% U.S. Treasury Fund should
consult their tax advisers as to state and local consequences of investment in
the Fund.
ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND TECHNIQUES
Reverse Repurchase Agreements
The Fund may enter into reverse repurchase agreements to avoid selling
securities during unfavorable market conditions to meet redemptions. Pursuant to
a reverse repurchase agreement, the Fund will sell portfolio securities and
agree to repurchase them from the buyer at a particular date and price. Whenever
the Fund enters into a reverse repurchase agreement, it will establish a
segregated account in which it will maintain liquid assets in an amount at least
equal to the repurchase price marked to market daily (including accrued
interest), and will subsequently monitor the account to ensure that such
equivalent value is maintained. The Fund pays interest on amounts obtained
pursuant to reverse repurchase agreements. Reverse repurchase agreements are
considered to be borrowings by the Fund under the 1940 Act and are subject to
the Fund's general limitations with respect to borrowing.
Firm Commitments and When-Issued Securities
The Fund may purchase securities on a firm commitment basis, including
when-issued securities. Securities purchased on a firm commitment basis are
purchased for delivery beyond the normal settlement date at a stated price and
yield. Such securities are recorded as an asset and are subject to changes in
value based upon changes in the general level of interest rates. The Fund will
make commitments to purchase securities on a firm commitment basis only with the
intention of actually acquiring the securities, but may sell them before the
settlement date if it is deemed advisable.
- 5 -
<PAGE>
No income accrues to the purchase of a security on a firm commitment
basis prior to delivery. Purchasing a security on a firm commitment basis can
involve a risk that the market price at the time of delivery may be lower than
the agreed upon purchase price, in which case there could be an unrealized loss
at the time of delivery.
The Fund will establish a segregated account in which it will maintain
assets in an amount at least equal in value to the Fund's commitments to
purchase securities on a firm commitment basis. If the value of these assets
declines, the Fund will place additional liquid assets in the account on a daily
basis so that the value of the assets in the account is equal to the amount of
such commitments.
Portfolio Securities Lending
Although the Fund does not anticipate engaging in such
activity in the ordinary course of business, the Fund may lend portfolio
securities to broker-dealers and other institutional investors in order to
generate additional income. Such loans of portfolio securities may not exceed
30% of the value of its total assets. In connection with such loans, the Fund
will receive collateral consisting of cash, cash equivalents, U.S. Government
securities or irrevocable letters of credit issued by financial institutions.
Such collateral will be maintained at all times in an amount equal to at least
102% of the current market value of the securities loaned plus accrued interest.
The Fund can earn income through the investment of such collateral. The Fund
continues to be entitled to the interest payable on a loaned security and, in
addition, receive interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. The Fund might experience risk of
loss if the institutions with which it has engaged in portfolio loan
transactions breach their agreements with such Fund. The risk in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower
experience financial difficulty. Loans will be made only to firms deemed by the
Adviser or Sub-Adviser to be of good standing and will not be made unless, in
the judgment of the investment Adviser or Sub-Adviser, the consideration to be
earned from such loans justifies the risk.
The foregoing investment policies and activities are not fundamental
and may be changed by the Board of Trustees of the Trust without the approval of
shareholders. For more detailed descriptions of certain of the Fund's investment
activities, see "Investment Policies -- Additional Investment Activities" in the
Statement of Additional Information.
MANAGEMENT OF THE FUND
Adviser
The Chase Manhattan Bank, N.A. manages the assets of the Fund pursuant
to an Investment Advisory Agreement, dated ________________. Subject to such
policies as the Board of Trustees may determine, Chase makes investment
decisions for the Fund. For its services under the Investment Advisory
Agreements, Chase is entitled to receive an annual fee computed daily and paid
monthly at an annual rate equal to 0.10% of the Fund's average daily net assets.
However, Chase may, from time to time, voluntarily waive all or a portion of its
fees payable under the Investment Advisory Agreement.
The Adviser, a wholly-owned subsidiary of The Chase Manhattan
Corporation, a registered bank holding company, is a commercial bank offering a
wide range of banking and investment services to customers throughout the United
States and around the world. Its headquarters is at One Chase Manhattan Plaza,
New York, NY 10081. The Adviser, including its predecessor organizations, has
over 100 years of money management experience and renders investment advisory
services to others. Also included among the Adviser's accounts are commingled
trust funds and a broad spectrum of individual trust and investment management
portfolios. These accounts have varying investment objectives.
- 6 -
<PAGE>
Certain Relationships and Activities. Chase and its affiliates may have
deposit, loan and other commercial banking relationships with the issuers of
securities purchased on behalf of the Fund, including outstanding loans to such
issuers which may be repaid in whole or in part with the proceeds of securities
so purchased. Chase and its affiliates deal, trade and invest for their own
accounts in U.S. Treasury obligations and are among the leading dealers of
various types of U.S. Treasury obligations. Chase and its affiliates may sell
U.S. Treasury obligations to, and purchase them from, other investment companies
sponsored by the Distributor or affiliates of the Distributor. The Adviser will
not invest any Fund assets in any U.S. Treasury obligations purchased from
itself or any affiliate, although under certain circumstances such securities
may be purchased from other members of an underwriting syndicate in which the
Adviser or an affiliate is a nonprincipal member. This restriction may limit the
amount or type of U.S. Treasury obligations available to be purchased on behalf
of the Fund. The Adviser has informed the Fund that in making its investment
decisions, it does not obtain or use material inside information in the
possession of any other division or department of such Adviser or in the
possession of any affiliate of such Adviser, including the division of Chase
that performs services for the Trust as Custodian. Shareholders of the Fund
should be aware that, subject to applicable legal or regulatory restrictions,
Chase and its affiliates may exchange among themselves certain information about
the shareholders and their accounts.
Under an investment advisory agreement between the Trust, on behalf of
the Fund, and Chase, Chase may delegate a portion of its responsibilities to a
sub-adviser. In addition, the investment advisory agreement provides that Chase
may render services through its own employees or the employees of one or more
affiliated companies that are qualified to act as an investment adviser of the
Fund and are under the common control of New Chase as long as all such persons
are functioning as part of an organized group of persons, managed by authorized
officers of Chase.
Sub-Adviser
Chase has entered into an investment sub-advisory agreement with its
affiliate, CAM Inc., a registered investment adviser, on behalf of the Fund. The
Sub-Adviser is a wholly-owned subsidiary of Chase. Subject to the supervision
and direction of the Adviser and the Board of Trustees, CAM Inc. provides
investment subadvisory services to the Fund in accordance with the Fund's
objectives and policies, makes investment decisions for the Fund and places
orders to purchase and sell securities on behalf of the Fund. The Sub-Advisory
Agreement provides that, as compensation for services, the Sub-Adviser receives,
from the Adviser, a fee, based on the Fund's average daily net assets,
determined at a rate agreed upon from time to time between the Adviser and CAM
Inc. [DISCLOSURE ABOUT SUB-ADVISER TO COME]
Administrator
Pursuant to an Administration Agreement, dated April 15, 1994 (the
"Administration Agreement"), Chase serves as Administrator of the Trust. The
Administrator provides certain administrative services, including, among other
responsibilities, coordinating relationships with independent contractors and
agents; preparing for signature by officers and filing of certain documents
required for compliance with applicable laws and regulations excluding those of
the securities laws of the various states; arranging for the maintenance of
books and records; and providing office facilities necessary to carry out its
duties. For these services and facilities, the Administrator is entitled to
receive from the Fund a fee computed daily and paid monthly at an annual rate
equal to 0.05% of the Fund's average daily net assets. However, the
Administrator may, from time to time, voluntarily waive all or a portion of its
fees payable under the Administration Agreement. The Administrator, pursuant to
the terms of the Administration Agreement, shall not have any responsibility or
authority for the Fund's investments, the determination of investment policy, or
for any matter pertaining to the distribution of Fund shares.
Glass-Steagall Act. Chase has received the opinion of its legal counsel
that it may provide the services described in the Investment Advisory and the
Administration Agreements, as described above, and the Shareholder Servicing
Agreements and Custodian Agreement described below without violating the federal
- 7 -
<PAGE>
banking law commonly known as the Glass-Steagall Act. The Act generally bars
banks from publicly underwriting or distributing certain securities.
Based on the advice of its counsel, Chase believes that the Court's
decision, and these other decisions of federal banking regulators, permit it to
serve as investment adviser to a registered, open-end investment company.
Regarding the performance of shareholder servicing and custodial
activities, the staff of the Office of the Comptroller of the Currency, which
supervises national banks, has issued opinion letters stating that national
banks may engage in shareholder servicing and custodial activities. Therefore,
Chase believes, based on advice of its counsel, that it may serve as shareholder
servicing agent to the Fund and render the services described in the shareholder
servicing agreements, and Chase believes, based on advice of its counsel, that
it may serve as Custodian to the Trust and render the services set forth in the
Custodian Agreement, as appropriate, incidental national banking functions and
as proper adjunct to its serving as investment adviser and administrator to the
Fund.
Industry practice and regulatory decisions also support a bank's
authority to act as administrator for a registered investment company. Chase, on
the advice of its counsel, believes that it may render the services described in
its Administration Agreement without violating the Glass-Steagall Act or other
applicable banking laws.
Possible future changes in federal law or administrative or judicial
interpretations of current or future law, however, could prevent Chase from
continuing to perform investment advisory, shareholder servicing, custodian or
other administrative services for the Fund. If that occurred, the Trust's Board
of Trustees promptly would seek to obtain for the Fund the services of another
qualified adviser, shareholder servicing agent, custodian or administrator, as
necessary. Although no assurances can be given, the Trust believes that, if
necessary, the switch to a new adviser, shareholder servicing agent, custodian
or administrator could be accomplished without undue disruption to the Funds'
operations.
In addition, state securities laws on this issue may differ from the
interpretation of federal law expressed herein, and banks and financial
institutions may be required to register as dealers pursuant to state law.
PURCHASES AND REDEMPTIONS OF SHARES
Purchases
The Vista Shares are continuously offered for sale without a sales load
at the net asset value next determined through Vista Broker-Dealer Services,
Inc. ("VBDS" or the "Distributor") after an order is received and accepted by
the Transfer Agent, provided it is transmitted prior to 12:00 noon, Eastern time
on any business day during which the New York Stock Exchange and the Adviser are
open for trading ("Fund Business Day"). (See "Other Information Concerning
Shares of the Funds--Net Asset Value"). Orders for Vista Shares received and
accepted prior to the above designated times will be entitled to all dividends
declared on such day.
It is anticipated that the Vista Shares' net asset value will remain
constant at $1.00 per share and the Fund will employ specific investment
policies and procedures to accomplish this result. Shares are being offered to
customers of a Shareholder Servicing Agent (i.e., a financial institution, such
as a federal or state-chartered bank, trust company or savings and loan
association that has entered into a shareholder servicing agreement with the
Fund) or to customers of brokers or certain financial institutions which have
entered into Selected Dealer Agreements with VBDS. An investor may purchase
Vista Shares by authorizing his Shareholder Servicing Agent, broker or financial
institution to purchase such Shares on his behalf through the Distributor, which
the Shareholder Servicing Agent, broker or financial institution must do on a
timely basis. All share purchases must be paid for in U.S. dollars, and checks
must be drawn on U.S. banks. In the event a check used to pay
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<PAGE>
for shares purchased is not honored by the bank on which it is drawn, the
purchase order will be cancelled and the shareholder will be liable for any
losses or expenses incurred by the Fund or its agents.
All purchases made by check should be in U.S. dollars and made payable
to the Vista Funds. Third party checks, except those payable to an existing
shareholder who is a natural person (as opposed to a corporation or
partnership), credit cards and cash will not be accepted. When purchases are
made by check or periodic automatic investment, redemptions will not be allowed
until the investment being redeemed has been in the account for 15 business
days.
Shareholder Servicing Agents may offer additional services to their
customers, including specialized procedures for the purchase and redemption of
Vista Shares, such as pre-authorized or systematic purchase and redemption
programs and "sweep" checking programs. Each Shareholder Servicing Agent may
establish its own terms, conditions and charges, including limitations on the
amounts of transactions, with respect to such services. Charges for these
services may include fixed annual fees, transaction fees, account maintenance
fees and minimum account balance requirements. The effect of any such fees will
be to reduce the yield on the investment of customers of that Shareholder
Servicing Agent. Conversely, certain Shareholder Servicing Agents may (although
they are not required by the Fund to do so) credit to the accounts of their
customers from whom they are already receiving other fees an amount not
exceeding the fees for their services as Shareholder Servicing Agents (see
"Shareholder Servicing Agents, Transfer Agent and Custodian--Shareholder
Servicing Agents"), which will have the effect of increasing the yield on the
investment of customers of that Shareholder Servicing Agent. Shareholder
Servicing Agents may also increase or reduce the minimum dollar amount required
to invest in the Fund and waive any applicable holding periods.
The Fund intends to be as fully invested at all times as is reasonably
practicable in order to enhance the yield on its assets. Accordingly, in order
to make investments which will immediately generate income, the Fund must have
federal funds available to it (i.e., monies credited to the account of the
Fund's custodian bank by a Federal Reserve Bank). Each Shareholder Servicing
Agent has agreed to provide each of the Vista Shares with federal funds for each
purchase at the time it transmits the order for such purchase to the
Distributor. Therefore, each shareholder and prospective investor should be
aware that if he does not have sufficient funds on deposit with, or otherwise
immediately available to, his Shareholder Servicing Agent, there may be a delay
in transmitting and effecting his purchase order since his Shareholder Servicing
Agent will have to convert his check, bank draft, money order or similar
negotiable instrument into federal funds prior to effecting the purchase order.
In such case, the purchase order will be effected at the purchase price per
share next determined after the conversion to federal funds has been
accomplished. If such a delay is necessary, it is expected that in most cases it
would not be longer than two business days.
The Vista Shares reserves the right to cease offering shares for sale
at any time, to reject any order for the purchase of shares and to cease
offering any services provided by a Shareholder Servicing Agent. Fund shares
will be maintained in book entry form, and no certificates representing shares
owned will be issued to shareholders.
Minimum Investments
The Fund has established minimum initial and additional investments for
the purchase of Fund Shares. The minimums detailed below vary by the type of
account being established:
Minimum
Initial
Account Type Investment
- -------------------------------------------- ---------------------------
Individual....................................... $ 2,500(1)
Individual Retirement Account (IRA)....... $ 1,000(2)
Spousal IRA...................................... $ 250
SEP-IRA.......................................... $ 1,000(2)
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Purchase Accumulation Plan....................... $ 250(3)
Payroll Deduction Program (401(k), 403(b), Keogh).... $ 100(4)
- ---------------
(1) Employees of the Adviser and its affiliates, and certain Qualified
Persons are eligible for a $1,000 minimum initial investment.
(2) A $250 minimum initial investment is allowed if the new account is
established with a $100 minimum monthly Systematic Investment Plan as
described below.
(3) Account must be established with a $200 minimum monthly Systematic
vestment Plan as described below. (4) A $25 minimum monthly investment
must be established through an automated payroll cycle.
The minimum additional investment is $100 for all types of accounts.
For further information as to how to direct a Shareholder Servicing
Agent to purchase shares of the Fund, an investor should contact his Shareholder
Servicing Agent.
Systematic Investment Plan. A shareholder may establish a monthly
investment plan by which investments are automatically made to his/her Vista
Fund account through Automatic Clearing House (ACH) deductions from a checking
account. The minimum monthly investment through this plan is $100. Shareholders
may choose either to have these investments made during the first or third week
each month. Please note that your initial ACH transactions may take up to 10
days from the receipt of your request to be established.
Shareholders electing to start this Systematic Investment Plan when
opening an account should complete Section 8 of the account application. Current
shareholders may begin a Systematic Investment Plan at any time by sending a
signed letter with signature guarantee to the Vista Service Center, P.O. Box
419392, Kansas City, MO 64141-6392. The letter should contain your Vista Fund
account number, the desired amount and cycle of the systematic investment, and
must include a voided check from the checking account from which debits are to
be made. A signature guarantee may be obtained from a bank, trust company,
broker-dealer or other member of the national securities exchange. Please note
that a notary public cannot provide signature guarantees.
Redemptions
A shareholder may redeem all or any portion of the shares in his
account on any Fund Business Day at the net asset value next determined after a
redemption request in proper form is furnished by the shareholder to his
Shareholder Servicing Agent and transmitted by it to and received by a Fund's
Transfer Agent. Therefore, redemptions will be effected on the same day the
redemption order is received only if such order is received prior to 12:00 noon,
Eastern time. Shares which are redeemed earn dividends up to and including the
day prior to the day the redemption is effected. The proceeds of a redemption
normally will be paid on the Fund Business Day the redemption is effected, but
in any event within seven days. The forwarding of proceeds from redemption of
shares which were recently purchased by check may be delayed until the purchase
check has cleared, which may take up to fifteen days. Similarly, the forwarding
of proceeds from redemption of shares which were purchased by Automatic Clearing
House transfer may be delayed up to 7 days. A shareholder who is a customer of a
Shareholder Servicing Agent may redeem his Vista Shares by authorizing his
Shareholder Servicing Agent or its agent to redeem such shares which the
Shareholder Servicing Agent or its agent must do on a timely basis.
The signature of both shareholders is required for any written
redemption requests (other than those by check) from a joint account. In
addition, a redemption request may be deferred for up to 15 calendar days if the
Transfer Agent has been notified of a change in either the address or the bank
account registration previously listed in the Fund records.
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<PAGE>
Although the Fund generally retains the right to pay the redemption
price of shares in kind with securities (instead of cash) the Trust has filed an
election under Rule 18f-1 of the Investment Company Act of 1940, as amended (the
"1940 Act"), committing to pay in cash all redemptions by a shareholder of
record up to the amounts specified in the rule (approximately $250,000).
The payment of redemption requests may be wired or mailed directly to a
previously designated domestic commercial bank account. However, all telephone
redemption requests in excess of $25,000 will be wired directly to such
previously designated bank account, for the protection of shareholders.
Normally, redemption payments will be transmitted on the next business day
following receipt of the request (provided it is made prior to 12:00 noon,
Eastern time). Redemption payments requested by telephone may not be available
in a previously designated bank account for up to four days. If no share
certificates have been issued, a wire redemption may be requested by telephone
or wire to the Vista Service Center. For telephone redemptions, call the Vista
Service Center at (800) 34-VISTA.
The right of any shareholder to receive payment with respect to any
redemption may be suspended or the payment of the redemption proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted or, to the
extent otherwise permitted by the 1940 Act if an emergency exists. Payment may
also be delayed on days when the Federal Reserve Bank is closed.
Automatic Redemption Plan. A shareholder owning $10,000 or more of the
shares of the Fund as determined by the then current net asset value may provide
for the payment monthly or quarterly of any requested dollar amount (subject to
limits) from his account to his order. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is received on
approximately the 1st or 15th day of the month following the end of the selected
payment period.
For further information as to how to direct a Shareholder Servicing
Agent to redeem shares of the Fund, a shareholder should contact his Shareholder
Servicing Agent.
Redemption of Accounts of Less than $500. The Fund may redeem the
shares of any shareholder, if at such time, the aggregate net asset value of the
shares in such shareholder's account is less than $500. In the event of any such
redemption, a shareholder will receive at least 60 days' notice prior to the
redemption.
Exchange Privileges
Shareholders of the Vista Shares of the Fund may exchange at relative
net asset value among the Vista Shares offered by Vista's other money market
funds, and may exchange at relative net asset value plus any applicable sales
charges among certain classes of shares of portfolios of Mutual Fund Group
("MFG"), an affiliated investment company, of which Chase is the adviser and
VBDS is the distributor, in accordance with the terms of the then-current
prospectus of the Fund being acquired. The prospectus of the Fund into which
shares are being exchanged should be read carefully prior to any exchange and
retained for future reference. With respect to exchanges into a fund which
charges a front-end sales charge, such sales charge will not be applicable if
the shareholder previously acquired his Vista Shares by exchange from such fund.
Under the Exchange Privilege, Shares of a Fund may be exchanged for
shares of other Funds of the Trust or MFG only if those Funds are registered in
the states where the exchange may legally be made. In addition, the account
registration for the Vista Fund (whether a Fund of the Trust or MFG) into which
shares of the Funds are being exchanged must be identical to that of the account
registration for the Fund from which shares are being redeemed. Any such
exchange may create a gain or loss to be recognized for Federal income tax
purposes. Normally, shares of the Fund to be acquired are purchased on the
Redemption Date, but such purchase may be delayed by either fund up to five
business days if the fund determines that it would be disadvantaged by an
immediate transfer of the proceeds.
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<PAGE>
This privilege may be amended or terminated at any time without notice.
Arrangements have been made for the acceptance of instructions by telephone to
exchange shares if certain preauthorizations or indemnifications are accepted
and on file. Further information and telephone exchange forms are available from
the Vista Service Center.
Market Timing. The exchange privilege described in each Prospectus is
not intended as a vehicle for short-term trading. Excessive exchange activity
may interfere with portfolio management and have an adverse effect on all
shareholders. In order to limit excessive exchange activity and other
circumstances where the Trustees, or Adviser believes doing so would be in the
best interest of the Fund, the Fund reserves the right to revise or terminate
the exchange privilege, limit the amount or number of exchanges or reject any
exchange. In addition, any shareholder who makes more than ten exchanges of
shares involving a Fund in a year or three in a calendar quarter will be charged
$5.00 administration fee per each such exchange.
General
The Fund has established certain procedures and restrictions, subject
to change from time to time, for purchase, redemption, and exchange orders,
including procedures for accepting telephone instructions and effecting
automatic investments and redemptions. The Fund's Transfer Agent may defer
acting on a shareholder's instructions until it has received them in proper
form. In addition, the privileges described in this Prospectus are not available
until a completed and signed account application has been received by the Fund's
Transfer Agent. Telephone transaction privileges are made available to
shareholders automatically upon opening an account unless the privilege is
declined in section 6 of the Account Application. To provide evidence of
telephone instructions, the Transfer Agent will record telephone conversations
with shareholders. The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. In the event the Fund does
not employ such procedures, it may be liable for losses due to unauthorized or
fraudulent instructions.
Upon receipt of any instructions or inquiries by telephone from a
shareholder or, if held in a joint account, from either party, or from any
person claiming to be the shareholder, the Fund or its agents are authorized,
without notifying the shareholder or joint account parties, to carry out the
instructions or to respond to the inquiries, consistent with the service options
chosen by the shareholder or joint shareholders in his or their latest account
application or other written request for services, including purchasing,
exchanging, or redeeming shares of the Fund and depositing and withdrawing
monies from the bank account specified in the Bank Account Registration section
of the shareholder's latest account application or as otherwise properly
specified to the Fund in writing. Shareholders agree to release and hold
harmless the Fund, the Adviser, the Administrator, any Shareholder Servicing
Agent or sub-agent and broker-dealer, and the officers, directors, employees and
agents thereof against any claim, liability, loss, damage and expense for any
act or failure to act in connection with Fund shares, any related investment
account, any privileges or services selected in connection with such investment
account, or any written or oral instructions or requests with respect thereto,
or any written or oral instructions or requests from someone claiming to be a
shareholder if the Fund or any of the above-described parties follow
instructions which they reasonably believe to be genuine and act in good faith
by complying with the reasonable procedures that have been established for Fund
accounts and services.
Shareholders purchasing their shares through a Shareholder Servicing
Agent may not assign, transfer or pledge any rights or interest in any Fund
shares or any investment account established with a Shareholder Servicing Agent
to any other person without the prior written consent of such Shareholder
Servicing Agent, and any attempted assignment, transfer or pledge without such
consent may be disregarded.
The Fund may also establish and revise, from time to time, account
minimums and transactions or amount restrictions on purchases, exchanges,
redemptions, checkwriting services, or other transactions permitted in
connection with shareholder accounts. The Fund may also require signature
guarantees for changes that shareholders request be made in Fund records with
respect to their accounts, including but not limited to, changes in the bank
account specified in the Bank Account Registration, or for any written requests
for
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<PAGE>
additional account services made after a shareholder has submitted an initial
account application to the Fund. The Fund may refuse to accept or carry out any
transaction that does not satisfy any restrictions then in effect.
.
TAX MATTERS
The following discussion is addressed primarily to individual investors
and is for general information only. A prospective investor, including a
corporate investor, should also review the more detailed discussion of federal
income tax considerations that is contained in the Statement of Additional
Information. In addition, each prospective investor should consult with his own
tax advisers as to the tax consequences of an investment in the Fund, including
the status of distributions from the Fund in his own state and locality.
The Fund intends to qualify each year and elect to be treated as a
separate "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Fund is treated as a
"regulated investment company" and all its taxable income, if any, is
distributed to its shareholders in accordance with the timing requirements
imposed by the Code, it will not be subject to federal income tax on amounts so
distributed. If for any taxable year the Fund does not qualify for the treatment
as a regulated investment company, all of its taxable income will be subject to
tax at regular corporate rates without any deduction for distributions to its
shareholders, and such distributions to shareholders will be taxable to the
extent of the Fund's current and accumulated earnings and profits.
The Trust is organized as a Massachusetts business trust and, under
current law, is not liable for any income or franchise tax in the Commonwealth
of Massachusetts as long as the Fund (and each other series of the Trust)
qualifies as a regulated investment company under the Code.
Distributions by the Fund of its taxable ordinary income (net of
expenses) and the excess, if any, of its net short-term capital gain over its
net long-term capital loss are generally taxable to shareholders as ordinary
income. Such distributions are treated as dividends for federal income tax
purposes, but do not qualify for the dividends-received deduction for
corporations. Distributions by a Fund of the excess, if any, of its net
long-term capital gain over its net short-term capital loss are designated as
capital gain dividends and are taxable to shareholders as long-term capital
gains, regardless of the length of time a shareholder has held his shares. The
Fund will seek to avoid recognition of capital gains.
Distributions to shareholders will be treated in the same manner for
federal income tax purposes whether received in cash or reinvested in additional
shares of a Fund. In general, distributions by a Fund are taken into account by
shareholders in the year in which they are made. However, certain distributions
made during January will be treated as having been paid by the Fund and received
by the shareholders on December 31 of the preceding year. A statement setting
forth the federal income tax status of all distributions made (or deemed made)
during the fiscal year, including any portions which constitute ordinary income
dividends, capital gain dividends and exempt-interest dividends, will be sent to
the Fund's shareholders promptly after the end of each year.
Under the backup withholding rules of the Code, certain shareholders
may be subject to 31% withholding of federal income tax on distributions and
redemption payments made by the Fund. Generally, shareholders are subject to
backup withholding if they have not provided the Fund with a correct taxpayer
identification number and certain required certifications.
Shareholders of the Fund will be subject to federal income tax on the
ordinary income dividends and any capital gain dividends from the Fund and may
also be subject to state and local taxes. The laws of some states and
localities, however, exempt from some taxes dividends such as those paid on
shares of the U.S. Government Fund to the extent such dividends are attributable
to interest on obligations of the and certain of its agencies and
instrumentalities. The Fund intends to advise its shareholders of the proportion
of their ordinary income dividends which are attributable to such interest.
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<PAGE>
The State of New York for example, exempts from its personal income tax
dividends such as those paid on shares of the Fund to the extent such dividends
are attributable to interest from obligations of the U.S. Government and certain
of its agencies and instrumentalities, provided that at least 50% of the Fund's
portfolio consists of such obligations and the Fund complies with certain notice
requirements. The New York State Department of Taxation and Finance (like most
other states) currently takes the position, however, that certain obligations
backed by the full faith and credit of the U.S. Treasury, such as GNMA
Certificates and repurchase agreements backed by any U.S. Government obligation,
do not constitute exempt obligations of the U.S. Government. (Under present
market conditions, it is expected that less than 50% of the Fund's portfolio
will consist of obligations which the New York State Department of Taxation and
Finance views as exempt. Accordingly, it is likely that no portion of the
dividends paid on shares of the Fund will be exempt from New York State personal
income tax.)
Shareholders are urged to consult their tax advisers regarding the
possible exclusion from state and local income tax of a portion of the dividends
paid on shares of the Fund which is attributable to interest from obligations of
the U.S. Government and its agencies and instrumentalities
OTHER INFORMATION CONCERNING SHARES OF THE FUND
Net Asset Value
The net asset value of the Shares of the Fund is determined as of 12:00
noon, Eastern time on each Fund Business Day, by dividing the value of the
Fund's net assets (i.e., the value of its securities and other assets less its
liabilities, including expenses payable or accrued) by the number of its shares
outstanding at the time the determination is made. The portfolio securities of
the Fund are valued at their amortized cost pursuant to Rule 2a-7 under the 1940
Act, certain requirements of which are summarized under "Additional Information
on Investment Policies and Techniques." This method increases stability in
valuation, but may result in periods during which the stated value of a
portfolio security is higher or lower than the price the Fund would receive if
the instrument were sold. It is anticipated that the net asset value of each
share will remain constant at $1.00 and the Fund will employ specific investment
policies and procedures to accomplish this result, although no assurance can be
given that they will be able to do so on a continuing basis. These procedures
include a review of the extent of any deviation of net asset value per share,
based on available market rates, from the $1.00 amortized cost price per share,
and consideration of certain actions before such deviation exceeds 1/2 of 1%.
Income earned on the Fund's investments is accrued daily and the Net Income, as
defined under "Distributions and Dividends" below, is declared each Fund
Business Day as a dividend. See "Determination of Net Asset Value" in the
Statement of Additional Information for further information regarding
determination of net asset value and the procedures to be followed to stabilize
the net asset value at $1.00 per share.
Distributions and Dividends
The net income of the Vista Shares is determined each Fund Business Day
(and on such other days as the Trustees deem necessary in order to comply with
Rule 22c-1 under the 1940 Act). This determination is made once during each such
day as of 12:00 noon, Eastern time. All the net income, as defined below, of the
Vista Shares so determined is declared in shares as a dividend to shareholders
of record at the time of such determination. Shares begin accruing dividends on
the day they are purchased. Dividends are distributed monthly on or about the
last business day of each month (or on such other date in each month as the
shareholder's Shareholder Servicing Agent may designate as the dividend
distribution date with respect to a particular shareholder). Unless a
shareholder elects to receive dividends in cash (subject to the policies of the
shareholder's Shareholder Servicing Agent), dividends are distributed in the
form of additional shares at the rate of one share (and fractions thereof) for
each one dollar (and fractions thereof) of dividend income.
For this purpose, the net income of the Vista Shares (from the time of
the immediately preceding determination thereof) shall consist of all income
accrued, including the accretion of discounts less the amortization of any
premium on the portfolio assets of the Fund, less all actual and accrued
expenses
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<PAGE>
determined in accordance with generally accepted accounting principles. As noted
above, securities are valued at amortized cost, which the Trustees have
determined in good faith constitutes fair value for the purposes of complying
with the 1940 Act. This valuation method will continue to be used until such
time as the Trustees determine that it does not constitute fair value for such
purposes.
Since the net income of the Vista Shares is declared as a dividend each
time its net income is determined, the net asset value per share (i.e., the
value of its net assets divided by the number of its shares outstanding) is
expected to remain at $1.00 per share immediately after each such determination
and dividend declaration. Any increase in the value of a shareholder's
investment, representing the reinvestment of dividend income, is reflected by an
increase in the number of shares in his account.
It is expected that the Vista Shares will have a positive net income at
the time of each determination thereof. If for any reason the net income
determined at any time is a negative amount, which could occur, for instance,
upon default by an issuer of a portfolio security, the Fund would first offset
the negative amount with respect to each shareholder account from the dividends
declared during the month with respect to each such account. If, and to the
extent that such negative amount exceeds such declared dividends at the end of
the month, the number of outstanding shares will be reduced by treating each
shareholder as having contributed to the capital of the Fund that number of full
and fractional shares in the account of such shareholder which represents his
proportion of the amount of such excess. Each shareholder will be deemed to have
agreed to such contribution in these circumstances by his investment. Thus, the
net asset value per share will be maintained at a constant $1.00.
Distribution Plan and Distribution and Sub-Administration Agreement
The Trustees have adopted a Distribution Plan ("Distribution Plan") in
accordance with Rule 12b-1 under the 1940 Act, after having concluded that there
is a reasonable likelihood that the Distribution Plan will benefit the Fund and
its shareholders.
The Distribution Plan provides that the Fund shall pay distribution
fees (the "Basic Distribution Fee"), including payments to the Distributor, at
an annual rate not to exceed .10% of the average daily net assets for
distribution services. Since the Basic Distribution Fee is not directly tied to
its expenses, the amount of Basic Distribution Fees paid by each of the Vista
Shares during any year may be more or less than actual expenses incurred
pursuant to the Distribution Plan. For this reason, this type of distribution
fee arrangement is characterized by the staff of the Securities and Exchange
Commission as being of the "compensation variety" (in contrast to
"reimbursement" arrangements such as those described in the next paragraph, by
which a distributor's compensation is directly linked to its expenses). However,
the Vista Shares are not liable for any distribution expenses incurred in excess
of the Basic Distribution Fee paid.
The Distribution and Sub-Administration Agreement dated ________, 1995
(the "Distribution Agreement") provides that the Distributor will act as the
principal underwriter of the Fund's shares and bear the expenses of printing,
distributing and filing prospectuses and statements of additional information
and reports used for sales purposes, and of preparing and printing sales
literature and advertisements not paid for by the Distribution Plan. In
addition, the Distributor will provide certain sub-administration services,
including providing officers, clerical staff and office space. The Distributor
currently receives a fee for sub-administration from the Fund at an annual rate
equal to 0.05% of the Fund's average daily net assets, on an annualized basis
for the Fund's then-current fiscal year. Other funds which have investment
objectives similar to those of the Fund, but which do not pay some or all of
such fees from their assets, may offer a higher return, although investors
would, in some cases, be required to pay a sales charge or a redemption fee.
The Distributor has agreed to use a portion of its distribution and
sub-administration fee to pay for certain expenses of the Fund incurred in
connection with organizing new series of the Trust and certain other ongoing
expenses of the Trust. The Distributor may, from time to time, waive all or a
portion of the fees payable to it by the Fund under the Distribution and
Sub-Administration Agreement.
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<PAGE>
Expenses
The Fund intends to pay all of its pro rata share of expenses,
including the compensation of the Trustees; all fees under its Distribution
Plan; governmental fees; interest charges; taxes; membership dues in the
Investment Company Institute; fees and expenses of independent accountants, of
legal counsel and of any transfer agent, Shareholder Servicing Agent, or
dividend disbursing agent; expenses of redeeming shares and servicing
shareholder accounts; expenses of preparing, printing and mailing prospectuses,
reports, notices, proxy statements and reports to shareholders and to
governmental officers and commissions; expenses connected with the execution,
recording and settlement of portfolio security transactions; insurance premiums;
fees and expenses of the Custodian including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the net
asset values of the Vista Shares; expenses of shareholder meetings; and the
advisory fees payable to the Adviser under the Investment Advisory Agreement,
the administration fee payable to the Administrator under the Administration
Agreement and the sub-administration fee payable to the Distributor under the
Distribution and Sub-Administration Agreement. Expenses relating to the
issuance, registration and qualification of shares of the Fund and the
preparation, printing and mailing of prospectuses for such purposes are borne by
the Fund except that the Distribution and Sub-Administration Agreement with the
Distributor requires the Distributor to pay for prospectuses which are to be
used for sales to prospective investors.
Pursuant to offering multiple classes of shares, certain expenses of
the Fund are borne by certain classes, either exclusively, or in a manner which
approximates the proportionate value received by the Class as a result of the
expense being incurred.
Description of Shares, Voting Rights and Liabilities
Mutual Fund Trust is an open-end, management investment company
organized as a Massachusetts business trust under the laws of the Commonwealth
of Massachusetts in 1994. The Trust has reserved the right to create and issue
additional series or classes. Each share of a series or class represents an
equal proportionate interest in that series or class with each other share of
that series or class. The shares of each series or class participate equally in
the earnings, dividends and assets of the particular series or class. Expenses
of the Trust which are not attributable to a specific series or class are
allocated among all the series in a manner believed by management of the Trust
to be fair and equitable. Shares have no pre-emptive or conversion rights.
Shares when issued are fully paid and non-assessable, except as set forth below.
Shareholders are entitled to one vote for each whole share held and each
fractional share shall be entitled to a proportionate fractional vote, except
that Trust shares held in the treasury of the Trust shall not be voted. Shares
of each series or class generally vote separately, for example to approve an
investment advisory agreement or distribution plan, but shares of all series and
classes vote together, to the extent required under the 1940 Act, in the
election or selection of Trustees and independent accountants.
Shareholders of the Vista Shares bear the fees and expenses described
in this Prospectus. Similarly, shareholders of the counterpart Premier Shares
and Institutional Shares bear the fees and expenses described in the prospectus
for such classes of Shares. The fees paid by the Vista Shares to the Distributor
and Shareholder Servicing Agent under the distribution plan and shareholder
servicing arrangements for distribution expenses and shareholder services
provided to investors by the Distributor and Shareholder Servicing Agents are
more than the respective fees paid under distribution plans and shareholder
servicing arrangements adopted for its counterpart Premier Shares. Moreover, the
Institutional Shares pay no fees under distribution plans or shareholder
servicing arrangements. As a result, at any given time, the net yield on the
Vista Shares will be approximately .10% to .25% lower then the yield on its
counterpart Premier Shares and approximately .30% to .50% lower than the yield
on the counterpart Institutional Shares. Standardized yield quotations will be
computed separately for each class of shares of the Fund.
The Trust is not required to hold annual meetings of shareholders but
will hold special meetings of shareholders of each series or class or of all
series or classes when in the judgment of the Trustees it is
- 16 -
<PAGE>
necessary or desirable to submit matters for a shareholder vote. A Trustee of
the Trust may, in accordance with certain rules of the Securities and Exchange
Commission, be removed from office when the holders of record of not less than
two-thirds of the outstanding shares either present a written declaration to the
Funds' Custodian or vote in person or by proxy at a meeting called for this
purpose. In addition, the Trustees will promptly call a meeting of shareholders
to remove a trustee(s) when requested to do so in writing by record holders of
not less than 10% of the outstanding shares of the Trust.
Finally, the Trustees shall, in certain circumstances, give such
shareholders access to a list of the names and addresses of all other
shareholders or inform them of the number of shareholders and the cost of
mailing their request. The Trust's Declaration of Trust provides that, at any
meeting of shareholders, a Shareholder Servicing Agent may vote any shares as to
which such Shareholder Servicing Agent is the agent of record and which are
otherwise not represented in person or by proxy at the meeting, proportionately
in accordance with the votes cast by holders of all shares of the same portfolio
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements. Shareholders of each series or class would be
entitled to share pro rata in the net assets of that series or class available
for distribution to shareholders upon liquidation of that series or class.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.
The Code of Ethics of the Trust prohibits all affiliated personnel from
engaging in personal investment activities which compete with or attempt to take
advantage of a Fund's planned portfolio transactions. The objective of the Code
of Ethics is to ensure that the operations of a Fund be carried out for the
exclusive benefit of a Fund's shareholders. The Trust maintains careful
monitoring of compliance with the Code of Ethics. See "General Information" in
the Fund's Statement of Additional Information.
SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
Shareholder Servicing Agents
The shareholder servicing agreement with the Shareholder Servicing
Agent provides that such Shareholder Servicing Agent will, as agent for its
customers, perform various services, including but not limited to the following:
answer customer inquiries regarding account status, history, the manner in which
purchases and redemptions of shares may be effected for the Fund or class of
shares as to which the Shareholder Servicing Agent is so acting and certain
other matters pertaining to the Fund or class of shares; assist shareholders in
designating and changing dividend options, account designations and addresses;
provide necessary personnel and facilities to establish and maintain shareholder
accounts and records; assist in processing purchase and redemption transactions;
arrange for the wiring of funds; transmit and receive funds in connection with
customer orders to purchase or redeem shares; verify and guarantee shareholder
signatures in connection with redemption orders and transfers and changes in
shareholder-designated accounts; furnish (either separately or on an integrated
basis with other reports sent to a shareholder by a Shareholder Servicing Agent)
monthly and year-end statements and confirmations of purchases and redemptions;
transmit, on behalf of the Fund or class of shares, proxy statements, annual
reports, updated prospectuses and other communications to shareholders; receive,
tabulate and transmit to the Fund proxies executed by shareholders with respect
to meetings of shareholders of the Fund or class of shares; vote the outstanding
shares of the Fund or class of shares whose shareholders do not transmit
executed proxies or attend shareholder meetings in the same proportion as the
votes cast by other shareholders of the Fund or class represented at the
shareholder meeting and provide such other related services as the Fund or a
shareholder may request. Shareholder Servicing Agents may be required to
register pursuant to state securities law.
- 17 -
<PAGE>
For performing these services, the Shareholder Servicing Agent for the
Vista Shares receives certain fees, which may be paid periodically, determined
by a formula based upon the number of accounts serviced by such Shareholder
Servicing Agent during the period for which payment is being made, the level of
activity in accounts serviced by such Shareholder Servicing Agent during the
period, and the expenses incurred by such Shareholder Servicing Agent. The fees
relating to acting as liaison to shareholders and providing personal services to
shareholders will not exceed, on an annualized basis for the Fund's then-current
fiscal year, .25% for the Vista Shares of the Fund, of the average daily net
assets represented by shares owned during the period for which payment is being
made by investors for whom such Shareholder Servicing Agent maintains a
servicing relationship. Each Shareholder Servicing Agent may, from time to time,
voluntarily waive a portion of the fees payable to it. In addition, Chase may
provide other related services to the Fund for which it may receive
compensation.
The Shareholder Servicing Agent, and its affiliates, agents and
representatives acting as Shareholder Servicing Agents, may establish custodial
investment accounts ("Accounts"), known as Chase Investment Accounts or by any
other name designated by a Shareholder Servicing Agent. Through such Accounts,
customers can purchase, exchange and redeem Fund shares, receive dividends and
distributions on Fund investments, and take advantage of any services related to
an Account offered by such Shareholder Servicing Agent from time to time. All
Accounts and any related privileges or services shall be governed by the laws of
the State of New York, without regard to its conflicts of laws provisions.
The Glass-Steagall Act and other applicable laws generally prohibit
federally chartered or supervised banks from publicly underwriting or
distributing certain securities such as the Fund's shares. The Trust, on behalf
of the Funds, will engage banks, including Chase and its affiliates, as
Shareholder Servicing Agents only to perform advisory, custodian, administrative
and shareholder servicing functions as described above. While the matter is not
free from doubt, the management of the Trust believes that such laws should not
preclude a bank, including a bank which acts as investment adviser, custodian or
administrator, or in all such capacities for the Trust, from acting as a
Shareholder Servicing Agent. However, possible future changes in federal law or
administrative or judicial interpretations of current or future law, could
prevent a bank from continuing to perform all or a part of its servicing
activities. If that occurred, the bank's shareholder clients would be permitted
to remain as shareholders and alternative means for continuing the servicing of
such shareholders would be sought. In such event, changes in the operation of
the Fund might occur and a shareholder serviced by such bank might no longer be
able to avail himself of any automatic investment or other services then being
provided by such bank. The Trust does not expect that shareholders would suffer
any adverse financial consequences as a result of these occurrences.
Transfer Agent and Custodian
DST Systems, Inc. ("DST") acts as transfer agent and dividend
disbursing agent (the "Transfer Agent") for the Trust. In this capacity, DST
maintains the account records of all shareholders in the Fund, including
statement preparation and mailing. DST is also responsible for disbursing
dividend and capital gain distributions to shareholders, whether taken in cash
or additional shares. From time to time, DST and/or the Fund may contract with
other entities to preform certain services for the Transfer Agent. For its
services as Transfer Agent, DST receives such compensation as is from time to
time agreed upon by the Trust and DST. DST's address is 127 W. 10th Street,
Kansas City, MO 64105.
Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of the Fund for which Chase receives compensation as is from time to time
agreed upon by the Trust and Chase. The Custodian's responsibilities include
safeguarding and controlling the Fund's cash and securities, handling the
receipt and delivery of securities, determining income and collecting interest
on the Fund's investments, maintaining books of original entry for portfolio and
Fund accounting and other required books and accounts, and calculating the daily
net asset value of shares of the Fund. Portfolio securities and cash may be held
by sub-custodian banks if such arrangements are reviewed and approved by the
Trustees. The internal division of Chase which serves as the Trust's Custodian
does not determine the investment policies of the Fund or decide which
securities will be
- 18 -
<PAGE>
bought or sold on behalf of the Fund or otherwise have access to or share
material inside information with the internal division that performs advisory
services for the Fund.
Tax Sheltered Retirement Plans
Shares of the Fund are offered in connection with the following
qualified prototype retirement plans: IRA, Rollover IRA, SEP-IRA,
Profit-Sharing, and Money Purchase Pension Plans which can be adopted by
self-employed persons ("Keogh") and by corporations, 401(k), and 403(b)
Retirement Plans. Call or write the Transfer Agent for more information.
YIELD AND PERFORMANCE INFORMATION
From time to time, the Vista Shares may use hypothetical investment
examples and performance information in advertisements, shareholder reports or
other communications to shareholders. Because such performance information is
based on historical earnings, it should not be considered as an indication or
representation of the performance of the Vista Shares in the future. From time
to time, the yield of the Vista Shares, as a measure of its performance, may be
quoted and compared to those of other mutual funds with similar investment
objectives, unmanaged investment accounts, including savings accounts, or other
similar products and to other relevant indices or to rankings prepared by
independent services or other financial or industry publications, such as Lipper
Analytical Services, Inc. or the Morningstar Mutual Funds on Disc, that monitor
the performance of mutual funds. In addition, the yield of each of the Vista
Shares may be compared to the Donoghue's Money Fund AveragesTM, compiled in the
Donoghue's Money Fund Report(R), a widely recognized independent publication
that monitors the performance of money market funds. Also, each of the Vista
Shares' yield data may be reported in national financial publications including,
but not limited to, Money Magazine, Forbes, Barron's, The Wall Street Journal
and The New York Times, or in publications of a local or regional nature. The
Vista Shares may, with proper authorization, reprint articles written about the
Vista Shares and provide them to prospective shareholders.
Vista Shares may provide its annualized "yield" and "effective yield"
to current and prospective shareholders. The "yield" of the Fund refers to the
income generated by an investment in the Fund over a seven-day period (which
period shall be stated in any advertisement or communication with a
shareholder). This income is then "annualized", that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of investment. The
"effective yield" is calculated similarly, but when annualized the income earned
by the investment during that week is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment.
Unlike some bank deposits or other investments which pay a fixed yield
for a stated period of time, the yield of each of the Vista Shares will vary
based on interest rates, the current market value of the securities held in the
Fund's portfolio and changes in the Fund's and the Shares' expenses. The
Adviser, the Administrator, the Distributor and each Shareholder Servicing Agent
may voluntarily waive a portion of their fees on a month-to-month basis. In
addition, the Distributor may assume a portion of the Fund's operating expenses
on a month-to-month basis. These actions would have the effect of increasing the
net income (and therefore the yield) of the Vista Shares during the period such
waivers of fees or assumptions of expenses are in effect. These factors and
possible differences in the methods used to calculate yields should be
considered when comparing the Vista Shares' yields to those published for other
money market funds and other investment vehicles. A Shareholder Servicing Agent
may charge its customers direct fees in connection with an investment (see
"Purchases and Redemptions of Shares-Purchases") which will have the effect of
reducing the net return on the investment of customers of that Shareholder
Servicing Agent. Conversely, the Vista Shares are advised that certain
Shareholder Servicing Agents may credit to the accounts of their customers from
whom they are already receiving other fees amounts not exceeding the Shareholder
Servicing Agent fees received (see "Purchases and Redemptions of
Shares-Purchases"), which will have the effect of increasing the net return on
the investment of customers of those Shareholder Servicing Agents. Such
customers may be able to obtain through their
- 19 -
<PAGE>
Shareholder Servicing Agents quotations reflecting such increased return. See
the Statement of Additional Information for further information concerning each
of the Vista Shares' calculation of yield.
The Fund is the successor to the Hanover 100 % U.S. Treasury Securities Money
Market Fund. The Fund may also quote historical performance of the Hanover 100 %
U.S. Treasury Securities Money Market Fund.
OTHER INFORMATION
The Statement of Additional Information contains more detailed
information about the Trust and the Fund, including information related to (i)
the Fund's investment policies and restrictions, (ii) risk factors associated
with the Fund's policies and investments, (iii) the Trust's Trustees, officers
and the Administrator, the Adviser and the Sub-Adviser, (iv) portfolio
transactions and brokerage allocation, (v) the Fund's shares, including rights
and liabilities of shareholders, and (vi) additional performance information,
including the method used to calculate yield or total rate of return quotations
of the Fund. The audited financial statements of the Predecessor Fund for its
last fiscal year end is incorporated by reference in the Statement of Additional
Information.
- 20 -
<PAGE>
TABLE OF CONTENTS
Expense Summary......................................................... 3
Financial Highlights.................................................... 5
Investment Objectives and Policies...................................... 6
Additional Information on Investment Policies and Techniques........... 5
Management of the Fund ...................................................6
Purchases and Redemptions of Shares..................................... 8
Tax Matters............................................................. 12
Other Information Concerning Shares of the Fund......................... 14
Shareholder Servicing Agents, Transfer Agent and Custodian.............. 17
Yield and Performance Information....................................... 21
Other Information....................................................... 22
- 21 -
<PAGE>
VISTA(SM) 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
PREMIER SHARES PROSPECTUS -- ___________, 1996
Mutual Fund Trust (the "Trust") is an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on February 4, 1994, presently consisting of ___ separate series
("Funds"). Under a multi-class distribution system, the money market funds may
be offered through three separate classes of shares (the "Shares"). The Premier
Shares described in and offered pursuant to this Prospectus, which are offered
only to institutional investors, are offered through the Vista 100% U.S.
Treasury Securities Money Market Fund (the "Premier Shares"). The Institutional
Shares of the Fund are also sold under a separate prospectus available only to
qualified institutional investors making an initial investment of at least
$1,000,000.
THE VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND'S (the "100%
U.S. Treasury Fund" or the "Fund") investment objective is to seek maximum
current income consistent with maximum safety of principal and maintenance of
liquidity. The Fund seeks to achieve its objectives by investing solely in
obligations issued by the U.S. Treasury, including U.S. Treasury bills, bonds
and notes, which differ principally only in their interest rates, maturities and
dates of issuance. The Fund does not purchase securities issued or guaranteed by
agencies or instrumentalities of the U.S. Government, nor does it enter
repurchase agreements. Because the Fund invests exclusively in direct Unites
States Treasury Obligations, investors may benefit from income tax exclusions
and exemptions that are available in certain states and localities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Chase Manhattan Bank, N.A. ("Chase") is the investment adviser
(the "Adviser"), custodian (the "Custodian"), administrator (the
"Administrator") and Shareholder Servicing Agent for the 100% U.S. Treasury
Fund. Chase Asset Management, Inc. is the investment sub-adviser ("CAM Inc." or
the "Sub-Adviser") for the 100% U.S. Treasury Fund.
Vista Broker-Dealer Services, Inc. ("VBDS" ) is the Fund's distributor
(the "Distributor") and is unaffiliated with Chase. Investment in the Fund is
subject to risk -- including possible loss of principal. Shares of the Fund are
not bank deposits or obligations of, or guaranteed or endorsed by, The Chase
Manhattan Bank, N.A. 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.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share. Prospective investors should
carefully consider the risks associated with an investment in the Fund. For a
further discussion on the risks associated with an investment in the Fund, see
"Investment Objectives and Policies" in this Prospectus. There can be no
assurance that the Fund will achieve its investment objectives.
The Premier Shares are continuously offered for sale without a sales
load through VBDS, the Fund's distributor, only to institutional investors who
are customers of a financial institution, such as a federal or state-chartered
bank, trust company or savings and loan association with which the Trust has
entered into a shareholder servicing agreement (collectively, "Shareholder
Servicing Agents") or securities brokers or certain financial institutions which
have entered into Selected Dealer Agreements with the Distributor. The Premier
Shares have a distribution plan and may incur distribution expenses, at an
annual rate, not to exceed a specified percentage of its average daily net
assets. An investor should obtain from his Shareholder Servicing Agent, if
applicable, and should read in conjunction with this Prospectus, the materials
provided by the Shareholder Servicing Agent describing the procedures under
which Premier Shares may be purchased and redeemed through such Shareholder
Servicing Agent.
<PAGE>
Shares may be redeemed by shareholders at the net asset value next determined on
any Fund Business Day as hereinafter defined.
This Prospectus sets forth concisely information concerning the Fund
and its Premier Shares that a prospective investor ought to know before
investing. A Statement of Additional Information for the Premier Shares dated
__________, 1996 containing more detailed information about the Fund has been
filed with the Securities and Exchange Commission and is incorporated into this
Prospectus by reference. An investor may obtain a copy of the Statement of
Additional Information for the Premier Shares without charge by contacting the
Distributor or the Shareholder Servicing Agent.
Investors should read this Prospectus and retain it for future
reference.
For information about the Premier Shares, simply call the Vista Service
Center at 1-800-34-VISTA.
- 2 -
<PAGE>
EXPENSE SUMMARY
The following table provides (i) a summary of the aggregate annual operating
expenses of the Fund, as a percentage of average net assets of the Fund, and
(ii) an example illustrating the dollar cost of such expenses on a $1,000
investment in shares of the Fund.
Premier
Shares
Annual Fund Operating Expenses
(as a percentage of average net assets)
Investment Advisory Fee..................................... .10%
Rule 12b-1 Distribution Plan Fee ....................................... .00%
Administrative Fee ..................................................... .05%
Other Expenses
Sub-Administration Fee...................................... .05%
Shareholder Servicing Fee +.................................. .25%
Other Operating Expenses++.................................. .10%
Total Fund Operating Expenses .55%
Example:
You would pay the following expenses on a $1,000 investment in a Fund, assuming
(1) 5% annual return and (2) redemption at the end of:
1 year........................................$
3 years.......................................$
5 years.......................................$
10 years......................................$
- ---------------
+ Shareholder Servicing Agents may provide various services to their
customers and charge additional fees for these services. The
Shareholder Servicing and Fund Servicing Fees include fees for
activities in connection with serving as liaison for holders of
Premier Shares and in providing personal services to such shareholders
as well as other ministerial and servicing activities. Fees for the
activities in connection with serving as liaison to, and providing
personal services to, holders of Premier Shares will not exceed the
NASD's maximum fee of 0.25% for these types of activities. The other
ministerial and servicing activities provided for the Fund include:
assisting in processing purchase and redemption transactions;
transmitting and receiving funds in connection with purchase and
redemption orders; preparing and providing periodic statements showing
account balances; and preparing and transmitting proxy statements and
other periodic reports and communications from the Trust to customers
++ A shareholder may incur a $10.00 charge for certain wire redemptions.
The expense summary is intended to assist investors in understanding
the various costs and expenses that a shareholder in the Premier Shares class of
shares of the Fund will bear directly or indirectly. The expense summary shows
the investment advisory fee, distribution fee, administrative fee,
sub-administration fee and shareholder servicing agent fee expected to be
incurred by the Premier Shares class of shares of the Fund.
As a result of the distribution fees, long-term investors may pay more
than the economic equivalent of the maximum front-end sales charge permitted by
the National Association of Securities Dealers, Inc. ("NASD"). A more complete
description of the Premier Shares class of shares' expenses, including any fee
waivers, is set forth herein.
- 3 -
<PAGE>
The "Example" set forth above should not be considered a representation
of future expenses of Premier Shares of the Fund; actual expenses may be greater
or less than those shown.
FINANCIAL HIGHLIGHTS
The table set forth below provides selected per share data and ratios
for one share outstanding throughout the period shown for The Hanover 100% U.S.
Treasury Securities Money Market Fund, the predecessor to the Fund (the
"Predecessor Fund"). This information is supplemented by financial statements
and accompanying notes appearing in the Predecessor Fund's Annual Report to
Shareholders for the fiscal year ended November 30, 1994, which is incorporated
by reference into the Statement of Additional Information. The financial
statements and notes, as well as the financial information set forth in the
tables set forth below have been audited by KPMG Peat Marwick LLP, independent
accountants, whose report thereon is also included in the Annual Report to
Shareholders. Shareholders can obtain a copy of this report by contacting the
Fund or their Shareholder Servicing Agent.
<TABLE>
<CAPTION>
THE HANOVER 100% U.S. TREASURY FUND
Year Ended November 30 Period Ended
1995 1994 1993 1992 November 30, 1994
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD....................... $ $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------
Income from Investment Operations:
Net Investment Income............................ 0.033 0.026 0.033 0.021
----- ----- ----- -----
Less Distributions:
Dividends from net investment income............. (0.033) (0.026) (0.033) (0.021)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD............................ $ $1.000 $1.000 $1.000 $1.000
====== ====== ====== ======
TOTAL RETURN**............................................ 3.32% 2.62% 3.33% 2.58%
Ratios/Supplemental Data
Net Assets, End of Period (in thousands)......... $ $1,024,125 $873,631 $383,688 $141,875
Ratio of Expenses to Average Net Assets++......... 0.59% 0.58% 0.55% 0.45%+
Ratio of Net Investment Income to Average
Net Assets++.................................... 3.26% 2.58% 3.28% 5.02%+
</TABLE>
- ----------------------
* Commencement of operations July 1, 1991.
** Total return computed for the period.
+ Annualized.
++ Ratios before effect of waivers were 0.62%, 0.61%, 0.67%, and 0.75%
annualized, respectively.
- 4 -
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing securities pursuant to Rule 2a-7 under the Investment Company Act of
1940, as amended (the "1940 Act"), certain requirements of which are summarized
as follows. In accordance with Rule 2a-7, the Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 397 days or less and invest only in
U.S. dollar denominated securities determined in accordance with procedures
established by the Board of Trustees to present minimal credit risks and which
are rated in one of the two highest rating categories for debt obligations by at
least two nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated only by one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees.
The Fund's investment objective is to seek maximum current
income consistent with maximum safety of principal and maintenance of liquidity.
The Fund seeks to achieve its objective by investing in obligations issued by
the U.S. Treasury, including U.S. Treasury bills, bonds and notes, which differ
principally only in their interest rates, maturities and dates of issuance. The
Fund does not purchase securities issued or guaranteed by agencies or
instrumentalities of the United States Government, nor does it enter into
repurchase agreements. The dollar weighted average maturity of the Fund will be
90 days or less. Although the Fund seeks to be fully invested, at times it may
hold uninvested cash reserves, which would adversely affect its yield.
Interest on United States Treasury obligations is exempt from
state and local income taxes under federal law; the interest is not exempt from
federal income tax. However, shareholders of the 100% U.S. Treasury Fund do not
directly receive interest on United States Treasury obligations, but rather
receive dividends from the 100% U.S. Treasury Fund that are derived from such
interest. Although many states allow the character of the 100% U.S. Treasury
Fund's income to pass through to its shareholders, certain states do not, so
that distributions from the 100% U.S. Treasury Fund derived from interest that
is exempt from state and local income taxes when received directly by a taxpayer
may not be exempt from such taxes when earned as a dividend by a shareholder of
the 100% U.S. Treasury Fund. Shareholders of the 100% U.S. Treasury Fund should
consult their tax advisers as to state and local consequences of investment in
the Fund.
ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND TECHNIQUES
REVERSE REPURCHASE AGREEMENTS
The Fund may enter into reverse repurchase agreements to avoid selling
securities during unfavorable market conditions to meet redemptions. Pursuant to
a reverse repurchase agreement, the Fund will sell portfolio securities and
agree to repurchase them from the buyer at a particular date and price. Whenever
the Fund enters into a reverse repurchase agreement, it will establish a
segregated account in which it will maintain liquid assets in an amount at least
equal to the repurchase price marked to market daily (including accrued
interest), and will subsequently monitor the account to ensure that such
equivalent value is maintained. The Fund pays interest on amounts obtained
pursuant to reverse repurchase agreements. Reverse repurchase agreements are
considered to be borrowings by the Fund under the 1940 Act and are subject to
the Fund's general limitations with respect to borrowing.
FIRM COMMITMENTS AND WHEN-ISSUED SECURITIES
The Fund may purchase securities on a firm commitment basis, including
when-issued securities. Securities purchased on a firm commitment basis are
purchased for delivery beyond the normal settlement date at a stated price and
yield. Such securities are recorded as an asset and are subject to changes in
value based upon changes in the general level of interest rates. The Fund will
make commitments to purchase securities on a firm commitment basis only with the
intention of actually acquiring the securities, but may sell them before the
settlement date if it is deemed advisable.
- 5 -
<PAGE>
No income accrues to the purchase of a security on a firm commitment
basis prior to delivery. Purchasing a security on a firm commitment basis can
involve a risk that the market price at the time of delivery may be lower than
the agreed upon purchase price, in which case there could be an unrealized loss
at the time of delivery.
The Fund will establish a segregated account in which it will maintain
assets in an amount at least equal in value to the Fund's commitments to
purchase securities on a firm commitment basis. If the value of these assets
declines, the Fund will place additional liquid assets in the account on a daily
basis so that the value of the assets in the account is equal to the amount of
such commitments.
PORTFOLIO SECURITIES LENDING
Although the Fund does not anticipate engaging in such
activity in the ordinary course of business, the Fund may lend portfolio
securities to broker-dealers and other institutional investors in order to
generate additional income. Such loans of portfolio securities may not exceed
30% of the value of its total assets. In connection with such loans, the Fund
will receive collateral consisting of cash, cash equivalents, U.S. Government
securities or irrevocable letters of credit issued by financial institutions.
Such collateral will be maintained at all times in an amount equal to at least
102% of the current market value of the securities loaned plus accrued interest.
The Fund can earn income through the investment of such collateral. The Fund
continues to be entitled to the interest payable on a loaned security and, in
addition, receive interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. The Fund might experience risk of
loss if the institutions with which it has engaged in portfolio loan
transactions breach their agreements with such Fund. The risk in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower
experience financial difficulty. Loans will be made only to firms deemed by the
Adviser or Sub-Adviser to be of good standing and will not be made unless, in
the judgment of the investment Adviser or Sub-Adviser, the consideration to be
earned from such loans justifies the risk.
The foregoing investment policies and activities are not fundamental
and may be changed by the Board of Trustees of the Trust without the approval of
shareholders. For more detailed descriptions of certain of the Fund's investment
activities, see "Investment Policies -- Additional Investment Activities" in the
Statement of Additional Information.
MANAGEMENT OF THE FUND
Adviser
The Chase Manhattan Bank, N.A. manages the assets of the Fund pursuant
to an Investment Advisory Agreement, dated ________________. Subject to such
policies as the Board of Trustees may determine, Chase makes investment
decisions for the Fund. For its services under the Investment Advisory
Agreements, Chase is entitled to receive an annual fee computed daily and paid
monthly at an annual rate equal to 0.10% of the Fund's average daily net assets.
However, Chase may, from time to time, voluntarily waive all or a portion of its
fees payable under the Investment Advisory Agreement.
The Adviser, a wholly-owned subsidiary of The Chase Manhattan
Corporation, a registered bank holding company, is a commercial bank offering a
wide range of banking and investment services to customers throughout the United
States and around the world. Its headquarters is at One Chase Manhattan Plaza,
New York, NY 10081. The Adviser, including its predecessor organizations, has
over 100 years of money management experience and renders investment advisory
services to others. Also included among the Adviser's accounts
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are commingled trust funds and a broad spectrum of individual trust and
investment management portfolios. These accounts have varying investment
objectives.
Certain Relationships and Activities. Chase and its affiliates may
have deposit, loan and other commercial banking relationships with the issuers
of securities purchased on behalf of the Fund, including outstanding loans to
such issuers which may be repaid in whole or in part with the proceeds of
securities so purchased. Chase and its affiliates deal, trade and invest for
their own accounts in U.S. Treasury obligations and are among the leading
dealers of various types of U.S. Treasury obligations. Chase and its affiliates
may sell U.S. Treasury obligations to, and purchase them from, other investment
companies sponsored by the Distributor or affiliates of the Distributor. The
Adviser will not invest any Fund assets in any U.S. Treasury obligations
purchased from itself or any affiliate, although under certain circumstances
such securities may be purchased from other members of an underwriting syndicate
in which the Adviser or an affiliate is a non-principal member. This restriction
may limit the amount or type of U.S. Treasury obligations available to be
purchased on behalf of the Fund. The Adviser has informed the Fund that in
making its investment decisions, it does not obtain or use material inside
information in the possession of any other division or department of such
Adviser or in the possession of any affiliate of such Adviser, including the
division of Chase that performs services for the Trust as Custodian.
Shareholders of the Fund should be aware that, subject to applicable legal or
regulatory restrictions, Chase and its affiliates may exchange among themselves
certain information about the shareholders and their accounts.
Under an investment advisory agreement between the Trust, on behalf of
the Fund, and Chase, Chase may delegate a portion of its responsibilities to a
sub-adviser. In addition, the investment advisory agreement provides that Chase
may render services through its own employees or the employees of one or more
affiliated companies that are qualified to act as an investment adviser of the
Fund and are under the common control of New Chase as long as all such persons
are functioning as part of an organized group of persons, managed by authorized
officers of Chase.
Sub-Adviser
Chase has entered into an investment sub-advisory agreement with its
affiliate, CAM Inc., a registered investment adviser, on behalf of the Fund. The
Sub-Adviser is a wholly-owned subsidiary of New Chase. Subject to the
supervision and direction of the Adviser and the Board of Trustees, CAM Inc.
provides investment subadvisory services to the Fund in accordance with the
Fund's objectives and policies, makes investment decisions for the Fund and
places orders to purchase and sell securities on behalf of the Fund. The
Sub-Advisory Agreement provides that, as compensation for services, the
Sub-Adviser receives, from the Adviser, a fee, computed and paid monthly based
on the Fund's average daily net assets, on an annualized basis for the Fund's
then-current fiscal year.
[DISCLOSURE ABOUT SUB-ADVISER TO COME]
Administrator
Pursuant to an Administration Agreement, dated April 15, 1994 (the
"Administration Agreement"), Chase serves as Administrator of the Trust. The
Administrator provides certain administrative services, including, among other
responsibilities, coordinating relationships with independent contractors and
agents; preparing for signature by officers and filing of certain documents
required for compliance with applicable laws and regulations excluding those of
the securities laws of the various states; arranging for the maintenance of
books and records; and providing office facilities necessary to carry out its
duties. For these services and facilities, the Administrator is entitled to
receive from the Fund a fee computed daily and paid monthly at an annual rate
equal to 0.05% of the Fund's average daily net assets. However, the
Administrator may, from time to time, voluntarily waive all or a portion of its
fees payable under the Administration Agreement. The Administrator, pursuant to
the terms of the Administration Agreement, shall not have any responsibility or
authority for the Fund's investments, the determination of investment policy, or
for any matter pertaining to the distribution of Fund shares.
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Glass-Steagall Act. Chase has received the opinion of its legal counsel
that it may provide the services described in the Investment Advisory and the
Administration Agreements, as described above, and the Shareholder Servicing
Agreements and Custodian Agreement described below without violating the federal
banking law commonly known as the Glass-Steagall Act. The Act generally bars
banks from publicly underwriting or distributing certain securities.
Based on the advice of its counsel, Chase believes that the Court's
decision, and these other decisions of federal banking regulators, permit it to
serve as investment adviser to a registered, open-end investment company.
Regarding the performance of shareholder servicing and custodial
activities, the staff of the Office of the Comptroller of the Currency, which
supervises national banks, has issued opinion letters stating that national
banks may engage in shareholder servicing and custodial activities. Therefore,
Chase believes, based on advice of its counsel, that it may serve as shareholder
servicing agent to the Fund and render the services described in the shareholder
servicing agreements, and Chase believes, based on advice of its counsel, that
it may serve as Custodian to the Trust and render the services set forth in the
Custodian Agreement, as appropriate, incidental national banking functions and
as proper adjunct to its serving as investment adviser and administrator to the
Fund.
Industry practice and regulatory decisions also support a bank's
authority to act as administrator for a registered investment company. Chase, on
the advice of its counsel, believes that it may render the services described in
its Administration Agreement without violating the Glass-Steagall Act or other
applicable banking laws.
Possible future changes in federal law or administrative or judicial
interpretations of current or future law, however, could prevent Chase from
continuing to perform investment advisory, shareholder servicing, custodian or
other administrative services for the Fund. If that occurred, the Trust's Board
of Trustees promptly would seek to obtain for the Fund the services of another
qualified adviser, shareholder servicing agent, custodian or administrator, as
necessary. Although no assurances can be given, the Trust believes that, if
necessary, the switch to a new adviser, shareholder servicing agent, custodian
or administrator could be accomplished without undue disruption to the Fund's
operations.
In addition, state securities laws on this issue may differ from the
interpretation of federal law expressed herein, and banks and financial
institutions may be required to register as dealers pursuant to state law.
PURCHASES AND REDEMPTIONS OF SHARES
Purchases
The Premier Shares are continuously offered for sale without a sales
load at the net asset value next determined through Vista Broker-Dealer
Services, Inc. after an order is received and accepted by a Shareholder
Servicing Agent if it is transmitted prior to 12:00 noon, Eastern time on any
business day during which the New York Stock Exchange and the Adviser are open
for trading ("Fund Business Day"). (See "Other Information Concerning Shares of
the Fund--Net Asset Value"). Orders for Premier Shares received and accepted
prior to the above designated times will be entitled to all dividends declared
on such day. The minimum initial purchase is $100,000. Shareholders must
maintain a minimum account balance of $100,000 in the Premier Shares at all
times. It is anticipated that the Premier Shares net asset value will remain
constant at $1.00 per share and the Fund will employ specific investment
policies and procedures to accomplish this result. Shares of the Fund are being
offered exclusively to customers of a Shareholder Servicing Agent (i.e., a
financial institution, such as a federal or state-chartered bank, trust company
or savings and loan association that has entered into a shareholder servicing
agreement with the Fund) or to customers of brokers or certain financial
institutions which have entered into Selected Dealer Agreements with VBDS. An
investor may purchase Vista Premier Shares by authorizing his Shareholder
Servicing Agent, broker or financial institution to purchase such Shares on his
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behalf through the Distributor, which the Shareholder Servicing Agent, broker or
financial institution must do on a timely basis. All share purchases must be
paid for in U.S. dollars, and checks must be drawn on U.S. banks. In the event a
check used to pay for shares purchased is not honored by the bank on which it is
drawn, the purchase order will be cancelled and the shareholder will be liable
for any losses or expenses incurred by the Fund or its agents.
Shareholder Servicing Agents may offer services to their customers,
including specialized procedures for the purchase and redemption of Premier
Shares, such as pre-authorized or systematic purchase and redemption programs
and "sweep" checking programs. Each Shareholder Servicing Agent may establish
its own terms, conditions and charges, including limitations on the amounts of
transactions, with respect to such services. Charges for these services may
include fixed annual fees, transaction fees, account maintenance fees and
minimum account balance requirements. The effect of any such fees will be to
reduce the yield on the investment of customers of that Shareholder Servicing
Agent. Conversely, certain Shareholder Servicing Agents may (although they are
not required by the Fund to do so) credit to the accounts of their customers
from whom they are already receiving other fees an amount not exceeding the fees
for their services as Shareholder Servicing Agents (see "Shareholder Servicing
Agents, Transfer Agent and Custodian - Shareholder Servicing Agents"), which
will have the effect of increasing the yield on the investment of customers of
that Shareholder Servicing Agent. Shareholder Servicing Agents may also increase
or reduce the minimum dollar amount; required to invest in the Fund and waive
any applicable holding periods.
The Fund intends to be as fully invested at all times as is reasonably
practicable in order to enhance the yield on its assets. Accordingly, in order
to make investments which will immediately generate income, the Fund must have
federal funds available to it (i.e., monies credited to the account of the
Fund's custodian bank by a Federal Reserve Bank). Each Shareholder Servicing
Agent has agreed to provide each of the Premier Shares with federal funds for
each purchase at the time it transmits the order for such purchase to the
Distributor. Therefore, each shareholder and prospective investor should be
aware that if he does not have sufficient funds on deposit with, or otherwise
immediately available to, his Shareholder Servicing Agent, there may be a delay
in transmitting and effecting his purchase order since his Shareholder Servicing
Agent will have to convert his check, bank draft, money order or similar
negotiable instrument into federal funds prior to effecting the purchase order.
In such case, the purchase order will be effected at the purchase price per
share next determined after the conversion to federal funds has been
accomplished. If such a delay is necessary, it is expected that in most cases it
would not be longer than two business days.
The Premier Shares reserves the right to cease offering shares for sale
at any time, to reject any order for the purchase of shares and to cease
offering any services provided by a Shareholder Servicing Agent. Fund shares
will be maintained in book entry form, and no certificates representing shares
owned will be issued to shareholders.
For further information as to how to direct a Shareholder Servicing
Agent to purchase shares of the Fund, an investor should contact his or her
Shareholder Servicing Agent.
Systematic Investment Plan. Shareholders may establish a monthly
investment plan by which investments are automatically made to his/her Vista
Fund account through Automatic Clearing House (ACH) deductions from a checking
account. The minimum monthly investment through this plan is $100. Shareholders
may choose either to have these investments made during the first or third week
each month. Please note that your initial ACH transactions may take up to 10
days from the receipt of your request to be established.
Shareholders electing to start this Systematic Investment Plan when
opening an account should complete Section 8 of the account application. Current
shareholders may begin a Systematic Investment Plan at any time by sending a
signed letter with signature guarantee to the Vista Service Center, P.O. Box
419392, Kansas City, MO 64141-6492. The letter should contain your Vista Fund
account number, the desired amount and cycle of the systematic investment, and
must include a voided check from the checking account from which debits are to
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be made. A signature guarantee may be obtained from a bank, trust company,
broker-dealer or other member of the national securities exchange. Please note
that notaries public cannot provide signature guarantees.
Redemptions
Shareholders may redeem all or any portion of the shares in their
account on any Fund Business Day at the net asset value next determined after a
redemption request in proper form is furnished by the shareholder to his
Shareholder Servicing Agent and transmitted by it to and received by a Fund's
Transfer Agent. Therefore, redemptions will be effected on the same day the
redemption order is received only if such order is received prior to 12:00 noon,
Eastern time on any Fund Business Day. Shares which are redeemed earn dividends
up to an including the day prior to the day the redemption is effected. The
proceeds of a redemption will be paid in federal funds normally on the Fund
Business Day the redemption is effected, but in any event within seven days. The
forwarding or proceeds from redemption of shares which were recently purchased
by check may be delayed until the purchase check has cleared, which may take up
to fifteen days. A shareholder who is a customer of a Shareholder Servicing
Agent may redeem his Premier Shares by authorizing his Shareholder Servicing
Agent or its agent to redeem such shares, which the Shareholder Servicing Agent
or its agent must do on a timely basis. The signature of both shareholders is
required for any written redemption requests (other than those by check) from a
joint account. In addition, a redemption request may be deferred for up to 15
calendar days if the Transfer Agent has been notified of a change in either the
address or the bank account registration previously listed in the Fund records.
The value of shares of the Fund redeemed may be more or less than the
shareholder's cost, depending on portfolio performance during the period the
shareholder owned his shares. Redemption of shares are taxable events on which
the shareholder may recognize a gain or loss. Although the Fund generally
retains the right to pay the redemption price of shares in kind with securities
(instead of cash), the Trust has filed an election under Rule 18f-1 under the
Investment Company Act of 1940, as amended (the "1940 Act") committing to pay in
cash all redemptions by a shareholder of record up to the amounts specified in
the rule (approximately $250,000).
The payment of redemption requests may be wired or mailed directly to a
previously designated domestic commercial bank account. However, all telephone
redemption requests in excess of $25,000 will be wired directly to such
previously designated bank account, for the protection of shareholders.
Normally, redemption payments will be transmitted on the next business day
following receipt of the request (provided it is made prior to 12:00 noon,
Eastern time. Redemption payments requested by telephone may not be available in
a previously designated bank account for up to four days. If no share
certificates have been issued, a wire redemption may be requested by telephone
or wire to the Vista Service Center. For telephone redemptions, call the Vista
Service Center at (800) 34-VISTA.
The right of any shareholder to receive payment with respect to any
redemption may be suspended or the payment of the redemption proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.
Automatic Redemption Plan. A shareholder owning $10,000 or more of the
shares of a Fund as determined by the then current net asset value may provide
for the payment monthly or quarterly of any requested dollar amount (subject to
limits) from his account to his order. A sufficient number of full and
fractional shares will be redeemed so that the designated payment is received on
approximately the 1st or 15th day of the month following the end of the selected
payment period.
Exchange Privileges
Shareholders of the Premier Shares of the Fund may exchange at relative
net asset value among the Premier Shares offered by Vista's other money market
funds, and may exchange at relative net asset value plus any applicable sales
charges among certain classes of shares of portfolios of Mutual Fund Group
("MFG"), an affiliated investment company, of which Chase is the advisor and
VBDS is the distributor, in accordance with the terms of the then-current
prospectus of the Fund being acquired. The prospectus of the Vista Fund into
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which shares are being exchanged should be read carefully prior to any exchange
and retained for future reference. With respect to exchanges into a fund which
charges a front-end sales charge, such sales charge will not be applicable if
the shareholder previously acquired his Premier Shares by exchange from such
fund. Under the Exchange Privilege, Shares of a Fund may be exchanged for shares
of other funds of the Trust or MFG only if those Funds are registered in the
states where the exchange may legally be made. In addition, the account
registration for the Vista Fund (whether a Fund of the Trust or MFG) into which
shares of the Fund are being exchanged must be identical to that of the account
registration for the Fund from which shares are being redeemed. Any such
exchange may create a gain or loss to be recognized for Federal income tax
purposes. Normally, shares of the Fund to be acquired are purchased on the
Redemption Date, but such purchase may be delayed by either fund up to five
business days if the fund determines that it would be disadvantaged by an
immediate transfer of the proceeds. This privilege my be amended or terminated
at any time without notice. Arrangements have been made for the acceptance of
instructions by telephone to exchange shares if certain pre-authorizations or
indemnifications are accepted and on file. Further information and telephone
exchange forms are available from Vista Service Center.
General
The Fund has established certain procedures and restrictions, subject
to change from time to time, for purchase, redemption, and exchange orders,
including procedures for accepting telephone instructions and effecting
automatic investments and redemptions. The Fund's Transfer Agent may defer
acting on a shareholder's instructions until it has received them in proper
form. In addition, the privileges described in this Prospectus are not available
until a completed and signed account application has been received by the Fund's
Transfer Agent. Telephone transaction privileges are made available to
shareholders automatically upon opening an account unless the privilege is
declined in section 6 of the Account Application. To provide evidence of
telephone instructions, the Transfer Agent will record telephone conversations
with shareholders. The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. In the event the Fund does
not employ such procedures, it may be liable for losses due to unauthorized or
fraudulent instructions.
Upon receipt of any instructions or inquiries by telephone from a
shareholder or, if held in a joint account, from either party, or from any
person claiming to be the shareholder, the Fund or its agents are authorized,
without notifying the shareholder or joint account parties, to carry out the
instructions or to respond to the inquiries, consistent with the service options
chosen by the shareholder or joint shareholders in his or their latest account
application or other written request for services, including purchasing,
exchanging, or redeeming shares of the Fund and depositing and withdrawing
monies from the bank account specified in the Bank Account Registration section
of the shareholder's latest account application or as otherwise properly
specified to the Fund in writing. Shareholders agree to release and hold
harmless the Fund, the Adviser, the Administrator, any Shareholder Servicing
Agent or sub-agent and broker-dealer, and the officers, directors, employees and
agents thereof against any claim, liability, loss, damage and expense for any
act or failure to act in connection with Fund shares, any related investment
account, any privileges or services selected in connection with such investment
account, or any written or oral instructions or requests with respect thereto,
or any written or oral instructions or requests from someone claiming to be a
shareholder if the Fund or any of the above-described parties follow
instructions which they reasonably believe to be genuine and act in good faith
by complying with the reasonable procedures that have been established for Fund
accounts and services.
Shareholders purchasing their shares through a Shareholder Servicing
Agent may not assign, transfer or pledge any rights or interest in any Fund
shares or any investment account established with a Shareholder Servicing Agent
to any other person without the prior written consent of such Shareholder
Servicing Agent, and any attempted assignment, transfer or pledge without such
consent may be disregarded.
The Fund may also establish and revise, from time to time, account
minimums and transactions or amount restrictions on purchases, exchanges,
redemptions, checkwriting services, or other transactions permitted in
connection with shareholder accounts. The Fund may also require signature
guarantees for changes that shareholders request be made in Fund records with
respect to their accounts, including but not limited to,
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<PAGE>
changes in the bank account specified in the Bank Account Registration, or for
any written requests for additional account services made after a shareholder
has submitted an initial account application to the Fund. The Fund may refuse to
accept or carry out any transaction that does not satisfy any restrictions then
in effect. .
TAX MATTERS
The following discussion is addressed primarily to individual investors
and is for general information only. A prospective investor, including a
corporate investor, should also review the more detailed discussion of federal
income tax considerations that is contained in the Statement of Additional
Information. In addition, each prospective investor should consult with his own
tax advisers as to the tax consequences of an investment in the Fund, including
the status of distributions from the Fund in his own state and locality.
The Fund intends to qualify each year and elect to be treated as a
separate "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Fund is treated as a
"regulated investment company" and all its taxable income, if any, is
distributed to its shareholders in accordance with the timing requirements
imposed by the Code, it will not be subject to federal income tax on amounts so
distributed. If for any taxable year the Fund does not qualify for the treatment
as a regulated investment company, all of its taxable income will be subject to
tax at regular corporate rates without any deduction for distributions to its
shareholders, and such distributions to shareholders will be taxable to the
extent of the Fund's current and accumulated earnings and profits.
The Trust is organized as a Massachusetts business trust and, under
current law, is not liable for any income or franchise tax in the Commonwealth
of Massachusetts as long as the Fund (and each other series of the Trust)
qualifies as a regulated investment company under the Code.
Distributions by the Fund of its taxable ordinary income (net of
expenses) and the excess, if any, of its net short-term capital gain over its
net long-term capital loss are generally taxable to shareholders as ordinary
income. Such distributions are treated as dividends for federal income tax
purposes, but do not qualify for the dividends-received deduction for
corporations. Distributions by a Fund of the excess, if any, of its net
long-term capital gain over its net short-term capital loss are designated as
capital gain dividends and are taxable to shareholders as long-term capital
gains, regardless of the length of time a shareholder has held his shares. The
Fund will seek to avoid recognition of capital gains.
Distributions to shareholders will be treated in the same manner for
federal income tax purposes whether received in cash or reinvested in additional
shares of a Fund. In general, distributions by a Fund are taken into account by
shareholders in the year in which they are made. However, certain distributions
made during January will be treated as having been paid by the Fund and received
by the shareholders on December 31 of the preceding year. A statement setting
forth the federal income tax status of all distributions made (or deemed made)
during the fiscal year, including any portions which constitute ordinary income
dividends, capital gain dividends and exempt-interest dividends, will be sent to
the Fund's shareholders promptly after the end of each year.
Under the backup withholding rules of the Code, certain shareholders
may be subject to 31% withholding of federal income tax on distributions and
redemption payments made by the Fund. Generally, shareholders are subject to
backup withholding if they have not provided the Fund with a correct taxpayer
identification number and certain required certifications.
Shareholders of the Fund will be subject to federal income tax on the
ordinary income dividends and any capital gain dividends from the Fund and may
also be subject to state and local taxes. The laws of some states and
localities, however, exempt from some taxes dividends such as those paid on
shares of the U.S. Government Fund to the extent such dividends are attributable
to interest on obligations of the and certain of its agencies and
instrumentalities. The Fund intends to advise its shareholders of the proportion
of their ordinary income dividends which are attributable to such interest.
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The State of New York, for example, exempts from its personal income
tax dividends such as those paid on shares of the Fund to the extent such
dividends are attributable to interest from obligations of the U.S. Government
and certain of its agencies and instrumentalities, provided that at least 50% of
the Fund's portfolio consists of such obligations and the Fund complies with
certain notice requirements. The New York State Department of Taxation and
Finance (like most other states) currently takes the position, however, that
certain obligations backed by the full faith and credit of the U.S. Treasury,
such as GNMA Certificates and repurchase agreements backed by any U.S.
Government obligation, do not constitute exempt obligations of the U.S.
Government. (UNDER PRESENT MARKET CONDITIONS, IT IS EXPECTED THAT LESS THAN 50%
OF THE FUND'S PORTFOLIO WILL CONSIST OF OBLIGATIONS WHICH THE NEW YORK STATE
DEPARTMENT OF TAXATION AND FINANCE VIEWS AS EXEMPT. ACCORDINGLY, IT IS LIKELY
THAT NO PORTION OF THE DIVIDENDS PAID ON SHARES OF THE FUND WILL BE EXEMPT FROM
NEW YORK STATE PERSONAL INCOME TAX.)
Shareholders are urged to consult their tax advisers regarding the
possible exclusion from state and local income tax of a portion of the dividends
paid on shares of the Fund which is attributable to interest from obligations of
the U.S. Government and its agencies and instrumentalities
OTHER INFORMATION CONCERNING SHARES OF THE FUND
Net Asset Value
The net asset value of the Shares of the Fund is determined as of
12:00 noon, Eastern time on each Fund Business Day, by dividing the value of the
Fund's net assets (i.e., the value of its securities and other assets less its
liabilities, including expenses payable or accrued) by the number of its shares
outstanding at the time the determination is made. The portfolio securities of
the Fund are valued at their amortized cost pursuant to Rule 2a-7 under the 1940
Act, certain requirements of which are summarized under "Additional Information
on Investment Policies and Techniques." This method increases stability in
valuation, but may result in periods during which the stated value of a
portfolio security is higher or lower than the price the Fund would receive if
the instrument were sold. It is anticipated that the net asset value of each
share will remain constant at $1.00 and the Fund will employ specific investment
policies and procedures to accomplish this result, although no assurance can be
given that they will be able to do so on a continuing basis. These procedures
include a review of the extent of any deviation of net asset value per share,
based on available market rates, from the $1.00 amortized cost price per share,
and consideration of certain actions before such deviation exceeds 1/2 of 1%.
Income earned on the Fund's investments is accrued daily and the Net Income, as
defined under "Distributions and Dividends" below, is declared each Fund
Business Day as a dividend. See "Determination of Net Asset Value" in the
Statement of Additional Information for further information regarding
determination of net asset value and the procedures to be followed to stabilize
the net asset value at $1.00 per share.
Distributions and Dividends
The net income of the Premier Shares is determined each Fund Business
Day (and on such other days as the Trustees deem necessary in order to comply
with Rule 22c-1 under the 1940 Act). This determination is made once during each
such day as of 12:00 noon, Eastern time. All the net income, as defined below,
of the Premier Shares so determined is declared in shares as a dividend to
shareholders of record at the time of such determination. Shares begin accruing
dividends on the day they are purchased. Dividends are distributed monthly on or
about the last business day of each month (or on such other date in each month
as the shareholder's Shareholder Servicing Agent may designate as the dividend
distribution date with respect to a particular shareholder). Unless a
shareholder elects to receive dividends in cash (subject to the policies of the
shareholder's Shareholder Servicing Agent), dividends are distributed in the
form of additional shares at the rate of one share (and fractions thereof) for
each one dollar (and fractions thereof) of dividend income.
For this purpose, the net income of the Premier Shares (from the time
of the immediately preceding determination thereof) shall consist of all income
accrued, including the accretion of discounts less the amortization of any
premium on the portfolio assets of the Fund, less all actual and accrued
expenses
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determined in accordance with generally accepted accounting principles. As noted
above, securities are valued at amortized cost, which the Trustees have
determined in good faith constitutes fair value for the purposes of complying
with the 1940 Act. This valuation method will continue to be used until such
time as the Trustees determine that it does not constitute fair value for such
purposes.
Since the net income of the Premier Shares is declared as a dividend
each time its net income is determined, the net asset value per share (i.e., the
value of its net assets divided by the number of its shares outstanding) is
expected to remain at $1.00 per share immediately after each such determination
and dividend declaration. Any increase in the value of a shareholder's
investment, representing the reinvestment of dividend income, is reflected by an
increase in the number of shares in his account.
It is expected that the Premier Shares will have a positive net income
at the time of each determination thereof. If for any reason the net income
determined at any time is a negative amount, which could occur, for instance,
upon default by an issuer of a portfolio security, the Fund would first offset
the negative amount with respect to each shareholder account from the dividends
declared during the month with respect to each such account. If, and to the
extent that such negative amount exceeds such declared dividends at the end of
the month, the number of outstanding shares will be reduced by treating each
shareholder as having contributed to the capital of the Fund that number of full
and fractional shares in the account of such shareholder which represents his
proportion of the amount of such excess. Each shareholder will be deemed to have
agreed to such contribution in these circumstances by his investment. Thus, the
net asset value per share will be maintained at a constant $1.00.
Distribution and Sub-Administration Agreement
The Distribution and Sub-Administration Agreement dated __________,
1996, for the Fund (the "Distribution Agreement") provides that the Distributor
will act as the principal underwriter of shares of the Fund and bear the
expenses of printing, distributing and filing prospectuses and statements of
additional information and reports used for sales purposes, and of preparing and
printing sales literature and advertisements. In addition, the Distributor will
provide certain sub-administration services, including providing officers,
clerical staff and office space. While there is no sales load, the Distributor
receives a fee from the Fund at an annual rate equal to 0.05% of each Fund's
average daily net assets, on an annualized basis for the Fund's then-current
fiscal year. Other funds which have investment objectives similar to those of
the Fund, but which do not pay some or all of such fees from their assets, may
offer a higher return, although investors would, in some cases, be required to
pay a sales charge or a redemption fee.
The Distributor has agreed to use a portion of its distribution and
sub-administration fee to pay for certain expenses incurred in connection with
organizing new series or classes of the Trust and certain other ongoing expenses
of the Trust.
Expenses
The Fund intends to pay all of its pro rata share of expenses,
including the compensation of the Trustees; governmental fees; interest charges;
taxes; membership dues in the Investment Company Institute; fees and expenses of
independent accountants, of legal counsel and of any transfer agent, Shareholder
Servicing Agent, or dividend disbursing agent; expenses of redeeming shares and
servicing shareholder accounts; expenses of preparing, printing and mailing
prospectuses, reports, notices, proxy statements and reports to shareholders and
to governmental officers and commissions; expenses connected with the execution,
recording and settlement of portfolio security transactions; insurance premiums;
fees and expenses of the Custodian including safekeeping of funds and securities
and maintaining required books and accounts; expenses of calculating the net
asset values of the Premier Shares; expenses of shareholder meetings; and the
advisory fees payable to the Adviser under the Investment Advisory Agreement,
the administration fee payable to the Administrator under the Administration
Agreement and the sub-administration fee payable to the Distributor under the
Distribution and Sub-Administration Agreement. Expenses relating to the
issuance, registration and qualification of shares of the Fund and the
preparation, printing and mailing of prospectuses for such purposes are borne by
the Fund except
- 14 -
<PAGE>
that the Distribution and Sub-Administration Agreement with the Distributor
requires the Distributor to pay for prospectuses which are to be used for sales
to prospective investors.
Pursuant to offering multiple classes of shares, certain expenses of
the Fund are borne by certain classes, either exclusively, or in a manner which
approximates the proportionate value received by the Class as a result of the
expense being incurred.
Description of Shares, Voting Rights and Liabilities
Mutual Fund Trust is an open-end, management investment company
organized as a Massachusetts business trust under the laws of the Commonwealth
of Massachusetts in 1994. The Trust has reserved the right to create and issue
additional series or classes. Each share of a series or class represents an
equal proportionate interest in that series or class with each other share of
that series or class. The shares of each series or class participate equally in
the earnings, dividends and assets of the particular series or class. Expenses
of the Trust which are not attributable to a specific series or class are
allocated among all the series in a manner believed by management of the Trust
to be fair and equitable. Shares have no pre-emptive or conversion rights.
Shares when issued are fully paid and non-assessable, except as set forth below.
Shareholders are entitled to one vote for each whole share held and each
fractional share shall be entitled to a proportionate fractional vote, except
that Trust shares held in the treasury of the Trust shall not be voted. Shares
of each series or class generally vote separately, for example to approve an
investment advisory agreement or distribution plan, but shares of all series and
classes vote together, to the extent required under the 1940 Act, in the
election or selection of Trustees and independent accountants.
Shareholders of the Premier Shares bear the fees and expenses described
in this Prospectus. Similarly, shareholders of the counterpart Vista Shares and
Institutional Shares bear the fees and expenses described in the prospectus for
such classes of Shares. The fees paid by the Premier Shares to the Distributor
and Shareholder Servicing Agent under the distribution plan and shareholder
servicing arrangements for distribution expenses and shareholder services
provided to institutional investors by the Shareholder Servicing Agents are less
than the respective fees paid under distribution plans and shareholder servicing
arrangements adopted for its counterpart Vista Shares. However, the
Institutional Shares pay no fees under distribution plans or shareholder
servicing arrangements. [As a result, at any given time, the net yield on the
Premier Shares will be approximately .10% to .25% higher than the yield on its
counterpart Vista Shares and approximately .18% to .28% lower than the yield on
the counterpart Institutional Shares.] Standardized yield quotations will be
computed separately for each class of shares of the Fund.
The Trust is not required to hold annual meetings of shareholders but
will hold special meetings of shareholders of each series or class or of all
series or classes when in the judgment of the Trustees it is necessary or
desirable to submit matters for a shareholder vote. A Trustee of the Trust may,
in accordance with certain rules of the Securities and Exchange Commission, be
removed from office when the holders of record of not less than two-thirds of
the outstanding shares either present a written declaration to the Funds'
Custodian or vote in person or by proxy at a meeting called for this purpose. In
addition, the Trustees will promptly call a meeting of shareholders to remove a
trustee(s) when requested to do so in writing by record holders of not less than
10% of the outstanding shares of the Trust.
Finally, the Trustees shall, in certain circumstances, give such
shareholders access to a list of the names and addresses of all other
shareholders or inform them of the number of shareholders and the cost of
mailing their request. The Trust's Declaration of Trust provides that, at any
meeting of shareholders, a Shareholder Servicing Agent may vote any shares as to
which such Shareholder Servicing Agent is the agent of record and which are
otherwise not represented in person or by proxy at the meeting, proportionately
in accordance with the votes cast by holders of all shares of the same portfolio
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements. Shareholders of each series or class would be
entitled to share pro rata in the net assets of that series or class available
for distribution to shareholders upon liquidation of that series or class.
- 15 -
<PAGE>
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance existed and the Trust itself was unable to meet its
obligations.
The Code of Ethics of the Trust prohibits all affiliated personnel from
engaging in personal investment activities which compete with or attempt to take
advantage of a Fund's planned portfolio transactions. The objective of the Code
of Ethics is to ensure that the operations of a Fund be carried out for the
exclusive benefit of a Fund's shareholders. The Trust maintains careful
monitoring of compliance with the Code of Ethics. See "General Information" in
the Fund's Statement of Additional Information.
SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
Shareholder Servicing Agents
The shareholder servicing agreement with the Shareholder Servicing
Agent provides that such Shareholder Servicing Agent will, as agent for its
customers, perform various services, including but not limited to the following:
answer customer inquiries regarding account status, history, the manner in which
purchases and redemptions of shares may be effected for the Fund or class of
shares as to which the Shareholder Servicing Agent is so acting and certain
other matters pertaining to the Fund or class of shares; assist shareholders in
designating and changing dividend options, account designations and addresses;
provide necessary personnel and facilities to establish and maintain shareholder
accounts and records; assist in processing purchase and redemption transactions;
arrange for the wiring of funds; transmit and receive funds in connection with
customer orders to purchase or redeem shares; verify and guarantee shareholder
signatures in connection with redemption orders and transfers and changes in
shareholderdesignated accounts; furnish (either separately or on an integrated
basis with other reports sent to a shareholder by a Shareholder Servicing Agent)
monthly and year-end statements and confirmations of purchases and redemptions;
transmit, on behalf of the Fund or class of shares, proxy statements, annual
reports, updated prospectuses and other communications to shareholders; receive,
tabulate and transmit to the Fund proxies executed by shareholders with respect
to meetings of shareholders of the Fund or class of shares; vote the outstanding
shares of the Fund or class of shares whose shareholders do not transmit
executed proxies or attend shareholder meetings in the same proportion as
the votes cast by other shareholders of the Fund or class represented at the
shareholder meeting and provide such other related services as the Fund or a
shareholder may request. Shareholder Servicing Agents may be required to
register pursuant to state securities law.
For performing these services, the Shareholder Servicing Agent for the
Premier Shares receives certain fees, which may be paid periodically, determined
by a formula based upon the number of accounts serviced by such Shareholder
Servicing Agent during the period for which payment is being made, the level of
activity in accounts serviced by such Shareholder Servicing Agent during the
period, and the expenses incurred by such Shareholder Servicing Agent. The fees
relating to acting as liaison to shareholders and providing personal services to
shareholders will not exceed, on an annualized basis for the Fund's then-current
fiscal year, .25% for the Premier Shares of the Fund, of the average daily net
assets represented by shares owned during the period for which payment is being
made by investors for whom such Shareholder Servicing Agent maintains a
servicing relationship. Each Shareholder Servicing Agent may, from time to time,
voluntarily waive a portion of the fees payable to it. In addition, Chase may
provide other related services to the Fund for which it may receive
compensation.
The Shareholder Servicing Agent, and its affiliates, agents and
representatives acting as Shareholder Servicing Agents, may establish custodial
investment accounts ("Accounts"), known as Chase Investment Accounts or by any
other name designated by a Shareholder Servicing Agent. Through such Accounts,
customers can purchase, exchange and redeem Fund shares, receive dividends and
distributions on Fund investments, and take advantage of any services related to
an Account offered by such Shareholder Servicing
- 16 -
<PAGE>
Agent from time to time. All Accounts and any related privileges or services
shall be governed by the laws of the State of New York, without regard to its
conflicts of laws provisions.
The Glass-Steagall Act and other applicable laws generally prohibit
federally chartered or supervised banks from publicly underwriting or
distributing certain securities such as the Fund's shares. The Trust, on behalf
of the Funds, will engage banks, including Chase and its affiliates, as
Shareholder Servicing Agents only to perform advisory, custodian, administrative
and shareholder servicing functions as described above. While the matter is not
free from doubt, the management of the Trust believes that such laws should not
preclude a bank, including a bank which acts as investment adviser, custodian or
administrator, or in all such capacities for the Trust, from acting as a
Shareholder Servicing Agent. However, possible future changes in federal law or
administrative or judicial interpretations of current or future law, could
prevent a bank from continuing to perform all or a part of its servicing
activities. If that occurred, the bank's shareholder clients would be permitted
to remain as shareholders and alternative means for continuing the servicing of
such shareholders would be sought. In such event, changes in the operation of
the Fund might occur and a shareholder serviced by such bank might no longer be
able to avail himself of any automatic investment or other services then being
provided by such bank. The Trust does not expect that shareholders would suffer
any adverse financial consequences as a result of these occurrences.
Transfer Agent and Custodian
DST Systems, Inc. ("DST") acts as transfer agent and dividend
disbursing agent (the "Transfer Agent") for the Trust. In this capacity, DST
maintains the account records of all shareholders in the Fund, including
statement preparation and mailing. DST is also responsible for disbursing
dividend and capital gain distributions to shareholders, whether taken in cash
or additional shares. From time to time, DST and/or the Fund may contract with
other entities to perform certain services for the Transfer Agent. For its
services as Transfer Agent, DST receives such compensation as is from time to
time agreed upon by the Trust and DST. DST's address is 127 W. 10th Street,
Kansas City, MO 64105.
Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of the Fund for which Chase receives compensation as is from time to time
agreed upon by the Trust and Chase. The Custodian's responsibilities include
safeguarding and controlling the Fund's cash and securities, handling the
receipt and delivery of securities, determining income and collecting interest
on the Fund's investments, maintaining books of original entry for portfolio and
Fund accounting and other required books and accounts, and calculating the daily
net asset value of shares of the Fund. Portfolio securities and cash may be held
by sub-custodian banks if such arrangements are reviewed and approved by the
Trustees. The internal division of Chase which serves as the Trust's Custodian
does not determine the investment policies of the Fund or decide which
securities will be bought or sold on behalf of the
Fund or otherwise have access to or share material inside information with the
internal division that performs advisory services for the Fund.
Tax Sheltered Retirement Plans
Shares of the Fund are offered in connection with the following
qualified prototype retirement plans: IRA, Rollover IRA, SEP-IRA,
Profit-Sharing, and Money Purchase Pension Plans which can be adopted by
self-employed persons ("Keogh") and by corporations, 401(k), and 403(b)
Retirement Plans. Call or write the Transfer Agent for more information.
YIELD AND PERFORMANCE INFORMATION
From time to time, the Premier Shares may use hypothetical investment
examples and performance information in advertisements, shareholder reports or
other communications to shareholders. Because such performance information is
based on historical earnings, it should not be considered as an indication or
representation of the performance of the Premier Shares in the future. From time
to time, the yield of the Premier Shares, as a measure of its performance, may
be quoted and compared to those of other mutual funds
- 17 -
<PAGE>
with similar investment objectives, unmanaged investment accounts, including
savings accounts, or other similar products and to other relevant indices or to
rankings prepared by independent services or other financial or industry
publications, such as Lipper Analytical Services, Inc. or the Morningstar Mutual
Funds on Disc, that monitor the performance of mutual funds. In addition, the
yield of each of the Premier Shares may be compared to the Donoghue's Money Fund
AveragesTM, compiled in the Donoghue's Money Fund Report(R), a widely recognized
independent publication that monitors the performance of money market funds.
Also, each of the Premier Shares' yield data may be reported in national
financial publications including, but not limited to, Money Magazine, Forbes,
Barron's, The Wall Street Journal and The New York Times, or in publications of
a local or regional nature. The Premier Shares may, with proper authorization,
reprint articles written about the Premier Shares and provide them to
prospective shareholders.
Premier Shares may provide its annualized "yield" and "effective yield"
to current and prospective shareholders. The "yield" of the Fund refers to the
income generated by an investment in the Fund over a seven-day period (which
period shall be stated in any advertisement or communication with a
shareholder). This income is then "annualized", that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of investment. The
"effective yield" is calculated similarly, but when annualized the income earned
by the investment during that week is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment.
Unlike some bank deposits or other investments which pay a fixed yield
for a stated period of time, the yield of each of the Premier Shares will vary
based on interest rates, the current market value of the securities held in the
Fund's portfolio and changes in the Fund's and the Shares' expenses. The
Adviser, the Administrator, the Distributor and each Shareholder Servicing Agent
may voluntarily waive a portion of their fees on a month-to-month basis. In
addition, the Distributor may assume a portion of the Fund's operating expenses
on a month-to-month basis. These actions would have the effect of increasing the
net income (and therefore the yield) of the Premier Shares during the period
such waivers of fees or assumptions of expenses are in effect. These factors and
possible differences in the methods used to calculate yields should be
considered when comparing the Premier Shares' yields to those published for
other money market funds and other investment vehicles. A Shareholder Servicing
Agent may charge its customers direct fees in connection with an investment (see
"Purchases and Redemptions of SharesPurchases") which will have the effect of
reducing the net return on the investment of customers of that Shareholder
Servicing Agent. Conversely, the Premier Shares are advised that certain
Shareholder Servicing Agents may credit to the accounts of their customers from
whom they are already receiving other fees amounts not exceeding the Shareholder
Servicing Agent fees received (see "Purchases and Redemptions of
Shares-Purchases"), which will have the effect of increasing the net return on
the investment of customers of those Shareholder Servicing Agents. Such
customers may be able to obtain through their Shareholder Servicing Agents
quotations reflecting such increased return. See the Statement of Additional
Information for further information concerning each of the Premier Shares'
calculation of yield.
The Fund is the successor to the Hanover 100% U.S. Treasury Securities Money
Market Fund. The Fund may also quote historical performance of the Hanover 100%
U.S. Treasury Securities Money Market Fund.
OTHER INFORMATION
The Statement of Additional Information contains more detailed
information about the Trust and the Fund, including information related to (i)
the Fund's investment policies and restrictions, (ii) risk factors associated
with the Fund's policies and investments, (iii) the Trust's Trustees, officers
and the Administrator, the Adviser and the SubAdviser, (iv) portfolio
transactions and brokerage allocation, (v) the Fund's shares, including rights
and liabilities of shareholders, and (vi) additional performance information,
including the method used to calculate yield or total rate of return quotations
of the Fund. The audited financial statements of the Predecessor Fund for its
last fiscal year end is incorporated by reference in the Statement of Additional
Information.
- 18 -
<PAGE>
TABLE OF CONTENTS
Expense Summary...................................................... 3
Financial Highlights................................................. 5
Investment Objectives and Policies................................... 6
Management of the Fund.............................................. 6
Purchases and Redemptions of Shares.................................. 8
Tax Matters.......................................................... 12
Other Information Concerning Shares of the Fund...................... 14
Shareholder Servicing Agents, Transfer Agent and Custodian........... 17
Additional Information on Investment Policies and Techniques......... 19
Yield and Performance Information.................................... 21
Other Information.................................................... 22
- 19 -
<PAGE>
VISTA(SM) 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
INSTITUTIONAL SHARES PROSPECTUS -- ___________, 1996
Mutual Fund Trust (the "Trust") is an open-end management investment
company organized as a business trust under the laws of the Commonwealth of
Massachusetts on February 4, 1994, presently consisting of ___ separate series
("Funds"). Under a multi-class distribution system, the money market funds may
be offered through three separate classes of shares (the "Shares"). The
Institutional Shares described in and offered pursuant to this Prospectus, which
are offered only to qualified institutional investors making an initial minimum
investment of $1,000,000, are offered through the Vista 100% U.S. Treasury
Securities Money Market Fund (the "Institutional Shares"). The Premier Shares of
the Fund are offered only to institutional clients and are sold under a separate
prospectus.
THE VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND'S (the "100%
U.S. Treasury Fund" or the "Fund") investment objective is to seek maximum
current income consistent with maximum safety of principal and maintenance of
liquidity. The Fund seeks to achieve its objectives by investing solely in
obligations issued by the U.S. Treasury, including U.S. Treasury bills, bonds
and notes, which differ principally only in their interest rates, maturities and
dates of issuance. The Fund does not purchase securities issued or guaranteed by
agencies or instrumentalities of the U.S. Government, nor does it enter
repurchase agreements. Because the Fund invests exclusively in direct Unites
States Treasury Obligations, investors may benefit from income tax exclusions
and exemptions that are available in certain states and localities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The Chase Manhattan Bank, N.A. ("Chase") is the investment adviser
(the "Adviser"), custodian (the "Custodian"), administrator (the
"Administrator") and Shareholder Servicing Agent for the 100% U.S. Treasury
Fund. Chase Asset Management, Inc. is the investment sub-adviser ("CAM Inc." or
the "Sub-Adviser") for the 100% U.S. Treasury Fund.
Vista Broker-Dealer Services, Inc. ("VBDS") is the Fund's distributor
(the "Distributor") and is unaffiliated with Chase. Investment in the Fund is
subject to risk -- including possible loss of principal. Shares of the Fund are
not bank deposits or obligations of, or guaranteed or endorsed by, The Chase
Manhattan Bank, N.A. 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.
An investment in the Fund is neither insured nor guaranteed by the U.S.
Government and there can be no assurance that the Fund will be able to maintain
a stable net asset value of $1.00 per share. Prospective investors should
carefully consider the risks associated with an investment in the Fund. For a
further discussion on the risks associated with an investment in the Fund, see
"Investment Objectives and Policies" in this Prospectus. There can be no
assurance that the Fund will achieve its investment objectives.
The Institutional Shares are continuously offered for sale without a
sales load through VBDS only to qualified institutional investors that make an
initial investment of $1,000,000. Shares may be redeemed by shareholders at the
net asset value next determined on any Fund Business Day as hereinafter defined.
This Prospectus sets forth concisely information concerning the Fund
and its Institutional Shares that a prospective investor ought to know before
investing. A Statement of Additional Information for the Institutional Shares,
dated _____________, 1996, containing more detailed information about the Fund
has been filed with
<PAGE>
the Securities and Exchange Commission and is incorporated into this Prospectus
by reference. An investor may obtain a copy of the Statement of Additional
Information for the Institutional Shares without charge by contacting the Fund.
Investors should read this Prospectus and retain it for future
reference.
For information about the Institutional Shares, simply call the Vista
Service Center at 1-800-34-VISTA.
EXPENSE SUMMARY
The following table provides (i) a summary of the aggregate annual operating
expenses of the Fund, as a percentage of average net assets of the Fund, and
(ii) an example illustrating the dollar cost of such expenses on a $1,000
investment in shares of the Fund.
Institutional
Shares
Annual Fund Operating Expenses
(as a percentage of average net assets)
Investment Advisory Fee.................................... .10%
Rule 12b-1 Distribution Plan Fee.............................. .00%
Administrative Fee............................................ .05%
Other Expenses
Sub-Administration Fee..................................... .05%
Servicing Fee +............................................ .00%
Other Operating Expenses++................................. .07%
Total Fund Operating Expenses .27%
Example:
You would pay the following expenses on a $1,000 investment in a Fund, assuming
(1) 5% annual return and (2) redemption at the end of:
1 year........................................$
3 years.......................................$
5 years.......................................$
10 years......................................$
- ---------------
++ A shareholder may incur a $10.00 charge for certain wire redemptions.
The expense summary is intended to assist investors in understanding
the various costs and expenses that a shareholder in the Institutional Shares
class of shares of the Fund will bear directly or indirectly. The expense
summary shows the investment advisory fee, distribution fee, administrative fee,
sub-administration fee and shareholder servicing agent fee expected to be
incurred by the Institutional Shares class of shares of the Fund.
The "Example" set forth above should not be considered a representation
of future expenses of Institutional Shares of the Fund; actual expenses may be
greater or less than those shown.
- 2 -
<PAGE>
FINANCIAL HIGHLIGHTS
The table set forth below provides selected per share data and ratios
for one share outstanding throughout the period shown for The Hanover 100% U.S.
Treasury Securities Money Market Fund, the predecessor to the Fund (the
"Predecessor Fund"). This information is supplemented by financial statements
and accompanying notes appearing in the Predecessor Fund's Annual Report to
Shareholders for the fiscal year ended November 30, 1994 which is incorporated
by reference into the Statement of Additional Information. The financial
statements and notes, as well as the financial information set forth in the
tables set forth below have been audited by KPMG Peat Marwick LLP, independent
accountants, whose report thereon is also included in the Annual Report to
Shareholders. Shareholders can obtain a copy of this report by contacting the
Fund or their Shareholder Servicing Agent.
<TABLE>
<CAPTION>
THE HANOVER 100% U.S. TREASURY FUND
Year Ended November 30 Period Ended
1995 1994 1993 1992 November 30, 1994
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE BEGINNING OF PERIOD....................... $ $1.000 $1.000 $1.000 $1.000
------ ------ ------ ------
Income from Investment Operations:
Net Investment Income............................ 0.033 0.026 0.033 0.021
----- ----- ----- -----
Less Distributions:
Dividends from net investment income............. (0.033) (0.026) (0.033) (0.021)
------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD............................ $ $1.000 $1.000 $1.000 $1.000
====== ====== ====== ======
TOTAL RETURN**............................................ 3.32% 2.62% 3.33% 2.58%
Ratios/Supplemental Data
Net Assets, End of Period (in thousands)......... $ $1,024,125 $873,631 $383,688 $141,875
Ratio of Expenses to Average Net Assets++......... 0.59% 0.58% 0.55% 0.45%+
Ratio of Net Investment Income to Average
Net Assets++.................................... 3.26% 2.58% 3.28% 5.02%+
</TABLE>
- ----------------------
* Commencement of operations July 1, 1991.
** Total return computed for the period.
+ Annualized.
++ Ratios before effect of waivers were 0.62%, 0.61%, 0.67%, and 0.75%
annualized, respectively.
- 3 -
<PAGE>
INVESTMENT OBJECTIVES AND POLICIES
The Fund seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Fund uses the amortized cost method of
valuing securities pursuant to Rule 2a-7 under the Investment Company Act of
1940, as amended (the "1940 Act"), certain requirements of which are summarized
as follows. In accordance with Rule 2a-7, the Fund will maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 397 days or less and invest only in
U.S. dollar denominated securities determined in accordance with procedures
established by the Board of Trustees to present minimal credit risks and which
are rated in one of the two highest rating categories for debt obligations by at
least two nationally recognized statistical rating organizations (or one rating
organization if the instrument was rated only by one such organization) or, if
unrated, are of comparable quality as determined in accordance with procedures
established by the Board of Trustees.
The Fund's investment objective is to seek maximum current income
consistent with maximum safety of principal and maintenance of liquidity. The
Fund seeks to achieve its objective by investing in obligations issued by the
U.S. Treasury, including U.S. Treasury bills, bonds and notes, which differ
principally only in their interest rates, maturities and dates of issuance. The
Fund does not purchase securities issued or guaranteed by agencies or
instrumentalities of the United States Government, nor does it enter into
repurchase agreements. The dollar weighted average maturity of the Fund will be
90 days or less. Although the Fund seeks to be fully invested, at times it may
hold uninvested cash reserves, which would adversely affect its yield.
Interest on United States Treasury obligations is exempt from state and
local income taxes under federal law; the interest is not exempt from federal
income tax. However, shareholders of the 100% U.S. Treasury Fund do not directly
receive interest on United States Treasury obligations, but rather receive
dividends from the 100% U.S. Treasury Fund that are derived from such interest.
Although many states allow the character of the 100% U.S. Treasury Fund's income
to pass through to its shareholders, certain states do not, so that
distributions from the 100% U.S. Treasury Fund derived from interest that is
exempt from state and local income taxes when received directly by a taxpayer
may not be exempt from such taxes when earned as a dividend by a shareholder of
the 100% U.S. Treasury Fund. Shareholders of the 100% U.S. Treasury Fund should
consult their tax advisers as to state and local consequences of investment in
the Fund.
ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND TECHNIQUES
REVERSE REPURCHASE AGREEMENTS
The Fund may enter into reverse repurchase agreements to avoid selling
securities during unfavorable market conditions to meet redemptions. Pursuant to
a reverse repurchase agreement, the Fund will sell portfolio securities and
agree to repurchase them from the buyer at a particular date and price. Whenever
the Fund enters into a reverse repurchase agreement, it will establish a
segregated account in which it will maintain liquid assets in an amount at least
equal to the repurchase price marked to market daily (including accrued
interest), and will subsequently monitor the account to ensure that such
equivalent value is maintained. The Fund pays interest on amounts obtained
pursuant to reverse repurchase agreements. Reverse repurchase agreements are
considered to be borrowings by the Fund under the 1940 Act and are subject to
the Fund's general limitations with respect to borrowing.
FIRM COMMITMENTS AND WHEN-ISSUED SECURITIES
The Fund may purchase securities on a firm commitment basis, including
when-issued securities. Securities purchased on a firm commitment basis are
purchased for delivery beyond the normal settlement date at a stated price and
yield. Such securities are recorded as an asset and are subject to changes in
value based upon changes in the general level of interest rates. The Fund will
make commitments to purchase securities on
- 4 -
<PAGE>
a firm commitment basis only with the intention of actually acquiring the
securities, but may sell them before the settlement date if it is deemed
advisable.
No income accrues to the purchase of a security on a firm commitment
basis prior to delivery. Purchasing a security on a firm commitment basis can
involve a risk that the market price at the time of delivery may be lower than
the agreed upon purchase price, in which case there could be an unrealized loss
at the time of delivery.
The Fund will establish a segregated account in which it will maintain
assets in an amount at least equal in value to the Fund's commitments to
purchase securities on a firm commitment basis. If the value of these assets
declines, the Fund will place additional liquid assets in the account on a daily
basis so that the value of the assets in the account is equal to the amount of
such commitments.
PORTFOLIO SECURITIES LENDING
Although the Fund does not anticipate engaging in such
activity in the ordinary course of business, the Fund may lend portfolio
securities to broker-dealers and other institutional investors in order to
generate additional income. Such loans of portfolio securities may not exceed
30% of the value of its total assets. In connection with such loans, the Fund
will receive collateral consisting of cash, cash equivalents, U.S. Government
securities or irrevocable letters of credit issued by financial institutions.
Such collateral will be maintained at all times in an amount equal to at least
102% of the current market value of the securities loaned plus accrued interest.
The Fund can earn income through the investment of such collateral. The Fund
continues to be entitled to the interest payable on a loaned security and, in
addition, receive interest on the amount of the loan. Such loans will be
terminable at any time upon specified notice. The Fund might experience risk of
loss if the institutions with which it has engaged in portfolio loan
transactions breach their agreements with such Fund. The risk in lending
portfolio securities, as with other extensions of secured credit, consist of
possible delays in receiving additional collateral or in the recovery of the
securities or possible loss of rights in the collateral should the borrower
experience financial difficulty. Loans will be made only to firms deemed by the
Adviser or Sub-Adviser to be of good standing and will not be made unless, in
the judgment of the investment Adviser or Sub-Adviser, the consideration to be
earned from such loans justifies the risk.
The foregoing investment policies and activities are not fundamental
and may be changed by the Board of Trustees of the Trust without the approval of
shareholders. For more detailed descriptions of certain of the Fund's investment
activities, see "Investment Policies -- Additional Investment Activities" in the
Statement of Additional Information.
MANAGEMENT OF THE FUND
Adviser
The Chase Manhattan Bank, N.A. manages the assets of the Fund pursuant
to an Investment Advisory Agreement, dated ________________. Subject to such
policies as the Board of Trustees may determine, Chase makes investment
decisions for the Fund. For its services under the Investment Advisory
Agreements, Chase is entitled to receive an annual fee computed daily and paid
monthly at an annual rate equal to 0.10% of the Fund's average daily net assets.
However, Chase may, from time to time, voluntarily waive all or a portion of its
fees payable under the Investment Advisory Agreement.
The Adviser, a wholly-owned subsidiary of The Chase Manhattan
Corporation, a registered bank holding company, is a commercial bank offering a
wide range of banking and investment services to customers throughout the United
States and around the world. Its headquarters is at One Chase Manhattan Plaza,
New York, NY 10081. The Adviser, including its predecessor organizations, has
over 100 years of money
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management experience and renders investment advisory services to others. Also
included among the Adviser's accounts are commingled trust funds and a broad
spectrum of individual trust and investment management portfolios. These
accounts have varying investment objectives.
Certain Relationships and Activities. Chase and its affiliates may have
deposit, loan and other commercial banking relationships with the issuers of
securities purchased on behalf of the Fund, including outstanding loans to such
issuers which may be repaid in whole or in part with the proceeds of securities
so purchased. Chase and its affiliates deal, trade and invest for their own
accounts in U.S. Treasury obligations and are among the leading dealers of
various types of U.S. Treasury obligations. Chase and its affiliates may sell
U.S. Treasury obligations to, and purchase them from, other investment companies
sponsored by the Distributor or affiliates of the Distributor. The Adviser will
not invest any Fund assets in any U.S. Treasury obligations purchased from
itself or any affiliate, although under certain circumstances such securities
may be purchased from other members of an underwriting syndicate in which the
Adviser or an affiliate is a nonprincipal member. This restriction may limit the
amount or type of U.S. Treasury obligations available to be purchased on behalf
of the Fund. The Adviser has informed the Fund that in making its investment
decisions, it does not obtain or use material inside information in the
possession of any other division or department of such Adviser or in the
possession of any affiliate of such Adviser, including the division of Chase
that performs services for the Trust as Custodian. Shareholders of the Fund
should be aware that, subject to applicable legal or regulatory restrictions,
Chase and its affiliates may exchange among themselves certain information about
the shareholders and their accounts.
Under an investment advisory agreement between the Trust, on behalf of
the Fund, and Chase, Chase may delegate a portion of its responsibilities to a
sub-adviser. In addition, the investment advisory agreement provides that Chase
may render services through its own employees or the employees of one or more
affiliated companies that are qualified to act as an investment adviser of the
Fund and are under the common control of New Chase as long as all such persons
are functioning as part of an organized group of persons, managed by authorized
officers of Chase.
Sub-Adviser
Chase has entered into an investment sub-advisory agreement with its
affiliate, CAM Inc., a registered investment adviser, on behalf of the Fund. The
Sub-Adviser is a wholly-owned subsidiary of New Chase. Subject to the
supervision and direction of the Adviser and the Board of Trustees, CAM Inc.
provides investment sub-advisory services to the Fund in accordance with the
Fund's objectives and policies, makes investment decisions for the Fund and
places orders to purchase and sell securities on behalf of the Fund. The
Sub-Advisory Agreement provides that, as compensation for services, the
Sub-Adviser receives, from the Adviser, a fee, computed and paid monthly based
on the Fund's average daily net assets, on an annualized basis for the Fund's
then-current fiscal year. [DISCLOSURE ABOUT SUB-ADVISER TO COME]
Administrator
Pursuant to an Administration Agreement, dated April 15, 1994 (the
"Administration Agreement"), Chase serves as Administrator of the Trust. The
Administrator provides certain administrative services, including, among other
responsibilities, coordinating relationships with independent contractors and
agents; preparing for signature by officers and filing of certain documents
required for compliance with applicable laws and regulations excluding those of
the securities laws of the various states; arranging for the maintenance of
books and records; and providing office facilities necessary to carry out its
duties. For these services and facilities, the Administrator is entitled to
receive from the Fund a fee computed daily and paid monthly at an annual rate
equal to 0.05% of the Fund's average daily net assets. However, the
Administrator may, from time to time, voluntarily waive all or a portion of its
fees payable under the Administration Agreement. The Administrator, pursuant to
the terms of the Administration Agreement, shall not have any responsibility or
authority for the Fund's investments, the determination of investment policy, or
for any matter pertaining to the distribution of Fund shares.
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Glass-Steagall Act. Chase has received the opinion of its legal counsel
that it may provide the services described in the Investment Advisory and the
Administration Agreements, as described above, and the Shareholder Servicing
Agreements and Custodian Agreement described below without violating the federal
banking law commonly known as the Glass-Steagall Act. The Act generally bars
banks from publicly underwriting or distributing certain securities.
Based on the advice of its counsel, Chase believes that the Court's
decision, and these other decisions of federal banking regulators, permit it to
serve as investment adviser to a registered, open-end investment company.
Regarding the performance of shareholder servicing and custodial
activities, the staff of the Office of the Comptroller of the Currency, which
supervises national banks, has issued opinion letters stating that national
banks may engage in shareholder servicing and custodial activities. Therefore,
Chase believes, based on advice of its counsel, that it may serve as shareholder
servicing agent to the Fund and render the services described in the shareholder
servicing agreements, and Chase believes, based on advice of its counsel, that
it may serve as Custodian to the Trust and render the services set forth in the
Custodian Agreement, as appropriate, incidental national banking functions and
as proper adjunct to its serving as investment adviser and administrator to the
Fund.
Industry practice and regulatory decisions also support a bank's
authority to act as administrator for a registered investment company. Chase, on
the advice of its counsel, believes that it may render the services described in
its Administration Agreement without violating the Glass-Steagall Act or other
applicable banking laws.
Possible future changes in federal law or administrative or judicial
interpretations of current or future law, however, could prevent Chase from
continuing to perform investment advisory, shareholder servicing, custodian or
other administrative services for the Fund. If that occurred, the Trust's Board
of Trustees promptly would seek to obtain for the Fund the services of another
qualified adviser, shareholder servicing agent, custodian or administrator, as
necessary. Although no assurances can be given, the Trust believes that, if
necessary, the switch to a new adviser, shareholder servicing agent, custodian
or administrator could be accomplished without undue disruption to the Funds'
operations.
In addition, state securities laws on this issue may differ from the
interpretation of federal law expressed herein, and banks and financial
institutions may be required to register as dealers pursuant to state law.
PURCHASES AND REDEMPTIONS OF SHARES
Purchases
The Institutional Shares are continuously offered for sale without a
sales load at the net asset value next determined through Vista Broker-Dealer
Services, Inc. ("VBDS" or the "Distributor") after an order is received if it is
transmitted prior to 12:00 noon, Eastern time on any business day during which
the New York Stock Exchange and the Adviser are open for trading ("Fund Business
Day"). (See "Other Information Concerning Shares of the Fund--Net Asset Value").
Orders for Institutional Shares received and accepted prior to the above
designated times will be entitled to all dividends declared on such day. The
minimum initial purchase is $1,000,000. Shareholders must maintain a minimum
account balance of $1,000,000 in the Institutional Shares at all times. It is
anticipated that each Institutional Share's net asset value will remain constant
at $1.00 per share and the Fund will employ specific investment policies and
procedures to accomplish this result. An investor may purchase Institutional
Shares by authorizing his broker or financial institution to purchase such
Shares on his behalf through the Distributor, which the broker or financial
institution must do on a timely basis. All share purchases must be paid for by
federal funds wire. If federal funds are not available with respect to any such
order by the close of business on the day the order is received by the Transfer
Agent, the order will
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be cancelled. Any order received after the time noted above, will not be
accepted. Any funds received in connection with late orders will be invested on
the next business day. The Fund may at its discretion reject any order for
shares. The Fund also reserves the right to suspend sales of shares to the
public at any time, in response to the conditions in the securities market or
otherwise. Fund shares will be maintained in book entry form, and no
certificates representing shares owned will be issued to shareholders.
Federal regulations require that each investor provide a certified
Taxpayer Identification Number upon opening an account.
The Fund intends to be as fully invested at all times as is reasonably
practicable in order to enhance the yield on its assets. Accordingly, in order
to make investments which will immediately generate income, the Fund must have
federal funds available to it (i.e., monies credited to the account of the
Fund's custodian bank by a Federal Reserve Bank).
Redemptions
An investor may redeem all or any portion of the shares in his account
on any Fund Business Day at the net asset value next determined after a
redemption request in proper form is received by the Fund's Transfer Agent.
Therefore, redemptions will be effected on the same day the redemption order is
received only if such order is received prior to 12:00 noon, Eastern time on any
Fund Business Day. Shares which are redeemed earn dividends up to and including
the day prior to the day the redemption is effected. The proceeds of a
redemption will be paid by wire in federal funds normally on the Fund Business
Day the redemption is effected, but in any event within seven days. Payment for
redemption requests received prior to the above-mentioned times is normally made
in federal funds wired to the redeeming shareholder on the same Business Day.
Payment for redeemed shares for which a redemption order is received after the
times stated above on a Business Day is normally made in federal funds wired to
the redeeming shareholder on the next Business Day following redemption. In
order to allow Chase to most effectively manage the Fund's portfolio, investors
are urged to make redemption requests as early in the day as possible. In making
redemption requests, the names of the registered shareholders and their account
numbers must be supplied. While the Fund retains the right to pay the redemption
price of shares in kind with securities (instead of cash), the Trust has filed
an election under Rule 18f-1 under the Investment Company Act of 1940, as
amended (the "1940 Act") committing to pay in cash all redemptions by a
shareholder of record up to the amounts specified in the rule (approximately
$250,000).
A wire redemption may be requested by telephone or wire to the Vista
Service Center. For telephone redemptions, call the Vista Service Center at
(800) 622-4273.
The right of any shareholder to receive payment with respect to any
redemption may be suspended or the payment of the redemption proceeds postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on such Exchange is restricted or, to the
extent otherwise permitted by the 1940 Act, if an emergency exists.
General
The Fund has established certain procedures and restrictions, subject
to change from time to time, for purchase and redemption, including procedures
for accepting telephone instructions. The Fund's Transfer Agent may defer acting
on a shareholder's instructions until it has received them in proper form. In
addition, the privileges described in this Prospectus are not available until a
completed and signed account application has been received by the Fund's
Transfer Agent. Telephone transaction privileges are made available to
shareholders automatically upon opening an account unless the privilege is
declined in the account application. To provide evidence of telephone
instructions, the Transfer Agent will record telephone conversations with
shareholders. The Fund will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. In the event the Fund does
not employ such procedures, it may be liable for losses due to unauthorized or
fraudulent instructions.
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<PAGE>
Shareholders agree to release and hold harmless the Fund, the Adviser,
the Administrator, any subagent and broker-dealer, and the officers, directors,
employees and agents thereof against any claim, liability, loss, damage and
expense for any act or failure to act in connection with Fund shares, any
related investment account, any privileges or services selected in connection
with such investment account, or any written or oral instructions or requests
with respect thereto, or any written or oral instructions or requests from
someone claiming to be a shareholder if the Fund or any of the above-described
parties follow instructions which they reasonably believe to be genuine and act
in good faith by complying with the reasonable procedures that have been
established for Fund accounts and services.
The Fund may also establish and revise from time to time account
minimums and transactions or amount restrictions on purchases, redemptions, or
other transactions permitted in connection with shareholder accounts. The Fund
may also require signature guarantees for changes that shareholders request be
made in Fund records with respect to its accounts, including but not limited to,
changes in the bank account specified in the Bank Account Registration, or for
any written requests for additional account services made after a shareholder
has submitted an initial account application to the Fund. The Fund may refuse to
accept or carry out any transaction that does not satisfy any restrictions then
in effect.
TAX MATTERS
The following discussion is addressed primarily to individual investors
and is for general information only. A prospective investor, including a
corporate investor, should also review the more detailed discussion of federal
income tax considerations that is contained in the Statement of Additional
Information. In addition, each prospective investor should consult with his own
tax advisers as to the tax consequences of an investment in the Fund, including
the status of distributions from the Fund in his own state and locality.
The Fund intends to qualify each year and elect to be treated as a
separate "regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Fund is treated as a
"regulated investment company" and all its taxable income, if any, is
distributed to its shareholders in accordance with the timing requirements
imposed by the Code, it will not be subject to federal income tax on amounts so
distributed. If for any taxable year the Fund does not qualify for the treatment
as a regulated investment company, all of its taxable income will be subject to
tax at regular corporate rates without any deduction for distributions to its
shareholders, and such distributions to shareholders will be taxable to the
extent of the Fund's current and accumulated earnings and profits.
The Trust is organized as a Massachusetts business trust and, under
current law, is not liable for any income or franchise tax in the Commonwealth
of Massachusetts as long as the Fund (and each other series of the Trust)
qualifies as a regulated investment company under the Code.
Distributions by the Fund of its taxable ordinary income (net of
expenses) and the excess, if any, of its net short-term capital gain over its
net long-term capital loss are generally taxable to shareholders as ordinary
income. Such distributions are treated as dividends for federal income tax
purposes, but do not qualify for the dividends-received deduction for
corporations. Distributions by a Fund of the excess, if any, of its net
long-term capital gain over its net short-term capital loss are designated as
capital gain dividends and are taxable to shareholders as long-term capital
gains, regardless of the length of time a shareholder has held his shares. The
Fund will seek to avoid recognition of capital gains.
Distributions to shareholders will be treated in the same manner for
federal income tax purposes whether received in cash or reinvested in additional
shares of a Fund. In general, distributions by a Fund are taken into account by
shareholders in the year in which they are made. However, certain distributions
made during January will be treated as having been paid by the Fund and received
by the shareholders on December 31 of the preceding year. A statement setting
forth the federal income tax status of all distributions made (or deemed made)
during the fiscal year, including any portions which constitute ordinary income
dividends, capital
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gain dividends and exempt-interest dividends, will be sent to the Fund's
shareholders promptly after the end of each year.
Under the backup withholding rules of the Code, certain shareholders
may be subject to 31% withholding of federal income tax on distributions and
redemption payments made by the Fund. Generally, shareholders are subject to
backup withholding if they have not provided the Fund with a correct taxpayer
identification number and certain required certifications.
Shareholders of the Fund will be subject to federal income tax on the
ordinary income dividends and any capital gain dividends from the Fund and may
also be subject to state and local taxes. The laws of some states and
localities, however, exempt from some taxes dividends such as those paid on
shares of the U.S. Government Fund to the extent such dividends are attributable
to interest on obligations of the and certain of its agencies and
instrumentalities. The Fund intends to advise its shareholders of the proportion
of their ordinary income dividends which are attributable to such interest.
The State of New York, for example, exempts from its personal income
tax dividends such as those paid on shares of the Fund to the extent such
dividends are attributable to interest from obligations of the U.S. Government
and certain of its agencies and instrumentalities, provided that at least 50% of
the Fund's portfolio consists of such obligations and the Fund complies with
certain notice requirements. The New York State Department of Taxation and
Finance (like most other states) currently takes the position, however, that
certain obligations backed by the full faith and credit of the U.S. Treasury,
such as GNMA Certificates and repurchase agreements backed by any U.S.
Government obligation, do not constitute exempt obligations of the U.S.
Government. (UNDER PRESENT MARKET CONDITIONS, IT IS EXPECTED THAT LESS THAN 50%
OF THE FUND'S PORTFOLIO WILL CONSIST OF OBLIGATIONS WHICH THE NEW YORK STATE
DEPARTMENT OF TAXATION AND FINANCE VIEWS AS EXEMPT. ACCORDINGLY, IT IS LIKELY
THAT NO PORTION OF THE DIVIDENDS PAID ON SHARES OF THE FUND WILL BE EXEMPT FROM
NEW YORK STATE PERSONAL INCOME TAX.)
Shareholders are urged to consult their tax advisers regarding the
possible exclusion from state and local income tax of a portion of the dividends
paid on shares of the Fund which is attributable to interest from obligations of
the U.S. Government and its agencies and instrumentalities
OTHER INFORMATION CONCERNING SHARES OF THE FUND
Net Asset Value
The net asset value of the Shares of the Fund is determined as of 12:00
noon, Eastern time on each Fund Business Day, by dividing the value of the
Fund's net assets (i.e., the value of its securities and other assets less its
liabilities, including expenses payable or accrued) by the number of its shares
outstanding at the time the determination is made. The portfolio securities of
the Fund are valued at their amortized cost pursuant to Rule 2a-7 under the 1940
Act, certain requirements of which are summarized under "Additional Information
on Investment Policies and Techniques." This method increases stability in
valuation, but may result in periods during which the stated value of a
portfolio security is higher or lower than the price the Fund would receive if
the instrument were sold. It is anticipated that the net asset value of each
share will remain constant at $1.00 and the Fund will employ specific investment
policies and procedures to accomplish this result, although no assurance can be
given that they will be able to do so on a continuing basis. These procedures
include a review of the extent of any deviation of net asset value per share,
based on available market rates, from the $1.00 amortized cost price per share,
and consideration of certain actions before such deviation exceeds 1/2 of 1%.
Income earned on the Fund's investments is accrued daily and the Net Income, as
defined under "Distributions and Dividends" below, is declared each Fund
Business Day as a dividend. See "Determination of Net Asset Value" in the
Statement of Additional Information for further information regarding
determination of net asset value and the procedures to be followed to stabilize
the net asset value at $1.00 per share.
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<PAGE>
Distributions and Dividends
The net income of the Institutional Shares is determined each Fund
Business Day (and on such other days as the Trustees deem necessary in order to
comply with Rule 22c-1 under the 1940 Act). This determination is made once
during each such day as of 12:00 noon, Eastern time. All the net income, as
defined below, of the Institutional Shares so determined is declared in shares
as a dividend to shareholders of record at the time of such determination.
Shares begin accruing dividends on the day they are purchased. Dividends are
distributed monthly on or about the last business day of each month. Unless a
shareholder elects to receive dividends in cash, dividends are distributed in
the form of additional shares at the rate of one share (and fractions thereof)
for each one dollar (and fractions thereof) of dividend income.
For this purpose, the net income of the Institutional Shares (from the
time of the immediately preceding determination thereof) shall consist of all
income accrued, including the accretion of discounts less the amortization of
any premium on the portfolio assets of the Fund, less all actual and accrued
expenses determined in accordance with generally accepted accounting principles.
As noted above, securities are valued at amortized cost, which the Trustees have
determined in good faith constitutes fair value for the purposes of complying
with the 1940 Act. This valuation method will continue to be used until such
time as the Trustees determine that it does not constitute fair value for such
purposes.
Since the net income of the Institutional Shares is declared as a
dividend each time its net income is determined, the net asset value per share
(i.e., the value of its net assets divided by the number of its shares
outstanding) is expected to remain at $1.00 per share immediately after each
such determination and dividend declaration. Any increase in the value of a
shareholder's investment, representing the reinvestment of dividend income, is
reflected by an increase in the number of shares in his account.
It is expected that the Institutional Shares will have a positive net
income at the time of each determination thereof. If for any reason the net
income determined at any time is a negative amount, which could occur, for
instance, upon default by an issuer of a portfolio security, the Fund would
first offset the negative amount with respect to each shareholder account from
the dividends declared during the month with respect to each such account. If,
and to the extent that such negative amount exceeds such declared dividends at
the end of the month, the number of outstanding shares will be reduced by
treating each shareholder as having contributed to the capital of the Fund that
number of full and fractional shares in the account of such shareholder which
represents his proportion of the amount of such excess. Each shareholder will be
deemed to have agreed to such contribution in these circumstances by his
investment. Thus, the net asset value per share will be maintained at a constant
$1.00.
Distribution and Sub-Administration Agreement
The Distribution and Sub-Administration Agreement dated ___________,
1996 for the Fund (the "Distribution Agreement") provides that the Distributor
will act as the principal underwriter of shares of the Fund and bear the
expenses of printing, distributing and filing prospectuses and statements of
additional information and reports used for sales purposes, and of preparing and
printing sales literature and advertisements. In addition, the Distributor will
provide certain sub-administration services, including providing officers,
clerical staff and office space. While there is no sales load, the Distributor
receives a fee from the Fund at an annual rate equal to 0.05% of the Fund's
average daily net assets, on an annualized basis for the Fund's then-current
fiscal year. Other funds which have investment objectives similar to those of
the Fund, but which do not pay some or all of such fees from their assets, may
offer a higher return, although investors would, in some cases, be required to
pay a sales charge or a redemption fee.
The Distributor has agreed to use a portion of its distribution and
sub-administration fee to pay for certain expenses incurred in connection with
organizing new series or classes of the Trust and certain other ongoing expenses
of the Trust.
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EXPENSES
The Fund intends to pay all of its pro rata share of certain expenses,
including the compensation of the Trustees; governmental fees; interest charges,
taxes; membership dues in the Investment Company Institute; fees and expenses of
independent accountants, of legal counsel and of any transfer agent, dividend
disbursing agent; expenses of redeeming shares; expenses of preparing, printing
and mailing prospectuses, reports, notices, proxy statements and reports to
shareholders and to governmental officers and commissions; expenses connected
with the execution, recording and settlement of portfolio security transactions;
insurance premiums; fees and expenses of the Custodian including safekeeping of
funds and securities and maintaining required books and accounts; expenses of
calculating the net asset values of the Fund Shares; expenses of shareholder
meetings; and the advisory fees payable to the Adviser under the Investment
Advisory Agreements, the administration fee payable to the Administrator under
the Administration Agreement and the sub-administration fee payable to the
Distributor under the Distribution and Sub-Administration Agreement. Expenses
relating to the issuance, registration and qualification of shares of the Fund
and the preparation, printing and mailing of prospectuses for such purposes are
borne by the Fund or the Shares except that the Distribution and
Sub-Administration Agreement with the Distributor requires the Distributor to
pay for prospectuses which are to be used for sales to prospective investors.
Pursuant to offering multiple classes of shares, certain expenses of
the Fund are borne by certain classes, either exclusively, or in a manner which
approximates the proportionate value received by the class as a result of the
expenses being incurred.
Description of Shares, Voting Rights and Liabilities
Mutual Fund Trust is an open-end management investment company
organized as a Massachusetts business trust under the laws of the Commonwealth
of Massachusetts in 1994. The Trust has reserved the right to create and issue
additional series or classes. Each share of a series or class represents an
equal proportionate interest in that series or class with each other share of
that series or class. The shares of each series or class participate equally in
the earnings, dividends and assets of the particular series or class. Expenses
of the Trust which are not attributable to a specific series or class are
allocated among all the series in a manner believed by management of the Trust
to be fair and equitable. Shares have no pre-emptive or conversion rights.
Shares when issued are fully paid and non-assessable, except as set forth below.
Shareholders are entitled to one vote for each whole share held, and each
fractional share shall be entitled to a proportionate fractional vote, except
that trust shares held in the treasury of the trust shall not be voted. Shares
of each series or class generally vote separately, for example to approve an
investment advisory agreement or distribution plan, but shares of all series and
classes vote together, to the extent required under the 1940 Act, in the
election or selection of Trustees and independent accountants.
Shareholders of the Institutional Shares bear the fees and expenses
described in this Prospectus. Similarly, shareholders of the counterpart Vista
Shares and Premier Shares bear the fees and expenses described in the
appropriate prospectuses for such classes of Shares. The absence of fees paid by
each of the Institutional Shares to the Distributor and shareholder servicing
agents for distribution expenses and shareholder services provided to
institutional investors differ significantly from similar fees paid under
distribution plans and shareholder servicing arrangements adopted for its
counterpart Vista Shares. As a result, at any given time, the net yield on the
Institutional Shares will be approximately .30% to .50% higher than the yield on
the counterpart Vista Shares and approximately .15% to .30% higher than the
yield on the counterpart Premier Shares. Standardized yield quotations will be
computed separately for each class of shares of a Fund.
The Trust is not required to hold annual meetings of shareholders but
will hold special meetings of shareholders of a series or class or of all series
and classes when in the judgment of the Trustees it is necessary or desirable to
submit matters for a shareholder vote. A Trustee of the Trust may, in accordance
with certain rules of the Securities and Exchange Commission, be removed from
office when the holders of record of not less than two-thirds of the outstanding
shares either present a written declaration to the Trust's Custodian or
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vote in person or by proxy at a meeting called for this purpose. In addition,
the Trustees will promptly call a meeting of shareholders to remove a trustee(s)
when requested to do so in writing by record holders of not less than 10% of the
outstanding shares of the Trust.
Finally, the Trustees shall, in certain circumstances, give such
shareholders access to a list of the names and addresses of all other
shareholders or inform them of the number of shareholders and the cost of
mailing their request. The Trust's Declaration of Trust provides that, at any
meeting of shareholders, a Shareholder Servicing Agent may vote any shares as to
which such Shareholder Servicing Agent is the agent of record and which are
otherwise not represented in person or by proxy at the meeting, proportionately
in accordance with the votes cast by holders of all shares of the same portfolio
otherwise represented at the meeting in person or by proxy as to which such
Shareholder Servicing Agent is the agent of record. Any shares so voted by a
Shareholder Servicing Agent will be deemed represented at the meeting for
purposes of quorum requirements. Shareholders of each series or class would be
entitled to share pro rata in the net assets of that series or class available
for distribution to shareholders upon liquidation of that series or class.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which both
inadequate insurance exists and the Fund itself is unable to meet its
obligations.
The Code of Ethics of the Trust prohibits all affiliated personnel from
engaging in personal investment activities which compete with or attempt to take
advantage of a Fund's planned portfolio transactions. The objective of the Code
of Ethics is to ensure that the operations of a Fund be carried out for the
exclusive benefit of a Fund's shareholders. The Trust maintains careful
monitoring of compliance with the Code of Ethics. See "General Information" in
the Fund's Statement of Additional Information.
TRANSFER AGENT AND CUSTODIAN
DST Systems, Inc. ("DST") acts as transfer agent and dividend
disbursing agent (the "Transfer Agent") for the Trust. In this capacity, DST
maintains the account records of all shareholders in the Fund, including
statement preparation and mailing. DST is also responsible for disbursing
dividend and capital gain distributions to shareholders, whether taken in cash
or additional shares. From time to time, DST and/or the Fund may contract with
other entities to perform certain services for the Transfer Agent. For its
services as Transfer Agent, DST receives such compensation as is from time to
time agreed upon by the Trust and DST. DST's address is 127 W. 10th Street,
Kansas City, MO 64105.
Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of the Fund for which Chase receives compensation as is from time to time
agreed upon by the Trust and Chase. The Custodian's responsibilities include
safeguarding and controlling the Fund's cash and securities, handling the
receipt and delivery of securities, determining income and collecting interest
on the Fund's investments, maintaining books of original entry for portfolio and
Fund accounting and other required books and accounts, and calculating the daily
net asset value of shares of the Fund. Portfolio securities and cash may be held
by sub-custodian banks if such arrangements are reviewed and approved by the
Trustees. The internal division of Chase which serves as the Trust's Custodian
does not determine the investment policies of the Fund or decide which
securities will be bought or sold on behalf of the Fund or otherwise have access
to or share material inside information with the internal division that performs
advisory services for the Fund.
Tax Sheltered Retirement Plans
Shares of the Fund are offered in connection with the following
qualified prototype retirement plans: IRA, Rollover IRA, SEP-IRA,
Profit-Sharing, and Money Purchase Pension Plans which can be adopted by
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<PAGE>
self-employed persons ("Keogh") and by corporations, 401(k), and 403(b)
Retirement Plans. Call or write the Transfer Agent for more information.
YIELD AND PERFORMANCE INFORMATION
From time to time, the Institutional Shares may use hypothetical
investment examples and performance information in advertisements, shareholder
reports or other communications to shareholders. Because such performance
information is based on historical earnings, it should not be considered as an
indication or representation of the performance of the Institutional Shares in
the future. From time to time, the yield of the Institutional Shares, as a
measure of its performance, may be quoted and compared to those of other mutual
funds with similar investment objectives, unmanaged investment accounts,
including savings accounts, or other similar products and to other relevant
indices or to rankings prepared by independent services or other financial or
industry publications, such as Lipper Analytical Services, Inc. or the
Morningstar Mutual Funds on Disc, that monitor the performance of mutual funds.
In addition, the yield of each of the Institutional Shares may be compared to
the Donoghue's Money Fund AveragesTM, compiled in the Donoghue's Money Fund
Report(R), a widely recognized independent publication that monitors the
performance of money market funds. Also, each of the Institutional Shares' yield
data may be reported in national financial publications including, but not
limited to, Money Magazine, Forbes, Barron's, The Wall Street Journal and The
New York Times, or in publications of a local or regional nature. The
Institutional Shares may, with proper authorization, reprint articles written
about the Institutional Shares and provide them to prospective shareholders.
Institutional Shares may provide its annualized "yield" and "effective
yield" to current and prospective shareholders. The "yield" of the Fund refers
to the income generated by an investment in the Fund over a seven-day period
(which period shall be stated in any advertisement or communication with a
shareholder). This income is then "annualized", that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 52-week period and is shown as a percentage of investment. The
"effective yield" is calculated similarly, but when annualized the income earned
by the investment during that week is assumed to be reinvested. The "effective
yield" will be slightly higher than the "yield" because of the compounding
effect of this assumed reinvestment.
Unlike some bank deposits or other investments which pay a fixed yield
for a stated period of time, the yield of each of the Institutional Shares will
vary based on interest rates, the current market value of the securities held in
the Fund's portfolio and changes in the Fund's and the Shares' expenses. The
Adviser, the Administrator, the Distributor [and each Shareholder Servicing
Agent] may voluntarily waive a portion of their fees on a month-to-month basis.
In addition, the Distributor may assume a portion of the Fund's operating
expenses on a month-to-month basis. These actions would have the effect of
increasing the net income (and therefore the yield) of the Institutional Shares
during the period such waivers of fees or assumptions of expenses are in effect.
These factors and possible differences in the methods used to calculate yields
should be considered when comparing the Institutional Shares' yields to those
published for other money market funds and other investment vehicles. [A
Shareholder Servicing Agent may charge its customers direct fees in connection
with an investment (see "Purchases and Redemptions of Shares-Purchases") which
will have the effect of reducing the net return on the investment of customers
of that Shareholder Servicing Agent. Conversely, the Institutional Shares are
advised that certain Shareholder Servicing Agents may credit to the accounts of
their customers from whom they are already receiving other fees amounts not
exceeding the Shareholder Servicing Agent fees received (see "Purchases and
Redemptions of Shares-Purchases"), which will have the effect of increasing the
net return on the investment of customers of those Shareholder Servicing Agents.
Such customers may be able to obtain through their Shareholder Servicing Agents
quotations reflecting such increased return.] See the Statement of Additional
Information for further information concerning each of the Institutional Shares'
calculation of yield.
The Fund is the successor to the Hanover 100 % U.S. Treasury Securities Money
Market Fund. The Fund may also quote historical performance of the Hanover 100 %
U.S. Treasury Securities Money Market Fund.
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<PAGE>
OTHER INFORMATION
The Statement of Additional Information contains more detailed
information about the Trust and the Fund, including information related to (i)
the Fund's investment policies and restrictions, (ii) risk factors associated
with the Fund's policies and investments, (iii) the Trust's Trustees, officers
and the Administrator, the Adviser and the Sub-Adviser, (iv) portfolio
transactions and brokerage allocation, (v) the Fund's shares, including rights
and liabilities of shareholders, and (vi) additional performance information,
including the method used to calculate yield or total rate of return quotations
of the Fund. The audited financial statements of the Predecessor Fund for its
last fiscal year end is incorporated by reference in the Statement of Additional
Information.
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<PAGE>
TABLE OF CONTENTS
Expense Summary..................................................... 3
Financial Highlights................................................ 5
Investment Objectives and Policies.................................. 6
Management of the Fund.............................................. 6
Purchases and Redemptions of Shares................................. 8
Tax Matters......................................................... 12
Other Information Concerning Shares of the Fund..................... 14
Shareholder Servicing Agents, Transfer Agent and Custodian.......... 17
Additional Information on Investment Policies and Techniques........ 19
Yield and Performance Information................................... 21
Other Information................................................... 22
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<PAGE>
PART B
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
, 1996
VISTA(SM) 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
125 West 55th Street, New York, New York 10019
This Statement of Additional Information sets forth information which
may be of interest to investors but which is not necessarily included in the
Prospectus offering the Fund or each class of shares. This Statement of
Additional Information should be read in conjunction with the Prospectus
offering shares of the Vista 100% U.S. Treasury Securities Money Market Fund.
Copies of the Prospectus may be obtained by an investor without charge by
contacting Vista Broker-Dealer Services, Inc., the Funds' distributor, at the
above-listed address.
This Statement of Additional Information is NOT a prospectus and is authorized
for distribution to prospective investors only if preceded or accompanied by an
effective prospectus.
For more information about your account, simply call the Vista Service Center at
our toll-free number:
1-800-34-VISTA
Vista Service Center
P.O. Box 419392
Kansas City, MO 64141
MFT-SAI
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<PAGE>
Table of Contents Page
The Fund ................................................................. 3
Investment Objective, Policies and Restrictions........................... 3
Performance Information................................................... 7
Determination of Net Asset Value.......................................... 8
Tax Matters............................................................... 9
Management of the Fund.................................................... 15
Independent Accountants................................................... 21
General Information....................................................... 22
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THE FUND
Mutual Fund Trust (the "Trust") is an open-end management investment
company which was organized as a business trust under the laws of the
Commonwealth of Massachusetts on February 4, 1994. The Trust presently consists
of __ separate series (the "Funds"). Certain of the Funds are diversified and
other Funds are non-diversified, as such term is defined in the Investment
Company Act of 1940, as amended (the "1940 Act"). Under a multiple class
distribution system, the Money Market Funds and the Vista Tax Free Income Fund
and the Vista New York Tax Free Income Fund may be offered through multiple
classes of shares. The Vista Shares class of the Money Market Funds are referred
to in this Statement of Additional Information as the "Vista Shares", the
Premier Shares class of the Money Market Funds are referred to herein as the
"Premier Shares" and the Institutional Shares class of the Money Market Funds
are referred to herein as the "Institutional Shares".
On ___________, 1996, the shareholders of The Hanover 100% U.S.
Treasury Securities Money Market Fund approved a reorganization into a
newly-created series of the Mutual Fund Trust, effective ___________, 1996.
The Fund's Shares are continuously offered for sale through Vista
Broker-Dealer Services, Inc. ("VBDS"), the Fund's distributor (the
"Distributor"), which is not affiliated with Chase Manhattan Bank, N.A.' or its
affiliates, to investors who are customers of a financial institution, such as a
federal or state-chartered bank, trust company, or savings and loan association
that has entered into a shareholder servicing agreement with the Trust on behalf
of the Fund (collectively, "Shareholder Servicing Agents") or customers of a
securities broker or certain financial institutions who have entered into
Selected Dealer Agreements with the Distributor. VBDS receives a distribution
fee from the Fund, pursuant to the plan of distribution adopted pursuant to Rule
12b-1 of the 1940 Act.
The Board of Trustees of the Trust provides broad supervision over
the affairs of the Trust including the Fund. The Chase Manhattan Bank, N.A.
("Chase") is the investment adviser (the "Adviser") for the Fund. Chase also
serves as the Trust's administrator (the "Administrator") and supervises the
overall administration of the Trust, including the Fund. Chase Asset Management,
Inc. ("CAM Inc." or the "Sub-Adviser") is the investment sub-adviser to the
Fund. The Adviser or Sub-Adviser continuously manage the investments of the Fund
in accordance with the investment objective and policies of the Fund. The
selection of investments for the Fund and the way in which it is managed depend
on the conditions and trends in the economy and the financial marketplaces.
Occasionally, communications to shareholders may contain the views of the
investment adviser as to current market, economic, trade and interest rate
trends, as well as legislative, regulatory and monetary developments, and may
include investment strategies and related matters believed to be of relevance to
the Fund. A majority of the Trustees of the Trust are not affiliated with the
Adviser or Sub-Adviser.
INVESTMENT OBJECTIVE, POLICIES AND RESTRICTIONS
Investment Objective
THE VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND's (the "100%
U.S. Treasury Fund" or the "Fund") investment objective is to seek to provide
maximum current income consistent with maximum safety of principal and
maintenance of liquidity. The 100% U.S. Treasury Fund invests only in short-term
United States Treasury obligations, which are backed by the full faith and
credit of the United States Government. Because the 100% U.S. Treasury Fund
invests exclusively in direct United States Treasury obligations, investors may
benefit from income tax exclusions and exemptions that are available in certain
states or localities.
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<PAGE>
Investment Policies
The Prospectus sets forth the various investment policies applicable
to the Fund. Unless otherwise stated, the following policies are not fundamental
and may be changed by the Board of Trustees of the Trust without shareholder
approval.
The following information supplements and should be read in
conjunction with the sections of the Prospectus entitled "Investment Objectives
and Policies" and "Additional Information on Investment Policies and
Techniques."
United States Government Securities
United States Treasury Obligations. The United States Treasury issues
various types of marketable securities. These securities are direct obligations
of the United States Government and differ primarily in the length of their
maturity. Treasury bills, the most frequently issued marketable United States
Government security, have a maturity of up to one year and are issued on a
discount basis.
Loans of Portfolio Securities
The Fund may lend securities from its portfolio if liquid assets in
an amount at least equal to the current market value of the securities loaned
(including accrued interest thereon) plus the interest payable to the Fund with
respect to the loan is maintained by the Fund in a segregated account. The Fund
will typically loan its portfolio securities only on a short-term basis, and
will not enter into any portfolio security lending arrangements having a
duration of longer than thirteen months. Any securities that the Fund may
receive as collateral will not become a part of its portfolio at the time of the
loan and, in the event of a default by the borrower, the Fund will, if permitted
by law, dispose of such collateral except for such part thereof that is a
security in which the Fund is permitted to invest. During the time securities
are on loan, the borrower will pay the Fund any accrued income on those
securities, and the Fund may invest the cash collateral and earn additional
income or receive an agreed-upon fee from a borrower that has delivered cash
equivalent collateral. Cash collateral received by the Fund will be invested in
securities in which the Fund is permitted to invest. The value of securities
loaned will be marked to market daily. Portfolio securities purchased with cash
collateral are subject to possible depreciation. Loans of securities by the Fund
will be subject to termination at the Fund's or the borrower's option. The Fund
may pay reasonable administrative and custodial fees in connection with a
securities loan and may pay a negotiated portion of the interest or fee earned
with respect to the collateral to the borrower or a placing broker. The Fund
does not currently intend to make loans of portfolio securities with a value in
excess of 5% of the value of its total assets.
Investment Restrictions
The Fund has adopted the following investment restrictions which may
not be changed without approval by a "majority of the outstanding shares" of the
Fund which, as used in this Statement of Additional Information, means the vote
of the lesser of (i) 67% or more of the shares of the Fund present at a meeting,
if the holders of more than 50% of the outstanding shares of the Fund are
present or represented by proxy, or (ii) more than 50% of the outstanding shares
of the Fund.
The Fund may not:
(i) borrow money, except that the Fund may borrow money
for temporary or emergency purposes, or by engaging in
reverse repurchase transactions, in an amount not exceeding
33 1/3% of the value of its total assets at the time when
the loan is made and may pledge, mortgage or hypothecate no
more than 1/3 of its net assets to secure such borrowings.
Any
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<PAGE>
borrowings representing more than 5% of the Fund's total
assets must be repaid before the Fund may make additional
investments.
(ii) make loans, except that the Fund may: (i) purchase
and hold debt instruments (including without limitation,
bonds, notes, debentures or other obligations and
certificates of deposit, bankers' acceptances and fixed time
deposits) in accordance with its investment objectives and
policies; (ii) enter into repurchase agreements with respect
to portfolio securities; and (iii) lend portfolio securities
with a value not in excess of one-third of the value of its
total assets.
(iii) purchase the securities of any issuer (other than
securities issued or guaranteed by the U.S. government or
any of its agencies or instrumentalities, or repurchase
agreements secured thereby) if, as a result, more than 25%
of the Fund's total assets would be invested in the
securities of companies whose principal business activities
are in the same industry. Notwithstanding the foregoing,
with respect to the Fund's permissible futures and options
transactions, positions in options and futures shall not be
subject to this restriction.
(iv) purchase or sell physical commodities unless
acquired as a result of ownership of securities or other
instruments (but this shall not prevent the Fund from
purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by
physical commodities) or engaging in forward purchases or
sales of foreign currencies or securities.
(v) purchase or sell real estate unless acquired as a
result of ownership of securities or other instruments (but
this shall not prevent the Fund from investing in securities
or other instruments backed by real estate or securities of
companies engaged in the real estate business). Investments
by the Fund in securities backed by mortgages on real estate
or in marketable securities of companies engaged in such
activities are not hereby precluded.
(vi) issue any senior security (as defined in the 1940
Act), except that (a) the Fund may engage in transactions
that may result in the issuance of senior securities to the
extent permitted under applicable regulations and
interpretations of the 1940 Act or an exemptive order; (b)
the Fund may acquire other securities, the acquisition of
which may result in the issuance of a senior security, to
the extent permitted under applicable regulations or
interpretations of the 1940 Act; (c) subject to the
restrictions set forth above, the Fund may borrow money as
authorized by the 1940 Act. For purposes of this
restriction, collateral arrangements with respect to the
Fund's permissible options and futures transactions,
including deposits of initial and variation margin, are not
considered to be the issuance of a senior security for
purposes of this restriction.
For purposes of investment restriction (v) above, real estate
includes Real Estate Limited Partnerships.
The following investment restrictions are nonfundamental and may be
changed without shareholder approval:
(i) The Fund may not, with respect to 75% of its
assets, hold more than 10% of the outstanding voting
securities of an issuer.
(ii) The Fund may not make short sales of securities,
other than short sales "against the box," or purchase
securities on margin except for short-term credits necessary
for clearance of portfolio transactions, provided that this
restriction will not be applied to limit the use of
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<PAGE>
options, futures contracts and related options, in the
manner otherwise permitted by the investment restrictions,
policies and investment program of the Fund.
(iii) The Fund may not purchase or sell interests in
oil, gas or mineral leases.
(iv) The Fund may not invest more than 15% of its net
assets in illiquid securities. [This limitation may be
subject to additional restrictions imposed by jurisdictions
in which the Fund's shares are offered for sale (currently
10%).]
(v) The Fund may not write, purchase or sell any put or
call option or any combination thereof, provided that this
shall not prevent the writing, purchasing or selling of
puts, calls or combinations thereof with respect to U.S.
government securities or with respect to the Fund's
permissible futures and options transactions, purchasing,
ownership, holding or selling of futures and options
positions or of puts, calls or combinations thereof with
respect to futures.
(vi) The Fund may invest up to 5% of its total assets
in the securities of any one investment company, but may not
own more than 3% of the securities of any one investment
company or invest more than 10% of its total assets in the
securities of other investment companies. [With respect to
any such investment, fees are waived to the extent required
under State requirements. For example, a Texas undertaking
currently requires a disclosure that advisory fees
pertaining to any such investments will be waived by Chase.]
If a percentage limitation is satisfied at the time of investment, a
later increase or decrease in such percentage resulting from a change in value
of the Fund's portfolio securities will not constitute violation of such
limitation.
The investment limitations described above and in the Prospectus with
respect to the Fund under "Limiting Investment Risks" are fundamental policies
of the Fund and may be changed only when permitted by law and approved by the
holders of a majority of the Fund's outstanding voting securities, as described
under "General Information."
In order to permit the sale of its shares in certain states, the Fund
may make commitments more restrictive than the investment policies and
limitations described above and in the Prospectus. Should the Fund determine
that any such commitment is no longer in its best interests, it will revoke the
commitment by terminating sales of its shares in the state involved.
Percentage and Rating Restrictions: If a percentage or rating
restriction on investment or utilization of assets set forth above or referred
to in the Prospectus is adhered to at the time an investment is made or assets
are so utilized, a later change in percentage resulting from changes in the
value of the portfolio securities or a later change in the rating of a portfolio
security of the Fund will not be considered a violation of policy.
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<PAGE>
Portfolio Transactions and Brokerage Allocation
Changes in the Fund's investments are reviewed by the Board of
Trustees. The Fund's portfolio manager may serve other clients of the Adviser or
Sub-Adviser in a similar capacity. Money market instruments are generally
purchased in principal transactions; thus, the Fund pays no brokerage
commissions.
Under the Advisory Agreement and the Sub-Advisory Agreement, the
Adviser 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 the Funds. The Adviser or Sub-Adviser attempts to achieve
this result by selecting broker-dealers to execute portfolio transactions on
behalf of the Funds and other clients of the Adviser or SubAdviser on the basis
of their professional capability, the value and quality of their brokerage
services, and the level of their brokerage commissions. Debt securities are
traded principally in the over-the-counter market through dealers acting on
their own account and not as brokers. In the case of securities traded in the
over-the-counter market (where no stated commissions are paid but the prices
include a dealer's markup or markdown), the Adviser or SubAdviser normally seeks
to deal directly with the primary market makers unless, in its opinion, best
execution is available elsewhere. In the case of securities purchased from
underwriters, the cost of such securities generally includes a fixed
underwriting commission or concession. From time to time, soliciting dealer fees
are available to the Adviser or Sub-Adviser on the tender of the Funds'
portfolio securities in so-called tender or exchange offers. Such soliciting
dealer fees are in effect recaptured for the Funds and by the Adviser or
Sub-Adviser. At present, no other recapture arrangements are in effect.
Under the Fund's Investment Advisory (Sub-Advisory) Agreement and as
permitted by Section 28(e) of the Securities Exchange Act of 1934, the Adviser
or Sub-Adviser may cause the Funds to pay a broker-dealer which provides
brokerage and research services to the Adviser or Sub-Adviser, the Funds and/or
other accounts for which the Adviser or Sub-Adviser exercises investment
discretion an amount of commission for effecting a securities transaction for
the Funds and in excess of the amount other broker-dealers would have charged
for the transaction if the Adviser or Sub-Adviser determines in good faith that
the greater commission is reasonable in relation to the value of the brokerage
and research services provided by the executing broker-dealer viewed in terms of
either a particular transaction or the Adviser or Sub-Adviser's overall
responsibilities to the Funds or to accounts over which they exercise investment
discretion. Not all of such services are useful or of value in advising the
Fund. The Adviser or Sub-Adviser shall report to the Board of Trustees of the
Trust regarding overall commissions paid by the Funds and their reasonableness
in relation to the benefits to the Funds. The term "brokerage and research
services" includes advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or of purchasers or sellers of securities, furnishing analyses and
reports concerning issues, industries, securities, economic factors and trends,
portfolio strategy and the performance of accounts, and effecting securities
transactions and performing functions incidental thereto such as clearance and
settlement.
Although commissions paid on every transaction will, in the judgment
of the Adviser or Sub-Adviser, be reasonable in relation to the value of the
brokerage services provided, commissions exceeding those which another broker
might charge may be paid to broker-dealers who were selected to execute
transactions on behalf of the Funds and Portfolios and the Adviser's or
Sub-Adviser's other clients as part of providing advice as to the availability
of securities or of purchasers or sellers of securities and services in
effecting securities transactions and performing functions incidental thereto,
such as clearance and settlement.
Broker-dealers may be willing to furnish statistical, research and
other factual information or services ("Research") to the Adviser or Sub-Adviser
for no consideration other than brokerage or underwriting commissions.
Securities may be bought or sold through such broker-dealers, but at present,
unless otherwise directed by the Funds, a commission higher than one charged
elsewhere will not be paid to such a firm solely because it provided Research to
the Adviser or Sub-Adviser.
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<PAGE>
The Adviser's or Sub-Adviser's investment management personnel will
attempt to evaluate the quality of Research provided by brokers. Results of this
effort are sometimes used by the Adviser or Sub-Adviser as a consideration in
the selection of brokers to execute portfolio transactions. However, the Adviser
or Sub-Adviser would be unable to quantify the amount of commissions which are
paid as a result of such Research because a substantial number of transactions
are effected through brokers which provide Research but which are selected
principally because of their execution capabilities.
The management fees that the Fund pays to the Adviser or Sub-Adviser
will not be reduced as a consequence of the Adviser or Sub-Adviser's receipt of
brokerage and research services. To the extent the Funds' portfolio transactions
are used to obtain such services, the brokerage commissions paid by the Funds
will exceed those that might otherwise be paid, by an amount which cannot be
presently determined. Such services would be useful and of value to the Adviser
or Sub-Adviser in serving one or more of the Funds and other clients and,
conversely, such services obtained by the placement of brokerage business of
other clients would be useful to the Adviser or Sub-Adviser in carrying out its
obligations to a Fund. While such services are not expected to reduce the
expenses of the Adviser or Sub-Adviser, the Adviser or Sub-Adviser would,
through use of the services, avoid the additional expenses which would be
incurred if it should attempt to develop comparable information through its own
staff.
In certain instances, there may be securities that are suitable for
one or more of the Funds as well as one or more of the Adviser's or
Sub-Adviser's other clients. Investment decisions for the Funds and for the
Adviser or Sub-Adviser's other clients are made with a view to achieving their
respective investment objectives. It may develop that the same investment
decision is made for more than one client or that a particular security is
bought or sold for only one client even though it might be held by, or bought or
sold for, other clients. Likewise, a particular security may be bought for one
or more clients when one or more clients are selling that same security. Some
simultaneous transactions are inevitable when several clients receive investment
advice from the same investment adviser, particularly when the same security is
suitable for the investment objectives of more than one client. In executing
portfolio transactions for a Fund, the Adviser or Sub-Adviser 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 the Adviser's or Sub-Adviser's reasonable judgment,
such aggregation (i) will result in an overall economic benefit to the 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 the Trust's registration statement
and the Fund's Prospectus and Statement of Additional Information. In such
event, the Adviser or Sub-Adviser 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 the Fund and such other clients.
When two or more Funds or other clients are simultaneously engaged in the
purchase or sale of the same security, the securities are allocated among
clients in a manner believed to be equitable to each. It is recognized that in
some cases this system could have a detrimental effect on the price or volume of
the security as far as the Funds are concerned. However, it is believed that the
ability of the Funds to participate in volume transactions will generally
produce better executions for the Funds.
No portfolio transactions are executed with the Adviser, Sub-Adviser
or a Shareholder Servicing Agent, or with any affiliate of the Adviser,
Sub-Adviser or a Shareholder Servicing Agent, acting either as principal or as
broker.
PERFORMANCE INFORMATION
Any current "yield" of the Shares of the Fund which is used in such a
manner as to be subject to the provisions of Rule 482(d) under the Securities
Act of 1933, as amended, shall consist of an annualized historical yield,
carried at least to the nearest hundredth of one percent, based on a specific
seven calendar day period and shall be calculated by dividing the net change in
the value of an account having a balance of one Share at the beginning of the
period by the value of the account at the beginning of the period and
multiplying the quotient by
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<PAGE>
365/7. For this purpose, the net change in account value would reflect the value
of additional Shares purchased with dividends declared on the original Share and
dividends declared on both the original Share and any such additional Shares,
but would not reflect any realized gains or losses from the sale of securities
or any unrealized appreciation or depreciation on portfolio securities. In
addition, any effective yield quotation of the Shares of the Fund so used shall
be calculated by compounding the current yield quotation for such period by
multiplying such quotation by 7/365, adding 1 to the product, raising the sum to
a power equal to 365/7, and subtracting 1 from the result. For the seven days
ended _________, 1995, the Fund's yield was __%.
DETERMINATION OF NET ASSET VALUE
Each Fund determines its net asset value per Share each day as of
12:00 noon, New York City time during which the New York Stock Exchange is open
for trading (a "Fund Business Day"), by dividing the value of its net assets
(i.e., the value of its securities and other assets less its liabilities,
including expenses payable or accrued, which, in the case of funds with multiple
share classes, is apportioned between the classes, to obtain net assets by
class) by the number of its shares outstanding (by class, for multiple class
Funds) at the time the determination is made. (As of the date of this Statement
of Additional Information, the New York Stock Exchange is open for trading every
weekday except for the following holidays: New Year's Day, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day.) The Adviser or Sub-Adviser is closed on the following: Martin
Luther King Junior Day, Columbus Day and Veterans' Day. Purchases and
redemptions will be effected at the time of determination of net asset value
next following the receipt of any purchase or redemption order. (See "Purchases
and Redemptions of Shares" in the Prospectus.)
The Fund's portfolio securities are valued at their amortized cost.
Amortized cost valuation involves valuing an instrument at its cost and
thereafter accreting discounts and amortizing premiums at a constant rate to
maturity. Pursuant to the rules of the Securities and Exchange Commission, the
Board of Trustees has established procedures to stabilize the net asset value of
the Fund at $1.00 per share. These procedures include a review of the extent of
any deviation of net asset value per share, based on available market rates,
from the $1.00 amortized cost price per share. If fluctuating interest rates
cause the market value of the Fund's portfolio to approach a deviation of more
than 1/2 of 1% from the value determined on the basis of amortized cost, the
Board of Trustees will consider what action, if any, should be initiated. Such
action may include redemption of shares in kind (as described in greater detail
below), selling portfolio securities prior to maturity, reducing or withholding
dividends and utilizing a net asset value per share as determined by using
available market quotations.
The Fund will maintain a dollar-weighted average portfolio maturity
of 90 days or less. The Fund will not purchase any instrument with a remaining
maturity greater than thirteen months.
The Fund has established procedures to ensure that its portfolio
securities meet its high quality criteria. (See "Investment Objectives, Policies
and Restrictions -- Investment Policies" above.)
Subject to compliance with applicable regulations, the Fund has
reserved the right to pay the redemption price of its Shares, either totally or
partially, by a distribution in kind of portfolio securities (instead of cash).
The securities so distributed would be valued at the same amount as that
assigned to them in calculating the net asset value for the shares being sold.
If a shareholder received a distribution in kind, the shareholder could incur
brokerage or other charges in converting the securities to cash. The Trust has
filed an election under Rule 18f-1 committing to pay in cash all redemptions by
a shareholder of record up to amounts specified by the rule (approximately
$250,000).
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TAX MATTERS
The following is only a summary of certain additional tax
considerations generally affecting the Funds and their shareholders that are not
described in the Fund's Prospectus. No attempt is made to present a detailed
explanation of the tax treatment of the Funds or their shareholders, and the
discussions here and in each Fund's Prospectus are not intended as substitutes
for careful tax planning.
Qualification as a Regulated Investment Company
Each Fund has elected to be taxed as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As a regulated investment company, each Fund is not subject to federal
income tax on the portion of its net investment income (i.e., taxable interest,
dividends and other taxable ordinary income, net of expenses) and capital gain
net income (i.e., the excess of capital gains over capital losses) that it
distributes to shareholders, provided that it distributes at least 90% of its
investment company taxable income (i.e., net investment income and the excess of
net short-term capital gain over net long-term capital loss) and at least 90% of
its tax-exempt income (net of expenses allocable thereto) for the taxable year
(the "Distribution Requirement"), and satisfies certain other requirements of
the Code that are described below. Distributions by a Fund made during the
taxable year or, under specified circumstances, within twelve months after the
close of the taxable year, will be considered distributions of income and gains
of the taxable year and can therefore satisfy the Distribution Requirement.
[Because certain Funds invest all of their assets in Portfolios which will be
classified as partnerships for federal income tax purposes, such Funds will be
deemed to own a proportionate share of the income of the Portfolio into which
each contributes all of its assets for purposes of determining whether such
Funds satisfy the Distribution Requirement and the other requirements necessary
to qualify as a regulated investment company (e.g., Income Requirement
(hereinafter defined), etc.).]
In addition to satisfying the Distribution Requirement, a regulated
investment company must: (1) derive at least 90% of its gross income from
dividends, interest, certain payments with respect to securities loans, gains
from the sale or other disposition of stock or securities or foreign currencies
(to the extent such currency gains are directly related to the regulated
investment company's principal business of investing in stock or securities) and
other income (including but not limited to gains from options, futures or
forward contracts) derived with respect to its business of investing in such
stock, securities or currencies (the "Income Requirement"); and (2) derive less
than 30% of its gross income (exclusive of certain gains on designated hedging
transactions that are offset by realized or unrealized losses on offsetting
positions) from the sale or other disposition of stock, securities or foreign
currencies (or options, futures or forward contracts thereon) held for less than
three months (the "Short-Short Gain Test"). For purposes of these calculations,
gross income includes tax-exempt income. However, foreign currency gains,
including those derived from options, futures and forwards, will not in any
event be characterized as Short-Short Gain if they are directly related to the
regulated investment company's investments in stock or securities (or options or
futures thereon). Because of the Short-Short Gain Test, a Fund may have to limit
the sale of appreciated securities that it has held for less than three months.
However, the Short-Short Gain Test will not prevent a Fund from disposing of
investments at a loss, since the recognition of a loss before the expiration of
the three-month holding period is disregarded for this purpose. Interest
(including original issue discount) received by a Fund at maturity or upon the
disposition of a security held for less than three months will not be treated as
gross income derived from the sale or other disposition of such security within
the meaning of the Short-Short Gain Test. However, income that is attributable
to realized market appreciation will be treated as gross income from the sale or
other disposition of securities for this purpose.
In general, gain or loss recognized by a Fund on the disposition of
an asset will be a capital gain or loss. However, gain recognized on the
disposition of a debt obligation (including a municipal obligation) purchased by
a Fund at a market discount (generally, at a price less than its principal
amount) will be treated as ordinary income
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<PAGE>
to the extent of the portion of the market discount which accrued during the
period of time the Fund held the debt obligation.
Further, the Code also treats as ordinary income, a portion of the
capital gain attributable to a transaction where substantially all of the return
realized is attributable to the time value of a Fund's net investment in the
transaction and: (1) the transaction consists of the acquisition of property by
such Fund and a contemporaneous contract to sell substantially identical
property in the future; (2) the transaction is a straddle within the meaning of
Section 1092 of the Code; (3) the transaction is one that was marketed or sold
to such Fund on the basis that it would have the economic characteristics of a
loan but the interest-like return would be taxed as capital gain; or (4) the
transaction is described as a conversion transaction in the Treasury
Regulations. The amount of the gain recharacterized generally will not exceed
the amount of the interest that would have accrued on the net investment for the
relevant period at a yield equal to 120% of the federal long-term, mid-term, or
short-term rate, depending upon the type of instrument at issue, reduced by an
amount equal to: (1) prior inclusions of ordinary income items from the
conversion transaction; and (2) the capitalized interest on acquisition
indebtedness under Code Section 263(g). Built-in losses will be preserved where
a Fund has a built-in loss with respect to property that becomes a part of a
conversion transaction. No authority exists that indicates that the converted
character of the income will not be passed to a Fund's shareholders.
In general, for purposes of determining whether capital gain or loss
recognized by a Fund on the disposition of an asset is long-term or short-term,
the holding period of the asset may be affected if: (1) the asset is used to
close a "short sale" (which includes for certain purposes the acquisition of a
put option) or is substantially identical to another asset so used, (2) the
asset is otherwise held by the Fund as part of a "straddle" (which term
generally excludes a situation where the asset is stock and the Fund grants a
qualified covered call option (which, among other things, must not be
deep-in-the-money) with respect thereto); or (3) the asset is stock and the Fund
grants an in-the-money qualified covered call option with respect thereto.
However, for purposes of the Short-Short Gain Test, the holding period of the
asset disposed of may be reduced only in the case of clause (i) above. In
addition, a Fund may be required to defer the recognition of a loss on the
disposition of an asset held as part of a straddle to the extent of any
unrecognized gain on the offsetting position.
Any gain recognized by a Fund on the lapse of, or any gain or loss
recognized by a Fund from a closing transaction with respect to, an option
written by the Fund will be treated as a short-term capital gain or loss. For
purposes of the Short-Short Gain Test, the holding period of an option written
by a Fund will commence on the date it is written and end on the date it lapses
or the date a closing transaction is entered into. Accordingly, a Fund may be
limited in its ability to write options which expire within three months and to
enter into closing transactions at a gain within three months of the writing of
options.
Transactions that may be engaged in by certain of the Funds (such as
regulated futures contracts, certain foreign currency contracts, and options on
stock indexes and futures contracts) will be subject to special tax treatment as
"Section 1256 contracts." Section 1256 contracts are treated as if they are sold
for their fair market value on the last business day of the taxable year, even
though a taxpayer's obligations (or rights) under such contracts have not
terminated (by delivery, exercise, entering into a closing transaction or
otherwise) as of such date. Any gain or loss recognized as a consequence of the
year-end deemed disposition of Section 1256 contracts is taken into account for
the taxable year together with any other gain or loss that was previously
recognized upon the termination of Section 1256 contracts during that taxable
year. Any capital gain or loss for the taxable year with respect to Section 1256
contracts (including any capital gain or loss arising as a consequence of the
year-end deemed sale of such contracts) is generally treated as 60% long-term
capital gain or loss and 40% short-term capital gain or loss. A Fund, however,
may elect not to have this special tax treatment apply to Section 1256 contracts
that are part of a "mixed straddle" with other investments of the Fund that are
not Section 1256 contracts. The Internal Revenue Service (the "IRS") has held in
several private rulings (and Treasury Regulations now provide) that gains
arising from Section 1256 contracts will be treated for purposes of the
Short-Short Gain Test as being derived from
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<PAGE>
securities held for not less than three months if the gains arise as a result of
a constructive sale under Code Section 1256.
Treasury Regulations permit a regulated investment company, in
determining its investment company taxable income and net capital gain (i.e.,
the excess of net long-term capital gain over net short-term capital loss) for
any taxable year, to elect (unless it has made a taxable year election for
excise tax purposes as discussed below) to treat all or any part of any net
capital loss, any net long-term capital loss or any net foreign currency loss
incurred after October 31 as if it had been incurred in the succeeding year.
In addition to satisfying the requirements described above, each Fund
must satisfy an asset diversification test in order to qualify as a regulated
investment company. Under this test, at the close of each quarter of a Fund's
taxable year, at least 50% of the value of the Fund's assets must consist of
cash and cash items, U.S. Government securities, securities of other regulated
investment companies, and securities of other issuers (as to which the Fund has
not invested more than 5% of the value of the Fund's total assets in securities
of such issuer and as to which the Fund does not hold more than 10% of the
outstanding voting securities of such issuer), and no more than 25% of the value
of its total assets may be invested in the securities of any one issuer (other
than U.S. Government securities and securities of other regulated investment
companies), or in two or more issuers which the Fund controls and which are
engaged in the same or similar trades or businesses. Generally, an option (call
or put) with respect to a security is treated as issued by the issuer of the
security not the issuer of the option. However, with regard to forward currency
contracts, there does not appear to be any formal or informal authority which
identifies the issuer of such instrument.
If for any taxable year a Fund does not qualify as a regulated
investment company, all of its taxable income (including its net capital gain)
will be subject to tax at regular corporate rates without any deduction for
distributions to shareholders, and such distributions will be taxable to the
shareholders as ordinary dividends to the extent of the Fund's current and
accumulated earnings and profits. Such distributions generally will be eligible
for the dividends-received deduction in the case of corporate shareholders.
Excise Tax on Regulated Investment Companies
A 4% non-deductible excise tax is imposed on a regulated investment
company that fails to distribute in each calendar year an amount equal to 98% of
ordinary taxable income for the calendar year and 98% of capital gain net income
for the one-year period ended on October 31 of such calendar year (or, at the
election of a regulated investment company having a taxable year ending November
30 or December 31, for its taxable year (a "taxable year election"))(Tax-exempt
interest on municipal obligations is not subject to the excise tax). The balance
of such income must be distributed during the next calendar year. For the
foregoing purposes, a regulated investment company is treated as having
distributed any amount on which it is subject to income tax for any taxable year
ending in such calendar year.
For purposes of the excise tax, a regulated investment company shall:
(1) reduce its capital gain net income (but not below its net capital gain) by
the amount of any net ordinary loss for the calendar year; and (2) exclude
foreign currency gains and losses incurred after October 31 of any year (or
after the end of its taxable year if it has made a taxable year election) in
determining the amount of ordinary taxable income for the current calendar year
(and, instead, include such gains and losses in determining ordinary taxable
income for the succeeding calendar year).
Each Fund intends to make sufficient distributions or deemed
distributions of its ordinary taxable income and capital gain net income prior
to the end of each calendar year to avoid liability for the excise tax. However,
investors should note that a Fund may in certain circumstances be required to
liquidate portfolio investments to make sufficient distributions to avoid excise
tax liability.
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<PAGE>
Fund Distributions
Each Fund anticipates distributing substantially all of its
investment company taxable income for each taxable year. Such distributions will
be taxable to shareholders as ordinary income and treated as dividends for
federal income tax purposes, but they will qualify for the 70%
dividends-received deduction for corporations only to the extent discussed
below. Dividends paid on Class A and Class B shares are calculated at the same
time and in the same manner. In general, dividends on Class B shares are
expected to be lower than those on Class A shares due to the higher distribution
expenses borne by the Class B shares. Dividends may also differ between classes
as a result of differences in other class specific expenses.
A Fund may either retain or distribute to shareholders its net
capital gain for each taxable year. Each Fund currently intends to distribute
any such amounts. If net capital gain is distributed and designated as a capital
gain dividend, it will be taxable to shareholders as long-term capital gain,
regardless of the length of time the shareholder has held his shares or whether
such gain was recognized by the Fund prior to the date on which the shareholder
acquired his shares. The Code provides, however, that under certain conditions
only 50% of the capital gain recognized upon a Fund's disposition of "small
business" stock will be subject to tax.
Conversely, if a Fund elects to retain its net capital gain, the Fund
will be taxed thereon (except to the extent of any available capital loss
carryovers) at the 35% corporate tax rate. If a Fund elects to retain its net
capital gain, it is expected that the Fund also will elect to have shareholders
of record on the last day of its taxable year treated as if each received a
distribution of his pro rata share of such gain, with the result that each
shareholder will be required to report his pro rata share of such gain on his
tax return as long-term capital gain, will receive a refundable tax credit for
his pro rata share of tax paid by the Fund on the gain, and will increase the
tax basis for his shares by an amount equal to the deemed distribution less the
tax credit.
Each Tax Free Fund intends to qualify to pay exempt-interest
dividends by satisfying the requirement that at the close of each quarter of the
Tax Free Fund's taxable year at least 50% of the its total assets consists of
tax-exempt municipal obligations. Distributions from a Tax Free Fund will
constitute exempt-interest dividends to the extent of its tax-exempt interest
income (net of expenses and amortized bond premium). Exempt-interest dividends
distributed to shareholders of a Tax Free Fund are excluded from gross income
for federal income tax purposes. However, shareholders required to file a
federal income tax return will be required to report the receipt of
exemptinterest dividends on their returns. Moreover, while exempt-interest
dividends are excluded from gross income for federal income tax purposes, they
may be subject to alternative minimum tax ("AMT") in certain circumstances and
may have other collateral tax consequences as discussed below. Distributions by
a Tax Free Fund of any investment company taxable income or of any net capital
gain will be taxable to shareholders as discussed above.
AMT is imposed in addition to, but only to the extent it exceeds, the
regular tax and is computed at a maximum marginal rate of 28% for noncorporate
taxpayers and 20% for corporate taxpayers on the excess of the taxpayer's
alternative minimum taxable income ("AMTI") over an exemption amount. In
addition, under the Superfund Amendments and Reauthorization Act of 1986, a tax
is imposed for taxable years beginning after 1986 and before 1996 at the rate of
0.12% on the excess of a corporate taxpayer's AMTI (determined without regard to
the deduction for this tax and the AMT net operating loss deduction) over $2
million. Exempt-interest dividends derived from certain "private activity"
municipal obligations issued after August 7, 1986 will generally constitute an
item of tax preference includable in AMTI for both corporate and noncorporate
taxpayers. In addition, exemptinterest dividends derived from all municipal
obligations, regardless of the date of issue, must be included in adjusted
current earnings, which are used in computing an additional corporate preference
item (i.e., 75% of the excess of a corporate taxpayer's adjusted current
earnings over its AMTI (determined without regard to this item and the AMT net
operating loss deduction)) includable in AMTI.
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<PAGE>
Exempt-interest dividends must be taken into account in computing the
portion, if any, of social security or railroad retirement benefits that must be
included in an individual shareholder's gross income and subject to federal
income tax. Further, a shareholder of a Tax Free Fund is denied a deduction for
interest on indebtedness incurred or continued to purchase or carry shares of
the Fund. Moreover, a shareholder who is (or is related to) a "substantial user"
of a facility financed by industrial development bonds held by a Tax Free Fund
will likely be subject to tax on dividends paid by the Tax Free Fund which are
derived from interest on such bonds. Receipt of exempt-interest dividends may
result in other collateral federal income tax consequences to certain taxpayers,
including financial institutions, property and casualty insurance companies and
foreign corporations engaged in a trade or business in the United States.
Prospective investors should consult their own tax advisers as to such
consequences.
For purposes of the Corporate AMT and the environmental Superfund tax
(which are discussed above in connection with exempt-interest dividends paid by
the Tax Free Funds), the corporate dividends-received deduction is not itself an
item of tax preference that must be added back to taxable income or is otherwise
disallowed in determining a corporation's AMTI.
Investment income that may be received by certain of the Funds from
sources within foreign countries may be subject to foreign taxes withheld at the
source. The United States has entered into tax treaties with many foreign
countries which entitle any such Fund to a reduced rate of, or exemption from,
taxes on such income. It is impossible to determine the effective rate of
foreign tax in advance since the amount of any such Fund's assets to be invested
in various countries is not known.
Distributions by a Fund that do not constitute ordinary income
dividends, exempt-interest dividends or capital gain dividends will be treated
as a return of capital to the extent of (and in reduction of) the shareholder's
tax basis in his shares; any excess will be treated as gain from the sale of his
shares, as discussed below.
Distributions by a Fund will be treated in the manner described above
regardless of whether such distributions are paid in cash or reinvested in
additional shares of the Fund (or of another fund). Shareholders receiving a
distribution in the form of additional shares will be treated as receiving a
distribution in an amount equal to the fair market value of the shares received,
determined as of the reinvestment date. In addition, if the net asset value at
the time a shareholder purchases shares of a Fund reflects undistributed net
investment income or recognized capital gain net income, or unrealized
appreciation in the value of the assets of the Fund, distributions of such
amounts will be taxable to the shareholder in the manner described above,
although such distributions economically constitute a return of capital to the
shareholder.
Ordinarily, shareholders are required to take distributions by a Fund
into account in the year in which the distributions are made. However, dividends
declared in October, November or December of any year and payable to
shareholders of record on a specified date in such a month will be deemed to
have been received by the shareholders (and made by the Fund) on December 31 of
such calendar year if such dividends are actually paid in January of the
following year. Shareholders will be advised annually as to the U.S. federal
income tax consequences of distributions made (or deemed made) during the year.
A Fund will be required in certain cases to withhold and remit to the
U.S. Treasury 31% of ordinary income dividends and capital gain dividends, and
the proceeds of redemption of shares, paid to any shareholder (1) who has
provided either an incorrect tax identification number or no number at all, (2)
who is subject to backup withholding by the IRS for failure to report the
receipt of interest or dividend income properly, or (3) who has failed to
certify to the Fund that it is not subject to backup withholding or that it is a
corporation or other "exempt recipient."
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<PAGE>
Sale or Redemption of Shares
The Fund seeks to maintain a stable net asset value of $1.00 per
share; however, there can be no assurance that the Fund will do this. In such a
case a shareholder will recognize gain or loss on the sale or redemption of
shares of a Fund in an amount equal to the difference between the proceeds of
the sale or redemption and the shareholder's adjusted tax basis in the shares.
All or a portion of any loss so recognized may be disallowed if the shareholder
purchases other shares of the Fund within 30 days before or after the sale or
redemption. In general, any gain or loss arising from (or treated as arising
from) the sale or redemption of shares of a Fund will be considered capital gain
or loss and will be long-term capital gain or loss if the shares were held for
longer than one year. However, any capital loss arising from the sale or
redemption of shares held for six months or less will be disallowed to the
extent of the amount of exempt-interest dividends received on such shares and
(to the extent not disallowed) will be treated as a long-term capital loss to
the extent of the amount of capital gain dividends received on such shares. For
this purpose, the special holding period rules of Code Section 246(c)(3) and (4)
(discussed above in connection with the dividends-received deduction for
corporations) generally will apply in determining the holding period of shares.
Long-term capital gains of noncorporate taxpayers are currently taxed at a
maximum rate 11.6% lower than the maximum rate applicable to ordinary income.
Capital losses in any year are deductible only to the extent of capital gains
plus, in the case of a noncorporate taxpayer, $3,000 of ordinary income.
If a shareholder (1) incurs a sales load in acquiring shares of a
Fund, (2) disposes of such shares less than 91 days after they are acquired and
(3) subsequently acquires shares of the Fund or another fund at a reduced sales
load pursuant to a right to reinvest at such reduced sales load acquired in
connection with the acquisition of the shares disposed of, then the sales load
on the shares disposed of (to the extent of the reduction in the sales load on
the shares subsequently acquired) shall not be taken into account in determining
gain or loss on the shares disposed of but shall be treated as incurred on the
acquisition of the shares subsequently acquired.
Foreign Shareholders
Taxation of a shareholder who, as to the United States, is a
nonresident alien individual, foreign trust or estate, foreign corporation, or
foreign partnership ("foreign shareholder"), depends on whether the income from
a Fund is "effectively connected" with a U.S. trade or business carried on by
such shareholder.
If the income from a Fund is not effectively connected with a U.S.
trade or business carried on by a foreign shareholder, ordinary income dividends
paid to a foreign shareholder will be subject to U.S. withholding tax at the
rate of 30% (or lower treaty rate) upon the gross amount of the dividend. Such a
foreign shareholder would generally be exempt from U.S. federal income tax on
gains realized on the sale of shares of the Fund, capital gain dividends and
exempt-interest dividends and amounts retained by the Fund that are designated
as undistributed capital gains.
If the income from a Fund is effectively connected with a U.S. trade
or business carried on by a foreign shareholder, then ordinary income dividends,
capital gain dividends, and any gains realized upon the sale of shares of the
Fund will be subject to U.S. federal income tax at the rates applicable to U.S.
citizens or domestic corporations.
In the case of foreign noncorporate shareholders, a Fund may be
required to withhold U.S. federal income tax at a rate of 31% on distributions
that are otherwise exempt from withholding tax (or taxable at a reduced treaty
rate) unless such shareholders furnish the Fund with proper notification of its
foreign status.
The tax consequences to a foreign shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described
herein. Foreign shareholders are urged to consult their own tax advisers with
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<PAGE>
respect to the particular tax consequences to them of an investment in a Fund,
including the applicability of foreign taxes.
Effect of Future Legislation; Local Tax Considerations
The foregoing general discussion of U.S. federal income tax
consequences is based on the Code and the Treasury Regulations issued thereunder
as in effect on the date of this Statement of Additional Information. Future
legislative or administrative changes or court decisions may significantly
change the conclusions expressed herein, and any such changes or decisions may
have a retroactive effect with respect to the transactions contemplated herein.
Rules of state and local taxation of ordinary income dividends,
exempt-interest dividends and capital gain dividends from regulated investment
companies often differ from the rules for U.S. federal income taxation described
above. Shareholders are urged to consult their tax advisers as to the
consequences of these and other state and local tax rules affecting investment
in a Fund.
MANAGEMENT OF THE FUND
Trustees and Officers of the Trust
The Trustees and officers and their principal occupations for at
least the past five years are set forth below. Their titles may have varied
during that period. Asterisks indicate those Trustees and officers that are
"interested persons" (as defined in the 1940 Act). Unless otherwise indicated
below, the address of each officer is 125 W. 55th Street, New York, New York
10019.
Trustees
FERGUS REID, III* - Chairman of the Board of Trustees; Chairman and Chief
Executive Officer, Lumelite Corporation, since September 1985.
Address: 700 River Road, Cos Cob, Connecticut 06807.
RICHARD E. TEN HAKEN - District Superintendent of Schools, Monroe No. 2 and
Orleans Counties, New York; Chairman of the Finance and the Audit and Accounting
Committees, Member of the Executive Committee and Vice President, New York State
Teachers' Retirement System.
Address: 4 Barnfield Road, Pittsford, New York 14534.
WILLIAM J. ARMSTRONG - Vice President and Treasurer, Ingersoll-Rand Company
(Woodcliff Lake, New Jersey).
Address: 49 Aspen Way, Upper Saddle River, New Jersey 07458.
JOHN R.H. BLUM - Partner in the law firm of Richards, O'Neil & Allegaert;
Commissioner of Agriculture - State of Connecticut.
Address: 322 Main Street, Lakeville, Connecticut 06039-0448.
JOSEPH J. HARKINS* - Retired; Commercial Sector Executive and Executive Vice
President of The Chase Manhattan Bank, N.A. from 1985 through 1989. He has been
employed by Chase in numerous capacities and offices since 1954. Director of
Blessings Corporation, Jefferson Insurance Company of New York, Monticello
Insurance Company and Nationar.
Address: 257 Plantation Circle South, Ponte Vedra South, Ponte Vedra Beach, FL
32082.
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H. RICHARD VARTABEDIAN* - President of the Trust, Retired; Senior Investment
Officer, Division Executive of the Investment Management Division of The Chase
Manhattan Bank, N.A., 1980-1991; responsible for investment research, trading
and portfolio management for commingled funds and high net worth individuals
within the U.S. Employed by Chase in various investment oriented capacities
since 1960, primarily as a senior portfolio manager for institutional, ERISA and
high net worth portfolios.
Address: P.O. Box 296, Beach Road, Hendrick's Head, Southport, Maine 04576.
STUART W. CRAGIN, Jr. - 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
Canover Industries.
Address: 652 Glenbrook Road, Stamford, Connecticut 06906.
IRVING L. THODE - Retired; Vice President of Quotron Systems. He has previously
served in a number of executive positions with Control Data Corp., including
President of their Latin American operations, and General Manager of their Data
Services business.
Address: 80 Perkins Road, Greenwich, Connecticut 06830.
The Board of Trustees of the Trust presently has an Audit Committee. The members
of the Audit Committee are Messrs. Ten Haken (Chairman), Blum, Armstrong,
Harkins, Reid, and Vartabedian who will serve until [Date]. The function of the
Audit Committee is to recommend independent auditors and monitor accounting and
financial matters.
The Audit Committee met __ times during the fiscal period ended October 31,
1995.
Remuneration of Trustees and Certain Executive Officers:
Each Trustee is reimbursed for expenses incurred in attending each
meeting of the Board of Trustees or any committee thereof. Each Trustee who is
not an affiliate of the Adviser or Sub-Adviser is compensated for his or her
services according to a fee schedule which recognizes the fact that each Trustee
also serves as a Trustee of other investment companies advised by the Adviser or
Sub-Adviser. Each Trustee receives a fee, allocated among all investment
companies for which the Trustee serves, which consists of an annual retainer
component and a meeting fee component. Effective August 21, 1995, each Trustee
of the Vista Funds receives a quarterly retainer of $12,000 and an additional
per meeting fee of $1,500. Members of committees receive a meeting fee only if
the committee meeting is held on a day other than a day on which a regularly
scheduled meeting is held. Prior to August 21, 1995, the annual retainer was
$36,000 and the per-meeting fee was $1,000. The Chairman of the Trustees, Fergus
Reid, has and continues to receive a 50% increment over regular Trustee total
compensation for serving as Chairman and Trustee for all the investment
companies advised by the Adviser or Sub-Adviser.
Effective August 21, 1995, the Trustees also instituted a Retirement
Plan for Eligible Trustees (the "Plan") pursuant to which each Trustee (who is
not an employee of any of the Portfolios, the Adviser or Sub-Adviser,
Administrator or distributor or any of their affiliates) may be entitled to
certain benefits upon retirement from the Board of Trustees. Pursuant to the
Plan, the normal retirement date is the date on which the eligible Trustee has
attained age 65 and has completed at least five years of continuous service with
one or more of the investment companies advised by the Adviser or Sub-Adviser
(collectively, the "Covered Funds"). Each eligible Trustee is entitled to
receive from the Covered Funds an annual benefit commencing on the first day of
the calendar quarter coincident with or following his date of retirement equal
to 10% of the highest annual compensation received from the Covered Funds
multiplied by the number of such Trustee's years of service (not in excess of 10
years) completed with respect to any of the Covered Funds. Such benefit is
payable to each eligible Trustee in monthly installments for the life of the
Trustee.
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<PAGE>
Set forth below in the table below are the estimated annual benefits
payable to an eligible Trustee upon retirement assuming various compensation and
years of service classifications. The estimated credited years of service for
Messrs. Reid, Ten Haken, Armstrong, Blum, Harkins, Vartabedian, Cragin, and
Thode are [insert years of service]
The following tables indicate the compensation received by each
Trustee during the fiscal period of the Portfolios which ended on October 31,
1995:
<TABLE>
<CAPTION>
Total Compensation
Pension or Retirement Benefits Estimated Annual Benefits from Victory
Accrued as Portfolio Expenses Upon Retirement "Portfolio Complex"
<S> <C> <C> <C>
Forges Reid, III, Trustee........
Richard E. Ten Haken, Trustee....
William J. Armstrong, Trustee....
John R.H. Blum, Trustee..........
Joseph J. Harkins, Trustee.......
H. Richard Vartabedian, Trustee..
Stuart W. Cragin, Jr., Trustee...
Irving L. Thode, Trustee.........
</TABLE>
Officers
MARTIN R. DEAN* - Treasurer and Assistant Secretary of the Trust (?); Vice
President, BISYS Financial Group, Inc.
ANN BERGIN* - Secretary and Assistant Treasurer of the Trust; Vice President,
BISYS Financial Group, Inc.; and Chief Compliance Officer and Secretary, Vista
Broker-Dealer Services, Inc.
The Declaration of Trust provides that the Trust will indemnify its
Trustees and officers against liabilities and expenses incurred in connection
with litigation in which they may be involved because of their offices with the
Trust, unless, as to liability to the Trust or its shareholders, it is finally
adjudicated that they engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in their offices or with
respect to any matter unless it is finally adjudicated that they did not act in
good faith in the reasonable belief that their actions were in the best interest
of the Trust. In the case of settlement, such indemnification will not be
provided unless it has been determined by a court or other body approving the
settlement or other disposition, or by a reasonable determination based upon a
review of readily available facts, by vote of a majority of disinterested
Trustees or in a written opinion of independent counsel, that such officers or
Trustees have not engaged in willful misfeasance, bad faith, gross negligence or
reckless disregard of their duties.
The Funds pay no direct remuneration to any officer of the Trust. As
of ____________, 1996, the Trustees and officers as a group owned of record less
than 1% of each Fund's outstanding shares, all of which were acquired for
investment purposes. For the fiscal year ended ____________, 1995, the Trust
paid to its disinterested Trustees fees and expenses for all meetings of the
Board and any committees attended in the aggregate amount of approximately which
amount is then apportioned between the Funds comprising the Trust.
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<PAGE>
Adviser
The Adviser manages the assets of each Fund pursuant to Investment
Advisory Agreements, dated _____________, 1996. Subject to such policies as the
Board of Trustees may determine, Chase makes investment decisions for the Fund.
Pursuant to the terms of the Advisory Agreements, the Adviser provides the Fund
with such investment advice and supervision as it deems necessary for the proper
supervision of the Fund's investments. The Adviser continuously provides
investment programs and determines from time to time what securities shall be
purchased, sold or exchanged and what portion of the Fund's assets shall be held
uninvested. The Adviser furnishes, at its own expense, all services, facilities
and personnel necessary in connection with managing the investments and
effecting portfolio transactions for the Fund. The other expenses attributable
to, and payable by the Fund, are described under "Expenses" in the Prospectus.
The Advisory Agreement for the Fund will continue in effect from year to year
with respect to the Fund only if such continuance is specifically approved at
least annually by the Board of Trustees or by vote of a majority of the Fund's
outstanding voting securities and, in either case, by a majority of the Trustees
who are not parties to the Advisory Agreement or interested persons of any such
party, at a meeting called for the purpose of voting on such Advisory Agreement.
Under the Advisory Agreement, the Adviser may utilize the specialized
portfolio skills of all its various affiliates, thereby providing the Fund with
greater opportunities and flexibility in accessing investment expertise.
Pursuant to the terms of the Advisory Agreement, the Adviser is
permitted to render services to others. The Advisory Agreement is terminable
without penalty by the Trust on behalf of the Fund and each Portfolio on not
more than 60 days', nor less than 30 days', written notice when authorized
either by a majority vote of the Fund's shareholders or by a vote of a majority
of the Board of Trustees of the Trust, or by the Adviser on not more than 60
days', nor less than 30 days', written notice, and will automatically terminate
in the event of its "assignment" (as defined in the 1940 Act). The Advisory
Agreement provides that the Adviser under the Agreement shall not be liable for
any error of judgment or mistake of law or for any loss arising out of any
investment or for any act or omission in the execution of portfolio transactions
for the Fund, except for willful misfeasance, bad faith or gross negligence in
the performance of its duties, or by reason of reckless disregard of its
obligations and duties thereunder.
In the event the operating expenses of the Fund, including all
investment advisory, administration and sub-administration fees, but excluding
brokerage commissions and fees, taxes, interest and extraordinary expenses such
as litigation, for any fiscal year exceed the most restrictive expense
limitation applicable to the Fund imposed by the securities laws or regulations
thereunder of any state in which the shares of the Fund are qualified for sale,
as such limitations may be raised or lowered from time to time, the Adviser
shall reduce its advisory fee (which fee is described below) to the extent of
its share of such excess expenses. The amount of any such reduction to be borne
by the Adviser shall be deducted from the monthly advisory fee otherwise payable
with respect to the Fund during such fiscal year; and if such amounts should
exceed the monthly fee, the Adviser shall pay to the Fund its share of such
excess expenses no later than the last day of the first month of the next
succeeding fiscal year.
In consideration of the services provided by the Adviser pursuant to
the Advisory Agreements, the Fund pays an investment advisory fee computed and
paid monthly based on a rate equal to .10% with respect to its Fund's average
daily net assets, on an annualized basis for the Fund's then-current fiscal
year. month-to-month basis.
Under an investment advisory agreement between the Trust, on behalf
of the Fund, and Chase, Chase may delegate a portion of its responsibilities to
a subadviser. In addition, the investment advisory agreement provides that Chase
may render services through its own employees or the employees of one or more
affiliated companies that are qualified to act as an investment adviser of the
Fund and are under the common control of New Chase as long as all such persons
are functioning as part of an organized group of persons, managed by authorized
officers of Chase.
Chase has entered into an investment sub-advisory agreement with its
affiliate, (Chase Asset Management, Inc. ("CAM Inc") on behalf of the Fund. The
Sub-Adviser is a wholly-owned subsidiary of New Chase. With
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<PAGE>
respect to the day to day management of the Fund, under the sub-advisory
agreement, the Sub-Adviser makes decisions concerning, and places all orders
for, purchases and sales of securities and helps maintain the records relating
to such purchases and sales. The Sub-Adviser may, in its discretion, provide
such services through its own employees or the employees of one or more
affiliated companies that are qualified to act as an investment adviser to the
Company under applicable laws and are under the common control of New Chase;
provided that (i) all persons, when providing services under the sub-advisory
agreement, are functioning as part of an organized group of persons, and (ii)
such organized group of persons is managed at all times by authorized officers
of the SubAdviser. This arrangement will not result in the payment of additional
fees by the Fund.
Administrator
Pursuant to an Administration Agreement, dated ________, 1995 for the
Fund (the "Administration Agreement"), Chase serves as administrator of the
Trust. Chase and provide certain administrative services to the Trust,
including, among other responsibilities, coordinating the negotiation of
contracts and fees with, and the monitoring of performance and billing of, the
Trust's independent contractors and agents; preparation for signature by an
officer of the Trust of all documents required to be filed for compliance by the
Trust with applicable laws and regulations excluding those of the securities
laws of various states; arranging for the computation of performance data,
including net asset value and yield; responding to shareholder inquiries; and
arranging for the maintenance of books and records of the Trust and providing,
at its own expense, office facilities, equipment and personnel necessary to
carry out its duties. The administrator does not have any responsibility or
authority for the management of the Fund, the determination of investment
policy, or for any matter pertaining to the distribution of Fund shares.
Under the administration agreement Chase renders administrative
services to others. The administration agreement will continue in effect from
year to year with respect to the Fund only if such continuance is specifically
approved at least annually by the Board of Trustees or by vote of a majority of
such Fund's outstanding voting securities and, in either case, by a majority of
the Trustees who are not parties to the administration agreement or "interested
persons" (as defined in the 1940 Act) of any such party. The administration
agreement is terminable without penalty by the Trust on behalf of the Fund on 60
days' written notice when authorized either by a majority vote of the Fund's
shareholders or by vote of a majority of the Board of Trustees, including a
majority of the Trustees who are not "interested persons" (as defined in the
1940 Act) of the Trust, or by the Administrator on 60 days' written notice, and
will automatically terminate in the event of its "assignment" (as defined in the
1940 Act). The administration agreements also provide that neither Chase nor
their personnel shall be liable for any error of judgment or mistake of law or
for any act or omission in the administration or management of the Fund, except
for willful misfeasance, bad faith or gross negligence in the performance of its
or their duties or by reason of reckless disregard of its or their obligations
and duties under the administration agreements.
In addition, the administration agreements provide that, in the event
the operating expenses of the Fund, including all investment advisory,
administration and sub-administration fees, but excluding brokerage commissions
and fees, taxes, interest and extraordinary expenses such as litigation, for any
fiscal year exceed the most restrictive expense limitation applicable to the
Fund imposed by the securities laws or regulations thereunder of any state in
which the shares of the Fund are qualified for sale, as such limitations may be
raised or lowered from time to time, Chase shall reduce its administration fee
(which fee is described below) to the extent of its share of such excess
expenses. The amount of any such reduction to be borne by Chase shall be
deducted from the monthly administration fee otherwise payable to Chase during
such fiscal year; and if such amounts should exceed the monthly fee, Chase shall
pay to such Fund its share of such excess expenses no later than the last day of
the first month of the next succeeding fiscal year.
In consideration of the services provided by Chase pursuant to the
administration agreement, the Administrator receives from the Fund a fee
computed and paid monthly at an annual rate equal to 0.05% of the Fund's average
daily net assets, on an annualized basis for the Fund's then-current fiscal
year. Chase may voluntarily waive a portion of the fees payable to it with
respect to the Fund on a month-to-month basis.
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<PAGE>
Distributor
Distribution Plan
The Trust has adopted a plan of distribution on behalf of the Class A
shares of the Fund pursuant to Rule 12b-1 under the 1940 Act (a "Distribution
Plan") which provides that the Fund shall pay a distribution fee (the "Basic
Distribution Fee"), including payments to the Distributor, at an annual rate not
to exceed 0.25% of its Class A Shares average daily net assets for distribution
services. The Distributor may use all or any portion of such Basic Distribution
Fee to pay for Fund expenses of printing prospectuses and reports used for sales
purposes, expenses of the preparation and printing of sales literature and other
such distribution-related expenses.
The Distribution Plan provides that it will continue in effect
indefinitely if such continuance is specifically approved at least annually by a
vote of both a majority of the Trustees and a majority of the Trustees who are
not "interested persons" (as defined in the 1940 Act) of the Trust and who have
no direct or indirect financial interest in the operation of the Distribution
Plan or in any agreement related to such Plan ("Qualified Trustees"). The
Distribution Plan requires that the Trust shall provide to the Board of
Trustees, and the Board of Trustees shall review, at least quarterly, a written
report of the amounts expended (and the purposes therefor) under the
Distribution Plan. The Distribution Plan further provides that the selection and
nomination of Qualified Trustees shall be committed to the discretion of the
disinterested Trustees (as defined in the 1940 Act) then in office. The
Distribution Plan may be terminated at any time by a vote of a majority of the
Qualified Trustees or, with respect to the Fund, by vote of a majority of the
outstanding voting Shares of the Fund (as defined in the 1940 Act). The
Distribution Plan may not be amended to increase materially the amount of
permitted expenses thereunder without the approval of Class A shareholders and
may not be materially amended in any case without a vote of the majority of both
the Trustees and the Qualified Trustees. The Fund will preserve copies of any
plan, agreement or report made pursuant to the Distribution Plan for a period of
not less than six years from the date of the Distribution Plan, and for the
first two years such copies will be preserved in an easily accessible place.
Since the Distribution Fee is not directly tied to actual expenses,
the amount of Basic Distribution Fee paid by each of the Shares during any year
may be more or less than actual expenses incurred pursuant to the Distribution
Plan. For this reason, this type of distribution fee arrangement is
characterized by the staff of the Securities and Exchange Commission as being of
the "compensation variety" (in contrast to "reimbursement" arrangements by which
the Distributor's compensation is directly linked to its expenses). However, the
Shares are not liable for any distribution expenses incurred in excess of the
Basic Distribution Fee paid.
Distribution and Sub-Administration Agreement
The Trust has entered into a Distributor and Sub-Administration
Agreement dated _________, 1995, with the Distributor, pursuant to which the
Distributor acts as the Fund's exclusive underwriter, provides certain
administration services and promotes and arranges for the sale of each of the
Shares. The Distributor is a wholly-owned subsidiary of BISYS Fund Services,
Inc. The Distribution Agreement provides that the Distributor will bear the
expenses of printing, distributing and filing prospectuses and statements of
additional information and reports used for sales purposes, and of preparing and
printing sales literature and advertisements not paid for by the Distribution
Plan. The Trust pays for all of the expenses for qualification of the shares of
each Fund for sale in connection with the public offering of such shares, and
all legal expenses in connection therewith. In addition, pursuant to the
Distribution Agreement, the Distributor provides certain sub-administration
services to the Trust, including providing officers, clerical staff and office
space.
The Distribution Agreement is currently in effect and will continue
in effect with respect to the Fund only if such continuance is specifically
approved at least annually by the Board of Trustees or by vote of a majority of
such Fund's outstanding voting securities and, in either case, by a majority of
the Trustees who are not parties to the Distribution Agreement or "interested
persons" (as defined in the 1940 Act) of any such party. The Distribution
Agreement is terminable without penalty by the Trust on behalf of the Fund on 60
days' written notice when authorized either by a majority vote of such Fund's
shareholders or by vote of a majority of the Board of Trustees
-21-
<PAGE>
of the Trust, including a majority of the Trustees who are not "interested
persons" (as defined in the 1940 Act) of the Trust, or by the Distributor on 60
days' written notice, and will automatically terminate in the event of its
"assignment" (as defined in the 1940 Act). The Distribution Agreement also
provides that neither the Distributor nor its personnel shall be liable for any
act or omission in the course of, or connected with, rendering services under
the Distribution Agreement, except for willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations or duties.
In the event the operating expenses of the Fund, including all
investment advisory, administration and sub-administration fees, but excluding
brokerage commissions and fees, taxes, interest and extraordinary expenses such
as litigation, for any fiscal year exceed the most restrictive expense
limitation applicable to that Fund imposed by the securities laws or regulations
thereunder of any state in which the shares of the Fund are qualified for sale,
as such limitations may be raised or lowered from time to time, the Distributor
shall reduce its sub-administration fee with respect to the Fund (which fee is
described below) to the extent of its share of such excess expenses. The amount
of any such reduction to be borne by the Distributor shall be deducted from the
monthly sub-administration fee otherwise payable with respect to the Fund during
such fiscal year; and if such amounts should exceed the monthly fee, the
Distributor shall pay to the Fund its share of such excess expenses no later
than the last day of the first month of the next succeeding fiscal year.
In consideration of the sub-administration services provided by the
Distributor pursuant to the Distribution Agreement, the Distributor receives an
annual fee, payable monthly, of 0.05% of the net assets of the Fund. However,
the Distributor has voluntarily agreed to waive a portion of the fees payable to
it under the Distribution Agreement with respect to the Fund on a month-to-month
basis.
Shareholder Servicing Agents, Transfer Agent and Custodian
The Trust has entered into a shareholder servicing agreement (a
"Servicing Agreement") with each Shareholder Servicing Agent to provide certain
services. The fees relating to acting as liaison to shareholders and providing
personal services to shareholders will not exceed, on an annualized basis, 0.25%
of the average daily net assets of each of the Shares represented by shares
owned during the period for which payment is being made by investors with whom
such Shareholder Servicing Agent maintains a servicing relationship. However,
each Shareholder Servicing Agent has voluntarily agreed to waive a portion of
the fees payable to it under its Servicing Agreement with respect to the Fund on
a month-to-month basis.
The Trust has also entered into a Transfer Agency Agreement with DST
Systems, Inc. ("DST") pursuant to which DST acts as transfer agent for the
Trust. Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of each Fund for which Chase receives compensation as is from time to
time agreed upon by Chase. For additional information, see "Shareholder
Servicing Agents, Transfer Agent and Custodian" in the Prospectus.
In certain circumstances Shareholder Servicing Agents may be required
to register as dealers under state law.
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York
10036 serves as independent accountants of the Fund. Price Waterhouse LLP
provides the Fund with audit services, tax return preparation, and assistnace
and consultation with respect to the preparation of filings with the Securities
and Exchange Commission.
The financial statements incorporated herein by reference from The
Hanover 100% U.S. Treasury Securities Money Market Fund Annual Reports to
Shareholders for the fiscal year ended November 30, 1994, have been so
incorporated by reference in reliance on the reports of KPMG Peat Marwick LLP,
345 Park Avenue, New York, New York, 10154, independent accountants of The
Hanover 100% U.S. Treasury Securities Money Market Fund, given on the authority
of said firm as experts in accounting and auditing.
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<PAGE>
GENERAL INFORMATION
Description of Shares, Voting Rights and Liabilities
Mutual Fund Trust is an open-end, management investment company
organized as Massachusetts business trust under the laws of the Commonwealth of
Massachusetts on February 4, 1994. Because certain of the Funds comprising the
Trust are "non-diversified", more than 5% of any of the assets of any such Fund
may be invested in the obligations of any single issuer, which may make the
value of the shares in such a Fund more susceptible to certain risks than shares
of a diversified mutual fund. The fiscal year-end of the Funds in the Trust is
August 31.
The Trust currently consists of __ Funds of shares of beneficial
interest without par value. With respect to the Money Market Funds and certain
of the Income Funds, the Trust may offer more than one class of shares. The
Trust has reserved the right to create and issue additional series or classes.
Each share of a series or class represents an equal proportionate interest in
that series or class with each other share of that series or class. The shares
of each series or class participate equally in the earnings, dividends and
assets of the particular series or class. Expenses of the Trust which are not
attributable to a specific series or class are allocated amount all the series
in a manner believed by management of the Trust to be fair and equitable. Shares
have no pre-emptive or conversion rights. Shares when issued are fully paid and
non-assessable, except as set forth below. Shareholders are entitled to one vote
for each share held. Shares of each series or class generally vote separately,
for example to approve investment advisory agreements or distribution plans, but
shares of all series and classes vote together, to the extent required under the
1940 Act, in the election or selection of Trustees and independent accountants.
With respect to shares purchased through a Shareholder Servicing Agent and, in
the event written proxy instructions are not received by the Fund or its
designated agent prior to a shareholder meeting at which a proxy is to be voted
and the shareholder does not attend the meeting in person, the Shareholder
Servicing Agent for such shareholder will be authorized pursuant to an
applicable agreement with the shareholder to vote the shareholder's outstanding
shares in the same proportion as the votes cast by other Fund shareholders
represented at the meeting in person or by proxy.
Shareholders of the Vista Shares, Premier Shares and Institutional
Shares of the Money Market Funds bear the fees and expenses described herein.
The fees paid by the Vista Shares to the Distributor and Shareholder Servicing
Agent under the distribution plans and shareholder servicing arrangements for
distribution expenses and shareholder services provided to investors by the
Distributor and Shareholder Servicing Agents generally are more than the
respective fees paid under distribution plans and shareholder servicing
arrangements adopted for the Premier Shares. The Institutional Shares pay no
distribution or Shareholder Servicing fee. As a result, at any given time, the
net yield on the Shares will be approximately .15% to .30% lower than the yield
on the Premier Shares and approximately 30% to 50% lower than the yield on the
Institutional Shares. Standardized yield quotations will be computed separately
for each class of shares of a Fund.
The Trust is not required to hold annual meetings of shareholders but
will hold special meetings of shareholders of a series or class when, in the
judgment of the Trustees, it is necessary or desirable to submit matters for a
shareholder vote. Shareholders have, under certain circumstances, the right to
communicate with other shareholders in connection with requesting a meeting of
shareholders for the purpose of removing one or more Trustees. Shareholders also
have, in certain circumstances, the right to remove one or more Trustees without
a meeting. No material amendment may be made to the Trust's Declaration of Trust
without the affirmative vote of the holders of a majority of the outstanding
shares of each portfolio affected by the amendment. The Trust's Declaration of
Trust provides that, at any meeting of shareholders of the Trust or of any
series or class, a Shareholder Servicing Agent may vote any shares as to which
such Shareholder Servicing Agent is the agent of record and which are not
represented in person or by proxy at the meeting, proportionately in accordance
with the votes cast by holders of all shares of that portfolio otherwise
represented at the meeting in person or by proxy as to which such Shareholder
Servicing Agent is the agent of record. Any shares so voted by a Shareholder
Servicing Agent will be deemed represented at the meeting for purposes of quorum
requirements. Shares have no preemptive or conversion rights. Shares, when
issued, are fully paid and non-assessable, except as set forth below. Any series
or class may be terminated (i) upon the merger or consolidation with, or the
sale or disposition of all or substantially
-23-
<PAGE>
all of its assets to, another entity, if approved by the vote of the holders of
two-thirds of its outstanding shares, except that if the Board of Trustees
recommends such merger, consolidation or sale or disposition of assets, the
approval by vote of the holders of a majority of the series' or class'
outstanding shares will be sufficient, or (ii) by the vote of the holders of a
majority of its outstanding shares, or (iii) by the Board of Trustees by written
notice to the series' or class' shareholders. Unless each series and class is so
terminated, the Trust will continue indefinitely.
Certificates are issued only upon the written request of a
shareholder, subject to the policies of the investor's Shareholder Servicing
Agent, but the Trust will not issue a stock certificate with respect to shares
that may be redeemed through expedited or automated procedures established by a
Shareholder Servicing Agent.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust". Under Massachusetts law, shareholders of such a business trust
may, under certain circumstances, be held personally liable as partners for its
obligations. However, the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for acts or obligations of the Trust and
provides for indemnification and reimbursement of expenses out of the Trust
property for any shareholder held personally liable for the obligations of the
Trust. The Trust's Declaration of Trust also provides that the Trust shall
maintain appropriate insurance (for example, fidelity bonding and errors and
omissions insurance) for the protection of the Trust, its shareholders,
Trustees, officers, employees and agents covering possible tort and other
liabilities. Thus, the risk of a shareholder incurring financial loss on account
of shareholder liability is limited to circumstances in which both inadequate
insurance existed and the Trust itself was unable to meet its obligations.
The Trust's Declaration of Trust further provides that obligations of
the Trust are not binding upon the Trustees individually but only upon the
property of the Trust and that the Trustees will not be liable for any action or
failure to act, errors of judgment or mistakes of fact or law, but nothing in
the Declaration of Trust protects a Trustee against any liability to which he
would otherwise be subject by reason of willful misfeasance, bad faith, gross
negligence, or reckless disregard of the duties involved in the conduct of his
office.
Principal Holders
As of November 30, 1995, the following persons owned beneficially,
directly or indirectly, 5% or more of the outstanding shares of the following
classes or Funds:
[TO COME]
Financial Statements
The financial statements for the fiscal period ended November 30,
1995 for the Fund is incorporated herein by reference from The Hanover 100% U.S.
Treasury Securities Money Market Fund Annual Report to Shareholders.
-24-
<PAGE>
PART C
<PAGE>
MUTUAL FUND TRUST
PART C. OTHER INFORMATION
ITEM 24. Financial Statements and Exhibits
List all financial statements and exhibits filed as part of
the Registration Statement for the Vista Funds of Mutual Fund Trust filed herein
as part of this post-effective amendment.
(a) Financial statements:
In Part A: Financial Highlights.
In Part B: To be filed by Amendment.
In Part C: None.
(b) Exhibits:
Exhibit
Number
1 Declaration of Trust. (1)
2 By-laws. (1)
3 None.
4 Specimen share certificate. (4)
5(a) Form of Investment Advisory Agreement. (1) and (3)
5(b) Form of Interim Investment Advisory Agreement.(6)
5(c) Form of Proposed Investment Advisory Agreement.(6)
5(d) Form of Proposed Investment Subadvisory Agreement between The Chase
Manhattan Bank and Chase Asset Management, Inc.(6)
5(e) Form of Administration Agreement. (1) and (3)
5(f) Form of Administration Agreement.(6)
6(a) Form of Distribution and Sub-Administration Agreement. (1)
6(b) Distribution and Sub-Administration Agreement dated August 21, 1995.(6)
7(a) Retirement Plan for Eligible Trustees.(6)
7(b) Deferred Compensation Plan for Eligible Trustees.(6)
8(a) Form of Custodian Agreement. (1)
8(b) None.
9(a) Form of Transfer Agency Agreement. (1)
9(b) Form of Shareholder Servicing Agreement. (1)
9(c) Form of Shareholder Servicing Agreement. (6)
9(d) Agreement and Plan of Reorganization and Liquidation.(6)
10(a) Opinion of Reid & Priest re: Legality of Securities being Registered. (2)
11(a) Consent of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.(6)
11(b) Consent of KPMG Peat Marwick, LLP. (6)
12 None
13 N/A.
14 None.
15(a) Forms of Rule 12b-1 Distribution Plans including Selected Dealer
Agreements and Shareholder Service Agreements. (1) and (3)
15(b) Form of Proposed Rule 12b-1 Distribution Plan (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).(6)
16. Schedule for Computation of Each Performance Quotation.(6)
C-1
<PAGE>
17. N/A.
18. Form of Rule 18f-3 Multi-Class Plan. (6)
- ----------------------------
(1) Filed as an Exhibit to the Registration Statement on Form N-1A of the
Registrant (File No. 33-75250) as filed with the Securities and
Exchange Commission on February 14, 1994.
(2) Filed as an Exhibit to Pre-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
April 18, 1994.
(3) Filed as an Exhibit to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
August 29, 1994.
(4) Filed as an Exhibit to Post-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of the Registrant (File No.
33-75250) as filed with the Securities and Exchange Commission on
October 28, 1994.
(5) Filed as an Exhibit to Post-Effective Amendment No. 3 to the
Registration Statement on Form N-1A of the Registrant (File No. 33-
75250) as filed with the Securities and Exchange Commission on October
31, 1995.
(6) Filed herein.
ITEM 25. Persons Controlled by or Under Common
Control with Registrant
Not applicable
ITEM 26. Number of Holders of Securities
Number of Record
Holders as of
Title of Series September 30, 1995
--------------- ------------------
None
Vista Premier Institutional Class A Class B
Shares Shares Shares Shares Shares
Vista(sm) Treasury Plus
Money Market Fund N/A 18 35 N/A N/A
Vista(sm) Federal Money
Market Fund 6,196 173 16 N/A N/A
Vista(sm) U.S. Government
Money Market Fund 4,010 463 93 N/A N/A
Vista(sm) Global Money
Market Fund 2,720 371 64 N/A N/A
Vista(sm) Prime Money
Market Fund -0- 91 37 N/A 231
Vista(sm) Tax Free Money
Market Fund 634 209 34 N/A N/A
Vista(sm) California Tax Free
Money Market Fund 80 N/A N/A N/A N/A
Vista(sm) New York Tax Free
Money Market Fund 3,838 N/A N/A N/A N/A
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<PAGE>
Vista(sm) Tax Free Income
Fund N/A N/A N/A 3,320 602
Vista(sm) New York Tax Free
Income Fund N/A N/A N/A 3,162 426
Vista(sm) California Intermediate
Tax Free Fund N/A N/A N/A 723 N/A
ITEM 27. Indemnification
Reference is hereby made to Article V of the Registrant's Declaration
of Trust.
The Trustees and officers of the Registrant and the personnel of the
Registrant's investment adviser, administrator and distributor are insured under
an errors and omissions liability insurance policy. The Registrant and its
officers are also insured under the fidelity bond required by Rule 17g-1 under
the Investment Company Act of 1940.
Under the terms of the Registrant's Declaration of Trust, the
Registrant may indemnify any person who was or is a Trustee, officer or employee
of the Registrant to the maximum extent permitted by law; provided, however,
that any such indemnification (unless ordered by a court) shall be made by the
Registrant only as authorized in the specific case upon a determination that
indemnification of such persons is proper in the circumstances. Such
determination shall be made (i) by the Trustees, by a majority vote of a quorum
which consists of Trustees who are neither in Section 2(a)(19) of the Investment
Company Act of 1940, nor parties to the proceeding, or (ii) if the required
quorum is not obtainable or, if a quorum of such Trustees so directs, by
independent legal counsel in a written opinion. No indemnification will be
provided by the Registrant to any Trustee or officer of the Registrant for any
liability to the Registrant or shareholders to which he would otherwise be
subject by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of duty.
Insofar as the conditional advancing of indemnification monies
for actions based upon the Investment Company Act of 1940 may be concerned, such
payments will be made only on the following conditions: (i) the advances must be
limited to amounts used, or to be used, for the preparation or presentation of a
defense to the action, including costs connected with the preparation of a
settlement; (ii) advances may be made only upon receipt of a written promise by,
or on behalf of, the recipient to repay that amount of the advance which exceeds
that amount to which it is ultimately determined that he is entitled to receive
from the Registrant by reason of indemnification; and (iii) (a) such promise
must be secured by a surety bond, other suitable insurance or an equivalent form
of security which assures that any repayments may be obtained by the Registrant
without delay or litigation, which bond, insurance or other form of security
must be provided by the recipient of the advance, or (b) a majority of a quorum
of the Registrant's disinterested, non-party Trustees, or an independent legal
counsel in a written opinion, shall determine, based upon a review of readily
available facts, that the recipient of the advance ultimately will be found
entitled to indemnification.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or 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
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<PAGE>
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 28 Business and Other Connections of Investment Adviser
The Chase Manhattan Bank, N.A. (the "Adviser") is a commercial bank
providing a wide range of banking and investment services.
To the knowledge of the Registrant, none of the Directors or executive
officers of the Adviser, except those described below, are or have been, at any
time during the past two years, engaged in any other business, profession,
vocation or employment of a substantial nature, except that certain Directors
and executive officers of the Adviser also hold or have held various positions
with bank and non-bank affiliates of the Adviser, including its parent, The
Chase Manhattan Corporation. Each Director listed below is also a Director of
The Chase Manhattan Corporation.
Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ----------- ----------------------------
Thomas G. Labreque Chairman of Chairman, Chief Executive Officer
the Board,and and a Director of The Chase
Director Manhattan Corporation and a
Director of AMAX, Inc.
Richard J. Boyle Vice Chairman Vice Chairman of the Board and a
of the Board Director of The Chase Manhattan
and Director Corporation and Trustee of
Prudential Realty Trust
Robert R. Douglass Vice Chairman Vice Chairman of the Board and a
of the Board Director of The Chase Manhattan
and Director Corporation and Trustee of HRE
Properties
Joan Ganz Cooney Director Chairman of the Executive
Committee of the Board of Trustees,
formerly Chief Executive Officer of
Children's Television Workshop and
a Director of each of Johnson &
Johnson, Metropolitan Life
Insurance Company and Xerox
Corporation
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<PAGE>
Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ----------- ----------------------------
Edward S. Finkelstein Director Retired Chairman and Chief
Executive Officer and Director of
R.H. Macy & Co., Inc. and a
Director of Time Warner Inc.
H. Laurance Fuller Director Chairman, President, Chief
Executive Officer and Director of
Amoco Corporation and Director of
Abbott Laboratories
Howard C. Kauffman Director Retired President of Exxon
Corporation and a Director of each
of Pfizer Inc. and Ryder System,Inc.
Paul W. MacAvoy Director Dean of Yale School of
Organization and Management
David T. McLaughlin Director President and Chief Executive
Officer of The Aspen Institute,
Chairman of Standard Fuse
Corporation and a Director of each
of ARCO Chemical Company and
Westinghouse Electric Corporation
Edmund T. Pratt, Jr. Director Chairman Emeritus, formerly
Chairman and Chief Executive
Officer, of Pfizer Inc. and a
Director of each of Pfizer, Inc.,
Celgene Corp., General Motors
Corporation and International Paper
Company
Henry B. Schacht Director Chairman and Chief Executive
Officer of Cummins Engine
Company, Inc. and a Director of
each of American Telephone and
Telegraph Company and CBS Inc.
A. Alfred Taubman Director Chairman and Director, formerly
also Chief Executive Officer, of
The Taubman Company, Inc.,
majority shareholder and Chairman
of Sotheby's Holdings, Inc., owner
of Woodward & Lothrop, Inc. and
its subsidiary, John Wanamaker,
C-5
<PAGE>
Principal Occupation or Other
Position with Employment of a Substantial
Name the Adviser Nature During Past Two Years
- ---- ----------- ----------------------------
and Chairman of A&W Restaurants, Inc.
and a Director of R.H. Macy & Co.,Inc.
Donald H. Trautlein Director President and Chief Executive
Officer of The Aspen Institute,
Chairman of Standard Fuse
Corporation and a Director of each
of ARCO Chemical Company and
Westinghouse Electric Corporation
Kay R. Whitmore Director Chairman of the Board, President
and Chief Executive Officer and
Director of Eastman Kodak Company
ITEM 29. Principal Underwriters
(a) Vista Broker-Dealer Services, Inc., a wholly-owned subsidiary of
The BISYS Group, Inc. is the underwriter for the Registrant.
(b) The following are the Directors and officers of Vista
Broker-Dealer Services, Inc., a wholly-owned subsidiary of The BISYS Group, Inc.
The principal business address of each of these persons, with the exception of
Mr. Spicer, is 125 West 55th Street, New York, New York 10022. The principal
business address of Mr. Spicer is One Bush Street, San Francisco, California
94104.
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<PAGE>
Position and Offices Position and Offices
Name with Distributor with the Registrant
- ---- ---------------- -------------------
William B. Blundin Director and Chief Executive Officer None
Richard E. Stierwalt Director and Chief Operating Officer None
Timothy M. Spicer Director and Chairman of the Board None
Joseph Kissel President None
George Martinez Chief Compliance Officer Secretary and
and Secretary Assistant Treasurer
(c) Not applicable
ITEM 30. Location of Accounts and Records
The accounts and records of the Registrant are located, in whole or in
part, at the office of the Registrant and the following locations:
Name
Address
Vista Broker-Dealer Services, Inc. a wholly-owned 125 West 55th Street
subsidiary of The BISYS Group, Inc. (distributor) New York, NY 10022
DST Systems, Inc. (transfer agent) 21 W. 10th Street
Kansas City, MO 64105
The Chase Manhattan Bank, N.A. (investment adviser 1211 Avenue of the
and custodian) Americas
New York, NY 10036
The Chase Manhattan Bank, N.A. (administrator) One Chase Square
Rochester, NY 14363
ITEM 31. Management Services
Not applicable
ITEM 32. Undertakings
(1) Registrant undertakes that its trustees shall promptly call a
meeting of shareholders of the Trust for the purpose of voting upon the question
of removal of any such trustee or trustees when requested in writing so to do by
the record holders of not less than 10 per centum of the outstanding shares of
the Trust. In addition, the Registrant shall, in certain circumstances, give
such shareholders assistance in communicating with other shareholders of a fund
as required by Section 16(c) of the Investment Company Act of 1940.
(2) The Registrant, on behalf of the Funds, undertakes, provided the
information required by Item 5A is contained in the latest annual report to
shareholders, to
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<PAGE>
furnish to each person to whom a prospectus has been delivered, upon their
request and without charge, a copy of the Registrant's latest annual report to
shareholders.
C-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant duly caused this Pre-Effective
Amendment to its Registration Statement on Form N-1A to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York and the
State of New York on the 20th day of December, 1995.
MUTUAL FUND TRUST
By/s/ H. Richard Vartabedian
H. Richard Vartabedian
President
Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
/s/ Fergus Reid, III Chairman and Trustee December 20, 1995
- ----------------------------------
Fergus Reid, III
/s/ William J. Armstrong Trustee December 20, 1995
- --------------------------------
William J. Armstrong
/s/ John R.H. Blum Trustee December 20, 1995
- --------------------------------
John R.H. Blum
/s/Joseph J. Harkins Trustee December 20, 1995
Joseph J. Harkins
/s/ Richard E. Ten Haken Trustee December 20, 1995
- -------------------------------
Richard E. Ten Haken
/s/ H. Richard Vartebedian Trustee December 20, 1995
- -------------------------------
H. Richard Vartebedian
/s/ Martin R. Dean Treasurer and December 20, 1995
- ---------------------------- Principal Financial Officer
Martin R. Dean
*By:
Attorney-in-Fact
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<PAGE>
As filed with the Securities and Exchange Commission on December 28, 1995.
File No. 811-8358
Registration No. 33-75250
Securities and Exchange Commission
Washington, D.C. 20549
EXHIBITS
filed with
Post-Effective Amendment No. 4
to the
Registration Statement
on
FORM N-1A
MUTUAL FUND TRUST
<PAGE>
EXHIBIT INDEX
Exhibit
Number
5(b) Form of Interim Investment Advisory Agreement.
5(c) Form of Proposed Investment Advisory Agreement.
5(d) Form of Proposed Investment Subadvisory Agreement between The Chase
Manhattan Bank and Chase Asset Management, Inc.
5(f) Form of Administration Agreement.
6(b) Distribution and Sub-Administration Agreement dated August 21, 1995.
7(a) Retirement Plan for Eligible Trustees.
7(b) Deferred Compensation Plan for Eligible Trustees.
9(c) Form of Shareholder Servicing Agreement.
9(d) Agreement and Plan of Reorganization and Liquidation.
11(a) Consent of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
11(b) Consent of KPMG Peat Marwick, LLP.
15(b) Form of Proposed Rule 12b-1 Distribution Plan (including forms of
Selected Dealer Agreement and Shareholder Servicing Agreement).
16. Schedule for Computation of Each Performance Quotation.
18. Form of Rule 18f-3 Multi-Class Plan.
Exhibit 5(b)
Form of Interim Investment Advisory Agreement.
FORM OF
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this day of , by and between MUTUAL FUND
(the "Trust") on behalf of the series of the Trust
(the "Fund") and THE CHASE MANHATTAN BANK, a New York State chartered banking
corporation (the "Adviser").
W I T N E S S E T H:
WHEREAS, the Trust is registered as an open-end, diversified management
investment company under the Investment Company Act of 1940, as amended (the
"Act"); and
WHEREAS, the Trust and the Adviser desire to enter into an agreement to
provide advisory services for the Fund on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and other good and valuable consideration, the receipt of which
is hereby acknowledged, it is hereby agreed by and between the parties hereto as
follows:
1. Appointment. The Adviser agrees, all as more fully set
forth herein, to act as investment adviser to the Fund with respect to
the investment of its assets and to supervise and arrange the purchase
of securities for and the sale of securities held in the portfolio of
the Fund.
2. Duties and Obligations of the Adviser With Respect
to Investments of Assets of the Fund.
(a) Subject to the succeeding provisions of this
section and subject to the direction and control of the Board
of Trustees of the Trust, the Adviser shall:
(i) supervise continuously the investment
program of the Fund and the composition of its
portfolio;
(ii) determine what securities shall be
purchased or sold by the Fund; and
(iii) arrange for the purchase and the sale
of securities held in the portfolio of the Fund.
(b) Any investment program furnished by the Adviser
under this section shall at all times conform to, and be in
accordance with, any requirements imposed by:
<PAGE>
(i) the provisions of the Act and of any
rules or regulations in force thereunder;
(ii) any other applicable provisions of
state and federal law;
(iii) the provisions of the Declaration of
Trust and By-Laws of the Trust, as amended from
time to time;
(iv) any policies and determinations of the
Board of Trustees of the Trust; and
(v) the fundamental policies of the Fund, as
reflected in its Registration Statement under the
Act, as amended from time to time.
(c) In making recommendations for the Fund, Trust
Division personnel of the Adviser will not inquire or take
into consideration whether the issuer of securities proposed
for purchase or sale for the Fund's account are customers of
the Commercial Division of the Adviser. In dealing with
commercial customers, the Commercial Division will not inquire
or take into consideration whether securities of those
customers are held by the Fund.
(d) The Adviser shall give the Fund the benefit of
its best judgment and effort in rendering services hereunder,
but the Adviser shall not be liable for any loss sustained by
the Fund in connection with the matters to which this
Agreement relates, including specifically but not limited to,
the calculation of net asset value and the adoption of any
investment policy or the purchase, sale or retention of any
security, whether or not such purchase, sale or retention
shall have been based upon its own investigation and research
or upon investigation and research made by any other
individual, firm or corporation, if such purchase, sale or
retention shall have been made and such other individual, firm
or corporation shall have been selected in good faith. Nothing
herein contained shall, however, be construed to protect the
Adviser against any liability to the Fund or its security
holders by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of
its reckless disregard of its obligations and duties under
this Agreement.
(e) Nothing in this Agreement shall prevent the
Adviser or any affiliated person (as defined in the Act) of
the Adviser from acting as investment adviser or manager for
any other person, firm or corporation (including other
investment companies) and shall not in
- 2 -
<PAGE>
any way limit or restrict the Adviser or any such affiliated
person from buying, selling or trading any securities for its
or their own accounts or for the accounts of others for whom
it or they may be acting; provided, however, that the Adviser
expressly represents that it will undertake no activities
which, in its judgment, will adversely affect the performance
of its obligations to the Fund under this Agreement.
(f) The Fund will supply the Adviser with certified
copies of the following documents: (i) the Trust's Declaration
of Trust and By-Laws, as amended; (ii) resolutions of the
Trust's Board of Trustees and shareholders authorizing the
appointment of the Adviser and approving this Agreement; (iii)
the Trust's Registration Statement, as filed with the SEC; and
(iv) the Fund's most recent prospectus and statement of
additional information. The Fund will furnish the Adviser from
time to time with copies of all amendments or supplements to
the foregoing, if any, and all documents, notices and reports
filed with the SEC.
(g) The Fund will supply, or cause its custodian bank
to supply, to the Adviser such financial information as is
necessary or desirable for the functions of the Adviser
hereunder.
3. Broker-Dealer Relationships. The Adviser is responsible for
decisions to buy and sell securities for the Fund, broker-dealer
selection and negotiation of its brokerage commission rates. The
Adviser's primary consideration in effecting a security transaction
will be execution at the most favorable price. The Fund understands
that a substantial majority of the Fund's portfolio transactions will
be transacted with primary market makers acting as principal on a net
basis, with no brokerage commissions being paid by the Fund. Such
principal transactions may, however, result in a profit to the market
makers. In certain instances the Adviser may make purchases of
underwritten issues at prices which include underwriting fees. In
selecting a broker or dealer to execute each particular transaction,
the Adviser will take the following into consideration; the best price
available; the reliability, integrity and financial condition of the
broker or dealer; the size of and difficulty in executing the order;
and the value of the expected contribution of the broker or dealer to
the investment performance of the Fund on a continuing basis.
Accordingly, the price to the Fund in any transaction may be less
favorable than that available from another broker or dealer if the
difference is reasonably justified by other aspects of the portfolio
execution services offered. Subject to such policies as the Board of
Trustees may determine, the Adviser shall not be deemed to have acted
unlawfully or to have breached any duty
- 3 -
<PAGE>
created by this Agreement or otherwise solely by reason of its having
caused the Fund to pay a broker or dealer that provides brokerage and
research services to the Adviser an amount of commission for effecting
a portfolio investment transaction in excess of the amount of
commission another broker or dealer would have charged for effecting
that transaction, if the Adviser determines in good faith that such
amount of commission was 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 Adviser's
overall responsibilities with respect to the Fund. The Adviser is
further authorized to allocate the orders placed by it on behalf of the
Fund to such brokers and dealers who also provide research or
statistical material, or other services to the Fund (which material or
services may also assist the Adviser in rendering services to other
clients). Such allocation shall be in such amounts and proportions as
the Adviser shall determine and the Adviser will report on said
allocations regularly to the Board of Trustees indicating the brokers
to whom such allocations have been made and the basis therefor.
4. Allocation of Expenses. The Adviser agrees that it will
furnish the Fund, at its expense, all office space and facilities,
equipment and clerical personnel necessary for carrying out its duties
under this Agreement and the keeping of certain accounting records of
the Fund. The Adviser agrees that it will supply to any sub-adviser or
administrator (the "Administrator") of the Fund all necessary financial
information in connection with the Administrator's duties under any
Agreement between the Administrator and the Trust. The Adviser will
also pay all compensation of all Trustees, officers and employees of
the Fund who are "affiliated persons" of the Adviser as defined in the
Act. All costs and expenses not expressly assumed by the Adviser under
this Agreement or by the Administrator under the administration
agreement between it and the Trust shall be paid by the Fund,
including, but not limited to (i) fees paid to the Adviser and the
Administrator; (ii) interest and taxes; (iii) brokerage commissions;
(iv) insurance premiums; (v) compensation and expenses of its Trustees
other than those affiliated with the Adviser or the Administrator; (vi)
legal, accounting and audit expenses; (vii) custodian and transfer
agent, or shareholder servicing agent, fees and expenses; (viii)
expenses, including clerical expenses, incident to the issuance,
redemption or repurchase of shares, including issuance on the payment
of, or reinvestment of, dividends; (ix) fees and expenses incident to
the registration under Federal or state securities laws of the Fund or
its shares; (x) expenses of preparing, setting in type, printing and
mailing prospectuses, statements of additional information, reports and
notices and proxy material to shareholders of the Fund;
- 4 -
<PAGE>
(xi) all other expenses incidental to holding meetings of the Fund's
shareholders; and (xii) such extraordinary expenses as may arise,
including litigation affecting the Fund and the legal obligations which
the Trust may have to indemnify its officers and Trustees with respect
thereto.
5. Compensation of the Adviser. (a) For the services to be
rendered and the expenses assumed by the Adviser, the Fund shall pay to
the Adviser monthly compensation at an annual rate, of % of the Fund's
average daily net assets, as set forth in Schedule A. Except as
hereinafter set forth, compensation under this Agreement shall be
calculated and accrued daily and the amounts of the daily accruals
shall be paid monthly. If the Agreement becomes effective subsequent to
the first day of a month or shall terminate before the last day of a
month, compensation for that part of the month this Agreement is in
effect shall be prorated in a manner consistent with the calculation of
the fees as set forth above. Subject to the provisions of subsection
(b) hereof, payment of the Adviser's compensation for the preceding
month shall be made as promptly as possible after completion of the
computations contemplated by subsection (b) hereof.
(b) In the event the operating expenses of the Fund
including all investment advisory, sub-advisory and
administration fees, for any fiscal year ending on a date on
which this Agreement is in effect exceed the expense
limitations applicable to the Fund imposed by the securities
laws or regulations thereunder of any state in which the
Fund's shares are qualified for sale, as such limitations may
be raised or lowered from time to time, the Adviser shall
reduce its investment advisory fee, but not below zero, to the
extent of its share of such excess expenses; provided,
however, there shall be excluded from such expenses the amount
of any interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any
indemnification related thereto) paid or payable by the Fund.
Such reduction, if any, shall be computed and accrued daily,
shall be settled on a monthly basis and shall be based upon
the expense limitation applicable to the Fund as at the end of
the last business day of the month. Should two or more of such
expense limitations be applicable as at the end of the last
business day of the month, that expense limitation which
results in the largest reduction in the Adviser's fee shall be
applicable. For the purposes of this paragraph, the Adviser's
share of any excess expenses shall be computed by multiplying
such excess expenses by a fraction, the numerator of which is
the amount of the investment advisory fee which would
otherwise be payable to the Adviser for such fiscal year were
it not
- 5 -
<PAGE>
for this subsection 5(b) and the denominator of which is the
sum of all investment advisory and administrative fees which
would otherwise be payable by the Fund were it not for the
expense limitation provisions of any investment advisory or
administrative agreement to which the Fund is a party.
6. Duration, Amendment and Termination. (a) This Agreement
shall go into effect as to the Fund on the date set forth above (the
"Effective Date") and shall, unless terminated as hereinafter provided,
continue in effect for two years from the Effective Date and shall
continue from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by the Board of
Trustees of the Trust, including the vote of a majority of the Trustees
who are not parties to this Agreement or "interested persons" (as
defined in the Act) of any such party cast in person at a meeting
called for the purpose of voting on such approval, or by the vote of
the holders of a "majority" (as so defined) of the outstanding voting
securities of the Fund and by such a vote of the Trustees.
(b) This Agreement may not be amended except in
accordance with the provisions of the Act, including
specifically, the provisions of the Act and the rules and
regulations thereunder regarding series votes by shareholders
of the Fund.
(c) This Agreement may be terminated by the Adviser
at any time without penalty upon giving the Fund sixty (60)
days' written notice (which notice may be waived by the Fund)
and may be terminated by the Fund at any time without penalty
upon giving the Adviser sixty (60) days' written notice (which
notice may be waived by the Adviser), provided that such
termination by the Fund shall be approved by the vote of a
majority of all the Trustees in office at the time or by the
vote of the holders of a majority (as defined in the Act) of
the voting securities of the Fund at the time outstanding and
entitled to vote. This Agreement may only be terminated in
accordance with the provisions of the Act, and shall
automatically terminate in the event of its assignment (as
defined in the Act).
7. Board of Trustees Meeting. The Fund agrees that notice of
each meeting of the Board of Trustees of the Trust will be sent to the
Adviser and that the Fund will make appropriate arrangements for the
attendance (as persons present by invitation) of such person or persons
as the Adviser may designate.
- 6 -
<PAGE>
8. Notices. Any notices under this Agreement shall be in
writing, addressed and delivered or mailed postage paid to the other
party at such address as such other party may designate for the receipt
of such notice. Until further notice to the other party, it is agreed
that the address of the Fund for this purpose shall be 125 West 55th
Street, New York, New York 10019, and that of the Adviser shall be One
Chase Manhattan Plaza, New York, New York 10081.
9. Questions of Interpretation. Any question of interpretation
of any term or provision of this Agreement having a counterpart in or
otherwise derived from a term or provision of the Act, as amended,
shall be resolved by reference to such term or provision of the Act and
to interpretations thereof, if any, by the United States Courts or in
the absence of any controlling decision of any such court, by rules,
regulations or orders of the Securities and Exchange Commission issued
pursuant to said Act. In addition, where the effect of a requirement of
the Act, reflected in any provision of this Agreement is revised by
rule, regulation or order of the Securities and Exchange Commission,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused the foregoing
instrument to be executed by their duly authorized officers and their seals to
be hereunder affixed, all as of the day and year first above written.
MUTUAL FUND
Name:
Title:
ATTEST:
THE CHASE MANHATTAN BANK
Name:
Title:
ATTEST:
- 7 -
Exhibit 5(c)
Form of Proposed Investment Advisory Agreement.
FORM OF
PROPOSED
INVESTMENT ADVISORY AGREEMENT
BETWEEN
MUTUAL FUND TRUST
AND
THE CHASE MANHATTAN BANK
AGREEMENT made this _____ day of __________, 1996, by and between Mutual Fund
Trust, a Massachusetts business trust which may issue one or more series of
shares (hereinafter the "Trust"), and The Chase Manhattan Bank, a New York state
chartered bank (hereinafter the "Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Adviser to furnish investment
advisory services in connection with the series of the Trust listed on Schedule
A (each, a "Fund" and collectively, the "Funds"), and the Adviser represents
that it is willing and possesses legal authority to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Structure of Agreement. The Trust is entering into this
Agreement on behalf of the Funds severally and not jointly. The responsibilities
and benefits set forth in this Agreement shall refer to each Fund severally and
not jointly. No individual Fund shall have any responsibility for any obligation
with respect to any other Fund arising out of this Agreement. Without otherwise
limiting the generality of the foregoing,
(a) any breach of any term of this Agreement regarding the Trust
with respect to any one Fund shall not create a right or
obligation with respect to any other Fund;
(b) under no circumstances shall the Adviser have the right to set
off claims relating to a Fund by applying property of any
other Fund; and
(c) the business and contractual relationships created by this
Agreement, the consideration for entering into this Agreement,
and the consequences of such
<PAGE>
relationships and consideration relate solely to the Trust and
the particular Fund to which such relationship and
consideration applies.
2. Delivery of Documents. The Trust has delivered to the Adviser
copies of each of the following documents and will deliver to it all future
amendments and supplements thereto, if any:
(a) The Trust's Declaration of Trust;
(b) The By-Laws of the Trust;
(c) Resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of this Agreement;
(d) The Trust's Registration Statement under the Securities Act of
1933, as amended (the "1933 Act"), and the Investment Company
Act of 1940, as amended (the "1940 Act"), on Form N-1A as
filed with the Securities and Exchange Commission (the
"Commission") on July 18, 1994 and all subsequent amendments
thereto relating to the Funds (the "Registration Statement");
(e) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission; and
(f) Prospectuses and Statements of Additional Information of the
Funds (collectively, the "Prospectuses").
3. Appointment.
(a) General. The Trust hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the
terms set forth in this Agreement. The Adviser accepts such
appointment and agrees to furnish the services herein set
forth for the compensation herein provided.
(b) Employees of Affiliates. The Adviser may, in its discretion,
provide such services through its own employees or the
employees of one or more affiliated companies that are
qualified to act as an investment adviser to the Trust under
applicable laws and are under the control of The Chase
Manhattan Corporation, the parent of the Adviser; provided
that (i) all persons, when providing services hereunder, are
functioning as part of an organized group of persons, and (ii)
such organized group of persons is managed at all times by
authorized officers of the Adviser.
(c) Sub-Advisers. It is understood and agreed that the Adviser may
from time to time employ or associate with such other entities
or persons as the Adviser
-2-
<PAGE>
believes appropriate to assist in the performance of this
Agreement with respect to a particular Fund or Funds (each a
"Sub-Adviser"), and that any such SubAdviser shall have all of
the rights and powers of the Adviser set forth in this
Agreement; provided that a Fund shall not pay any additional
compensation for any Sub-Adviser and the Adviser shall be as
fully responsible to the Trust for the acts and omissions of
the Sub-Adviser as it is for its own acts and omissions; and
provided further that the retention of any Sub-Adviser shall
be approved in advance by (i) the Board of Trustees of the
Trust and (ii) the shareholders of the relevant Fund if
required under any applicable provisions of the 1940 Act. The
Adviser will review, monitor and report to the Trust's Board
of Trustees regarding the performance and investment
procedures of any Sub-Adviser. In the event that the services
of any Sub-Adviser are terminated, the Adviser may provide
investment advisory services pursuant to this Agreement to the
Fund without a Sub-Adviser and without further shareholder
approval, to the extent consistent with the 1940 Act. A
Sub-Adviser may be an affiliate of the Adviser.
4. Investment Advisory Services.
(a) Management of the Funds. The Adviser hereby undertakes to act
as investment adviser to the Funds. The Adviser shall
regularly provide investment advice to the Funds and
continuously supervise the investment and reinvestment of
cash, securities and other property composing the assets of
the Funds and, in furtherance thereof, shall:
(i) supervise all aspects of the operations of the Trust
and each Fund;
(ii) obtain and evaluate pertinent economic, statistical
and financial data, as well as other significant
events and developments, which affect the economy
generally, the Funds' investment programs, and the
issuers of securities included in the Funds'
portfolios and the industries in which they engage,
or which may relate to securities or other
investments which the Adviser may deem desirable for
inclusion in a Fund's portfolio;
(iii) determine which issuers and securities shall be
included in the portfolio of each Fund;
(iv) furnish a continuous investment program for each
Fund;
(v) in its discretion and without prior consultation with
the Trust, buy, sell, lend and otherwise trade any
stocks, bonds and other securities and investment
instruments on behalf of each Fund; and
-3-
<PAGE>
(vi) take, on behalf of each Fund, all actions the Adviser
may deem necessary in order to carry into effect such
investment program and the Adviser's functions as
provided above, including the making of appropriate
periodic reports to the Trust's Board of Trustees.
(b) Covenants. The Adviser shall carry out its investment advisory
and supervisory responsibilities in a manner consistent with
the investment objectives, policies, and restrictions provided
in: (i) each Fund's Prospectus and Statement of Additional
Information as revised and in effect from time to time; (ii)
the Company's Trust Instrument, By-Laws or other governing
instruments, as amended from time to time; (iii) the 1940 Act;
(iv) other applicable laws; and (v) such other investment
policies, procedures and/or limitations as may be adopted by
the Company with respect to a Fund and provided to the Adviser
in writing. The Adviser agrees to use reasonable efforts to
manage each Fund so that it will qualify, and continue to
qualify, as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended, and
regulations issued thereunder (the "Code"), except as may be
authorized to the contrary by the Company's Board of Trustees.
The management of the Funds by the Adviser shall at all times
be subject to the review of the Company's Board of Trustees.
(c) Books and Records. The Adviser shall keep each Fund's books
and records required by applicable law to be maintained by the
Funds with respect to advisory services. The Adviser agrees
that all records which it maintains for a Fund are the
property of the Fund and it will promptly surrender any of
such records to the Fund upon the Fund's request. The Adviser
further agrees to preserve for the periods prescribed by the
1940 Act any such records of the Fund required to be preserved
by such Rule.
(d) Reports, Evaluations and other services. The Adviser shall
furnish reports, evaluations, information or analyses to the
Trust with respect to the Funds and in connection with the
Adviser's services hereunder as the Trust's Board of Trustees
may request from time to time or as the Adviser may otherwise
deem to be desirable. The Adviser shall make recommendations
to the Trust's Board of Trustees with respect to Trust
policies, and shall carry out such policies as are adopted by
the Board of Trustees. The Adviser shall, subject to review by
the Board of Trustees, furnish such other services as the
Adviser shall from time to time determine to be necessary or
useful to perform its obligations under this Agreement.
(e) Purchase and Sale of Securities. The Adviser shall place all
orders for the purchase and sale of portfolio securities for
each Fund with brokers or dealers selected by the Adviser,
which may include brokers or dealers affiliated with the
Adviser to the extent permitted by the 1940 Act and the
Trust's policies
-4-
<PAGE>
and procedures applicable to the Funds. The Adviser 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 the Funds. In
assessing the best overall terms available for any
transaction, the Adviser 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 the Adviser, and the reasonableness of
the commission, if any, both for the specific transaction and
on a continuing basis. In no event shall the Adviser be under
any duty to obtain the lowest commission or the best net price
for any Fund on any particular transaction, nor shall the
Adviser be under any duty to execute any order in a fashion
either preferential to any Fund relative to other accounts
managed by the Adviser or otherwise materially adverse to such
other accounts.
(f) Selection of Brokers or Dealers. 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 the Adviser, the
Funds and/or the other accounts over which the Adviser
exercises investment discretion. The Adviser is authorized to
pay a broker or dealer who provides such brokerage and
research services a commission for executing a portfolio
transaction for a Fund which is in excess of the amount of
commission another broker or dealer would have charged for
effecting that transaction if the Adviser 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 the
Adviser with respect to accounts over which it exercises
investment discretion. The Adviser shall report to the Board
of Trustees of the Trust regarding overall commissions paid by
the Funds and their reasonableness in relation to the benefits
to the Funds.
(g) Aggregation of Securities Transactions. In executing portfolio
transactions for a Fund, the Adviser 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 the
Adviser's reasonable judgment, such aggregation (i) will
result in an overall economic benefit to the 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 the Trust's registration statement and the Fund's
Prospectus and Statement of Additional Information. In such
event, the Adviser 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
the Fund and such other clients.
-5-
<PAGE>
5. Expenses. (a) The Adviser shall, at its expense, provide the
Funds with office space, furnishings and equipment and personnel required by it
to perform the services to be provided by the Adviser pursuant to this
Agreement. The Adviser also hereby agrees that it will supply to any sub-adviser
or administrator (the "Administrator") of a Fund all necessary financial
information in connection with the Administrator's duties under any Agreement
between the Administrator and the Trust.
(b) Except as provided in subparagraph (a), the Trust shall be
responsible for all of the Funds' expenses and liabilities, including, but not
limited to, taxes; interest; fees (including fees paid to its trustees who are
not affiliated with the Adviser or any of its affiliates); fees payable to the
Securities and Exchange Commission; state securities qualification fees;
association membership dues; costs of preparing and printing Prospectuses for
regulatory purposes and for distribution to existing shareholders; advisory and
administration fees; charges of the custodian and transfer agent; insurance
premiums; auditing and legal expenses; costs of shareholders' reports and
shareholders' meetings; any extraordinary expenses; and brokerage fees and
commissions, if any, in connection with the purchase or sale of portfolio
securities.
6. Compensation. (a) In consideration of the services to be
rendered by the Adviser under this Agreement, the Trust shall pay the Adviser
monthly fees on the first Business Day (as defined in the Prospectuses) of each
month based upon the average daily net assets of each Fund during the preceding
month (as determined on the days and at the time set forth in the Prospectuses
for determining net asset value per share) at the annual rate set forth opposite
the Fund's name on Schedule A attached hereto. If the fees payable to the
Adviser pursuant to this paragraph begin to accrue before the end of any month
or if this Agreement terminates before the end of any month, the fees for the
period from such date to the end of such month or from the beginning of such
month to the date of termination, as the case may be, shall be prorated
according to the proportion which such period bears to the full month in which
such effectiveness or termination occurs. For purposes of calculating each such
monthly fee, the value of the Funds' net assets shall be computed in the manner
specified in the Prospectuses and the Articles for the computation of the value
of the Funds' net assets in connection with the determination of the net asset
value of shares of the Funds' capital stock.
(b) If the aggregate expenses incurred by, or allocated to, each Fund
in any fiscal year shall exceed the lowest expense limitation, if applicable to
such Fund, imposed by state securities laws or regulations thereunder, as such
limitations may be raised or lowered from time to time, the Adviser shall reduce
its investment advisory fee, but not below zero, to the extent of its share of
such excess expenses; provided, however, there shall be excluded from such
expenses the amount of any interest, taxes, brokerage commissions and
extraordinary expenses (including but not limited to legal claims and
liabilities and litigation costs and any indemnification related thereto) paid
or payable by the Fund. Such reduction, if any, shall be computed and accrued
daily, shall be settled on a monthly basis and shall be based upon the expense
limitation applicable to the Fund as at the end of the last business day of the
month.
-6-
<PAGE>
Should two or more of such expense limitations be applicable at the end of the
last business day of the month, that expense limitation which results in the
largest reduction in the Adviser's fee shall be applicable. For the purposes of
this paragraph, the Adviser's share of any excess expenses shall be computed by
multiplying such excess expenses by a fraction, the numerator of which is the
amount of the investment advisory fee which would otherwise be payable to the
Adviser for such fiscal year were it not for this subsection 6(b) and the
denominator of which is the sum of all investment advisory and administrative
fees which would otherwise be payable by the Fund were it not for the expense
limitation provisions of any investment advisory or administrative agreement to
which the Fund is a party.
(c) In consideration of the Adviser's undertaking to render the
services described in this Agreement, the Trust agrees that the Adviser shall
not be liable under this Agreement for any error of judgment or mistake of law
or for any act or omission or loss suffered by the Trust in connection with the
performance of this Agreement, provided that nothing in this Agreement shall be
deemed to protect or purport to protect the Investment Adviser against any
liability to the Trust or its stockholders to which the Adviser would otherwise
be subject by reason of willful misfeasance, bad faith or gross negligence in
the performance of the Adviser's duties under this Agreement or by reason of the
Adviser's reckless disregard of its obligations and duties hereunder or breach
of fiduciary duty with respect to receipt of compensation.
7. Non-Exclusive Services. Except to the extent necessary to
perform the Investment Adviser's obligations under this Agreement, nothing
herein shall be deemed to limit or restrict the right of the Adviser, or any
affiliate of the Adviser, including any employee of the Adviser, to engage in
any other business or to devote time and attention to the management or other
aspects of any other business, whether of a similar or dissimilar nature, or to
render services of any kind to any other corporation, firm, individual or
association.
8. Effective Date; Modifications; Termination. This Agreement
shall become effective on the date hereof (the "Effective Date"), provided that
it shall have been approved by a majority of the outstanding voting securities
of each Fund, in accordance with the requirements of the 1940 Act, or such later
date as may be agreed by the parties following such shareholder approval.
(a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph, this Agreement shall continue in force for two years from the
date hereof and shall continue in effect from year to year thereafter, but only
so long as the continuance after such date shall be specifically approved at
least annually by vote of the Trustees of the Trust or by vote of a majority of
the outstanding voting securities of each Fund.
-7-
<PAGE>
(b) This Agreement may be modified by mutual consent, such consent on
the part of the Trust to be authorized by vote of a majority of the outstanding
voting securities of each Fund.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of
this paragraph, the terms of any continuance or modification of this Agreement
must have been approved by the vote of a majority of those Trustees of the Trust
who are not parties to this Agreement or interested persons of any such party,
cast in person at a meeting called for the purpose of voting on such approval.
(d) Either party hereto may, at any time on sixty (60) days prior
written notice to the other, terminate this Agreement, without payment of any
penalty, by action of its Trustees or Board of Trustees, as the case may be, or
by action of its authorized officers or, with respect to a Fund, by vote of a
majority of the outstanding voting securities of that Fund. This Agreement may
remain in effect with respect to a Fund even if it has been terminated in
accordance with this paragraph with respect to the other Funds. This Agreement
shall terminate automatically in the event of its assignment as that term is
defined under the 1940 Act..
9. Board of Trustees Meetings. The Trust agrees that notice of
each meeting of the Board of Trustees of the Trust will be sent to the Adviser
and that the Trust will make appropriate arrangements for the attendance (as
persons present by invitation) of such person or persons as the Adviser may
designate.
10. Governing Law. This Agreement shall be governed by the laws of
the State of New York.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, and their
respective seals to be hereunto affixed, all as of the date written above.
THE CHASE MANHATTAN BANK MUTUAL FUND TRUST
By: _________________________ By:_______________________
-8-
<PAGE>
Schedule A
Fund: Fee:
----- ----
1. Vista California Tax Free Money Market Fund 0.10%
2. Vista New York Tax Free Money Market Fund 0.10
3. Vista Tax Free Money Market Fund 0.10
4. Vista U.S. Government Money Market Fund 0.10
5. Vista Cash Management Money Market Fund 0.10
6. Vista Federal Money Market Fund 0.10
7. Vista Treasury Plus Money Market Fund 0.10
8. Vista 100% U.S. Treasury Securities Money Market Fund 0.10
9. Vista Prime Money Market Fund 0.10
10. Vista Tax Free Income Fund 0.30
11. Vista New York Tax Free Income Fund 0.30
12. Vista California Intermediate Tax Free Income Fund 0.30
13. Vista U.S. Treasury Income Fund 0.30
14. Vista U.S. Government Securities Fund 0.30
-9-
Exhibit 5(d)
Form of Proposed Investment Subadvisory Agreement
between The Chase Manhattan Bank and Chase Asset
Management, Inc.
FORM OF
PROPOSED
INVESTMENT SUBADVISORY AGREEMENT
between
THE CHASE MANHATTAN BANK
and
CHASE ASSET MANAGEMENT, INC.
AGREEMENT made as of the ______ day of ___________, 1996, by and between The
Chase Manhattan Bank, a New York State chartered bank (the "Adviser"), and Chase
Asset Management, Inc., a [New York] corporation (the "Sub-Adviser").
WHEREAS, the Adviser is a registered investment adviser under the
Investment Advisers Act of 1940, as amended (the "Advisers Act"); and
WHEREAS, the Adviser provides investment advisory services to the
series of Mutual Fund Variable Annuity Trust, a Massachusetts business trust
(the "Trust"), an open-end, management investment company registered under the
Investment Trust Act of 1940, as amended (the "1940 Act") which serves as the
underlying investment for certain variable annuity contracts issued by insurance
company separate accounts, pursuant to an Investment Advisory Agreement dated
________, 1996 (the "Advisory Agreement"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser to furnish
investment subadvisory services in connection with the series of the Trust
listed on Schedule A (each, a "Portfolio" and collectively, the "Portfolios"),
and the Sub-Adviser represents that it is willing and possesses legal authority
to so furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment.
(a) General. The Adviser hereby appoints the Sub-Adviser to act as
investment subadviser to the Portfolios for the period and on
the terms set forth in this Agreement. The Sub-Adviser accepts
such appointment and agrees to furnish the services herein set
forth for the compensation herein provided.
(b) Employees of Affiliates. The Sub-Adviser may, in its
discretion, provide such services through its own employees or
the employees of one or more affiliated companies that are
qualified to act as an investment subadviser to the Portfolios
under applicable laws and are under the control of New Chase,
the parent of the
<PAGE>
Sub-Adviser; provided that (i) all persons, when providing
services hereunder, are functioning as part of an organized
group of persons, and (ii) such organized group of persons is
managed at all times by authorized officers of the SubAdviser.
2. Delivery of Documents. The Adviser has delivered to the
Sub-Adviser copies of each of the following documents along with all amendments
thereto through the date hereof, and will promptly deliver to it all future
amendments and supplements thereto, if any:
(a) the Trust's Declaration of Trust;
(b) the By-Laws of the Trust;
(c) resolutions of the Board of Trustees of the Trust authorizing
the execution and delivery of the Advisory Agreement and this
Agreement;
(d) the most recent Post-Effective Amendment to the Trust's
Registration Statement under the Securities Act of 1933, as
amended (the "1933 Act"), and the 1940 Act, on Form N-1A as
filed with the Securities and Exchange Commission (the
"Commission");
(e) Notification of Registration of the Trust under the 1940 Act
on Form N-8A as filed with the Commission; and
(f) the currently effective Prospectuses and Statements of
Additional Information of the Portfolios.
3. Investment Advisory Services.
(a) Management of the Portfolios. The Sub-Adviser hereby
undertakes to act as investment subadviser to the Portfolios.
The Sub-Adviser shall regularly provide investment advice to
the Portfolios and continuously supervise the investment and
reinvestment of cash, securities and other property composing
the assets of the Portfolios and, in furtherance thereof,
shall:
(i) obtain and evaluate pertinent economic, statistical
and financial data, as well as other significant
events and developments, which affect the economy
generally, the Portfolios' investment programs, and
the issuers of securities included in the portfolio
of each Portfolio and the industries in which they
engage, or which may relate to securities or other
investments which the Sub-Adviser may deem desirable
for inclusion in a Portfolio's portfolio;
- 2 -
<PAGE>
(ii) determine which issuers and securities shall be
included in the portfolio of each Portfolio;
(iii) furnish a continuous investment program for each
Portfolio;
(iv) in its discretion, and without prior consultation,
buy, sell, lend and otherwise trade any stocks, bonds
and other securities and investment instruments on
behalf of each Portfolio; and
(v) take, on behalf of each Portfolio, all actions the
Sub-Adviser may deem necessary in order to carry into
effect such investment program and the Sub-Adviser's
functions as provided above, including the making of
appropriate periodic reports to the Adviser and the
Trust's Board of Trustees.
(b) Covenants. The Sub-Adviser shall carry out its investment
subadvisory responsibilities in a manner consistent with the
investment objectives, policies, and restrictions provided
in: (i) each Portfolio's Prospectus and Statement of
Additional Information as revised and in effect from time to
time; (ii) the Trust's Declaration of Trust, By-Laws or other
governing instruments, as amended from time to time; (iii)
the 1940 Act; (iv) the provisions of the Internal Revenue
Code of 1986, as amended, including Subchapters L and M,
relating to Variable Contracts and regulated investment
companies, respectively, (v) other applicable laws; and (vi)
such other investment policies, procedures and/or limitations
as may be adopted by the Trust with respect to a Portfolio
and provided to the Adviser in writing. The management of the
Portfolios by the Adviser shall at all times be subject to
the review of the Trust's Board of Trustees.
(c) Books and Records. Pursuant to applicable law, the
Sub-Adviser shall keep each Portfolio's books and records
required to be maintained by, or on behalf of, the Portfolios
with respect to subadvisory services rendered hereunder. The
Sub- Adviser agrees that all records which it maintains for a
Portfolio are the property of the Portfolio and it will
promptly surrender any of such records to the Portfolio upon
the Portfolio's request. The Sub-Adviser further agrees to
preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any such records of the Portfolio required to be
preserved by such Rule.
(d) Reports, Evaluations and other services. The Sub-Adviser shall
furnish reports, evaluations, information or analyses to the
Adviser and the Trust with respect to the Portfolios and in
connection with the Sub-Adviser's services hereunder as the
Adviser and/or the Trust's Board of Trustees may request from
time to time or as the Sub-Adviser may otherwise deem to be
desirable. The Sub-Adviser shall make recommendations to the
Adviser and the Trust's Board of Trustees with
- 3 -
<PAGE>
respect to the Trust's policies, and shall carry out such
policies as are adopted by the Board of Trustees. The
Sub-Adviser may, subject to review by the Adviser, furnish
such other services as the Sub-Adviser shall from time to time
determine to be necessary or useful to perform its obligations
under this Agreement.
(e) Purchase and Sale of Securities. The Sub-Adviser shall place
all orders for the purchase and sale of portfolio securities
for each Portfolio with brokers or dealers selected by the
Sub-Adviser, which may include brokers or dealers affiliated
with the Adviser or the Sub-Adviser to the extent permitted
by the 1940 Act and the Trust's policies and procedures
applicable to the Portfolios. The Sub-Adviser 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 the Portfolios. In
assessing the best overall terms available for any
transaction, the Sub-Adviser 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 the Sub- Adviser, and the reasonableness
of the commission, if any, both for the specific transaction
and on a continuing basis. In no event shall the Sub-Adviser
be under any duty to obtain the lowest commission or the best
net price for any Portfolio on any particular transaction,
nor shall the Sub-Adviser be under any duty to execute any
order in a fashion either preferential to any Portfolio
relative to other accounts managed by the Sub-Adviser or
otherwise materially adverse to such other accounts.
(f) Selection of Brokers or Dealers. 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 the
Sub-Adviser, the Portfolios, and/or the other accounts over
which the Sub-Adviser exercises investment discretion. The
Sub-Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission
for executing a portfolio transaction for a Portfolio which
is in excess of the amount of commission another broker or
dealer would have charged for effecting that transaction if
the Sub- Adviser 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 the Sub-Adviser with
respect to accounts over which it exercises investment
discretion. The Sub-Adviser shall report to the Board of
Trustees of the Trust regarding overall commissions paid by
the Portfolios and their reasonableness in relation to their
benefits to the Portfolios.
(g) Aggregation of Securities Transactions. In executing
portfolio transactions for a Portfolio, the Sub-Adviser may,
to the extent permitted by applicable laws and
- 4 -
<PAGE>
regulations, but shall not be obligated to, aggregate the
securities to be sold or purchased with those of other
Portfolios or its other clients if, in the Sub-Adviser's
reasonable judgment, such aggregation (i) will result in an
overall economic benefit to the Portfolio, 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 the Trust's registration statement and the
Portfolio's Prospectus and Statement of Additional
Information. In such event, the Sub-Adviser 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 the Portfolio and such other clients.
4. Representations and Warranties.
(a) The Sub-Adviser hereby represents and warrants to the Adviser
as follows:
(i) The Sub-Adviser is a corporation duly organized and
in good standing under the laws of the State of [New
York] and is fully authorized to enter into this
Agreement and carry out its duties and obligations
hereunder.
(ii) The Sub-Adviser is registered as an investment
adviser with the Commission under the Advisers Act,
and is registered or licensed as an investment
adviser under the laws of all applicable
jurisdictions. The SubAdviser shall maintain such
registrations or licenses in effect at all times
during the term of this Agreement.
(iii) The Sub-Adviser at all times shall provide its best
judgment and effort to the Adviser in carrying out
the Sub-Adviser's obligations hereunder.
(b) The Adviser hereby represents and warrants to the Sub-Adviser
as follows:
(i) The Adviser is a state chartered bank duly organized
and in good standing under the laws of the State of
New York and is fully authorized to enter into this
Agreement and carry out its duties and obligations
hereunder.
(ii) The Trust has been duly organized as a business
trust under the laws of the State of Massachusetts.
(iii) The Trust is registered as an investment company with
the Commission under the 1940 Act, and shares of the
each Portfolio are registered for offer and sale to
the public under the 1933 Act and all applicable
state securities laws where currently sold. Such
registrations will be kept in effect during the term
of this Agreement.
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<PAGE>
5. Compensation. (a) As compensation for the services which the
Sub-Adviser is to provide or cause to be provided pursuant to Paragraph 3, with
respect to each Portfolio, the Adviser shall pay to the Sub-Adviser (or cause to
be paid by the Trust directly to the SubAdviser) a fee, which shall be accrued
daily and paid in arrears on the first business day of each month, at an annual
rate to be determined between the parties hereto from time to time, as a
percentage of the average daily net assets of the Portfolio during the preceding
month (computed in the manner set forth in the Portfolio's most recent
Prospectus and Statement of Additional Information). Average daily net assets
shall be based upon determinations of net assets made as of the close of
business on each business day throughout such month. The fee for any partial
month shall be calculated on a proportionate basis, based upon average daily net
assets for such partial month. As a percentage of average daily net assets.
(b) The Sub-Adviser shall have the right, but not the
obligation, to voluntarily waive any portion of the sub-advisory fee from time
to time. Any such voluntary waiver will be irrevocable and determined in advance
of rendering sub-investment advisory services by the Sub-Adviser, and shall be
in writing and signed by the parties hereto.
(c) If the aggregate expenses incurred by, or allocated to,
each Portfolio in any fiscal year shall exceed the lowest expense limitation, if
applicable to such Portfolio, imposed by state securities laws or regulations
thereunder, as such limitations may be raised or lowered from time to time, the
Sub-Adviser shall reduce its investment advisory fee, but not below zero, to the
extent of its share of such excess expenses; provided, however, there shall be
excluded from such expenses the amount of any interest, taxes, brokerage
commissions and extraordinary expenses (including but not limited to legal
claims and liabilities and litigation costs and any indemnification related
thereto) paid or payable by the Portfolio. Such reduction, if any, shall be
computed and accrued daily, shall be settled on a monthly basis and shall be
based upon the expense limitation applicable to the Portfolio as at the end of
the last business day of the month. Should two or more of such expense
limitations be applicable at the end of the last business day of the month, that
expense limitation which results in the largest reduction in the Sub-Adviser's
fee shall be applicable. For the purposes of this paragraph, the Sub-Adviser's
share of any excess expenses shall be computed by multiplying such excess
expenses by a fraction, the numerator of which is the amount of the investment
advisory fee which would otherwise be payable to the Sub-Adviser for such fiscal
year were it not for this subsection 5(b) and the denominator of which is the
sum of all investment advisory and administrative fees which would otherwise be
payable by the Portfolio were it not for the expense limitation provisions of
any investment advisory or administrative agreement to which the Portfolio is a
party.
6. Interested Persons. It is understood that, to the extent
consistent with applicable laws, the Trustees, officers and shareholders of the
Trust or the Adviser are or may be or become interested in the Sub-Adviser as
directors, officers or otherwise and that directors, officers and
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<PAGE>
shareholders of the Sub-Adviser are or may be or become similarly interested in
the Trust or the Adviser.
7. Expenses. The Sub-Adviser will pay all expenses incurred by it
in connection with its activities under this Agreement other than the cost of
securities (including brokerage commissions) purchased for or sold by the
Portfolios.
8. Non-Exclusive Services; Limitation of Sub-Adviser's Liability.
The services of the Sub-Adviser hereunder are not to be deemed exclusive, and
the Sub-Adviser may render similar services to others and engage in other
activities. The Sub-Adviser and its affiliates may enter into other agreements
with the Portfolios, the Trust or the Adviser for providing additional services
to the Portfolios, the Trust or the Adviser which are not covered by this
Agreement, and to receive additional compensation for such services. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Sub-Adviser, or
a breach of fiduciary duty with respect to receipt of compensation, neither the
Sub-Adviser nor any of its directors, officers, shareholders, agents, or
employees shall be liable or responsible to the Adviser, the Trust, the
Portfolios or to any shareholder of the Portfolios for any error of judgment or
mistake of law or for any act or omission in the course of, or connected with,
rendering services hereunder or for any loss suffered by the Adviser, the Trust,
a Portfolio, or any shareholder of a Portfolio in connection with the
performance of this Agreement.
9. Effective Date; Modifications; Termination. This Agreement
shall become effective on the date hereof (the "Effective Date") provided that
it shall have been approved by a majority of the outstanding voting securities
of each Portfolio, in accordance with the requirements of the 1940 Act, or such
later date as may be agreed by the parties following such shareholder approval.
(a) This Agreement shall continue in force for two years from the
Effective Date. Thereafter, this Agreement shall continue in
effect as to each Portfolio for successive annual periods,
provided such continuance is specifically approved at least
annually (i) by a vote of the majority of the Trustees of the
Trust who are not parties to this Agreement or interested
persons of any such party, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by a vote
of the Board of Trustees of the Trust or a majority of the
outstanding voting securities of the Portfolio.
(b) The modification of any of the non-material terms of this
Agreement may be approved by a vote of a majority of those
Trustees of the Trust who are not interested persons of any
party to this Agreement, cast in person at a meeting called
for the purpose of voting on such approval.
(c) Notwithstanding the foregoing provisions of this Paragraph 9,
either party hereto may terminate this Agreement as to any
Portfolio(s) at any time on sixty (60)
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<PAGE>
days' prior written notice to the other, without payment of
any penalty. A termination of the Sub-Adviser may be effected
as to any particular Portfolio by the Adviser, by a vote of
the Trust's Board of Trustees, or by vote of a majority of the
outstanding voting securities of the Portfolio. This Agreement
shall terminate automatically in the event of its assignment.
10. Limitation of Liability of Trustees and Shareholders. The
Sub-Adviser acknowledges the following limitation of liability:
The terms "Mutual Fund Variable Annuity Trust" and "Trustees of Mutual
Fund Variable Annuity Trust" refer, respectively, to the trust created and the
Trustees, as trustees but not individually or personally, acting from time to
time under the Declaration of Trust, to which reference is hereby made and a
copy of which is on file at the office of the Secretary of State of the State of
Massachusetts, such reference being inclusive of any and all amendments thereto
so filed or hereafter filed. The obligations of "Mutual Fund Variable Annuity
Trust" entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities and
are not binding upon any of the Trustees, shareholders or representatives of the
Trust personally, but bind only the assets of the Trust, and all persons dealing
with the Trust or a Portfolio must look solely to the assets of the Trust or
Portfolio for the enforcement of any claims against the Trust or Portfolio.
11. Certain Definitions. The terms "vote of a majority of the
outstanding voting securities," "assignment," "control," and "interested
persons," when used herein, shall have the respective meanings specified in the
1940 Act. References in this Agreement to the 1940 Act and the Advisers Act
shall be construed as references to such laws as now in effect or as hereafter
amended, and shall be understood as inclusive of any applicable rules,
interpretations and/or orders adopted or issued thereunder by the Commission.
12. Independent Contractor. The Sub-Adviser shall for all purposes
herein be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Board of Trustees of the Trust
from time to time, have no authority to act for or represent a Portfolio in any
way or otherwise be deemed an agent of a Portfolio.
13. Structure of Agreement. The Adviser and Sub-Adviser are
entering into this Agreement with regard to the respective Portfolios severally
and not jointly. The responsibilities and benefits set forth in this Agreement
shall be deemed to be effective as between the Adviser and Sub-Adviser in
connection with each Portfolio severally and not jointly. This Agreement is
intended to govern only the relationships between the Adviser, on the one hand,
and the SubAdviser, on the other hand, and is not intended to and shall not
govern (i) the relationship between the Adviser or Sub-Adviser and any
Portfolio, or (ii) the relationships among the respective Portfolios.
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<PAGE>
14. Governing Law. This Agreement shall be governed by the laws of
the State of New York, provided that nothing herein shall be construed in a
manner inconsistent with the 1940 Act or the Advisers Act.
15. Severability. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby and, to this extent, the
provisions of this Agreement shall be deemed to be severable.
16. Notices. Notices of any kind to be given to the Adviser
hereunder by the SubAdviser shall be in writing and shall be duly given if
mailed or delivered to the Adviser at
_________________________________________________________________________ or at
such other address or to such individual as shall be so specified by the Adviser
to the SubAdviser. Notices of any kind to be given to the Sub-Adviser hereunder
by the Adviser shall be in writing and shall be duly given if mailed or
delivered to the Sub-Adviser at
__________________________________________________________________________ or at
such other address or to such individual as shall be so specified by the
Sub-Adviser to the Adviser. Notices shall be effective upon delivery.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
written above.
CHASE ASSET MANAGEMENT, INC. THE CHASE MANHATTAN BANK
By:________________________ By:___________________________
Name: Name:
Title: Title:
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<PAGE>
Schedule A
Portfolio:
International Equity Portfolio
Capital Growth Portfolio
Growth and Income Portfolio
Asset Allocation Portfolio
Treasury Portfolio
Money Market Portfolio
i
Exhibit 5(f)
Form of Administration Agreement.
FORM OF
ADMINISTRATION AGREEMENT
THIS AGREEMENT made this _______ day of __________, by and between
MUTUAL FUND __________ (the "Trust"), a Massachusetts business trust and THE
CHASE MANHATTAN BANK, a New York state chartered banking corporation (the
"Administrator").
WITNESSETH:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
FIRST: The Trust on behalf of each of its series and any new series to
be created hereby authorizes the Administrator to provide administrative
services to the Trust in accordance with the terms and conditions of this
Agreement. The Administrator's services shall be subject to the direction and
control of the Board of Trustees of the Trust and shall be performed under the
direction of the appropriate Trust officers. The Administrator's functions shall
be entirely ministerial in nature, and it shall not have any responsibility or
authority for the management of the Trust, the determination of its policies, or
for any matter pertaining to the distribution of securities issued by the Trust.
SECOND: The Administrator shall provide certain
administration services including:
(A) arranging for the maintenance of the Trust's books and
records except for: accounting books and records, sales literature and other
documents relating to the sale of securities issued by the Trust (other than
copies of such documents preserved as a record of presentations to the Board of
Trustees or Trust officers), and records pertaining to the ownership of
securities issued by the Trust;
(B) preparing applications for insurance for the Trust
and claims under any insurance policy;
<PAGE>
(C) preparing for the signature of the appropriate Trust
officer (or assist counsel and auditors in the preparation of) all required
Trust tax returns, proxy statements, semiannual reports to the Trust's
shareholders, semiannual reports to be filed with the Securities and Exchange
Commission, and updates to the Trust's Registration Statement under the
Investment Company Act of 1940 (the "Act");
(D) arranging for the printing and mailing (at the Trust's
expense) of proxy statements and other reports or other materials provided to
the Trust's shareholders;
(E) preparing applications and reports which may be necessary
to maintain on behalf of the Trust any registration of the Trust and/or the
shares of any series of the Trust under the securities or "bluesky" laws of any
state, province, or foreign country (the Trust shall pay for any filing or legal
fees in connection with such filings);
(F) preparing agendas and supporting documentation
for, and minutes of, Trustee and shareholder meetings;
(G) arranging for the computation of performance data
including net asset value and yield;
(H) arranging for the publication of current price
information in newspapers and publications;
(I) responding to all inquires or other communications from
shareholders of the Trust and other parties or, if the inquiry is more properly
responded to by the Trust's transfer agent or distributor, referring the
individual making the inquiry to the appropriate person;
(J) reviewing from time to time the portfolios of each series
of the Trust and transactions with brokers and dealers for compliance with
applicable law and Trust policy;
(K) coordinating all relationships between the Trust and its
contractors, including coordinating the negotiation of agreements, the review of
performance of agreements, and the exchange of information, provided that
coordination with the distributor shall be limited to the exchange of
information
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<PAGE>
necessary for the administration of the Trust and the reporting of that
information to the Board of Trustees and Trust officers.
THIRD: Any activities performed by the Administrator under this
Agreement shall at all times conform to, and be in accordance with, any
requirements imposed by: (1) the provisions of the Act and of any rules or
regulations in force thereunder; (2) any other applicable provision of law; (3)
the provisions of the Agreement and Declaration of Trust and By-Laws of the
Trust as amended from time to time; (4) any policies of each series of the
Trust, as reflected in the then current Registration Statement of the Trust. As
used in this Agreement, the term "Registration Statement" shall mean the
Registration Statement most recently filed by the Trust with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as amended,
as such Registration Statement is amended at such time, and the term
"Prospectus" and "Statement of Additional Information" shall mean for the
purposes of this Agreement the form of the then current prospectus and statement
of additional information for each series of the Trust.
FOURTH: Nothing in this Agreement shall prevent the Administrator or
any officer thereof from acting as administrator for any other person, firm or
corporation and shall not in any way limit or restrict the Administrator or any
of its directors, officers, employees or affiliates from buying, selling or
trading any securities for its own or their own accounts or for the accounts of
others for whom it or they may be acting, provided, however, that the
Administrator expressly represents that it will undertake no activities which,
in its judgment, will adversely affect the performance of its obligations to the
Trust under the Agreement.
FIFTH: The Administrator shall, at its own expense, provide
office space and facilities, equipment and personnel for the
performance of its functions hereunder.
SIXTH: The Trust shall pay the Administrator, as full
compensation for all services rendered hereunder, an annual fee
on behalf of each series payable monthly and computed on the net
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<PAGE>
asset value of the series at the end of each business day at the annual rates
set forth in Exhibit A hereto.
SEVENTH: In the event the operating expenses of any series of the
Trust, including all investment advisory, administration and sub-administrator
fees, but excluding brokerage commissions and fees, taxes, interest and
extraordinary expenses such as litigation, for any fiscal year ending on a date
on which this Agreement is in effect exceed the most restrictive expense
limitation applicable to the series imposed by the securities laws or
regulations thereunder of any state in which the shares of the series are
qualified for sale, as such limitations may be raised or lowered from time to
time, the Administrator shall reduce its administration fee to the extent of its
share of such excess expenses. The amount of any such reduction to be borne by
the Administrator shall be deducted from the monthly administration fee
otherwise payable to the Administrator during such fiscal year; and if such
amounts should exceed the monthly fee, the Administrator shall pay to such
series its share of such excess expenses no later than the last day of the first
month of the next succeeding fiscal year. For the purposes of this paragraph,
the term "fiscal year" shall exclude the portion of the current fiscal year
which shall have elapsed prior to the date hereof and shall include the portion
of the then current fiscal year which shall have elapsed at the date of
termination of this Agreement.
EIGHTH:
(A) This Agreement shall go into effect at the close of the
business on the date hereof, and, unless terminated as hereinafter provided,
shall continue in effect for two years thereafter and from year to year
thereafter, but only so long as such continuance is specifically approved at
least annually by the Trust's Board of Trustees, including the vote of a
majority of the Trustees who are not parties to this Agreement or "interested
persons" (as defined in the Act) of any such party cast in person at a meeting
called for the purpose of voting on such approval, or by the vote of the holders
of a "majority" (as
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<PAGE>
so defined) of the outstanding voting securities of the applicable series and by
such vote of the Trustees.
(B) This Agreement may be terminated by the
Administrator at any time without penalty upon giving the Board of Trustees of
the Trust sixty (60) days' written notice (which notice may be waived by the
Trust) and may be terminated by the Board of Trustees of the Trust at any time
without penalty upon giving the Administrator sixty (60) days' written notice
(which notice may be waived by the Administrator), provided that such
termination by the Board of Trustees of the Trust shall be directed or approved
by the vote of a majority of all of its Trustees in office at the time,
including a majority of the Trustees who are not interested persons (as defined
in the Act) of the Trust, or by the vote of the holders of a majority (as
defined in the Act) of the voting securities of each series of the Trust at the
time outstanding and entitled to vote. This Agreement shall automatically
terminate in the event of its assignment, the term "assignment" for this purpose
having the meaning defined in Section 2(a)(4) of the Act.
NINTH: In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator or any of its officers, directors or employees, the Trust
shall indemnify the Administrator which the Administrator may incur based on any
omission in the course of, or connected with, rendering services hereunder.
TENTH: A copy of the Agreement and Declaration of Trust of the Trust is
on file with the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees of the
Trust as Trustees and not individually, and that the obligations of this
instrument are not binding upon any of the Trustees or shareholders individually
but are binding only upon the assets and property of the Trust.
ELEVENTH: Any notice under this Agreement shall be in writing,
addressed and delivered, or mailed, postage paid, to the other party at such
address as such other party may designate for
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<PAGE>
the receipt of such notices. Until further notice to the other party, it is
agreed that the address of the Trust shall be 125 West 55th Street, New York, NY
10019, and the address of the Administrator shall be 1 Chase Square, Rochester,
NY 14643.
IN WITNESS WHEREOF, the parties hereto have caused the Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
ATTEST: MUTUAL FUND
____________________ By:___________________________
ATTEST: THE CHASE MANHATTAN BANK
____________________ By:___________________________
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Exhibit 6(b)
Distribution and Sub-Administration Agreement dated
August 21, 1995.
DISTRIBUTION AND SUB-ADMINISTRATION AGREEMENT
THIS AGREEMENT made as of the 21st day of August, 1995 by and between
MUTUAL FUND TRUST (the "Trust"), a Massachusetts business trust, and VISTA
BROKER-DEALER SERVICES, INC. (the "Distributor"), an indirect wholly owned
subsidiary of THE BISYS GROUP, INC., a Delaware corporation.
W I T N E S S E T H:
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
FIRST: The Trust on behalf of each of its series and any new
series to be created hereby appoints the Distributor as its
sub-administrator and as its exclusive underwriter to provide certain
administration services and to promote and arrange for the sale of
shares of beneficial interest of each series of the Trust in
jurisdictions wherein shares may legally be offered for sale. The Trust
shall notify the Distributor in writing of all states in which its
shares are qualified for offer and sale, including any limitations with
respect to offers or sales in such states. In addition, the Distributor
shall receive payment for certain distribution expenses pursuant to
Rule 12b-1 distribution plans ("12b-1 Plans") adopted by the Trust.
The Trust agrees to sell and deliver its unissued shares of
each series, as from time to time shall be effectively registered under
the Securities Act of 1933 (the "1933 Act"), upon the terms hereinafter
set forth.
SECOND: The Trust hereby authorizes the Distributor, subject
to law and the Declaration of Trust of the Trust (the "Declaration of
Trust"), to accept, for the account of each series of the Trust, orders
for the purchase of shares, satisfactory to the Distributor, as of the
time of receipt of such orders or as otherwise described in the then
current Prospectuses and Statements of Additional Information of the
Trust.
THIRD: The price at which the shares may be sold (the
"offering price") shall be the net asset value per share plus any sales
charge that may be imposed on any class of shares. For the purpose of
computing the offering price, the net asset value per share and the
sales charge, if any, shall be determined in the manner provided in the
Registration Statement of the Trust, as amended from time to time.
FOURTH: The Distributor shall use its best efforts with
reasonable promptness to promote and sell shares of each of the series
of the Trust. The Distributor, with the consent of the Trust, may enter
into agreements with selected broker-dealers ("Selected Dealers") for
the purpose of sale and redemption of shares of each of the series of
the Trust upon terms consistent with those found in this Agreement. The
Distributor shall not be obligated to sell any certain number of
<PAGE>
shares of beneficial interest. Each series of the Trust reserves the
right to issue shares in connection with any merger or consolidation of
the Trust or any series with any other investment company or any
personal holding company or in connection with offers of exchange
exempted from Section 11(a) of the Investment Company Act of 1940 (the
"Act").
FIFTH: All sales literature and advertisements used by the
Distributor in connection with sales of shares of any series of the
Trust shall be subject to the approval of the Trust. The Trust
authorizes the Distributor in connection with the sale or arranging for
the sale of the shares to give only such information and to make only
such statements or representations as are contained in the then current
Prospectuses and Statements of Additional Information of the Trust or
in sales literature or advertisements approved for any series by the
Trust or in such financial statements and reports as are furnished to
the Distributor pursuant to this Agreement. The Trust shall not be
responsible in any way for any information, statements or
representations given or made by the Distributor or its representative
or agents other than such information, statements or representations
contained in the then current Prospectuses and Statement of Additional
Information or other financial statements of the Trust or any sales
literature or advertisements approved by the Trust.
SIXTH: The Distributor as agent of the Trust, and any Selected
Dealer entering into a Selected Dealer Agreement with the Distributor
are authorized, subject to the direction of the Trust, to accept shares
of the series of the Trust for redemption at their net asset value less
any applicable deferred sales charge, determined as prescribed in the
then current Prospectuses and Statement of Additional Information of
the Trust.
SEVENTH: The Trust shall cause to be delivered to the
Distributor all books, records, and other documents and papers relating
to the federal and state registration of Trust shares, as well as all
books, records and other documents and papers relating in any way to
the sub-administration of the Trust or the distribution of Trust
shares.
EIGHTH: The Trust shall bear:
(A) The costs and expenses incurred in connection
with the registration of the shares of each series of the
Trust under the 1933 Act (including any amendment to any
Registration Statement or Prospectuses or Statements of
Additional Information), and all expenses in connection with
preparing, printing and distributing the Prospectuses or
Statements of Additional Information except as set forth in
Paragraph NINTH hereof;
(B) the expenses of qualification of the shares of
each series of the Trust for sale in connection with such
public offerings in such states as shall be selected by the
Distributor and of continuing the qualification therein until
the Distributor notifies the Trust that it does not wish such
qualification continued; and
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<PAGE>
(C) all legal expenses in connection with the
foregoing.
NINTH: The Distributor shall provide certain
sub-administration and distribution services including:
(A) providing officers, clerical staff and office
space to use as the headquarters of the Trust;
(B) arranging for the printing, distribution and
filing of prospectuses and statements of additional
information;
(C) preparing, filing and maintaining all Trust
registrations with the securities regulatory agencies of all
states and other jurisdictions in which the Trust shares are
sold;
(D) making all required filings of advertising and
promotional materials with the National Association of
Securities Dealers, Inc.; and
(E) bearing the expenses of:
(i) the printing, distribution and filing of
prospectuses and statements of additional information
after such have been typeset (other than those
prospectuses and statements of additional information
required by applicable laws and regulations to be
distributed to the existing shareholders of the Trust
and pursuant to any 12b-1 Plan adopted by the Trust);
(ii) any promotional or sales literature
which are used by the Distributor or furnished by the
Distributor to purchasers or dealers in connection
with the Distributor's activities pursuant to this
Agreement (unless paid for by any 12b-1 Plan adopted
by the Trust);
(iii) any advertising used by the
Distributor in connection with such public offering
(unless paid for by any 12b-1 Plan adopted by the
Trust); and
(iv) all legal expenses in connection
with the foregoing.
TENTH: The Distributor will accept orders for shares of a
series of the Trust only to the extent of purchase orders actually
received and not in excess of such orders,
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<PAGE>
and it will not avail itself of any opportunity of making a profit by
expediting or withholding orders.
ELEVENTH: The Trust shall keep the Distributor fully informed
with regard to its affairs and shall furnish the Distributor with a
certified copy of all financial statements and any amendments to its
Registration Statement under the 1933 Act.
TWELFTH: The Trust shall register, from time to time as
necessary, additional shares with the Securities and Exchange
Commission, state and other regulatory bodies and to pay the related
filing fees therefor and to file such amendments, reports and other
documents as may be necessary in order that there may be no untrue
statement of a material fact in the Registration Statement, Prospectus
or Statements of Additional Information necessary in order that there
may be no omission to state a material fact therein, in light of the
circumstances under which they were made, not misleading. As used in
this Agreement, the term "Registration Statement" shall mean the
Registration Statement most recently filed by the Trust with the
Securities and Exchange Commission and effective under the 1933 Act, as
such Registration Statement is amended at such time, and the term
"Prospectus" and "Statement of Additional Information" shall mean for
the purposes of this Agreement the form of the then current
prospectuses and statements of additional information for each series
authorized by the Trust for use by the Distributor and by dealers.
THIRTEENTH:
(A) The Trust and the Distributor shall each comply
with all applicable provisions of the Act, the 1933 Act and
the rules and regulations of the National Association of
Securities Dealers, Inc. and of all other Federal and state
laws, rules and regulations governing the issuance and sale of
shares of the series of Trust.
(B) The Distributor shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the
Trust in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Distributor's part in the
performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement.
(C) In the absence of willful misfeasance, bad faith,
gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Distributor or any of its
officers, directors or employees, the Trust agrees to
indemnify the Distributor and any controlling person of the
Distributor against any and all claims, demands, liabilities
and expenses (including reasonable attorney's fees) which the
Distributor may incur (i) based on any act or omission the
course of, or connected with, rendering services hereunder,
(ii) based on any
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<PAGE>
representations made herein by the Trust; (iii) based on any
act or omission of any prior Distributor (in its capacity as
Distributor or Sub-Administrator), Administrator or Adviser to
the Trust, including the registration or failure to register
any shares of the Trust in accordance with state or federal
laws or resulting from or relating to any books or records
delivered to the Distributor in connection with its
responsibilities under this Agreement and occurring prior to
the date of this Agreement; and (iv) under the 1933 Act, or
common law or otherwise, arising out of or based upon any
alleged untrue statement of a material fact contained in any
Registration Statement, Statements of Additional Information
or Prospectuses of the Trust, or any omission to state a
material fact therein, the omission of which makes any
statement contained therein misleading, unless such statement
or omission was made in reliance upon, and in conformity with
written information furnished to the Trust in connection
therewith by or on behalf of the Distributor.
(D) The Distributor shall indemnify the Trust against
any and all claims, demands, liabilities and expenses which
the Trust may incur under the 1933 Act, or common law or
otherwise, arising out of or based upon any alleged untrue
statement of material fact contained in any Registration
Statement, Statements of Additional Information or
Prospectuses of the Trust, or any omission to state a material
fact therein if such statement or omission was made in
reliance upon, and in conformity with, written information
furnished to the Trust in connection therewith by the
Distributor.
FOURTEENTH: Nothing herein contained shall require the Trust
to take any action contrary to any provision of its Declaration of
Trust or to any applicable statute or regulation.
FIFTEENTH: The Trust shall pay the Distributor, as full
compensation for the sub-administration services rendered hereunder, an
annual fee on behalf of each series payable monthly and computed on the
net asset value of the series the end of each business day at the
annual rate of .05%.
SIXTEENTH:
(A) This Agreement shall go into effect at the close
of business on the date hereof, and, unless terminated as
hereinafter provided, shall continue in effect for six months
thereafter and from year to year thereafter, but only so long
as such continuance is specifically approved at least annually
by the Trust's Board of Trustees, including the vote of a
majority of the Trustees who are not parties to this Agreement
or "interested persons" (as defined in the Act) of any such
party cast in person at a meeting called for the purpose of
voting on such approval, or by the vote of the holders of a
"majority" (as so defined) of the outstanding voting
securities of the applicable series and by such vote of the
Trustees.
(B) This Agreement may be terminated by the
Distributor at any time without penalty upon giving the Board
of Trustees of the Trust sixty (60) days' written notice
(which notice may be waived by the Trust) and may be
terminated by the Board of Trustees of the Trust at any time
without penalty upon giving the Distributor sixty (60) days'
written notice (which may be waived by the Distributor),
provided that such termination by the Board of Trustees of the
Trust shall be directed or approved by the vote of a majority
of
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<PAGE>
all of its Trustees in office at the time, including a
majority of the Trustees who are not interested persons (as
defined in the Act) of the Trust, or by the vote of the
holders of a majority (as defined in the Act) of the voting
securities of each series of the Trust at the time outstanding
and entitled to vote. This Agreement shall automatically
terminate in the event of its assignment, the term
"Assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the Act.
SEVENTEENTH: The Distributor may at any time or times in its
discretion and at its own expense appoint (and may at any time remove)
an agent or agents to carry out such of the provisions of Article
EIGHTH herein as the Distributor may from time to time direct;
provided, however, that the appointment of any agent shall not relieve
the Distributor of its responsibilities or liabilities hereunder.
EIGHTEENTH: In the event this Agreement is terminated, the
Distributor agrees to delete the word "Vista" from its name and to
discontinue any other use of the words "Vista" and "Vista Premier". The
adviser to the Trust, and certain of its affiliates, are entitled to
use such names and to grant to other investment companies,
administrators, investment advisers or broker-dealers the right to use
that name in connection with the business of operating or providing
services to management investment companies, as defined in the Act.
NINETEENTH: A copy of the Declaration of Trust is on file with
the Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this instrument is executed on behalf of the Trustees
of the Trust as Trustees and not individually, and that the obligations
of this instrument are not binding upon any of the Trustees or
shareholders individually but are binding only upon the assets and
property of the Trust, and all persons dealing with any class of shares
of the Trust must look solely to the Trust property belonging to such
class for the enforcement of any claims against the Trust.
TWENTIETH: Any notice under this Agreement shall be in
writing, addressed and delivered, or mailed, postage paid, to the other
party at such address as such other party may designate for the receipt
of such notices. Until further notice to the other party, it is agreed
that the address of the Trust and the Distributor shall be 125 West
55th Street, New York, NY 10019.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the day and year first above
written.
ATTEST: MUTUAL FUND TRUST
_________________________________ By:_________________________________
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<PAGE>
ATTEST: VISTA BROKER-DEALER SERVICES, INC.
an indirect wholly owned subsidiary
of THE BISYS GROUP, INC..
_________________________________ By:_________________________________
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<PAGE>
EXHIBIT A
Mutual Fund Trust
Schedule of
Distribution and
Sub-Administration Fees
The Trust shall pay the Distributor/Sub-Administrator, as full
compensation for all services rendered, an annual fee on behalf of each Fund
payable monthly and computed on the net asset value of the Fund at the end of
each business day at the annual following rates:
Fund Fee%
---- ----
Vista Federal Money Market Fund 0.05%
Vista Treasury Plus Money Market Fund 0.05
Vista U.S. Government Money Market Fund 0.05
Vista Tax Free Money Market Fund 0.05
Vista N.Y. Tax Free Money Market Fund 0.05
Vista California Tax Free Money Market Fund 0.05
Vista Cash Management Money Market Fund 0.05
Vista Prime Money Market Fund 0.05
Vista Tax Free Income Fund 0.05
Vista N.Y. Tax Free Income Fund 0.05
Vista California Intermediate Tax Free Fund 0.05
Vista 100% U.S. Treasury Securities Money Market Fund 0.05
Revised as of____________
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Exhibit 7(a)
Retirement Plan for Eligible Trustees.
MUTUAL FUND GROUP
MUTUAL FUND TRUST
MUTUAL FUND VARIABLE ANNUITY TRUST
GLOBAL FIXED INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
CAPITAL GROWTH PORTFOLIO
RETIREMENT PLAN FOR ELIGIBLE
TRUSTEES
Effective as of August 22, 1995
<PAGE>
RETIREMENT PLAN FOR ELIGIBLE
TRUSTEES
TABLE OF CONTENTS
Page
ARTICLE I DEFINITION OF TERMS AND CONSTRUCTION................... 1
1.1 Definitions............................................ 1
(a) "Accrued Benefit"............................... 1
(b) "Actuary"....................................... 2
(c) "Administrator"................................. 2
(d) "Board of Trustees"............................. 2
(e) "Code".......................................... 2
(f) "Compensation".................................. 2
(g) "Disability".................................... 2
(h) "Effective Date"................................ 2
(i) "Funds"......................................... 2
(j) "Normal Retirement Date"...................... 2
(k) "Participant"................................... 2
(l) "Plan".......................................... 2
(m) "Retirement".................................... 2
(n) "Retirement Benefit"............................ 2
(o) "Service"....................................... 2
(p) "Trustee"....................................... 3
(q) "Year of Service"............................... 3
1.2 Plurals and Gender..................................... 3
1.3 Headings............................................... 3
1.4 Severability........................................... 3
ARTICLE II PARTICIPATION........................................... 3
2.1 Participation.......................................... 3
2.2 Resumption Of Participation............................ 3
2.3 Determination of Eligibility........................... 4
ARTICLE III BENEFITS UPON RETIREMENT AND OTHER TERMINATION
OF SERVICE............................................. 4
3.1 Retirement............................................. 4
3.2 Termination of Service Before Vesting.................. 4
3.3 Benefits Calculated in the Aggregate for all
of the Funds......................................... 4
3.4 Forfeiture for Cause................................... 4
3.5 Death of Participant................................... 5
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Page
ARTICLE IV SUSPENSION OF BENEFITS.................................. 5
4.1 Suspension of Benefits Upon Resumption of Service....... 5
ARTICLE V ADMINISTRATOR........................................... 5
5.1 Appointment of Administrator............................ 5
5.2 Powers and Duties of Administrator...................... 5
5.3 Action by Administrator................................. 6
5.4 Participation by Administrators......................... 6
5.5 Agents and Expenses..................................... 7
5.6 Allocation of Duties.................................... 7
5.7 Delegation of Duties.................................... 7
5.8 Administrator's Action Conclusive....................... 7
5.9 Records and Reports..................................... 7
5.10 Information from the Funds.............................. 7
5.11 Reservation of Rights by Boards of Trustees............. 8
5.12 Liability and Indemnification........................... 8
ARTICLE VI AMENDMENTS AND TERMINATION.............................. 8
6.1 Amendments.............................................. 8
6.2 Termination............................................. 9
ARTICLE VII CLAIMS PROCEDURE........................................ 9
7.1 Notice of Denial........................................ 9
7.2 Right to Reconsideration................................ 9
7.3 Review of Documents..................................... 10
7.4 Decision by Administrator............................... 10
7.5 Notice of Administrator................................. 10
ARTICLE VIII MISCELLANEOUS........................................... 10
8.1 Rights of Creditors..................................... 10
8.2 Liability Limited....................................... 10
8.3 Incapacity.............................................. 10
8.4 Payments Due Missing Persons............................ 11
8.5 Cooperation of Parties.................................. 11
8.6 Governing Law........................................... 11
8.7 Nonguarantee of Trusteeship............................. 12
8.8 Spendthrift Provision................................... 12
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<PAGE>
THE MUTUAL FUND GROUP
THE MUTUAL FUND TRUST
THE MUTUAL FUND VARIABLE ANNUITY TRUST
GLOBAL FIXED INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
CAPITAL GROWTH PORTFOLIO
RETIREMENT PLAN FOR ELIGIBLE
TRUSTEES
PREAMBLE
Effective as of August 22, 1995 the regulated investment companies
managed or administered by The Chase Manhattan Bank, N.A., or its affiliates
(the "Funds") have adopted the RETIREMENT PLAN FOR ELIGIBLE TRUSTEES (the
"Plan") for the benefit of each of the trustees of each of the Funds who is not
an employee of the Funds' distributor, administrator or adviser, or any of their
affiliates. As the Plan does not benefit any employees of the Funds, it is not
intended to constitute an employee benefit plan within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
1.1 Definitions.
Unless a different meaning is plainly implied by the
context, the following terms as used in this Plan have the following meanings:
(a) "Accrued Benefit" means, as of any date prior to a
Participant's Normal Retirement Date, his Retirement Benefit commencing on his
Normal Retirement Date, but based upon his Compensation and Years of Service
computed as of such date of determination, as if his Service terminated on such
date.
(b) "Actuary" means the independent actuary selected by the
Administrator.
<PAGE>
(c) "Administrator" means the administrative committee
provided for in Article VI.
(d) "Board of Trustees" means the Board of Trustees of each
of the Funds.
(e) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor statute.
(f) "Compensation" means, for any Trustee, the aggregate
amount of trustee's fees paid or accrued by the Funds for such Trustee during
the twelve consecutive month period (including amounts of fees deferred with
respect to such period) that produces the highest such amount.
(g) "Disability" means the inability of the Participant to
participate in meetings of the Board, either in person or by telephone, for a
period of at least nine consecutive months.
(h) "Effective Date" means August 22, 1995.
(i) "Funds" means any series of a regulated investment
company, existing or to be created, managed or administered by The Chase
Manhattan Bank, N.A. or any of its affiliates, or any successor thereto that
adopts this Plan by operation of law or otherwise.
(j) "Normal Retirement Date" means, the first day of the
month coincident with or next following the date on which a Participant has
attained age 65 and completed at least five continuous Years of Service.
(k) "Participant" means a Trustee who has met all of the
eligibility requirements of the Plan and who is currently included in the Plan
as provided in Article II.
(l) "Plan" means this "Retirement Plan for Eligible
Trustees" as set forth herein or as amended from time to time.
(m) "Retirement" means a Trustee's termination of his active
Service with the Funds on or after his Normal Retirement Date, due to his death,
Disability, or voluntary or involuntary termination of his Service.
(n) "Retirement Benefit" means the benefit described under
Sections 3.1 to which a Participant is entitled on or after his Normal
Retirement Date.
(o) "Service" means an individual's serving as a Trustee of
one or more of the Funds (including service as a Trustee prior to the Effective
Date for the following Funds: Mutual Fund Group, Mutual Fund Trust, Mutual Fund
Variable Annuity Trust, Global Fixed Income Portfolio, Growth and Income
Portfolio, International Equity Portfolio, Capital Growth Portfolio, Pinnacle
Fund and the Park Avenue Funds).
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(p) "Trustee" means an individual who is a trustee of one or
more of the Funds which have adopted the Plan but who is not an employee of the
Funds' distributor, administrator or adviser, or any of their affiliates.
(q) "Year of Service" means a twelve consecutive month
period of Service.
1.2 Plurals and Gender.
Where appearing in the Plan, the masculine gender shall
include the feminine and neuter genders, and the singular shall include the
plural, and vice versa, unless the context clearly indicates a different
meaning.
1.3 Headings.
The headings and sub-headings in this Plan are inserted for
the convenience of reference only and are to be ignored in any construction of
the provisions hereof.
1.4 Severability.
In case any provision of this Plan shall be held illegal or
void, such illegality or invalidity shall not affect the remaining provisions of
this Plan, but shall be fully severable, and the Plan shall be construed and
enforced as if such illegal or invalid provisions were not a part of this Plan.
ARTICLE II
PARTICIPATION
2.1 Participation.
Each Trustee shall become a Participant hereunder on the
later of the effective date or the date his trusteeship of one or more of the
Funds commences. A Trustee shall cease to be a Participant upon termination of
his Service.
2.2 Resumption of Participation.
Any Participant whose Service terminates and who thereafter
again becomes a Trustee shall resume participation immediately upon again
becoming a Trustee.
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<PAGE>
2.3 Determination of Eligibility
The Administrator shall determine the eligibility of
Trustees in accordance with the provisions of this Article.
ARTICLE III
BENEFITS UPON
RETIREMENT AND OTHER TERMINATION OF SERVICE
3.1 Retirement.
Upon Retirement, a Participant shall receive an annual
benefit from the Funds commencing on the first day of the month coincident with
or next following his Normal Retirement Date or his date of Retirement, if
later, equal to the product of (A) ten percent of his highest Compensation
multiplied by (B) the number of his complete Years of Service, not in excess of
ten Years of Service. Such amount shall be payable in monthly installments
ending with the payment for the month in which the Participant dies. Unless
otherwise determined by the Board, a Trustee shall retire no later than the
January 1 of the year following his attainment of age 73.
3.2 Termination of Service Before Retirement.
If a Participant's Service terminates by reason of
resignation, death, Disability or removal by the Board for cause (as defined in
Section 3.4) prior to his Normal Retirement Date, he shall not be entitled to
any benefits under this Plan. If a Participant's Service terminates for any
other reason and he has accumulated at least five continuous Years of Service,
he shall be entitled to his Accrued benefit determined as of such date of
termination.
3.3 Benefits Calculated in the Aggregate for all of the Funds.
A Participant's annual benefits payable hereunder shall be
based on the aggregate Compensation paid by the Funds and on the Participant's
Years of Service. Each Fund's share of the obligation to provide such benefits
shall be determined by use of accounting methods adopted by the Administrator.
3.4 Forfeiture for Cause.
Notwithstanding any other provision of this Plan to the
contrary, any benefits to which a Participant may otherwise be entitled
hereunder will be forfeited in the event the Administrator, in its sole
discretion, determines that a Participant's termination of Service is due to
such Participant's willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Trustee.
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<PAGE>
3.5 Death of Participant.
No benefits will be paid under this Plan with respect to a
Participant who dies whether prior to or after the commencement of his benefits.
ARTICLE IV
SUSPENSION OF BENEFITS
4.1 Suspension of Benefits Upon Resumption of Service.
In the case of a Participant who, at a time when he is
receiving Retirement Benefits under Article III, resumes Service with any Fund,
such Retirement Benefits shall be suspended until his subsequent Retirement, or
other termination of Service. Subject to the limitations of Section 3.1, in the
event of his Retirement or other termination of Service following such a
suspension, the monthly amount of his Retirement Benefits shall be adjusted, if
appropriate, to reflect any additional Years of Service completed by, and/or a
higher rate of Compensation received by, such Participant.
ARTICLE V
ADMINISTRATOR
5.1 Appointment of Administrator.
This Plan shall be administered by the Compensation
Committees of the Funds. The members of such committees shall not be "interested
persons" (within the meaning of Section 2(a)(19) of the Investment Company Act
of 1940) of any of the Funds. The term "Administrator" as used in this Plan
shall refer to the members of such committees, either individually or
collectively, as appropriate.
5.2 Powers and Duties of Administrator.
Except as provided below, the Administrator shall have the
following duties and responsibilities in connection with the administration of
this Plan:
(a) To promulgate and enforce such rules, regulations and
procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the
administration, interpretation and application of the Plan, including questions
of eligibility and of the status and rights of Participants and any other
persons hereunder;
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<PAGE>
(c) To decide any dispute arising hereunder; provided,
however, that no Administrator shall participate in any matter involving any
questions relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Trustees of the Funds regarding
the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments
which shall be payable to any Participant in accordance with the provisions of
the Plan and to determine the person or persons to whom such benefits shall be
paid;
(g) To make recommendations to the Boards of Trustees of the
Funds with respect to proposed amendments to the Plan;
(h) To file all reports with government agencies,
Participants and other parties as may be required by law, whether such reports
are initially the obligation of the Funds, or the Plan;
(i) To engage the Actuary of the Plan and to cause the
liabilities of the Plan to be evaluated by the Actuary; and
(j) To have all such other powers as may be necessary to
discharge its duties hereunder.
5.3 Action by Administrator.
The Administrator may elect a Chairman and Secretary from
among its members and may adopt rules for the conduct of its business. A
majority of the members then serving shall constitute a quorum for the
transacting of business. All resolutions or other action taken by the
Administrator shall be by vote of a majority of those present at such meeting
and entitled to vote. Resolutions may be adopted or other action taken without a
meeting upon written consent signed by at least a majority of the members. All
documents, instruments, orders, requests, directions, instructions and other
papers shall be executed on behalf of the Administrator by either the Chairman
or the Secretary of the Administrator, if any, or by any member or agent of the
Administrator duty authorized to act on the Administrator's behalf.
5.4 Participation by Administrators.
No Administrator shall be precluded from becoming a
Participant in the Plan if he would be otherwise eligible, but he shall not be
entitled to vote or act upon matters or to sign any documents relating
specifically to his own participation under the Plan, except when such matters
or documents relate to benefits generally. If this disqualification results in
the lack of a quorum, then the Boards of Trustees, by majority vote of the
members of a majority of such
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<PAGE>
Boards of Trustees (a "Majority Vote"), shall appoint a sufficient number of
temporary Administrators, who shall serve for the sole purpose of determining
such a question.
5.5 Agents and Expenses.
The Administrator may employ agents and provide for such
clerical, legal, actuarial, accounting, medical, advisory or other services as
it deems necessary to perform its duties under this Plan. The cost of such
services and all other expenses incurred by the Administrator in connection with
the administration of the Plan shall be allocated to each Fund pursuant to the
method utilized under Section 3.3 hereof with respect to costs related to
benefit accruals.
5.6 Allocation of Duties.
The duties, powers and responsibilities reserved to the
Administrator may be allocated among its members so long as such allocation is
pursuant to written procedures adopted by the Administrator, in which case no
Administrator shall have any liability, with respect to any duties, powers or
responsibilities not allocated to him, for the acts or omissions of any other
Administrator.
5.7 Delegation of Duties.
The Administrator may delegate any of its duties to
employees of one or more of the Funds, or to any other person or firm, provided
that the Administrator shall prudently choose such agents and rely in good faith
on their actions.
5.8 Administrator's Action Conclusive.
Any action on matters within the discretion of the
Administrator shall be final and conclusive.
5.9 Records and Reports.
The Administrator shall maintain adequate records of its
actions and proceedings in administering this Plan and shall file all reports
and take all other actions as it deems appropriate in order to comply with any
federal or state law.
5.10 Information from the Funds.
The Funds shall promptly furnish all information to the
Administrator to permit it to perform its duties under this Plan. The
Administrator shall be entitled to rely upon the accuracy and completeness of
all information furnished to it by the Funds, unless it knows or should have
known that such information is erroneous.
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<PAGE>
5.11 Reservation of Rights by Boards of Trustees.
When rights are reserved in this plan to the Boards of
Trustees, such rights shall be exercised only by Majority Vote of the Boards of
Trustees, except where the Boards of Trustees, by unanimous written resolution,
delegate any such rights to one or more persons or to the Administrator. Subject
to the rights reserved to the Boards of Trustees as set forth in this Plan, no
member of the Boards of Trustees shall have any duties or responsibilities under
this Plan, except to the extent he shall be acting in the capacity of an
Administrator.
5.12 Liability and Indemnification.
(a) The Administrator shall perform all duties required of
it under this Plan in a prudent manner. The Administrator shall not be
responsible in any way for any action or omission of the Funds or their
employees in the performance of their duties and obligations as set forth in
this Plan. The Administrator also shall not be responsible for any act or
omission of any of its agents provided that such agents were prudently chosen by
the Administrator and that the Administrator relied in good faith upon the
action of such agents.
(b) Except for its own gross negligence, willful misconduct
or willful breach of the terms of this Plan, the Administrator shall be
indemnified and held harmless by the Funds against any and all liability, loss,
damages, cost and expense which may arise occurring by reason of, or be based
upon, any matter connected with or related to this Plan or its administration
(including, but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending any litigation, commenced or
threatened, or in settlement of any such claim).
ARTICLE VI
AMENDMENTS AND TERMINATION
6.1 Amendments.
The Boards of Trustees reserve the right at any time and
from time to time, and retroactively if deemed necessary or appropriate by it,
to amend in whole or in part by Majority Vote any or all of the provisions of
this Plan, provided that:
(a) No amendment shall make it possible for any part of a
Participant's or former Participant's Retirement Benefit to be used for, or
diverted to, purposes other than for the exclusive benefit of such Participant,
except to the extent otherwise provided in this Plan; and
(b) No amendment may reduce any Participant's or former
Participant's Retirement Benefit as of the effective date of the amendment.
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<PAGE>
Amendments may be made in the form of Board of Trustees'
resolutions or separate written document.
6.2 Termination.
The Boards of Trustees reserve the right to terminate this
Plan at any time, in whole or in part, with respect to all or any individual
Trustee, by Majority Vote by giving to the Administrator notice in writing of
such termination. The Plan (or any part thereof) shall terminate upon the date
of receipt of such notice (or any subsequent specified date). If the Plan is
terminated, unless the Boards of Trustees determine otherwise, the present value
of each affected Participant's Retirement Benefit shall be paid as soon as
practicable after such termination. Such present value shall be determined using
(a) the mortality table prescribed under section 417(e)(3) of the Code and (b)
an interest rate equal to the annual rate of interest on U.S. Treasury
securities having a maturity period no greater than the mortality period
determined under (a).
ARTICLE VII
CLAIMS PROCEDURE
7.1 Notice of Denial.
If a Participant is denied any Retirement Benefit under this
Plan, either in total or in an amount less than the full Retirement Benefit to
which he would normally be entitled, the Administrator shall advise the
Participant in writing of the amount of his Retirement Benefit, if any, and the
specific reasons for the denial. The Administrator shall also furnish the
Participant at that time with a written notice containing:
(a) A specific reference to pertinent Plan provisions.
(b) A description of any additional material or information
necessary for the Participant to perfect his claim, if possible, and an
explanation of why such material or information is needed.
(c) An explanation of the Plan's claim review procedure.
7.2 Right to Reconsideration.
Within 60 days of receipt of the information stated in
Section 9.1 above, the Participant shall, if he desires further review, file a
written request for reconsideration with the Administrator.
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<PAGE>
7.3 Review of Documents.
So long as the Participant's request for review is pending
(including the 60 day period in 9.2 above), the Participant or his duly
authorized representative may review pertinent Plan documents and may submit
issues and comments in writing to the Administrator.
7.4 Decision by Administrator.
A final and binding decision shall be made by the
Administrator within 60 days of the filing by the Participant of his request for
reconsideration, provided, however, that if the Administrator, in its
discretion, feels that additional time is necessary or desirable, this period
shall be extended an additional 60 days.
7.5 Notice of Administrator.
The Administrator's decision shall be conveyed to the
Participant in writing and shall include specific reasons for the provisions on
which the decision is based.
ARTICLE VIII
MISCELLANEOUS
8.1 Rights of Creditors.
(a) The Plan is unfunded. Neither the Participants nor any
other persons shall have any interest in any fund or in any specific asset or
assets of any of the Funds by reason of any Accrued or Retirement Benefit
hereunder, nor any rights to receive distribution of any Retirement Benefit
except and as to the extent expressly provided hereunder.
(b) The Accrued and Retirement Benefits of each Participant
are unsecured and shall be subject to the claims of the general creditors of the
Funds.
8.2 Liability Limited.
Neither the Funds, the Administrator, nor any agents,
employees, officers, trustees or shareholders of any of them, nor any other
person shall have any liability or responsibility with respect to this Plan,
except as expressly provided herein.
8.3 Incapacity.
If the Administrator shall receive evidence satisfactory to
it that a Participant entitled to receive any benefit under the Plan is, at the
time when such benefit becomes payable, physically or mentally incompetent to
receive such benefit and to give a valid release therefor, and that another
person or an institution is then maintaining or has custody of such Participant
and that no guardian, committee or other representative of the estate of such
Participant shall
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<PAGE>
have been duly appointed, the Administrator may make payment of such benefit
otherwise payable to such Participant to such other person or institution, and
the release of such other person or institution shall be a valid and complete
discharge for the payment of such benefit.
8.4 Payments Due Missing Persons.
The Administrator shall make a reasonable effort to locate
all persons entitled to benefits under the Plan; however, notwithstanding any
provisions of this Plan to the contrary, if, after a period of 5 years from the
date such benefits first become due, any such persons entitled to benefits have
not been located, their rights under the Plan shall stand suspended. Before this
provision becomes operative, the Administrator shall send a certified letter to
all such persons at their last known address advising them that their benefits
under the Plan shall be suspended. Any such suspended amounts shall be held by
the Funds for a period of three additional years (or a total of 8 years from the
time the benefits first became payable) and thereafter such amounts shall be
forfeited.
8.5 Cooperation of Parties.
All parties to this Plan and any person claiming any
interest hereunder agree to perform any and all acts and execute any and all
documents and papers which are necessary or desirable for carrying out this Plan
or any of its provisions.
8.6 Governing Law.
All rights under the Plan shall be governed by and construed
in accordance with rules of Federal law applicable to such plans and, to the
extent not preempted, by the laws of the State of New York without regard to
principles of conflicts of law. No action shall be brought by or on behalf of
any Participant for or with respect to benefits due under this Plan unless the
person bringing such action has timely exhausted the Plan's claim review
procedure. Any such action must be commenced within three years. This three-year
period shall be computed from the earlier of (a) the date a final determination
denying such benefit, in whole or in part, is issued under the Plan's claim
review procedure or (b) the date such individual's cause of action first
accrued. Any dispute, controversy or claim arising out of or in connection with
this Plan (including the applicability of this arbitration provision) and not
resolved pursuant to the Plan's claim review procedure shall be determined and
settled by arbitration conducted by the American Arbitration Association ("AAA")
in the County and State of the Funds' principal place of business and in
accordance with the then existing rules, regulations, practices and procedures
of the AAA. Any award in such arbitration shall be final, conclusive and binding
upon the parties to the arbitration and may be enforced by either party in any
court of competent jurisdiction. Each party to the arbitration will bear its own
costs and fees (including attorney's fees).
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8.7 Nonguarantee of Trusteeship.
Nothing contained in this Plan shall be construed as a
guaranty or right of any Participant to be continued as a Trustee of one or more
of the Funds (or of a right of a Trustee to any specific level of Compensation)
or as a limitation of the right of the Funds to remove any of its trustees.
8.8 Spendthrift Provision.
A Participant's interest in his Accrued Benefit or
Retirement Benefit may not be transferred, alienated, assigned nor become
subject to execution, garnishment or attachment, and any attempt to do so will
render benefits hereunder immediately forfeitable.
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Exhibit 7(b)
Deferred Compensation Plan for Eligible Trustees.
MUTUAL FUND GROUP
MUTUAL FUND TRUST
MUTUAL FUND VARIABLE ANNUITY TRUST
GLOBAL FIXED INCOME PORTFOLIO
GROWTH AND INCOME PORTFOLIO
INTERNATIONAL EQUITY PORTFOLIO
CAPITAL GROWTH PORTFOLIO
DEFERRED COMPENSATION PLAN FOR ELIGIBLE
TRUSTEES
<PAGE>
ARTICLE Page
1 Definitions........................................... 1
2 Deferrals............................................. 3
3 Payment of Benefits................................... 8
4 Beneficiaries........................................ 12
5 Administration and Reservation of Rights............. 14
<PAGE>
ARTICLE 1
DEFINITIONS
The following terms when used in this Plan have the designated
meanings unless a different meaning is clearly required by the context.
1.1 Account means the record maintained on the books of the Funds to
reflect deferrals of Compensation by a Participant pursuant to Section 2.2.
1.2 Beneficiary means the person or persons designated pursuant to
Article 4 to receive a benefit pursuant to Section 3.4.1 in the event of a
Participant's death before his benefit under this Plan has been paid.
1.3 Board means the board of Board of Trustees of each of the Funds.
1.4 Compensation means, for any Eligible Trustee, the amount of
trustee's fees paid or accrued by the Funds for such Trustee with respect to a
calendar year (prior to reduction for amounts deferred pursuant to this Plan).
1.5 Eligible Trustee means an individual who is a trustee of one or
more of the Funds which have adopted the Plan but who is not an employee of the
Funds' distributor, administrator or adviser, or any of their affiliates.
1.6 Funds means any series of a regulated investment company, existing
or to be created, managed or administered by The Chase Manhattan Bank, N.A. or
any of its affiliates.
<PAGE>
1.7 Participant means an Eligible Trustee who has deferred
Compensation pursuant to this Plan and who has an Account to which amounts stand
credited.
1.8 Payment Date means a date designated pursuant to Section 2.3 for
payment of some portion or all of a Participant's Account.
1.9 Plan means this "Deferred Compensation Plan for Eligible Trustees"
as set forth herein and as in effect from time to time.
1.10 Plan Administrator means the Compensation Committees of the Funds
and such individual or individuals appointed from time to time by such
Committees to assist in the administration of the Plan. The members of such
Compensation Committees shall not be "interested persons" (within the meaning of
Section 2(a)(19) of the Investment Company Act of 1940) of any of the Funds. The
term "Plan Administrator" as used in this Plan shall refer to the members of
such Committees, either individually or collectively, and their delegees, as
appropriate.
1.11 Termination of Service means cessation for any reason of a
Participant's service as Trustee of each of the Funds.
1.12 Valuation Date means the last business day of each calendar
quarter and any other day that the Plan Administrator makes a valuation of an
Account.
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ARTICLE 2
DEFERRALS
2.1 Accounts. The Funds shall establish an Account for each Eligible
Trustee who elects to defer Compensation pursuant to Section 2.2. Amounts
deferred pursuant to Section 2.2, and the value thereof determined pursuant to
Section 2.4, shall be credited to such Account.
2.2 Deferral of Compensation.
2.2.1 Initial Deferral Election. An Eligible Trustee may direct
the Funds to reduce the Compensation otherwise payable to him and to
pay the amount of such reduction to him in the future as deferred
compensation. A deferral direction pursuant to this Section 2.2 shall
be made in writing before the first day of the calendar year for which
such Compensation is paid, in such manner as the Plan Administrator
shall prescribe, shall be irrevocable and shall continue in effect for
all subsequent calendar years unless it is canceled or modified as
provided below. Notwithstanding the foregoing, (i) any Eligible
Trustee who is elected to the Board during a calendar year of the Fund
may elect before becoming a Trustee or within 30 days after becoming
an Eligible Trustee to defer any unpaid portion of his Compensation in
respect of such calendar year and the fees for any future meetings
during such calendar year by filing an election form with the Plan
Administrator, and (ii) Eligible Trustees may elect to defer any
unpaid portion of the retainer for the calendar year in which this
Plan is first adopted by the Board and any unpaid fees for any future
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<PAGE>
meetings during such calendar year by submitting an election form to
the Plan Administrator within 30 days of such authorization.
2.2.2 Change in Deferral Election. A Participant may cancel or
modify the amount of his Compensation deferrals on a prospective basis
by submitting to the Plan Administrator a revised Compensation
deferral election form. Such change will be effective as of the first
day of the calendar year following the date such revision is submitted
to the Plan Administrator.
2.3 Payment Date.
2.3.1 Designation of Date. Each deferral direction given pursuant
to Section 2.2 shall include designation of the Payment Date for the
value of the amount deferred. Such Payment Date shall be the first day
of any calendar quarter, subject to the limitation set forth in
Section 2.3.3.
2.3.2 Extension of Date. One year before the Payment Date
initially designated pursuant to Section 2.3.1, the Participant may
irrevocably elect to extend such Payment Date to the first day of any
calendar quarter, subject to the limitation set forth in Section
2.3.3.
2.3.3 Limitation. An Eligible Trustee shall select a Payment Date
(or extended Payment Date) that is no sooner than the earlier of (a)
the January 1 that follows the third anniversary of the Participant's
deferral election made pursuant to Section 2.3.1 or 2.3.2 or (b) the
January 1 of the year in which the Participant attains age 74.
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<PAGE>
2.3.4 Methods of Payments. A Participant may elect, at the time a
Payment Date is selected, to receive the amount which will become
payable as of such Payment Date in no more than ten annual
installments. Except as may be elected pursuant to this Section 2.3.4,
all amounts becoming payable under this Plan shall be paid in a single
sum.
2.3.5 Irrevocability. Except as provided in Section 2.3.2, a
designation of a Payment Date and an election of installment payments
shall be irrevocable; provided, however, that payment may be made on a
different date as provided in Section 3.4.
2.4 Value of Participants' Accounts. Compensation deferrals shall be
allocated to each Participant's Account on the first business day following the
date such Compensation is withheld from the Trustee's Compensation and shall be
deemed invested pursuant to this Section 2.4, as soon as practicable.
2.4.1 Crediting of Income, Gains and Losses. As of each Valuation
Date, income, gain and loss equivalents (determined as if the Account
is invested in the manner set forth below) attributable to the period
following the next preceding Valuation Date shall be credited to
and/or deducted from the Account.
2.4.2 Investment of Account Balance. The Participant may select,
from various options made available by the Funds, the Funds in which
all or part of his Account shall be deemed to be invested. The Funds
available to the
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<PAGE>
Participant as of the date of inception of this Plan are listed on
Appendix B hereto.
2.4.2.1 The Participant shall make an investment designation
on a form provided by the Plan Administrator which shall remain
effective until another valid designation has been made by the
Participant as herein provided. The Participant may amend his
investment designation as of the end of each calendar quarter by
giving written direction to the Plan Administrator at least
thirty (30) days prior to the end of such calendar quarter. A
timely change to a Participant's investment designation shall
become effective on the first day of the calendar quarter
following receipt by the Plan Administrator.
2.4.2.2 Any changes to the Funds to be made available to the
Participant, and any limitation on the maximum or minimum
percentages of the Participant's Account that may be invested in
any particular Fund, shall be communicated from time-to-time to
the Participant by the Plan Administrator.
2.4.3 Default Provision. Except as provided below, the
Participant's Account shall be deemed to be invested in accordance
with his investment designations, provided such designations conform
to the provisions of this Section. Notwithstanding the above, the
Board, in its sole discretion, may disregard the Participant's
election and determine that all Compensation deferrals shall be deemed
to be invested in a Fund determined by the Board. In
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<PAGE>
the event that any Fund under which any portion of the Participant's
Account is deemed to be invested ceases to exist, such portion of the
Account thereafter shall be deemed held in the successor to such Fund,
subject to subsequent deemed investment elections.
2.4.4 Regulatory Approvals. The use of the returns on the Funds
to determine the amount of the earnings credited to a Participant's
Account is subject to regulatory approval. Until such approval is
received, the Compensation deferrals of a Participant shall be
continuously credited with earnings in an amount determined by
multiplying the balance credited to the Account by an interest rate
equal to the yield on 90-day U.S. Treasury Bills (as determined by the
Plan Administrator at the beginning of each calendar quarter).
2.4.5 Statements. The Fund shall provide an annual statement to
the Participant showing such information as is appropriate, including
the aggregate amount credited to the Account, as of a reasonably
current date.
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<PAGE>
ARTICLE 3
PAYMENT OF BENEFITS
3.1 Nonforfeitability. A Participant's right to a deferred amount of
Compensation and his right to the income and gains credited thereon, shall be
fully vested and nonforfeitable at all times.
3.2 Income. Any payment made pursuant to Sections 3.3, 3.4. or 3.5
shall include the income, gains and losses calculated in the manner described in
Section 2.4 through the end of the month preceding the month in which such
payment is made.
3.3 Time of Payment. Except as provided in Section 3.4, the amount
credited to the Account of each Participant shall become payable to the
Participant in cash as of the Payment Date designated pursuant to Section 2.3.
If the Participant has elected installment payments, such payments shall begin
within thirty days of the Payment Date. In any other case, payment shall be made
as a single sum within thirty days of the Payment Date.
3.4 Termination of Service. In the event of a Participant's
Termination of Service while amounts stand credited to his Account, such amounts
shall be disposed of as provided in this Section 3.4.
3.4.1 Death of Participant. If the Participant's Termination of
Service is on account of his death, or if he dies following
Termination of Service but while receiving installment payments, his
Account shall be paid as soon as practicable to his Beneficiary as a
single sum in cash.
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<PAGE>
3.4.2 Termination. If the Participant's Termination of Service is
for a reason other than death, his Account shall be paid to him as a
single sum in cash; provided, however, that if the Participant had
elected installment payments pursuant to Section 2.3.4 for any
deferred Compensation, the amount of such deferred Compensation and
income, gains and losses credited thereon shall be paid in cash in the
number of installments thus elected. All payments pursuant to this
Section 3.4.2 shall be made or begin no more than three months after
the end of the calendar year in which Termination of Service occurs.
3.5 Withdrawal for Emergency Need.
3.5.1 Authorization. The Board may permit a Participant who
demonstrates an emergency need to withdraw from the Plan an amount no
greater than the amount determined by the Plan Administrator to be
reasonably necessary to satisfy such emergency need. Such withdrawal
shall be funded by drawing on deferred Compensation amounts (and
income thereon) in the order in which such amounts were originally
credited to the Participant's Account.
3.5.2 Emergency Need. For purposes of this Section 3.5, an
emergency need is a severe financial hardship of a Participant
resulting from (a) a sudden and unexpected illness of or accident to
the Participant or a dependent within the meaning of section 152(a) of
the Internal Revenue Code, or (b) a casualty loss to the Participant's
property or (c) other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the Participant's
control. A need is not an emergency need to the extent
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<PAGE>
that it is relieved by reimbursement or compensation by insurance or
otherwise, or by liquidation of the Participant's assets insofar as
such liquidation would not cause severe financial hardship, or by
cessation of deferrals under the Plan.
3.6 Source of Payment. The Compensation deferred pursuant to this Plan
(and the income, gains and losses credited thereon) shall be the general
obligation of the Funds. Each Fund's share of the obligation to provide such
amounts shall be determined by use of accounting methods adopted by the Plan
Administrator. The claim of a Participant or Beneficiary to a benefit shall at
all times be merely the claim of an unsecured creditor of the applicable Funds.
No trust, security, escrow, or similar account need be established for the
purpose of paying benefits hereunder. The Funds shall not be required to
purchase, hold or dispose of any investments pursuant to this Agreement;
however, if in order to cover its obligations hereunder the Fund elects to
purchase any investments the same shall continue for all purposes to be a part
of the general assets and property of the Fund, subject to the claims of its
general creditors and no person other than the Fund shall by virtue of the
provisions of this Agreement have any interest in such assets other than an
interest as a general creditor.
3.7 Withholding. All amounts credited to Participants' Accounts
pursuant to this Plan and all payments under the Plan shall be subject to any
applicable withholding requirements imposed by any tax (including, without
limitation, FICA) or other law. Each Fund shall have the right to require as a
condition of any crediting to a Participant's Account or of any payment
hereunder that the Participant remit to the Fund an amount sufficient in its
opinion to satisfy all applicable withholding requirements. With respect to
withholding
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<PAGE>
applicable to any payment made hereunder, a payee may discharge such obligation
by directing the Funds to withhold amounts payable under the Plan.
3.8 Right of Offset. Any amount payable pursuant to this Plan shall be
reduced at the discretion of the Plan Administrator to take account of any
amount due, and not paid, by the Participant to the Funds at the time payment is
to be made hereunder.
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<PAGE>
ARTICLE 4
BENEFICIARIES
4.1 Beneficiary Designation.
4.1.1 Designation. A Participant may from time to time designate,
in the manner specified by the Plan Administrator, a Beneficiary to
receive payment pursuant to Section 3.4 in the event of his death.
4.1.2 Absence of Beneficiary. In the event that there is no
properly designated Beneficiary living at the time of a Participant's
death, his benefit hereunder shall be paid to his estate.
4.2 Payment to Incompetent. If any person entitled to benefits under
this Plan shall be a minor or shall be physically or mentally incompetent in the
judgment of the Plan Administrator, such benefits may be paid in any one or more
of the following ways, as the Plan Administrator in his sole discretion shall
determine:
4.2.1 to the legal representatives of such minor or incompetent
person;
4.2.2 directly to such minor or incompetent person; or
4.2.3 to a parent or guardian of such minor or incompetent
person, to the person with whom such minor or incompetent person
resides, or to a custodian for such minor under the Uniform Gifts to
Minors Act (or similar statute) of any jurisdiction.
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<PAGE>
Payment to any person in accordance with the foregoing provisions of this
Section 4.2 shall to that extent discharge the applicable Funds and the Plan
Administrator, who shall not be required to see to the proper application of any
such payment.
4.3 Doubt as to Right to Payment. If any doubt exists as to the right
of any person to any benefits under this Plan or the amount or time of payment
of such benefits (including, without limitation, any case of doubt as to
identity, or any case in which any notice has been received from any other
person claiming any interest in amounts payable hereunder, or any case in which
a claim from other persons may exist by reason of community property or similar
laws), the Plan Administrator may, in his discretion, direct that payment of
such benefits be deferred until such right or amount or time is determined, or
pay such benefits into a court of competent jurisdiction in accordance with
appropriate rules of law, or direct that payment be made only upon receipt of a
bond or similar indemnification (in such amount and in such form as is
satisfactory to the Plan Administrator).
4.4 Spendthrift Clause. No benefit, distribution or payment under the
Plan may be anticipated, assigned (either at law or in equity), alienated or
subject to attachment, garnishment, levy, execution or other legal or equitable
process whether pursuant to a "qualified domestic relations order" as defined in
section 414(p) of the Internal Revenue Code or otherwise.
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<PAGE>
ARTICLE 5
ADMINISTRATION AND RESERVATION OF RIGHTS
5.1 Plan Administrator. Authority to administer the Plan shall be
vested in the Plan Administrator, who shall have the power and discretion to:
5.1.1 promulgate and enforce such rules, regulations and
procedures as shall be proper for the efficient administration of the
Plan;
5.1.2 determine all questions arising in the administration,
interpretation and application of the Plan, including questions of
eligibility and of the status and rights of Participants and any other
persons hereunder;
5.1.3 decide any dispute arising hereunder; provided, however,
that no Administrator shall participate in any matter involving any
questions relating solely to his own participation or benefits under
this Plan;
5.1.4 advise the Boards of Trustees of the Funds regarding the
known future need for funds to be available for distribution;
5.1.5 correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan;
5.1.6 compute the amount of benefits and other payments which
shall be payable to any Participant in accordance with the provisions
of the Plan and to determine the person or persons to whom such
benefits shall be paid;
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<PAGE>
5.1.7 make recommendations to the Boards of Trustees of the Funds
with respect to proposed amendments to the Plan;
5.1.8 file all reports with government agencies, Participants and
other parties as may be required by law, whether such reports are
initially the obligation of the Funds, or the Plan; and
5.1.9 have all such other powers as may be necessary to discharge
its duties hereunder.
5.2 Claims Procedure. If the Plan Administrator denies any
Participant's or Beneficiary's claim for benefits under the Plan:
5.2.1 the Plan Administrator shall notify such Participant or
Beneficiary of such denial by written notice which shall set forth the
specific reasons for such denial; and
5.2.2 the Participant or Beneficiary shall be afforded a
reasonable opportunity for a full and fair review by the Board of the
decision to deny his claim for Plan benefits.
5.3 Action by Administrator. The Plan Administrator may elect a
Chairman and Secretary from among its members and may adopt rules for the
conduct of its business. A majority of the members then serving shall constitute
a quorum for the transacting of business. All resolutions or other action taken
by the Plan Administrator shall be by vote of a majority of those present at
such meeting and entitled to vote. Resolutions may be adopted or other
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<PAGE>
action taken without a meeting upon written consent signed by at least a
majority of the members. All documents, instruments, orders, requests,
directions, instructions and other papers shall be executed on behalf of the
Plan Administrator by either the Chairman or the Secretary of the Plan
Administrator, if any, or by any member or agent of the Plan Administrator duly
authorized to act on the Plan Administrator's behalf.
5.4 Participation by Plan Administrators. No Plan Administrator shall
be precluded from becoming a Participant in the Plan if he would be otherwise
eligible, but he shall not be entitled to vote or act upon matters or to sign
any documents relating specifically to his own participation under the Plan,
except when such matters or documents relate to benefits generally. If this
disqualification results in the lack of a quorum, then the Boards of Trustees,
by majority vote of the members of a majority of such Boards of Trustees (a
"Majority Vote"), shall appoint a sufficient number of temporary Plan
Administrators, who shall serve for the sole purpose of determining such a
question.
5.5 Agents and Expenses. The Plan Administrator may employ agents and
provide for such clerical, legal, actuarial, accounting, medical, advisory or
other services as it deems necessary to perform its duties under this Plan. The
cost of such services and all other expenses incurred by the Plan Administrator
in connection with the administration of the Plan shall be allocated to each
Fund pursuant to the method utilized under Section 3.6 hereof with respect to
costs related to benefit accruals.
5.6 Allocation of Duties. The duties, powers and responsibilities
reserved to the Plan Administrator may be allocated among its members so long as
such allocation is pursuant to written procedures adopted by the Plan
Administrator, in which case no Plan
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<PAGE>
Administrator shall have any liability, with respect to any duties, powers or
responsibilities not allocated to him, for the acts or omissions of any other
Plan Administrator.
5.7 Delegation of Duties. The Plan Administrator may delegate any of
its duties to employees of one or more of the Funds, or to any other person or
firm
5.8 Plan Administrator's Action Conclusive. Any action on matters
within the discretion of the Plan Administrator shall be final and conclusive.
5.9 Records and Reports. The Plan Administrator shall maintain
adequate records of its actions and proceedings in administering this Plan and
shall file all reports and take all other actions as it deems appropriate in
order to comply with any federal or state law.
5.10 Information from the Funds. The Funds shall promptly furnish all
information to the Plan Administrator to permit it to perform its duties under
this Plan. The Plan Administrator shall be entitled to rely upon the accuracy
and completeness of all information furnished to it by the Funds, unless it
knows or should have known that such information is erroneous.
5.11 Reservation of Rights by Boards of Trustees. When rights are
reserved in this plan to the Boards of Trustees, such rights shall be exercised
only by Majority Vote of the Boards of Trustees, except where the Boards of
Trustees, by unanimous written resolution, delegate any such rights to one or
more persons or to the Plan Administrator. Subject to the rights reserved to the
Boards of Trustees as set forth in this Plan, no member of the Boards of
Trustees shall have any duties or responsibilities under this Plan, except to
the extent he shall be acting in the capacity of an Plan Administrator.
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<PAGE>
5.12 Liability and Indemnification.
5.12.1 The Plan Administrator shall perform all duties required
of it under this Plan in a prudent manner. The Plan Administrator
shall not be responsible in any way for any action or omission of the
Funds or their employees in the performance of their duties and
obligations as set forth in this Plan. The Plan Administrator also
shall not be responsible for any act or omission of any of its agents
provided that such agents were prudently chosen by the Plan
Administrator and that the Plan Administrator relied in good faith
upon the action of such agents.
5.12.2 Except for its own gross negligence, willful misconduct or
willful breach of the terms of this Plan, the Plan Administrator shall
be indemnified and held harmless by the Funds against any and all
liability, loss, damages, cost and expense which may arise occurring
by reason of, or be based upon, any matter connected with or related
to this Plan or its administration (including, but not limited to, any
and all expenses whatsoever reasonably incurred in investigating,
preparing or defending any litigation, commenced or threatened, or in
settlement of any such claim.
5.12.3 Indemnity. The Funds shall indemnify and hold the Plan
Administrator and each employee, officer or trustee of the Funds
harmless against any and all loss, liability, claim, damage, cost and
expense which may arise by reason of, or be based upon, any matter
connected with or related to
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<PAGE>
the Plan or the administration of the Plan (including, but not limited
to, any and all expenses reasonably incurred in investigating,
preparing or defending against any litigation, commenced or
threatened, or in settlement of any such claim) to the fullest extent
permitted under applicable law, except when the same is judicially
determined to be due to the gross negligence or willful misconduct of
the Plan Administrator or such employee, officer or trustee.
5.13 Payment of Expenses. The Plan Administrator shall serve without
special compensation. All expenses of Plan administration shall be paid by the
Funds.
5.14 Right to Amend or Terminate. The Board may at any time amend the
Plan in any respect, retroactively or otherwise, or terminate the Plan. However,
no such amendment or termination shall reduce the amount standing credited to
any Participant's Account as of the date of such amendment or termination. In
the event of the termination of the Plan, the Board, in its sole discretion, may
choose to pay out Participants' Accounts prior to the designated Payment Dates.
Otherwise, following a termination of the Plan, income, gains and losses shall
continue to be credited to each Account in accordance with the provisions of
this Plan until the time such Accounts are paid out.
5.15 Usage. Whenever applicable, the masculine gender, when used in
the Plan, includes the feminine gender, and the singular includes the plural.
5.16 Separability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provisions of the
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<PAGE>
Plan, and the Plan shall be construed and enforced as if such provision had not
been included therein.
5.17 Captions. The captions in this document and in the table of
contents are inserted only as a matter of convenience and for reference and in
no way define, limit, enlarge or describe the scope or intent of the Plan and
shall in no way affect the Plan or the construction of any provision thereof.
5.18 Right of Discharge Reserved. Nothing contained in this Plan shall
be construed as a guaranty or right of any Participant to be continued as a
Trustee of one or more of the Funds (or of a right of a Trustee to any specific
level of Compensation) or as a limitation of the right of the Funds to remove
any of its trustees.
5.19 Governing Law and Construction. The Plan is intended to
constitute an unfunded, nonqualified deferred compensation arrangement. Except
to the extent preempted by Federal law, all rights under the Plan shall be
governed by and construed in accordance with the laws of the State of New York
without regard to principles of conflicts of law. No action shall be brought by
or on behalf of any Eligible Employee or Beneficiary for or with respect to
benefits due under this Plan unless the person bringing such action has timely
exhausted the Plan's claim review procedure. Any such action must be commenced
within three years. This three-year period shall be computed from the earlier of
(a) the date a final determination denying such benefit, in whole or in part, is
issued under the Plan's claim review procedure or (b) the date such individual's
cause of action first accrued. Any dispute, controversy or claim arising out of
or in connection with this Plan (including the applicability of this arbitration
provision) and not resolved pursuant to the Plan's claim review procedure
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<PAGE>
shall be determined and settled by arbitration conducted by the American
Arbitration Association ("AAA") in the County and State of the Funds's principal
place of business and in accordance with the then existing rules, regulations,
practices and procedures of the AAA. Any award in such arbitration shall be
final, conclusive and binding upon the parties to the arbitration and may be
enforced by either party in any court of competent jurisdiction. Each party to
the arbitration will bear its own costs and fees (including attorney's fees.)
-21-
Exhibit 9(c)
Form of Shareholder Servicing Agreement.
FORM OF
PROPOSED
SHAREHOLDER SERVICING AGREEMENT
THIS AGREEMENT, dated as of , 19 by and between, on the one
hand, Mutual Fund ____________ (the "Trust"), a Massachusetts business trust
having its principal place of business at 125 W. 55th Street, New York, New York
10022 and, on other hand, The Chase Manhattan Bank, N.A., a national banking
association having its principal place of business at One Chase Manhattan Plaza,
New York, New York 10081, Global Securities Services Division, 4 Chase MetroTech
Center, 18th Floor, Brooklyn, New York 11245, and each other direct or indirect
subsidiary of The Chase Manhattan Corporation listed on Exhibit A hereto as it
may be amended from time to time hereafter, which is made a part hereof (each
such bank or other subsidiary referred to individually herein as the "Financial
Institution"), each Financial Institution on behalf of itself and each of its
components listed as an Agent on Exhibit A, each of which is a shareholder
servicing agent hereunder (each such Financial Institution and component thereof
referred to individually herein as the "Agent");
W I T N E S S E T H
WHEREAS, all transactions in Shares of Beneficial Interest (without par
value) of the Trust ("Shares") may be made only by investors who are customers
of and using the services of, a financial institution or broker-dealer which has
entered into a shareholder servicing or similar agreement with the Trust or its
distributor;
WHEREAS, the Financial Institution wishes to make it possible for its
customers (the "Customers") to purchase Shares and wishes to act as the
Customers' agent in performing certain administrative functions in connection
with purchases and redemptions of Shares from time to time upon the order and
for the account of Customers in connection with their investments in the Trust;
WHEREAS, the Financial Institution may also provide certain services to
the Trust relating to shareholders and their accounts; and
WHEREAS, it is in the interest of the Trust to avail itself of the
Agent's services and make the services of the Agent available to Customers who
are or may become shareholders of the Trust.
NOW THEREFORE, the Trust and the Financial Institution hereby agree as
follows:
1. Appointment. The Financial Institution, as Agent, hereby
agrees to perform certain services for the Trust and/or Customers as hereinafter
set forth. The Agent's appointment hereunder is non-exclusive, and the parties
recognize and agree that, from time
<PAGE>
to time, the Trust may enter into other shareholder servicing or similar
agreements, in writing, with other financial institutions.
2. Service to Be Performed.
2.1 Type of Service. To the extent directed by the Trust, the
Agent shall be responsible for performing some or all of the administrative and
servicing functions for shareholder accounts and series of the Trust, which
shall include without limitation the following Shareholder Liaison Services and
Other Services:
(a) Shareholder Liaison Services. The Agent shall
be responsible for (a) answering Customer inquiries regarding account status and
history, the manner in which purchases and redemptions of the Shares may be
effected, and certain other matters pertaining to the Trust; (b) assisting
Customers in designating and changing dividend options, account designations and
addresses; (c) providing necessary personnel and facilities to establish and
maintain certain shareholder accounts and records, as requested from time to
time by the Trust; (d) arranging for the wiring of funds; (e) transmitting and
receiving funds in connection with Customer orders to purchase or redeem shares;
(f) verifying Customer signatures on check writing drafts in connection with
redemption orders, transfers among and changes in Customerdesignated accounts;
(g) furnishing (either separately or on an integrated basis with other reports
sent to a Customer by the Agent) monthly and annual statements and confirmations
of all purchases and redemptions of Shares in a Customer's account; and (h)
providing such other related services as the Trust or a Customer may reasonably
request.
(b) Other Administrative Services. The Agent shall
also be responsible for (a) assisting in processing purchase and redemption
transactions; (b) transmitting proxy statements, annual reports, updating
prospectuses and other communications from the Trust to Customers; (c)
receiving, tabulating and transmitting to the Trust proxies executed by
Customers with respect to annual and special meetings of shareholders of the
Trust; (d) provide beneficial owners with statements showing their positions in
the various series of the Trust; (e) providing periodic statements showing a
Customer's account balances and, to the extent practicable, integration of such
information with information concerning other client transactions effected with
or through the Financial Institution; and (f) processing dividend payments.
The Agent shall provide all personnel and facilities necessary
in order for it to perform the functions described in sub-paragraphs 2.1(a) and
2.1(b) above with respect to its Customers.
The Agent understands that the Trust may contract with other
parties to perform certain of the functions enumerated above.
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2.2 Standard of Services. All services to be rendered by the
Agent hereunder shall be performed in a professional, competent and timely
manner. The details of the operating standards and procedures to be followed by
the Agent in performance of the services described above shall be determined
from time to time by agreement between the Agent and the Trust.
3. Fees.
3.1 Fees from the Trust. In consideration for the services
described in Section 2.1(a) hereof relating to acting as liaison to shareholders
and providing personal services to shareholders, the Agent shall receive fees to
be paid in arrears periodically (but in no event less frequently than
semi-annually) at an annual rate of the average daily net assets set forth with
respect to the applicable Fund and Class of Shares so indicated on Schedule A
attached hereto represented by Shares owned during the period for which payment
is being made by Customers for whom the Agent is the holder or Agent of record
or with whom it maintains a servicing relationship. In consideration for the
services described in Section 2.1(b) hereof relating to other administrative
services and the incurring of expenses in connection therewith, the Agent shall
receive fees to be paid in arrears periodically (but in no event less frequently
than semi-annually) at an annual rate of the average daily net assets set forth
with respect to the applicable Fund and Class of Shares so indicated on Schedule
A attached hereto represented by Shares owned during the period for which
payment is being made by Customers for whom the Agent is the holder or Agent of
record or with whom it maintains a servicing relationship. For purposes of
determining the fees payable to the Agent hereunder, the value of the Trust's
net assets shall be computed in the manner specified in the Trust's then-current
prospectus and statement of additional information for computation of the net
asset value of the Trust's Shares. Any Agent may direct the Trust in writing
that its fees from the Trust for the services rendered hereunder and incurring
of expenses in connection therewith be paid to another Agent on a consolidated
basis. Any such consolidated payment to a designated Agent by the Trust shall
relieve the Trust of responsibility for payment of compensation it owes to any
other individual Agent and shall satisfy the Trust's fee payment obligations
hereunder with respect to all Agents.
3.2 Fees from Customers. It is agreed that the Financial
Institution may impose certain conditions on Customers, in addition to or
different from those imposed by the Trust, such as requiring a minimum initial
investment or charging Customers direct fees for the same or similar services as
are provided hereunder by the Financial Institution as Agent (which fees may
either relate specifically to the Financial Institution's services with respect
to the Trust or generally over services not limited to those with respect to the
Trust). The Financial Institution shall bill Customers directly for such fees.
In the event the Financial Institution charges Customers such fees, it shall
make appropriate prior written disclosure (such disclosure to be in accordance
with
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all applicable laws) to Customers both of any direct fees charged to the
Customer and of the fees received or to be received by it from the Trust
pursuant to Section 3.1 of this Agreement. It is understood, however, that in no
event shall the Financial Institution have recourse or access as Agent or
otherwise to the account of any shareholder of the Trust except to the extent
expressly authorized by law or by such shareholder, or to any assets of the
Trust, for payment of any direct fees referred to in this Section 3.2.
4. Information Pertaining to the Shares; Etc. The Agent and its
officers, employees and agents are not authorized to make any representations
concerning the Trust or the Shares to Customers or prospective Customers,
excepting only accurate communication of (i) factual information contained in
the then-current Trust prospectus and statement or additional information, (ii)
current and historical yield and other performance information for any or all of
the Trust portfolios, calculated by the Administrator of the Funds in accordance
with then-current rules and regulations of the Securities and Exchange
Commission (the "SEC"), and furnished to the Agent by the Trust and (iii) any
other factual information permitted to be communicated by the Agent and its
officers, employees and agents under then-current rules and regulations of the
SEC, National Association of Securities Dealers, Inc. and any other appropriate
regulatory, governmental or judicial authority. The Agent shall act as agent for
the Customer only in furnishing information regarding the Trust or the Shares
and shall have no authority to act as agent for the Trust.
Advance copies or proofs of all materials which are to be
generally circulated or disseminated by the Agent to Customers or prospective
Customers which identify or describe the Trust shall be provided to the Trust
(or its designee) at least 10 days prior to such circulation or dissemination
(unless the Trust consents in writing to a shorter period), and such materials
shall not be circulated or disseminated or further circulated or disseminated at
any time after the Trust shall have given written notice to the Agent of any
objection thereto.
Nothing in this Section 4 shall be construed to make the Trust
liable for the use of any information about the Trust which is disseminated by
the Agent.
5. Use of the Agent's Name. The Trust shall not use the name of the
Agent, in any prospectus, sales literature or other material relating to the
Trust in a manner not approved by the Agent prior thereto in writing; provided,
however, that the approval of the Agent shall not be required for any use of its
name which merely refers in accurate and factual terms to its appointment
hereunder or which is required by the SEC or any state securities authority or
any other appropriate regulatory, governmental or judicial authority; provided,
further, that in no event shall such approval be unreasonably withheld or
delayed.
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6. Use of the Trust's Name. Without limiting the effect of Section 4
hereof, the Agent shall not use the name of the Trust on any checks, bank
drafts, bank statements or forms for other than internal use in a manner not
approved by the Trust prior thereto in writing; provided, however, that the
approval of the Trust shall not be required for the use of the Trust's name in
connection with communications permitted by Section 4 hereof or subject to
Section 4, to the extent the same may be applicable for any use of the Trust's
name which merely refers in accurate and factual terms to the Agent's role
hereunder or which is required by the SEC, or any state securities authority or
any other appropriate regulatory, governmental or judicial authority; provided,
further, that in no event shall such approval be unreasonably withheld or
delayed.
7. Security. The Agent represents and warrants that the various
procedures and systems which it has implemented (including provision for
twenty-four hours a day restricted access) with regard to safeguarding from loss
or damage attributable to fire, theft or any other cause that Trust's records
and other data and the Agent's records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are adequate and
that it will make such changes therein from time to time as in its judgment are
required for the secure performance of its obligations hereunder. The parties
shall review such systems and procedures on a periodic basis, and the Trust
shall from time to time specify the types of records and other data of the Trust
to be safeguarded in accordance with this Section 7.
8. Compliance with Laws; Etc. The Agent shall comply with all
applicable federal and state laws and regulations, including securities laws.
The Agent represents and warrants to the Trust that the performance of all its
obligations hereunder will comply with all applicable laws and regulations, the
provisions of its charter documents and by-laws and all material contractual
obligations binding upon the Agent. The Agent furthermore undertakes that it
will promptly inform the Trust of any change in applicable laws or regulations
(or interpretations thereof) or in its charter or by-laws or material contracts
which would prevent or impair full performance of any of its obligations
hereunder.
9. Reports. To the extent requested by the Trust from time to time, the
Agent agrees that it will provide the Treasurer of the Trust with a written
report of the amounts expended by the Agent pursuant to this Agreement and the
purposes for which such expenditures were made. Such written reports shall be in
a form satisfactory to the Trust and shall supply all information necessary for
the Trust and the Trustees of the Trust to discharge their respective
responsibilities under applicable laws and regulations.
10. Record-Keeping.
10.1 Section 31(a), Etc. The Agent shall maintain
records in form acceptable to, and as directed by, the Trust in
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compliance with applicable laws and the rules and regulations of the SEC,
including but not limited to the record-keeping requirements of Section 31(a) of
the Investment Company Act of 1940, as amended (the "1940 Act"), and the rules
thereunder. Such records shall be deemed to be the property of the Trust and
will be made available, at the Trust's request, for inspection and used by the
Trust, representatives of the Trust and governmental authorities. The Agent
agrees that, for so long as it retains any records of the Trust, it will meet
all reporting requirements, if any, pursuant to the 1940 Act with respect to
such records, as may be specified by the Trust from time to time.
10.2 Rules 17a-3 and 17a-4. The Agent shall maintain accurate
and complete records with respect to services performed by the Agent in
connection with the purchase and redemption of Shares. The Agent hereby
undertakes to permit examination of such records at any time or from time to
time during business hours by examiners or other representatives of the SEC or
other authorities and offices having regulatory authority over the Trust or any
dealer of the Shares, and to furnish to such authorities and offices or the SEC
at the location specified by any of them copies of any or all of such records as
may be requested by any of them. Such records shall include the data and be
maintained in the form and for the time periods specified in Schedule A attached
hereto and incorporated herein by reference ("Schedule A"). Compliance by the
Agent with the record keeping requirements specified in Schedule A and such
reporting requirements, if any, as may be specified by the Trust, from time to
time, shall be deemed to satisfy fully any obligation of the Agent hereunder to
comply with Rules 17a-3 and 17a-4 under the Securities Exchange Act of 1934
pursuant to which any dealer of the Shares must maintain certain records and
file reports or other documents. All such records maintained by the Agent
pursuant to this Section 10.2 of this Agreement shall be the property of such
dealer and will be made available for inspection and use by the Trust or such
dealer upon the request of either of them. If so requested by any such dealer,
the Agent shall confirm to such dealer its obligations under this Section 10.2
by a writing reasonably satisfactory to such dealer.
10.3 Identification, Etc. of Records. The Trust shall
from time to time specify to the Agent, and the Trust and the Agent shall
periodically review, the records to be maintained and the procedures to be
followed by the Agent in complying with the foregoing Sections 10.1 and 10.2.
10.4 Transfer of Customer Data. In the event this
Agreement is terminated or a successor to the Agent is appointed, or another
party is engaged by the Trust to provide some or all of the services enumerated
in Section 2 of this Agreement, the Agent shall, at the expense of the Trust,
transfer to such designee as the Trust may direct a certified list of
shareholders of the Trust as to whom the Agent provides services hereunder (with
name, address and tax identification or Social Security number), a complete
record of the account of each such shareholder and the
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status thereof, and all other relevant books, records, correspondence, and other
data established or maintained by the Agent under this Agreement. In the event
this Agreement is terminated, the Agent will use its best efforts to cooperate
in the orderly transfer of such duties and responsibilities, including
assistance in the establishment of books, records and other data by the
successor.
10.5 Survival of Record-Keeping Obligations. The
record-keeping obligations imposed in this Section 10 shall survive the
termination of this Agreement.
10.6 Obligations Pursuant to Agreement Only. Nothing in
this Section 10 shall be construed to mean that the Agent would, by virtue of
its role hereunder, be required under applicable law to maintain the records
required to be maintained by it under this Section 10, but it is understood that
the Agent has agreed to do so in order to enable the Trust and its dealer or
dealers to comply with laws and regulations applicable to them.
11. Force Majeure. The Agent shall not be liable or responsible for
delays or errors by reason of circumstances beyond its control, including, but
not limited to, acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown, flood or catastrophe, Acts of God,
insurrection, war, riots or failure of communication or power supply.
12. Indemnification.
12.1 Indemnification of the Agent. Without limiting the
rights of the Agent under applicable law, the Trust will indemnify and hold the
Agent harmless from all losses, claims, damages, liabilities or expenses
(including reasonable fees and disbursements of counsel) from any claim, demand,
action or suit (collectively, "Claims") (a) arising in connection with
misstatements or omissions in the Trust's Prospectus, actions or inactions by
the Trust or any of its agents or contractors or the performance of the Agent's
obligations hereunder and (b) not resulting from (i) the bad faith or negligence
of the Agent, its directors, officers, employees or agents, or (ii) any breach
of applicable law by the Agent, its directors, officers, employees or agents,
other than any breach of applicable law due solely and directly to the Agent's
proper reliance upon an action or omission by the Trust or any of its agents or
contractors which constitutes a breach of applicable law by the Trust or any of
agents or contractors, or (iii) any action of the Agent, its directors,
officers, employees or agents which exceeds the legal authority of the Agent or
its authority hereunder, or (iv) any error or omission of the Agent, its
directors, officers, employees or agents with respect to the purchase,
redemption and transfer of Customer's Shares or the Agent's verification of any
Customer signature on check writing drafts. Notwithstanding anything herein to
the contrary, the Trust will indemnify and hold the Agent harmless from
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any and all losses, claims, damages, liabilities or expenses (including
reasonable counsel fees and expenses) resulting from any Claim as a result of
its acting in accordance with any written instructions reasonably believed by
the Agent to have been executed by any person duly authorized by the Trust, or
as a result of acting in reliance upon any instrument or stock certificate
reasonably believed by the Agent to have been genuine and signed, countersigned
or executed by a person duly authorized by the Trust, excepting only the gross
negligence or bad faith of the Agent.
In any case in which the Trust may be asked to indemnify or
hold the Agent harmless, the Trust shall be advised of all pertinent facts
concerning the situation in question and the Agent shall use reasonable care to
identify and notify the Trust promptly concerning any situation which presents
or appears likely to present a claim for indemnification against the Trust. The
Trust shall have the option to defend the Agent against any Claim which may be
the subject of indemnification hereunder. In the event that the Trust elects to
defend against such Claim, the defense shall be conducted by counsel chosen by
the Trust and satisfactory to the Agent. The Agent may retain additional counsel
at its expense. Except with the prior written consent of the Trust, the Agent
shall not confess any Claim or make any compromise in any case in which the
Trust will be asked to indemnify the Agent.
12.2 Indemnification of the Trust. Without limiting the
rights of the Trust under applicable law, the Agent will indemnify and hold the
Trust harmless from all losses, claims, damages, liabilities or expenses
(including reasonable fees and disbursements or counsel) from any Claim (a)
resulting from (i) the bad faith or negligence of the Agent, its directors,
officers, employees or agents, or (ii) any breach of applicable law by the
Agent, its directors, officers, employees or agents, other than any breach of
applicable law due solely and directly to the Agent's proper reliance upon an
action or omission by the Trust or its agents or contractors which constitutes a
breach of applicable law by the Trust or its agents or contractors or (iii) any
action of the Agent, its directors, officers, employees or agents which exceeds
the legal authority of the Agent or its authority hereunder, or (iv) any error
or omission of the Agent, its directors, officers, employees or agents with
respect to the purchase, redemption and transfer of Customers' Shares or the
Agent's verification of any Customer signature on check writing drafts, and (b)
not resulting from the Agent's actions in accordance with written instructions
reasonably believed by the Agent to have been executed by any person duly
authorized by the Trust, or in reliance upon any instrument or stock certificate
reasonably believed by the Agent to have been genuine and signed, countersigned
or executed by a person duly authorized by the Trust.
In any case in which the Agent may be asked to indemnify or
hold the Trust harmless, the Agent shall be advised of all pertinent facts
concerning the situation in question and the Trust shall use reasonable care to
identify and notify the Agent promptly
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concerning any situation which presents or appears likely to present a claim for
indemnification against the Agent. The Agent shall have the option to defend the
Trust against any Claim which may be the subject of indemnification hereunder.
In the event that the Agent elects to defend against such Claim, the defense
shall be conducted by counsel chosen by the Agent and reasonably satisfactory to
the Trust. The Trust may retain additional counsel at its expense. Except with
the prior written consent of the Agent, the Trust shall not confess any Claim or
make any compromise in any case in which the Agent will be asked to indemnify
the Trust.
12.3 Survival of Indemnities. The indemnities granted by
the parties in this Section 12 shall survive the termination of this Agreement.
13. Insurance. The Agent shall maintain reasonable insurance
coverage against any and all liabilities which may arise in
connection with the performance of its duties hereunder.
14. Notices. All notices or other communication hereunder to
either party shall be in writing and shall be deemed sufficient if mailed to
such party at the address of such party set forth in the preamble of this
Agreement or at such other address as such party may have designated by written
notice to the other.
15. Further Assurances. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
16. Termination. This Agreement may be terminated by the Trust,
without payment of any penalty, at any time upon not more than 60 days' nor less
than 30 days' notice, by a vote of a majority of the Board of Trustees of the
Trust who are not "interested persons" of the Trust (as defined in the 1940 Act)
and have no direct or indirect financial interest in the operation of the
Administrative Services Plan pursuant to which the Trust has entered into this
Agreement (the "Plan"), this Agreement or any other agreement related to such
Plan, or by "a vote of a majority of the outstanding voting securities" (as
defined int he 1940 Act) of the Trust. The Agent may terminate this Agreement
upon not more than 60 days' nor less than 30 days' notice to the Trust.
Notwithstanding anything herein to the contrary, but except as provided in
Section 19 of this Agreement, this Agreement may not be assigned and shall
terminate automatically without notice to either party upon any assignment. Upon
termination hereof, the Trust shall pay such compensation as may be due the
Agent as of the date of such termination.
17. Changes; Amendments. This Agreement may be changed or amended
only by written instrument signed by both parties.
18. Limitation of Shareholder Liability; Etc. The Agent hereby
agrees that obligations assumed by the Trust pursuant to
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this Agreement shall be limited in all cases to the Trust and its assets and
that the Agent shall not seek satisfaction of any such obligation from the
shareholders or any shareholder of the Trust. It is further agreed that the
Agent shall not seek satisfaction of any such obligations from the Board of
Trustees or any individual Trustee of the Trust.
19. Subcontracting by Agent. The Agent may, with the written
approval of the Trust (such approval not be unreasonably withheld or delayed),
subcontract for the performance of the Agent's obligations hereunder with any
one or more persons, including but not limited to any one or more persons which
is an affiliate of the Agent; provided, however, that the Agent shall be as
fully responsible to the Trust for the acts and omissions of any subcontractor
as it would be for its own acts or omissions.
20. Authority to Vote. The Trust hereby confirms that, pursuant to
the Declaration of Trust of the Trust, at any meeting of shareholders of the
Trust or of any series of the Trust, the Agent is authorized to vote any Shares
held in accounts as to which the Agent provides services hereunder, and which
are otherwise not represented in person or by proxy at the meeting,
proportionately in accordance with the votes cast by holders of all Shares
otherwise represented at the meeting in person or by proxy and held in accounts
as to which the Agent provides services hereunder.
21. Several Nature of Agent's Obligation. Except as may be
otherwise provided in this Agreement, each entity names as an Agent in Exhibit A
hereto shall perform the services and other obligations required to be performed
for the Trust by an Agent hereunder to the extent that they relate to that Agent
and its Customers, and the Trust shall perform its responsibilities hereunder to
the extent that they apply to the Agent or its customers. Each Agent may
separately exercise any of its rights under this Agreement or may, from time to
time, with written notice to the Trust, allow another Agent to exercise these
rights on its behalf. In no event shall any Agent be liable for performance or
payment of all or any portion of another Agent's duties and obligations under
this Agreement.
22. Miscellaneous. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the Commonwealth of
Massachusetts. The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. This Agreement has been executed on behalf of the Trust by the
undersigned not individually, but in the capacity indicated.
23. Disclosure to Customers; etc. The Agent hereby represents that
any compensation payable to it pursuant to this
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Agreement in connection with investment of Customers' assets in Shares (a) will
be disclosed by the Agent to its Customers, (b) will be authorized by such
Customers, and (c) will not result in an excessive fee to the Agent.
MUTUAL FUND_____________
[Signature on Exhibit A]
FINANCIAL INSTITUTIONS
[Signatures on Exhibit A]
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Schedule A
RECORDS ON SHARE TRANSACTIONS
I. With respect to the services to be performed by the Agent under this
Agreement, other than those services to be performed by DST Systems,
Inc. pursuant to the Transfer Agency Agreement, dated as of February 1,
1995, the Agent shall maintain records in compliance with applicable
requirements of Rules 17a-3 and 17a-4 under the Securities Exchange Act
of 1934.
Exhibit 9(d)
Agreement and Plan of Reorganization and Liquidation.
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION
AGREEMENT AND PLAN OF REORGANIZATION AND LIQUIDATION, dated as of
December 18, 1995 (this "Agreement") between THE HANOVER FUNDS, INC.
("Hanover"), a Maryland corporation comprised of the following separate
investment portfolios: The 100% U.S. Treasury Securities Money Market Fund, The
U.S. Treasury Money Market Fund, The Government Money Market Fund, The Cash
Management Fund, The Tax Free Money Market Fund and The New York Tax Free Money
Market Fund (each, a "Hanover Portfolio") and MUTUAL FUND TRUST ("MFT"), a
Massachusetts business trust comprised of separate investment portfolios which
include Vista Treasury Plus Money Market Fund, Vista U.S. Government Money
Market Fund, Vista Global Money Market Fund, Vista Tax Free Money Market Fund
and Vista New York Tax Free Money Market Fund and which is expected to include,
at the Effective Time of the Reorganization (as defined herein), Vista 100% U.S.
Treasury Securities Money Market Fund (each, an "MFT Portfolio").
In consideration of the mutual promises herein contained, the parties
hereto agree as follows:
SECTION 1. SHAREHOLDER APPROVAL
(a) Hanover Meeting of Shareholders. A meeting of the
shareholders of each Hanover Portfolio shall be called and held for the
purpose of acting upon this Agreement and the transactions contemplated
herein. MFT shall furnish to Hanover such data and information relating
to MFT as shall be reasonably requested by Hanover for inclusion in the
information to be furnished to such shareholders in connection with the
meeting for the purpose of acting upon this Agreement and the
transactions contemplated herein.
(b) MFT Meeting of Shareholders. A meeting of the shareholders
of MFT shall be called and held for the purpose of all of the
shareholders of MFT acting upon the matters referred to in clause (i)
of Section 7(f) of this Agreement, the shareholders of each MFT
Portfolio acting upon the matters referred to in clauses (ii) and (v)
of Section 7(f) of this Agreement, and the shareholders of the MFT
Portfolios referred to in clauses (iii) and/or (iv) of Section 7(f) of
this Agreement acting upon the matters referred to therein.
SECTION 2. REORGANIZATION
The transactions described in this section are hereinafter referred to
as the "Reorganization." For the avoidance of doubt, MFT's investment portfolios
other than the MFT Portfolios (consisting of Vista Prime Money Market Fund,
Vista California Tax Free Money Market Fund, Vista Tax Free Income Fund, Vista
New York Tax Free Income Fund, Vista California Intermediate Tax Free Fund and
Vista Federal Money Market Fund) are not parties to the Reorganization.
<PAGE>
2
(a) Plan of Reorganization and Liquidation.
(1) Hanover will cause each Hanover Portfolio to
convey, transfer and deliver to the MFT Portfolio set forth
opposite its name in the table attached hereto as Schedule I
(each such MFT Portfolio being the "Corresponding MFT
Portfolio" of the Hanover Portfolio set forth opposite its
name, and each such Hanover Portfolio being the "Corresponding
Hanover Portfolio" of the MFT Portfolio set forth opposite its
name) at the closing provided for in Section 2(b) hereof (the
"Closing") all of the then existing assets of such Hanover
Portfolio. In consideration thereof, MFT agrees at the Closing
to cause each MFT Portfolio (i) to assume and pay, to the
extent that they exist on or after the Effective Time of the
Reorganization (as defined in Section 2(b) hereof), all of the
obligations and liabilities of its Corresponding Hanover
Portfolio and (ii) to issue and deliver to the Corresponding
Hanover Portfolio full and fractional shares of that series
and class of MFT's shares of beneficial interest, representing
Vista Shares of such MFT Portfolio ("MFT Portfolio Shares"),
equal to that number of full and fractional MFT Portfolio
Shares as determined in Section 2(c) hereof. Any shares of
capital stock, par value $.001 per share, of the Hanover
Portfolios ("Hanover Portfolio Shares") held in the treasury
of Hanover on the Effective Time of the Reorganization (as
defined in Section 2(b) hereof) shall thereupon be retired.
(2) At the Effective Time of the Reorganization, each
Hanover Portfolio will liquidate and distribute pro rata to
its holders of Hanover Portfolio Shares as of the Effective
Time of the Reorganization the MFT Portfolio Shares of the
Corresponding MFT Portfolio received by such Hanover Portfolio
pursuant to this Section 2(a). Such liquidation and
distribution will be accompanied by the establishment of an
account on the respective share records of each MFT Portfolio
in the name of each record holder of Hanover Portfolio Shares
of the Corresponding Hanover Portfolio and representing the
respective pro rata number of MFT Portfolio Shares due such
shareholder. Fractional MFT Portfolio Shares will be carried
to the third decimal place. Simultaneously with such crediting
of MFT Portfolio Shares to the shareholders, the Hanover
Portfolio Shares held by such shareholders shall be cancelled.
(3) As soon as practicable after the Effective Time
of the Reorganization, Hanover shall take all the necessary
steps under Maryland law and Hanover's Articles of
Incorporation, as amended and supplemented, to effect a
complete dissolution of Hanover and to deregister Hanover
under the Investment Company Act of 1940, as amended (the
"Act").
(b) Closing and Effective Time of the Reorganization. Subject
to the satisfaction of the conditions to the Closing specified in this
Agreement, the Closing shall occur at 12:00 noon (with respect to the
Vista Tax Free Money Market Fund and the Vista New York Tax Free Money
Market Fund and their corresponding Hanover
<PAGE>
3
Portfolios) and at 2 p.m. (with respect to each of the other Vista
Portfolios and their corresponding Hanover Portfolios), New York City
time, on the day which is the later of (i) the final adjournment of the
meeting of the holders of Hanover Portfolio Shares at which this
Agreement will be considered, (ii) the declaration by the Securities
and Exchange Commission (the "Commission") of the effectiveness of the
First N-1A Amendment and the Second N-1A Amendment (each as defined in
Section 5(b) hereof), (iii) July 31, 1996, and (iv) such later day as
the parties may mutually agree (the "Effective Time of the
Reorganization").
(c) Valuation. The number of full and fractional MFG Portfolio
Shares to be issued pursuant to Section 2(a) hereof to holders of
shares of the Corresponding Hanover Portfolio shall be determined by
multiplying the number of shares of the Corresponding Hanover Portfolio
that will be exchanged for such MFG Portfolio Shares by the appropriate
exchange ratio computed as set forth below, the product of such
multiplication to be rounded to the nearest one thousandth of a full
share. For each Hanover Portfolio and its Corresponding MFT Portfolio,
the exchange ratio shall be the number determined by dividing the net
asset value per share of the Hanover Portfolio Shares by the net asset
value per share of the MFT Portfolio Shares of the Corresponding MFT
Portfolio, in each case such values to be determined on a consistent
basis by the valuation procedures that have been adopted by the Board
of Trustees of MFT, as of the Effective Time of the Reorganization;
provided, that in the case of Vista 100% U.S. Treasury Securities Money
Market Fund and The 100% U.S. Treasury Securities Money Market Fund of
Hanover, the exchange ratio shall be one. Each such exchange ratio
shall be rounded to the nearest ten thousandth.
All computations of value shall be made in accordance with the regular
practice of the MFT Portfolios as of the Effective Time by the agent then
responsible for pricing shares of the MFT Portfolios.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF MFT
MFT represents and warrants to Hanover as follows:
(a) Organization, Existence, etc. MFT is a business trust 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, and each MFT Portfolio is a
validly existing series of shares of such business trust representing
interests therein under the laws of Massachusetts. MFT has all
necessary federal, state and local authorization to own all of its
properties and assets and to carry on its business as now being
conducted.
(b) Registration as Investment Company. MFT 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.
<PAGE>
4
(c) Current Offering Documents. The current prospectuses and
statements of additional information of MFT, each dated October 28,
1994 and included in MFT's registration statement on Form N-1A filed
with 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 herein,
in light of the circumstances under which they were made, not
misleading.
(d) Capitalization. MFT has an unlimited number of authorized
shares of beneficial interest, currently without par value, of which as
of ________, 1995 there were outstanding the following numbers of
shares of the MFT Portfolios: _______ shares of Vista Treasury Plus
Money Market Fund (consisting of __________ Premier Shares and
__________ Institutional Shares), ________ shares of Vista U.S.
Government Money Market Fund (consisting of __________ Vista Shares,
__________ Premier Shares and __________ Institutional Shares),
________ shares of Vista Global Money Market Fund (consisting of
__________ Vista Shares, __________ Premier Shares and __________
Institutional Shares), _______ shares of Vista Tax Free Money Market
Fund (consisting of __________ Vista Shares, __________ Premier Shares
and __________ Institutional Shares), and _______ shares of Vista New
York Tax Free Money Market Fund (all of the Vista Shares class). There
are no outstanding shares of Vista 100% U.S. Treasury Money Market
Fund. All of the outstanding shares of MFT have been duly authorized
and are validly issued, fully paid and nonassessable. Because MFT is an
open-end investment company engaged in the continuous offering and
redemption of its shares, the number of outstanding shares may change
prior to the Effective Time of the Reorganization. All of each MFT
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 of MFT for
the fiscal year ended August 31, 1995, which have been audited by Price
Waterhouse LLP, (the "MFT Financial Statements"), previously delivered
to Hanover, fairly present the financial position of MFT as of the
dates thereof and the results of its operations and changes in its net
assets for each of the periods indicated, in accordance with GAAP.
(f) Shares to be Issued Upon Reorganization. The MFT 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 MFT
Portfolios' Prospectuses and recognizing that under Massachusetts law,
shareholders of an MFT Portfolio could, under certain circumstances, be
held personally liable for the obligations of such MFT Portfolio).
(g) Authority Relative to this Agreement. MFT has the power
to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have
<PAGE>
5
been duly authorized by MFT's Board of Trustees and no other
proceedings by MFT other than those contemplated under this Agreement
are necessary to authorize its officers to effectuate this Agreement
and the transactions contemplated hereby. MFT is not a party to or
obligated under any charter, by-law, 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 Agreement in accordance with its terms.
(h) Liabilities. There are no liabilities of MFT or the MFT
Portfolios, whether actual or contingent and whether or not determined
or determinable, other than liabilities disclosed or provided for in
the MFT Financial Statements and liabilities incurred in the ordinary
course of business subsequent to August 31, 1995 or otherwise
previously disclosed to Hanover, none of which has been materially
adverse to the business, assets or results of operations of MFT.
(i) No Material Adverse Change. Since August 31, 1995, there
has been no material adverse change in the financial condition, results
of operations, business, properties or assets of MFT, other than those
occurring in the ordinary course of business (for these purposes, a
decline in net asset value and a decline in net assets due to
redemptions do not constitute a material adverse change).
(j) Litigation. There are no claims, actions, suits or
proceedings pending or, to the knowledge of MFT, threatened which would
adversely affect MFT or the MFT Portfolios or MFT's assets or business
or which would prevent or hinder consummation of the transactions
contemplated hereby, there are no facts which would form the basis for
the institution of administrative proceedings against MFT and, to the
knowledge of MFT, there are no regulatory investigations of MFT pending
or threatened, other than routine inspections and audits.
(k) Contracts. Except for contracts and agreements disclosed
to Hanover on Schedule II hereto under which no default exists, MFT is
not a party to or subject to any material contract, debt instrument,
plan, lease, franchise, license or permit of any kind or nature
whatsoever with respect to the MFT Portfolios. As of the Effective Time
of the Reorganization, MFT will have no liability in respect of any of
the contracts referred to in Section 5(f) with respect to which MFT is
to receive releases.
(l) Taxes. The federal income tax returns of MFT and each MFT
Portfolio, and all other income tax returns required to be filed by MFT
and any MFT Portfolio, have been filed for all taxable years to and
including August 31, 1994, and all taxes payable pursuant to such
returns have been paid. To the knowledge of MFT, 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 MFT or any MFT Portfolio
have been paid so far as due. Each portfolio of MFT, other than Vista
100% U.S. Treasury Securities Money Market Fund, which has not yet
commenced operations, is qualified as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code"), in
respect of each taxable year since commencement of its operations.
<PAGE>
6
SECTION 4. REPRESENTATIONS AND WARRANTIES OF HANOVER
Hanover represents and warrants to MFT as follows:
(a) Organization, Existence, etc. Hanover is a corporation
duly organized, validly existing and in good standing under the laws of
the State of Maryland and has the power to carry on its business as it
is now being conducted, and each Hanover Portfolio is a validly
existing series of shares of such corporation representing interests
therein under the laws of Maryland. Hanover has all necessary federal,
state and local authorization to own all of its properties and assets
and to carry on its business as now being conducted.
(b) Registration as Investment Company. Hanover is registered
under the Act as an open-end diversified investment company of the
management type; such registration has not been revoked or rescinded
and is in full force and effect.
(c) Current Offering Documents. The current prospectus and
statement of additional information of Hanover, each dated March 30,
1995 and included in Hanover's registration statement on Form N-1A
filed with the Commission, comply in all material respects with the
requirements of the Securities Act and the Act, and do not contain an
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(d) Capitalization. The authorized capital stock of Hanover
consists of 10,000,000,000 shares of Common Stock, each having a par
value $.001 per share. As of ________, 1995, there were outstanding
______ shares of The 100% U.S. Treasury Securities Money Market Fund,
_______ shares of The U.S. Treasury Money Market Fund, ________ shares
of The Government Money Market Fund, _______ shares of The Cash
Management Fund, _______ shares of The Tax Free Money Market Fund,
________ and shares of The New York Tax Free Money Market Fund. All of
the outstanding shares of Hanover have been duly authorized and are
validly issued, fully paid and nonassessable. Because Hanover 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 time of the Closing, be held by the shareholders of record
of the Hanover Portfolios as set forth on the books and records of
Hanover's transfer agent (and in the amounts set forth therein) and as
set forth in any list of shareholders of record provided to MFT for
purposes of the Closing, and no such shareholders of record will have
any preemptive rights to purchase any of such shares, and Hanover does
not have outstanding any options, warrants or other rights to subscribe
for or purchase any shares (other then dividend reinvestment plans of
the Hanover Portfolios or as set forth in this Agreement), nor are
there outstanding any securities convertible into any shares of the
Hanover Portfolios (except pursuant to exchange privileges
<PAGE>
7
described in the current Prospectus and Statement of Additional
Information of Hanover). All of each Hanover 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 of Hanover
for the year ended November 30, 1994, which have been audited by KPMG
Peat Marwick LLP, and the unaudited financial statements of Hanover for
the six months ended May 31, 1995 (collectively, the "Hanover Financial
Statements"), previously delivered to MFT, fairly present the financial
position of Hanover as of the date thereof, and the results of its
operations and changes in its net assets for the periods indicated, in
accordance with GAAP.
(f) Authority Relative to this Agreement. Hanover has the
power to enter into this Agreement and to carry out its obligations
hereunder. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly
authorized by its Board of Directors, and, except for approval by the
shareholders of Hanover, no other proceedings by Hanover are necessary
other than those contemplated under this Agreement to authorize its
officers to effectuate this Agreement and the transactions contemplated
hereby. Hanover is not a party to or obligated under any charter,
by-law, 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
Agreement in accordance with its terms.
(g) Liabilities. There are no liabilities of Hanover, whether
actual or contingent and whether or not determined or determinable,
other than liabilities disclosed or provided for in the Hanover
Financial Statements and liabilities incurred in the ordinary course of
business subsequent to [date that is fiscal year or stub period end] or
otherwise previously disclosed to MFT, none of which has been
materially adverse to the business, assets or results of Hanover.
(h) No Material Adverse Change. Since May 31, 1995, there has
been no material adverse change in the financial condition, results of
operations, business, properties or assets of Hanover, 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 Hanover, threatened which
would adversely affect Hanover or its assets or business or which would
prevent or hinder consummation of the transactions contemplated hereby,
there are no facts which would form the basis for the institution of
administrative proceedings against Hanover and, to the knowledge of
Hanover, there are no regulatory investigations of Hanover pending or
threatened, other than routine inspections and audits.
<PAGE>
8
(j) Contracts. Except for contracts and agreements disclosed
to MFT on Schedule II hereto under which no default exists, Hanover is
not a party to or subject to any material contract, debt instrument,
plan, lease, franchise, license or permit of any kind or nature
whatsoever. As of the Effective Time of the Reorganization, Hanover
will have no liability in respect of any of the contracts referred to
in Section 6(e) with respect to which Hanover is to receive releases.
(k) Taxes. The federal income tax returns of Hanover and each
Hanover Portfolio, and all other income tax returns required to be
filed by Hanover, have been filed for all taxable years to and
including the taxable year ended November 30, 1994, and all taxes
payable pursuant to such returns have been paid. To the knowledge of
Hanover, 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 Hanover or any Hanover Portfolio have been paid so far as due.
Each Hanover Portfolio has qualified as a regulated investment company
under the Code in respect of each taxable year since commencement of
its operations.
SECTION 5. COVENANTS OF MFT
MFT covenants to Hanover as follows:
(a) Portfolio Securities. All securities owned by MFT as of
the Effective Time of the Reorganization will be owned by MFT free and
clear of any liens, claims, charges, options and encumbrances, except
as may be indicated in a schedule delivered by MFT to Hanover
immediately prior to the Effective Time of the Reorganization or as may
be permitted under the Act.
(b) Formation of New Portfolio; Amendment of Registration
Statement on Form N-1A. Prior to the Effective Time of the
Reorganization, MFT will cause the formation and registration of Vista
100% U.S. Treasury Securities Money Market Fund, including filing an
amendment or amendments to MFT's registration statement on Form N-1A
(collectively, the "First N-1A Amendment") with the Commission relating
to the registration of Vista 100% U.S. Treasury Securities Money Market
Fund. The investment objective and policies of Vista 100% U.S. Treasury
Securities Money Market Fund will conform with the descriptions thereof
contained in the Prospectus and Statement of Additional Information in
the form presented to the Hanover Board of Directors. MFT will not
issue any shares of Vista 100% U.S. Treasury Securities Money Market
Fund prior to the Effective Time of the Reorganization except as
contemplated by this Agreement. Prior to the Effective Time of the
Reorganization, MFT will also file an amendment to MFT's registration
statement on Form N-1A (the "Second N-1A Amendment") with the
Commission to conform the descriptions of the MFT Portfolios in such
registration statement with the descriptions of the MFT Portfolios in
the Registration Statement (as defined in Section 5(c) hereof), as the
Registration Statement may be amended or supplemented prior to the
Effective Time of the Reorganization.
<PAGE>
9
(c) Registration Statement. MFT shall file with the Commission
a Registration Statement on Form N-14 (the "Registration Statement")
under the Securities Act relating to the MFT Portfolio Shares issuable
hereunder. At the time the Registration Statement becomes effective,
the Registration Statement (i)) will comply in all material respects
with the provisions of the Securities Act and the rules and regulations
of the Commission thereunder (the "Regulations") and (ii) will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and at the time the Registration
Statement becomes effective, at the time of the shareholders' meeting
referred to in Section 1(a) hereof, and at the Effective Time of the
Reorganization, the prospectus/proxy statement (the "Prospectus") and
statement of additional information included therein (the "Statement of
Additional Information"), as amended or supplemented by any amendments
or supplements filed by MFT, 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; provided, however, that none of the
representations and warranties in this subsection shall apply to
statements in or omissions from a Registration Statement, Prospectus or
Statement of Additional Information made in reliance upon and in
conformity with information furnished by Hanover for use in the
Registration Statement, Prospectus or Statement of Additional
Information as provided in Section 6(b) hereof.
(d) Cooperation in Effecting Reorganization. MFT agrees to use
all reasonable efforts (by taking such actions as may be necessary or
advisable) to effectuate the Reorganization, to continue in operation
thereafter, and to obtain any necessary regulatory approvals. MFT will
cooperate fully with Hanover in preparing and effecting any filings
with the Federal Trade Commission required under federal antitrust laws
with respect to the proposed Reorganization.
(e) Operations in the Ordinary Course. Except as otherwise
contemplated by this Agreement, MFT shall conduct its business in the
ordinary course until the consummation of the Reorganization.
(f) Interim Advisory Arrangements. Each portfolio of MFT shall
enter into an interim advisory agreement with The Chase Manhattan Bank,
N.A. that will be effective beginning at the time the merger of
Chemical Banking Corporation and The Chase Manhattan Corporation is
consummated, and each such agreement shall have been approved by the
Board of Trustees of MFT. MFT shall have obtained from the Commission
exemptive relief from Section 15(a) of the Act enabling it to enter
into the interim advisory agreements referred to above without
obtaining prior shareholder approval, and shall comply with all
representations and conditions contained in the Commission's order
issued in connection therewith.
SECTION 6. COVENANTS OF HANOVER
Hanover covenants to MFT as follows:
<PAGE>
10
(a) Portfolio Securities. With respect to the assets to be
transferred in accordance with Section 1(a), each Hanover Portfolio's
assets shall consist of all property and assets of any nature
whatsoever, including, without limitation, all cash, cash equivalents,
securities, claims and receivables (including dividend and interest
receivables) owned, and any deferred or prepaid expenses shown as an
asset on Hanover's books. At least five (5) business days prior to the
Closing, each Hanover Portfolio will provide MFT with a list of its
assets and a list of its stated Liabilities. Each Hanover Portfolio
shall have the right to sell any of the securities or other assets
shown on the list of assets prior to the Closing but will not, without
the prior approval of MFT, acquire any additional securities other
than securities which the Corresponding MFT Portfolio is permitted to
purchase, pursuant to its investment objective and policies or
otherwise (taking into consideration its own portfolio composition as
of such date). In the event that MFT informs Hanover that a Hanover
Portfolio holds any investments that its Corresponding MFT Portfolio
would not be permitted to hold, the Hanover Portfolio will dispose of
such securities prior to the Closing to the extent practicable and to
the extent that its shareholders would not be materially affected in
an adverse manner by such a disposition. In addition, Hanover will
prepare and deliver to MFT, immediately prior to the Effective Time of
the Reorganization, a Schedule of Investments (the "Schedule") listing
all the securities owned by each Hanover Portfolio as of the Effective
Time of the Reorganization. All securities to be listed in the
Schedule as of the Effective Time of the Reorganization will be owned
by Hanover free and clear of any liens, claims, charges, options and
encumbrances, except as indicated in the Schedule or as permitted by
the Act, and, except as so indicated, none of such securities is or,
after the Reorganization as contemplated hereby, will be subject to
any restrictions, legal or contractual, on the disposition thereof
(including restrictions as to the public offering or sale thereof
under the Securities Act) and, except as so indicated, all such
securities are or will be readily marketable.
(b) Registration Statement. In connection with the
Registration Statement, Hanover will cooperate with MFT and will
furnish to MFT the information relating to Hanover required by the
Securities Act and the Regulations to be set forth in the Registration
Statement (including the Prospectuses and Statements of Additional
Information). At the time the Registration Statement becomes effective,
the Registration Statement, insofar as it relates to Hanover, (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 shareholders' meeting referred to in
Section 1(a) hereof 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 MFT, insofar as
they relate to Hanover, 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
<PAGE>
11
or omissions from the Registration Statement, Prospectus or Statement
of Additional Information made in reliance upon and in conformity with
information furnished by Hanover for use in the Registration Statement,
Prospectus or Statement of Additional Information as provided in this
Section 6(b).
(c) Cooperation in Effecting Reorganization. Hanover agrees to
use all reasonable efforts (by taking such actions as may be necessary
or advisable) to effectuate the Reorganization, including calling the
meeting of shareholders referred to in Section 1(a) of this Agreement,
and to obtain any necessary regulatory approvals. Hanover will
cooperate fully with MFT in preparing and effecting any filings with
the Federal Trade Commission required under federal antitrust laws with
respect to the proposed Reorganization. Hanover will assist MFT in
obtaining such information as MFT reasonably requests concerning the
beneficial ownership of the shares of the Hanover Portfolios.
(d) Operations in the Ordinary Course. Except as otherwise
contemplated by this Agreement, Hanover shall conduct its business in
the ordinary course until the consummation of the Reorganization.
(e) Contract Terminations. Hanover shall, prior to the
consummation of the Reorganization, terminate its agreements with The
Portfolio Group, Inc. (with respect to the 100% U.S. Treasury
Securities Money Market Fund, The U.S. Treasury Money Market Fund, The
Government Money Market Fund and The New York Tax Free Money Market
Fund), Texas Commerce Bank, National Association (with respect to The
Cash Management Fund and The Tax Free Money Market Fund), Chemical
Bank, Furman Selz Incorporated, Hanover Funds Distributor, Inc., and
each of the financial institutions with whom Hanover has entered into a
shareholder servicing agreement (as set forth in Schedule II hereto)
for Investment Advisory, Administration, Administration and Fund
Accounting, Custody, Distribution, Transfer Agency, SubTransfer Agency
and Shareholder Servicing services, as the case may be, such
terminations to be effective as of the Effective Time of the
Reorganization.
SECTION 7. CONDITIONS TO OBLIGATIONS OF HANOVER
The obligations of Hanover hereunder with respect to the consummation
of the Reorganization as it relates to each Hanover Portfolio are subject to the
satisfaction of the following conditions:
(a) Approval by Hanover Shareholders. This Agreement and the
transactions contemplated by the Reorganization, including, when
necessary, a temporary amendment of the investment restrictions that
might otherwise preclude the consummation of the Reorganization, shall
have been approved by the requisite vote of the shares of each Hanover
Portfolio entitled to vote in the matter.
(b) Covenants, Warranties and Representations. MFT shall
have complied with each of its covenants contained herein, each of the
representations and warranties
<PAGE>
12
contained herein shall be true in all material respects as of the
Effective Time of the Reorganization (except as otherwise contemplated
herein), there shall have been no material adverse change (as defined
in Section 3(i)) in the financial condition, results of operations,
business, properties or assets of the MFT Portfolios since August 31,
1995, and Hanover shall have received a certificate of the President of
MFT satisfactory in form and substance to Hanover so stating. Hanover
shall also have received certificates of (i) The Chase Manhattan Bank,
N.A., in its capacity as investment adviser to MFT and as MFT's
administrator, and (ii) Vista Broker-Dealer Services, Inc., in its
capacity as MFT's distributor, in each case to the effect that, as of
the Effective Time of the Reorganization, such entity is not aware that
any of the representations and warranties of MFT herein is not true in
all material respects.
(c) Regulatory Approval. The Registration Statement, the First
N-1A Amendment and the Second N-1A Amendment shall each have been
declared effective by the Commission, no stop orders under the
Securities Act pertaining thereto shall have been issued and all
approvals, registrations, and exemptions under federal and state laws
considered to be necessary shall have been obtained.
(d) Tax Opinion. Hanover shall have received the opinion of
Simpson Thacher & Bartlett dated on or before the date of the Closing,
addressed to and in form and substance satisfactory to Hanover, as to
certain of the federal income tax consequences under the Code of the
Reorganization, insofar as it relates to each Hanover Portfolio and its
Corresponding MFT Portfolio, and to shareholders of each Hanover
Portfolio. For purposes of rendering their opinion, Simpson Thacher &
Bartlett may rely exclusively and without independent verification, as
to factual matters, upon the statements made in this Agreement, the
prospectus/proxy statement which will be distributed to the
shareholders of the Hanover Portfolios in connection with the
Reorganization, and upon such other written representations as the
President of each of Hanover and MFT will have verified as of the
Effective Time of the Reorganization. The opinion of Simpson Thacher &
Bartlett 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 each Hanover Portfolio and its
Corresponding MFT Portfolio; (ii) no gain or loss will be recognized by
any of the Hanover Portfolios or the Corresponding MFT Portfolios upon
the transfer of all the assets and liabilities, if any, of each Hanover
Portfolio to its Corresponding MFT Portfolio solely in exchange for MFT
Portfolio Shares or upon the distribution of the MFT Portfolio Shares
to the holders of Hanover Portfolio Shares solely in exchange for all
of their Hanover Portfolio Shares; (iii) no gain or loss will be
recognized by shareholders of any of the Hanover Portfolios upon the
exchange of such Hanover Portfolio Shares solely for MFT Portfolio
Shares; (iv) the holding period and tax basis of the MFT Portfolio
Shares received by each holder of Hanover Portfolio Shares pursuant to
the Reorganization will be the same as the holding period (provided the
Hanover Portfolio Shares were held as a capital asset on the date of
the Reorganization) and tax basis of the Hanover Portfolio Shares held
by the shareholder immediately prior to the Reorganization; and (v) the
holding period and tax basis of the assets of each of the
<PAGE>
13
Hanover Portfolios acquired by its Corresponding MFT Portfolio will be
the same as the holding period and tax basis of those assets to each of
the Hanover Portfolios immediately prior to the Reorganization.
The payment by Chemical Banking Corporation and/or The Chase
Manhattan Corporation of the related Reorganization expenses referred
to in Section 10 hereof will not affect the opinions set forth above
regarding the tax consequences of the exchanges by Hanover and the
shareholders of Hanover; however, Simpson Thacher & Bartlett will
express no opinion as to any federal income tax consequences to any of
the parties of the payment of such expenses by Chemical Banking
Corporation and/or The Chase Manhattan Corporation.
(e) Opinion of Counsel. Hanover shall have received the
opinion of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel as counsel
for MFT, dated as of the date of the Closing, addressed to and in form
and substance satisfactory to Hanover, to the effect that: (i) MFT is a
business trust duly organized and existing under the laws of the
Commonwealth of Massachusetts, and each MFT Portfolio is a validly
existing series of shares of such business trust; (ii) MFT is an
open-end investment company of the management type registered under the
Act; (iii) this Agreement and the Reorganization provided for herein
and the execution of this Agreement have been duly authorized and
approved by all requisite action of MFT and this Agreement has been
duly executed and delivered by MFT and is a valid and binding
obligation of MFT enforceable against MFT in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; (iv) the Registration
Statement has been declared effective under the Securities Act and to
the best of such counsel's knowledge after reasonable investigation no
stop order has been issued or threatened suspending its effectiveness;
(v) to the best of such counsel's knowledge, no consent, approval,
order or other authorization of any federal or New York state or
Massachusetts state court or administrative or regulatory agency is
required for MFT to enter into this Agreement or carry out its terms
that has not already been obtained, other than where the failure to
obtain any such consent, approval, order or authorization would not
have a material adverse effect on the operations of MFT; (vi) to the
best of such counsel's knowledge, MFT is not in breach or violation of
any material contract listed on Schedule II hereto to which it is a
party, which breach or violation would (a) affect the ability of MFT to
enter into this Agreement or consummate the transactions contemplated
hereby, including the Reorganization, or (b) have a material adverse
effect on the business or financial condition of MFT; (vii) to the best
of such counsel's knowledge, no federal or New York state or
Massachusetts state administrative or regulatory proceeding is pending
or threatened against MFT which would (i) affect the ability of MFT to
enter into this Agreement or consummate the transactions contemplated
hereby, including the Reorganization, or (b) have a material adverse
effect on the business or financial condition of MFT; and (viii) the
MFT Portfolio Shares to be issued in the Reorganization have been duly
authorized and upon issuance
<PAGE>
14
thereof in accordance with this Agreement, will be validly issued,
fully paid and nonassessable. In rendering such opinion, Kramer, Levin,
Naftalis, Nessen, Kamin & Frankel may rely on the opinion of
Massachusetts counsel as to matters relating to Massachusetts law and
on certificates of officers and/or trustees of MFT as to factual
matters.
(f) Board of Trustees Approvals. The Board of Trustees of MFT
shall have taken the following action with respect to MFT or the MFT
Portfolios, as the case may be, at a meeting duly called for such
purposes:
(i) approval of the selection of Price
Waterhouse LLP as MFT's independent auditors for the fiscal
year ending August 31, 1996, on terms acceptable to the
Hanover Board of Directors;
(ii) approval of an investment advisory
agreement with The Chase Manhattan Bank, N.A. with respect
to each MFT Portfolio, in each case in the form presented to
the Hanover Board of Directors;
(iii) approval of sub-investment advisory
agreements between The Chase Manhattan Bank, N.A. and Texas
Commerce Bank, National Association with respect to the Vista
Global Money Market Fund (to be renamed the Vista Cash
Management Fund in connection with the Reorganization) and the
Vista Tax Free Money Market Fund, and between The Chase
Manhattan Bank, N.A. and Chase Asset Management, Inc., with
respect to each other MFT Portfolio, in each case in the form
presented to the Hanover Board of Directors;
(iv) approval of the application of MFT's
distribution plan pursuant to Rule 12b-1 under the Act to
Vista Shares of the Vista 100% U.S. Treasury Securities Money
Market Fund, to conform with the Prospectus and Statement of
Additional Information in the form presented to the Hanover
Board of Directors, as the Prospectus and Statement of
Additional Information may be amended or supplemented at the
time of the shareholders' meeting referred to in Section 1(a)
hereof;
(v) approval of the modification of certain
fundamental investment limitations of the MFT Portfolios and
certain other investment policies to conform with the
descriptions thereof contained in the Prospectus and Statement
of Additional Information in the form presented to the Hanover
Board of Directors or as may be amended or supplemented at the
time of the shareholder's meeting referred to in Section 1(a)
hereof; and
(vi) creation of Vista Shares in the Vista
Treasury Plus Money Market Fund and authorization of the
issuance by MFT, immediately prior to the Effective Time of
the Reorganization, of one Vista Share of Vista 100% U.S.
Treasury Securities Money Market Fund of MFT to ______________
in consideration for payment equal to the net asset value per
share of The 100%
<PAGE>
15
U.S. Treasury Securities Money Market Fund of Hanover, and one
Vista Share of Vista Treasury Plus Money Market Fund of MFT to
______________ in consideration for payment equal to the net
asset value per share of The U.S Treasury Money market Fund of
Hanover for the purpose of enabling ________________ to vote
on the matters referred to in paragraph (g) and (h),
respectively, of Section 8.
(g) Trustees and Officers Insurance. Chemical Banking
Corporation and/or The Chase Manhattan Corporation shall have purchased
trustees and officers liability insurance coverage referred to in
Section 10(b) of this Agreement.
(h) Contract Terminations. Hanover shall have terminated the
agreements referred to in Section 6(e) of this Agreement as provided
therein.
(i) Bank Holding Company Merger. The merger of The Chase
Manhattan Corporation with and into Chemical Banking Corporation shall
have been consummated.
SECTION 8. CONDITIONS TO OBLIGATIONS OF MFT
The obligations of MFT hereunder with respect to the consummation of
the Reorganization as it relates to each MFT Portfolio are subject to the
satisfaction of the following conditions:
(a) Approval by Shareholders. This Agreement and the
transactions contemplated by the Reorganization, including, when
necessary, a temporary amendment of the investment restrictions that
might otherwise preclude the consummation of the Reorganization, shall
have been approved by the requisite vote of the shares of each Hanover
Portfolio entitled to vote on the matter.
(b) Covenants, Warranties and Representations. Hanover 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), there shall have been no
material adverse change (as defined in Section 4(h)) in the financial
condition, results of operations, business, properties or assets of the
Hanover Portfolios since November, 1995, and MFT shall have received a
certificate of the President of Hanover satisfactory in form and
substance to MFT so stating. MFT shall also have received certificates
of (i) The Portfolio Group, Inc., in its capacity as investment adviser
to The U.S. Treasury Money Market Fund, The Government Money Market
Fund, The 100% U.S. Treasury Securities Money Market Fund and The New
York Tax Free Money Market Fund of Hanover, (ii) Texas Commerce Bank,
National Association, in its capacity as investment adviser to The Cash
Management Fund and The Tax Free Money Market Fund of Hanover, (iii)
Furman Selz Incorporated, in its capacity as Hanover's administrator
and (iv) Hanover Funds Distributor, Inc., in its capacity as Hanover's
distributor, in each case to the effect that, as of the Effective Time
of the
<PAGE>
16
Reorganization, such entity is not aware that any of the
representations and warranties of Hanover herein is not true in all
material respects.
(c) Portfolio Securities. All securities to be acquired by
each MFT Portfolio in the Reorganization shall have been approved for
acquisition by the investment adviser of such MFT Portfolio as
consistent with the investment policies of such MFT Portfolio and all
such securities on the books of the Corresponding Portfolio that are
not readily marketable shall be valued on the basis of an evaluation by
an independent appraiser acceptable to both Hanover and MFT at the
expense of Chemical Banking Corporation and/or The Chase Manhattan
Corporation, taking into account the information contained in the
Schedule.
(d) Regulatory Approval. The Registration Statement, the First
N-1A Amendment and the Second N-1A Amendment shall each have been
declared effective by the Commission, no stop orders under the
Securities Act pertaining thereto shall have been issued and all
approvals, registrations, and exemptions under federal and state laws
considered to be necessary shall have been obtained.
(e) Tax Opinion. MFT shall have received the opinion of
Simpson Thacher & Bartlett, dated on or before the date of the Closing,
addressed to and in form and substance satisfactory to MFT, as to
certain of the federal income tax consequences under the Code of the
Reorganization insofar as it relates to each Hanover Portfolio and its
Corresponding MFT Portfolio, and to shareholders of each Hanover
Portfolio. For purposes of rendering their opinion, Simpson Thacher &
Bartlett may rely exclusively and without independent verification as
to factual matters, upon the statements made in this Agreement, the
prospectus/proxy statement which will be distributed to the
shareholders of the Hanover Portfolios in connection with the
Reorganization, and upon such other written representations as the
President of each of Hanover and MFT will have verified as of the
Effective Time of the Reorganization. The opinion of Simpson Thacher &
Bartlett 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 Code with respect to each Hanover Portfolio and its
Corresponding MFT Portfolio; (ii) no gain or loss will be recognized by
any of the Hanover Portfolios or the Corresponding MFT Portfolios upon
the transfer of all the assets and liabilities, if any, of each Hanover
Portfolio to its Corresponding MFT Portfolio solely in exchange for MFT
Portfolio Shares or upon the distribution of the MFT Portfolios Shares
to the holders of Hanover Portfolio Shares solely in exchange for all
of their Hanover Portfolios Shares; (iii) no gain or loss will be
recognized by shareholders of any of the Hanover Portfolios upon the
exchange of such Hanover Portfolio Shares solely for MFT Portfolio
Shares; (iv) the holding period and tax basis of the MFT Portfolio
Shares received by each holder of Hanover Portfolio Shares pursuant to
the Reorganization will be the same as the holding period (provided the
Hanover Portfolio Shares were held as a capital asset on the date of
the Reorganization) and tax basis of the Hanover Portfolio Shares held
by the shareholder immediately prior to the Reorganization; and (v) the
holding period and tax basis of the assets of each of the
<PAGE>
17
Hanover Portfolios acquired by its Corresponding MFT Portfolio will be
the same as the holding period and tax basis of those assets to each of
the Hanover Portfolios immediately prior to the Reorganization.
The payment by Chemical Banking Corporation and/or The Chase
Manhattan Corporation of the related Reorganization expenses referred
to in Section 10 hereof will not affect the opinions set forth above
regarding the tax consequences of the exchanges by Hanover and the
shareholders of Hanover; however, Simpson Thacher & Bartlett will
express no opinion as to any federal income tax consequences to any of
the parties of the payment of such expenses by Chemical Banking
Corporation and/or The Chase Manhattan Corporation.
(f) Opinion of Counsel. MFT shall have received the opinion of
Simpson Thacher & Bartlett, as counsel for Hanover, dated as of the
date of the Closing, addressed to and in form and substance
satisfactory to MFT, to the effect that (i) Hanover is a corporation
duly organized and validly existing under the laws of the State of
Maryland and each Hanover Portfolio is a validly existing series of
shares of such corporation; (ii) Hanover is an open-end investment
company of the management type registered under the Act; (iii) this
Agreement and the Reorganization provided for herein and the execution
of this Agreement have been duly authorized and approved by all
requisite corporate action of Hanover and this Agreement has been duly
executed and delivered by Hanover and is a valid and binding obligation
of Hanover enforceable against Hanover in accordance with its terms,
except as affected by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing; (iv) to the best of such
counsel's knowledge, no consent, approval, order or other authorization
of any federal or New York state or Maryland state court or
administrative or regulatory agency is required for Hanover to enter
into this Agreement or carry out its terms that has not already been
obtained other than where the failure to obtain any such consent,
approval, order or authorization would not have a material adverse
effect on the operations of Hanover; (v) to the best of such counsel's
knowledge, Hanover is not in breach or violation of any material
contract listed on Schedule II hereto to which it is a party, which
breach or violation would (a) affect the ability of Hanover to enter
into this Agreement or consummate the transactions contemplated hereby,
including the Reorganization, or (b) have a material adverse effect on
the business or financial condition of Hanover; and (vi) to the best of
such counsel's knowledge, no federal or New York state or Maryland
state administrative or regulatory proceeding is pending or threatened
against Hanover which would (a) affect the ability of Hanover to enter
into this Agreement or consummate the transactions contemplated hereby,
including the Reorganization, or (b) have a material adverse effect on
the business or financial condition of Hanover. In rendering such
opinion, Simpson Thacher & Bartlett may rely on the opinion of Maryland
counsel as to matters relating to Maryland law, and on certificates of
officers and/or trustees of Hanover as to factual matters.
<PAGE>
18
(g) Vote by the Sole Shareholder of Vista 100% U.S. Treasury
Securities Money Market Fund. _____________ shall have voted,
immediately after it becomes sole shareholder of Vista Shares of Vista
100% U.S. Treasury Securities Money Market Fund of MFT and prior to the
receipt by Hanover of any of Vista 100% U.S. Treasury Securities Money
Market Fund shares other than the share purchased by _____________
pursuant to Section 7(f) hereof, to:
(i) approve the investment advisory agreement
between MFT and The Chase Manhattan Bank, N.A., and the
sub-investment advisory agreement between The Chase Manhattan
Bank and Chase Asset Management, Inc. with respect to Vista
100% U.S. Treasury Securities Money Market Fund as
contemplated by Section 7(f) hereof;
(ii) approve MFT's distribution plan pursuant
to Rule 12b-1 under the Act for Vista Shares of Vista 100%
U.S. Treasury Securities Money Market Fund as contemplated by
Section 7(f) hereof;
(iii) approve all persons who are to be
Trustees of MFT effective upon consummation of the
Reorganization as Trustees of MFT; and
(iv) approve the selection of Price Waterhouse
LLP as MFT's independent auditors for the fiscal year ending
August 31, 1996.
(h) Vote by the Sole Shareholder of Vista Shares of Vista
Treasury Plus Money Market Fund. _____________ shall have voted,
immediately after it becomes sole shareholder of Vista Shares of Vista
Treasury Plus Money Market Fund of MFT and prior to the receipt by
Hanover of any of Vista Treasury Plus Money Market Fund shares other
than the share purchased by _____________ pursuant to Section 7(g)
hereof, to approve MFT's distribution plan pursuant to Rule 12b-1 under
the Act for Vista Shares of Vista Treasury Plus Money Market Fund as
contemplated by Section 7(g) hereof.
(i) Contract Terminations. Hanover shall have terminated the
agreements referred to in Section 6(e) of this Agreement as provided
therein.
(j) Bank Holding Company Merger. The merger of The Chase
Manhattan Corporation with and into Chemical Banking Corporation shall
have been consummated.
SECTION 9. AMENDMENTS; TERMINATIONS; NO SURVIVAL OF COVENANTS,
WARRANTIES AND REPRESENTATIONS
(a) Amendments. The parties hereto may, by agreement in
writing authorized by their respective Board of Trustees or Board of
Directors, amend this Agreement at any time before or after approval
hereof by the shareholders of Hanover or MFT or
<PAGE>
19
both, 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 of the parties hereto 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 neither party may waive the conditions set forth in
Sections 7(c) or 8(d) hereof.
(c) Termination by Hanover. Hanover may terminate this
Agreement at any time prior to the Effective Time of the Reorganization
by notice to MFT and Chemical Banking Corporation if (i) a material
condition to its performance hereunder or a material covenant of MFT
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 Agreement shall be made by MFT.
(d) Termination by MFT. MFT may terminate this Agreement at
any time prior to the Effective Time of the Reorganization by notice to
Hanover and Chemical Banking Corporation if (i) a material condition to
its performance hereunder or a material covenant of Hanover 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 Agreement shall be made by Hanover.
(e) Termination by either Hanover or MFT. This Agreement may
be terminated by Hanover or MFT at any time prior to the Effective Time
of the Reorganization, whether before or after approval of this
Agreement by the shareholders of Hanover, without liability on the part
of either party hereto, its respective Directors, Trustees, officers or
shareholders, or Chemical Banking Corporation, on notice to the other
parties in the event that such party's Board of Directors or Board of
Trustees, as the case may be, determines that proceeding with this
Agreement is not in the best interest of that party's shareholders.
Unless the parties hereto shall otherwise agree in writing, this
Agreement shall terminate without liability as of the close of business
on July 31, 1996 if the Effective Time of the Reorganization is not on
or prior to such date.
(f) Survival. No representations, warranties or covenants in
or pursuant to this Agreement (including certificates of officers),
except for the provisions of Section 10 of this Agreement, shall
survive the Reorganization.
SECTION 10. EXPENSES; INSURANCE
(a) Except as otherwise specified in this Section 10, the
expenses of the Reorganization will be borne by Chemical Banking
Corporation and/or The Chase Manhattan Corporation. Such expenses
include, without limitation, (i) expenses incurred in connection with
the entering into and the carrying out of the provisions of
<PAGE>
20
this Agreement; (ii) expenses associated with the preparation and
filing of the Registration Statement under the Securities Act covering
the MFT Portfolio Shares to be issued pursuant to the provisions of
this Agreement (other than registration fees payable to the Commission
in respect of the registration of such shares, which shall be payable
by the respective MFT Portfolios in which such shares represent
interests); (iii) registration or qualification fees and expenses of
preparing and filing such forms as are necessary under applicable state
securities laws to qualify the Corresponding MFT Portfolio Shares to be
issued in connection herewith in each state in which shareholders of
the corresponding Hanover Portfolios are resident as of the date of the
mailing of the Prospectus to such shareholders; (iv) postage; (v)
printing; (vi) accounting fees; (vii) legal fees and (viii)
solicitation costs relating to the Reorganization.
(b) Chemical Banking Corporation and/or The Chase Manhattan
Corporation agrees to purchase, prior to the Effective Time of the
Reorganization, trustee and officers liability insurance coverage for
the benefit of the Board of Directors of Hanover for a period of one
year following the Closing, the coverage and policy limits to be no
less favorable than those of the Hanover insurance coverage currently
in existence.
SECTION 11. NOTICES
Any notice, report, statement or demand required or permitted by any
provision of this Agreement shall be in writing and shall be given by 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:
(a) if to Hanover, to it at:
237 Park Avenue
New York, New York 10017
Attention: Joan V. Fiore, Esq.
Facsimile: (212) 808-3980
with a copy to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Gary S. Schpero, Esq.
Facsimile: (212) 455-2502
(b) if to MFT, to it at:
<PAGE>
21
125 West 55th Street
New York, New York 10019
Attention: Ann Bergin
Facsimile: (212) ______________
with a copy to:
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
919 Third Avenue
New York, New York 10022
Attention: Carl Frischling, Esq.
Facsimile: (212) 715-8000
(c) if to Chemical Banking Corporation, to it at:
270 Park Avenue
48th Floor
New York, New York 10017
Attention: Gary N. Gordon
Facsimile: (212) 270-4173
with a copy to:
c/o Chemical Bank
270 Park Avenue
New York, New York 10017
Attention: Molly Sheehan, Esq.
Facsimile: (212) 270-1224
(d) if to The Chase Manhattan Corporation, to it at:
c/o Vista Capital Management
101 Park Avenue
New York, New York 10178
Attention: Leonard M. Spalding, Jr.
Facsimile: (212) 907-6123
with a copy to:
c/o The Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, New York 10081
Attention: Deborah B. Oliver, Esq.
Facsimile: (212) 552-4786
SECTION 12. GENERAL
<PAGE>
22
This Agreement supersedes all prior agreements between the parties
(written or oral), is intended as a complete and exclusive statement of the
terms of the Agreement between the parties and may not be changed or terminated
orally. This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement, and shall become effective when
one or more counterparts have been executed by Hanover and MFT and delivered to
each of the parties hereto. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Nothing in this Agreement, expressed or
implied, is intended to confer upon any other person any rights or remedies
under or by reason of this Agreement.
<PAGE>
23
Copies of the Declaration of Trust, as amended, establishing MFT are on
file with the Secretary of the Commonwealth of Massachusetts and with the City
Clerk for the City of Boston, and notice is hereby given that this Agreement and
Plan of Reorganization and Liquidation is executed on behalf of MFT by officers
of MFT as officers and not individually and that the obligations of or arising
out of this Agreement are not binding upon any of the Trustees, officers,
shareholders, employees or agents of MFT individually but are binding only upon
the assets and property of MFT.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
Attest: MUTUAL FUND TRUST
By:______________________ By_______________________
Attest: THE HANOVER FUNDS, INC.
By:______________________ By________________________
Accepted and agreed to as to Sections 8(c) and 10:
CHEMICAL BANKING CORPORATION
By:______________________
[ ]
Attorney-in-fact
THE CHASE MANHATTAN CORPORATION
By:______________________
[ ]
Attorney-in-fact
<PAGE>
SCHEDULE I
to Agreement
CORRESPONDING PORTFOLIOS OF THE HANOVER FUNDS, INC.
AND MUTUAL FUND TRUST
Hanover Portfolios Corresponding MFT Portfolios
- ------------------ ----------------------------
The 100% U.S. Treasury Vista 100% U.S. Treasury
Securities Money Market Fund Securities Money Market Fund
The U.S. Treasury Money Market Fund Vista Treasury Plus Money Market Fund
The Government Money Market Fund Vista U.S. Government Money Market
Fund
The Cash Management Fund Vista Global Money Market Fund
The Tax Free Money Market Fund Vista Tax Free Money Market Fund
The New York Tax Free Money Vista New York Tax Free Money
Market Fund Market Fund
Exhibit 11(a)
Consent of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel.
Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022 3852
(212) 715 9100
FAX
(212) 715-8000
------
WRITER'S DIRECT NUMBER
(212) 715-9100
December 20, 1995
Mutual Fund Trust
125 West 55th Street
New York, New York 10019
Re: Registration Statement on Form N-1A
File No. 33-75250
Gentlemen:
We hereby consent to the reference of our firm as counsel in this
Registration Statement on Form N-1A.
Very truly yours,
/s/Kramer, Levin, Naftalis, Nessen, Kamin & Frankel
Exhibit 11(b)
Consent of KPMG Peat Marwick, LLP.
Independent Accountants' Consent
To the Shareholders and Directors of the 100% U.S. Treasury Securities Money
Market Fund:
We consent to the use of our report dated January 20, 1995 with respect to the
Hanover 100% U.S. Treasury Securities Fund incorporated herein by reference and
to the references to our Firm under the headings "Financial Highlights" in the
Prospectus and "Independent Auditors" in the Statement of Additional
Information.
KPMG Peat Marwick LLP
New York, New York
December 28, 1995
Exhibit 15(b)
Form of Proposed Rule 12b-1 Distribution Plan (including
forms of Selected Dealer Agreement and Shareholder Servicing Agreement).
DRAFT
MUTUAL FUND TRUST
VISTA SHARES
PROPOSED
PLAN FOR PAYMENT OF CERTAIN EXPENSES FOR
DISTRIBUTION OR SHAREHOLDER SERVICING ASSISTANCE
Distribution Plan (the "Plan") of MUTUAL FUND TRUST, a Massachusetts
business trust (the "Trust"), an open-end, non-diversified management investment
company registered under the Investment Company Act of 1940, as amended (the
"Act"), on behalf of the class of shares designated as the Vista Shares of its
Vista California Tax Free Money Market Fund, Vista New York Tax Free Money
Market Fund, Vista Tax Free Money Market Fund, Vista U.S. Government Money
Market Fund, Vista Cash Management Money Market Fund, Vista Federal Money Market
Fund, Vista U.S. Treasury Money Market Fund, Vista Tax Free Income Fund, Vista
New York Tax Free Income Fund, Vista California Intermediate Tax Free Income
Fund, Vista 100% U.S. Treasury Securities Money Market Fund and the Vista shares
of any series of the Trust which may be created in the future, adopted pursuant
to Section 12(b) of the Act and Rule 12b-1 promulgated thereunder ("Rule
12b-1").
1. Principal Underwriter. Vista Broker-Dealer Services, Inc., a
Delaware corporation ("the Distributor"), acts as the principal underwriter of
the shares of each series of the Trust pursuant to a Distribution and
Sub-Administration Agreement.
2. Distribution Payments. (a) The Trust may make payments periodically
(i) to the Distributor or to any broker-dealer (a "Broker") who is registered
under the Securities Exchange Act of 1934 and a member in good standing of the
National Association of Securities Dealers, Inc. and who has entered into a
selected dealer agreement with the Distributor in a form similar to the one
annexed hereto as Exhibit A or (ii) to other persons or organizations
("Servicing Agents") who have entered into shareholder processing and service
agreements with the Trust or with the Distributor, in a form similar to the one
annexed hereto as Exhibit B, with respect to Trust shares owned by shareholders
for which such broker is the dealer or holder of record or such Servicing Agent
has a servicing relationship.
(b) Payments may be made pursuant to the Plan for any advertising and
promotional expenses relating to selling efforts of the shares of each series of
the Trust, including but not limited to the incremental costs of printing
(excluding typesetting) of prospectuses, statements of additional information,
annual reports and other periodic reports for distribution to persons who are
not shareholders of the Trust; the costs of preparing and distributing any other
supplemental sales literature; expenses of certain personnel engaged in the
distribution of shares; costs of travel, office expenses (including rent and
overhead), equipment, printing, delivery and mailing costs incurred in the
distribution of shares.
-1-
<PAGE>
(c) The aggregate amount of payments by the Trust in a fiscal year, to
brokers, servicing agents, or the Distributor pursuant to paragraphs (a) and (b)
shall not exceed .25% of the average daily net assets of each series of the
Trust.
(d) The schedule of such fees and the basis upon which such fees will
be paid shall be determined from time to time by the Board of Trustees of the
Trust.
3. Reports. Quarterly, in each year that this Plan remains in effect,
the Trust and the Distributor shall prepare and furnish to the Board of Trustees
of the Trust a written report, complying with the requirements of Rule 12b-1,
setting forth the amounts expended by the Trust under the Plan and purposes for
which such expenditures were made.
4. Approval of Plan. This Plan shall become effective upon approval of
the Plan, the form of Selected Dealer Agreement and the form of Shareholder
Service Agreement, by the majority votes of both (a) the Trust's Board of
Trustees and the Qualified Trustees (as defined in Section 6), cast in person at
a meeting called for the purpose of voting on the Plan and (b) the outstanding
voting securities of each series of the Trust, as defined in Section 2(a)(42) of
the Act.
5. Term. This Plan shall remain in effect for one year from its
adoption date and may be continued thereafter if this Plan and all related
agreements are approved at least annually by a majority vote of the Trustees of
the Trust, including a majority of the Qualified Trustees, cast in person at a
meeting called for the purpose of voting on such Plan and agreements. This Plan
may not be amended in order to increase materially the amount to be spent for
distribution assistance without shareholder approval in accordance with Section
4 hereof. All material amendments to this Plan must be approved by a vote of the
Board of Trustees of the Trust, and of the Qualified Trustees (as hereinafter
defined), cast in person at a meeting called for the purpose of voting thereon.
6. Termination. This Plan may be terminated as to any series at any
time by a majority vote of the Trustees who are not interested persons (as
defined in Section 2(a)(19) of the Act) of the Trust and have no direct or
indirect financial interest in the operation of the Plan or in any agreements
related to the Plan (the "Qualified Trustees") or by vote of a majority of the
outstanding voting securities of the Trust, as defined in Section 2(a)(42) of
the Act.
7. Nomination of "Disinterested" Trustees. While this Plan shall be in
effect, the selection and nomination of the "disinterested" trustees of the
Trust shall be committed to the discretion of the Qualified Trustees then in
office.
8. Miscellaneous. (a) Any termination or noncontinuance of (i) a
selected dealer agreement between the Distributor and a particular broker or
(ii) a shareholder service agreement between the Distributor or the Trust and a
particular person or organization, shall have no effect on any similar
agreements between brokers or other persons and the Distributor of the Trust
pursuant to this Plan.
-2-
<PAGE>
(b) Neither the Distributor nor the Trust shall be under any obligation
because of this Plan to execute any selected dealer agreement with any broker or
any shareholder service agreement with any person or organization.
(c) All agreements with any person or organization relating to the
implementation of this Plan shall be in writing and any agreement related to
this Plan shall be subject to termination, without penalty, pursuant to the
provisions of Section 6 hereof.
Dated: __________, 1996
-3-
<PAGE>
EXHIBIT A
Vista Broker-Dealer Services, Inc.
125 West 55th Street
New York, New York 10019
Re: Selected Dealer Agreement for
Mutual Fund Trust
Gentlemen:
We understand that Mutual Fund Trust (the "Trust") has adopted plans
(the "Plans") pursuant to Rule 12b-1 of the Investment Company Act of 1940, as
amended (the "Act") for making payments to selected brokers for Trust
distribution assistance.
We desire to enter into an Agreement with you for the sale and
distribution of the shares of the Premier Funds of the Trust (the "shares") for
which you are Distributor and whose shares are offered to the public at net
asset value. Upon acceptance of this Agreement by you, we understand that we may
offer and sell the shares, subject, however, to all of the terms and conditions
hereof and to your right to suspend or terminate the sale of such securities.
1. We understand that the shares covered by this Agreement will be
offered and sold at net asset value without a sales charge. We further
understand that all purchase requests and applications submitted by us are
subject to acceptance or rejection in the Trust's discretion.
2. We certify that we are members of the National Association of
Securities Dealers, Inc. ("NASD") and agree to maintain membership in said
Association, or in the alternative, that we are foreign brokers not eligible for
membership in said Association. In either case, we agree to abide by all the
rules and regulations of the NASD which are binding upon underwriters and
brokers in the distribution of the shares of open-end investment companies,
including without limitation, Section 26 of Article III of the Rules of Fair
Practice, all of which are incorporated herein" as if set forth in full. We
further agree to comply with all applicable state and Federal laws and the rules
and regulations of authorized regulatory agencies. We agree that we will not
sell or offer for sale, the shares in any state or jurisdiction where they are
not exempt from or have not been qualified for sale.
3. We will offer and sell the Shares covered by this Agreement only in
accordance with the terms and conditions of its then current Prospectus, and we
will make no representations not included in said Prospectus or in any
authorized supplemental material supplied by you. We will use our best efforts
in the development and promotion of sales of the shares covered by this
Agreement and agree to be responsible for the proper instruction and training of
all sales personnel employed by us, in order that the shares will be offered in
accordance with the terms and conditions of this Agreement and all applicable
laws, rules and regulations. We agree to hold you harmless and indemnify you in
the event that we, or any of our sales representatives, should violate any law,
rule or regulation, or any provisions of this Agreement, which may result in
liability to you; and in the event you determine to refund any amount paid by
any investor by reason of any such violation on our part, we shall return to you
any distribution assistance payments previously paid or allowed by you to us
with respect to the transaction for which the refund is made. All expenses which
we incur in connection with our activities under this Agreement shall be borne
by us.
4. For purposes of this Agreement "Qualified Accounts" shall mean:
accounts of customers of ours who have purchased shares and who use our
facilities to communicate with the Trust or to effect redemptions or additional
purchases of shares and with respect to which we provide shareholder and
administration services, which services may include, without limitation:
answering inquiries regarding the Trust; assistance to customers in changing
dividend options, account designations and addresses; performance of
sub-accounting; establishment and maintenance of shareholder accounts and
records; processing purchase and redemption transactions; automatic investment
in Trust shares of customer account cash balances; providing periodic statements
showing a customer's account balance and
A-1
<PAGE>
the integration of such statements with those of other transactions and balances
in the customer's other accounts serviced by us; arranging for bank wires; and
such other shareholder services as you reasonably may request, to the extent we
are permitted by applicable statute, rule or regulation.
5. In consideration of the services and facilities described herein, we
shall be entitled to receive from you such fees as are set forth in the Plans
for Payment of Certain Expenses for Distribution or Shareholder Servicing
Assistance. We understand that the payment of such fees has been authorized
pursuant to Plans approved by the Board of Trustees and shareholders of certain
of the Funds comprising the Trust and shall be paid only so long as this
Agreement is in effect.
6. The frequency of payment, the terms of any right to sell in a
territory, and any other supplemental terms, conditions or qualifications for us
to receive such payments are subject to change by you from time to time, upon 30
days' written notice. Any orders placed after the effective date of such change
shall be subject to the fee rates in effect at the time of receipt of the
payment by the Trust or you. Such 30-day period may be waived at your sole
option in the event such change increases the distribution assistance payments
due us.
7. Payment for shares shall be made to the Trust and shall be received
by the Trust promptly after the acceptance of our order. If such payment is not
received by the Trust, we understand that the Trust reserves the right without
notice, forthwith to cancel the sale, or, at the Trust's option, to sell the
shares ordered by us back to the Trust in which latter case we may be held
responsible for any loss, including loss of profit, suffered by the Trust
resulting from our failure to make payments aforesaid.
8. Your obligations to us under this Agreement are subject to all the
provisions of any underwriting agreements you have or may enter into with the
Trust provided copies thereof have been provided to us. We understand and agree
that in performing our services covered by this Agreement we are acting as
principal, and you are in no way responsible for the manner of our performance
or for any of our acts or omissions in connection therewith. Nothing in this
Agreement or in the Plans shall be construed to constitute us or any of our
agents, employees or representatives as your agent, partner or employee, or the
agent, partner or employee of the Trust.
9. This Agreement shall terminate automatically (i) in the event of its
assignment, the term "assignment" for this purpose having the meaning defined in
Section 2(a)(4) of the Act or (ii) in the event the Plans are terminated.
10. This Agreement may be terminated at any time (without payment of
any penalty) by a majority of the "Qualified Trustees" as defined in the Plans
or by a vote of a majority of the outstanding voting securities of the Trust as
defined in the Plans (on not more than 60 days' written notice to us at our
principal place of business). We, on 60 days' written notice addressed to you at
your principal place of business, may terminate this Agreement. You may also
terminate this Agreement for cause on violation by us of any of the provisions
of this Agreement, said termination to become effective on the date of mailing
notice to us of such termination. Without limiting the generality of the
foregoing, any provision hereof to the contrary notwithstanding, our expulsion
from the NASD will automatically terminate this Agreement without notice; our
suspension from the NASD or violation of applicable state or Federal laws or
rules and regulations of authorized regulatory agencies will terminate this
Agreement effective upon date of mailing notice to us of such termination. Your
failure to terminate for any cause shall not constitute a waiver of your right
to terminate at a later date for any such cause.
A-2
<PAGE>
11. All communications to you shall be sent to you at your offices at
156 West 56th Street, New York, New York 10019. Any notice to us shall be duly
given if mailed or telegraphed to us at the address shown on this Agreement.
12. This Agreement shall become effective as of the date when it is
executed and dated by you below. This Agreement and all the rights and
obligations of the parties hereunder shall be governed by and construed under
the laws of the State of New York.
___________________________________________
(Broker/Dealer)
By:________________________________________
Name:
Title:
___________________________________________
(Address)
___________________________________________
(City) (State) (Zip Code)
Accepted:
VISTA BROKER-DEALER SERVICES, INC.
Distributor
By:_______________________________
Name:
Title:
Dated:
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<PAGE>
EXHIBIT B
Mutual FundTrust
125 West 55th Street
New York, New York 10019
Re: Shareholder Service Agreement for
Mutual Fund Trust
Gentlemen:
We understand that Mutual Fund Trust (the "Trust") has adopted plans
(the "Plans"), on behalf of the existing series (the "Funds") of the Trust,
pursuant to Rule 12b-1 of the Investment Company Act of 1940, as amended (the
"Act"), for making payments to certain persons for distribution assistance and
shareholder servicing.
We desire to enter into an Agreement with the Trust for the servicing
of shareholders of, and the administration of shareholder accounts in, certain
Funds comprising the Trust. Subject to the Trust's acceptance of this Agreement,
the terms and conditions of this Agreement, shall be as follows:
1. We shall provide shareholder and administration services for certain
shareholders of the Funds who purchase shares of the Funds as a result of their
relationship to us, as further designated in Exhibit A hereto ("Qualified
Accounts"). Such services may include, without limitation, some or all of the
following: answering inquiries regarding the Funds; assistance in changing
dividend options, account designations and addresses; performance of
sub-accounting; establishment and maintenance of shareholder accounts and
records; assistance in processing purchase and redemption transactions;
providing periodic statements showing a shareholder's account balance and the
integration of such statements with those of other transactions and balances in
the shareholder's other accounts serviced by us, if any; and such other
information and services as the Trust reasonably may request, to the extent we
are permitted by applicable statute, rule or regulation to provide such
information or services.
2. If Fund shares are to be purchased or held by us on behalf of our
clients:
(i) Such shares will be registered in our name or in the name
of our nominee. The client will be the beneficial owner of the shares
of each Fund purchased and held by us in accordance with the client's
instructions and the client may exercise all rights of a shareholder of
a Fund. We agree to transmit to the Trust's transfer agent in a timely
manner, all purchase orders and redemption requests of our clients and
to forward to each client all proxy statements, periodic shareholder
reports and other communications received from the Trust by us on
behalf of our clients.
(ii) We agree to transfer to the Trust's transfer agent, on
the date such purchase orders are effective, federal funds in an amount
equal to the amount of all purchase orders placed by us on behalf of
our clients and accepted by the Trust (net of any redemption orders
placed by us on behalf of our clients). In the event that the Trust
fails to receive such federal funds on such date (other than through
the fault of the Trust or its transfer agent), we shall indemnify the
Trust against any expense (including overdraft charges) incurred by the
Trust as a result of its failure to receive such federal funds.
(iii) We agree to make available to the Trust, upon the
Trust's request, such information relating to our clients who are
beneficial owners of Fund shares and their transactions in Fund shares
as may be required by applicable laws and regulations or as may be
reasonably requested by the Trust.
B-1
<PAGE>
(iv) We agree to transfer record ownership of a client's
shares of a Fund to the client promptly upon the request of the client.
In addition, record ownership will be promptly transferred to the
client in the event that the person or entity ceases to be our client.
3. We shall provide to the Trust copies of the lists of members of our
organization, if any, and make available to the Trust any publications and other
facilities of our organization for the placement of advertisements or
promotional materials and sending information regarding the Funds, to enable the
Trust to solicit for sale and to sell shares to such members.
4. We shall provide such facilities and personnel (which may be all or
any part of the facilities currently used in our business, or all or any
personnel employed by us) as is necessary or beneficial for providing
information and services to shareholders maintaining Qualified Accounts with the
Trust, and to assist the Trust in servicing accounts of such shareholders.
5 Neither we nor any of our employees or agents are authorized to make
any representation concerning Fund shares except those contained in the then
current Prospectus for the applicable Fund, copies of which will be supplied by
the Trust to us; and we shall have no authority to act as agent for the Trust.
6. In consideration of the services and facilities described herein, we
shall be entitled to receive from each Fund such fees as are set forth in
Exhibit A hereto. We understand that the payment of such fees has been
authorized pursuant to the Plans approved by the Trustees and shareholders of
the Trust and shall be paid only so long as the Plans and this Agreement are in
effect.
7. The Trust reserves the right, at the Trust's discretion and without
notice, to suspend the sale of shares or withdraw the sale of shares of each
Fund.
8. This Agreement shall terminate automatically (i) in the event of
its assignment, the term "assignment" for this purpose having the meaning
defined in Section 2(a)(4) of the Act or (ii) in the event that the Plans
terminate.
9. This Agreement may be terminated at any time (without payment of any
penalty) by a majority of the "Qualified Trustees" as defined in the Plans or by
a vote of a majority of the outstanding voting securities of each Fund as
defined in the Plans (on not more than 60 days' written notice to us at our
principal place of business). We, on 60 days' written notice addressed to the
Trust at its principal place of business, may terminate this Agreement. The
Trust may also terminate this Agreement for cause on violation by us of any of
the provisions of this Agreement or in the event that the Plans shall terminate,
said termination to become effective on the date of mailing notice to us of such
termination. The Trust's failure to terminate for any cause shall not constitute
a waiver of its right to terminate at a later date for any such cause.
10. All communications to the Trust shall be sent to the Trust at the
address set forth above. Any notice to us shall be duly given if mailed or
telegraphed to us at the address set forth below.
B-2
<PAGE>
11. This Agreement shall become effective as of the date when it is
executed and dated by the Trust below. This Agreement and all the rights and
obligations of the parties hereunder shall be governed by and construed under
the laws of the State of New York.
______________________________________
(Firm Name)
_____________________________________
(Address)
_____________________________________
(Firm Name)
_____________________________________
(City) (State) (Zip Code)
By:_______________________________________
Name:
Title:
Accepted:
MUTUAL FUND TRUST
By:_____________________________
Name:
Title:
Dated:
B-3
<PAGE>
Exhibit 16
Schedule for Computation of Each Performance Quotation.
EXHIBIT 16
FORM OF COMPUTATION OF PERFORMANCE QUOTATION
YIELDS. A Fund's "yield" (referred to as "standardized yield") for a given
30-day period for a class of shares is calculated using the following formula
set forth in rules adopted by the Securities and Exchange Commission that apply
to all funds that quote yields:
Standardized Yield = 2 [(a-b + 1)^6 - 1]
---
cd
The symbols above represent the following factors:
a = dividends and interest earned during the 30-day period.
b = expenses accrued for the period (net of any expense reimbursements).
c = the average daily number of shares outstanding during the 30-day period
that were entitled to receive dividends.
d = the maximum offering price per share of the class on the last day of the
period, adjusted for undistributed net investment income.
<PAGE>
EXHIBIT 16
FORM OF COMPUTATION OF PERFORMANCE QUOTATION
TOTAL RETURNS. The "average annual total return" of each class of a fund is an
average annual compounded rate of return for each year in a specified number of
years. It is the rate of return based on the change in value of a hypothetical
initial investment of $1,000 ("P" in the formula below) held for a number of
years ("n") to achieve an Ending Redeemable Value ("ERV"), according to the
following formula:
( ERV )^n - 1 = Average Annual Total Return ("T")
-----
( P )
Where: P = A hypothetical initial payment of $1000
T = Average annual total return
n = Number of years
ERV = Ending redeemable value of a hypothetical $1,000
payment made at the beginning of the one, five,
or 10 year periods at the end of the one, five, or
10 year periods (or fractional portion
thereof).
<PAGE>
EXHIBIT 16
FORM OF COMPUTATION OF PERFORMANCE QUOTATION - MONEY MARKET FUNDS
YIELD
A money market fund calculates its yield daily, based upon the seven days ending
on the day of the calculation, called the "base period." This yield is computed
by:
o determining the net change in the value of a hypothetical account with
a balance of one share at the beginning of the base period, with the
net change excluding capital changes but including the value of any
additional shares purchased with dividends earned from the original one
share and all dividends declared on the original and any purchased
shares;
o dividing the net change in the account's value by the value of the
account at the beginning of the base period to determine the base
period return; and
o multiplying the base period return by (365/7).
<PAGE>
EXHIBIT 16
FORM OF COMPUTATION OF PERFORMANCE QUOTATION - MONEY MARKET FUNDS
EFFECTIVE YIELD
A money market fund's effective yield is computed by compounding the
unannualized base period return by:
o adding 1 to the base period return;
o raising the sum to the 365/7th power; and
o subtracting 1 from the result
according to the following formula:
EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)^365/7] - 1
Exhibit 18
Form of Rule 18f-3 Multi-Class Plan.
MUTUAL FUND TRUST
RULE 18f-3 MULTI-CLASS PLAN
I. Introduction.
Pursuant to Rule 18f-3 under the Investment Company Act of
1940, as amended (the "1940 Act"), the following sets forth the method for
allocating fees and expenses among each class of shares of the underlying
investment funds of Mutual Fund Trust (the "Trust") that issues multiple classes
of shares (the "Multi-Class Funds"). In addition, this Rule 18f-3 Multi-Class
Plan (the "Plan") sets forth the shareholder servicing arrangements,
distribution arrangements, conversion features, exchange privileges and other
shareholder services of each class of shares in the Multi-Class Funds.
The Trust is an open-end series investment company registered
under the 1940 Act the shares of which are registered on Form N-1A under the
Securities Act of 1933 (Registration Nos. 33-75250 and 811-8358). Upon the
effective date of this Plan, the Trust hereby elects to offer multiple classes
of shares in the Multi-Class Funds pursuant to the provisions of Rule 18f-3 and
this Plan.
The Trust currently consists of the following fourteen
separate Funds: Vista California Tax Free Money Market Fund, Vista New York Tax
Free Money Market Fund, Vista Tax Free Money Market Fund, Vista U.S. Government
Money Market Fund, Vista Cash Management Money Market Fund, Vista Federal Money
Market Fund, Vista Treasury Plus Money Market Fund, Vista 100% U.S. Treasury
Securities Money Market Fund, Vista Prime Money Market Fund, Vista Tax Free
Income Fund, Vista New York Tax Free Income Fund, Vista California Intermediate
Tax Free Income Fund, Vista U.S. Treasury Income Fund and Vista U.S. Government
Securities Fund.
Each of the following Funds is a Multi-Class Fund, authorized
to issue the following classes of shares representing interests in the same
underlying portfolio of assets of the respective Fund:
(i) Vista Tax Free Income Fund, Vista New York Tax Free
Income Fund, Vista U.S. Treasury Income Fund, Vista
U.S. Government Securities Fund, are authorized to
issue two classes of shares -- Class A and Class B
shares;
(ii) Vista Tax Free Money Market Fund, Vista U.S.
Government Money Market Fund, Vista Cash Management
Fund, Vista Federal Money
<PAGE>
Market Fund, Vista U.S. Treasury Plus Money Market
Fund, and Vista 100% U.S. Treasury Securities Money
Market Fund are authorized to issue Vista Shares,
Premier Shares and Institutional Shares classes of
shares; and
(iii) the Prime Money Fund is authorized to issue Premier
Shares, Institutional Shares and Class B shares
classes of shares.
II. Allocation of Expenses.
Pursuant to Rule 18f-3 under the 1940 Act, the Trust shall
allocate to each class of shares in a Multi-Class Fund (i) any fees and expenses
incurred by the Trust in connection with the distribution of such class of
shares under a distribution plan adopted for such class of shares pursuant to
Rule 12b-1, and (ii) any fees and expenses incurred by the Trust under a
shareholder servicing plan in connection with the provision of shareholder
services to the holders of such class of shares. In addition, pursuant to Rule
18f-3, the Trust may allocate the following fees and expenses to a particular
class of shares in a single MultiClass Fund:
(i) transfer agent fees identified by the transfer agent
as being attributable to such class of shares;
(ii) printing and postage expenses related to preparing
and distributing materials such as shareholder
reports, prospectuses, reports, and proxies to
current shareholders of such class of shares or to
regulatory agencies with respect to such class of
shares;
(iii) blue sky registration or qualification fees incurred
by such class of shares;
(iv) Securities and Exchange Commission registration fees
incurred by such class of shares;
(v) the expense of administrative personnel and services
(including, but not limited to, those of a fund
accountant or dividend paying agent charged with
calculating net asset values or determining or paying
dividends) as required to support the shareholders of
such class of shares;
(vi) litigation or other legal expenses relating solely to
such class of shares;
(vii) Trustees fees incurred as result of issues relating
to such class of shares; and
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<PAGE>
(viii) independent accountants' fees relating solely to such
class of shares.
The initial determination of the class expenses that will be
allocated by the Trust to a particular class of shares and any subsequent
changes thereto will be reviewed by the Board of Trustees and approved by a vote
of the Trustees of the Trust, including a majority of the Trustees who are not
interested persons of the Trust. The Trustees will monitor conflicts of interest
among the classes and agree to take any action necessary to eliminate conflicts.
Income, realized and unrealized capital gains and losses, and
any expenses of a Multi-Class Fund not allocated to a particular class of such
Fund pursuant to this Plan shall be allocated to each class of the Fund on the
basis of the net asset value of that class in relation to the net asset value of
the Fund.
The Adviser, Distributor, Administrator and any other provider
of services to the Funds may waive or reimburse the expenses of a particular
class or classes, provided, however, that such wavier shall not result in cross
subsidization between the classes.
III. Class Arrangements.
The following summarizes the front-end sales charges,
contingent deferred sales charges, Rule 12b-1 distribution fees, shareholder
servicing fees, exchange privileges and other shareholder services applicable to
each class of shares of the Multi-Class Funds. Additional details regarding such
fees and services are set forth in each Fund's current Prospectus and Statement
of Additional Information.
A. Class A Shares -
1. Initial Sales Load: Up to 4.50% (of the
offering price).
2. Contingent Deferred Sales Charge: None.
3. Rule 12b-1 Distribution Fees: Up to 0.25%
per annum of the average daily net assets.
4. Shareholder Servicing Fees: Up to 0.25% per
annum of average daily net assets.
5. Exchange Privileges: Subject to restrictions
and conditions set forth in the Prospectus,
may be exchanged for Class A shares of any
other Fund.
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<PAGE>
6. Other Shareholder Services: As provided in
the Prospectus. Services do not differ from
those applicable to Class B shares.
B. Class B Shares -
1. Initial Sales Load: None
2. Contingent Deferred Sales Charge: 5% in the
first year, declining to 1% in the sixth
year and eliminated thereafter.
3. Rule 12b-1 Distribution Fees: Up to 0.75%
per annum of the average daily net assets.
4. Shareholder Servicing Fees: Up to 0.25% per
annum of the average daily net assets.
5. Exchange Privileges: May be exchanged for
Class B shares of other Multi-class Funds.
6. Other Shareholder Services: As provided in
the Prospectus.
C. Vista Shares Class -
1. Initial Sales Load: None
2. Contingent Deferred Sales Charge: None.
3. Rule 12b-1 Distribution Fees: Up to 0.25%
per annum of the average daily net assets.
4. Shareholder Servicing Fees: Up to 0.25% per
annum of the average daily net assets.
5. Exchange Privileges: May be exchanged for
Vista shares of other Multi-class Funds at
relative net asset value.
6. Other Shareholder Services: As provided in
the Prospectus.
D. Premier Shares Class -
1. Initial Sales Load: None
2. Contingent Deferred Sales Charge: None.
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<PAGE>
3. Rule 12b-1 Distribution Fees: Up to 0.10%
per annum of the average daily net assets.
4. Shareholder Servicing Fees: Up to 0.10% per
annum of the average daily net assets.
5. Exchange Privileges: May be exchanged for
Premier shares of other Multi-class Funds at
relative net asset value.
6. Other Shareholder Services: As provided in
the Prospectus.
E. Institutional Shares Class -
1. Initial Sales Load: None.
2. Contingent Deferred Sales Charge: None.
3. Rule 12b-1 Distribution Fees: None.
4. Shareholder Servicing Fees: None.
5. Exchange Privileges: May be exchanged for
Institutional shares of other Multi-class
Funds at relative net asset value.
6. Other Shareholder Services: As provided in
the Prospectus.
IV. Conversions.
All Class B Shares of the Funds shall convert automatically to
Class A Shares in the ninth year after the date of purchase, together with the
pro rata portion of all Class B Shares representing dividends and other
distributions paid in additional Class B shares. The conversion will be effected
at the relative net asset values per share of the two classes on the first
business day of the month following the eighth anniversary of the original
purchase.
After conversion, the converted shares will be subject to an
asset-based sales charge and/or service fee (as those terms are defined in
Article III, Section 26 of the National Association Securities Dealers, Inc.
Rules of Fair Practice), if any, that in the aggregate are lower than the
asset-based sales charge and service fee to which they were subject prior to
that conversion. In no event will a class of shares have a conversion feature
that automatically would convert shares of such class into shares of a class
with a distribution arrangement that could be viewed as less favorable to the
shareholder from the point of view of overall cost.
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<PAGE>
The implementation of the conversion feature is subject to the
continuing availability of a ruling of the Internal Revenue Service, or of an
opinion of counsel or tax advisor, stating that the conversion of one class of
shares to another does not constitute a taxable event under federal income tax
law. The conversion feature may be suspended if such a ruling or opinion is not
available.
If a Fund implements any amendment to a Distribution Plan (or,
if presented to shareholders, adopts or implements any amendment of a
shareholder services plan) that the Board of Trustees determines would
materially increase the charges that may be borne by the Class A Shareholders
under such plan, the Class B Shares will stop converting to the Class A Shares
until the Class B Shares, voting separately, approve the amendment or adoption.
The Board of Trustees shall have sole discretion in determining whether such
amendment or adoption is to be submitted to a vote of the Class B Shareholders.
Should such amendment or adoption not be submitted to a vote of the Class B
Shareholders or, if submitted, should the Class B Shareholders fail to approve
such amendment or adoption, the Board of Trustees shall take such action as is
necessary to: (1) create a new class (the "New Class A Shares") which shall be
identical in all material respects to the Class A Shares as they existed prior
to the implementation of the amendment or adoption; and (2) ensure that the
existing Class B Shares will be exchanged or converted into New Class A Shares
no later than the date such Class B Shares were scheduled to convert to Class A
Shares. If deemed advisable by the Board of Trustees to implement the foregoing,
and at the sole discretion of the Board of Trustees, such action may include the
exchange of all Class B Shares for a new class (the "New Class B Shares"),
identical in all respects to the Class B Shares except that the New Class B
Shares will automatically convert into the New Class A Shares. Such exchanges or
conversions shall be effected in a manner that the Board of Trustees reasonably
believes will not be subject to federal taxation.
V. Board Review.
The Board of Trustees of the Trust shall review this Plan as
frequently as it deems necessary. Prior to any material amendment(s) to this
Plan, the Board of Trustees, including a majority of the Trustees that are not
interested persons of the Trust, shall find that the Plan, as proposed to be
amended (including any proposed amendments to the method of allocating class
and/or fund expenses), is in the best interest of each class of shares of a
Multi-Class Fund individually and the Fund as a whole. In considering whether to
approve any proposed amendment(s) to the Plan, the Trustees shall request and
evaluate such information as they consider reasonably necessary to evaluate the
proposed amendment(s) to the Plan. Such information shall address the issue of
whether any waivers or reimbursements of fees or expenses could be considered a
cross-subsidization of one class by another, and other potential conflicts of
interest between classes.
In making its initial determination to approve this Plan, the
Trustees have focused on, among other things, the relationship between or among
the classes and has
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<PAGE>
examined potential conflicts of interest among classes (including those
potentially involving a cross-subsidization between classes) regarding the
allocation of fees, services, waivers and reimbursements of expenses, and voting
rights. The Board has evaluated the level of services provided to each class and
the cost of those services to ensure that the services are appropriate and the
allocation of expenses is reasonable. In approving any subsequent amendments to
this Plan, the Board shall focus on and evaluate such factors as well as any
others deemed necessary by the Board.
Adopted effective __________, 1996
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