<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 29, 1995
REGISTRATION NO. 33-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
/ / Pre-Effective Amendment No. ______________
/ / Post-Effective Amendment No. ______________
(Check appropriate box or boxes)
------------------------
MUTUAL FUND TRUST
(Exact Name of Registrant as Specified in Charter)
1-800-34-VISTA
(Area Code and Telephone Number)
125 WEST 55TH STREET
NEW YORK, NEW YORK 10019
(Address of Principal Executive Offices)
------------------------
Name and Address of Agent for Service:
ANN BERGIN
SECRETARY
MUTUAL FUND TRUST
125 WEST 55TH STREET
NEW YORK, NEW YORK 10019
Copies to:
<TABLE>
<S> <C> <C>
MARGUERITE SHEEHAN, ESQ. GARY S. SCHPERO, ESQ. SUSAN J. PENRY-WILLIAMS, ESQ.
CHEMICAL BANK SIMPSON THACHER & BARTLETT KRAMER, LEVIN, NAFTALIS,
270 PARK AVENUE 425 LEXINGTON AVENUE NESSEN, KAMIN & FRANKEL
NEW YORK, NEW YORK 10017 NEW YORK, NEW YORK 10017 919 THIRD AVENUE
NEW YORK, NEW YORK 10022
</TABLE>
------------------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon after the effective
date of this registration statement as is practicable.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
------------------------
THE REGISTRANT HAS PREVIOUSLY REGISTERED AN INDEFINITE NUMBER OR AMOUNT OF
ITS SHARES PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940 ON
FEBRUARY 11, 1994; ACCORDINGLY, NO FEE IS PAYABLE HEREWITH. A RULE 24F-2 NOTICE
FOR REGISTRANT'S FISCAL YEAR ENDED AUGUST 31, 1995 WAS FILED ON OCTOBER 25,
1995.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
MUTUAL FUND TRUST
CROSS REFERENCE SHEET
PURSUANT TO RULE 481(A) UNDER THE SECURITIES ACT OF 1933
<TABLE>
<S> <C> <C>
FORM N-14 ITEM NO. LOCATION
- ------------------ --------
Prospectus/Proxy Statement
Caption
PART A
- ------
Item 1. Beginning of Registration Statement and Outside Cover Page
Front Cover Page of Prospectus
Item 2. Beginning and Outside Back Cover Page of Prospectus Table of Contents
Item 3. Synopsis and Risk Factors Summary
Item 4. Information About the Transaction Summary; Reasons for the
Reorganization; Information
About the Reorganization;
Comparative Information on
Shareholder Rights; Agreement
and Plan of Reorganization and
Liquidation
Item 5. Information About the Registrant Summary; Comparison of
Investment Objectives and
Policies; Additional
Information About Vista
Item 6. Information About the Company Being Acquired Summary; Comparison of
Investment Objectives and
Policies; Information About
Hanover
Item 7. Voting Information Voting Information
Item 8. Interest of Certain Persons and Experts Financial Statements and
Experts
Item 9. Additional Information Required for Reoffering by Not Applicable
Persons Deemed to be Underwriters
Statement of Additional
Information Caption
PART B
- ------
Item 10. Cover Page Cover Page
Item 11. Table of Contents Cover Page
Item 12. Additional Information About the Registrant Statement of Additional
Information
Item 13. Additional Information About the Company Being Not Applicable
Acquired
Item 14. Financial Statements Historical Financial
Statements; Pro Forma Financial
Statements; The caption
"Information about Hanover" in
the Prospectus
</TABLE>
PART C
- ------
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C of this Registration Statement.
<PAGE> 3
PART A
<PAGE> 4
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
THE HANOVER FUNDS, INC.
237 PARK AVENUE
NEW YORK, NEW YORK 10017
January , 1996
Dear Shareholder:
It's an exciting time for mutual fund investors and, I believe, an
especially exciting time for you as a Hanover Funds shareholder.
That's because, in conjunction with the proposed merger of The Chemical
Banking Corporation and The Chase Manhattan Corporation, the Board of Directors
of your fund has been seeking ways to enhance your investment relationship with
us. I am writing today to ask you to vote on a proposed reorganization that will
allow your fund to operate more efficiently and offer you substantial benefits
as a shareholder.
We've considered a proposal that will combine each of the six Hanover funds
with an existing or newly-created fund in Mutual Fund Trust, better known as the
Vista Family of Mutual Funds, which is affiliated with Chase Manhattan. Vista is
comprised of a family of 30 funds ranging from stock and bond to money market
funds and including both domestic and international fund offerings.
Through the reorganization, your investment would be in a larger combined
fund family, allowing you as a shareholder to take advantage of the many
benefits that size and a diverse array of products offer. In addition, the
resulting increase in the assets under management of the Vista Funds should
enhance the ability of the funds' portfolio managers to buy and sell securities
on a more favorable basis. Larger transactions can often be achieved at a better
price, while giving the portfolio manager greater flexibility and potentially
increasing the funds' diversification.
The entire impact of the proposed reorganization is spelled out in the
enclosed Prospectus/Proxy Statement. After carefully considering all the issues
involved, your Board of Directors has unanimously concluded that the proposal is
in the best interests of your fund and its shareholders. THEREFORE, WE RECOMMEND
THAT YOU VOTE IN FAVOR USING THE ENCLOSED PROXY CARD.
The value of your investment will not be affected by the reorganization.
Nor, in the opinion of legal counsel, will the transaction be subject to federal
income taxes.
I ENCOURAGE YOU TO COMPLETE AND RETURN YOUR PROXY CARD IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE, AS YOUR VOTE IS IMPORTANT. Please be
advised that you may receive a mailing and proxy card on each Hanover account
you own, and that each proxy must be voted separately.
Thank you for your continuing support of The Hanover Funds. We look forward
to serving you better in the near future as part of the Vista Family of Mutual
Funds. If you have any questions regarding the attached proxy, please contact
your investment representative or call your client services representative at
1-800-821-2371.
Sincerely yours,
W. Perry Neff
Chairman of the Board of Directors
The Hanover Funds, Inc.
<PAGE> 5
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
THE HANOVER FUNDS, INC.
237 PARK AVENUE
NEW YORK, NEW YORK 10019
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
January , 1996
Dear Shareholder:
A special meeting of shareholders of the portfolios of The Hanover Funds,
Inc. ("Hanover") will be held on March 15, 1996 at at the offices of
, , New York, New York for the following purposes:
1. To consider and act upon an Agreement and Plan of Reorganization and
Liquidation (the "Agreement") between Hanover and Mutual Fund Trust ("Vista")
providing for:
(a) the transfer of all of the assets and liabilities of The 100% U.S.
Treasury Securities Money Market Fund of Hanover to the Vista 100% U.S.
Treasury Securities Money Market Fund (a newly organized Vista portfolio)
in exchange for Vista Shares of the Vista 100% U.S. Treasury Securities
Money Market Fund, the distribution of such shares to the shareholders of
The 100% U.S. Treasury Securities Money Market Fund of Hanover and the
subsequent termination of The U.S. 100% Treasury Securities Money Market
Fund of Hanover (to be voted on only by the shareholders of The U.S. 100%
Treasury Securities Money Market Fund of Hanover);
(b) the transfer of all of the assets and liabilities of The U.S.
Treasury Money Market Fund of Hanover to the Vista Treasury Plus Money
Market Fund in exchange for Vista Shares of the Vista Treasury Plus Money
Market Fund, the distribution of such shares to the shareholders of The
U.S. Treasury Money Market Fund of Hanover and the subsequent termination
of The U.S. Treasury Money Market Fund of Hanover (to be voted on only by
the shareholders of The U.S. Treasury Money Market Fund of Hanover);
(c) the transfer of all of the assets and liabilities of The U.S.
Government Money Market Fund of Hanover to the Vista U.S. Government Money
Market Fund in exchange for Vista Shares of the Vista U.S. Government Money
Market Fund, the distribution of such shares to the shareholders of The
U.S. Government Money Market Fund of Hanover and the subsequent termination
of The U.S. Government Money Market Fund of Hanover (to be voted on only by
the shareholders of The U.S. Government Money Market Fund of Hanover);
(d) the transfer of all of the assets and liabilities of The Cash
Management Fund of Hanover to the Vista Cash Management Fund (currently
known as the Vista Global Money Market Fund) in exchange for Vista Shares
of the Vista Cash Management Fund, the distribution of such shares to the
shareholders of The Cash Management Fund of Hanover and the subsequent
termination of The Cash Management Fund of Hanover (to be voted on only by
the shareholders of The Cash Management Fund of Hanover);
(e) the transfer of all of the assets and liabilities of The Tax Free
Money Market Fund of Hanover to the Vista Tax Free Money Market Fund in
exchange for Vista Shares of the Vista Tax Free Money Market Fund, the
distribution of such shares to the shareholders of The Tax Free Money
Market Fund of Hanover and the subsequent termination of The Tax Free Money
Market Fund of Hanover (to be voted on only by the shareholders of The Tax
Free Money Market Fund of Hanover); and
(f) the transfer of all of the assets and liabilities of The New York
Tax Free Money Market Fund of Hanover to the Vista New York Tax Free Money
Market Fund in exchange for Vista Shares of the Vista New York Tax Free
Money Market Fund, the distribution of such shares to the shareholders of
The
<PAGE> 6
New York Tax Free Money Market Fund of Hanover and the subsequent
termination of the New York Tax Free Money Market Fund of Hanover (to be
voted on only by the shareholders of the New York Tax Free Money Market
Fund of Hanover).
2. Transaction of such other business as may properly come before the
meeting.
The Board of Directors of Hanover has recently reviewed and unanimously
endorsed the proposals set forth in the accompanying Prospectus/Proxy Statement.
Approval of the Agreement will require the affirmative vote of the holders of at
least a majority of the outstanding shares of each of the portfolios of Hanover.
By approving the Agreement, Hanover shareholders will be deemed to have waived
temporarily certain of Hanover's investment limitations insofar as they might be
deemed to apply to the transactions provided for therein. The Board of Directors
knows of no other business that will be acted upon at the meeting.
Each shareholder is invited to attend the Special Meeting in person.
Shareholders of record at the close of business on January , 1996 have the
right to vote at the Special Meeting.
A quorum for the Special Meeting for each Hanover portfolio will consist of
the presence in person or by proxy of shareholders entitled to cast a majority
of the votes of that portfolio entitled to be cast. In the event that a quorum
for any Hanover portfolio is not present at the Special Meeting, or in the event
that a quorum is present but sufficient votes to approve any of the matters to
be acted upon are not received, the persons named as proxies may propose one or
more adjournments of the Special Meeting to permit further solicitation of
proxies. Any such adjournment will require the affirmative vote of a majority of
those shares present or represented at the meeting in person or by proxy. The
persons named as proxies will vote those proxies which they are entitled to vote
FOR or AGAINST any such proposal in their discretion. A stockholder vote may be
taken on one or more of the matters to be acted upon as described in the
accompanying Prospectus/Proxy Statement prior to any such adjournment if
sufficient votes have been received for approval.
Detailed information about the proposed transaction and the reasons for it
are contained in the enclosed materials. Please exercise your right to vote by
attending the Special Meeting or completing, dating and signing the enclosed
proxy card. A self-addressed, postage-paid envelope has been enclosed for your
convenience. It is very important that you vote and that your voting
instructions be received prior to the Special Meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, THE BOARD
OF DIRECTORS SOLICITS YOUR PROXY AND STRONGLY INVITES YOUR
PARTICIPATION BY ASKING YOU TO REVIEW, COMPLETE AND
RETURN YOUR PROXY AS SOON AS POSSIBLE.
NOTE: You may receive more than one proxy package if you hold shares in
more than one account or if you own shares in more than one portfolio which is
being reorganized. You must return separate proxy cards for separate holdings.
We have provided postage-paid return envelopes for each.
By Order of the Board of Directors
Joseph L. McElroy
President
<PAGE> 7
PRELIMINARY COPY -- FOR THE INFORMATION OF THE
SECURITIES AND EXCHANGE COMMISSION ONLY
PROSPECTUS/PROXY STATEMENT DATED , 1996
ACQUISITION OF THE ASSETS OF
THE HANOVER FUNDS, INC.
237 PARK AVENUE
NEW YORK, NEW YORK 10017
1-800-821-2371
BY AND IN EXCHANGE FOR SHARES OF
MUTUAL FUND TRUST
125 WEST 55TH STREET
NEW YORK, NEW YORK 10019
1-800-34-VISTA
This Prospectus/Proxy Statement relates to the proposed transfer of all of
the assets and liabilities of each portfolio of The Hanover Funds, Inc.
("Hanover") to corresponding portfolios of Mutual Fund Trust ("Vista") having
substantially identical investment objectives in exchange for Vista Shares of
such portfolios of Vista. Vista is an open-end investment company of the
management type offering shares in several portfolios, and, in most cases,
multiple classes of shares in each such portfolio. As a result of the proposed
transaction, each shareholder of a portfolio of Hanover will receive that number
of Vista Shares of the corresponding portfolio of Vista equal in value at the
date of the exchange to the value of such shareholder's shares of the portfolio
of Hanover at such date. The terms and conditions of these transactions are more
fully described in this Prospectus/Proxy Statement and in the Agreement and Plan
of Reorganization and Liquidation between Vista and Hanover attached hereto as
Exhibit A.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about Vista and its portfolios
that a prospective investor should know before investing. A statement of
additional information dated , 1996 (the "Statement of Additional
Information") containing additional information about Vista has been filed with
the Securities and Exchange Commission (the "Commission") and is incorporated by
reference into this Prospectus/Proxy Statement. A copy of Hanover's current
prospectus may be obtained without charge by writing to Hanover at its address
noted above or by calling 1-800-821-2371. A copy of the Statement of Additional
Information may be obtained without charge by writing to Vista at its address
noted above or by calling 1-800-34-VISTA.
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/PROXY STATEMENT. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS COMBINED PROXY
STATEMENT/PROSPECTUS AND IN THE MATERIALS EXPRESSLY INCORPORATED
HEREIN BY REFERENCE AND, IF GIVEN OR MADE, SUCH OTHER
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY VISTA OR HANOVER.
INVESTMENTS IN THE VISTA PORTFOLIOS ARE SUBJECT TO RISK -- INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE VISTA MONEY MARKET PORTFOLIOS 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 VISTA MONEY MARKET PORTFOLIOS IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT AND THERE CAN BE NO ASSURANCE THAT ANY
PORTFOLIO WILL BE ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Summary................................................................................ 3
Reasons for the Reorganization......................................................... 9
Information About the Reorganization................................................... 11
Voting Information..................................................................... 14
Comparison of Investment Objectives and Policies....................................... 15
Comparative Information on Shareholder Rights.......................................... 34
Additional Information About Vista..................................................... 36
Information About Hanover.............................................................. 58
Financial Statements and Experts....................................................... 58
Legal Matters.......................................................................... 58
Appendix............................................................................... A-1
</TABLE>
Exhibit
A -- Agreement and Plan of Reorganization and Liquidation between Mutual Fund
Trust and The Hanover Funds, Inc.
2
<PAGE> 9
SUMMARY
This summary is qualified by reference to the more complete information
contained in this Prospectus/Proxy Statement, the prospectus of Hanover and the
Agreement and Plan of Reorganization and Liquidation attached to this
Prospectus/Proxy Statement as Exhibit A. The information concerning Hanover
contained or incorporated by reference into this Prospectus/Proxy Statement has
been furnished by Hanover, and the information concerning Vista contained or
incorporated by reference into this Prospectus/Proxy Statement has been
furnished by Vista.
Proposed Transaction. The Board of Directors of Hanover (the "Hanover
Board"), including the Directors who are not "interested persons" of Hanover
(the "Independent Directors"), has unanimously approved an Agreement and Plan of
Reorganization and Liquidation (the "Agreement") providing for the transfer of
all of the assets and liabilities (whether contingent or otherwise) of each
portfolio of Hanover (each, a "Hanover Portfolio") to a corresponding portfolio
of Vista (each, a "Vista Portfolio") having a substantially identical investment
objective in exchange for Vista Shares of such Vista Portfolio. (The proposed
transaction is referred to in this Prospectus/Proxy Statement as the
"Reorganization.") The value of the shares of each Vista Portfolio issued in the
Reorganization shall equal the value of the net assets of the corresponding
Hanover Portfolio being acquired by such Vista Portfolio. In connection with the
Reorganization, Vista Shares of each Vista Portfolio will be distributed to
shareholders of the corresponding Hanover Portfolio in liquidation of that
Hanover Portfolio. The number of full and fractional shares of a Vista Portfolio
received by a shareholder of the corresponding Hanover Portfolio will be equal
in value to the value of that shareholder's shares of the corresponding Hanover
Portfolio as of 12:00 noon (in the case of Vista 100% U.S. Treasury Securities
Money Market Fund, Vista Tax Free Money Market Fund and Vista New York Tax Free
Money Market Fund and their corresponding Hanover Portfolios) or as of 2:00 p.m.
(in the case of the other Vista Portfolios and their corresponding Hanover
Portfolios) (Eastern time) on the closing date of the Reorganization. Upon
completion of such distribution, Hanover will be dissolved and will then
deregister as an investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), by filing the appropriate application with the
Commission and will also be terminated under state law. As a result of the
Reorganization, each shareholder of each Hanover Portfolio listed in the table
below will become a shareholder of the Vista Portfolio listed opposite the
Hanover Portfolio (each Hanover or Vista Portfolio being referred to herein as
the "corresponding" Hanover or Vista Portfolio to the respective Vista or
Hanover Portfolio listed opposite its name). Certain of the Vista Portfolios
will be renamed in connection with the Reorganization, as indicated in the table
below.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
HANOVER PORTFOLIO VISTA PORTFOLIO
<S> <C>
- ---------------------------------------------------------------------------------------------
The 100% U.S. Treasury Securities
Money Market Fund Vista 100% U.S. Treasury 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 Cash Management Fund**
- ---------------------------------------------------------------------------------------------
The Tax Free Money Market Fund Vista Tax Free Money Market Fund
- ---------------------------------------------------------------------------------------------
The New York Tax Free Money
Market Fund Vista New York Tax Free Money Market Fund
- ---------------------------------------------------------------------------------------------
</TABLE>
*Vista 100% U.S. Treasury Securities Money Market Fund is a newly organized
portfolio of Vista created for the purpose of operating as a successor to The
100% U.S. Treasury Securities Money Market Fund of Hanover in connection with
the Reorganization.
**Currently known as the Vista Global Money Market Fund.
3
<PAGE> 10
Under the proposed Reorganization, shareholders of each Hanover Portfolio
will receive Vista Shares in a Vista Portfolio with a substantially identical
investment objective and similar investment policies and restrictions. In
addition, purchase, redemption and dividend policies will remain substantially
unchanged.
The investment advisers to the Hanover Portfolios are The Portfolio Group,
Inc. ("TPG") (with respect to the Hanover 100% U.S. Treasury Securities Money
Market Fund, the Hanover U.S. Treasury Money Market Fund, the Hanover Government
Money Market Fund and the Hanover New York Tax Free Money Market Fund), and
Texas Commerce Bank, National Association (with respect to the Hanover Cash
Management Fund and the Hanover Tax Free Money Market Fund) ("TCBNA"). TPG is a
wholly-owned direct subsidiary of CBC and TCBNA is an indirect wholly-owned
subsidiary of CBC. The Chase Manhattan Bank, N.A. serves as the investment
adviser to each of the existing Vista Portfolios. Pursuant to the Bank Merger
described below under "Reasons for the Reorganization," The Chase Manhattan
Bank, N.A. will be merged with and into Chemical Bank, at which time Chemical
Bank will assume the Chase Manhattan name (as used herein, the term "Chase"
refers to The Chase Manhattan Bank, N.A. and its successor in the Bank Merger,
and the term "Adviser" means Chase (including its successor in the Bank Merger)
in its capacity as investment adviser to the Vista Portfolios.). Following
consummation of the Reorganization involving Hanover and Vista, Chase will serve
as investment adviser to each of the Vista Portfolios. In addition, Chase Asset
Management, Inc. ("CAM"), a wholly-owned operating subsidiary of Chase, will
serve as the sub-investment adviser to each Vista Portfolio, other than the
Vista Cash Management Fund and the Vista Tax Free Money Market Fund, following
the consummation of the Reorganization pursuant to an agreement with Chase and
will manage each such portfolio on a day-to-day basis. TCBNA, which currently
serves as the investment adviser to the Hanover Cash Management Fund and the
Hanover Tax Free Money Market Fund, will serve as the sub-investment adviser to
the Vista Cash Management Fund and the Vista Tax Free Money Market Fund
following the consummation of the Reorganization pursuant to an agreement with
Chase and will manage those portfolios on a day-to-day basis.
For the reasons set forth above and those set forth below under "Reasons
for the Reorganization," the Hanover Board, including all of the independent
Directors, has unanimously concluded that the Reorganization would be in the
best interests of the shareholders of each Hanover Portfolio, and that the
interests of existing shareholders of each Hanover Portfolio would not be
diluted as a result of the transactions contemplated by the Reorganization. For
all of the reasons noted, the Hanover Board has unanimously recommended approval
of the Reorganization.
The consummation of the Reorganization is contingent on the satisfaction of
the conditions described below under "Information About the Reorganization."
Prior to or effective upon the consummation of the Reorganization, it is
anticipated that Vista will effect changes to certain of its procedures and
investment policies and limitations, as well as to the composition of Vista's
Board of Trustees (the "Vista Board") (collectively, the "Related Changes").
However, the failure to effect any or all of the Related Changes will not
prevent the Reorganization from occurring. Information contained herein with
respect to Vista and the Vista Portfolios describes the Related Changes where so
indicated.
If the Reorganization were to have been consummated as of November 30,
1995, the approximate resulting aggregate net assets of the (1) Vista 100% U.S.
Treasury Securities Money Market Fund would be $1,338,000,000, (2) Vista
Treasury Plus Money Market Fund would be $1,804,000,000, (3) Vista U.S.
Government Money Market Fund would be $3,753,000,000, (4) Vista Cash Management
Fund would be $2,504,000,000, (5) Vista Tax Free Money Market Fund would be
$753,000,000 and (6) Vista New York Tax Free Money Market Fund would be
$633,000,000.
Tax Consequences. Prior to the consummation of the Reorganization, counsel
to Hanover will issue an opinion that no gain or loss will be recognized by the
Vista Portfolios or the Hanover Portfolios or shareholders of the Hanover
Portfolios for federal income tax purposes as a result of the Reorganization.
The holding period and tax basis of the shares of a Vista Portfolio received by
a shareholder of the corresponding Hanover Portfolio will be the same as the
holding period and tax cost basis of the shareholder's shares of the
corresponding Hanover Portfolio. In addition, the holding period and tax basis
of the assets of a Hanover Portfolio transferred to the corresponding Vista
Portfolio as a result of the Reorganization will be the holding
4
<PAGE> 11
period and tax basis of those assets in the hands of that Hanover Portfolio
immediately prior to the Reorganization. For further information about the tax
consequences of the Reorganization, see "Information about the Reorganization --
Federal Income Tax Consequences."
Investment Objectives and Policies. The following table sets forth the
investment objective of each Hanover Portfolio and its corresponding Vista
Portfolio and their investment approach. Although each Hanover Portfolio and its
corresponding Vista Portfolio have substantially identical investment objectives
and their investment policies and restrictions are similar, there are certain
differences in the investment policies and restrictions of the portfolios that
should be considered by shareholders of the Hanover Portfolios. See "Comparison
of Investment Objectives and Policies."
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
HANOVER PORTFOLIO AND
CORRESPONDING VISTA
PORTFOLIO INVESTMENT OBJECTIVE AND APPROACH
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
Hanover 100% U.S. Treasury Seek to provide as high a level of current income as is
Securities Money Market Fund consistent with maximum safety of principal and maintenance
and Vista 100% U.S. Treasury of liquidity, by investing only in short-term U.S. Treasury
Securities Money Market Fund obligations.
- ------------------------------------------------------------------------------------------------
Hanover U.S. Treasury Money Seek to provide maximum current income as is consistent
Market Fund and Vista with the preservation of capital and maintenance of
Treasury Plus Money Market liquidity, by investing only in short-term U.S. Treasury
Fund obligations, and repurchase agreements collateralized by
such securities.
- ------------------------------------------------------------------------------------------------
Hanover Government Money Seek to provide as high a level of income as is consistent
Market Fund and Vista U.S. with the preservation of capital and maintenance of
Government Money Market Fund liquidity, by investing only in short-term U.S. Treasury
obligations issued or guaranteed by the U.S. Treasury,
agencies or instrumentalities of the U.S. Government, and
repurchase agreements collateralized by such securities.
- ------------------------------------------------------------------------------------------------
Hanover Cash Management Seek to provide maximum current income consistent with
Fund and Vista Cash preservation of capital and maintenance of liquidity, by
Management Fund* investing in high-quality short term U.S.
dollar-denominated money market instruments.
- ------------------------------------------------------------------------------------------------
Hanover Tax Free Money Seek to provide as high a level of current income which is
Market Fund and Vista Tax exempt from federal income taxes as is consistent with the
Free Money Market Fund preservation of capital and maintenance of liquidity, by
investing primarily in short-term municipal obligations.
- ------------------------------------------------------------------------------------------------
Hanover New York Tax Free Seek to provide as high a level of current income which is
Money Market Fund and Vista exempt from federal, New York State and New York City
New York Tax Free Money personal income taxes as is consistent with the
Market Fund preservation of capital and maintenance of liquidity, by
investing primarily in short-term municipal obligations
issued by or on behalf of the State of New York, its
instrumentalities or political subdivisions.
- ------------------------------------------------------------------------------------------------
</TABLE>
- ---------------
*Currently known as the Vista Global Money Market Fund.
Additional Trust Portfolios. In addition to the Vista Portfolios referred
to above, Vista currently offers six additional portfolios, three of which are
money market portfolios -- Vista Prime Money Market Fund, Vista California Tax
Free Money Market Fund and Vista Federal Money Market Fund, and three of which
are tax-free fixed-income portfolios and are not money market portfolios --
Vista Tax Free Income Fund, Vista New York Tax Free Income Fund and Vista
California Intermediate Tax Free Fund. Vista may add additional portfolios from
time to time in the future.
Fees and Expenses. The table which follows sets forth ratios of expenses
to average net assets ("Expense Ratios") for the Hanover Portfolios for the year
ended November 30, 1995, as incurred after giving effect to certain voluntary
fee waivers and expense reimbursements during the period ("Current" --
5
<PAGE> 12
Column 1), as incurred without giving effect to such waivers and reimbursements
("Current Contractual" -- Column 2) and as are permitted to be incurred based
upon the maximum levels provided for under current contractual arrangements
("Maximum Contractual" -- Column 3), and the pro-forma expense ratios for the
Vista Shares of the corresponding Vista Portfolios as if the Reorganization had
occurred at the commencement of the fiscal year ended August 31, 1995 based upon
the fee arrangements that will be in place upon the consummation of the
Reorganization, both reflecting the commitment by Chase, described below,
voluntarily to waive fees and/or reimburse expenses in an amount sufficient to
maintain the expense ratios for Vista Shares of the Vista Portfolios at the
levels indicated for a period of at least one year period following consummation
of the Reorganization ("Committed" -- Column 4), and without giving effect to
such commitment based upon the maximum levels provided for under the contractual
arrangements to be in effect upon the consummation of the Reorganization
("Contractual" -- Column 5).
As indicated in the table below, after giving effect to the commitment by
Chase to maintain the expense ratios of the Vista Portfolios for a period of at
least one year following the consummation of the Reorganization, the Committed
expense ratio for Vista Shares of each Vista Portfolio is lower than the Maximum
Contractual expense ratio for the corresponding Hanover Portfolio for the
respective periods presented.
<TABLE>
<CAPTION>
CORRESPONDING
VISTA PORTFOLIOS
PRO-FORMA COMBINED
EXPENSE RATIOS** (VISTA
HANOVER EXPENSE RATIOS* SHARES)
(UNAUDITED) (UNAUDITED)
------------------------------------ ------------------------
(1) (2) (3) (4) (5)
CURRENT MAXIMUM
HANOVER PORTFOLIOS CURRENT CONTRACTUAL CONTRACTUAL COMMITTED CONTRACTUAL
- ------------------------------------------- ------- ----------- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
Hanover 100% U.S. Treasury Securities
Money Market Fund........................ 0.58 0.61% 0.71% 0.59% 0.76%
Hanover U.S. Treasury Money Market Fund.... 0.58 0.63 0.73 0.59 0.74
Hanover Government Money Market Fund....... 0.59 0.62 0.72 0.59 0.71
Hanover Cash Management Fund............... 0.58 0.62 0.72 0.59 0.61
Hanover Tax Free Money Market Fund......... 0.62 0.66 0.76 0.59 0.73
Hanover New York Tax Free Money Market
Fund..................................... 0.60 0.64 0.74 0.59 0.74
----------- ----------
</TABLE>
- ---------------
* The Current expense ratios presented in Column 1 above give effect to certain
voluntary fee waivers by certain service providers to the respective Hanover
Portfolios during the periods presented. Absent such voluntary waivers, the
expense ratios would be the Current Contractual expense ratios presented in
Column 2 above. Had Hanover's distributor incurred and sought reimbursement
for distribution expenses at the maximum level permitted under Hanover's plan
of distribution, as more fully described below, the expense ratios would be
the Maximum Contractual expense ratios presented in Column 3 above.
**The Committed expense ratios presented in Column 4 above reflect the agreement
by Chase voluntarily to waive fees payable to it and/or reimburse expenses for
a period of at least one year following the consummation of the Reorganization
to the extent necessary to prevent the annualized expense ratio for Vista
Shares of each Vista Portfolio for such period from exceeding 0.59% of average
net assets. Absent such agreement, the pro-forma expense ratios would be the
Contractual expense ratios presented in Column 5 above. In addition, Chase has
agreed to waive fees payable to it and/or reimburse expenses for a two year
period following consummation of the Reorganization to the extent necessary to
prevent the annualized expense ratio for Vista Shares of each Vista Portfolio
during such period from exceeding the Maximum Contractual expense ratio
presented in Column 3 above for the corresponding Hanover Portfolio.
There can be no assurance that the foregoing pro-forma expense ratios would
have been the actual expense ratios for Vista Shares of the corresponding Vista
Portfolios had the Reorganization been consummated when assumed above, or that
the foregoing pro-forma Contractual expense ratios reflect the actual
6
<PAGE> 13
expense ratios, absent waivers and reimbursements, that would be incurred by the
Vista Shares of the corresponding Vista Portfolios indicated above if the
Reorganization is consummated.
The fee payable for investment advisory services by each Hanover Portfolio
is a monthly fee at an annual rate of 0.15% of its average daily net assets,
while the fee which will be payable by each Vista Portfolio for investment
advisory services upon consummation of the Reorganization will be a monthly fee
at an annual rate of 0.10% of its average net assets.
Hanover has adopted a plan of distribution pursuant to Rule 12b-1 under the
1940 Act which provides that each Hanover Portfolio may pay to the distributor
of its shares an annual distribution fee of up to .10% of its average net assets
as reimbursement for distribution expenses incurred. To date, the distributor of
Hanover's shares has not collected distribution fees under the plan. The Vista
Shares of the Vista Portfolios, after the consummation of the Reorganization,
will be subject to an annual distribution fee of up to .10% of average net
assets (with the exception of the Vista Cash Management Fund, which will not be
subject to any distribution fees) as compensation for distribution services
without regard to actual expenses incurred. The Vista Shares of the Vista
Portfolios, after the consummation of the Reorganization, will be subject to an
annual shareholder servicing fee payable periodically of up to .35% of average
net assets. The Hanover Portfolios are currently subject to an annual
shareholder servicing fee payable monthly at an annual rate of up to .35% of
average net assets.
The aggregate fees payable by Hanover for administration and fund
accounting services are a monthly fee at an annual rate of .09% of the first
$500 million of average daily net assets of the Hanover Portfolios, 0.08% of the
next $500 million of such assets, and 0.07% of such assets in excess of $1
billion, plus $25,000 per year for each Hanover Portfolio. In contrast, the
aggregate fees that will be payable by Vista for administration and fund
accounting services upon consummation of the Reorganization will be a monthly
fee at an annual rate of .10% of average daily net assets of the Vista
Portfolios, plus $45,000 per year for each Vista Portfolio and a quotation fee
of 50c per quote per day. Hanover and Vista each pay fees for transfer agency
services on a per account basis, which may vary depending on the type of account
involved. The fees payable by Hanover for custody services are a monthly fee at
an annual rate of .015% of the first $300 million of the aggregate average daily
net assets of the Hanover Portfolios, .010% of the next $300 million of such
assets and .005% of such assets in excess of $600 million, plus a fee of $25.00
for each transaction involving a security which is not book-entry and $15.00 for
each transaction involving a book-entry security. The fees that will be in
effect for Vista for custody services upon consummation of the Reorganization
are a monthly fee at an annual rate of .010% of the first $250 million of the
aggregate average daily net assets, .0075% of the next $250 million of such
assets and .005% of such assets in excess of $500 million, plus a fee of $10.00
for each transaction involving a book-entry security, $20.00 for each
transaction involving a physical security and $10 for income collections.
In addition to the fees described above, each of the Hanover Portfolios and
Vista Portfolios bears certain additional fees and expenses relating to, among
other things, printing and audit, legal and other professional services.
For more complete information regarding the historical and projected
expenses of the Vista Portfolios, see "Additional Information about Vista --
Expenses."
Distribution and Shareholder Servicing Arrangements. Hanover Funds
Distributor, Inc. acts as distributor for Hanover (the "Hanover Distributor")
and Vista Broker-Dealer Services, Inc. acts as distributor for Vista (the "Vista
Distributor"). Hanover has adopted a plan (the "Hanover Plan") under Rule 12b-1
under the 1940 Act. Under the Hanover Plan, each Hanover Portfolio may, solely
for the purpose of reimbursing the Hanover Distributor for activities primarily
intended to result in the sale of its shares, spend up to .10% of its net assets
annually in accordance with the Hanover Plan. As noted above, the Hanover
Portfolios currently do not bear any distribution fees. Activities for which the
Hanover Distributor may be reimbursed under the Hanover Plan include (but are
not limited to) the development and implementation of direct mail promotions and
advertising for the Hanover Portfolios and the preparation, printing and
distribution of prospectuses for the Hanover Portfolios to recipients other than
existing shareholders.
7
<PAGE> 14
Vista has also adopted a Plan of Distribution (the "Vista Distribution
Plan") under Rule 12b-1 under the 1940 Act. Under the Vista Distribution Plan,
following the consummation of the Reorganization, each Vista Portfolio (other
than the Vista Cash Management Fund) will be authorized, effective upon the
consummation of the Reorganization, to spend up to .10% of average net assets
annually as compensation to the Vista Distributor for distribution services
provided by it. A substantial portion of the distribution fees payable to the
Vista Distributor under the Vista Distribution Plan is paid by the Vista
Distributor to non-affiliated broker-dealers for distribution services that they
provide. The fees payable to the Vista Distributor under the Vista Distribution
Plan will be payable without regard to actual expenses incurred.
Hanover and Vista are each authorized to enter into Shareholder Servicing
Agreements with financial institutions and selected dealers ("Shareholder
Servicing Agents") which provide certain shareholder administrative support
services. Chemical and certain of its affiliates, among others, currently act as
Shareholder Servicing Agents for the Hanover Portfolios. Each Hanover
Shareholder Servicing Agent is paid a fee at an annual rate of up to .35% of the
average daily net asset value of shares in each Hanover Portfolio for which it
acts as Shareholder Servicing Agent. Chase and certain of its affiliates, among
others, currently act as Shareholder Servicing Agents for Vista. The fees
payable by Vista Shares of the Vista Portfolios for shareholder servicing
following the Reorganization will be paid at an annual rate of up to .35% of
average net assets.
Purchase and Redemption. All purchase orders for shares of Hanover
Portfolios must be placed through a Hanover Shareholder Servicing Agent or the
Hanover Distributor in accordance with procedures established by such Hanover
Shareholder Servicing Agents or the Hanover Distributor in connection with
requirements of the accounts of customers. Purchase orders must generally be
received by the Hanover Distributor prior to 12:00 noon to be executed on the
same day. Purchase orders received by the Hanover Distributor after 12:00 noon
are only accepted in Hanover's discretion, and orders received after 4:00 p.m.,
Eastern time, are not accepted. All purchase orders for Vista Shares of Vista
Portfolios must be placed through a Vista Shareholder Servicing Agent, brokers
or certain financial institutions which have entered into Selected Dealer
Agreements with the Vista Distributor ("Selected Dealers"), or the Vista
Distributor in accordance with procedures established by such Vista Shareholder
Servicing Agents, Selected Dealers or the Vista Distributor in connection with
requirements of the accounts of customers. Currently, in order for purchases of
Vista Shares to be executed on the same day, such purchase orders must be
received by Vista's transfer agent by 12:00 noon, Eastern time, for the Vista
100% U.S. Treasury Securities Money Market Fund, the Vista Tax Free Money Market
Fund and the Vista New York Tax Free Money Market Fund, and by 2:00 p.m.,
Eastern time for the Vista Treasury Plus Money Market Fund, the Vista U.S.
Government Money Market Fund and the Vista Cash Management Fund. Effective upon
consummation of the Reorganization, although the aforementioned deadlines will
generally continue in effect, purchase orders for Vista Shares of the Vista
Treasury Plus Money Market Fund and the Vista Cash Management Fund received by
Vista's transfer agent after 2:00 p.m., Eastern time, and prior to 4:00 p.m.,
Eastern time, may be accepted and executed on the same day in Vista's
discretion. The minimum initial purchase for individuals for Vista Shares is
$2,500. This minimum will be waived for Hanover Portfolio shareholders that
receive Vista Portfolio shares in connection with the Reorganization. The
Hanover Portfolios do not have a minimum purchase amount. Each Hanover and Vista
Shareholder Servicing Agent may establish its own terms, conditions and charges
with respect to the services provided by it.
Hanover shares may be redeemed in accordance with instructions and
limitations established by a Shareholder Servicing Agent or through the Hanover
Distributor. Vista Portfolio shares may be redeemed either through a Shareholder
Servicing Agent or through the Vista Distributor. Redemption orders for each
Hanover Portfolio and each Vista Portfolio are effected at the net asset value
per share next determined after the order is received by the Hanover Distributor
or Vista's transfer agent, as the case may be. Payment for redemption requests
received by the Hanover Distributor before 12:00 noon, Eastern time, will
normally be wired or credited to the customer's Shareholder Servicing Agent that
day. Redemptions of Vista Shares will be effected and the proceeds paid on the
same day the redemption request is made if such request is received prior to
12:00 noon, Eastern time, for the Vista 100% U.S. Treasury Securities Money
Market Fund, the Vista Tax Free Money Market Fund and the Vista New York Tax
Free Money Market Fund, and prior to 2:00 p.m.,
8
<PAGE> 15
Eastern time for the Vista Treasury Plus Money Market Fund, the Vista U.S.
Government Money Market Fund and the Vista Cash Management Fund. Each Hanover
Portfolio and Vista Portfolio may suspend the right of redemption or postpone
the date of payment for shares for more than seven days during any period when
(i) trading on the New York Stock Exchange is restricted; (ii) the Exchange is
closed for other than customary weekend and holiday closings; or (iii) an
emergency exists as determined by the Commission.
Dividends and Distributions. Each Hanover Portfolio and each Vista
Portfolio declares dividends from available net investment income daily and pays
such dividends monthly.
Risk Factors. Because of the similarities of investment objectives and
policies of the Hanover Portfolios and the corresponding Vista Portfolios, the
risks associated with an investment in the Hanover Portfolios are generally the
same as those associated with an investment in corresponding Vista Portfolios.
These investment risks, in general, are those typically associated with
investing in a managed portfolio of the specific types of instruments that each
Hanover Portfolio and each corresponding Vista Portfolio invests in. The risks
of investment in the Vista Cash Management Fund and the Hanover Cash Management
Fund include the risks associated with investments in bank obligations and
dollar-denominated securities of foreign issuers. The risks of investment in the
Hanover Tax Free Money Market Fund and the Vista Tax Free Money Market Fund
relate primarily to the ability of these portfolios to concentrate investments
in municipal obligations and the risks associated with these types of
investments. The Vista Tax Free Money Market Fund is a non-diversified
portfolio, unlike the Hanover Tax Free Money Market Fund, and therefore also
bears the risks associated with its non-diversified status. The risks of
investment in the Hanover New York Tax Free Money Market Fund and the Vista New
York Tax Free Money Market Fund, in addition to including the risks associated
with the Hanover Tax Free Money Market Fund and the Vista Tax Free Money Market
Fund, relate primarily to the non-diversified nature of these portfolios and the
risks associated with obligations issued by the State of New York and its
political subdivisions and instrumentalities. Further information relating to
the risks associated with an investment in these portfolios is set forth below
under "Comparison of Investment Objectives and Policies."
REASONS FOR THE REORGANIZATION
The Reorganization has been proposed by the Vista Board and the Hanover
Board as a result of the consequences of the merger (such merger being referred
to herein as the "Parent Merger"), announced in August 1995, of The Chase
Manhattan Corporation ("CMC") with and into Chemical Banking Corporation
("CBC"). Pursuant to the merger agreement entered into between CMC and CBC on
August 27, 1995, the effectiveness of the Parent Merger is subject to certain
conditions, including the receipt of certain regulatory approvals and the
approval of the shareholders of CMC and CBC. Following the Parent Merger, Chase,
the principal operating subsidiary of CMC and the investment adviser to each of
the Vista Portfolios, will be merged (such merger being referred to herein as
the "Bank Merger") with and into Chemical, a principal operating subsidiary of
CBC, with the surviving entity being renamed The Chase Manhattan Bank. CMC and
CBC anticipate that the Parent Merger may occur as early as January 31, 1996 and
that the Bank Merger will occur during July 1996. On December 11, 1995, the
respective shareholders of CMC and CBC voted to approve the Parent Merger.
In determining whether to recommend approval of the Reorganization to
shareholders of Hanover, the Hanover Board (including the independent Directors,
with the advice and assistance of independent legal counsel) made an inquiry
into a number of matters and considered the following factors, among others: (1)
the advantages to each Hanover Portfolio and corresponding Vista Portfolio as
well as to CBC and its affiliates following the Parent Merger of eliminating the
unnecessary competition and duplication of effort inherent in marketing funds
having similar investment objectives; (2) the compatibility of the investment
objectives, policies, restrictions and portfolios, as well as service features
available to shareholders of each Hanover Portfolio and each corresponding Vista
Portfolio; (3) the capabilities and resources of Chase (including Chemical as
its successor in the Bank Merger), its affiliates and other Vista service
providers in the areas of investment management, administration, fund
accounting, transfer agency, custody, marketing and shareholder servicing; (4)
expense ratios and available information regarding the fees and expenses of each
9
<PAGE> 16
Hanover Portfolio, each corresponding Vista Portfolio and the relevant share
class thereof (historical and pro forma) as well as similar funds; (5) the
historical performance of the Vista Portfolios and the Hanover Portfolios; (6)
portfolio transaction policies of the Hanover Portfolios and the Vista
Portfolios; (7) the terms and conditions of the Reorganization and whether the
Reorganization would result in dilution of shareholder interests; (8) costs
incurred by each Hanover Portfolio and each corresponding Vista Portfolio as a
result of the Reorganization; (9) tax consequences of the Reorganization; (10)
possible alternatives to the Reorganization; and (11) the commitment of CBC and
its affiliates following the Parent Merger to maintain and enhance its position
in the money market fund business and the prospects that the combination of the
respective portfolios will ensure the continued strength of the money market
fund efforts of CBC and its affiliates for the benefit of shareholders of the
Vista Portfolios, including former shareholders of the Hanover Portfolios.
In reaching the decision to recommend that the shareholders of each Hanover
Portfolio vote to approve the Reorganization, the Hanover Board concluded that
the participation of each Hanover Portfolio in the Reorganization is in the best
interests of its respective shareholders and would not result in the dilution of
such shareholders' interests. Their conclusion was based on a number of factors,
including the following:
1. The Reorganization would permit the shareholders of the Hanover
U.S. Treasury Money Market Fund, the Hanover Government Money Market Fund,
the Hanover Cash Management Fund, the Hanover Tax Free Money Market Fund
and the Hanover New York Tax Free Money Market Fund to pursue substantially
the same investment goals in respectively larger funds. Such larger funds
should enhance the ability of portfolio managers to effect their portfolio
transactions on more favorable terms and give portfolio managers greater
investment flexibility and the ability to select a larger number of
portfolio securities, with the attendant benefits of increased
diversification. Because the Vista 100% U.S. Treasury Securities Money
Market Fund has been newly organized to acquire the assets of the Hanover
100% U.S. Treasury Securities Money Market Fund and will not commence
operations until the consummation of the Reorganization, the Vista 100%
U.S. Treasury Securities Money Market Fund, immediately following the
Reorganization, will not be larger than the Hanover 100% U.S. Treasury
Securities Money Market Fund, but should nonetheless benefit from being
part of a larger, combined fund group.
2. Under the Reorganization, current shareholders of each of the
Hanover Portfolios would receive the investment advisory services of Chase
(including Chemical as its successor in the Bank Merger) and day-to-day
management by CAM (in the case of all Hanover Portfolios other than the
Hanover Cash Management Fund and the Hanover Tax Free Money Market Fund) or
TCBNA (in the case of the Hanover Cash Management Fund and the Hanover Tax
Free Money Market Fund). Chase, including its predecessor organizations,
has over 100 years of money management experience. Chase currently manages
32 mutual fund portfolios, which invest in a broad array of assets and
include money market, debt and equity, and domestic as well as
international, portfolios. Also included among Chase's accounts are
commingled trust funds and a broad spectrum of individual trust and
investment management portfolios with varying investment objectives. CAM is
registered with the Commission as an investment adviser and was formed for
the purpose of providing discretionary investment advisory services to
institutional clients and to consolidate Chase's investment management
function, and the same individuals who serve as portfolio managers for CAM
also serve as portfolio managers for Chase. Current shareholders of the
Hanover Cash Management Fund and the Hanover Tax Free Money Market Fund
would continue, under the Reorganization, to receive the day-to-day
investment management services of TCBNA. TCBNA has been in the investment
counselling business since 1987 and is an indirect, wholly owned subsidiary
of CBC. TCBNA renders investment advice to a wide variety of corporations,
pension plans, foundations, trusts and individuals.
3. Through the Reorganization, shareholders of the Hanover Portfolios
would become shareholders in a larger combined fund family consisting of a
wide range of stock, bond and money market funds, including both domestic
and international portfolios.
10
<PAGE> 17
4. It is expected that the Reorganization will lead to a more focused
marketing and distribution effort with respect to the Vista Portfolios,
thereby reducing potential investor confusion and promoting asset growth in
such portfolios.
INFORMATION ABOUT THE REORGANIZATION
Agreement and Plan of Reorganization and Liquidation. The following
summary of the Agreement is qualified in its entirety by reference to the form
of the Agreement attached to this Prospectus/Proxy Statement as Exhibit A. The
Agreement, to which Vista and Hanover are parties, provides that the Vista 100%
U.S. Treasury Securities Money Market Fund will acquire all of the assets and
liabilities of the Hanover 100% U.S. Treasury Securities Money Market Fund in
exchange for Vista Shares of the Vista 100% U.S. Treasury Securities Money
Market Fund, the Vista Treasury Plus Money Market Fund will acquire all of the
assets and liabilities of the Hanover U.S. Treasury Money Market Fund in
exchange for Vista Shares of the Vista Treasury Plus Money Market Fund, the
Vista U.S. Government Money Market Fund will acquire all of the assets and
liabilities of the Hanover Government Money Market Fund in exchange for Vista
Shares of the Vista U.S. Government Money Market Fund, the Vista Cash Management
Fund will acquire all of the assets and liabilities of the Hanover Cash
Management Fund in exchange for Vista Shares of the Vista Cash Management Fund,
the Vista Tax Free Money Market Fund will acquire all of the assets and
liabilities of the Hanover Tax Free Money Market Fund in exchange for Vista
Shares of the Hanover Tax Free Money Market Fund, and the Vista New York Tax
Free Money Market Fund will acquire all of the assets and liabilities of the
Hanover New York Tax Free Money Market Fund in exchange for Vista Shares of the
Vista New York Tax Free Money Market Fund. Subject to the satisfaction of the
conditions described below, such acquisitions shall take place on March ,
1996 or such later date as may be agreed upon by the parties (the "Closing
Date"). The net asset value per Vista Share for each Vista Portfolio will be
determined by dividing each portfolio's net assets attributable to such class of
its shares by the total number of its outstanding shares of such class.
As is the case with the Hanover Portfolios, there can be no assurance that
the Vista Portfolios will be able to maintain a stable net asset value of $1.00
per share. Portfolio securities will be valued in accordance with the valuation
practices of the Vista Portfolios, which are described below under "Additional
Information About Vista -- F. Other Information Concerning Shares of Vista."
As promptly as practicable after the Closing Date, each Hanover Portfolio
will liquidate and distribute pro rata to its shareholders of record as of 12:00
noon (in the case of the Vista 100% U.S. Treasury Securities Money Market Fund,
the Hanover Tax Free Money Market Fund and the Hanover New York Tax Free Money
Market Fund) or as of 2:00 p.m. (in the case of the other Hanover Portfolios)
(New York time) on the Closing Date the shares of the corresponding Vista
Portfolio received by that Hanover Portfolio in the Reorganization. Such
liquidation and distribution will be accomplished by the establishment of
accounts on the share records of the Vista Portfolios in the names of the
shareholders of the corresponding Hanover Portfolio, each account representing
the respective pro rata number of shares of such Vista Portfolio due the
shareholder. After such distribution and the winding up of its affairs, the
Hanover Portfolios will be terminated and Hanover will be dissolved and will be
deregistered as an investment company under the 1940 Act.
The Vista Board and the Hanover Board have each determined, with respect to
their respective portfolios that are parties to the Reorganization, that the
interests of existing shareholders of such portfolios will not be diluted as a
result of the transactions contemplated by the Reorganization and that
participation in the Reorganization is in the best interests of each such
portfolio's shareholders.
Certain of the existing investment limitations of the Hanover Portfolios
that require shareholder approval for amendment prohibit the Hanover Portfolios
from purchasing common stock or investing more than a stated percentage of its
assets in an issuer's securities. By approving the Agreement, the shareholders
of the Hanover Portfolios will be deemed to have agreed to waive temporarily
these limitations insofar as they might be deemed to apply to the
Reorganization.
11
<PAGE> 18
The consummation of the Reorganization is subject to the conditions set
forth in the Agreement, including that the Parent Merger be consummated and that
the majority of the shareholders of each Hanover Portfolio approve the
Reorganization. The Agreement may be terminated and the Reorganization abandoned
at any time prior to the Closing Date, before or after approval by the
shareholders of the Hanover Portfolios, by either Hanover or Vista if (i) any
condition or covenant set forth in the Agreement has not been fulfilled or
waived by the party entitled to its benefits, (ii) there has been a material
breach by the other party or (iii) the Vista Board or the Hanover Board, as the
case may be, determines that proceeding with the Reorganization is not in the
best interests of that party's shareholders. The Agreement provides that either
party may waive compliance with any of the covenants or conditions made therein
for its benefit, except for certain conditions regarding the receipt of
regulatory approvals.
The expenses of the Reorganization, including the cost of a proxy
soliciting agent that has been retained (see "Voting Information"), will be
borne by CBC and/or CMC.
Approval of the Agreement will require the affirmative vote of the holders
of at least a majority of the outstanding shares of each Hanover Portfolio
entitled to vote on the matter. If the Reorganization is not approved by the
shareholders of each Hanover Portfolio or is not consummated for any other
reason, the Hanover Board will consider other possible courses of action.
Approval of the Agreement by the shareholders of each Hanover Portfolio will
also constitute approval of Hanover's dissolution and deregistration under the
1940 Act following consummation of the Reorganization. See "Voting Information"
below.
THE HANOVER BOARD HAS UNANIMOUSLY RECOMMENDED
APPROVAL OF THE AGREEMENT.
Description of Shares of Vista. Shareholders of each Hanover Portfolio
will be issued Vista Shares of the corresponding Vista Portfolio in accordance
with the procedures provided for in the Agreement as described above. Each such
share will be fully paid and non-assessable when issued with no personal
liability attaching to the ownership thereof and transferable without
restrictions and will have no preemptive or conversion rights.
Federal Income Tax Consequences. As a condition to the consummation of the
Reorganization, Hanover and Vista will each receive an opinion from Simpson
Thacher & Bartlett to the effect that, on the basis of existing provisions of
the Internal Revenue Code of 1986, as amended (the "Code"), current
administrative rules and court decisions, for federal income tax purposes: (1)
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 Vista Portfolio; (2) no gain or loss will be recognized by any of
the Hanover Portfolios or the corresponding Vista Portfolios upon the transfer
of all of the assets and liabilities, if any, of each Hanover Portfolio to its
corresponding Vista Portfolio solely in exchange for corresponding Vista
Portfolio shares or upon the distribution of the shares of the corresponding
Vista Portfolios to the shareholders of the Hanover Portfolios solely in
exchange for all of their shares of the Hanover Portfolios; (3) no gain or loss
will be recognized by shareholders of any of the Hanover Portfolios upon the
exchange of such Hanover Portfolio's shares solely for shares of its
corresponding Vista Portfolio; (4) the holding period and tax basis of the
corresponding Vista Portfolio shares received by each shareholder of each
Hanover Portfolio pursuant to the Reorganization will be the same as the holding
period (provided the shares of the Hanover Portfolios were held as a capital
asset on the date of the Reorganization) and tax basis of the shares of the
Hanover Portfolio held by the shareholder immediately prior to the
Reorganization; and (5) the holding period and tax basis of the assets of each
of the Hanover Portfolios acquired by its corresponding Vista 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 CBC
and/or CMC of certain expenses of Hanover and Vista which are directly related
to the Reorganization will not affect such opinion. However, no opinion will be
given as to any other federal income tax consequences of the payment of such
expenses.
12
<PAGE> 19
Capitalization. The following tables show the capitalization (unaudited)
of each Hanover Portfolio and the corresponding Vista Portfolio as of November
30, 1995, and on a pro-forma combined basis as of that date for the
Reorganization giving effect to the proposed acquisition of assets at net asset
value:
<TABLE>
<CAPTION>
VISTA 100%
U.S. TREASURY HANOVER 100% U.S.
SECURITIES TREASURY
MONEY MARKET SECURITIES PRO-FORMA
FUND(1) MONEY MARKET FUND COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Assets
Vista Shares(2)............... $0 $1,337,548,820 $1,337,548,820
Premier Shares................ $0 $0 $0
Institutional Shares.......... $0 $0 $0
Net Asset Value per Share(3).... -- $1.00 $1.00
Shares Outstanding.............. 0 1,337,562,968 1,337,562,968
</TABLE>
<TABLE>
<CAPTION>
VISTA TREASURY HANOVER U.S.
PLUS TREASURY PRO-FORMA
MONEY MARKET FUND MONEY MARKET FUND COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Assets
Vista Shares(2)............... $0 $1,663,828,952 $1,663,828,952
Premier Shares................ $55,909,617 $0 $55,909,617
Institutional Shares.......... $83,936,697 $0 $83,936,697
Net Asset Value per Share(3).... $1.00 $1.00 $1.00
Shares Outstanding.............. 139,829,131 1,663,828,952 1,803,658,083
</TABLE>
<TABLE>
<CAPTION>
VISTA U.S. HANOVER
GOVERNMENT GOVERNMENT PRO-FORMA
MONEY MARKET FUND MONEY MARKET FUND COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Assets
Vista Shares(2)............... $348,724,311 $1,551,998,439 $1,900,722,750
Premier Shares................ $1,064,318,943 $0 $1,064,318,943
Institutional Shares.......... $787,731,705 $0 $787,731,705
Net Asset Value per Share(3).... $1.00 $1.00 $1.00
Shares Outstanding.............. 2,200,773,505 1,551,998,439 3,752,771,944
</TABLE>
<TABLE>
<CAPTION>
VISTA CASH HANOVER CASH PRO-FORMA
MANAGEMENT FUND MANAGEMENT FUND COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Assets
Vista Shares(2)............... $100,904,317 $1,634,493,092 $1,735,397,409
Premier Shares................ $423,768,849 $0 $423,768,849
Institutional Shares.......... $344,735,362 $0 $344,735,362
Net Asset Value per Share(3).... $1.00 $1.00 $1.00
Shares Outstanding.............. 869,343,150 1,634,493,092 2,503,836,242
</TABLE>
<TABLE>
<CAPTION>
VISTA TAX FREE HANOVER TAX FREE PRO-FORMA
MONEY MARKET FUND MONEY MARKET FUND COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Assets
Vista Shares(2)............... $155,137,950 $314,466,384 $469,604,334
Premier Shares................ $152,377,832 $0 $152,377,832
Institutional Shares.......... $130,800,571 $0 $130,800,571
Net Asset Value per Share(3).... $1.00 $1.00 $1.00
Shares Outstanding.............. 438,154,570 314,512,104 752,666,674
</TABLE>
13
<PAGE> 20
<TABLE>
<CAPTION>
VISTA NEW YORK HANOVER NEW YORK
TAX FREE TAX FREE PRO-FORMA
MONEY MARKET FUND MONEY MARKET FUND COMBINED
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Assets
Vista Shares(2)............... $380,464,579 $252,621,101 $633,085,680
Net Asset Value per Share(3).... $1.00 $1.00 $1.00
Shares Outstanding.............. 380,451,873 252,668,725 633,120,598
</TABLE>
- ---------------
(1) The Vista 100% U.S. Treasury Securities Money Market Fund has been newly
organized to acquire the assets of the Hanover 100% U.S. Treasury
Securities Money Market Fund; no shares are outstanding at November 30,
1995.
(2) Information presented for the corresponding Hanover Portfolio is for the
class of shares that will receive the class of shares of the corresponding
Vista Portfolio indicated pursuant to the Reorganization.
(3) For each class of shares outstanding.
VOTING INFORMATION
Proxies from the shareholders of each Hanover Portfolio are being solicited
by the Hanover Board for the Special Meeting of Shareholders to be held on March
15, 1996 at the offices of , , New York, New York
, at .M. or at such later time as necessary by adjournment. A proxy
may be revoked at any time before the meeting by oral or written notice to
Hanover. Unless revoked, all valid proxies will be voted in accordance with the
specification thereon, or in the absence of specification, for approval of the
Agreement. Approval of the Agreement will require the affirmative vote of the
holders of at least a majority of the outstanding shares of each portfolio of
Hanover entitled to vote thereon. Approval of the Agreement by the shareholders
of each Hanover Portfolio will also constitute approval of Hanover's dissolution
and deregistration under the 1940 Act following consummation of the
Reorganization.
Proxies are to be solicited by mail. Additional solicitations may be made
by telephone, telegram or personal contact by officers, employees or agents of
CBC and its affiliates. Each Hanover Portfolio has retained to assist
in the solicitation of proxies in connection with the Reorganization. The cost
of solicitation, including a fee of $ will be paid by CBC and/or CMC.
Under the Agreement, shareholders of each Hanover Portfolio will receive
Vista Shares of the corresponding Vista Portfolio, as described above, with an
aggregate net asset value equal to the value of the shareholder's investment in
each Hanover Portfolio at the effective time of the transaction. This method of
valuation is also consistent with interpretations of Rule 22c-1 under the 1940
Act by the Commission's Division of Investment Management. Any shareholder of a
Hanover Portfolio may redeem his or her shares at the then-current net asset
value prior to the Closing Date.
Shareholders of the Hanover Portfolios of record at the close of business
on January , 1996 will be entitled to vote at the Special Meeting or any
adjournment of the meeting. The holders of a majority of the shares outstanding
of each such Hanover Portfolio at the close of business on that date present in
person or represented by proxy will constitute a quorum for the meeting;
however, as noted above, the affirmative vote of at least a majority of the
shares outstanding of each such Hanover Portfolio at the close of business on
that date is required to approve the Reorganization. Shareholders are entitled
to one vote for each share held and fractional votes the fractional shares held.
As of January , 1996, as shown on the books of Hanover, there were issued and
outstanding shares of the Hanover 100% U.S. Treasury Securities Money
Market Fund, shares of the Hanover U.S. Treasury Money Market Fund,
shares of the Hanover Government Money Market Fund, shares
of the Hanover Cash Management Fund, shares of the Hanover Tax Free
Money Market Fund, and shares of the Hanover New York Tax Free Money
Market Fund. The votes of the shareholders of the corresponding Vista Portfolios
are not being solicited to approve the Reorganization, since their approval or
consent is not required with respect to the Reorganization. Their votes are
being solicited, however, in connection with the approval of certain of the
Related Changes.
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<PAGE> 21
The Agreement was approved for Hanover by unanimous vote of the Hanover
Board, including all of the Directors then serving who were not interested
persons of Hanover or Vista (other than in their capacity as Trustees or
Directors of Vista or Hanover, as the case may be).
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The investment objective of each Vista Portfolio and the corresponding
Hanover Portfolio are substantially identical. In seeking to achieve its
investment objective, each Vista Portfolio is guided by investment policies and
restrictions that are substantially similar except as otherwise noted below, to
those of the corresponding Hanover Portfolio.
The investment objective and policies of each of the Vista Portfolios,
after giving effect to the Related Changes except where otherwise indicated, are
set forth below, together with a discussion of the primary differences from
those of the respective corresponding Hanover Portfolios. The investment
objective of each Vista Portfolio is fundamental and may not be changed without
the affirmative vote of a majority of its outstanding shares. Of course,
achievement of these objectives cannot be guaranteed.
The Vista Portfolios seek to maintain a net asset value of $1.00 per share
for purchases and redemptions. To do so, the Vista Portfolios, like the Hanover
Portfolios, use the amortized cost method of valuing securities pursuant to Rule
2a-7 under the 1940 Act, certain requirements of which are summarized as
follows. In accordance with Rule 2a-7, the Vista Portfolios are required to
maintain a dollar-weighted average portfolio maturity of 90 days or less and
purchase only instruments which have or are deemed to have remaining maturities
of 397 days or less. Each Vista Portfolio invests only in U.S. dollar
denominated securities determined in accordance with procedures established by
the Board of Trustees of Vista to present minimal credit risks and which are
rated in the highest short-term rating category (the two highest short-term
rating categories in the case of the Vista New York Tax Free Money Market Fund)
by at least two nationally recognized statistical rating organizations
("NRSROs") (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 of Vista. If a
security is backed by an unconditional demand feature, the issuer of the demand
feature rather than the issuer of the underlying security may be relied upon in
determining whether the foregoing criteria have been met. Securities in which
the Vista Portfolios and Hanover Portfolios invest may not earn as high a level
of current income as long-term or lower quality securities.
A. VISTA 100% U.S. TREASURY SECURITIES MONEY MARKET FUND
The investment objective of the Vista 100% U.S. Treasury Securities Money
Market Fund is to seek to provide maximum current income consistent with maximum
safety of principal and maintenance of liquidity. The Vista 100% U.S. Treasury
Securities Money Market Fund seeks to achieve its investment 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 Vista 100% U.S. Treasury Securities Money
Market Fund does not purchase securities issued or guaranteed by agencies or
instrumentalities of the U.S. Government, nor does it enter into repurchase
agreements. The dollar weighted average maturity of the Vista 100% U.S. Treasury
Securities Money Market Fund will be 90 days or less. Although the Vista 100%
U.S. Treasury Securities Money Market Fund seeks to be fully invested, at times
it may hold uninvested cash reserves, which would adversely affect its yield.
Although the Vista 100% U.S. Treasury Securities Money Market Fund's
investment objective may not be changed without shareholder approval, such
approval is not required to change any of the other investment policies
discussed above or in "G. Additional Information on Investment Policies and
Techniques," except for policies identified as fundamental.
15
<PAGE> 22
Differences with Hanover 100% U.S. Treasury Securities Money Market Fund
Because the Vista 100% U.S. Treasury Securities Money Market Fund has been
created for the purpose of operating as a successor to the Hanover 100% U.S.
Treasury Securities Money Market Fund in connection with the Reorganization, the
investment objective, policies and restrictions of the Vista 100% U.S. Treasury
Securities Money Market Fund and the Hanover 100% U.S. Treasury Securities Money
Market Fund are substantially identical, except for certain differences
discussed below under "G. Additional Information on Investment Policies and
Techniques" and "H. Investment Limitations."
B. VISTA TREASURY PLUS MONEY MARKET FUND
The investment objective of the Vista Treasury Plus Money Market Fund is to
seek to provide maximum current income consistent with preservation of capital
and maintenance of liquidity. The Vista Treasury Plus Money Market Fund seeks to
achieve its investment objective by investing in obligations issued by the U.S.
Treasury, including U.S. Treasury bills, bonds and notes. In addition, the Vista
Treasury Plus Money Market Fund will seek to enhance its yield by investing in
repurchase agreements which are fully collateralized by U.S. Treasury
obligations. The dollar weighted average maturity of the Vista Treasury Plus
Money Market Fund will be 60 days or less. Although the Vista Treasury Plus
Money Market Fund seeks to be fully invested, at times it may hold uninvested
cash reserves, which would adversely affect its yield.
The Vista Treasury Plus Money Market Fund may invest in U.S. Government
securities issued or guaranteed as to principal and interest by the U.S.
Government, including U.S. Treasury bills, bonds, and notes, which differ
principally only in their interest rates, maturities and dates of issuance.
Although the Vista Treasury Plus Money Market Fund's investment objective
may not be changed without shareholder approval, such approval is not required
to change any of the other investment policies discussed above or in
"G. Additional Information on Investment Policies and Techniques," except for
policies identified as fundamental.
Differences with Hanover U.S. Treasury Money Market Fund
In contrast to the Vista Treasury Plus Money Market Fund, the Hanover U.S.
Treasury Money Market Fund is permitted to maintain a dollar weighted average
portfolio maturity of up to 90 days.
For a discussion of certain additional differences between the Vista
Treasury Plus Money Market Fund and the Hanover U.S. Treasury Money Market Fund,
see "G. Additional Information on Investment Policies and Techniques" and
"H. Investment Limitations."
C. VISTA U.S. GOVERNMENT MONEY MARKET FUND
The investment objective of the Vista U.S. Government Money Market Fund is
to provide its shareholders with as high a level of current income as is
consistent with the preservation of capital and the maintenance of liquidity.
The Vista U.S. Government Money Market Fund seeks to achieve its investment
objective by investing at least 80% of its assets in obligations that are issued
or guaranteed by the U.S. Treasury, by agencies of the U.S. Government, and by
instrumentalities that have been established or sponsored by the U.S.
Government, and in repurchase agreements collateralized by U.S. Government
obligations or other securities in which the Vista U.S. Government Money Market
Fund is permitted to invest. The U.S. Government obligations in which the Vista
U.S. Government Money Market Fund invests will be of high quality and present
minimal credit risk. Although the Vista U.S. Government Money Market Fund seeks
to be fully invested, at times it may hold uninvested cash reserves, which would
adversely affect its yield. Neither the United States nor any of its agencies
insures or guarantees the market value of shares of the Vista U.S. Government
Money Market Fund. The dollar weighted average maturity of the Vista U.S.
Government Money Market Fund will be 60 days or less.
U.S. Treasury securities are backed by the "full faith and credit" of the
U.S. Government. Other U.S. Government obligations may or may not be backed by
the "full faith and credit" of the U.S. Government. In the case of securities
not backed by the "full faith and credit" of the U.S. Government, the
16
<PAGE> 23
investor must look principally to the agency issuing or guaranteeing the
obligation for ultimate repayment, and may not be able to assert a claim against
the U.S. Government itself in the event the agency or instrumentality does not
meet its commitments.
Treasury securities include Treasury bills, Treasury notes and Treasury
bonds. Government agencies which issue or guarantee securities backed by the
"full faith and credit" of the U.S. Government include the Government National
Mortgage Association ("GNMA"), the Student Loan Marketing Association ("SLMA"),
the Farmer's Home Administration and the Small Business Administration. The U.S.
Government agencies and instrumentalities that issue or guarantee securities not
backed by the "full faith and credit" of the U.S. Government include, but are
not limited to the Federal Farm Credit System, the Federal Land Banks, the
Federal Intermediate Credit Banks, the Bank for Cooperatives, the Federal Home
Loan Banks, the Federal National Mortgage Association ("FNMA") and the Federal
Home Loan Mortgage Corporation ("FHLMC").
The Vista U.S. Government Money Market Fund is also permitted to invest in
U.S. Government agency securities, which often provide higher yields than are
available from the more common types of government-backed instruments. While
they may frequently offer attractive yields, the limited-activity markets of
many of these securities means that, if the Vista U.S. Government Money Market
Fund were required to liquidate any of them, it might not be able to do so
advantageously. For additional information on these types of securities, see
"Investment Objectives, Policies and Restrictions -- Investment Policies:
Specialized Kinds of Government Agency Securities" in Vista's statement of
additional information dated October 28, 1994 (the "Vista SAI"), which is
incorporated into the Statement of Additional Information by reference.
If securities issued or guaranteed by GNMA, FNMA or FHLMC are purchased at
a premium above principal, the premium is not guaranteed by the issuing agency
and a decline in the market value to par may result in a loss to the Vista U.S.
Government Money Market Fund of the premium, which may be particularly likely in
the event of a prepayment.
Shareholder approval is currently required to change any of the investment
policies discussed above or in "G. Additional Information on Investment Policies
and Techniques." Upon consummation of the Reorganization, shareholder approval
will no longer be required to change any of the investment policies (other than
the investment objective) discussed above or in "G. Additional Information on
Investment Policies and Techniques" if approval to eliminate the shareholder
approval requirement is obtained from the shareholders of the Vista U.S.
Government Money Market Fund.
Differences with Hanover Government Money Market Fund
In contrast to the Vista U.S. Government Money Market Fund, the Hanover
U.S. Government Money Market Fund is permitted to maintain a dollar weighted
average portfolio maturity of up to 90 days.
In contrast to the Vista U.S. Government Money Market Fund, the investment
policies of the Hanover Government Money Market Fund generally are not
fundamental and therefore may be changed without shareholder approval. However,
as noted above, upon consummation of the Reorganization, shareholder approval
will no longer be required to change the investment policies (other than the
investment objective) of the Vista U.S. Government Money Market Fund if approval
to eliminate the shareholder approval requirement is obtained from shareholders
of the Vista U.S. Government Money Market Fund.
The Vista U.S. Government Money Market Fund is required as a matter of
policy to invest at least 80% of its assets in obligations issued or guaranteed
by the U.S. Treasury, by agencies of the U.S. Government and by
instrumentalities that have been established or sponsored by the U.S.
Government, and in repurchase agreements collateralized by U.S. Government
obligations or other securities in which the Vista U.S. Government Money Market
Fund may invest. In contrast, the Hanover Government Money Market Fund is
required to invest all of its assets in the foregoing.
In contrast to the Vista U.S. Government Money Market Fund, the Hanover
Government Money Market Fund may invest without limitation in participation
interests and certificates of indebtedness.
17
<PAGE> 24
For a discussion of certain additional differences between the Vista U.S.
Government Money Market Fund and the Hanover Government Money Market Fund, see
"G. Additional Information on Investment Policies and Techniques" and
"H. Investment Limitations."
D. VISTA CASH MANAGEMENT MONEY MARKET FUND
The investment objective of the Vista Cash Management Fund is to seek to
provide maximum current income consistent with preservation of capital and
maintenance of liquidity. The Vista Cash Management Fund seeks to achieve its
investment objective by investing in high quality, short-term U.S. Dollar-
denominated money market instruments. The Vista Cash Management Fund invests in
(i) U.S. Dollar-denominated high quality commercial paper and other short-term
obligations, including floating and variable rate master demand notes of U.S.
and foreign corporations; (ii) U.S. Dollar denominated obligations of foreign
governments and supranational agencies (e.g., the International Bank for
Reconstruction and Development); (iii) U.S. Dollar denominated obligations
issued or guaranteed by U.S. banks with total assets exceeding $1 billion
(including obligations of foreign branches of such banks) and by foreign banks
with total assets exceeding $10 billion (or the equivalent in other currencies)
which have branches or agencies in the U.S. (including U.S. branches of such
banks), or such other U.S. or foreign commercial banks which are judged by the
Adviser to meet comparable credit standing criteria; (iv) securities issued or
guaranteed as to principal and interest by the U.S. Government or by agencies or
instrumentalities thereof; and (v) repurchase agreements related to these
securities. The securities in which the Vista Cash Management Fund invests,
described in greater detail under "G. Additional Information on Investment
Policies and Techniques," will be of high quality and present minimal credit
risks. Although the Vista Cash Management Fund seeks to be fully invested, at
times it may hold uninvested cash reserves, which would adversely affect its
yield.
All of the Vista Cash Management Fund's investments will be in U.S. Dollar
denominated securities with remaining maturities of 397 days or less. Certain
instruments issued or guaranteed by issuers, including the U.S. Government or
agencies thereof, which have a variable rate of interest readjusted no less
frequently than annually are deemed to have a maturity equal to the period
remaining until the next readjustment of the interest rate.
U.S. Government Securities. The Vista Cash Management Fund may invest in
U.S. Government securities issued or guaranteed as to principal and interest by
the U.S. Government or by agencies or instrumentalities thereof including
certain U.S. Treasury obligations, consisting of bills, notes and bonds, which
principally differ only in their interest rates, maturities and times of
issuance, and obligations issued or guaranteed by U.S. Government agencies and
instrumentalities which are primarily supported by the full faith and credit of
the U.S. Treasury, such as securities of the Small Business Administration. In
addition, the Vista Cash Management Fund may invest in those obligations
supported by (i) the limited authority of the issuer to borrow from the U.S.
Treasury (such as securities of the Student Loan Marketing Association), (ii)
the authority of the U.S. Government to purchase certain obligations of the
issuer (such as securities of FNMA), or (iii) only the credit of the issuer. No
assurance can be given that the U.S. Government will provide financial support
to U.S. Government agencies and instrumentalities as described in clauses (i),
(ii) or (iii) above in the future, other than as set forth above, since it is
not obligated to do so by law. The Vista Cash Management Fund is also permitted
to invest in certain specialized U.S. Government agency securities, which often
provide higher yields than are available from the more common types of
government backed instruments. While they may frequently offer attractive
yields, the limited-activity markets of many of these securities means that, if
the Vista Cash Management Fund were required to liquidate any of them, it might
not be able to do so advantageously.
Domestic Bank Obligations. The domestic bank obligations in which the
Vista Cash Management Fund may invest consist of certificates of deposit, time
deposits and bankers' acceptances issued or guaranteed by U.S. banks. Such bank
obligations may be general obligations of the parent bank or may be limited to
the issuing branch by the terms of the specific obligation or by government
regulation.
Foreign Bank Obligations. The foreign bank obligations in which the Vista
Cash Management Fund may invest consist of U.S. Dollar denominated obligations
issued or guaranteed by foreign banks, including
18
<PAGE> 25
foreign branches of U.S. banks, foreign banks and U.S. branches of foreign
banks. Such bank obligations may be general obligations of the parent bank or
may be limited to the issuing branch by the terms of the specific obligation or
by government regulation.
Commercial Paper and Other Short-Term Obligations. The commercial paper
and other short-term obligations of U.S. and foreign issuers which may be
purchased by the Vista Cash Management Fund, other than those of bank holding
companies, include obligations which are (i) rated in the category Prime-1 by
Moody's Investors Service, Inc. ("Moody's"), A-1 by Standard & Poor's
Corporation ("Standard & Poor's"), F-1 by Fitch Investors Service, Inc.
("Fitch") or D-1 by Duff & Phelps ("D&P"), or comparably rated by another NRSRO;
or (ii) determined by the Adviser to be of comparable quality to those rated
obligations which may be purchased by the Vista Cash Management Fund at the date
of purchase or which at the date of purchase have an outstanding debt issue
rated in the highest rating category by Moody's, Standard & Poor's, Fitch, D&P
or another NRSRO. For descriptions of the ratings of Standard & Poor's, Moody's,
Fitch and D&P, see "Description of Ratings" in Appendix A. The commercial paper
and other short-term obligations of U.S. bank holding companies which may be
purchased by the Vista Cash Management Fund include obligations issued or
guaranteed by bank holding companies with total assets exceeding $1 billion. For
purposes of the size standards with respect to banks and bank holding companies,
"total deposits" and "total assets" are determined on an annual basis by
reference to an institution's then most recent annual financial statements.
Floating and Variable Rate Obligations. The Vista Cash Management Fund
also may purchase floating and variable rate demand notes and bonds, as well as
floating and variable rate obligations of U.S. and foreign banks, which are
obligations normally having stated maturities in excess of 397 days, but which
permit the holder to demand payment of principal at any time, or at specified
intervals not exceeding 397 days, in each case upon not more than 30 days'
notice. Variable rate demand notes include master demand notes which are
obligations that permit the Vista Cash Management Fund to invest fluctuating
amounts, which may change daily without penalty, pursuant to direct arrangements
between the Vista Cash Management Fund, as lender, and the borrower. The
interest rates on these notes fluctuate from time to time. The issuer of such
obligations normally has a corresponding right, after a given period, to prepay
in its discretion the outstanding principal amount of the obligations plus
accrued interest upon a specified number of days' notice to the holders of such
obligations. The interest rate on a floating rate demand obligation is based on
a known lending rate, such as a bank's prime rate, and is adjusted automatically
each time such rate is adjusted. The interest rate on a variable rate demand
obligation is adjusted automatically at specified intervals. Frequently, such
obligations are secured by letters of credit or other credit support
arrangements provided by banks. Because these obligations are direct lending
arrangements between the lender and the borrower, it is not contemplated that
such instruments will generally be traded, and there generally is no established
secondary market for these obligations, although they are redeemable at face
value. Accordingly, where these obligations are not secured by letters of credit
or other credit support arrangements, the Vista Cash Management Fund's right to
redeem is dependent on the ability of the borrower to pay principal and interest
on demand. Such obligations frequently are not rated by credit rating agencies
and, if not so rated, the Vista Cash Management Fund may invest in them only if
the Adviser determines that at the time of investment the obligations are of
comparable quality to the other obligations in which the Vista Cash Management
Fund may invest. The Adviser, on behalf of the Vista Cash Management Fund, will
consider on an ongoing basis the creditworthiness of the issuers of the floating
and variable rate demand obligations in the Vista Cash Management Fund's
portfolio. The Vista Cash Management Fund will not invest more than 10% of the
value of its respective total assets in floating or variable rate demand
obligations as to which it cannot exercise the demand feature on not more than
seven days' notice if there is no secondary market available for these
obligations, and in other securities that are not readily marketable.
Asset-Backed Securities. The Vista Cash Management Fund may purchase
asset-backed securities. Asset-backed securities represent defined interests in
an underlying pool of assets. Such securities may be issued as pass-through
certificates, which represent undivided fractional interests in the underlying
pool of assets. Alternatively, asset-backed securities may be issued as
interests, generally in the form of debt securities, in a special purpose entity
organized solely for the purpose of owning the underlying assets and
19
<PAGE> 26
issuing such securities. In the latter case, such securities are secured by and
payable from a stream of payments generated by the underlying assets. The assets
underlying asset-backed securities are often a pool of assets similar to one
another, such as motor vehicle receivables or credit card receivables.
Alternatively, the underlying assets may be a particular type of securities,
various contractual rights to receive payments and/or other types of assets.
Asset-backed securities frequently carry credit protection in the form of extra
collateral, subordinate certificates, cash reserve accounts, letters of credit
or other enhancements. Any asset-backed securities held by the Vista Cash
Management Fund must comply with its portfolio maturity and credit quality
requirements.
Municipal Obligations. The Vista Cash Management Fund may also invest in
high-quality, short-term municipal obligations that carry yields that are
competitive with those of other types of money market instruments in which it
may invest. Dividends paid by the Vista Cash Management Fund derived from
interest on municipal obligations that may be purchased by it will be taxable to
shareholders for federal income tax purposes.
Securities of Foreign Governments and Supranational Agencies. The Vista
Cash Management Fund may invest without limitation in obligations of
supranational agencies, such as the International Bank for Reconstruction and
Development, also known as the World Bank, which are supported by subscribed,
but unpaid, commitments of its member countries. There is no assurance that
these commitments will be undertaken or complied with in the future. For a
discussion of the risks associated in investment in these securities see "Risk
Factors" below. The Vista Cash Management Fund intends to invest a substantial
portion of its total assets from time to time in securities of foreign
governments and supranational agencies.
The Vista Cash Management Fund will limit its investments in U.S.
dollar-denominated foreign government obligations to the commercial paper and
other short-term notes issued or guaranteed by the governments of Western
Europe, Australia, New Zealand, Japan and Canada.
Custodial Receipts. The Vista Cash Management Fund may acquire securities
in the form of custodial receipts that evidence ownership of future interest
payments, principal payments or both on certain U.S. Treasury notes or bonds in
connection with programs sponsored by banks and brokerage firms and are not
deemed U.S. Government securities, including "Treasury Receipts", "Treasury
Investment Growth Receipts" ("TIGRs") and "Certificates of Accrual on Treasury
Securities" ("CATS"). These notes and bonds are held in custody by a bank on
behalf of the owners of the receipts.
Participation Interests. The Vista Cash Management Fund may invest without
limitation in participation interests (purchased from persons not affiliated
with Vista or the Adviser) in, and in certificates of indebtedness for, any of
the types of obligations discussed above. See "G. Additional Information on
Investment Policies and Techniques" for a description of participation
certificates and related risks, and further information relating to the
investment policies and techniques of the Vista Cash Management Fund.
Although the Vista Cash Management Fund's investment objective may not be
changed without shareholder approval, such approval is not required to change
any of the other investment policies discussed above or in "G. Additional
Information on Investment Policies and Techniques," except for policies
identified as fundamental.
Risk Factors. The Vista Cash Management Fund may invest without limitation
(subject to the provisions of Rule 2a-7 under the 1940 Act) in obligations
issued by banks, including U.S. banks, foreign branches of U.S. banks, foreign
banks and their branches. The Vista Cash Management Fund's ability to invest
without limitation in obligations of issuers in the U.S. and foreign banking
industries may involve certain additional credit risks, such as defaults or
downgrades, if at some future date adverse economic conditions prevail in such
industries.
Foreign bank obligations include fixed time deposits which are payable at a
stated maturity date and bear a fixed rate of interest. Generally, fixed time
deposits may be withdrawn on demand by the investor, but may be subject to early
withdrawal penalties which vary depending upon market conditions and the
remaining maturity of the obligations. The Vista Cash Management Fund will not
invest more than 10% of its total assets in fixed time deposits. Fixed time
deposits do not have a market and therefore may be regarded as illiquid.
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However, there are no contractual restrictions on the right to transfer a
beneficial interest in the deposit to a third party.
U.S. banks are subject to extensive governmental regulations which may
limit both the amount and types of loans which may be made and interest rates
which may be charged. In addition, the profitability of the banking industry is
largely dependent upon the availability and cost of funds for the purpose of
financing lending operations under prevailing money market conditions. General
economic conditions as well as exposure to credit losses arising from possible
financial difficulties of borrowers play an important part in the operations of
this industry.
Foreign securities issued by foreign governments, any of their political
subdivisions, agencies and instrumentalities, debt obligations issued by foreign
banks and their branches and commercial paper issued by foreign issuers involve
investment risks in addition to those of domestic obligations of domestic
issuers, including the possibilities that liquidity could be impaired because of
future political and economic developments, that the obligations may be less
marketable than comparable domestic obligations of domestic issuers, that a
foreign jurisdiction might impose withholding taxes on interest income payable
on those obligations, that deposits may be seized or nationalized, that foreign
governmental restrictions such as exchange controls may be adopted which might
adversely affect the payment of principal and interest on those obligations,
that the selection of foreign obligations may be more difficult because there
may be less publicly available information concerning foreign issuers, that
there may be difficulties in obtaining or enforcing a judgment against a foreign
issuer (including branches) or that the accounting, auditing and financial
reporting standards, practices and requirements applicable to foreign issuers
may differ from those applicable to United States issuers. In addition, foreign
banks are not subject to examination by any U.S. Government agency or
instrumentality.
Differences with Hanover Cash Management Fund
Although both the Vista Cash Management Fund and the Hanover Cash
Management Fund may invest without limitation in securities of foreign
governments and supranational agencies, unlike the Vista Cash Management Fund,
the Hanover Cash Management Fund does not have a stated intention to invest a
substantial portion of its total assets from time to time in such securities.
The Vista Cash Management Fund may acquire securities in the form of
custodial receipts, including TIGRs and CATS, while the Hanover Cash Management
Fund prospectus does not mention such investments.
For a discussion of certain additional differences between the Vista Cash
Management Fund and the Hanover Cash Management Fund, see "G. Additional
Information on Investment Policies and Techniques" and "H. Investment
Limitations."
E. VISTA TAX FREE MONEY MARKET FUND
The investment objective of the Vista Tax Free Money Market Fund is to
provide its shareholders with as high a level of current income which is
excluded from gross income for federal income tax purposes as is consistent with
the preservation of capital and the maintenance of liquidity. The Vista Tax Free
Money Market Fund seeks to achieve its investment objective by investing in
short-term, fixed rate and variable rate Municipal Obligations (as defined below
under "G. Additional Information on Investment Policies and Techniques --
Municipal Obligations"). The Municipal Obligations in which the Vista Tax Free
Money Market Fund invests will be of high quality and present minimal credit
risks. Although the Vista Tax Free Money Market Fund seeks to be fully invested,
at times it may hold uninvested cash reserves, which would adversely affect its
yield.
Although the Vista Tax Free Money Market Fund will attempt to invest 100%
of its assets in Municipal Obligations, it reserves the right to invest up to
20% of the value of its total assets in securities the interest on which is
includable in gross income for federal income tax purposes or which constitute a
preference item and, therefore, may be subject to the federal alternative
minimum tax on individuals. The Vista Tax Free Money
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Market Fund may invest more than 25% of its assets in Municipal Obligations
secured by bank letters of credit or guarantees. In view of this possible
"concentration" in these Municipal Obligations with bank credit support, an
investment in the Vista Tax Free Money Market Fund shares should be made with an
understanding of the characteristics of the banking industry and the potential
risks associated with such an investment. See "G. Additional Information on
Investment Policies and Techniques -- Vista Tax Free Money Market Fund and Vista
New York Tax Free Money Market Fund" below. The maturities of variable rate
demand instruments held in the Vista Tax Free Money Market Fund's portfolio will
be deemed to be the longer of the demand period or the period remaining until
the next interest rate adjustment, although the stated maturities may be in
excess of 397 days.
As a fundamental policy, the Vista Tax Free Money Market Fund, during
periods of normal market conditions, will have at least 80% of its assets
invested in Municipal Obligations the interest on which, in the opinion of bond
counsel, is excluded from gross income for federal income tax purposes and does
not constitute a preference item and, therefore, will not be subject to the
federal alternative minimum tax on individuals.
As a non-fundamental policy, Municipal Obligations in which the Vista Tax
Free Money Market Fund invests must satisfy the following ratings criteria:
Municipal bonds must be rated in the category Aaa by Moody's, AAA by Standard &
Poor's or AAA by Fitch, or have a comparable rating from another NRSRO,
municipal notes must be rated in the category MIG-1 by Moody's, SP-1 by Standard
& Poor's or F-1 by Fitch, or have a comparable rating from another NRSRO, and
municipal commercial paper must be rated in the category Prime-1 by Moody's, A-1
by Standard & Poor's or F-1 by Fitch, or have a comparable rating from another
NRSRO, or, if any of the foregoing is unrated, it must be of comparable quality.
In connection with the foregoing requirements, Vista's Board of Trustees has
established a policy that each Municipal Obligation in which the Vista Tax Free
Money Market Fund invests must be so rated at the time of investment by at least
two NRSROs. For descriptions of the ratings of Standard & Poor's, Moody's and
Fitch, see "Description of Ratings" in Appendix A.
For descriptions of certain types of investments that may be purchased by
the Vista Tax Free Money Market Fund, including variable rate demand
instruments, participation certificates, municipal lease obligations,
"when-issued" securities and stand-by commitments, as well as further
information and risks regarding the investment policies and techniques of the
Vista Tax Free Money Market Fund, see "G. Additional Information on Investment
Policies and Techniques" and "H. Investment Limitations." Although the
investment objective and fundamental policy referred to above may not be changed
without shareholder approval, such approval is not required to change any of the
other investment policies discussed above or in "G. Additional Information on
Investment Policies and Techniques," except for policies identified as
fundamental.
Differences with Hanover Tax Free Money Market Fund
The Vista Tax Free Money Market Fund attempts to invest 100% of its assets
in Municipal Obligations, but reserves the right to invest up to 20% of the
value of its total assets in securities that pay interest that is includable in
gross income for federal income tax purposes, or that is a tax preference item
under the alternative minimum tax ("AMT Items"), in the following circumstances:
pending investment of proceeds of sales of Fund shares or of portfolio
securities, pending settlement of purchases of portfolio securities and to
maintain liquidity for the purpose of meeting anticipated redemptions. The
Hanover Tax Free Money Market Fund, as a matter of current intention, invests
substantially all of its assets in obligations that are exempt from federal
income tax and that are not AMT Items, and as a fundamental policy, under normal
circumstances, with respect to at least 80% of the value of its total assets.
For a discussion of certain additional differences between the Vista Tax
Free Money Market Fund and the Hanover Tax Free Money Market Fund, see "G.
Additional Information on Investment Policies and Techniques" and "H. Investment
Limitations."
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F. VISTA NEW YORK TAX FREE MONEY MARKET FUND
The investment objective of the Vista New York Tax Free Money Market Fund
is to provide its shareholders with as high a level of current income which is
excluded from gross income for federal income tax purposes and from New York
State and New York City personal income taxes as is consistent with the
preservation of capital and the maintenance of liquidity. The Vista New York Tax
Free Money Market Fund seeks to achieve its investment objective by investing in
a non-diversified portfolio of short-term, fixed rate and variable rate
Municipal Obligations. The Municipal Obligations in which the Vista New York Tax
Free Money Market Fund invests will be of high quality and present minimal
credit risks. To the extent suitable New York Municipal Obligations (as defined
below under "G. Additional Information on Investment Policies and Techniques --
Municipal Obligations") are not available for investment, the Vista New York Tax
Free Money Market Fund may purchase Municipal Obligations issued by other
states, their agencies and instrumentalities. Except when acceptable securities
are unavailable for investment as determined by the Adviser, at least 65% of the
assets of the Vista New York Tax Free Money Market Fund will be invested in New
York Municipal Obligations, although the exact amount of its assets invested in
such securities will vary from time to time. Although the Vista New York Tax
Free Money Market Fund seeks to be fully invested, at times it may hold
uninvested cash reserves, which would adversely affect its yield.
Although the Vista New York Tax Free Money Market Fund will attempt to
invest 100% of its assets in Municipal Obligations, it reserves the right to
invest up to 20% of the value of its total assets in securities the interest on
which is includable in gross income for federal income tax purposes or which
constitutes an AMT Item (defined above under "E. Vista Tax Free Money Market
Fund"). The Vista New York Tax Free Money Market Fund may invest more than 25%
of its assets in Municipal Obligations secured by U.S. bank letters of credit or
guarantees. In view of this possible "concentration" in these Municipal
Obligations with bank credit support, an investment in the Vista New York Tax
Free Money Market Fund shares should be made with an understanding of the
characteristics of the banking industry and the potential risks associated with
such an investment. See "G. Additional Information on Investment Policies and
Techniques -- Vista Tax Free Money Market Fund and Vista New York Tax Free Money
Market Fund" below. The maturities of variable rate demand instruments held in
the Vista New York Tax Free Money Market Fund's portfolio will be deemed to be
the longer of the demand period, or the period remaining until the next interest
rate adjustment, although the stated maturities may be in excess of 397 days.
As a fundamental policy, the Vista New York Tax Free Money Market Fund,
during periods of normal market conditions, will have at least 80% of its assets
invested in obligations the interest on which, in the opinion of bond counsel,
is excluded from gross income for federal income tax purposes and does not
constitute a preference item and, therefore, will not be subject to the federal
alternative minimum tax on individuals.
As a non-fundamental policy, Municipal Obligations in which the Vista New
York Tax Free Money Market Fund invests must satisfy the following ratings
criteria: Municipal bonds must be rated in the categories Aaa or Aa by Moody's,
AAA or AA by Standard & Poor's or AAA or AA by Fitch, or have a comparable
rating from another NRSRO, municipal notes must be rated in the categories MIG-1
or MIG-2 by Moody's, SP-1 or SP-2 by Standard & Poor's or F-1 or F-2 by Fitch,
or have a comparable rating from another NRSRO, and municipal commercial paper
must be rated in the categories Prime-1 or Prime-2 by Moody's, A-1 or A-2 by
Standard & Poor's or F-1 or F-2 by Fitch, or have a comparable rating from
another NRSRO, or, if any of the foregoing is unrated, it must be of comparable
quality. In connection with the foregoing requirements, Vista's Board of
Trustees has established a policy that each Municipal Obligation in which the
Vista New York Tax Free Money Market Fund invests must be so rated at the time
of investment by at least two NRSROs. For descriptions of the ratings of
Standard & Poor's, Moody's and Fitch, see "Description of Ratings" in
Appendix A.
For descriptions of certain types of investments that may be purchased by
the Vista New York Tax Free Money Market Fund, including variable rate demand
instruments, participation certificates, municipal lease obligations,
"when-issued" securities and stand-by commitments, as well as further
information and risks regarding the investment policies and techniques of the
Vista New York Tax Free Money Market Fund of
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<PAGE> 30
which investors should be aware, see "G. Additional Information on Investment
Policies and Techniques." Although the investment objective and fundamental
policy referred to above may not be changed without shareholder approval, such
approval is not required to change any of the other investment policies
discussed above or in "G. Additional Information on Investment Policies and
Techniques," except for policies identified as fundamental.
Special Factors Affecting New York Municipal Obligations
Investors in the Vista New York Tax Free Money Market Fund should consider
carefully the special risks inherent in investments in New York Municipal
Obligations. These risks result from the financial condition of New York State,
certain of its public bodies and municipalities and New York City. Beginning in
early 1975, New York State, New York City and other State entities faced serious
financial difficulties which jeopardized the credit standing and impaired the
borrowing abilities of such entities and contributed to high interest rates on,
and lower market prices for, debt obligations issued by them. A recurrence of
such financial difficulties or a failure of certain financial recovery programs
could result in defaults or declines in the market value of various New York
Municipal Obligations in which the Vista New York Tax Free Money Market Fund may
invest. If there should be a default or other financial crisis relating to New
York State, New York City, a State or City agency, or other municipality, the
market value and marketability of outstanding New York Municipal Obligations in
the Vista New York Tax Free Money Market Fund's portfolio and the interest
income to it could be adversely affected. Moreover, the effects of the Federal
Tax Reform Act of 1986 and conforming State tax legislation have added
substantial uncertainty to estimates of the State's tax revenues, which resulted
in the State's overestimate of tax receipts in the 1989 fiscal year by $1.9
billion. In 1991, Moody's and Standard & Poor's downgraded certain obligations
backed by New York State and have placed other bonds on a watch list for
possible future downgrade. The effects of actual and proposed changes in Capital
Federal and Capital State tax laws, as well as the significant slowdown in the
New York and Regional economy, have added substantial uncertainty to estimates
of the State's tax revenues, which resulted in the State's overestimate of
General Fund cash receipts in the 1992 fiscal year by $575 million. The 1992
fiscal year was the fourth consecutive year in which the State incurred a
cash-basis operating deficit in the General Fund and issued deficit notes.
Potential recurring revenue shortfalls in future fiscal years may adversely
affect the State. On January 6, 1992, Moody's lowered the ratings on certain
appropriation-backed debt of New York State and its agencies from A to Baa1 on
January 13, 1992. Standard & Poor's lowered from A to A- the ratings of New York
State general obligation bonds. The ratings of various agency debt, State moral
obligations, contractual obligations, lease purchase obligations and State
guarantees also were lowered.
A number of pending court actions have been brought against or involve the
State, its agencies, or other municipal subdivisions of the State, which actions
relate to financing. Adverse decisions in such cases could require extraordinary
appropriations or expenditure reductions or both and might have a materially
adverse effect on the financial condition of the State and its agencies and
municipal subdivisions. Any such adverse effect could affect, to some extent,
all municipal securities issued by the State, its agencies, or municipal
subdivisions. Potential recurring shortfalls in future fiscal years may
adversely affect New York State.
As a non-diversified Fund, the Vista New York Tax Free Money Market Fund is
not subject to the diversification requirements set forth in the 1940 Act, and
may have a larger position in a single issuer than would be the case if the
Vista New York Tax Free Money Market Fund were diversified. The investment
return on a non-diversified portfolio typically is dependent upon the
performance of a smaller number of securities relative to the number of
securities held in a diversified portfolio. The Vista New York Tax Free Money
Market Fund's assumption of large positions in the obligations of a small number
of issuers will affect the value of the Vista New York Tax Free Money Market
Fund's portfolio to a greater extent than that of a diversified portfolio in the
event of changes in the financial condition or in the market's assessment of the
issuers, and the Vista New York Tax Free Money Market Fund's shares may be more
susceptible to any single economic, political or regulatory occurrence than the
shares of a diversified fund.
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Differences with Hanover New York Tax Free Money Market Fund
The Vista New York Tax Free Money Market Fund attempts to invest 100% of
its assets in Municipal Obligations, but reserves the right to invest up to 20%
of the value of its total assets in securities that pay interest that is
includable in gross income for federal income tax purposes, or AMT Items
(discussed above under "E. Vista New York Tax Free Money Market Fund"), in the
following circumstances: pending investment of proceeds of sales of Fund shares
or of portfolio securities, pending settlement of purchases of portfolio
securities and to maintain liquidity for the purpose of meeting anticipated
redemptions. The Hanover New York Tax Free Money Market Fund, as a matter of
current intention, invests substantially all of its assets in obligations that
are exempt from federal income tax and that are not AMT Items, and as a
fundamental policy, under normal circumstances, with respect to at least 80% of
the value of its total assets.
For a discussion of certain additional differences between the Vista New
York Tax Free Money Market Fund and the Hanover New York Tax Free Money Market
Fund, see "G. Additional Information on Investment Policies and Techniques" and
"H. Investment Limitations."
G. ADDITIONAL INFORMATION ON INVESTMENT POLICIES AND TECHNIQUES
Repurchase Agreements. When appropriate, each Vista Portfolio other than
the Vista 100% U.S. Treasury Securities Money Market Fund may, like the
corresponding Hanover Portfolios, enter into repurchase agreements (a purchase
of and simultaneous commitment to resell a security at an agreed-upon price and
date which is usually not more than seven days from the date of purchase). The
Vista Portfolios will enter into repurchase agreements only with counterparties
which are member banks of the Federal Reserve System and security dealers
believed creditworthy by the Trustees and only if fully collateralized by U.S.
Government obligations (in the case of the Vista Treasury Plus Money Market
Fund, U.S. Treasury obligations) or other securities in which the Vista
Portfolios are permitted to invest. In contrast, the Hanover Portfolios may also
enter into repurchase agreements with foreign banks. In the event the seller
fails to pay the agreed-to sum on the agreed-upon delivery date, the underlying
security could be sold by the Vista Portfolio, but the Vista Portfolio might
incur a loss in doing so, and in certain cases may not be permitted to sell the
security. As an operating policy, each Vista Portfolio, through its custodian
bank, takes constructive possession of the collateral underlying repurchase
agreements. Additionally, procedures have been established for the Vista
Portfolios to monitor, on a daily basis, the market value of the collateral
underlying all repurchase agreements to ensure that the collateral is at least
102% of the value of the repurchase agreements. No Vista Portfolio will invest
more than 10% of its respective total assets in illiquid securities, including
repurchase agreements maturing in more than seven days.
Reverse Repurchase Agreements. Subject to certain limitations described
under "H. Investment Restrictions," the Vista Portfolios, except for the Vista
Tax Free Money Market Fund and the Vista New York Tax Free Money Market Fund,
may invest in reverse repurchase agreements to avoid selling securities during
unfavorable market conditions to meet redemptions, which involve the sale of
money market securities held by the respective Vista Portfolio with an agreement
to repurchase the securities at an agreed upon price, date and interest payment.
Reverse repurchase agreements have the same characteristics as borrowing by the
Vista Portfolios. During the time a reverse repurchase agreement is outstanding,
a Vista Portfolio will maintain a segregated custodial account containing U.S.
Government or other appropriate high quality debt securities having a value
equal to the repurchase price. Reverse repurchase agreements are usually for
seven days or less and cannot be repaid prior to their expiration dates. Reverse
repurchase agreements involve the risk that the market value of the respective
Vista Portfolio securities transferred may decline below the price at which the
Vista Portfolio is obliged to purchase the securities. Further, because a
reverse repurchase agreement entered into by a Vista Portfolio constitutes
borrowing, it may have a leveraging effect. Upon consummation of the
Reorganization, the Vista Tax Free Money Market Fund and the Vista New York Tax
Free Money Market Fund each will have the ability to enter into reverse
repurchase agreements as described above if approval is obtained from the
shareholders of such Vista Portfolio.
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Each Hanover Portfolio other than the Hanover 100% U.S. Treasury Securities
Fund, subject to the limitations described under "H. Investment Restrictions,"
may enter into reverse repurchase agreements and would intend to do so to avoid
selling securities during unfavorable market conditions to meet redemptions.
STRIPS and Zero Coupon Obligations. Each of the Vista Portfolios other
than the Vista 100% U.S. Treasury Securities Money Market Fund may, subject to
their investment objectives and policies, invest in separately traded principal
and interest components of securities backed by the full faith and credit of the
United States Treasury. The principal and interest components of United States
Treasury bonds with remaining maturities of longer than ten years are eligible
to be traded independently under the Separate Trading of Registered Interest and
Principal of Securities ("STRIPS") program. Under the STRIPS program, the
principal and interest components are separately issued by the United States
Treasury at the request of depository financial institutions, which then trade
the component parts separately. The interest component of STRIPS may be more
volatile than that of United States Treasury bills with comparable maturities.
In accordance with Rule 2a-7 under the 1940 Act, the Vista Portfolios'
investments in STRIPS are limited to those with maturity components not
exceeding thirteen months. The Vista Portfolios will not actively trade in
STRIPS. Each Vista Portfolio will limit its investments in STRIPS to 20% of its
total assets.
In addition to investing in STRIPS, the Vista Cash Management Fund, Vista
Tax Free Money Market Fund and Vista New York Tax Free Money Market Fund may
invest in zero coupon obligations. Such obligations are debt securities that do
not pay regular interest payments. Instead, zero coupon obligations are sold at
a substantial discount from their value at maturity and, when held to maturity,
their entire return, which consists of the amortization of discount, comes from
the difference between their purchase price and maturity value. Because interest
on a zero coupon obligation is not distributed on a current basis, the
obligation tends to be subject to greater price fluctuations in response to
changes in interest rates than are ordinary interest-paying securities with
similar maturities. The value of zero coupon obligations appreciates more during
periods of declining interest rates and depreciates more during periods of
rising interest rates. In accordance with Rule 2a-7 under the 1940 Act,
investments by the Vista Cash Management Fund, Vista Tax Free Money Market Fund
and Vista New York Tax Free Money Market Fund in zero coupon obligations are
limited to those with maturities not exceeding thirteen months. Investments by
the Vista Cash Management Fund, Vista Tax Free Money Market Fund and Vista New
York Tax Free Money Market Fund in zero coupon obligations will be limited,
together with any investments in STRIPS, to 20% of the respective total assets
of those Vista Portfolios. Under the stripped bond rules of the Internal Revenue
Code of 1986, as amended, investments by the relevant Vista Portfolios in STRIPS
and zero coupon obligations will result in the accrual of interest income on
such investments in advance of the receipt of the cash corresponding to such
income.
Each Hanover Portfolio other than the Hanover 100% U.S. Treasury Securities
Fund may also invest up to 20% of its total assets in STRIPS. In contrast to the
Vista Cash Management Fund, the Hanover Cash Management Fund does not invest in
zero coupon obligations.
Illiquid Securities. As a matter of fundamental policy, not more than 10%
of the total assets of a Vista Portfolio (other than the Vista 100% U.S.
Treasury Securities Money Market Fund) may be invested in securities which are
subject to legal or contractual restrictions on resale, including securities
that are not readily marketable and repurchase agreements maturing in more than
seven days. Upon consummation of the Reorganization, as a matter of fundamental
policy, each of these Vista Portfolios instead will be prohibited from investing
10% or more of its total assets in illiquid securities, including repurchase
agreements maturing in more than seven days and fixed time deposits subject to
withdrawal penalties having notice periods of more than seven days, if approval
of such change is obtained from the shareholders of such Vista Portfolio. As a
matter of fundamental policy, each Hanover Portfolio (other than the Hanover
100% U.S. Treasury Securities Money Market Fund) may not invest more than 10% of
its total assets in illiquid securities, including repurchase agreements
maturing in more than seven days and fixed time deposits subject to withdrawal
penalties having notice periods of more than seven days. The Vista 100% U.S.
Treasury Securities Money Market Fund, like the Hanover 100% U.S. Treasury
Securities Money Market Fund, may not invest any of its assets in such
securities.
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In addition, the Hanover Portfolios, other than the Hanover U.S. Treasury
Money Market Fund and the Hanover 100% U.S. Treasury Securities Money Market
Fund, may elect to treat as liquid, in accordance with procedures established by
the Hanover Board, certain investments in restricted securities for which there
may be a secondary market of qualified institutional buyers as contemplated by
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act")
and commercial obligations issued in reliance on the so-called "private
placement" exemption from registration afforded by Section 4(2) of the
Securities Act. Upon consummation of the Reorganization, each Vista Portfolio
other than the Vista 100% U.S. Treasury Securities Money Market Fund and the
Vista Treasury Plus Money Market Fund will be permitted to treat as liquid the
foregoing instruments in accordance with procedures established by the Vista
Board, subject to shareholder approval of the changes with respect to each such
Vista Portfolio described in the preceding paragraph.
When-Issued or Forward Delivery Purchases. Each of the Vista Portfolios,
like the Hanover Portfolios, may purchase new issues of securities in which it
is permitted to invest on a "when-issued" or, with respect to existing issues,
on a "forward delivery" basis, which means that the securities will be delivered
at a future date beyond the customary settlement time. There is no limit as to
the amount of the commitments which may be made by a Vista Portfolio to purchase
securities on a "when-issued" or "forward delivery" basis. A Vista Portfolio
does not pay for such obligations or start earning interest on them until the
contractual settlement date. Although commitments to purchase "when-issued" or
"forward delivery" securities will only be made with the intention of actually
acquiring them, these securities may be sold before the settlement date if
deemed advisable by the Adviser.
While it is not intended that such purchases would be made for speculative
purposes, purchases of securities on a "when-issued" or "forward delivery" basis
can involve more risk than other types of purchases and have the effect of
leveraging. For example, when the time comes to pay for a "when-issued" or
"forward delivery" security, a Vista Portfolio's securities may have to be sold
in order to meet payment obligations, and a sale of securities to meet such
obligations carries with it a greater potential for the realization of capital
gain, which is not tax-exempt. Also, if it is necessary to sell the
"when-issued" or "forward delivery" security before delivery, a Vista Portfolio
may incur a loss because of market fluctuations since the time the commitment to
purchase the "when-issued" or "forward delivery" security was made. Any gain
resulting from any such sale would not be tax-exempt. For additional information
concerning these risks and other risks associated with the purchase of
"when-issued" or "forward delivery" securities as well as other aspects of the
purchase of securities on a "when-issued" or "forward delivery" basis, see
"Investment Objectives, Policies and Restrictions -- Investment Policies:
When-Issued and Forward Delivery Purchases" in the Vista SAI.
Stand-by Commitments. The Vista Portfolios may enter into put
transactions, including transactions sometimes referred to as stand-by
commitments, with respect to U.S. Government securities held in their
portfolios. In a put transaction, a Vista Portfolio acquires the right to sell a
security at an agreed upon price within a specified period prior to its maturity
date, and a stand-by commitment entitles a Vista Portfolio to same-day
settlement and to receive an exercise price equal to the amortized cost of the
underlying security plus accrued interest, if any, at the time of exercise. In
the event that the party obligated to purchase the underlying security from a
Vista Portfolio defaults on its obligation to purchase the underlying security,
then the Vista Portfolio might be unable to recover all or a portion of any loss
sustained from having to sell the security elsewhere. Acquisition of puts will
have the effect of increasing the cost of the securities subject to the put and
thereby reducing the yields otherwise available from such securities. Upon
consummation of the Reorganization, the Vista Portfolios (other than the Vista
100% U.S. Treasury Securities Money Market Fund and the Vista Treasury Plus
Money Market Fund) will each also be permitted to enter into put transactions,
including stand-by commitments, with respect to securities in their portfolios
other than U.S. Government securities, subject to shareholder approval of such
change with respect to each such Vista Portfolio. For further information
concerning stand-by commitments, see "Investment Objectives, Policies and
Restrictions -- Investment Policies: Stand-by Commitments" in the Vista SAI.
Each of the Hanover Portfolios, except for the Hanover 100% U.S. Treasury
Securities Money Market Fund and the Hanover U.S. Treasury Money Market Fund,
may acquire stand-by commitments with respect to its portfolio securities.
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Variable Rate Securities and Participation Certificates. The variable rate
demand instruments that may be purchased by the Vista Tax Free Money Market Fund
and the Vista New York Tax Free Money Market Fund, as well as the corresponding
Hanover Portfolios, are tax exempt obligations ordinarily having stated
maturities in excess of 397 days, but which permit the holder to demand payment
of principal at any time or at specified intervals not exceeding 397 days, in
each case not more than 30 days' notice. In addition, each Vista Portfolio may
purchase certain Government securities provide for a periodic adjustment in the
interest rate paid on the instrument and/or permit the holder to demand payment
upon a specified number of days' notice of the unpaid principal balance plus
accrued interest either from the issuer or by drawing on a bank letter of
credit, a guarantee or insurance issued with respect to such instrument. The
variable rate securities in which the Vista Tax Free Money Market Fund, Vista
New York Tax Free Money Market Fund and Vista Cash Management Fund may be
invested include participation certificates (and, with respect to the Vista Cash
Management Fund, certificates of indebtedness) issued by a bank, insurance
company or other financial institution, and in variable rate securities owned by
such institutions or affiliated organizations. Participation certificates are
pro rata interests in securities held by others; certificates of indebtedness or
safekeeping are documentary receipts for such original securities held in
custody by others. These instruments may have fixed, floating or variable rates
of interest, with remaining maturities of 397 days or less. If the participation
interest is unrated, or has been given a rating below that which otherwise is
permissible for purchase by one of the Vista Portfolios, the participation
interest will be backed by an irrevocable letter of credit or guarantee of a
bank that the Trustees have determined meets the prescribed quality standards
for banks, or the payment obligation otherwise will be collateralized by U.S
Government securities. (See "Investment Objectives, Policies and Restrictions --
Investment Policies: Variable Rate Securities and Participation Certificates" in
the Vista SAI.) The Adviser will monitor on an on-going basis the ability of the
underlying issuers to meet their demand obligations. Although variable rate
securities may be sold by a Vista Portfolio, it is intended that they be held
until an interest reset date, except under certain specified circumstances. (See
"Investment Objectives, Policies and Restrictions -- Investment Policies:
Variable Rate Securities and Participation Certificates" in the Vista SAI.) As a
result of the variable rate nature of these investments, a Vista Portfolio's
yield will decline and its shareholders will forego the opportunity for capital
appreciation during periods when prevailing interest rates have declined.
Conversely, during periods where prevailing interest rates have increased, a
Vista Portfolio's yield will increase and its shareholders will have reduced
risk of capital depreciation.
Certain of the variable rate obligations that may be purchased by the Vista
Tax Free Money Market Fund and the Vista New York Tax Free Money Market Fund,
like the corresponding Hanover Portfolios, may carry a demand feature that would
permit the holder to tender them back to the issuer of the underlying
instrument, or to a third party, at par value prior to maturity. Such
obligations include variable rate demand or master notes which provide for
periodic adjustments in the interest rate. Master demand notes, which are
instruments issued pursuant to an agreement between the issuer and the holder
may permit the indebtedness thereunder to vary. The holder of an obligation with
a third party demand feature may be required to pay the third party a "tender
fee," the amount of which would be periodically adjusted so that the
obligation/demand feature combination would reasonably be expected to have a
market value that approximates the par value of the obligation. The
obligation/demand feature combination would therefore be functionally equivalent
to ordinary variable rate obligations as described above, and the Vista Tax Free
Money Market Fund and the Vista New York Tax Free Money Market Fund may purchase
such obligations subject to certain conditions specified by the Commission.
The Vista Tax Free Money Market Fund and the Vista New York Tax Free Money
Market Fund, like the corresponding Hanover Portfolios, may also invest in
participation interests in variable rate municipal obligations held by a bank in
trust or otherwise, which have demand features that permit the holder to tender
its bonds to a third party at periodic intervals and receive par value. The
Vista Tax Free Money Market Fund and the Vista New York Tax Free Money Market
Fund consider variable rate instruments structured as participations to be
essentially equivalent to other variable rate demand obligations they purchase.
The Internal Revenue Service has not ruled on whether the interest on such
participations is tax-exempt, and, accordingly, the Vista Tax Free Money Market
Fund and the Vista New York Tax Free Money Market Fund would purchase such
instruments based on opinions of bond counsel.
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The Vista Tax Free Money Market Fund and the Vista New York Tax Free Money
Market Fund, like the corresponding Hanover Portfolios, may invest without
limitation in obligations that have a demand feature permitting them to tender
the obligation to a foreign bank. The holder's ability to receive payment in
such circumstances under the demand feature from such foreign banks may involve
certain of the risks described under "D. The Vista Cash Management Fund -- Risk
Factors" above, such as future political and economic developments, the possible
establishment of laws or restrictions that might adversely affect the payment of
the bank's obligations under the demand feature and the difficulty of obtaining
or enforcing a judgement against the bank.
Other Money Market Funds. Each of the Vista Treasury Plus Money Market
Fund, the Vista U.S. Government Money Market Fund, the Vista Cash Management
Fund, the Vista Tax Free Money Market Fund and the Vista New York Tax Free Money
Market Fund may invest up to 10% of its total assets in shares of other money
market funds subject, in the case of the Vista Tax Free Money Market Fund and
the Vista New York Tax Free Money Market Fund, to the limitations on investing
in taxable money market instruments. A Vista Portfolio will only invest in other
money market funds which are subject to the requirements of Rule 2a-7 under the
1940 Act and which are considered to present minimal credit risks, and its
investment adviser will monitor the policies and investments of other money
market funds in which it invests based upon information furnished to
shareholders of those funds, with respect to their compliance with their
investment objectives and Rule 2a-7.
Each of the Hanover Portfolios other than the Hanover 100% U.S. Treasury
Securities Money Market Fund and the Hanover U.S. Treasury Money Market Fund may
similarly invest up to 10% of its total assets in shares of other money market
funds.
Portfolio Securities Lending. Although the Vista Portfolios do not intend
to engage in such activity in the ordinary course of business, each Vista
Portfolio (other than the Vista Tax Free Money Market Fund and the Vista New
York Tax Free Money Market Fund) is permitted to lend its 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 a
Vista Portfolio's total assets. In connection with such loans, the Vista
Portfolios will receive collateral consisting of cash, cash equivalents, U.S.
Government securities or irrevocable letters of credit issued by financial
institutions (or, in the case of the Vista Treasury Plus Money Market Fund, U.S.
Treasury obligations). 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 Vista Portfolios can increase their income
through the investment of such collateral. The Vista Portfolios continue to be
entitled to the interest payable or any dividend-equivalent payments received on
a loaned security and, in addition, receive interest on the amount of the loan.
However, the receipt of any dividend-equivalent payments by a Vista Portfolio on
a loaned security from the borrower will not qualify for the dividends-received
deduction. Such loans will be terminable at any time upon specified notice. The
Vista Portfolios might experience risk of loss if the institutions with which
they have engaged in portfolio loan transactions breach their agreements with
the Vista Portfolios. The risks 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 to be of good standing and will not
be made unless, in the judgment of the Adviser, the consideration to be earned
from such loans justifies the risk.
Each Hanover Portfolio may lend portfolio securities with a value not in
excess of one-third of the value of its respective total assets. However, no
Hanover Portfolio currently intends to make loans of portfolio securities with a
value in excess of 5% of the value of its total assets.
Portfolio Management and Turnover. It is intended that the Vista
Portfolios will be fully managed by buying and selling securities, as well as
holding securities to maturity. In managing the Vista Portfolios, the Adviser
seeks to take advantage of market developments, yield disparities and variations
in the creditworthiness of issuers. For a description of the strategies that may
be used by the Adviser in managing these Vista Portfolios, which may include
adjusting the average maturity of a portfolio in anticipation of a change in
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interest rates, see "Investment Objectives, Policies and Restrictions --
Investment Policies: Portfolio Management" in the Vista SAI.
Generally, the primary consideration in placing portfolio securities
transactions with broker-dealers for execution is to obtain, and maintain the
availability of, execution at the most favorable prices and in the most
effective manner possible. Since money market instruments are generally
purchased in principal transactions, the Vista Portfolios pay no brokerage
commissions. For a complete discussion of portfolio transactions and brokerage
allocation, see "Investment Objectives, Policies and Restrictions -- Investment
Policies: Portfolio Transactions and Brokerage Allocation" in the Vista SAI.
Effect of Rule 2a-7 on Portfolio Management. The portfolio management of
each Vista Portfolio, like each Hanover Portfolio, is intended to comply with
the provisions of Rule 2a-7 under the 1940 Act under which, if a Vista Portfolio
meets certain conditions, it may use the "amortized cost" method of valuing its
securities. Under Rule 2a-7, the maturity of an instrument is generally
considered to be its stated maturity (or in the case of an instrument called for
redemption, the date on which the redemption payment must be made), with special
exceptions for certain kinds of instruments. Repurchase agreements and
securities loan agreements are, in general, treated as having a maturity equal
to the period remaining until they can be executed.
In accordance with the provisions of Rule 2a-7, each of the Vista Cash
Management Fund, Vista U.S. Government Money Market Fund, Vista Treasury Plus
Money Market Fund and Vista 100% U.S. Treasury Securities Money Market Fund
must: (i) maintain a dollar weighted average portfolio maturity (see above) not
in excess of 90 days (however, as noted above, the Vista Treasury Plus Money
Market Fund and the Vista U.S. Government Money Market Fund do not plan to have
a dollar weighted portfolio maturity in excess of 60 days); (ii) limit its
investments, including repurchase agreements, to those instruments which are
denominated in U.S. dollars, which the Board of Trustees of Vista determines
present minimal credit risks, and which are of "high quality" as determined by
at least two major rating services; or, in the case of any instrument that is
split-rated or not rated, of comparable quality as determined by the Board; and
(iii) not purchase any instruments with a remaining maturity (see above) of more
than 397 days. Rule 2a-7 also contains special provisions as to the maturity of
variable rate and floating rate instruments. In accordance with the Rule, the
Vista Tax Free Money Market Fund and Vista New York Tax Free Money Market Fund
must (i) maintain a dollar-weighted average portfolio maturity of 90 days or
less, (ii) purchase only instruments having remaining maturities of 397 days or
less and (iii) invest only in U.S. dollar denominated securities determined in
accordance with procedures established by the Board of Trustees of Vista 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 of Vista.
Municipal Obligations. "Municipal Obligations" are obligations issued by
or on behalf of states, territories and possessions of the United States, and
their authorities, agencies, instrumentalities and political subdivisions, the
interest on which, in the opinion of bond counsel, is excluded from gross income
for federal income tax purposes (without regard to whether the interest thereon
is also exempt from the personal income taxes of any state or whether the
interest thereon constitutes a preference item for purposes of the federal
alternative minimum tax). "New York Municipal Obligations" are Municipal
Obligations of the State of New York and its political subdivisions and of
Puerto Rico, other U.S. territories and their political subdivisions, the
interest on which, in the opinion of bond counsel, is exempt from New York State
and New York City personal income taxes. Municipal Obligations consist of notes,
bonds and commercial paper.
There are four major varieties of state and municipal notes: Tax
Anticipation Notes ("TANs"); Revenue Anticipation Notes ("RANS"); Bond
Anticipation Notes ("BANs") and Construction Loan Notes ("CLNs").
TANs and RANs are issued by states, municipalities and other tax-exempt
issuers to finance short-term cash needs or, occasionally, to finance
construction. Most TANs and RANs are general obligations of the issuing entity
payable from taxes or revenues (respectively) expected to be received within one
year.
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BANs are issued with the expectation that principal and interest of the
maturing notes will be paid out of proceeds from bonds to be issued concurrently
or at a later date. BANs are issued most frequently by revenue bond issuers to
finance such items as construction and mortgage purchases.
CLNs are issued primarily by housing agencies to finance construction of
projects for an interim period prior to a bond issue. CLNs are secured by a lien
on the property under construction, and therefore have security beyond that of
the traditional BAN.
Municipal bonds are debt obligations of states, cities, counties,
municipalities and municipal agencies (all of which are generally referred to as
"municipalities") which generally have a maturity at the time of issue of one
year or more and which are issued to raise funds for various public purposes
such as construction of a wide range of public facilities, to refund outstanding
obligations and to obtain funds for institutions and facilities.
The two principal classifications of municipal bonds are "general
obligation" and "revenue" bonds. General obligation bonds are secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest. Issuers of general obligation bonds include states,
counties, cities, towns and other governmental units. The principal of, and
interest on, revenue bonds are payable from the income of specific projects or
authorities and generally are not supported by the issuer's general power to
levy taxes. In some cases, revenues derived from specific taxes are pledged to
support payments on a revenue bond.
In addition, certain kinds of revenue bonds are issued by or on behalf of
public authorities to provide funding for various privately operated industrial
facilities such as warehouse, office, plant and store facilities ("Private
Activity Bonds"). Interest on the Private Activity Bonds is generally, with
certain exceptions, excluded from gross income for federal income tax purposes
pursuant to Section 103(a) of the Code, provided the issuer and corporate
obligor thereof continue to meet certain conditions. Private Activity Bonds in
most cases, do not generally constitute the pledge of the credit of the issuer
of such bonds. The payment of the principal and interest on Private Activity
Bonds usually depends solely on the ability of the user of the facilities
financed by the bonds or other guarantor to meet its financial obligations and,
in certain instances, the pledge of real and personal property as a security for
payment. In the case of many Private Activity Bonds, there is no established
secondary market for their purchase or sale and therefore they may not be
readily marketable. However, Private Activity Bonds or the participation
certificates in Private Activity Bonds purchased by a Vista Portfolio will have
liquidity because they will be supported by demand features to "high quality"
banks, insurance companies or other financial institutions which may be
exercised by a Vista Portfolio at any time.
Issues of municipal commercial paper typically represent very short-term,
unsecured, negotiable promissory notes. These obligations are often issued to
meet seasonal working capital needs of municipalities or to provide interim
construction financing and are paid from general revenues of municipalities or
are refinanced with long-term debt. In most cases, municipal commercial paper is
backed by letters of credit, lending agreements, note repurchase agreements (see
"Investment Objectives, Policies and Restrictions -- Investment Policies:
Repurchase Agreements" in the Vista SAI) or other credit facility agreements
offered by banks or other institutions which may be called upon in the event of
default by the issuer of the commercial paper.
In view of the possible "concentration" of the Vista Tax Free Money Market
Fund and the Vista New York Tax Free Money Market Fund in Municipal Obligations
secured by bank letters of credit or guarantees, an investment in the Vista Tax
Free Money Market Fund or the Vista New York Tax Free Money Market Fund should
be made with an understanding of the characteristics of the banking industry and
the risks associated with such an investment. Banks are subject to extensive
governmental regulations which may limit both the amounts and types of loans and
other financial commitments which may be made and interest rates and fees which
may be charged. The profitability of this industry is largely dependent upon the
availability and cost of capital funds for the purpose of financing lending
operations under prevailing money market conditions. Also, general economic
conditions play an important part in the operations of this industry and
exposure to credit losses arising from possible financial difficulties of
borrowers might affect a bank's ability to meet its obligations under a letter
of credit. For further information concerning variable rate demand instruments,
see "Investment Objectives, Policies and Restrictions -- Investment Policies:
Variable Rate Securities and Participation Certificates" in the Vista SAI.
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More than 25% of the assets of the Vista Tax Free Money Market Fund or the
Vista New York Tax Free Money Market Fund may be invested in securities to be
paid from revenue of similar projects, which may cause such Funds to be more
susceptible to similar economic, political, or regulatory occurrences
(particularly with respect to the Vista New York Tax Free Money Market Fund,
since most or all of the issuers in which such portfolio invests are likely to
be located in New York). The value of shares of these Hanover Portfolios may be
subject to greater risk than those of other mutual funds that do not permit such
a practice.
Federal tax legislation enacted over the past few years has limited the
types and volume of bonds, the interests on which is excludable from gross
income or does not constitute a preference item potentially subject to the
alternative minimum tax on individuals. As a result, this legislation may affect
the availability of Municipal Obligations for investment by the Vista Tax Free
Money Market Fund or the Vista New York Tax Free Money Market Fund.
Municipal Lease Obligations. The Vista Tax Free Money Market Fund and the
Vista New York Tax Free Money Market Fund, like the corresponding Hanover
Portfolios, may invest in municipal obligations that constitute participations
in a lease obligation or installment purchase contract obligation (hereafter
collectively called "municipal lease obligations") of a municipal authority or
entity. Although municipal lease obligations do not constitute general
obligations of the municipality for which the municipality's taxing power is
pledged, a municipal lease obligation is ordinarily backed by the municipality's
covenant to budget for, appropriate and make the payments due under the lease
obligation. However, certain municipal lease obligations contain
"non-appropriation" clauses which provide that the municipality has no
obligation to make lease or installment payments in future years unless money is
appropriated for such purpose on a yearly basis. Although non-appropriation
municipal lease obligations are secured by the leased property, disposition of
the property in the event of foreclosure might prove difficult. The Vista Tax
Free Money Market Fund and the Vista New York Tax Free Money Market Fund will
seek to minimize the special risks associated with such securities by not
investing more than 10% of their assets in municipal lease obligations that
contain non-appropriation clauses, and by only investing in those
non-appropriation leases where (1) the nature of the leased equipment or
property is such that its ownership or use is essential to a government function
of the municipality, (2) appropriate covenants will be obtained from the
municipal obligor prohibiting the substitution or purchase of similar equipment
if lease payments are not appropriated, (3) the lease obligor has maintained
good market acceptability in the past, (4) the investment is of a size that will
be attractive to institutional investors and (5) the underlying leased equipment
has elements of portability and/or use that enhance its marketability in the
event foreclosure on the underlying equipment were ever required. Municipal
lease obligations provide a premium interest rate which along with regular
amortization of the principal may make them attractive for a portion of the
assets of the Vista Tax Free Money Market Fund and the Vista New York Tax Free
Money Market Fund.
H. INVESTMENT RESTRICTIONS
In addition to the investment restrictions discussed above, each Vista
Portfolio has adopted certain fundamental investment restrictions which are set
forth in the Vista SAI. Such investment restrictions are substantially similar
to those of the corresponding Hanover Portfolio, except to the extent otherwise
noted in the preceding discussion or below.
Unlike the Vista Cash Management Fund and the Vista Tax Free Money Market
Fund, each of the Hanover Cash Management Fund and the Hanover Tax Free Money
Market Fund has a stated fundamental investment restriction prohibiting it, with
respect to 75% of its total assets, from investing more than 5% of its total
assets in the securities of any one issuer, other than obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities. The
Hanover Cash Management Fund has also adopted a non-fundamental policy to limit
investments in the securities of any single issuer (other than securities issued
or guaranteed by the U.S. Government, its agencies or instrumentalities) to not
more than 5% of the Hanover Cash Management Fund's total assets, provided that
it may invest up to 25% of its total assets in the securities of a single issuer
for a period of up to three business days. Although the Vista Cash Management
Fund and the Vista Tax Free Money Market Fund have no fundamental issuer
diversification policies, they each are effectively subject to the same
limitations as a matter of operating policy by virtue of Rule 2a-7.
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Unlike the Vista New York Tax Free Money Market Fund, the Hanover New York
Tax Free Money Market Fund has a stated fundamental investment restriction
prohibiting it, with respect to 50% of its total assets, from investing more
than 5% of its total assets in the securities of any one issuer, and with
respect to its remaining assets, from investing more than 25% of its total
assets in the securities of any one issuer, in each case other than obligations
issued or guaranteed by the U.S. Government, its agencies or instrumentalities.
Although the Vista New York Tax Free Money Market Fund is not subject to a
fundamental issuer diversification policy, it must satisfy certain issuer
diversification requirements in order to qualify as regulated investment
companies under Subchapter M of the Code, which are more fully described under
"Tax Matters -- Qualification as a Regulated Investment Company" in the Vista
SAI.
The Vista Cash Management Fund and Vista Treasury Plus Money Market Fund
each has a fundamental investment restriction which permits it to engage in
reverse repurchase transactions through which it borrows money in an amount not
exceeding 10% of the value of its respective net assets, less bank borrowings
outstanding for the purpose of meeting redemption requests while effecting the
orderly sale of portfolio securities, in order to obtain money for purposes
which may include purchases of additional portfolio securities. The Vista U.S.
Government Money Market Fund has a fundamental investment restriction which
permits it to borrow money in an amount not exceeding one-third of the value of
its total assets, including borrowing by engaging in reverse repurchase
transactions in an amount not exceeding 5% of the value of its total assets. The
Vista U.S. Government Money Market Fund may borrow from banks solely for the
purpose of meeting redemption requests while effecting the orderly sale of
portfolio securities, but may borrow by engaging in reverse repurchase
transactions for purposes which may include purchases of additional portfolio
securities. The Vista 100% U.S. Treasury Securities Money Market Fund has a
fundamental investment restriction permitting it to borrow from banks (for
temporary purposes) and enter into reverse repurchase agreements in an amount
not in excess of one-third of the value of its respective assets (less bank
borrowings outstanding for temporary purposes). As a matter of fundamental
policy, none of the Vista Portfolios which may borrow or enter into repurchase
agreements will purchase portfolio securities if its outstanding borrowing,
including borrowing through repurchase agreements, exceeds 5% of the value of
its total assets. As a matter of non-fundamental policy, the Vista Portfolios
will only enter into reverse repurchase agreements for purposes of avoiding
selling portfolio securities during unfavorable market conditions to meet
redemptions. Upon consummation of the Reorganization, subject to shareholder
approval of such change with respect to each such Vista Portfolio, as a matter
of fundamental policy, each Vista Portfolio will have the ability to borrow
money for temporary or emergency purposes or by engaging in reverse repurchase
transactions in an amount not in excess of one-third of the value of its assets,
provided that borrowings representing more than 5% of its total assets must be
repaid before such Vista Portfolio makes additional investments.
In contrast, while each Hanover Portfolio has a fundamental investment
restriction permitting it to borrow from banks (for temporary purposes) and
(except for the Hanover 100% U.S. Treasury Securities Money Market Fund) enter
into reverse repurchase agreements in an amount not in excess of one-third of
the value of its respective assets (less bank borrowings outstanding for
temporary purposes), the Hanover Portfolios may, as a matter of non-fundamental
policy, enter into reverse repurchase agreements for purposes of avoiding
selling portfolio securities during unfavorable market conditions to meet
redemptions. No Hanover Portfolio may purchase portfolio securities if its
outstanding borrowing, including borrowing through repurchase agreements,
exceeds 5% of the value of its total assets.
While the Hanover Portfolios each have a fundamental investment restriction
prohibiting them from investing in or selling put options, call options,
straddles, spreads, or any combination thereof (except for acquiring rights to
put their portfolio securities in order to maintain liquidity), the Vista
Portfolios have a corresponding fundamental investment restriction which
prohibits writing, purchasing or selling put options, call options or any
combination thereof but which permits the writing, purchasing or selling of
puts, calls and combinations thereof with respect to U.S. Government securities.
Upon consummation of the Reorganization, each Vista Portfolio (other than the
Vista 100% U.S. Treasury Securities Money Market Fund and the Vista Treasury
Plus Money Market Fund) also will be permitted to enter into put transactions
with respect to securities in its portfolio other than U.S. Government
securities if approval is obtained from the shareholders of such Vista
Portfolio.
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While the Hanover Portfolios and the Vista Portfolios each have a
fundamental investment restriction prohibiting them from engaging in short sales
of securities, the Vista Tax Free Money Market Fund, Vista New York Tax Free
Money Market Fund and Vista Treasury Plus Money Market Fund are subject to an
exception which permits them to engage in covered short sales with respect to up
to 10% of their respective net assets. However, each such Vista Portfolio states
that it has no current intention of engaging in short sales. Upon consummation
of the Reorganization, each Vista Portfolio, as a matter of fundamental policy,
will be prohibited from engaging in short sales, other than short sales "against
the box," if approval of the foregoing revised policy is obtained from the
shareholders of such Vista Portfolio.
While the Hanover Portfolios each have a fundamental investment restriction
limiting their ability to purchase securities of other investment companies, the
Vista Portfolios have no corresponding fundamental investment restriction.
However, each Vista Portfolio, as a matter of law, is subject to the same
limitations.
Following consummation of the Reorganization, each Vista Portfolio, as a
matter of fundamental policy, will be permitted to invest all or a part of its
assets in an investment company having substantially the same investment
objective and policies as such Vista Portfolio, if approval is obtained from the
shareholders of such Vista Portfolio with respect to the adoption of such new
fundamental policy. The Hanover Portfolios have no similar fundamental policy.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
General. As a Massachusetts business trust, the operation of Vista will be
governed by the Declaration of Trust of Vista (the "Declaration of Trust") and
applicable Massachusetts law rather than by the Articles of Incorporation (the
"Articles") of Hanover and applicable Maryland law. Certain differences between
the two forms of organization are summarized below.
Shares of Portfolios. Interests in Hanover are represented by transferable
shares of stock, par value $.001 per share. The Articles authorize Hanover to
issue 10 billion shares of stock. The Hanover Board may, without shareholder
approval, increase the number of authorized shares and divide authorized but
unissued stock into an unlimited number of separate portfolios or series, and
classes thereof. Currently, all the authorized stock of Hanover is divided into
six separate series (corresponding to the six Hanover Portfolios), and none of
these series is further subdivided into classes. Each share of a Hanover
Portfolio represents an equal proportionate interest in that Hanover Portfolio's
investment portfolio with the other shares of the same Hanover Portfolio. Each
share of a Hanover Portfolio is entitled to dividends and distributions out of
the assets of that Hanover Portfolio, as declared by the Hanover Board in its
discretion. Fractional shares have proportionate rights to full shares.
Generally, shares will be voted in the aggregate without reference to a
particular portfolio, except if the matter affects only one portfolio or voting
by portfolio is required by law, in which case shares will be voted separately
by portfolio. Maryland law does not require a registered investment company to
hold annual meetings of shareholders in any year in which the election of
directors is not required under the 1940 Act, and it is anticipated that annual
shareholder meetings will be held only when specifically required by the 1940
Act. There are no conversion or preemptive rights in connection with shares of
Hanover.
Vista has an unlimited number of authorized shares of beneficial interest,
currently without par value, which may be divided into portfolios or series and
classes thereof. Upon consummation of the Reorganization, the par value of the
shares of Vista will be $.001, subject to shareholder approval of such change.
Each Vista Portfolio is one portfolio of Vista and, with the exception of the
Vista New York Tax Free Money Market Fund, offers multiple classes of shares.
Each share of a portfolio or class of Vista represents an equal proportionate
interest in that portfolio or class with each other share of that portfolio or
class. The shares of each portfolio or class of Vista participate equally in the
earnings, dividends and assets of the particular portfolio or class. Fractional
shares have proportionate rights to full shares. Expenses of Vista which are not
attributable to a specific portfolio or class are allocated to all the
portfolios of Vista in a manner believed by management of Vista to be fair and
equitable. Generally, shares of each portfolio or class will be voted
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 by the 1940 Act, including the election or selection of trustees
and independent accountants. Vista is not required to hold regular annual
meetings of shareholders,
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but may hold special meetings from time to time. There are no conversion or
preemptive rights in connection with shares of Vista.
Shareholder Voting Rights. Each Director of Hanover holds office, unless
sooner removed, until his successor is elected and qualified. Any Director may
be removed, with or without cause, by the affirmative vote of a majority of the
shares entitled to vote, at any meeting of the shareholders, and the vacancy
caused by such removal may be filled by the shareholders at any meeting called
for the purpose. A vacancy in the Hanover Board resulting from the resignation
of a Director or otherwise may be filled by a vote of a majority of the
remaining Directors then in office. However, under the 1940 Act, no vacancy may
be filled by Directors unless immediately thereafter at least two-thirds of the
Directors holding office shall have been elected to such office by the
shareholders. Special meetings of shareholders for any purpose or purposes may
be called by Hanover's chairman, president or a majority of the Hanover Board,
and upon the written request of the shareholders holding at least 10% of the
shares of Hanover outstanding and entitled to vote at such meeting. Business
transacted at any special meeting of shareholders shall be limited to the
purposes stated in the notice of such meeting sent to shareholders.
Vista is not required to hold annual meetings of shareholders but will hold
special meetings of shareholders of a portfolio or class when the Trustees deem
such a meeting to be necessary or desirable. A vacancy in Vista Board resulting
from the resignation of a Trustee or otherwise may be filled by a vote of a
majority of the remaining Trustees then in office. However, under the 1940 Act,
no vacancy may be filled by Trustees unless immediately thereafter at least
two-thirds of the Trustees holding office shall have been elected to such office
by the shareholders. In addition, Trustees may be removed from office by a vote
of holders of shares representing two-thirds of the outstanding shares of each
portfolio of Vista at a meeting duly called for the purpose. A meeting of
shareholders shall be held upon the written request of the holders of shares
representing not less than 10% of the outstanding shares entitled to vote on the
matters specified in the written request. Upon written request by the holders of
shares representing at least $25,000 or 1% of the outstanding shares of Vista
stating that such shareholders wish to communicate with the other shareholders
for the purpose of obtaining the signatures necessary to demand a meeting to
consider removal of a Trustee, the Trustees will within five business days after
receipt of such request either provide a list of shareholders or inform such
applicants as to the approximate number of shareholders and the approximate
costs of mailing the request to them. If the second option is chosen by the
Trustees, then the Trustees are generally obligated, upon written request of the
applicants, to mail the requested materials to all shareholders of record (at
the expense of the requesting shareholders). Except as set forth above, the
Trustees may continue to hold office and may appoint successor Trustees.
Shareholder Liability. Under Maryland law, Hanover shareholders have no
personal liability for Hanover's acts or obligations. Under Massachusetts law,
shareholders of Vista could, under certain circumstances, be held personally
liable as partners for the obligations of Vista. However, Vista Agreement
disclaims shareholder liability for acts or obligations of Vista and provides
for indemnification and reimbursement of expenses out of Vista property for any
shareholder held personally liable for the obligations of Vista. The Declaration
of Trust also provides that Vista shall maintain appropriate insurance (for
example, fidelity bonding and errors and omissions insurance) for the protection
of Vista, 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 Vista itself was unable to meet
its obligations.
Liability of Directors and Trustees. Under Maryland law and the Articles,
directors and officers of Hanover are not liable to the corporation or its
stockholders for money damages, except to the extent that (1) it is proved that
such person actually received an improper benefit or profit in money, property,
or services for the amount of the benefit for profit in money, property, or
services actually received, or (2) a judgment or other final adjudication
adverse to such person is entered in a proceeding based on a finding that the
person's action, or failure to act, was the result of active and deliberate
dishonesty and was material to the cause of action adjudicated. However, a
director or officer of Hanover is liable to the extent his actions are the
result of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office ("Disabling Conduct"). In
the event of any litigation against the Directors or officers of Hanover,
35
<PAGE> 42
Hanover's By-Laws require that Hanover indemnify a Director or officer for
certain expenses and to advance money for such expenses provided that (a) the
court or other body before whom the proceeding to which the Director or officer
is a party was brought (i) dismisses the proceeding for insufficiency of
evidence of any Disabling Conduct or (ii) reaches a final decision on the merits
that the Director or officer was not liable by reason of Disabling Conduct; or
(b) in the absence of such a decision, there is a reasonable determination,
based upon a review of the facts, that the Director or officer was not liable by
reason of Disabling Conduct, which determination shall be made by: (i) the vote
of a majority of a quorum of the Directors who are neither "interested persons"
of Hanover as defined in the 1940 Act nor parties to the proceeding; or (ii) an
independent legal counsel in a written opinion. Under the Declaration of Trust,
the Trustees of Vista are personally liable only for bad faith, willful
misfeasance, gross negligence or reckless disregard of their duties as Trustees.
Under the Declaration of Trust, a Trustee or officer of Vista will generally be
indemnified against all liability and against all expenses reasonably incurred
or paid by him in connection with any claim, action, suit or by proceeding in
which he becomes involved as a party or otherwise by virtue of his being or
having been a Trustee or officer and against amounts paid or incurred by him in
the settlement thereof.
The foregoing is only a summary of certain of the major differences between
Hanover, its Articles and By-Laws and Maryland law and Vista, its Declaration of
Trust and By-Laws and Massachusetts law. Shareholders may wish to refer directly
to the provisions of Hanover's Articles and By-Laws, Maryland law and Vista's
Declaration of Trust and By-Laws and Massachusetts law for a more thorough
comparison.
ADDITIONAL INFORMATION ABOUT VISTA
A. EXPENSES
The following expense tables are provided to assist investors in
understanding the various costs and expenses that an investor will indirectly
incur as a beneficial owner of Vista Shares in each of the Vista Portfolios. The
table reflects information for the twelve months ended August 31, 1995 for the
Vista 100% U.S. Treasury Securities Money Market Fund, the Vista Treasury Plus
Money Market Fund, the Vista U.S. Government Money Market Fund, the Vista Cash
Management Fund, the Vista Tax Free Money Market Fund and the Vista New York Tax
Free Money Market Fund, in each case restated to reflect the fee arrangements
that will be in effect commencing on the Closing Date as if these arrangements
had been in effect during that period and significant changes in asset levels
through November 1995, and assuming that the Reorganization had occurred at the
beginning of that period. Because the Vista 100% U.S. Treasury Securities Money
Market Fund will not commence operations until the Closing Date, information for
that portfolio reflects estimated annual expenses for the 1996 fiscal year.
<TABLE>
<CAPTION>
VISTA 100%
U.S.
TREASURY VISTA VISTA U.S. VISTA NEW
SECURITIES TREASURY GOVERNMENT VISTA CASH VISTA TAX YORK TAX
MONEY MARKET PLUS MONEY MONEY MARKET MANAGEMENT FREE MONEY FREE MONEY
FUND VISTA MARKET FUND FUND VISTA FUND VISTA MARKET FUND MARKET FUND
SHARES VISTA SHARES SHARES SHARES VISTA SHARES VISTA SHARES
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of daily net assets)
Investment Advisory Fee................ 0.10% 0.10% 0.10% 0.10% 0.10% 0.10%
Rule 12b-1 Distribution Plan Fee....... 0.10% 0.10% 0.10% 0.00% 0.10% 0.10%
Administration Fee..................... 0.05% 0.05% 0.05% 0.05% 0.05% 0.05%
Other Expenses
Sub-Administration Fee............... 0.05% 0.05% 0.05% 0.05% 0.05% 0.05%
Shareholder Servicing*............... 0.18% 0.20% 0.23% 0.33% 0.21% 0.20%
Other Operating Expenses**........... 0.11% 0.09% 0.06% 0.06% 0.08% 0.09%
Total Other Expenses................... 0.34% 0.34% 0.34% 0.44% 0.34% 0.34%
TOTAL FUND OPERATING EXPENSES*......... 0.59% 0.59% 0.59% 0.59% 0.59% 0.59%
</TABLE>
- ---------------
*"Total Fund Operating Expenses" reflect the agreement by Chase voluntarily to
waive fees payable to it and/or reimburse expenses for a period of at least
one year following the consummation of the Reorganization to the extent
necessary to prevent Total Fund Operating Expenses of Vista Shares of each
36
<PAGE> 43
Vista Portfolio for such period from exceeding 0.59% of average net assets.
"Shareholder Servicing Fees" for each Vista Portfolio reflect estimated fee
waivers by Chase pursuant to such agreement; absent such waivers, "Shareholder
Servicing Fees" would be 0.35% for each such Vista Portfolio. In addition,
Chase has agreed to waive fees payable to it and/or reimburse expenses for a
two year period following consummation of the Reorganization to the extent
necessary to prevent Total Fund Operating Expenses for Vista Shares of the
Vista 100% U.S. Treasury Securities Money Market Fund, the Vista Treasury Plus
Money Market Fund, the Vista U.S. Government Money Market Fund, the Vista Cash
Management Fund, the Vista Tax Free Money Market Fund and the Vista New York
Tax Free Money Market Fund from exceeding 0.71%, 0.73%, 0.72%, 0.72%, 0.76%
and 0.74%, respectively, of average net assets during such period.
**"Other Operating Expenses" include custody fees, transfer agency fees,
registration fees, legal fees, audit fees, directors' fees, insurance fees,
and other miscellaneous expenses. A shareholder may incur a $10.00 charge for
certain wire redemptions.
Example: You would pay the following expenses on a $1,000 investment in Vista
Shares of the Vista Portfolio indicated based upon payment by the Vista
Portfolios of operating expenses at the levels set forth in the table above,
assuming (1) 5% annual return and (2) redemption at the end of each time period.
<TABLE>
<CAPTION>
VISTA NEW YORK
VISTA CASH VISTA TAX FREE TAX FREE MONEY
MANAGEMENT FUND MONEY MARKET FUND MARKET FUND
(VISTA SHARES) (VISTA SHARES) (VISTA SHARES)
----------------- ----------------- -----------------
<S> <C> <C> <C>
1 Year.............................. $ 6 $ 6 $ 6
3 Years............................. 19 19 19
5 Years............................. 33 33 33
10 Years............................ 74 74 74
</TABLE>
<TABLE>
<CAPTION>
VISTA 100% U.S.
TREASURY VISTA TREASURY VISTA U.S.
SECURITIES PLUS MONEY GOVERNMENT
MONEY MARKET FUND MARKET FUND MONEY MARKET FUND
(VISTA SHARES) (VISTA SHARES) (VISTA SHARES)
----------------- ----------------- -----------------
<S> <C> <C> <C>
1 Year.............................. $ 6 $ 6 $ 6
3 Years............................. 19 19 19
5 Years............................. 33 33 33
10 Years............................ 74 74 74
</TABLE>
THE "EXAMPLE" SET FORTH ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF
FUTURE EXPENSES OF VISTA SHARES OF A VISTA PORTFOLIO; ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE SHOWN.
A long-term shareholder in shares of a mutual fund with 12b-1 fees, such as
the Vista Shares of each Vista Portfolio other than the Vista Cash Management
Fund, may pay more than the economic equivalent of the maximum front-end sales
charge permitted by rules of the National Association of Securities Dealers,
Inc.
B. FINANCIAL HIGHLIGHTS
The following financial highlights for Vista Shares of Vista U.S.
Government Money Market Fund, Vista Cash Management Fund and Vista Tax Free
Money Market Fund and for Shares of Vista New York Tax Free Money Market Fund
are supplemented by financial statements and accompanying notes appearing in
Vista's Annual Report to shareholders for the fiscal year ended August 31, 1995,
which is incorporated by reference into the Vista SAI. The financial statements
and notes thereto, as well as the financial information set forth in the tables
set forth below for each of the periods commencing subsequent to June 30, 1992
for Vista U.S. Government Money Market and Vista Cash Management Funds and
subsequent to November 1, 1988 for Vista Tax Free Money Market and Vista New
York Tax Free Money Market Funds have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon is included in the Annual Report
to shareholders.
37
<PAGE> 44
The financial highlights for the 100% U.S. Treasury Securities Money Market
Fund of Hanover have been audited by KPMG Peat Marwick LLP, independent
certified public accountants, whose report expressed an unqualified opinion
thereon.
The following information should be read in conjunction with the related
financial statements and notes thereto which are incorporated by reference into
the Statement of Additional Information.
Investors are advised that the Financial Highlights should not be viewed as
indicative of future financial results of the Vista Portfolios.
VISTA U.S. GOVERNMENT MONEY MARKET FUND
<TABLE>
<CAPTION>
---------------------------------------------------------
VISTA SHARES
---------------------------------------------------------
FOR THE PERIOD
NOVEMBER 1, 1993 JANUARY 1, 1993**
YEAR ENDED THROUGH TO
AUGUST 31, 1995 AUGUST 31, 1994* OCTOBER 31, 1993
--------------- ----------------- -----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.......... $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations:
Net Investment Income....................... 0.049 0.025 0.019
--------- --------- ---------
Total from Investment Operations............ 0.049 0.025 0.019
Less Distributions:
Dividends from net investment income........ 0.049 0.025 0.019
--------- --------- ---------
Total Distributions......................... 0.049 0.025 0.019
--------- --------- ---------
NET ASSET VALUE, END OF PERIOD................ $ 1.00 $ 1.00 $ 1.00
========= ========= =========
TOTAL RETURN.................................. 5.05% 2.48% 2.02%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted)..... $ 341,336 $ 335,365 $ 323,498
Ratio of Expenses to Average Net Assets#.... 0.80% 0.80% 0.82%
Ratio of Net Investment Income to Average
Net Assets#.............................. 4.93% 2.94% 2.39%
Ratio of Expenses without waivers and
assumption of expenses to Average Net
Assets#.................................. 0.80% 0.80% 0.82%
Ratio of net investment income without
waivers and assumption of expenses to
Average Net Assets#...................... 4.93% 2.94% 2.39%
</TABLE>
- ---------------
# Short periods have been annualized.
* In 1994 the Vista U.S. Government Money Market Fund changed its fiscal
year-end from October 31 to August 31.
** Commencement of offering of shares.
38
<PAGE> 45
VISTA CASH MANAGEMENT FUND(1)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
VISTA SHARES
-------------------------------------------------------------------------------------------
FOR THE
NOVEMBER 1, FOR THE PERIOD
YEAR 1993 YEAR ENDED JULY 1,
ENDED THROUGH OCTOBER 1992 TO YEAR ENDED JUNE 30,
AUGUST 31, AUGUST 31, 31, OCTOBER 31, --------------------------------
1995 1994+ 1993 1992* 1992 1991 1990
---------- ------------ ---------- ----------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment
Operations:
Net Investment Income............ 0.051 0.028 0.029 0.010 0.045 0.069 0.081
---------- ------------ ---------- ----------- -------- -------- --------
Total from Investment
Operations..................... 0.051 0.028 0.029 0.010 0.045 0.069 0.081
Less Distributions:
Dividends from net investment
income......................... 0.051 0.028 0.029 0.010 0.045 0.069 0.081
---------- ------------ ---------- ----------- -------- -------- --------
Total Distributions.............. 0.051 0.028 0.029 0.010 0.045 0.069 0.081
---------- ------------ ---------- ----------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ============ ========== ========== ======== ======== ========
TOTAL RETURN....................... 5.27% 2.84% 2.99% 1.02% 4.59% 7.13% 8.42%
Ratios/Supplemental Data*
Net Assets, End of Period (000
omitted)......................... $ 91,621 $156,645 $258,630 $ 443,102 $464,810 $359,637 $392,073
Ratio of Expenses to Average Net
Assets#.......................... 0.51% 0.60% 0.60% 0.59% 0.59% 0.59% 0.59%
Ratio of Net Investment Income to
Average Net Assets#.............. 5.13% 3.29% 2.93% 3.03% 4.50% 6.91% 8.13%
Ratio of expenses without waivers
and assumption of expenses to
Average Net Assets#.............. 0.79% 0.74% 0.70% 0.59% 0.59% 0.59% --
Ratio of net investment income
without waivers and assumption of
expenses to Average Net
Assets#.......................... 4.91% 3.15% 2.82% 3.03% 4.50% 6.91% --
<CAPTION>
1989 1988 1987 1986
-------- -------- -------- --------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD........................... $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment
Operations:
Net Investment Income............ 0.084 0.066 0.059 0.072
-------- -------- -------- --------
Total from Investment
Operations..................... 0.084 0.066 0.059 0.072
Less Distributions:
Dividends from net investment
income......................... 0.084 0.066 0.059 0.072
-------- -------- -------- --------
Total Distributions.............. 0.084 0.066 0.059 0.072
-------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD..... $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ========
TOTAL RETURN....................... 8.68% 6.83% 6.03% 7.29%
Ratios/Supplemental Data*
Net Assets, End of Period (000
omitted)......................... $526,972 $471,740 $414,983 $363,642
Ratio of Expenses to Average Net
Assets#.......................... 0.59% 0.57% 0.55% 0.57%
Ratio of Net Investment Income to
Average Net Assets#.............. 8.41% 6.63% 5.88% 7.29%
Ratio of expenses without waivers
and assumption of expenses to
Average Net Assets#.............. -- -- -- --
Ratio of net investment income
without waivers and assumption of
expenses to Average Net
Assets#.......................... -- -- -- --
</TABLE>
- ---------------
* In 1992, the Trinity Money Market Fund, the predecessor to the Vista Cash
Management Fund, changed its fiscal year-end from June 30 to October 31.
# Short periods have been annualized.
(1) Trinity Money Market Fund and Vista Cash Management Fund each reorganized as
a new portfolio of Vista effective January 1, 1993 in a tax-free
reorganization. The new portfolio was named Vista Global Money Market Fund
and, in connection with the Reorganization, is being renamed Vista Cash
Management Fund. In connection with each reorganization, shares of the
Trinity Money Market Fund were re-organized as Vista Shares of Vista Cash
Management Fund, and shares of the former Vista Cash Management Fund were
reorganized as Premier Shares. The per share data and ratios for the period
prior to the reorganization relate to the Trinity Money Market Fund.
+ In 1994 the Vista Cash Management Fund changed its fiscal year-end from
October 31 to August 31.
39
<PAGE> 46
VISTA TAX FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------
VISTA SHARES
-----------------------------------------------------------------------------
NOVEMBER
1,
YEAR 1993
ENDED THROUGH YEAR ENDED OCTOBER 31,
AUGUST 31, AUGUST 31, -----------------------------------------------
1995 1994+ 1993 1992 1991 1990
---------- ---------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations
Net Investment Income.............................. 0.029 0.015 0.019 0.028 0.043 0.054
---------- ---------- -------- -------- -------- --------
Total from Investment Operations................... 0.029 0.015 0.019 0.028 0.043 0.054
Less Distributions:
Dividends from net investment income............. 0.029 0.015 0.019 0.028 0.043 0.054
---------- ---------- -------- -------- -------- --------
Total Distributions.............................. 0.029 0.015 0.019 0.028 0.043 0.054
---------- ---------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD..................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= ========= ======== ======== ======== ========
TOTAL RETURN....................................... 2.99% 1.54% 1.90% 2.79% 4.37% 5.47%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted).......... $166,915 $121,710 $160,497 $145,241 $115,770 $112,770
Ratio of Expenses to Average Net Assets#......... 0.86% 0.85% 0.85% 0.85% 0.85% 0.85%
Ratio of Net Investment Income to Average Net
Assets#........................................ 2.96% 1.82% 1.88% 2.70% 4.27% 5.33%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets#............. 0.94% 0.85% 0.91% 0.98% 0.99% 0.97%
Ratio of net investment income without waivers
and assumption of expenses to Average Net
Assets#........................................ 2.87% 1.82% 1.83% 2.57% 4.13% 5.21%
<CAPTION>
9/4/87* to
1989 1988 10/31/87
-------- -------- ----------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............... $ 1.00 $ 1.00 $ 1.00
Income From Investment Operations
Net Investment Income.............................. 0.056 0.045 0.007
-------- -------- ----------
Total from Investment Operations................... 0.056 0.045 0.007
Less Distributions:
Dividends from net investment income............. 0.056 0.045 0.007
-------- -------- ----------
Total Distributions.............................. 0.056 0.045 0.007
-------- -------- ----------
NET ASSET VALUE, END OF PERIOD..................... $ 1.00 $ 1.00 $ 1.00
======== ======== ==========
TOTAL RETURN....................................... 5.76% 4.61% 4.50%
Ratios/Supplemental Data:
Net Assets, End of Period (000 omitted).......... $107,534 $116,260 $133,177
Ratio of Expenses to Average Net Assets#......... 0.85% 0.85% 0.85%
Ratio of Net Investment Income to Average Net
Assets#........................................ 5.59% 4.47% 4.47%
Ratio of Expenses without waivers and assumption
of expenses to Average Net Assets#............. 1.01% 1.02% 1.18%
Ratio of net investment income without waivers
and assumption of expenses to Average Net
Assets#........................................ 5.43% 4.30% 4.15%
</TABLE>
- ---------------
* Commencement of offering of shares.
# Short periods have been annualized.
+ In 1994 the Vista Tax Free Money Market Fund changed its fiscal year-end from
October 31 to August 31.
40
<PAGE> 47
VISTA NEW YORK TAX FREE MONEY MARKET FUND
<TABLE>
<CAPTION>
------------------------------------------------------------------------------
NOVEMBER 1,
1993 YEAR ENDED OCTOBER 31,
YEAR ENDED THROUGH -----------------------------------------------
AUGUST 31, AUGUST 31,
1995 1994+ 1993 1992 1991 1990
---------- ----------- -------- -------- -------- --------
VISTA VISTA VISTA VISTA VISTA VISTA
SHARES SHARES SHARES SHARES SHARES SHARES
---------- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income......................... 0.028 0.015 0.017 0.025 0.038 0.050
---------- ----------- -------- -------- -------- --------
Total from Investment Operations.............. 0.028 0.015 0.017 0.025 0.038 0.050
Less Distributions:
Dividends from net investment income.......... 0.028 0.015 0.017 0.025 0.038 0.050
---------- ----------- -------- -------- -------- --------
Total Distributions........................... 0.028 0.015 0.017 0.025 0.038 0.050
---------- ----------- -------- -------- -------- --------
NET ASSET VALUE, END OF PERIOD.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
========= =========== ======== ======== ======== ========
TOTAL RETURN.................................... 2.88% 1.48% 1.75% 2.53% 3.87% 5.02%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)....... $378,400 $ 365,669 $300,425 $285,889 $230,855 $251,897
Ratio of Expenses to Average Net Assets#...... 0.86% 0.85% 0.85% 0.85% 0.85% 0.83%
Ratio of Net Income to Average Net Assets#.... 2.84% 1.77% 1.72% 2.48% 3.83% 4.91%
Ratio of expenses without waivers and
assumption of expenses to Average Net
Assets#..................................... 0.95% 0.85% 0.89% 0.92% 0.92% 0.91%
Ratio of net investment income without waivers
and assumption of expenses to Average Net
Assets#..................................... 2.75% 1.77% 1.68% 2.41% 3.76% 4.83%
<CAPTION>
9/4/87* to
1989 1988 10/31/87
-------- -------- ------------
VISTA VISTA VISTA
SHARES SHARES SHARES
-------- -------- ------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD............ $ 1.00 $ 1.00 $ 1.00
Income from Investment Operations:
Net Investment Income......................... 0.051 0.043 0.009
-------- -------- ------------
Total from Investment Operations.............. 0.051 0.043 0.009
Less Distributions:
Dividends from net investment income.......... 0.051 0.043 0.009
-------- -------- ------------
Total Distributions........................... 0.051 0.043 0.009
-------- -------- ------------
NET ASSET VALUE, END OF PERIOD.................. $ 1.00 $ 1.00 $ 1.00
======== ======== ===========
TOTAL RETURN.................................... 5.28% 4.50% 4.71%
Ratios/Supplemental Data
Net Assets, End of Period (000 omitted)....... $252,201 $230,639 $ 2,385
Ratio of Expenses to Average Net Assets#...... 0.81% 0.78% 0.25%
Ratio of Net Income to Average Net Assets#.... 5.15% 4.26% 4.71%
Ratio of expenses without waivers and
assumption of expenses to Average Net
Assets#..................................... 0.95% 1.10% 1.50%
Ratio of net investment income without waivers
and assumption of expenses to Average Net
Assets#..................................... 5.01% 3.94% 3.46%
</TABLE>
- ---------------
* Commencement of operations.
# Short periods have been annualized.
+ In 1994 the Vista New York Tax Free Money Market Fund changed its fiscal
year-end from October 31 to August 31.
41
<PAGE> 48
THE 100% U.S. TREASURY SECURITIES
MONEY MARKET FUND OF HANOVER
(FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD)
<TABLE>
<CAPTION>
YEAR ENDED NOVEMBER 30, PERIOD ENDED
------------------------------------------------- NOVEMBER 30,
1995 1994 1993 1992 1991*
--------- --------- -------- -------- ------------
<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 0.74%
annualized, respectively.
C. MANAGEMENT OF THE PORTFOLIOS
ADVISER AND SUB-ADVISERS
Chase acts as investment adviser to each existing Vista Portfolio and will
act as investment adviser to each Vista Portfolio effective upon the Closing
Date. Upon consummation of the Bank Merger, Chase's successor will continue to
act as investment adviser to each Vista Portfolio. As used herein, the term
"Adviser" means Chase (including its successor in the Bank Merger) in its
capacity as investment adviser to the Vista Portfolios. Under the Investment
Advisory Agreement between the Adviser and Vista relating to each Vista
Portfolio that will take effect as of the Closing Date, the Adviser will have
responsibility for investment decisions for each Vista Portfolio. For its
services under the Investment Advisory Agreement relating to each Vista
Portfolio, the Adviser will receive an annual fee computed daily and paid
monthly at an annual rate equal to 0.10% of the average daily net assets of such
Vista Portfolio.
Effective upon the Closing Date, CAM will act as the sub-investment adviser
to each Vista Portfolio, other than Vista Cash Management Fund and Vista Tax
Free Money Market Fund, pursuant to a separate Sub-Investment Advisory Agreement
between CAM and Chase. Under the Sub-Investment Advisory Agreement, CAM will
make investment decisions for, and be responsible for the day-to-day management
of, each such portfolio. For its services under such Sub-Investment Advisory
Agreement, CAM will be entitled to receive, with respect to each such Vista
Portfolio, such compensation, payable by the Adviser out of its advisory fee, as
shall be agreed to from time to time between the Adviser and CAM.
Effective upon the Closing Date, TCBNA will act as the sub-investment
adviser to the Vista Cash Management Fund and the Vista Tax Free Money Market
Fund pursuant to separate Sub-Investment Advisory Agreements between Chase and
TCBNA. Under the Sub-Investment Advisory Agreements, TCBNA will make investment
decisions for, and be responsible for the day-to-day management of, the Vista
Cash Management Fund and Vista Tax Free Money Market Fund. For its services
under the Sub-Investment Advisory Agreement relating to each of the Vista Cash
Management Fund and Vista Tax Free Money Market Fund, TCBNA will be entitled to
receive such compensation, payable by the Adviser out of its advisory fee, as
shall be agreed to from time to time between the Adviser and TCBNA.
42
<PAGE> 49
The Adviser, CAM and TCBNA may each, from time to time, voluntarily waive
all or a portion of the fees payable to it under an Investment Advisory
Agreement or a Sub-Investment Advisory Agreement, as the case may be.
The Adviser is currently a wholly-owned subsidiary of CMC, a registered
bank holding company, and is a commercial bank offering a wide range of banking
and investment services to customers throughout the United States and around the
world. Effective upon consummation of the Parent Merger, the Adviser will be a
wholly-owned subsidiary of CBC, and CBC will be renamed "The Chase Manhattan
Corporation". Upon consummation of the Bank Merger, the Adviser will continue to
be a wholly-owned subsidiary of CBC. Its headquarters is currently located at
One Chase Manhattan Plaza, New York, New York 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.
CAM is a wholly-owned operating subsidiary of Chase, and upon consummation
of the Bank Merger, will be a wholly-owned operating subsidiary of the Adviser.
CAM is registered with the Commission as an investment adviser and was formed
for the purpose of providing discretionary investment advisory services to
institutional clients and to consolidate Chase's investment management function,
and the same individuals who serve as portfolio managers for CAM also serve as
portfolio managers for Chase. CAM is located at 1211 Avenue of the Americas, New
York, New York 10036.
TCBNA has been in the investment counselling business since 1987 and is
ultimately controlled and owned by CBC. TCBNA renders investment advice to a
wide variety of corporations, pension plans, foundations, trusts and
individuals. TCBNA currently serves as the investment adviser to the Hanover
Cash Management Fund and the Hanover Tax Free Money Market Fund. The principal
business address of TCBNA is 600 Travis, Houston, Texas 77002.
If, in connection with the Related Changes, the shareholders of the Vista
Cash Management Fund or the Vista Tax Free Money Market Fund do not approve the
investment sub-advisory agreement with TCBNA, then, in that case, the Adviser
will continue to act as the investment adviser to such Vista Portfolio pursuant
to the terms of the investment advisory agreements relating to those Vista
Portfolios.
CERTAIN RELATIONSHIPS AND ACTIVITIES. The Adviser and its affiliates may
have deposit, loan and other commercial banking relationships with the issuers
of securities purchased on behalf of any of the Vista Portfolios, including
outstanding loans to such issuers which may be repaid in whole or in part with
the proceeds of securities so purchased. The Adviser and its affiliates deal,
trade and invest for their own accounts in U.S. Government obligations, and
municipal obligations. The Adviser and its affiliates may sell U.S. Government
obligations and municipal obligations to, and purchase them from, other
investment companies sponsored by the Vista Distributor or affiliates of the
Vista Distributor. The Adviser will not invest any Vista Portfolio assets in any
U.S. Government obligations, municipal obligations or commercial paper 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. Government obligations, municipal
obligations or commercial paper available to be purchased on behalf of any Vista
Portfolio. The Adviser has informed Vista 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 Vista as Custodian. Shareholders of the Vista
Portfolios should be aware that, subject to applicable legal or regulatory
restrictions, the Adviser and its affiliates may exchange among themselves
certain information about the shareholders and their accounts.
ADMINISTRATOR
Pursuant to an Administration Agreement (the "Administration Agreement"),
Chase serves as administrator of Vista (in such capacity, the "Administrator").
The Administrator provides certain administrative services, including, among
other responsibilities, coordinating relationships with independent contractors
and
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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 each existing Vista Portfolio, and will be entitled to receive from
each Vista Portfolio effective upon the Closing Date, a fee computed daily and
paid monthly at an annual rate equal to 0.05% of such Vista Portfolio'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 each Vista Portfolio's investments,
the determination of investment policy, or for any matter pertaining to the
distribution of Vista Portfolio shares.
REGULATORY MATTERS. Banking laws and regulations, including the
Glass-Steagall Act as currently interpreted by the Board of Governors of the
Federal Reserve System, prohibit a bank holding company registered under the
Bank Holding Company Act of 1956, as amended, or any affiliate thereof from
sponsoring, organizing, controlling, or distributing the shares of a registered,
open-end investment company continuously engaged in the issuance of its shares,
and prohibit banks generally from issuing, underwriting, selling or distributing
securities, but do not prohibit such a bank holding company or affiliate from
acting as investment adviser, administrator, transfer agent, or custodian to
such an investment company or from purchasing shares of such a company as agent
for and upon the order of a customer. Chemical, Chase, Hanover and Vista believe
that Chase, CAM, TCBNA, or any other affiliate of Chemical or Chase, may perform
the investment advisory, administrative, custody and transfer agency services
for Vista, as the case may be, described in this Prospectus/Proxy Statement, and
that Chase, CAM, TCBNA or any other affiliate of Chemical or Chase, subject to
such banking laws and regulations, may perform the shareholder services
contemplated by this Prospectus/Proxy Statement, without violation of such
banking laws or regulations. However, future changes in legal requirements
relating to the permissible activities of banks and their affiliates, as well as
future interpretations of present requirements, could prevent Chase, CAM, TCBNA
or any other affiliate of Chemical or Chase from continuing to perform
investment advisory, administrative or custody services for Vista, as the case
may be, or require Chase, CAM, Inc., TCBNA or any other affiliate of Chemical or
Chase to alter or discontinue the services provided by it to shareholders of
Vista Portfolios.
If Chase, CAM, TCBNA or any other affiliate of Chemical or Chase were
prohibited from performing investment advisory, administrative, custody or
transfer agency services for Vista, as the case may be, it is expected that the
Vista Board would recommend to Vista's shareholders that they approve new
agreements with another entity or entities qualified to perform such services
and selected by the Board of Trustees. If Chase, CAM, TCBNA or any other
affiliate of Chemical or Chase were required to discontinue all or part of its
shareholder servicing activities, its customers would be permitted to remain the
beneficial owners of Trust shares and alternative means for continuing the
servicing of such customers would be sought. Vista does not anticipate that
investors would suffer any adverse financial consequences as a result of these
occurrences.
In addition, state securities laws on this issue may differ from the
interpretations of federal law expressed herein and banks and financial
institutions may be required to register as dealers pursuant to state laws.
D. PURCHASES AND REDEMPTIONS OF SHARES
PURCHASES
The Vista Shares of the Vista Portfolios are continuously offered for sale
without a sales load at the net asset value next determined through the Vista
Distributor after an order is received and accepted by Vista's transfer agent
provided it is transmitted prior to 12:00 noon, Eastern time for the Vista 100%
U.S. Treasury Securities Money Market Fund, the Vista Tax Free Money Market Fund
and the Vista New York Tax Free Money Market Fund, and prior to 2:00 p.m.,
Eastern time for the Vista Treasury Plus Money Market Fund, the Vista U.S.
Government Money Market Fund and the Vista Cash Management Fund 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
Vista-Net Asset Value"). Effective upon consummation of the Reorganization,
although the aforementioned deadlines will generally continue in effect,
purchase orders for
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Vista Shares of the Vista Treasury Plus Money Market Fund and the Vista Cash
Management Fund received by Vista's transfer agent after 2:00 p.m., Eastern
time, and prior to 4:00 p.m., eastern time, on any Fund Business Day may be
accepted and executed on the same day in Vista's discretion. Orders for Vista
Shares of the Vista Portfolios received and accepted prior to the above
designated times will be entitled to all dividends declared on such day.
It is anticipated that each Vista Shares' net asset value will remain
constant at $1.00 per share and each Vista Portfolio will employ specific
investment policies and procedures to accomplish this result. Shares of each
Vista Portfolio 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 Vista) or to customers of
brokers or certain financial institutions which have entered into Selected
Dealer Agreements with the Vista Distributor. An investor may purchase Vista
Shares of a Vista Portfolio by authorizing his Shareholder Servicing Agent,
broker or financial institution to purchase such Shares on his behalf through
the Vista 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 Vista or its agents.
Shareholder Servicing Agents may offer 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 a Vista Portfolio 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 Vista Portfolios and waive any applicable holding periods.
Each Vista Portfolio 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, each Vista
Portfolio must have federal funds available to it (i.e., monies credited to the
account of such Vista Portfolio'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 Vista Distributor. Therefore, each shareholder and prospective
investor should be aware that if he or she does not have sufficient funds on
deposit with, or otherwise make 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.
Each of the Vista Portfolios reserves the right to cease offering Vista
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. Vista
Portfolio Vista Shares will be maintained in book entry form, and no
certificates representing shares owned will be issued to shareholders.
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MINIMUM INVESTMENTS
The Vista Portfolios have established minimum initial and additional
investments for the purchase of Vista Shares. The minimums detailed below vary
by the type of account being established:
<TABLE>
<CAPTION>
MINIMUM INITIAL
ACCOUNT TYPE INVESTMENT
---------------------------------------------------- ---------------
<S> <C>
Individual.......................................... $ 2,500(1)
Individual Retirement Account (IRA)................. $ 1,000(2)
Spousal IRA......................................... $ 250
SEP-IRA............................................. $ 1,000(2)
Purchase Accumulation Plan.......................... $ 250(3)
Payroll Deduction Program (401K, 403B, Keogh)....... $ 100(4)
</TABLE>
- ---------------
(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
Investment Plan as described below.
(4) A $25 minimum monthly investment must be established through an automatic
payroll cycle.
The minimum additional investment is $100 for all types of accounts. The
initial investment minimums will be waived for Hanover Portfolio shareholders
that receive Vista Portfolio Shares in connection with the Reorganization.
For further information as to how to direct a Shareholder Servicing Agent
to purchase shares of a Vista Portfolio, an investor should contact his or her
Shareholder Servicing Agent.
SYSTEMATIC INVESTMENT PLAN. A Shareholder may establish a monthly
investment plan by which investments are automatically made to his/her Vista
Portfolio 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
Portfolio 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 notaries 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 Vista'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 for
the Vista 100% U.S. Treasury Securities Money Market Fund, the Vista Tax Free
Money Market Fund and the Vista New York Tax Free Money Market Fund, and prior
to 2:00 p.m., Eastern time for the Vista Treasury Plus Money Market Fund, the
Vista U.S. Government Money Market Fund and the Vista Cash Management Fund on
any Fund Business Day. Shares which are redeemed earn
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dividends up to and including the day prior to the day the redemption is
effected. 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. 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 Vista's records. Redemptions of shares are taxable events
on which the shareholder may recognize a gain or loss. Although Vista generally
retains the right to pay the redemption price of shares in kind with securities
(instead of cash), Vista has filed an election under Rule 18f-1 under 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 same Fund Business Day
as the receipt of the request (provided it is made prior to 12:00 noon, Eastern
time for the Vista 100% U.S. Treasury Securities Money Market Fund, the Vista
Tax Free Money Market Fund and the Vista New York Tax Free Money Market Fund,
and prior to 2:00 p.m., Eastern time for the Vista Treasury Plus Money Market
Fund, the Vista U.S. Government Money Market Fund and the Vista Cash Management
Fund, on any Fund Business Day), and in any event within seven days. 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
1-800-34-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 Vista Portfolio 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 or her account to his or her 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 a Vista Portfolio, a shareholder should contact his or her
Shareholder Servicing Agent.
REDEMPTION OF ACCOUNTS OF LESS THAN $500. Each Vista Portfolio 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
Holders of the Vista Shares of each Vista Portfolio may exchange at
relative net asset value among the Vista Shares offered by Vista's other money
market portfolios, and may exchange at relative net asset value plus any
applicable sales charges among certain classes of shares of the portfolios of
Vista other than the money market portfolios of Vista or for the shares of the
portfolios of Mutual Fund Group ("MFG"), an affiliated investment company, of
which Chase is the adviser and the Vista Distributor 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
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fund. Under the exchange privilege, shares of a fund may be exchanged for shares
of other funds of Vista 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 fund (whether a portfolio of Vista or MFG) into which shares of the
Vista Portfolios 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 Vista determines that it would be disadvantaged by an immediate
transfer of the proceeds. 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 pre-authorizations or
indemnifications are accepted and on file. Further information and telephone
exchange forms are available from Vista Service Center.
GENERAL
The Vista Portfolios have 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. Vista's Transfer Agent may defer acting
on a shareholder's instructions until it has received them in proper form. In
addition, the privileges described herein are not available until a completed
and signed account application has been received by Vista'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. Vista will employ reasonable procedures to confirm that
instructions communicated by telephone are genuine. In the event Vista 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 Vista Portfolios or their 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 a Vista Portfolio 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 Vista in writing. Shareholders agree to release
and hold harmless the Vista Portfolios, 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 Vista
Portfolio 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 Vista
Portfolios 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 Vista Portfolio accounts
and services.
Shareholders purchasing their shares through a Shareholder Servicing Agent
may not assign, transfer or pledge any rights or interest in any Vista Portfolio
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 Vista Portfolios 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 Vista Portfolios may also require
signature guarantees for changes that shareholders request be made in Trust
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 additional account services made after a shareholder has submitted
an initial account application
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to Vista. The Vista Portfolios may refuse to accept or carry out any transaction
that does not satisfy any restrictions then in effect.
E. 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 relevant to each Vista Portfolio that is contained in the Vista
SAI. In addition, each prospective investor should consult with his own tax
advisers as to the tax consequences of an investment in the Vista Portfolios,
including the status of distributions from a Vista Portfolio in his or her own
state and locality and the possible applicability of the federal alternative
minimum tax to a portion of the distributions of the Vista Tax Free Money Market
Fund and the Vista New York Tax Free Money Market Fund.
Each Vista Portfolio intends to qualify each year and elect to be treated
as a separate "regulated investment company" under Subchapter M of the Code. If
a Vista Portfolio qualifies as a "regulated investment company" and all of 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 the amounts so distributed. If for any taxable year a Vista
Portfolio 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 will be taxable to shareholders to the extent of each Vista
Portfolio's current and accumulated earnings and profits.
Vista 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 each Vista Portfolio (and each other series of Vista)
qualifies as a regulated investment company under the Code.
Distributions by a Vista Portfolio 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 the Vista Tax Free Money Market Fund and the
Vista New York Tax Free Money Market Fund of their tax-exempt interest income
(net of expenses) are designated as "exempt-interest dividends" which are
excluded from gross income for regular federal income tax purposes.
Distributions by a Vista Portfolio 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. Each Vista Portfolio
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 Vista Portfolio. In general, distributions by a Vista Portfolio 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
a Vista Portfolio 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 gains dividends and
exempt interest dividends, will be sent to each shareholder of a Vista Portfolio
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 a Vista Portfolio. Generally, shareholders are subject to
backup withholding if they have not provided a Vista Portfolio with a correct
taxpayer identification number and certain required certifications.
VISTA U.S. GOVERNMENT MONEY MARKET FUND. Shareholders of the Vista U.S.
Government Money Market Fund (other than tax-exempt shareholders) will be
subject to federal income tax on the ordinary income dividends and any capital
gains dividends from such Vista Portfolio 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 Vista U.S. Government Money
Market Fund to the extent such dividends are
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attributable to interest from obligations of the U.S. Government and certain of
its agencies and instrumentalities. The Vista U.S. Government Money Market Fund
intends to advise their 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 Vista U.S. Government Money Market
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 such Vista Portfolio's portfolio consists of such
obligations and such Vista Portfolio 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 Vista U.S. Government Money
Market 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 such Vista Portfolio 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 Vista U.S. Government Money Market Fund which is attributable to
interest from obligations of the U.S. Government and its agencies and
instrumentalities.
VISTA TAX FREE MONEY MARKET FUND AND VISTA NEW YORK TAX FREE MONEY MARKET
FUND. In accordance with the investment objectives of the Vista Tax Free Money
Market Fund and the Vista New York Tax Free Money Market Fund, it is expected
that most or all of the net investment income of the Vista Tax Free Money Market
Fund and the Vista New York Tax Free Money Market Fund will be attributable to
interest from Municipal Obligations, although from time to time a portion of the
portfolio of each such Vista Portfolio may be invested in short-term taxable
obligations since the preservation of capital and the maintenance of liquidity
are important aspects of each such Vista Portfolio's investment objective. As a
result, most or all of the dividends paid out of the Vista Tax Free Money Market
Fund's and the Vista New York Tax Free Money Market Fund's net investment income
will be designated "exempt-interest dividends". The percentage of such dividends
so designated will be applied uniformly to all such dividends from the Vista Tax
Free Money Market Fund or the Vista New York Tax Free Money Market Fund made
during each fiscal year and may differ from the actual percentage for any
particular month. Any dividends paid out of any net long-term or short-term
capital gains will be taxable to shareholders, although the Vista Tax Free Money
Market Fund and the Vista New York Tax Free Money Market Fund each will seek to
avoid recognition of capital gains.
Although excluded from gross income for regular federal income tax
purposes, exempt-interest dividends, together with other tax-exempt interest,
are required to be reported on shareholders' federal income tax returns, and are
taken into account in determining the portion, if any, of Social Security
benefits which must be included in gross income for federal income tax purposes.
In addition, exempt-interest dividends paid out of interest on certain Municipal
Obligations that may be purchased by the Vista Tax Free Money Market Fund or the
Vista New York Tax Free Money Market Fund will be treated as a tax preference
item for both individual and corporate shareholders potentially subject to an
alternative minimum tax ("AMT"), and all exempt-interest dividends will be
included in computing a corporate shareholder's adjusted current earnings, upon
which is based a separate corporate preference item which may be subject to AMT
and to the environmental superfund tax.
Interest on indebtedness incurred to purchase or carry shares of the Vista
Tax Free Money Market Fund or the Vista New York Tax Free Money Market Fund is
not deductible. Further, entities or persons who may be "substantial users" (or
persons related to "substantial users") of facilities financed by certain types
of Municipal Obligations should consult with their own tax advisers before
purchasing shares of the Vista Tax Free Money Market Fund or the Vista New York
Tax Free Money Market Fund.
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The exclusion from gross income for federal income tax purposes of
exempt-interest dividends does not necessarily result in an exclusion under the
income or other tax laws of any state or local taxing authority. Shareholders of
the Vista Tax Free Money Market Fund or the Vista New York Tax Free Money Market
Fund may be exempt from state and local taxes on exempt-interest dividends paid
out of interest on Municipal Obligations of the state and/or municipalities of
the state in which they reside but may be subject to state and local tax on
exempt-interest dividends paid out of interest on Municipal Obligations of other
jurisdictions. To the extent that exempt-interest dividends from the Vista New
York Tax Free Money Market Fund are paid out of interest on New York Municipal
Obligations, the dividends will be exempt from New York State and New York City
personal income taxes for a New York individual resident shareholder. The annual
tax information statements referred to above, when sent to shareholders of the
Vista New York Tax Free Money Market Fund, will indicate the New York State and
New York City personal income tax status of distributions by such Fund.
Exempt-interest dividends from the Vista New York Tax Free Money Market Fund are
not excluded in determining New York State or New York City franchise taxes on
corporations and financial institutions.
F. OTHER INFORMATION CONCERNING SHARES OF VISTA
NET ASSET VALUE
The net asset value of the Vista Shares of the Vista 100% U.S. Treasury
Securities Money Market Fund, the Vista Tax Free Money Market Fund and the Vista
New York Tax Free Money Market Fund is determined at 12:00 noon, Eastern time
and the net asset value of the Vista Shares of the Vista Treasury Plus Money
Market Fund, the Vista U.S. Government Money Market Fund and the Vista Cash
Management Fund is currently determined at 2:00 p.m., Eastern time, on each Fund
Business Day. Effective upon consummation of the Reorganization, the net asset
value of the Vista Shares of the Vista Treasury Plus Money Market Fund and the
Vista Cash Management Fund will also be determined as of 4:00 p.m., Eastern
time, on each Fund Business Day. Net asset value is determined by dividing a
Vista Portfolio's net assets attributable to Vista Shares by the number of its
Vista Shares outstanding at the time the determination is made. The portfolio
securities of each Vista Portfolio are valued at their amortized cost pursuant
to Rule 2a-7 under the 1940 Act, certain requirements of which are summarized
under "Comparison of Investment Objectives and Policies." 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 such Vista Portfolio
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 these Vista Portfolios
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 exceed 1/2 of 1%. Income earned on a Vista Portfolio'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 Vista SAI 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 of the Vista Portfolios 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 for the Vista 100% U.S.
Treasury Securities Money Market Fund, the Vista Tax Free Money Market Fund and
the Vista New York Tax Free Money Market Fund and as of 2:00 p.m., Eastern time
for the Vista Treasury Plus Money Market Fund, the Vista U.S. Government Money
Market Fund and the Vista Cash Management Fund. Effective upon the consummation
of the Reorganization, this determination will be made at 4:00 p.m., Eastern
time, rather than at 12:00 noon, Eastern time, in the case of the Vista Treasury
Plus Money Market Fund and the Vista Cash Management Fund. 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
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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, except for the Vista Tax Free
Money Market Fund and the Vista New York Tax Free Money Market Fund, less the
amortization of any premium on the portfolio assets of such Vista Portfolio,
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 Vista Shares of a Vista Portfolio 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, Vista 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 Vista 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 PLANS AND DISTRIBUTION AND SUB-ADMINISTRATION AGREEMENT
The Vista Board has adopted the Vista Distribution Plan for the Vista
Shares of certain Vista Portfolios in accordance with Rule 12b-1 under the 1940
Act, and, effective upon the Closing Date, the Vista Distribution Plan will be
in effect for the Vista Shares of each Vista Portfolio except for the Vista Cash
Management Fund. The Vista Trustees have concluded that there is a reasonable
likelihood that the Vista Distribution Plan will benefit the Vista Portfolios
and the holders of their Vista Shares.
Effective upon the Closing Date, the Vista Distribution Plan will provide
that the Vista Portfolios other than the Vista Cash Management Fund may pay
distribution fees (the "Distribution Fee"), including payments to the Vista
Distributor, at an annual rate not to exceed 0.10% of the average daily net
assets for the Vista Shares thereof. As noted above, there will be no
distribution plan for the Vista Cash Management Fund, and, accordingly, the
Vista Cash Management Fund will bear no distribution fees. The Vista Distributor
may, from time to time, voluntarily waive all or a portion of its fees payable
under the Vista Distribution Plan. Since the Distribution Fee is not directly
tied to expenses, the amount of Distribution Fees paid by each of the Vista
Portfolio's Vista Shares during any year may be more or less than actual
expenses incurred pursuant to the Vista Distribution Plan. For this reason, this
type of distribution fee arrangement is characterized by the staff of the
Commission as being of the "compensation variety" (in contrast to
"reimbursement" arrangements 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 Distribution Fee paid. No class
of shares of a Vista Portfolio will make payments or be liable for any
distribution expenses incurred by any other class of shares of such Vista
Portfolio.
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Pursuant to a Distribution and Sub-Administration Agreement (the
"Distribution Agreement"), the Vista Distributor acts as the principal
underwriter of shares of each existing Vista Portfolio and will act in such
capacity for each Vista Portfolio effective upon the Closing Date. Under the
Distribution Agreement, the Vista Distributor bears 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 Vista Distribution Plan. In
addition, the Vista Distributor provides certain sub-administration services,
including providing officers, clerical staff and office space. While there is no
sales load, the Vista Distributor receives a fee from each Vista Portfolio at an
annual rate equal to 0.05% of each such Vista Portfolio's average daily net
assets, on an annualized basis for Vista's then-current fiscal year. Other funds
which have investment objectives similar to those of each Vista Portfolio, 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 Vista 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 Vista and certain other ongoing expenses of
Vista.
EXPENSES
Each of the Vista Portfolios intends to pay all or its pro rata share of
expenses, including the compensation of the Trustees; all fees under the Vista
Distribution Plan for that Vista Portfolio (payable on a per class basis);
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 Portfolios; 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 Vista Distributor under
the Distribution and Sub-Administration Agreement. Expenses relating to the
issuance, registration and qualification of shares of each Vista Portfolio and
the preparation, printing and mailing of prospectuses for such purposes are
borne by the Vista Portfolio except that the Distribution and Sub-Administration
Agreement with the Vista Distributor requires the Vista 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
Vista Portfolios 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
Vista is an open-end management investment company organized as a
Massachusetts business trust under the laws of the Commonwealth of Massachusetts
in 1994. Vista 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 Vista which
are not attributable to a specific series or class are allocated among all the
series in a manner believed by management of Vista to be fair and equitable.
Shares have no preemptive 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
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vote together, to the extent required under the 1940 Act, in the election or
selection of Trustees and independent accountants.
The Vista Portfolios offer other classes of shares in addition to the Vista
Shares. Shareholders of the Vista Shares bear the fees and expenses described
herein. Similarly, shareholders of each other class of a Vista Portfolio bear
the fees and expenses described in the appropriate prospectus for such classes
of shares. Standardized yield quotations will be computed separately for each
class of shares of a Vista Portfolio. The principal differences between the
various share classes within a Vista Portfolio relate to minimum investment and
balance requirements, the level of services provided to investors, and the
amount of distribution, shareholder servicing and certain other fees and
expenses borne by the shares of each class. Investors may call Vista at
1-800-34-VISTA to obtain additional information about the classes of shares of
the Vista Portfolios that are offered. Any person entitled receive compensation
for selling or servicing shares of a Vista Portfolio may receive different
levels of compensation with respect to one class of shares of such Vista
Portfolio over another.
Vista 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 Vista may in accordance with
certain rules of the 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 Vista's 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
Vista. 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. Vista'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 series
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.
Vista 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 Vista itself is unable to meet its obligations.
On October 28, 1994, certain mutual fund series of MFG, an affiliated
investment company, underwent a statutory reorganization to become series of
Vista. The Vista U.S. Government Money Market Fund and the Vista Tax Free Money
Market Fund are among such series and, therefore, certain information contained
herein reflects the history of those Funds since their inception as series of
MFG and the fact that certain policies, plans and shareholder privileges
continued unchanged as a result of the reorganization.
G. SHAREHOLDER SERVICING AGENTS, TRANSFER AGENT AND CUSTODIAN
SHAREHOLDER SERVICING AGENTS
The shareholder servicing agreement with each Shareholder Servicing Agent
for Vista 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 and history, the manner in
which purchases and redemptions of shares may be effected for each Vista
Portfolio or class of shares as to which the Shareholder Servicing Agent is so
acting and certain other matters pertaining to a Vista Portfolio 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
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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 each
Vista Portfolio or class of shares, proxy statements, annual reports, updated
prospectuses and other communications to shareholders; receive, tabulate and
transmit to the Vista Portfolios proxies executed by shareholders with respect
to meetings of shareholders of each Vista Portfolio or class of shares; vote the
outstanding shares of each Vista Portfolio 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 such Vista Portfolio or
class represented at the shareholder meeting and provide such other related
services as the Vista Portfolios or a shareholder may request. For performing
these services, each Shareholder Servicing Agent for the Vista Shares will be
entitled to receive, effective upon the Closing Date, an annual fee of up to
.35% of the average daily net assets of each Vista Portfolio 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.
Vista's Board of Trustees has determined that the amount payable by each Vista
Portfolio in respect of "service fees" (as defined in Article III, Section 26 of
the Rules of Fair Practice of the NASD) does not exceed .25% of the average
annual net assets of such portfolio. 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 Vista 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 Vista Portfolio shares, receive
dividends and distributions on Vista Portfolio 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 each Vista Portfolio's shares. Vista, on
behalf of the Vista Portfolios, 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 Vista 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 Vista, 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
each Vista Portfolio 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. Vista 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 Vista. In this capacity, DST maintains the
account records of all shareholders in the existing Vista Portfolios and will
maintain such records for each Vista Portfolio effective upon the Closing Date,
including statement preparation and mailing. DST also is 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 Vista
Portfolios 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 Vista and DST. DST's address
is 127 W. 10th Street, Kansas City, MO 64105.
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Pursuant to a Custodian Agreement, Chase acts as the custodian of the
assets of each existing Vista Portfolio, and will act as the custodian for each
Vista Portfolio effective upon the Closing Date. For its services as Custodian,
Chase receives compensation as is from time to time agreed upon by Vista and
Chase. The Custodian's responsibilities include safeguarding and controlling
each Vista Portfolio's cash and securities, handling the receipt and delivery of
securities, determining income and collecting interest on each Vista Portfolio'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 each Vista Portfolio. 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 Vista's Custodian
does not determine the investment policies of the Vista Portfolios or decide
which securities will be bought or sold on behalf of the Vista Portfolios or
otherwise have access to or share material inside information with the internal
division that performs advisory services for the Vista Portfolios.
TAX SHELTERED RETIREMENT PLANS
Shares of the Vista U.S. Government Money Market Fund and the Vista Cash
Management 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, and 403(b) Retirement Plans. Call or write the Transfer Agent for
more information.
H. YIELD AND PERFORMANCE INFORMATION
From time to time, each of 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 each 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
Averages(TM), compiled in the Donoghue's Money Fund Report, 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. Each of the Vista Shares may, with proper authorization,
reprint articles written about the Vista Shares and provide them to prospective
shareholders.
Each of the Vista Shares may provide its annualized "yield" and "effective
yield" to current and prospective shareholders. The "yield" of a 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.
The Vista Tax Free Money Market Fund and the Vista New York Tax Free Money
Market Fund each may also quote a "tax equivalent yield." The "tax equivalent
yield" refers to the yield that a taxable money market fund would have to
generate in order to produce an after-tax yield equivalent to that of the Vista
Tax Free Money Market Fund or the Vista New York Tax Free Money Market Fund. The
use of a tax equivalent yield allows investors to compare the yield of the Vista
Tax Free Money Market Fund or the Vista New York Tax Free Money Market Fund,
which provide shareholders with income excluded for federal income tax
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and/or New York State and New York City tax purposes, to the yields of money
market funds which are not so tax-exempt.
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 Vista
Portfolio's portfolio and changes in the Vista Portfolio's and the shares'
expenses. In addition, the Adviser, the Administrator, the Vista Distributor and
each Shareholder Servicing Agent may voluntarily waive a portion of their fees
on a month-to-month basis. In addition, the Vista Distributor may assume a
portion of a Vista Portfolio's 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 each of 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,
each of the Vista Shares is advised that certain Shareholder Servicing Agent 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 Vista SAI for further information concerning each of the Vista Shares'
calculation of yield.
I. ADDITIONAL INFORMATION
Each Vista Portfolio has adopted a Code of Ethics which prohibits all
affiliated personnel from engaging in personal investment activities which
compete with or attempt to take advantage of such Vista Portfolio's planned
portfolio transactions. The objective of each Vista Portfolio's Code of Ethics
is that such Vista Portfolio's operations be carried out for the exclusive
benefit of its shareholders. Each Vista Portfolio maintains careful monitoring
of compliance with its Code of Ethics
The Vista SAI contains more detailed information about Vista and the Vista
Shares, including information related to (i) each Vista Portfolio's investment
policies and restrictions, (ii) risk factors associated with each Vista
Portfolio's policies and investments, (iii) Vista's Trustees, officers and the
Administrator and the Adviser, (iv) portfolio transactions and brokerage
allocation, (v) the Vista Portfolio'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 such
shares. The audited financial statements for the existing Vista Portfolios for
their last fiscal year end are incorporated by reference into the Vista SAI.
The Vista SAI has been filed with the Commission and is incorporated by
reference into the Statement of Additional Information. A copy of the Vista SAI
may be obtained without charge by writing or calling Vista at the address and
telephone number shown on the cover page of this Prospectus/Proxy Statement.
These Reports and other information filed by Vista can be inspected and copied
at the Public Reference Facilities maintained by the Securities and Exchange
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the New York
regional office of the Securities and Exchange Commission at 26 Federal Plaza,
Room 1028, New York, New York 10007. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, Securities and Exchange Commission, Washington, D.C. 20549
at prescribed rates.
As of November 30, 1995, the officers and Trustees of Vista as a group
owned less than 1% of any of its portfolios and [5% holder information to be
provided]. As of November 30, 1995, the officers and Directors of Hanover as a
group owned less than 1% of any of its portfolios. For information regarding
persons owning 5% or more of the outstanding shares of the Hanover Portfolios,
see the Hanover SAI (as defined below).
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INFORMATION ABOUT HANOVER
Information concerning the operations and management of Hanover is
incorporated herein by reference from its current prospectus and its current
statement of additional information (the "Hanover SAI"), each dated March 30,
1995, copies of which may be obtained without charge by writing or calling
Hanover at the address and telephone number shown on the cover page of this
Prospectus/Proxy Statement. Reports and other information filed by Hanover can
be inspected and copied at the Public Reference Facilities maintained by the
Securities and Exchange Commission, located at 450 Fifth Street, N.W.,
Washington, D.C., and copies of such material can be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549 at prescribed rates.
Hanover will furnish, without charge, a copy of Hanover's Annual Report for
the fiscal year ended November 30, 1995 to a shareholder upon request. Such
requests may be made to the Secretary, The Hanover Funds, Inc., 237 Park Avenue,
New York, New York 10017 (1-800-821-2371).
FINANCIAL STATEMENTS AND EXPERTS
The financial statements of each Vista Portfolio other than Vista 100% U.S.
Treasury Securities Money Market Fund incorporated by reference into this
Prospectus/Proxy Statement have been so incorporated in reliance on the report
of Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in accounting and auditing.
The financial statements of the Hanover 100% U.S. Treasury Securities Money
Market Fund, the Hanover U.S. Treasury Money Market Fund, the Hanover Government
Money Market Fund, the Hanover Cash Management Fund, the Hanover Tax Free Money
Market Fund and the Hanover New York Tax Free Money Market Fund as of November
30, 1994, incorporated by reference into this Prospectus/Proxy Statement, have
been incorporated herein in reliance on the report of KPMG Peat Marwick LLP,
independent certified public accountants, given on the authority of said firm as
experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the Vista
Portfolios will be passed upon by Kramer, Levin, Naftalis, Nessen, Kamin &
Frankel, New York, New York.
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<PAGE> 65
APPENDIX A-1
RATINGS DESCRIPTION*
The ratings of Moody's, Standard & Poor's, Fitch and D&P represent their
opinions as to the quality of various Municipal Obligations. It should be
emphasized, however, that ratings are not absolute standards of quality.
Consequently, Municipal Obligations with the same maturity, coupon and rating
may have different yields while Municipal Obligations of the same maturity and
coupon with different ratings may have the same yield.
DESCRIPTION OF MOODY'S TWO HIGHEST MUNICIPAL BOND RATINGS:
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree investment risk and are generally referred to as "gilt
edge". Interest payments are protected by a large or by exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities, or fluctuation of
protective elements may be of greater amplitude, or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities. Bonds in the Aa category which Moody's believes possess the
strongest investment attributes are designated by the symbol Aa1.
DESCRIPTION OF MOODY'S TWO HIGHEST RATINGS OF STATE AND MUNICIPAL NOTES:
Moody's ratings for state and municipal notes and other short-term loans
are designated Moody's Investment Grade ("MIG"). Such ratings recognize the
differences between short-term credit risk and long-term risk. Factors affecting
the liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important over the short run.
Symbols used are as follows:
MIG-1 -- Notes bearing this designation are of the best quality, enjoying
strong protection from established cash flows of funds for their servicing or
from established and broad-based access to the market for refinancing, or both.
MIG-2 -- Notes bearing this designation are of high quality, with margins
of protection ample although not so large as in the preceding group.
DESCRIPTION OF MOODY'S TWO HIGHEST COMMERCIAL PAPER RATINGS:
Moody's Commercial Paper ratings are opinions of the ability of issuers to
repay punctually promissory obligation not having an original maturity in excess
of nine months. Moody's employs three designations, all judged to be investment
grade, to indicate the relative repayment capacity of rated issuers: Prime-1,
Prime-2 and Prime-3.
Issuer rated Prime-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. Prime-1 repayment
capacity will normally be evidenced by the following characteristics: (1)
leading market positions in well-established industries; (2) high rates of
return on funds employed; (3) conservative capitalization structures with
moderate reliance on debt and ample asset protection; (4) broad margins in
earnings coverage of fixed financial charges and high internal cash generation;
and (5) well-established access to a range of financial markets and assured
sources of alternate liquidity.
- ---------------
*As described by the rating agencies. Ratings are generally given to securities
at the time of issuance. While the rating agencies may from time to time revise
such ratings, they undertake no obligation to do so.
<PAGE> 66
Issuers rated Prime-2 (or related supporting institutions) have a strong
capacity for repayment of short-term promissory obligations. This will normally
be evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be more
affected by external conditions. Ample alternate liquidity is maintained.
DESCRIPTION OF STANDARD & POOR'S TWO HIGHEST MUNICIPAL BOND RATINGS:
AAA -- Bonds rated AAA have the highest rating assigned by Standard &
Poor's. Capacity to pay interest and repay principal is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
DESCRIPTION OF STANDARD & POOR'S RATINGS OF MUNICIPAL NOTES AND TAX-EXEMPT
DEMAND BONDS:
A Standard & Poor's note rating reflects the liquidity concerns and market
access risks unique to notes. Notes due in 3 years or less will likely receive a
note rating. Notes maturing beyond 3 years will most likely receive a long-term
debt rating. The following criteria will be used in making that assessment.
-- Amortization schedule (the larger the final maturity relative to
other maturities the more likely it will be treated as a note).
-- Source of Payment (the more dependent the issue is on the market
for its refinancing, the more likely it will be treated as a note)
Note rating symbols are as follows:
SP-1 -- Very strong or strong capacity to pay principal and interest.
Those issues determined to possess overwhelming safety characteristics are
given a plus (+) designation.
SP-2 -- Satisfactory capacity to pay principal and interest.
Standard & Poor's assigns "dual" ratings to all long-term debt issues that
have as part of their provisions a demand or double feature.
The first rating addresses the likelihood of repayment of principal and
interest as due, and the second rating addresses only the demand feature. The
long-term debt rating symbols are used for bonds to denote the long-term
maturity and the commercial paper rating symbols are used to denote the put
option (for example, "AAA/A-1+"). For the newer "demand notes," Standard &
Poor's note rating symbols, combined with the commercial per symbols, are used
(for example, "SP-1+/A-1+").
DESCRIPTION OF STANDARD & POOR'S TWO HIGHEST COMMERCIAL PAPER RATINGS:
A -- Issues assigned this highest rating are regarded as having the
greatest capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1 -- This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those issues determined to
possess overwhelming safety characteristics will be denoted with a plus (+) sign
designation.
A-2 -- Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high as for issues
designated A-1.
DESCRIPTION OF FITCH'S RATINGS OF MUNICIPAL NOTES AND TAX-EXEMPT DEMAND BONDS
MUNICIPAL BOND RATINGS
The ratings represent Fitch's assessment of the issuer's ability to meet
the obligations of a specific debt issue or class of debt. The ratings take into
consideration special features of the issuer, its relationship to other
A-2
<PAGE> 67
obligations of the issuer, the current financial condition and operative
performance of the issuer and of any guarantor, as well as the political and
economic environment that might affect the issuer's financial strength and
credit quality.
AAA-Bonds rated AAA are considered to be investment grade and of the
highest credit quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by reasonably
foreseeable events.
AA-Bonds rated AA are considered to be investment grade and of very high
credit quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated AAA. Because bonds
rated in the AAA and AA categories are not significantly vulnerable to
foreseeable developments, short-term debt of these issuers is generally rated
F-1.
SHORT-TERM RATINGS
Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of up to three years, including commercial
paper, certificates of deposit, medium-term notes, and municipal and investment
notes.
Although the credit analysis is similar to Fitch's bond rating analysis,
the short-term rating places greater emphasis than bond ratings on the existence
of liquidity necessary to meet the issuer's obligations in a timely manner.
F-1+ -- Exceptionally Strong Credit Quality. Issues assigned this rating
are regarded as having the strongest degree of assurance for timely payment.
F-1 -- Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated F-1+.
F-2 -- Good Credit Quality. Issues carrying this rating have satisfactory
degree of assurance for timely payments, but the margin of safety is not as
great as the F-1+ and F-1 categories.
DESCRIPTION OF D&P'S TWO HIGHEST SHORT-TERM RATING CATEGORIES
D-1+ -- Highest Certainty of Timely Payment. Short-term liquidity,
including internal operating factors and/or access to alternative sources of
funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.
D-1 -- Very High Certainty of Timely Payment. Liquidity factors are
excellent and supported by good fundamental protection factors. Risk factors are
minor.
D-1- -- High Certainty of Timely Payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are very small.
D-2 -- Good Certainty of Timely Payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
A-3
<PAGE> 68
EXHIBIT A
<PAGE> 69
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.
(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
<PAGE> 70
("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 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
2
<PAGE> 71
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.
(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
December 15, 1995 there were outstanding the following numbers of shares of
the MFT Portfolios: 141,507,578.55 shares of Vista Treasury Plus Money
Market Fund (consisting of 57,276,010.49 Premier Shares and 84,231,560.06
Institutional Shares), 2,223,546,134.64 shares of Vista U.S. Government
Money Market Fund (consisting of 357,781,049.38 Vista Shares,
1,062,319,669.24 Premier Shares and 803,445,416.02 Institutional Shares),
909,499,297.91 shares of Vista Global Money Market Fund (consisting of
86,381,957.53 Vista Shares, 499,705,017.41 Premier Shares and
323,412,322.97 Institutional Shares), 444,587,213 shares of Vista Tax Free
Money Market Fund (consisting of 144,649,563 Vista Shares, 182,827,067
Premier Shares and 117,110,583 Institutional Shares), and 391,964,383
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 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
3
<PAGE> 72
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.
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 December 15, 1995, 1995, there were outstanding 1,297,696,923
shares of The 100% U.S. Treasury Securities Money Market Fund,
1,590,651,002 shares of The U.S. Treasury Money Market Fund, 1,564,200,698
shares of The Govern-
4
<PAGE> 73
ment Money Market Fund, 1,648,244,437 shares of The Cash Management Fund,
317,954,363 shares of The Tax Free Money Market Fund, and 260,324,578
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 than 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 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.
(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
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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.
(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
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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:
(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
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therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall apply only to statements in or omissions from the
Registration Statement, Prospectus or Statement of Additional Information
made in reliance upon and in conformity with information furnished by
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, Sub-Transfer
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 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
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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 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 such counsel's
knowledge after reasonable investigation no stop order has been issued or
threatened suspending its effectiveness; (v) to 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 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 such counsel's knowledge, no federal
or New York
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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 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 shareholders' 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 Vista Broker
Dealer Services ("VBDS") in consideration for payment equal to the net
asset value per share of The 100% U.S. Treasury Securities Money Market
Fund of Hanover, and one Vista Share of Vista Treasury Plus Money Market
Fund of MFT to VBDS 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 VBDS 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.
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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 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
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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 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 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 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 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.
(g) Vote by the Sole Shareholder of Vista 100% U.S. Treasury
Securities Money Market Fund. VBDS 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, 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;
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(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. VBDS 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, 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 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.
13
<PAGE> 82
(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 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
14
<PAGE> 83
(b) if to MFT, to it at:
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
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.
15
<PAGE> 84
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.
<TABLE>
<S> <C>
Attest: MUTUAL FUND TRUST
By: By:
---------------------------------------- ------------------------------------------
Attest: THE HANOVER FUNDS, INC.
By: By:
---------------------------------------- ------------------------------------------
</TABLE>
Accepted and agreed to as to Sections 8(c) and 10:
<TABLE>
<S> <C>
CHEMICAL BANKING CORPORATION
By:
----------------------------------------
[ ]
Attorney-in-fact
By: THE CHASE MANHATTAN CORPORATION
----------------------------------------
[ ]
Attorney-in-fact
</TABLE>
16
<PAGE> 85
SCHEDULE I
TO AGREEMENT
CORRESPONDING PORTFOLIOS OF THE HANOVER FUNDS, INC.
AND MUTUAL FUND TRUST
<TABLE>
<CAPTION>
HANOVER PORTFOLIOS CORRESPONDING MFT PORTFOLIOS
<S> <C>
The 100% U.S. Treasury Securities Money Vista 100% U.S. Treasury Securities Money
Market Fund 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 Market Fund Vista New York Tax Free Money Market Fund
</TABLE>
<PAGE> 86
APPENDIX FOR GRAPHIC AND IMAGE MATERIAL
Pursuant to Rule 304 of Regulation S-T, the following table presents fair
and accurate narrative descriptions of graphic and image material omitted from
this EDGAR Submission File due to ASCII-incompatibility and cross-references
this material to the location of each occurrence in the text.
<TABLE>
<S> <C>
DESCRIPTION OF OMITTED LOCATION OF GRAPHIC OR IMAGE
GRAPHIC OR IMAGE IN TEXT
------------------------------------------ --------------------------------------------
Gray shading in table Page 6 of prospectus, at third and fourth
columns of table
</TABLE>
<PAGE> 87
PART B
<PAGE> 88
STATEMENT OF ADDITIONAL INFORMATION
MUTUAL FUND TRUST
This Statement of Additional Information is not a prospectus. A
Prospectus/Proxy Statement, dated , 1996 may be obtained by
writing or calling Mutual Fund Trust at 12 W. 55th Street, New York, New York
10022 (1-800-34-VISTA). Further information about Mutual Fund Trust is contained
in and incorporated by reference into its Statement of Additional Information
dated October 28, 1994 and its preliminary Statement of Additional Information
relating to the Vista 100% U.S. Treasury Securities Money Market Fund dated
December 28, 1995, which are incorporated herein by reference. Also incorporated
herein by reference are the audited financial statements of Mutual Fund Trust
relating to the Vista Treasury Plus Money Market Fund, the Vista U.S. Government
Money Market Fund, the Vista Cash Management Fund (currently known as the Vista
Global Money Market Fund), the Vista Tax Free Money Market Fund and the Vista
New York Tax Free Money Market Fund included in the Annual Report to
Shareholders of Mutual Fund Trust for the fiscal year ended August 31, 1995, and
the audited financial statements of The Hanover Funds, Inc. relating to the
Hanover 100% U.S. Treasury Securities Money Market Fund for the fiscal year
ended November 30, 1994.
, 1996
<PAGE> 89
MUTUAL FUND TRUST
PRO-FORMA FINANCIAL STATEMENTS
PF-1
<PAGE> 90
VISTA U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TREASURY PLUS TREASURY PLUS U.S. TREASURY U.S. TREASURY COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government
Obligations --
U.S. Treasury Note,
6.125, 07/31/96..... $2,000,000 $ 2,010,571 $ -- $ -- $ 2,000,000 $ 2,010,571
7.875%, 07/15/96.... -- -- 36,500,000 37,095,000 36,500,000 37,095,000
6.250%, 08/31/96.... -- -- 25,000,000 25,067,716 25,000,000 25,067,716
---------- -------------- --------------
Total U.S. Government
Obligations......... 2,010,571 62,162,716 64,173,287
---------- -------------- --------------
U.S. Treasury Bills
09/07/95............ -- -- 150,000,000 149,873,333 150,000,000 149,873,333
09/21/95............ -- -- 15,000,000 14,955,000 15,000,000 14,955,000
09/28/95............ -- -- 299,450,000 298,258,528 299,450,000 298,258,528
10/19/95............ -- -- 50,000,000 49,639,333 50,000,000 49,639,333
10/26/95............ -- -- 100,000,000 99,188,750 100,000,000 99,188,750
11/02/95............ -- -- 115,000,000 113,954,698 115,000,000 113,954,698
12/21/95............ -- -- 100,000,000 98,347,333 100,000,000 98,347,333
07/25/96............ -- -- 12,500,000 11,892,403 12,500,000 11,892,403
---------- -------------- --------------
Total U.S. Treasury
Bills............... -- 836,109,378 836,109,378
---------- -------------- --------------
Total U.S. Treasury
Obligations......... 2,010,571 898,272,094 900,282,665
---------- -------------- --------------
Repurchase
Agreements --
Scotia McLeod, 5.70%,
due 9/1/95,
(Dated 8/31/95;
Proceeds $5,000,792,
Secured by
$5,010,000 U.S.
Treasury Note
6.125%, due 7/31/96;
Market Value
$5,057,820)......... 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
Hong Kong-Shanghai
Banking Corp.,
5.70%, due 9/1/95,
(Dated 8/31/95;
Proceeds $4,302,681,
Secured by
$4,080,000 U.S.
Treasury Note 7.75%,
due 11/30/99; Market
Value $4,413,433)... 4,302,000 4,302,000 -- -- 4,302,000 4,302,000
Goldman Sachs & Co.,
5.70%, due 9/1/95,
(Dated 8/31/95;
Proceeds $8,301,314,
Secured by
$8,515,000 U.S.
Treasury Note,
5.625%, due 8/31/97;
Market Value
$8,480,393)......... 8,300,000 8,300,000 -- -- 8,300,000 8,300,000
Merrill Lynch,
5.75%, due 9/1/95,
(Dated 8/31/95;
Proceeds $8,301,326,
Secured by
$7,690,000 U.S.
Treasury Note,
9.00%, due 5/15/98;
Market Value
$8,474,150)......... 8,300,000 8,300,000 -- -- 8,300,000 8,300,000
Morgan Stanley & Co.
Inc.
5.77%, due 9/1/95,
(Dated 8/31/95;
Proceeds
$125,020,035,
Secured by
$127,280,000 U.S.
Treasury Notes,
5.125%, due
3/31/98)............ -- -- 125,000,000 125,000,000 125,000,000 125,000,000
Deutsche Bank
Government
Securities Inc.
5.80%, due 9/1/95,
(Dated 8/31/95;
Proceeds
$100,016,111,
Secured by
$95,455,000 U.S.
Treasury Notes,
6.375%, due
07/15/99)........... -- -- 100,000,000 100,000,000 100,000,000 100,000,000
Donaldson Lufkin &
Jenrette Securities
Corp. 5.80%, due
9/1/95, (Dated
8/31/95; Proceeds
$80,012,889, Secured
by $81,726,000 U.S.
Treasury Notes,
5.50%- 5.875%, due
07/31/97-08/15/98).. -- -- 80,000,000 80,000,000 80,000,000 80,000,000
Morgan (J.P.)
Securities Inc.
5.80%, due 9/1/95,
(Dated 8/31/95;
Proceeds
$125,020,139,
Secured by
$121,526,000 U.S.
Treasury Notes,
6.75%- 6.875%, due
03/31/00-04/30/00)... -- -- 125,000,000 125,000,000 125,000,000 125,000,000
</TABLE>
See notes to financial statements.
PF-2
<PAGE> 91
VISTA U.S. TREASURY MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TREASURY PLUS TREASURY PLUS U.S. TREASURY U.S. TREASURY COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------- ---------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Nomura Securities
Int'l, Inc.
5.80%, due 9/1/95,
(Dated 8/31/95;
Proceeds
$125,020,139,
Secured by
$125,165,000 U.S.
Treasury Notes,
6.00% - 6.375%, due
07/15/99 -
10/15/99)........... $ -- $ -- $125,000,000 $ 125,000,000 $125,000,000 $ 125,000,000
Sanwa BGK Securities,
Inc.
5.80%, due 9/1/95,
(Dated 8/31/95;
Proceeds
$75,012,083, Secured
by $73,489,000 U.S.
Treasury Notes,
6.625% - 6.875%, due
03/31/97)........... -- -- 75,000,000 75,000,000 75,000,000 75,000,000
Aubrey G. Lanston,
5.85%, due 9/1/95,
(Dated 8/31/95;
Proceeds $8,301,349,
Secured by
$8,301,000 U.S.
Treasury Note,
5.875%, due 3/31/99;
Market Value
$8,475,171)......... 8,300,000 8,300,000 -- -- 8,300,000 8,300,000
Goldman Sachs & Co.
5.85%, due 9/1/95,
(Dated 8/31/95;
Proceeds
$80,013,000, Secured
by $80,205,000 U.S.
Treasury Notes,
6.375%, due
01/15/99)........... -- -- 80,000,000 80,000,000 80,000,000 80,000,000
---------- -------------- --------------
Total Repurchase
Agreements.......... 34,202,000 710,000,000 744,202,000
---------- -------------- --------------
TOTAL INVESTMENTS..... $ 36,212,571 $ 1,608,272,094 $ 1,644,484,665
========== ============== ==============
</TABLE>
See notes to financial statements.
PF-3
<PAGE> 92
VISTA US TREASURY MONEY MARKET FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER
TREASURY PLUS US TREASURY PRO FORMA PRO FORMA
MMF MMF ADJUSTMENTS COMBINED
------------- -------------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value.......... $36,212,571 $1,608,272,094 $ 0 $1,644,484,665
Cash..................................... 4 7,324,903 15,782(6) 7,340,689
Receivables
Interest............................... 16,114 1,274,856 0 1,290,970
Expense reimbursement from
Distributor.......................... 57,744 0 0 57,744
Prepaid insurance........................ 0 28,830 0 28,830
Unamortized organizational expenses...... 0 15,782 (15,782)(6) 0
------------- -------------- ----------- --------------
Total assets...................... 36,286,433 1,616,916,465 0 1,653,202,898
------------- -------------- ----------- --------------
LIABILITIES:
Dividends payable........................ 14,291 6,986,401 0 7,000,692
Other liabilities........................ 1,206 6,872 0 8,078
Accrued liabilities:
Administration fee..................... 0 75,728 0 75,728
Advisory fee........................... 0 172,662 0 172,662
Custodian fees......................... 12,498 103,623 0 116,121
Professional........................... 0 30,277 0 30,277
Shareholder servicing fees............. 0 501,823 0 501,823
Fund accounting........................ 0 12,522 0 12,522
Sub-administration fee................. 0 43,165 0 43,165
Other.................................. 50,959 62,140 0 113,099
------------- -------------- ----------- --------------
Total liabilities................. 78,954 7,995,213 0 8,074,167
------------- -------------- ----------- --------------
NET ASSETS:
Paid in capital.......................... 36,207,479 1,608,955,594 0 1,645,163,073
Accumulated undistributed net realized
gain (loss) on investment
transactions........................... 0 (34,342) 0 (34,342)
------------- -------------- ----------- --------------
Net assets........................... $36,207,479 $1,608,921,252 $ 0 $1,645,128,731
============ ============== =========== ==============
Net assets by class
Vista.................................. $ 0 $1,608,921,252 $ 0 $1,608,921,252
------------- -------------- ----------- --------------
Premier................................ 18,572,280 0 0 18,572,280
------------- -------------- ----------- --------------
Institutional.......................... 17,635,199 0 0 17,635,199
------------- -------------- ----------- --------------
Total combined net assets by class... $36,207,479 $1,608,921,252 $ 0 $1,645,128,731
============ ============== =========== ==============
Shares of beneficial interest outstanding
(no par value; unlimited number of
shares authorized):
Vista Shares........................... 0 1,608,955,594 0 1,608,955,594
============ ============== =========== ==============
Premier Shares......................... 18,572,280 0 0 18,572,280
============ ============== =========== ==============
Institutional Shares................... 17,635,199 0 0 17,635,199
============ ============== =========== ==============
Net asset value, offering and redemption
price per share, Vista, Premier and
Institutional (net assets/shares
outstanding)........................... $1.00 $1.00 $0.00 $1.00
============ ============== =========== ==============
Cost of Investments...................... $36,212,571 $1,608,272,094 $ 0 $1,644,484,665
============ ============== =========== ==============
</TABLE>
See notes to financial statements.
PF-4
<PAGE> 93
VISTA US TREASURY MONEY MARKET FUND
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER
TREASURY PLUS US TREASURY PRO FORMA PRO FORMA
MMF MMF ADJUSTMENTS COMBINED
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME................................ $ 1,259,757 $75,014,272 $ 0 $76,274,029
------------- ----------- ----------- -----------
EXPENSES
Distribution fees
Vista Shares............................... 0 0 1,608,921(1) 1,608,921
Premier Shares............................. 0 0 0 0
Institutional Shares....................... 0 0 0 0
Fund Servicing fees
Vista Shares............................... 0 0 0 0
Premier Shares............................. 2,971 0 (2,971)(2) 0
Institutional Shares....................... 0 0 0 0
Shareholder Servicing fees
Vista Shares............................... 0 4,722,021 909,203(1) 5,631,224
Premier Shares............................. 2,971 0 743(3) 3,714
Institutional Shares....................... 0 0 0 0
Administration fees.......................... 11,331 590,588 213,873(1) 815,792
Advisory fees................................ 22,663 2,023,723 (414,802)(1) 1,631,584
Sub-Administration fees...................... 11,331 404,744 399,717(1) 815,792
Professional fees............................ 8,659 62,692 (8,659)(6) 62,692
Custodian fees............................... 52,775 229,747 (74,116)(4) 208,406
Printing and postage......................... 1,003 25,202 0 26,205
Registration costs........................... 23,174 140,213 0 163,387
Fund Accounting.............................. 0 24,733 (24,733)(6) 0
Insurance.................................... 0 24,850 0 24,850
Transfer agent fees
Vista Shares............................... 0 51,046 904,958(5) 956,004
Premier Shares............................. 18,524 0 11,603(5) 30,127
Institutional Shares....................... 19,973 0 6,725(5) 26,698
Trustee fees................................. 3,281 16,020 62,720(7) 82,021
Amortization of organizational costs......... 0 19,768 (19,768)(6) 0
Other........................................ 43,680 50,090 0 93,770
------------- ----------- ----------- -----------
Total expenses........................ 222,336 8,385,437 3,573,415 12,181,188
------------- ----------- ----------- -----------
Less amounts waived by the Administrator,
Shareholder Servicing Agents, Adviser
and Distributor....................... 51,267 474,021 1,888,094(8) 2,413,382
Less expenses borne by Distributor....... 93,200 0 (93,200)(8) 0
------------- ----------- ----------- -----------
Net expenses............................. 77,869 7,911,416 1,778,521 9,767,806
------------- ----------- ----------- -----------
Net investment income................. 1,181,888 67,102,856 (1,778,521) 66,506,223
------------- ----------- ----------- -----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS
Realized gain (loss) on investment
transactions............................... 3,586 3,536 0 7,122
------------- ----------- ----------- -----------
Net increase in net assets from operations... $ 1,185,474 $67,106,392 $(1,778,521) $66,513,345
============ ============ ============ ============
</TABLE>
See notes to financial statements.
PF-5
<PAGE> 94
VISTA U.S. GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER
U.S. GOV'T U.S. GOV'T U.S. GOV'T U.S. GOV'T COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- -------------------------------------- ------------ -------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
U.S. Government Agency and Agency
Sponsored Obligations--
Federal Farm Credit Bank,
5.875%, due 09/03/96................ $ 25,000,000 $ 24,977,122 $ -- $ -- $ 25,000,000 $ 24,977,122
5.750%, due 08/01/96................ 40,000,000 39,945,285 50,000,000 49,953,688 90,000,000 89,898,973
5.750%, due 09/09/96................ -- -- 13,685,000 13,660,009 13,685,000 13,660,009
-------------- -------------- --------------
64,922,407 63,613,697 114,876,095
-------------- -------------- --------------
Federal Farm Credit Bank, DN,
6.050%, due 10/06/95................ 15,000,000 14,911,771 -- -- 15,000,000 14,911,771
-------------- -------------- --------------
Federal Home Loan Bank,
5.750%, due 07/18/96................ 25,000,000 25,000,000
5.980%, due 07/08/96................ -- -- 50,000,000 49,987,289 50,000,000 49,987,289
5.970%, due 07/18/96................ -- -- 50,000,000 50,000,000 50,000,000 50,000,000
6.050%, due 08/22/96................ -- -- 40,000,000 40,000,000 40,000,000 40,000,000
6.100%, due 09/05/96................ -- -- 30,000,000 30,000,000 30,000,000 30,000,000
-------------- -------------- --------------
25,000,000 169,987,289 169,987,289
-------------- -------------- --------------
Federal Home Loan Bank, FRDN,
6.000%, due 09/01/95................ 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
-------------- -------------- --------------
Federal Home Loan Bank, DN,
5.670%, due 09/01/95................ 100,000,000 100,000,000 -- -- 100,000,000 100,000,000
5.700%, due 09/01/95................ 125,000,000 125,000,000 -- -- 125,000,000 125,000,000
-------------- -------------- --------------
225,000,000 -- 225,000,000
-------------- -------------- --------------
Federal Home Loan Mortgage Corp. DN
due 09/12/95........................ -- -- 32,458,000 32,401,171 32,458,000 32,401,171
due 09/20/95........................ -- -- 200,000,000 199,401,500 200,000,000 199,401,500
due 09/21/95........................ -- -- 48,525,000 48,371,338 48,525,000 48,371,338
due 09/25/95........................ -- -- 81,775,000 81,462,619 81,775,000 81,462,619
-------------- -------------- --------------
-- 361,636,628 361,636,628
-------------- -------------- --------------
Federal National Mortgage Association
("FNMA"),
6.270%, due 04/03/96................ 10,000,000 10,004,763 -- -- 10,000,000 10,004,763
5.580%, due 09/06/95................ 25,000,000 25,000,000 -- -- 25,000,000 25,000,000
-------------- -------------- --------------
35,004,763 -- 35,004,763
-------------- -------------- --------------
Federal National Mortgage Association
("FNMA"), DN,
5.980%, due 10/03/95................ 10,000,000 9,946,844 -- -- 10,000,000 9,946,844
5.900%, due 11/13/95................ 25,000,000 24,700,903 -- -- 25,000,000 24,700,903
5.660%, due 09/01/95................ 35,000,000 35,000,000 -- -- 35,000,000 35,000,000
5.800%, due 10/13/95................ 15,025,000 14,923,331 -- -- 15,025,000 14,923,331
6.080%, due 01/19/96................ 10,000,000 9,763,556 -- -- 10,000,000 9,763,556
5.910%, due 09/11/95................ 25,000,000 24,958,958 -- -- 25,000,000 24,958,958
5.670%, due 09/08/95................ 78,735,000 78,648,195 -- -- 78,735,000 78,648,195
5.895%, due 10/20/95................ 25,000,000 24,799,406 -- -- 25,000,000 24,799,406
5.950%, due 11/03/95................ 15,000,000 14,843,813 -- -- 15,000,000 14,843,813
5.670%, due 09/05/95................ 60,000,000 59,962,200 -- -- 60,000,000 59,962,200
due 09/01/95........................ -- -- 60,000,000 60,000,000 60,000,000 60,000,000
due 09/14/95........................ -- -- 100,000,000 99,794,528 100,000,000 99,794,528
due 09/18/95........................ -- -- 150,000,000 149,596,958 150,000,000 149,596,958
-------------- -------------- --------------
297,547,206 309,391,486 606,938,692
-------------- -------------- --------------
Fidelity Federal Bank (Backed by
Irrevocable LOC by FHLB), DN,
5.880%, due 11/13/95................ 15,000,000 14,821,150 -- -- 15,000,000 14,821,150
5.440%, due 07/12/96................ 5,000,000 4,762,000 -- -- 5,000,000 4,762,000
6.030%, due 10/05/95................ 10,000,000 9,943,050 -- -- 10,000,000 9,943,050
5.980%, due 07/08/96................ 10,000,000 9,998,390 -- -- 10,000,000 9,998,390
-------------- -------------- --------------
39,524,590 -- 39,524,590
-------------- -------------- --------------
Student Loan Marketing Association,
FRDN,
5.690%, due 09/06/95................ 25,000,000 24,991,942 -- -- 25,000,000 24,991,942
</TABLE>
See notes to financial statements.
PF-6
<PAGE> 95
VISTA U.S. GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER
U.S. GOV'T U.S. GOV'T U.S. GOV'T U.S. GOV'T COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- -------------------------------------- ------------ -------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
5.710%, due 09/06/95................ $ 15,000,000 $ 15,002,231 $ -- $ -- $ 15,000,000 $ 15,002,231
5.720%, due 09/06/95................ 25,000,000 25,000,000 -- -- 25,000,000 25,000,000
5.670%, due 09/06/95................ 25,000,000 25,000,236 -- -- 25,000,000 25,000,236
5.710%, due 09/06/95................ 24,000,000 24,004,127 -- -- 24,000,000 24,004,127
5.710%, due 09/06/95................ 25,000,000 25,000,000 -- -- 25,000,000 25,000,000
5.720%, due 09/06/95................ 25,000,000 25,000,000 -- -- 25,000,000 25,000,000
5.700%, due 09/05/95................ -- -- 50,000,000 50,000,000 50,000,000 50,000,000
5.710%, due 09/05/95................ -- -- 77,000,000 76,992,529 77,000,000 76,992,529
5.850%, due 09/05/95................ -- -- 45,000,000 45,129,916 45,000,000 45,129,916
-------------- -------------- --------------
163,998,536 172,122,445 336,120,981
-------------- -------------- --------------
Total U.S. Government Agency and
Sponsored Agency Obligations........ 870,909,273 1,076,751,545 1,947,660,818
-------------- -------------- --------------
Repurchase Agreements--
Bear Stearns,
Dated 8/28/95; Proceeds
$150,337,167, 5.780%, due 09/11/95
Secured by FNMA REMICS; $17,702,185
at 6.00%, due 8/25/20; $26,400,000
at 7.00%, due 4/25/23; $46,612,756
at 6.50%, due 4/25/08; $15,940,429
at 6.50%, due 3/25/23; $19,718,294
at 7.00% due 9/25/22; $4,370,000 at
6.25%, due 1/15/20; and $30,000,000
at 7.00%, due 12/15/07; Market Value
$153,206,831........................ 150,000,000 150,000,000 -- -- 150,000,000 150,000,000
CS First Boston,
Dated 8/29/95; Proceeds
$150,168,583, 5.780%, due 09/05/95
Secured by FNMA REMICS; $22,710,000
at 7.269%, due 2/25/22; $23,803,246
at 6.769%, due 10/25/20; 38,995,767
at 6.00%, due 4/25/21; and FHLMC
REMICS; $23,283,752 at 6.5%, due
1/15/24; $25,574,641 at 5.50%, due
11/15/08; Market Value
$153,622,741........................ 150,000,000 150,000,000 -- -- 150,000,000 150,000,000
Donaldson, Lufkin & Jenrette
Securities Corp.
Dated 8/31/95, Proceeds $150,024,167
5.800%, due 09/01/95 Secured by:
$50,000,000 U.S. Treasury Bill,
11/09/95 $99,915,000 U.S. Treasury
Notes, 7.125%-7.625%, due
5/31/96-2/15/23..................... -- -- 150,000,000 150,000,000 150,000,000 150,000,000
Fuji Securities Inc.
Dated 08/31/95, Proceeds
$100,016,111 5.800%, due 09/01/95
Secured by:
$99,720,000 U.S. Treasury Notes,
4.375%-6.75%, due
9/30/96-10/31/98.................... -- -- 100,000,000 100,000,000 100,000,000 100,000,000
Morgan (J.P.) Securities Inc.
Dated 08/31/95, Proceeds
$150,024,167 5.800%, due 09/01/95
Secured by:
$135,378,000 U.S. Treasury Notes,
7.875%-8.125%, due
08/15/19-02/15/21................... -- -- 150,000,000 150,000,000 150,000,000 150,000,000
Nikko Securities,
Dated 8/31/95; Proceeds
$150,024,000, 5.760%, due 09/05/95
Secured by FNMA REMICS totaling
$114,307,902 at 7.00%, due 8/1/25;
FHLMC Pool; $29,266,162 at 6.668%,
due 12/1/23; PC Gold Pool;
$11,776,288 at 8.5%, due 1/1/25;
Market Value $153,403,069........... 150,000,000 150,000,000 -- -- 150,000,000 150,000,000
</TABLE>
See notes to financial statements.
PF-7
<PAGE> 96
VISTA U.S. GOVERNMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER
U.S. GOV'T U.S. GOV'T U.S. GOV'T U.S. GOV'T COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- -------------------------------------- ------------ -------------- ------------ -------------- ------------ --------------
<S> <C> <C> <C> <C> <C> <C>
Prudential-Bache Securitites,
Dated 8/30/95; Proceeds
$150,168,292, 5.770%, due 09/06/95
Secured by FNMA REMIC; 5.77%, due
9/6/95, $20,000,000 at 5.00%, due
3/25/12, FNMA ARM Pool: $25,578,040
at 6.391%, due 4/1/34 and by FHLMC
REMICS; $21,617,020 at 6.368%, due
11/15/08; $19,000,000 at 9.30%, due
8/15/20; $25,000,000 at 6.50% due
9/15/23; $28,000,000 at 7.00%, due
1/15/07, and FHLMC ARM Pool;
$15,317,792 at 8.115%, due 7/1/23;
Market Value $153,025,974).......... $150,000,000 $ 150,000,000 $ -- $ -- $150,000,000 $ 150,000,000
Sanwa Bank,
Dated 8/31/95; Proceeds
$110,610,101, 5.730%, due 09/07/95
Secured by U.S. Treasury Notes;
$25,000,000 at 7.875%, due 8/15/01;
$47,444,000 at 7.125%, due 2/15/23;
$25,377,000 at 6.250%, due 8/31/96;
$9,384,000 at 7.875%, due 2/15/21;
Market Value $113,648,880).......... 110,487,000 110,487,000 -- -- 110,487,000 110,487,000
-------------- -------------- --------------
TOTAL REPURCHASE AGREEMENTS........... 710,487,000 400,000,000 1,110,487,000
-------------- -------------- --------------
TOTAL INVESTMENTS..................... $1,581,396,273 $1,476,751,545 $3,058,147,818
============= ============= =============
</TABLE>
DN = Discount Note
GNMA = Government National Mortgage Association
FHLMC = Federal Home Loan Mortgage Corp.
REMIC = Real Estate Mortgage Investment Conduit
LOC = Letter of Credit
FRDN = Floating Rate Demand Notes: The maturity date shown is the next interest
reset date; the rate shown is the rate in effect at August 31, 1995.
See notes to financial statements.
PF-8
<PAGE> 97
VISTA US GOVERNMENT MONEY MARKET FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER GOV'T PRO FORMA PRO FORMA
US GOV'T MMF MMF ADJUSTMENTS COMBINED
------------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value.......... $1,581,396,273 $1,476,751,545 $ 0 $3,058,147,818
Cash..................................... 0 9,553,675 32,502(6) 9,586,177
Receivables
Investment securities sold.......... 0 25,001,953 0 25,001,953
Interest............................ 2,613,140 2,398,192 0 5,011,332
Shares of beneficial interest
sold.............................. 276,241 0 0 276,241
Other receivables................... 5,000,000 0 0 5,000,000
Unamortized organizational expenses...... 0 32,502 (32,502)(6) 0
------------- ------------- ----------- -------------
Total assets.................... 1,589,285,654 1,513,737,867 0 3,103,023,521
------------- ------------- ----------- -------------
LIABILITIES:
Payable for investment securities
purchased.............................. 0 55,000,000 0 55,000,000
Payable for shares of beneficial interest
redeemed............................... 9,753,167 10,546 0 9,763,713
Payable to Custodian..................... 4,999,300 0 0 4,999,300
Dividends payable........................ 2,507,366 6,553,266 0 9,060,632
Accrued liabilities:
Administration fee.................. 67,786 106,580 0 174,366
Advisory fee........................ 134,111 152,092 0 286,203
Custodian fees...................... 79,066 38,311 0 117,377
Distribution fee.................... 94,127 (10,068) 0 84,059
Fund servicing fees................. 61,603 0 0 61,603
Shareholder servicing fees.......... 138,367 443,602 0 581,969
Sub-administration fee.............. 67,786 0 0 67,786
Other............................... 354,939 75,653 0 430,592
------------- ------------- ----------- -------------
Total liabilities............... 18,257,618 62,369,982 0 80,627,600
------------- ------------- ----------- -------------
NET ASSETS
Paid in capital.......................... 1,571,026,583 1,451,720,872 0 3,022,747,455
Accumulated undistributed net realized
gain (loss) on investment
transactions........................... 1,453 (352,987) 0 (351,534)
------------- ------------- ----------- -------------
Net assets...................... $1,571,028,036 $1,451,367,885 0 $3,022,395,921
============== ============== =========== ==============
Net assets by class
Vista............................... $ 341,335,948 $1,451,367,885 0 $1,792,703,833
------------- ------------- ----------- -------------
Premier............................. 763,609,176 0 0 763,609,176
------------- ------------- ----------- -------------
Institutional....................... 466,082,912 0 0 466,082,912
------------- ------------- ----------- -------------
Total combined net assets by
class......................... $1,571,028,036 $1,451,367,885 0 $3,022,395,921
============== ============== =========== ==============
Shares of beneficial interest outstanding
(no par value; unlimited number of
shares authorized):
Vista Shares........................ 341,335,448 1,451,720,872 0 1,793,056,320
============== ============== =========== ==============
Premier Shares...................... 763,608,676 0 0 763,608,676
============== ============== =========== ==============
Institutional Shares................ 466,082,459 0 0 466,082,459
============== ============== =========== ==============
Net asset value, offering and redemption
price per share, Vista, Premier and
Institutional (net assets/shares
outstanding)........................... $ 1.00 $ 1.00 0 $ 1.00
============== ============== =========== ==============
Cost of Investments...................... $1,581,396,273 $1,473,003,982 0 $3,054,400,255
============== ============== =========== ==============
</TABLE>
See notes to financial statements.
PF-9
<PAGE> 98
VISTA US GOVERNMENT MONEY MARKET FUND
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER PRO FORMA PRO FORMA
US GOV'T MMF GOV'T MMF ADJUSTMENTS COMBINED
------------ ----------- ----------- ------------
<S> <C> <C> <C> <C>
INTEREST INCOME........................ $83,335,925 $71,718,948 $ 0 $155,054,873
------------ ----------- ----------- ------------
EXPENSES
Distribution fees
Vista Shares.................. 326,670 0 1,451,368(1) 1,778,038
Premier Shares................ 684,952 0 0 684,952
Institutional Shares.......... 0 0 0 0
Fund Servicing fees
Vista Shares.................. 326,670 25,382 (352,052)(1),(2) 0
Premier Shares................ 684,952 0 (684,952)(2) 0
Institutional Shares.......... 0 0 0 0
Shareholder Servicing fees
Vista Shares.................. 816,674 4,512,358 894,099(1),(3) 6,223,131
Premier Shares................ 684,952 0 171,238(3) 856,190
Institutional Shares.......... 0 0 0 0
Administration fees................ 720,093 565,952 159,732(1) 1,445,777
Advisory fees...................... 1,440,186 1,933,868 (482,500)(1) 2,891,554
Sub-Administration fees............ 720,093 386,773 338,911(1) 1,445,777
Professional fees.................. 105,210 61,935 (61,935)(6) 105,210
Custodian fees..................... 407,465 71,465 (154,907)(4) 324,023
Printing and postage............... 25,389 23,731 0 49,120
Registration costs................. 150,863 208,301 0 359,164
Insurance.......................... 0 20,579 0 20,579
Transfer agent fees
Vista Shares.................. 294,003 64,242 143,767(5) 502,012
Premier Shares................ 190,562 0 110,354(5) 300,916
Institutional Shares.......... 89,603 0 26,675(5) 116,278
Trustee fees....................... 81,167 16,000 53,521(7) 150,688
Amortization of organizational
costs........................... 0 6,485 (6,485)(6) 0
Other.............................. 94,016 19,463 0 113,479
------------ ----------- ----------- ------------
Total expenses........... 7,843,520 7,916,534 1,606,834 17,366,888
------------ ----------- ----------- ------------
Less amounts waived by the
Administrator, Shareholder
Servicing Agents, Adviser
and Distributor............. (259,057 ) (386,773) (1,963,580)(8) (2,609,410)
Less expenses borne by
Distributor................. (34,709 ) 0 34,709(8) 0
------------ ----------- ----------- ------------
Net expenses.................. 7,549,754 7,529,761 (322,037) 14,757,478
------------ ----------- ----------- ------------
Net investment income.... 75,786,171 64,189,187 322,037 140,297,395
------------ ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN/ (LOSS) ON
INVESTMENTS
Realized gain (loss) on investment
transactions.................... 1,453 (249,790) 0 (248,337)
------------ ----------- ----------- ------------
Net increase in net assets from
operations...................... $75,787,624 $63,939,397 $ 322,037 $140,049,058
============= ============ ============ =============
</TABLE>
See notes to financial statements.
PF-10
<PAGE> 99
VISTA CASH MANAGEMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
GLOBAL GLOBAL CASH MGMT. CASH MGMT. COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Corporate Bonds &
Notes--
Ciesco Limited
Partnership 6.62%,
due 02/26/96........ $ -- $ -- $ 10,000,000 $ 9,998,088 $ 10,000,000 $ 9,998,088
FCC National Bank Note
6.51%, due
05/02/96............ -- -- 10,000,000 10,005,144 10,000,000 10,005,144
First National Bank of
Baltimore, Maryland,
6.063%, due
09/27/95............ 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
Ford Motor Credit
Corp.,
8.875%, due
03/15/96............ 3,325,000 3,374,485 -- -- 3,325,000 3,374,485
General Electric
Capital Corp. 7.85%,
due 07/18/96........ -- -- 13,000,000 13,193,884 13,000,000 13,193,884
Household Finance
Corp.,
9.000%, due
09/01/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Huntington National
Bank 5.80%, due
11/27/95............ -- -- 13,000,000 13,004,108 13,000,000 13,004,108
International Lease
Finance Corp.,
4.875%, due
09/15/95............ 14,500,000 14,495,034 -- -- 14,500,000 14,495,034
7.800%, due
09/18/95.......... 1,000,000 1,000,771 -- -- 1,000,000 1,000,771
J.P. Morgan & Co.,
Inc. Delaware 5.75%,
due 08/07/96........ -- -- 2,000,000 1,999,115 2,000,000 1,999,115
Morgan Guaranty Trust
Co. 6.05%, due
08/21/96............ -- -- 10,000,000 10,000,000 10,000,000 10,000,000
Paccar Financial
Corp.,
4.770%, due
10/10/95............ 1,000,000 998,708 -- -- 1,000,000 998,708
Philip Morris Co.,
9.400%, due
10/01/95............ 3,385,000 3,393,845 -- -- 3,385,000 3,393,845
Society National Bank,
6.000%, due
04/25/96............ 2,000,000 1,999,548 -- -- 2,000,000 1,999,548
Toyota Motor Credit
Corp.,
5.800%, due
08/16/96............ 12,000,000 11,989,470 -- -- 12,000,000 11,989,470
6.740%, due
03/18/96.......... -- -- 25,000,000 25,018,440 25,000,000 25,018,440
U.S. Leasing
International, Inc.,
8.750%, due
05/01/96............ 10,765,000 10,948,943 -- -- 10,765,000 10,948,943
WMX Technologies
Family Waste
Management Co.
4.875%, due
06/15/96............ -- -- 10,000,000 9,914,132 10,000,000 9,914,132
----------- -------------- --------------
Total Corporate Bonds
& Notes............. 54,200,804 93,132,911 147,333,715
----------- -------------- --------------
Commercial Paper --
AAA Funding Corp,#
5.780%, due
09/15/95............ 18,000,000 17,959,540 -- -- 18,000,000 17,959,540
5.780%, due
09/20/95.......... 12,296,000 12,258,490 -- -- 12,296,000 12,258,490
5.750%, due
10/13/95.......... 9,297,000 9,234,633 -- -- 9,297,000 9,234,633
Abbott Laboratories
5.820%, due
09/06/95............ -- -- 15,000,000 14,988,083 15,000,000 14,988,083
Aes Shady Point
Energy, Inc.,
5.800%, due
09/18/95............ 15,000,000 14,958,917 -- -- 15,000,000 14,958,917
5.850%, due
09/25/95.......... 20,000,000 19,922,000 -- -- 20,000,000 19,922,000
American Express
Credit Corp.:
6.380%, due
09/11/95............ -- -- 8,000,000 7,986,445 8,000,000 7,986,445
6.110%, due
09/14/95.......... -- -- 19,000,000 18,959,451 19,000,000 18,959,451
American Telephone &
Telegraph Co.:
6.010%, due
09/14/95............ -- -- 17,000,000 16,964,149 17,000,000 16,964,149
due 10/05/95........ -- -- 14,000,000 13,925,691 14,000,000 13,925,691
Anheuser-Busch Cos.,
Inc.
6.110%, due
09/01/95............ -- -- 14,500,000 14,500,000 14,500,000 14,500,000
Associates Corp. North
America
5.860%, due
09/05/95............ -- -- 20,000,000 19,987,334 20,000,000 19,987,334
Broadway Capital,#
5.760%, due
09/11/95............ 10,000,000 9,984,000 -- -- 10,000,000 9,984,000
5.750%, due
11/22/95.......... 5,000,000 4,934,514 -- -- 5,000,000 4,934,514
Cargill, Inc.
5.790%, due
10/17/95............ -- -- 20,000,000 19,855,356 20,000,000 19,855,356
5.800%, due
11/03/95.......... -- -- 10,000,000 9,901,300 10,000,000 9,901,300
</TABLE>
See notes to financial statements.
PF-11
<PAGE> 100
VISTA CASH MANAGEMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
GLOBAL GLOBAL CASH MGMT. CASH MGMT. COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Caterpillar, Inc.
5.890%, due
09/11/95............ $ -- $ -- $ 3,000,000 $ 2,995,192 $ 3,000,000 $ 2,995,192
Cemex,
5.770%, due
09/11/95............ 10,000,000 9,983,972 -- -- 10,000,000 9,983,972
Ciesco Limited
Partnership
5.790%, due
09/14/95............ -- -- 13,000,000 12,973,476 13,000,000 12,973,476
5.790%, due
09/15/95.......... -- -- 24,000,000 23,947,267 24,000,000 23,947,267
5.850%, due
02/26/96.......... -- -- 5,000,000 4,861,308 5,000,000 4,861,308
COFCO Capital Corp.,
5.690%, due
10/10/95............ 10,000,000 9,938,358 -- -- 10,000,000 9,938,358
Cogentrix Richmond
Inc.,
5.780%, due
09/19/95............ 19,000,000 18,945,090 -- -- 19,000,000 18,945,090
Commerzbank A.G.
5.820%, due
11/22/95............ -- -- 12,900,000 12,733,690 12,900,000 12,733,690
Consolidated Natural
Gas Co.
5.810%, due
09/20/95............ -- -- 8,100,000 8,075,633 8,100,000 8,075,633
Crown Leasing,#
5.800%, due
09/18/95............ 4,000,000 3,989,044 -- -- 4,000,000 3,989,044
Daimier-Benz North
America Corp.
5.870%, due
09/01/95............ -- -- 6,250,000 6,250,000 6,250,000 6,250,000
5.880%, due
03/15/96.......... -- -- 5,000,000 4,847,556 5,000,000 4,847,556
duPont (EI) de Nemours
& Co.
6.450%, due
01/03/96............ -- -- 18,000,000 17,623,040 18,000,000 17,623,040
Enterprise Funding
Capital Corp.,#
5.800%, due
09/13/95............ 14,197,000 14,169,552 -- -- 14,197,000 14,169,552
Ford Motor Credit Co.
6.490%, due
09/06/95............ -- -- 15,000,000 14,987,083 15,000,000 14,987,083
6.450%, due
09/11/95.......... -- -- 14,000,000 13,976,045 14,000,000 13,976,045
5.740%, due
01/12/96.......... -- -- 10,000,000 9,797,914 10,000,000 9,797,914
General Electric
Capital Corp.
6.300%, due
10/30/95............ -- -- 9,000,000 8,911,058 9,000,000 8,911,058
5.760%, due
11/06/95.......... -- -- 10,000,000 9,898,250 10,000,000 9,898,250
General Electric Co.
5.800%, due
09/15/95............ -- -- 18,500,000 18,458,992 18,500,000 18,458,992
Heller International
Corp.,#
5.830%, due
09/01/95............ 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
5.770%, due
09/06/95.......... 10,000,000 9,991,986 -- -- 10,000,000 9,991,986
Hosokawa Micron Corp.,
Intl. Inc.,
5.800%, due
09/11/95............ 25,967,000 25,925,164 -- -- 25,967,000 25,925,164
Hunt Resources, Inc.,
5.780%, due
09/08/95............ 2,150,000 2,147,584 -- -- 2,150,000 2,147,584
5.750%, due
09/27/95.......... 6,300,000 6,273,838 -- -- 6,300,000 6,273,838
International Lease
Finance Corp.
5.790%, due
10/12/95............ -- -- 24,000,000 23,846,113 24,000,000 23,846,113
5.800%, due
10/25/95.......... -- -- 15,000,000 14,873,100 15,000,000 14,873,100
5.860%, due
11/20/95.......... -- -- 14,000,000 13,822,667 14,000,000 13,822,667
5.820%, due
11/21/95.......... -- -- 3,250,000 3,208,538 3,250,000 3,208,538
5.790%, due
02/01/96.......... -- -- 4,250,000 4,150,657 4,250,000 4,150,657
J.C. Penney Funding
Corp.
5.850%, due
10/13/95............ -- -- 29,000,000 28,806,473 29,000,000 28,806,473
Jeld-Wen, Inc.
5.800%, due
09/08/95............ 5,250,000 5,244,079 -- -- 5,250,000 5,244,079
Konica Financial
U.S.A. Corp.,#
5.850%, due
09/15/95............ 3,000,000 2,993,175 -- -- 3,000,000 2,993,175
Lilly, Eli & Co.
6.410%, due
09/18/95............ -- -- 32,000,000 31,907,520 32,000,000 31,907,520
Met Life Funding Corp.
5.890%, due
09/11/95............ -- -- 45,003,000 44,931,495 45,003,000 44,931,495
5.790%, due
11/07/95.......... -- -- 15,000,000 14,842,271 15,000,000 14,842,271
Mitsubishi Motors
Credit Acceptance,
5.700%, due
10/05/95............ 5,000,000 4,973,083 -- -- 5,000,000 4,973,083
National Rural
Utilities
Cooperative Finance
Corp.
5.850%, due
10/13/95............ -- -- 60,000,000 59,599,250 60,000,000 59,599,250
</TABLE>
See notes to financial statements.
PF-12
<PAGE> 101
VISTA CASH MANAGEMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
GLOBAL GLOBAL CASH MGMT. CASH MGMT. COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Omnicom Financial
Inc.,
5.750%, due
09/22/95............ $ 6,000,000 $ 5,979,875 $ -- $ -- $ 6,000,000 $ 5,979,875
5.750%, due
09/28/95.......... 5,000,000 4,978,438 -- -- 5,000,000 4,978,438
Orix America Inc.,#
5.790%, due
10/05/95............ 4,000,000 3,978,127 -- -- 4,000,000 3,978,127
5.790%, due
10/10/95.......... 4,000,000 3,974,910 -- -- 4,000,000 3,974,910
5.800%, due
10/12/95.......... 2,000,000 1,986,789 -- -- 2,000,000 1,986,789
5.790%, due
10/16/95.......... 1,000,000 992,763 -- -- 1,000,000 992,763
5.800%, due
11/01/95.......... 2,000,000 1,980,344 -- -- 2,000,000 1,980,344
5.750%, due
11/06/95.......... 12,000,000 11,873,500 -- -- 12,000,000 11,873,500
5.800%, due
11/10/95.......... 2,000,000 1,977,445 -- -- 2,000,000 1,977,445
5.800%, due
11/15/95.......... 7,000,000 6,915,417 -- -- 7,000,000 6,915,417
PepsiCo, Inc.
5.810%, due
10/05/95............ -- -- 2,250,000 2,237,888 2,250,000 2,237,888
5.740%, due
01/22/96.......... -- -- 10,000,000 9,781,528 10,000,000 9,781,528
Petroleo Brasileiro,
5.750%, due
02/05/96............ 10,000,000 9,749,236 -- -- 10,000,000 9,749,236
PGA Tours Investments
Financial Income,#
5.800%, due
09/14/95............ 20,500,000 20,457,064 -- -- 20,500,000 20,457,064
PHH Corp.
5.830%, due
09/25/95............ -- -- 20,000,000 19,911,022 20,000,000 19,911,022
Prudential Funding
Corp.
5.830%, due
10/05/95............ -- -- 7,000,000 6,962,713 7,000,000 6,962,713
Republic National Bank
New York
5.780%, due 01/25/96 -- -- 5,000,000 4,887,864 5,000,000 4,887,864
Republic New York
Corp.
5.780%, due
10/13/95............ -- -- 50,000,000 49,672,167 50,000,000 49,672,167
RTZ Corp. PLC
5.820%, due
09/05/95............ -- -- 43,300,000 43,272,480 43,300,000 43,272,480
Sinochem American
Holdings
5.780%, due
09/14/95............ 4,000,000 3,991,651 -- -- 4,000,000 3,991,651
5.760%, due
10/20/95.......... 9,000,000 8,929,440 -- -- 9,000,000 8,929,440
5.750%, due
10/26/95.......... 5,000,000 4,956,076 -- -- 5,000,000 4,956,076
Societe Generale
5.860%, due
10/02/95............ -- -- 20,000,000 19,825,222 20,000,000 19,825,222
Somerset Railroad
Corp.
5.800%, due
10/26/95............ 13,800,000 13,742,193 -- -- 13,800,000 13,742,193
75 State Street
Capital Corp.
5.750%, due
10/03/95............ 10,000,000 9,948,889 -- -- 10,000,000 9,948,889
Toronto Dominion Bank
6.410%, due
09/18/95............ -- -- 25,000,000 24,927,631 25,000,000 24,927,631
Toyota Motor Credit
Corp.
5.850%, due
09/18/95............ -- -- 5,000,000 4,986,497 5,000,000 4,986,497
5.810%, due
09/21/95.......... -- -- 8,650,000 8,622,608 8,650,000 8,622,608
Transamerica Finance
Corp.
6.480%, due
01/12/96............ -- -- 12,000,000 11,729,566 12,000,000 11,729,566
USAA Capital Corp.
5.780%, due
10/16/95............ -- -- 10,000,000 9,929,750 10,000,000 9,929,750
U.S. Leasing
International Corp.
5.850%, due
09/25/95............ -- -- 45,000,000 44,828,100 45,000,000 44,828,100
U.S. West
Communications, Inc.
5.990%, due
09/06/95............ -- -- 11,300,000 11,290,866 11,300,000 11,290,866
6.010%, due
09/13/95.......... -- -- 18,000,000 17,964,909 18,000,000 17,964,909
5.810%, due
09/27/95.......... -- -- 15,000,000 14,938,575 15,000,000 14,938,575
----------- -------------- --------------
Total Commertial
Paper............... 325,239,176 853,161,783 1,178,400,959
----------- -------------- --------------
Floating Rate Notes --
US Government and
Agencies
Federal Home Loan
Bank,
4.760%, due
09/06/95............ 37,000,000 37,000,000 -- -- 37,000,000 37,000,000
Federal Home Loan
Mortgage Corp.,
6.840%, due
09/06/95............ 16,000,000 16,000,000 -- -- 16,000,000 16,000,000
5.960%, due
02/28/96.......... -- -- 12,000,000 12,054,486 12,000,000 12,054,486
</TABLE>
See notes to financial statements.
PF-13
<PAGE> 102
VISTA CASH MANAGEMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
GLOBAL GLOBAL CASH MGMT. CASH MGMT. COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Federal National
Mortgage Assoc.,
4.950%, due
09/01/95............ $ 10,000,000 $ 9,990,575 $ -- $ -- $ 10,000,000 $ 9,990,575
4.950%, due
09/01/95.......... 10,000,000 10,001,875 -- -- 10,000,000 10,001,875
5.740%, due
09/28/95.......... -- -- 20,000,000 19,913,300 20,000,000 19,913,300
Student Loan Marketing
Association,
5.600%, due
09/06/95............ 10,525,000 10,525,000 -- -- 10,525,000 10,525,000
5.710%, due
09/06/95.......... 40,700,000 40,711,810 -- -- 40,700,000 40,711,810
5.710%, due
09/06/95.......... 18,500,000 18,504,000 -- -- 18,500,000 18,504,000
5.720%, due
09/06/95.......... 49,000,000 49,000,000 -- -- 49,000,000 49,000,000
5.650%, due
09/06/95.......... 10,000,000 9,999,824 -- -- 10,000,000 9,999,824
5.710%, due
09/06/95.......... 4,675,000 4,675,000 -- -- 4,675,000 4,675,000
----------- -------------- --------------
Total US Government
and Agencies........ 206,408,084 31,967,786 238,375,870
----------- -------------- --------------
State and Municipal --
Illinois Student
Assistance
Commission, Student
Loan
5.940%, due
09/06/95............ 9,100,000 9,100,000 -- -- 9,100,000 9,100,000
New Orleans Louisiana,
Aviation Board,
Rev., Ser. A
6.020%, due
09/06/95............ 3,885,000 3,885,000 -- -- 3,885,000 3,885,000
Richmond County Ga.
Dev. Auth. IDR,
Monsanto Co.
6.270%, due
06/01/96............ -- -- 5,000,000 5,000,000 5,000,000 5,000,000
----------- -------------- --------------
Total State and
Municipal........... 12,985,000 5,000,000 17,985,000
----------- -------------- --------------
Corporate and
Other --
AT&T Capital Corp.,
5.820%, due
09/01/95............ -- -- 13,000,000 13,000,000 13,000,000 13,000,000
Avco Financial
Services, Inc.
6.030%, due
09/01/95............ 45,000,000 44,994,573 -- -- 45,000,000 44,994,573
Beta Finance Corp.,#
5.520%, due
09/06/95............ 10,000,000 9,999,880 -- -- 10,000,000 9,999,880
CIT Group Holdings,
6.200%, due
09/01/95............ 45,000,000 44,994,225 -- -- 45,000,000 44,994,225
Comerica Bank,
5.600%, due
09/06/95............ 25,000,000 24,995,937 -- -- 25,000,000 24,995,937
5.610%, due
09/06/95.......... 25,000,000 24,993,326 -- -- 25,000,000 24,993,326
CS First Boston, Inc.
6.060%, due
09/01/95............ 45,000,000 45,000,000 -- -- 45,000,000 45,000,000
FCC National Bank,
6.100%, due
09/01/95............ 35,000,000 35,000,000 -- -- 35,000,000 35,000,000
5.540%, due
01/10/96.......... -- -- 5,000,000 5,000,614 5,000,000 5,000,614
5.690%, due
01/19/96.......... -- -- 18,000,000 18,000,000 18,000,000 18,000,000
First Chicago Corp.
Medium Term Note
5.800%, due
11/30/95............ -- -- 8,000,000 8,000,000 8,000,000 8,000,000
General Electric
Capital Corp.,
6.100%, due
09/01/95............ 25,000,000 24,996,824 -- -- 25,000,000 24,996,824
Household Finance
Corp.,
6.420%, due
09/01/95............ 5,000,000 5,003,246 -- -- 5,000,000 5,003,246
5.720%, due
09/06/95.......... -- -- 5,000,000 4,998,246 5,000,000 4,998,246
Merrill Lynch & Co.,
Inc.
6.110%, due
09/01/95............ 35,000,000 34,998,180 -- -- 35,000,000 34,998,180
PHH Corp 5.68%
due 09/06/95........ -- -- 35,000,000 34,997,423 35,000,000 34,997,423
----------- -------------- --------------
Total Corporate and
Other............... 294,976,191 83,996,283 378,972,474
----------- -------------- --------------
Total Floating Rate
Notes............... 514,369,275 120,964,069 635,333,344
----------- -------------- --------------
Certificates of
Deposit --
Bank of Nova Scotia
5.78%
due 09/25/95........ -- -- 15,000,000 15,000,099 15,000,000 15,000,099
Banque National de
Paris 5.78%
due 12/29/95........ -- -- 10,000,000 10,004,480 10,000,000 10,004,480
</TABLE>
See notes to financial statements.
PF-14
<PAGE> 103
VISTA CASH MANAGEMENT MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
GLOBAL GLOBAL CASH MGMT. CASH MGMT. COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Commerzbank A.G. 5.89%
due 09/15/95........ $ -- $ -- $ 35,000,000 $ 34,999,865 $ 35,000,000 $ 34,999,865
Deutsche Bank A.G.
6.03%
due 08/08/96........ -- -- 20,000,000 20,000,000 20,000,000 20,000,000
Dresdner Bank A.G.
6.94%
due 01/08/96........ -- -- 5,000,000 5,009,194 5,000,000 5,009,194
Lloyds Bank PLC 5.64%
due 01/16/96........ -- -- 10,000,000 10,000,736 10,000,000 10,000,736
Mitsubishi Bank,
5.860%, due
01/31/96............ 10,000,000 9,996,953 -- -- 10,000,000 9,996,953
National Westminster
Bank PLC 6.50%
due 01/04/96........ -- -- 25,000,000 25,013,658 25,000,000 25,013,658
Sanwa Bank,
5.900%, due
11/22/95............ 14,000,000 13,999,599 -- -- 14,000,000 13,999,599
Societe General
6.420%, due
09/11/95............ -- -- 20,000,000 20,000,346 20,000,000 20,000,346
5.980%, due
08/07/96.......... -- -- 20,000,000 20,000,000 20,000,000 20,000,000
Trust Co. of Atlanta
5.875%, due
09/01/95............ 3,891,000 3,891,000 -- -- 3,891,000 3,891,000
----------- -------------- --------------
Total Certificates of
Deposit............. 27,887,552 160,028,378 187,915,930
----------- -------------- --------------
Repurchase
Agreement --
Merrill Gov't
Securities Inc.
Dated 8/31/95,
5.70%, due 9/01/95
(Proceeds at
maturity $23,740,758
collateralized by:
$22,190,000 U.S.
T-Note, 9.25%, due
8/15/98)............ -- -- 23,737,000 23,737,000 23,737,000 23,737,000
----------- -------------- --------------
Total Repurchase
Agreement........... 23,737,000 23,737,000
Money Market Fund --
Fidelity U.S. Gov't
Portfolio 5.730%.... -- -- 16,000,000 16,000,000 16,000,000 16,000,000
----------- -------------- --------------
Total Investments..... $ 921,696,807 $ 1,267,024,141 $ 2,188,720,948
=========== ============== ==============
</TABLE>
- ---------------
# Security may only be sold to institutional buyers.
Floating Rate Demand Notes: The maturity date shown is the next interest reset
date; the rate shown is the rate in effect at August 31, 1995.
See notes to financial statements.
PF-15
<PAGE> 104
VISTA CASH MANAGEMENT MONEY MARKET FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA GLOBAL HANOVER CASH PRO FORMA PRO FORMA
MMF MGMT. MMF ADJUSTMENTS COMBINED
------------ -------------- ----------- --------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value........... $921,696,807 $1,267,024,141 $ 0 $2,188,720,948
Cash...................................... 110,504 0 0 110,504
Receivables
Interest............................. 5,029,389 4,784,429 0 9,813,818
Shares of beneficial interest sold... 175,180 0 0 175,180
Other receivables.................... 0 25,456 0 25,456
------------ -------------- ----------- --------------
Total assets......................... 927,011,880 1,271,834,026 0 2,198,845,906
LIABILITIES:
Payable for shares of beneficial interest
redeemed................................ 1,152,349 0 0 1,152,349
Payable to Custodian...................... 0 36,361 0 36,361
Dividends payable......................... 974,506 5,574,767 0 6,549,273
Accrued liabilities:
Administration fee................... 39,898 55,914 0 95,812
Advisory fee......................... 71,815 126,179 0 197,994
Custodian fees....................... 89,210 0 0 89,210
Distribution fee..................... 0 1,304 0 1,304
Fund servicing fees.................. 15,963 10,941 0 26,904
Shareholder servicing fees........... 55,828 368,022 0 423,850
Sub-administration fee............... 39,898 31,544 0 71,442
Other................................ 358,979 81,100 0 440,079
------------ -------------- ----------- --------------
Total liabilities.................... 2,798,446 6,286,132 0 9,084,578
------------ -------------- ----------- --------------
NET ASSETS
Paid in capital........................... 924,198,092 1,265,547,894 0 2,189,745,986
Accumulated undistributed net realized
gain (loss) on investment
transactions............................ 15,342 0 0 15,342
------------ -------------- ----------- --------------
Net assets........................... $924,213,434 $1,265,547,894 $ 0 $2,189,761,328
============= ============== =========== ==============
Net assets by class
Vista................................ $ 91,655,094 $1,265,547,894 $ 0 $1,357,202,988
------------ -------------- ----------- --------------
Premier.............................. 473,401,069 0 0 473,401,069
------------ -------------- ----------- --------------
Institutional........................ 359,157,271 0 0 359,157,271
------------ -------------- ----------- --------------
Total combined net assets by class... $924,213,434 $1,265,547,894 $ 0 $2,189,761,328
============= ============== =========== ==============
Shares of beneficial interest outstanding
(no par value; unlimited number of
shares authorized):
Vista Shares......................... 91,653,574 1,265,547,894 0 1,357,201,468
============= ============== =========== ==============
Premier Shares....................... 473,393,210 0 0 473,393,210
============= ============== =========== ==============
Institutional Shares................. 359,151,308 0 0 359,151,308
============= ============== =========== ==============
Net asset value, offering and redemption
price per share, Vista, Premier and
Institutional (net assets/shares
outstanding)............................ $1.00 $1.00 $0.00 $1.00
============= ============== =========== ==============
Cost of investments....................... $921,696,807 $1,267,024,141 $ 0 $2,188,720,948
============= ============== =========== ==============
</TABLE>
See notes to financial statements.
PF-16
<PAGE> 105
VISTA CASH MANAGEMENT MONEY MARKET FUND
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER
GLOBAL CASH PRO FORMA PRO FORMA
MMF MGMT. MMF ADJUSTMENTS COMBINED
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
INTEREST INCOME.......................... $61,159,379 $59,915,086 $ 0 $121,074,465
----------- ----------- ----------- ------------
EXPENSES
Distribution fees
Vista Shares................... 0 0 0 0
Premier Shares................. 0 0 0 0
Institutional Shares........... 0 0 0 0
Fund Servicing fees
Vista Shares................... 139,371 47,360 (186,731)(2) 0
Premier Shares................. 421,596 0 (421,596)(2) 0
Institutional Shares........... 0 0 0 0
Shareholder Servicing fees
Vista Shares................... 348,428 3,626,644 810,513 1),(3 4,785,585
Premier Shares................. 421,596 0 105,399(3) 526,995
Institutional Shares........... 0 0 0 0
Administration fees................. 538,169 453,952 55,489(1) 1,047,610
Advisory fees....................... 1,076,339 1,554,275 (535,393)(1) 2,095,221
Sub-Administration fees............. 538,169 310,856 198,585(1) 1,047,610
Professional fees................... 105,459 50,580 (50,580)(6) 105,459
Custodian fees...................... 320,508 108,042 (211,612)(4) 216,938
Interest expense.................... 106,570 0 0 106,570
Printing and postage................ 15,002 20,072 0 35,074
Registration costs.................. 173,864 118,185 0 292,049
Transfer agent fees
Vista Shares................... 240,952 29,109 143,232(5) 413,293
Premier Shares................. 183,407 0 17,058(5) 200,465
Institutional Shares........... 75,958 0 (26,902)(5) 49,056
Trustee fees........................ 61,233 12,975 (11,112)(7) 63,096
Amortization of organizational
costs............................. 0 9,804 (9,804)(6) 0
Insurance........................... 0 14,710 0 14,710
Other............................... 48,315 17,186 0 65,501
----------- ----------- ----------- ------------
Total expenses................. 4,814,936 6,373,750 (123,454) 11,065,232
----------- ----------- ----------- ------------
Less amounts waived by the
Administrator, Shareholder
Servicing Agents, Adviser and
Distributor.................. 983,697 353,536 (971,112)(8) 366,121
----------- ----------- ----------- ------------
Net expenses................... 3,831,239 6,020,214 847,659 10,699,112
----------- ----------- ----------- ------------
Net investment income.......... 57,328,140 53,894,872 (847,659) 110,375,353
----------- ----------- ----------- ------------
REALIZED AND UNREALIZED GAIN/ (LOSS) ON
INVESTMENTS
Realized gain (loss) on investment
transactions...................... 31,579 59,072 0 90,651
----------- ----------- ----------- ------------
Net increase in net assets from
operations........................ $57,359,719 $53,953,944 $(847,659) $110,466,004
========== ========== ========= ===========
</TABLE>
See notes to financial statements.
PF-17
<PAGE> 106
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Alabama--
Alabama Higher
Education Loan
Corp., Student Loan
Rev., Ser. B, Rev.,
4.500%, due
03/01/96............ $1,380,000 $ 1,382,950 $ -- $ -- $ 1,380,000 $ 1,382,950
Birmingham, Alabama,
Ser. 1992-A, FRDN,
3.625%, due
09/06/95............ 6,300,000 6,300,000 -- -- 6,300,000 6,300,000
Warrants, Ser. A,
FRDN,
3.600%, due
09/06/95............ 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Birmingham, University
of Alabama General
RB Series
3.550%, due
09/06/95............ -- -- -- 5,700,000 0 5,700,000
Mcintosh, Al.,
Industrial Dev. Bd.
Solid Waste Disp.,
CIBA-Geigy Corp.,
FRDN,
3.750%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
St. Clair County
Alabama Industrial
Development Board,
FRDN,
3.650%, due
09/06/95............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
---------------- ---------------- ----------------
13,182,950 5,700,000 18,882,950
---------------- ---------------- ----------------
Alaska--
Valdez Alaska Marine
Terminal, Exxon
Pipeline Project,
CP,
3.750%, due
10/10/95............ 4,000,000 4,000,000 -- -- 4,000,000 4,000,000
Valdez City Marine
Terminal Revenue RFB
ARCO Transportation
Alaska, Inc. Project
Series 1994A
(Atlantic Richfield)
3.800%, due
11/13/95............ -- -- 4,900,000 4,900,000 4,900,000 4,900,000
---------------- ---------------- ----------------
4,000,000 4,900,000 8,900,000
---------------- ---------------- ----------------
Arizona--
Apache County, Arizona
IDA, Tucson Electric
Power Co., 83-B
FRDN,
3.700%, due
09/06/95............ 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
Apache County IDA, IDR
RB Tucson Electric
Power Co.
Springville Project
Series 1985A
(Barclays Bank PLC)
FRDN
3.650%, due
09/06/95............ -- -- 1,300,000 1,300,000 1,300,000 1,300,000
Arizona State
Transportation Board
Highway Rev., Rev.,
8.000%, due
07/01/96............ 1,000,000 1,052,140 -- -- 1,000,000 1,052,140
Maricopa County School
District TANS Series
1995 4.500%, due
07/31/96............ -- -- 9,000,000 9,040,625 9,000,000 9,040,625
Phoenix Arizona IDA
Multifamily Housing,
Southwest Housing,
FRDN,
3.550%, due
09/06/95............ 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Paradise Shadows
Apartments, FRDN,
3.550%, due
09/06/95............ 1,950,000 1,950,000 -- -- 1,950,000 1,950,000
Pima County Arizona
IDA,
Tucson Electric,
Ser. A, FRDN,
3.550%, due
09/06/95............ 2,700,000 2,700,000 -- -- 2,700,000 2,700,000
Tucson Electric
Power Project, 1983
Ser. A, FRDN,
3.625%, due
09/06/95............ 1,200,000 1,200,000 -- -- 1,200,000 1,200,000
Pima County IDA,
Industrial
Development RB:
Tuscon Electric
Power Co.:
General Project
Series 1982A FRDN
3.600%, due
09/06/95............ -- -- 3,000,000 3,000,000 3,000,000 3,000,000
Irvington Series
1982A FRDN
3.650%, due
09/06/95............ -- -- 1,000,000 1,000,000 1,000,000 1,000,000
Tucson Retirement
Center Series 1988
FRDN
3.700%, due
09/06/95............ -- -- 4,100,000 4,100,000 4,100,000 4,100,000
---------------- ---------------- ----------------
14,902,140 18,440,625 33,342,765
---------------- ---------------- ----------------
</TABLE>
See notes to financial statements.
PF-18
<PAGE> 107
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Arkansas--
Hope Arkansas Solid
Waste Disposal Rev.,
Temple-Inland Forest
Products, Rev., CP
3.850%, due
09/12/95............ $4,000,000 $ 4,000,000 $ -- $ -- $ 4,000,000 $ 4,000,000
The Board of Trustees
of the University of
Arkansas Various
Facility UAMS Campus
RB
FRDN 3.600%, due
09/06/95............ -- -- 9,000,000 9,000,000 9,000,000 9,000,000
---------------- ---------------- ----------------
4,000,000 9,000,000 13,000,000
---------------- ---------------- ----------------
California--
California Higher
Education Lending
Authority, Ser. A,
FRDN,
3.550%, due
09/06/95............ 1,600,000 1,600,000 -- -- 1,600,000 1,600,000
California Higher
Education Loan
Authority, Ser. A,
Rev.,
4.350%, due
05/01/96............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
California Higher
Education Loan
Authority Series
1987 FRDN
3.650%, due
09/06/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Ca., Pol., Ctrl.,
Fin., Auth., Solid
Waste Dis, Shell Oil
Co. Martinez Project
FRDN,
3.900%, due
09/01/95............ 200,000 200,000 -- -- 200,000 200,000
California School Cash
Reserve Program
Authority Pool, Ser.
A, Rev.,
4.750%, due
07/03/96............ 2,000,000 2,016,107 -- -- 2,000,000 2,016,107
California State Rev.
Anticipation
Warrants, Ser. C,
5.750%, due
04/25/96............ 11,500,000 11,641,642 -- -- 11,500,000 11,641,642
California Statewide
Communities
Development Corp,
FRDN,
3.400%, due
09/06/95............ 2,460,000 2,460,000 -- -- 2,460,000 2,460,000
California Student
Education Loan
Marketing Corp.
Student Loan Revenue
RFB Series 1993A
(Dresdner Bank A.G.)
3.650%, due
09/07/95............ -- -- 7,000,000 7,000,000 7,000,000 7,000,000
Contra Costa County
California, TRAN,
4.500%, due
07/03/96............ 2,000,000 2,013,703 -- -- 2,000,000 2,013,703
Foothill/Eastern
Transportation
Corridor Agency
California FRDN,
Toll Road, Ser. C,
3.300%, due
09/06/95............ 1,200,000 1,200,000 -- -- 1,200,000 1,200,000
Series 1995B (Morgan
Guaranty Trust Co.)
FRDN
3.350%, due
09/07/95............ -- -- 2,500,000 2,500,000 2,500,000 2,500,000
Series 1995C (Credit
Suisse) FRDN
3.300%, due 09/07/95 -- -- 5,000,000 5,000,000 5,000,000 5,000,000
Fremont California
Multifamily Housing,
Mission Wells
Project, Ser. E,
FRDN,
3.650%, due
09/06/95............ 1,900,000 1,900,000 -- -- 1,900,000 1,900,000
Fremont California,
Building & Equipment
Financing Project,
COP, FRDN
3.700%, due
09/06/95............ 400,000 400,000 -- -- 400,000 400,000
Irvine Improvement
Board Act 1915
Assignment District
No. 8 9-10 Series
1990 Updates
(National
Westminster Bank
PLC) FRDN
3.350%, due
09/01/95............ -- -- 30,000 30,000 30,000 30,000
Lancaster California
Multifamily, Mercury
S&L, Gangi Builders,
Inc., FRDN,
4.050%, due
09/06/95............ 1,100,000 1,100,000 -- -- 1,100,000 1,100,000
L.A. Ca. Regional
Airports Imp. Corp.,
American Airlines,
L.A. International
FRDN,
3.500%, due
09/04/95............ 1,400,000 1,400,000 -- -- 1,400,000 1,400,000
Los Angeles California
Union School
District, TRAN,
4.500%, due
07/03/96............ 3,000,000 3,019,344 -- -- 3,000,000 3,019,344
</TABLE>
See notes to financial statements.
PF-19
<PAGE> 108
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Los Angeles County,
California
Metropolitan
Transportation
Authority FRDN,
3.550%, due
09/06/95............ $2,000,000 $ 2,000,000 $ -- $ -- $ 2,000,000 $ 2,000,000
Madera County
California IDA,
Regency
Thermographers,
FRDN,
3.700%, due
09/06/95............ 1,840,000 1,840,000 -- -- 1,840,000 1,840,000
Three Valleys
Municipal Water
District, Miramar
Water Treatment,
FRDN,
3.625%, due
09/06/95............ 600,000 600,000 -- -- 600,000 600,000
Oakland HFA,
Muiltifamily Rental
Revenue RB Skyline
Hills Association
3.400%, due
09/07/95............ -- -- 3,300,000 3,300,000 3,300,000 3,300,000
San Diego City HFA,
Multifamily Revenue
Demand Bonds Market
Street Square
Apartments Project
Series 1985 Issue G
(Barclays Bank PLC)
3.650%, due
09/06/95............ -- -- 1,500,000 1,500,000 1,500,000 1,500,000
---------------- ---------------- ----------------
34,890,796 21,330,000 56,220,796
---------------- ---------------- ----------------
Colorado--
Colorado HFA, Sisters
of Charity Health
Care Systems Series
1992A ARTS
(SPA-Toronto
Dominion Bank)
3.550%, due
09/07/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Colorado State General
Fund Revenue TRANS
Series 1995
4.500%, due
06/27/96............ -- -- 11,200,000 11,274,976 11,200,000 11,274,976
---------------- ---------------- ----------------
-- 13,274,976 13,274,976
---------------- ---------------- ----------------
Connecticut--
Waterbury Connecticut,
RAN,
4.600%, due
09/12/95............ 3,000,000 3,000,530 -- -- 3,000,000 3,000,530
Connecticut State
Development
Authority PCR,
Connecticut Light &
Power Co. Project A
(Deutsche Bank A.G.)
3.550%, due
09/06/95............ -- -- 3,000,000 3,000,000 3,000,000 3,000,000
---------------- ---------------- ----------------
3,000,530 3,000,000 6,000,530
---------------- ---------------- ----------------
District of Columbia--
District of Columbia
GO RFB Series 1992:
3.700%, due
09/01/95............ -- -- 3,300,000 3,300,000 3,300,000 3,300,000
A-2 (Bank of Nova
Scotia)
3.700%, due
09/01/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
A-3 (Toronto
Dominion Bank)
3.700%, due
09/01/95............ -- -- 3,700,000 3,700,000 3,700,000 3,700,000
A-5 (Bank of Nova
Scotia)
3.700%, due
09/01/95............ -- -- 5,900,000 5,900,000 5,900,000 5,900,000
---------------- ---------------- ----------------
-- 14,900,000 14,900,000
---------------- ---------------- ----------------
Florida--
Broward County,
Florida Housing
Finance Authority,
Palm Aire-Oxford
FRDN,
4.150%, due
09/06/95............ 3,600,000 3,600,000 -- -- 3,600,000 3,600,000
Florida Housing
Finance Agency,
Blairstone FRDN,
3.550%, due
09/06/95............ 400,000 400,000 -- -- 400,000 400,000
Jacksonville Florida
Electric Authority,
St. Johns River
Power Park System,
Rev.,
8.250%, due
10/01/95............ 1,000,000 1,002,967 -- -- 1,000,000 1,002,967
Jacksonville Florida
Industrial
Development, Trailer
Marine Crowley
Project, FRDN,
3.800%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Jacksonville City PCR,
RFB Florida Power &
Light Co. Project
Series 1994
3.850%, due
11/13/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
</TABLE>
See notes to financial statements.
PF-20
<PAGE> 109
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Okaloosa County
Revenue Gulf Coast
Treatment Center
Project Series 1984
3.600%, due
09/06/95............ $ -- $ -- $ 1,900,000 $ 1,900,000 $ 1,900,000 $ 1,900,000
Orange County, Florida
Housing Finance
Authority, Westlake,
Westlake FRDN,
3.625%, due
09/06/95............ 5,950,000 5,950,000 -- -- 5,950,000 5,950,000
Westlake, Windscape
FRDN,
3.625%, due
09/06/95............ 700,000 700,000 -- -- 700,000 700,000
Orange County HFA
Housing Revenue
Multifamily
Smokewood/Sun
3.650%, due
09/06/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Orlando Florida
Utilities Community
Water & Electric,
Rev.,
8.625%, due
10/01/95............ 3,000,000 3,071,843 -- -- 3,000,000 3,071,843
Orlando Utilities
Commonwealth Water
and Electric Revenue
RB U.S. Government
Securities
Collateral
8.625%, due
10/01/95............ -- -- 5,000,000 5,118,039 5,000,000 5,118,039
Palm Beach County
School District TANS
Series 1994
4.750%, due
09/13/95............ -- -- 7,000,000 7,001,434 7,000,000 7,001,434
St. Lucie County
Florida Pollution
Control Rev.,
Florida Power &
Light Co.
3.700%, due
11/03/95............ 6,500,000 6,500,000 6,500,000 6,500,000
Volusia County,
Florida Housing
Finance Authority,
Sun Pointe Apts.,
Ser. H, FRDN,
3.550%, due
09/06/95............ 1,225,000 1,225,000 -- -- 1,225,000 1,225,000
---------------- ---------------- ----------------
23,449,810 18,019,473 41,469,283
---------------- ---------------- ----------------
Georgia--
Atlanta City Urban
RFA, Multifamily
Rental Housing
Revenue RFB Towers
Project Series 1988A
(Sanwa Bank, Ltd.)
3.700%, due
11/01/95............ -- -- 8,500,000 8,500,000 8,500,000 8,500,000
Bartow County Georgia
IDA, Princeton
Carpets, Inc., FRDN,
3.750%, due
09/06/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Bibb County
Development
Authority
Environmental
Improvement Revenue
1991 IR-1 (Temple
Inland, Inc.)
3.800%, due
09/07/95............ -- -- 8,000,000 8,000,000 8,000,000 8,000,000
Cherokee County,
Georgia, Seaboard
Forms of Canton,
Inc., FRDN,
3.650%, due
09/06/95............ 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Clayton County,
Georgia Housing
Authority,
Multifamily Rainwood
Development FRDN,
3.825%, due
09/06/95............ 2,700,000 2,700,000 -- -- 2,700,000 2,700,000
Columbus, Georgia
Development
Authority, R P Real
Estate, Inc., FRDN,
4.100%, due
09/06/95............ 25,000 25,000 -- -- 25,000 25,000
Elbert County,
Georgia, FRDN,
3.750%, due 09/06/95 2,200,000 2,200,000 -- -- 2,200,000 2,200,000
Fulco Georgia Hospital
Authority
Certificates
Updates, St Josephs
Hospital FRDN,
3.800%, due
09/06/95............ 2,500,000 2,500,000 -- -- 2,500,000 2,500,000
Georgia State, GO,
6.250%, due
09/01/95............ 1,395,000 1,395,000 -- -- 1,395,000 1,395,000
Fulton County HFA,
Multifamily Housing
Revenue RFB Spring
Creek Crossing
Series 1994
(Wachovia Bank of
Georgia, N.A.)
3.650%, due
09/06/95............ -- -- 5,000,000 5,000,000 5,000,000 5,000,000
</TABLE>
See notes to financial statements.
PF-21
<PAGE> 110
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Marietta City Housing
Authority
Multifamily Housing
Revenue RFB
Apartments Series
1994 (FNMA)
3.500%, due
09/06/95............ $ -- $ -- $ 4,525,000 $ 4,525,000 $ 4,525,000 $ 4,525,000
Peachtree City,
Georgia Development
Authority, Hoshizaki
America, Inc., FRDN,
3.700%, due
09/06/95............ 2,200,000 2,200,000 -- -- 2,200,000 2,200,000
Washington Georgia,
Wilkes Payroll
Development
Authority, Pak
Products, Inc.,
FRDN,
3.950%, due
09/06/95............ 2,130,000 2,130,000 -- -- 2,130,000 2,130,000
---------------- ---------------- ----------------
18,150,000 26,025,000 44,175,000
---------------- ---------------- ----------------
Idaho--
Idaho State, TAN,
4.500%, due 06/27/96 4,000,000 4,022,118 -- -- 4,000,000 4,022,118
Port Lewiston Port
Facilities Idaho
Rev., Fribourg
Investment Co.,
FRDN,
3.940%, due
09/06/95............ 3,800,000 3,800,000 -- -- 3,800,000 3,800,000
---------------- ---------------- ----------------
7,822,118 -- 7,822,118
---------------- ---------------- ----------------
Illinois--
Chicago Illinois
O'Hare Intl.
Airport, American
Airlines, Ser. B,
PUT,
3.950%, due
09/01/95............ 5,100,000 5,100,000 -- -- 5,100,000 5,100,000
Chicago O'Hare
International
Airport,
General Airport
Second Lien RB
3.550%, due
09/06/95............ -- -- 5,500,000 5,500,000 5,500,000 5,500,000
DuPage County
Illinois, GO,
3.750%, due
01/01/96............ 1,800,000 1,794,162 -- -- 1,800,000 1,794,162
Illinois Development
Financing Authority
IRB, Demert &
Dougherty Inc.
Project GO, FRDN
3.900%, due
09/06/95............ 4,900,000 4,900,000 -- -- 4,900,000 4,900,000
Illinois EFAR, RB
Museum of Science
and Industry Series
1985
3.650%, due
09/06/95............ -- -- 2,200,000 2,200,000 2,200,000 2,200,000
Illinois HFAR, RB
Revolving Fund
Pooled Financing
Program Series 1985F
3.550%, due
09/06/95............ -- -- 4,300,000 4,300,000 4,300,000 4,300,000
Illinois State, GO,
5.250%, due
10/01/95............ 1,000,000 1,000,981 -- -- 1,000,000 1,000,981
Savanna IDR, Metform
Corp. Project RB
Series 1994C
3.700%, due
09/06/95............ -- -- 1,600,000 1,600,000 1,600,000 1,600,000
Southwestern Illinois
IDA, Robinson Steel
Co. Inc. Project,
FRDN,
3.850%, due
09/06/95............ 700,000 700,000 -- -- 700,000 700,000
---------------- ---------------- ----------------
13,495,143 13,600,000 27,095,143
---------------- ---------------- ----------------
Indiana--
Hammond Development
Finance Authority
PCR, RB Amoco Oil
Co. Project
3.700%, due
09/01/95............ -- -- 7,500,000 7,500,000 7,500,000 7,500,000
Indiana Health
Facility Financing
Authority Refunding
RB MMM-Invest, Inc.
Series 1990A (Banc
One Indianapolis,
N.A.)
3.650%, due
09/07/95............ -- -- 3,460,000 3,460,000 3,460,000 3,460,000
Indiana State
Employment
Development,
Griner Engineering
Co., FRDN,
3.950%, due
09/06/95............ 200,000 200,000 -- -- 200,000 200,000
Metal Services &
Supply, Inc., FRDN,
3.950%, due
09/06/95............ 200,000 200,000 -- -- 200,000 200,000
Mobel Project, FRDN,
3.950%, due
09/06/95............ 100,000 100,000 -- -- 100,000 100,000
Southern Indiana
Rehabilitation
Services, Inc.,
FRDN,
3.950%, due
09/06/95............ 100,000 100,000 -- -- 100,000 100,000
</TABLE>
See notes to financial statements.
PF-22
<PAGE> 111
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Triangle Ventures
Project, FRDN,
3.950%, due
09/06/95............ $ 175,000 $ 175,000 $ -- $ -- $ 175,000 $ 175,000
Lafayette City EDR,
RFB Health Quest
Realty XI Project
Series 1993
3.650%, due
09/07/95............ -- -- 2,605,000 2,605,000 2,605,000 2,605,000
Muncie City EDR, RFB
Health Quest Realty
Project Series 1993
3.650%, due
09/07/95............ -- -- 1,075,000 1,075,000 1,075,000 1,075,000
Sullivan City PCR, RB
Hoosier Energy Rural
Electric
Cooperative, Inc.
Series 1985L-4
(National Rural
Utilities
Cooperative Finance
Corp.)
3.750%, due
10/25/95............ -- -- 2,200,000 2,200,000 2,200,000 2,200,000
---------------- ---------------- ----------------
775,000 16,840,000 17,615,000
---------------- ---------------- ----------------
Iowa--
Iowa School
Corporations Warrant
Certificates,
Cash Anticipation
Program, Ser. A,
Rev.,
4.750%, due
06/28/96............ 2,200,000 2,215,820 -- -- 2,200,000 2,215,820
Ser. B, Rev.,
5.750%, due
02/01/96............ 2,000,000 2,005,986 -- -- 2,000,000 2,005,986
---------------- ---------------- ----------------
4,221,806 -- 4,221,806
---------------- ---------------- ----------------
Kentucky--
Carroll County,
Kentucky IDA,
Kentucky Ladder Co.,
FRDN,
3.850%, due
09/06/95............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
Clark County PCR, East
Kentucky Power
Cooperative, Inc.
Project
4.150%, due
10/15/95............ -- -- 3,000,000 2,999,817 3,000,000 2,999,817
---------------- ---------------- ----------------
1,500,000 2,999,817 4,499,817
---------------- ---------------- ----------------
Louisiana--
Louisiana State
Recovery District
Sales Tax Rev.,
FRDN,
3.500%, due
09/01/95............ 2,500,000 2,500,000 -- -- 2,500,000 2,500,000
South La Port
Commerical Marine
Terminal Facilities
Revenue RB Project
Series 1991 (Credit
Suisse)
3.600%, due
09/06/95............ -- -- 2,700,000 2,700,000 2,700,000 2,700,000
---------------- ---------------- ----------------
2,500,000 2,700,000 5,200,000
---------------- ---------------- ----------------
Maine--
Lewiston, Maine,
Geiger Brothers
Project, FRDN,
3.950%, due
09/30/95............ 3,575,000 3,575,000 -- -- 3,575,000 3,575,000
Maine State, TAN,
4.500%, due
06/28/96............ 5,000,000 5,029,750 -- -- 5,000,000 5,029,750
Portland, Maine,
Oakhurst Dairy,
FRDN,
4.100%, due
09/30/95............ 1,700,000 1,700,000 -- -- 1,700,000 1,700,000
Regional Waste
Systems, Inc., Ser.
K, FRDN,
3.750%, due
09/06/95............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
---------------- ---------------- ----------------
11,804,750 -- 11,804,750
---------------- ---------------- ----------------
Maryland--
Annapolis, Maryland,
Forest-Gemini
Facility, FRDN,
4.000%, due
09/06/95............ 700,000 700,000 -- -- 700,000 700,000
Anne Arundel County,
Maryland, FRDN,
3.750%, due 09/06/95 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Baltimore County
Maryland,
Econmic West
Capital, Ser. B, CP,
3.900%, due
10/02/95............ 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Baltimore County,
Maryland Pollution
Control, Baltimore
Gas & Electric Co.,
3.700%, due
10/04/95............ 7,000,000 7,000,000 7,000,000 7,000,000
</TABLE>
See notes to financial statements.
PF-23
<PAGE> 112
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Baltimore County,
Maryland, Sheppard &
Enoch Pratt
Hospital, FRDN,
3.550%, due
09/06/95............ $1,700,000 $ 1,700,000 $ -- $ -- $ 1,700,000 $ 1,700,000
Howard County,
Maryland, Owen Brown
Joint Facilities,
FRDN,
4.000%, due
09/06/95............ 300,000 300,000 -- -- 300,000 300,000
Maryland State Board
of Environmental
Resource Recovery,
Colstrip Project,
FRDN,
3.650%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Prince George's
County, Maryland,
Parsons Paper, CP,
4.000%, due
09/06/95............ 1,700,000 1,700,000 -- -- 1,700,000 1,700,000
Baltimore PCR
Multi-Modal SCM
Plants, Inc. Project
Series 1993
3.550%, due
09/07/95............ -- -- 3,500,000 3,500,000 3,500,000 3,500,000
Baltimore Series 1986
Pre-refunded U.S.
Government
Securities
Collateral
6.500%, due
08/01/96............ -- -- 1,150,000 1,201,132 1,150,000 1,201,132
---------------- ---------------- ----------------
17,400,000 4,701,132 22,101,132
---------------- ---------------- ----------------
Massachusetts--
Massachusetts Bay
Transportation
Authority,
Ser. A, Rev.,
5.500%, due
03/01/96............ 3,000,000 3,012,859 -- -- 3,000,000 3,012,859
Ser. B, GO,
4.750%, due
09/06/96............ 5,000,000 5,035,950 -- -- 5,000,000 5,035,950
Massachusetts State
Health & Educational
Facilities Authority
FRDN,
3.550%, due
09/06/95............ 1,300,000 1,300,000 -- -- 1,300,000 1,300,000
Massachusetts State
Industrial Financing
Agency,
Catamount Realty
Trust, FRDN,
4.100%, due
09/30/95............ 1,300,000 1,300,000 -- -- 1,300,000 1,300,000
ZBR Ltd. Partnership
Issue, FRDN,
3.750%, due
09/06/95............ 3,500,000 3,500,000 -- -- 3,500,000 3,500,000
Massachusetts State
UTGO Series 1995A
4.250%, due 06/12/96 -- -- 8,625,000 8,646,557 8,625,000 8,646,557
Taunton Massachusetts
IDA, Realty Trust IX
Project, FRDN,
4.100%, due
09/30/95............ 2,485,000 2,485,000 -- -- 2,485,000 2,485,000
---------------- ---------------- ----------------
16,633,809 8,646,557 25,280,366
---------------- ---------------- ----------------
Michigan--
Allegan County,
Michigan Economic
Development Corp.,
Dean Foods Co. FRDN,
3.750%, due
09/06/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Dearborn Michigan
Economic Development
Corp., Oakbrook
Common Proj., FRDN,
3.650%, due
09/06/95............ 8,300,000 8,300,000 -- -- 8,300,000 8,300,000
Farmington Hills,
Michigan Economic
Development Corp.,
Carrefour, FRDN,
3.825%, due
09/06/95............ 3,025,000 3,025,000 -- -- 3,025,000 3,025,000
Grand Rapids, Michigan
Economic Development
Corp., Amway Hotel,
FRDN,
3.650%, due
09/06/95............ 1,300,000 1,300,000 -- -- 1,300,000 1,300,000
Jackson County,
Michigan Economic
Development Corp.,
Melling Tool
Project, FRDN,
3.700%, due
09/06/95............ 400,000 400,000 -- -- 400,000 400,000
Michigan Municipal
Bond Authority
Revenue Series 1995B
4.500%, due
07/03/96............ -- -- 4,750,000 4,776,265 4,750,000 4,776,265
Michigan State
Strategic Fund IDA,
Michigan Sugar Co.,
Croswell Project,
FRDN,
3.750%, due
09/06/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
</TABLE>
See notes to financial statements.
PF-24
<PAGE> 113
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Michigan State
Strategic Fund, Lex
Controls, Inc.
Project, FRDN,
3.850%, due
09/06/95............ $2,000,000 $ 2,000,000 $ -- $ -- $ 2,000,000 $ 2,000,000
Michigan State, GO,
5.000%, due
09/29/95............ 3,000,000 3,002,077 -- -- 3,000,000 3,002,077
---------------- ---------------- ----------------
22,027,077 4,776,265 26,803,342
---------------- ---------------- ----------------
Minnesota--
Becker Minnesota
Pollution Control
Rev., Northern State
Power Co., Ser. A,
CP,
3.800%, due
09/06/95............ 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
Bloomington, Minnesota
Port Authority,
Mall of America
Project, FRDN,
3.800%, due
09/06/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Minnesota School
Districts Tax & Aid
Anticipation
Borrowing Progress
Rev.,
5.100%, due
03/15/96............ 2,000,000 2,002,031 -- -- 2,000,000 2,002,031
Saint Louis Park,
Minnesota Industrial
Development, Unicare
Home, Inc., FRDN,
3.800%, due
09/30/95............ 600,000 600,000 -- -- 600,000 600,000
Duluth City Miller
Dwan Medical Center
Revenue RB Series
1989A
3.650%, due
09/07/95............ -- -- 6,300,000 6,300,000 6,300,000 6,300,000
Rochester Health Care
Facilities RB Mayo
Foundation/Mayo
Medical Center
3.600%, due
09/05/95............ -- -- 2,100,000 2,100,000 2,100,000 2,100,000
---------------- ---------------- ----------------
9,602,031 8,400,000 18,002,031
---------------- ---------------- ----------------
Mississippi--
Mississippi Business
Finance Corp., Air
Cruisers Project,
Ser. C, FRDN,
3.900%, due
09/06/95............ 300,000 300,000 -- -- 300,000 300,000
---------------- ----------------
Missouri--
Independence, Missouri
IDA, Multifamily
Housing,
Independence Ridge
Apts., FRDN,
3.550%, due
09/06/95............ 1,600,000 1,600,000 -- -- 1,600,000 1,600,000
Kansas City, Missouri
IDA, Multifamily
Housing, Locarno
Project, FRDN,
3.550%, due
09/06/95............ 1,700,000 1,700,000 -- -- 1,700,000 1,700,000
Kansas City IDA,
Multifamily Housing
RB The Willow Creek
Multifamily Housing
Project Series 1985
(Citibank, N.A.)
3.550%, due
09/05/95............ -- -- 5,000,000 5,000,000 5,000,000 5,000,000
Macon, Missouri IDA,
Health Care Realty,
FRDN,
4.050%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Missouri State Health
& Educational
Facilities
Authority,
St. Anthony's
Medical Center,
Ser. A, FRDN,
3.550%, due
09/06/95............ 2,900,000 2,900,000 -- -- 2,900,000 2,900,000
Washington
University Project,
Ser. A, FRDN,.
3.550%, due
09/06/95............ 3,800,000 3,800,000 -- -- 3,800,000 3,800,000
Missouri State Health
& Educational
Facilities Authority
Health Facilities
SSM Health Care
Series 1988C
(Mitsubishi Bank,
Ltd.)
3.750%, due
10/24/95............ -- -- 7,100,000 7,100,000 7,100,000 7,100,000
</TABLE>
See notes to financial statements.
PF-25
<PAGE> 114
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Missouri State
Industrial
Development Board,
Kawasaki Motors Mfg.
Co., FRDN,
3.850%, due
09/06/95............ $3,600,000 $ 3,600,000 $ -- $ -- $ 3,600,000 $ 3,600,000
St. Charles County
IDA, Industrial
Development Revenue
RFB Venture Stores
Project Sereis 1991
(Bank of Nova
Scotia)
3.650%, due
09/06/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
---------------- ---------------- ----------------
14,600,000 14,100,000 28,700,000
---------------- ---------------- ----------------
Montana--
Montgomery County,
Montana Housing
Opportunity
Commission, Draper
Lane FRDN,
3.750%, due
09/06/95............ 1,100,000 1,100,000 -- -- 1,100,000 1,100,000
Osage Beach Montana,
IDA, Health Care
Realty Osage, FRDN,
4.000%, due
09/30/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
---------------- ---------------- ----------------
2,100,000 -- 2,100,000
---------------- ---------------- ----------------
Nevada--
Nevada State
Department of
Community Industrial
Development,
Kinplex Project,
Ser. A, FRDN,
4.000%, due
09/06/95............ 650,000 650,000 -- -- 650,000 650,000
Master-Halco Proj.
Ser. A, FRDN,
4.000%, due
09/06/95............ 4,100,000 4,100,000 -- -- 4,100,000 4,100,000
---------------- ---------------- ----------------
4,750,000 -- 4,750,000
---------------- ---------------- ----------------
New Hampshire--
Nashua, New Hampshire,
Clocktower Project,
FRDN,
3.750%, due
09/06/95............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
New Hampshire State
Business Financing
Authority Industrial
Facilities, FRDN,
3.950%, due
09/06/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
New Hampshire State
Housing Finance
Authority,
Multifamily,
Manchester, FRDN,
3.700%, due
09/06/95............ 500,000 500,000 -- -- 500,000 500,000
---------------- ---------------- ----------------
4,000,000 -- 4,000,000
---------------- ---------------- ----------------
New Mexico--
Albuquerque City
Municipal Gross
Receipts Tax
Adjustable Tender RB
3.600%, due
09/06/95............ -- -- 1,500,000 1,500,000 1,500,000 1,500,000
---------------- ---------------- ----------------
New York--
East Meadow UFSD TANS
Series 1995
4.250%, due
06/27/96............ -- -- 6,800,000 6,832,226 6,800,000 6,832,226
Hempstead Town New
York, Ser. A, BAN,
5.250%, due
03/01/96............ 3,000,000 3,009,642 -- -- 3,000,000 3,009,642
Metropolitan
Transportation
Authority of New
York, Ser. A, RAN,
5.500%, due
12/14/95............ 2,500,000 2,507,517 -- -- 2,500,000 2,507,517
Nassau County, New
York, Ser. C, TAN,
5.400%, due
09/28/95............ 3,000,000 3,002,547 -- -- 3,000,000 3,002,547
New York City, New
York Municipal Water
Financing Authority,
Ser. C, FRDN,
3.350%, due
09/01/95............ 700,000 700,000 -- -- 700,000 700,000
Water & Sewer
Systems, Ser. A,
FRDN,
3.600%, due
09/01/95............ 4,000,000 4,000,000 -- -- 4,000,000 4,000,000
New York City, New
York,
Ser. A, TAN,
4.500%, due
02/15/96............ 10,000,000 10,030,355 -- -- 10,000,000 10,030,355
Ser. A, RAN,
4.500%, due
04/11/96............ 5,000,000 5,018,266 -- -- 5,000,000 5,018,266
</TABLE>
See notes to financial statements.
PF-26
<PAGE> 115
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Ser. B through
Sub-Ser. B-8, GO,
FRDN
3.600%, due
09/06/95............ $1,300,000 $ 1,300,000 $ -- $ -- $ 1,300,000 $ 1,300,000
Ser. C through
Sub-Ser. C-4, GO,
FRDN
3.500%, due
09/01/95............ 3,100,000 3,100,000 -- -- 3,100,000 3,100,000
Ser. E-3, GO, FRDN
3.500%, due
09/01/95............ 8,500,000 8,500,000 -- -- 8,500,000 8,500,000
Sub-Ser. E-2 GO,
FRDN
3.450%, due
09/01/95............ 100,000 100,000 -- -- 100,000 100,000
Ser. F-6, GO, FRDN
3.550%, due
09/06/95............ 600,000 600,000 -- -- 600,000 600,000
West Islip UFSD TANS
Series 1995
4.570%, due
06/27/96............ -- -- 2,000,000 2,011,656 2,000,000 2,011,656
---------------- ---------------- ----------------
41,868,327 8,843,882 50,712,209
---------------- ---------------- ----------------
North Carolina--
Durham North Carolina
Water & Sewer
Utility Systems
Rev., FRDN,
3.550%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Lenoir County
Industrial
Facilities and
Pollution Control
Financing Authority
IDR, Texasgulf Inc.
Project Series 1983
(Bankers Trust Co.)
4.950%, due
09/07/95............ -- -- 1,400,000 1,400,000 1,400,000 1,400,000
North Carolina Eastern
Municipal Power
Agency Power System
RB (Morgan Guaranty
Trust Co. and Union
Bank of
Switzerland):
3.600%, due
09/05/95............ -- -- 4,800,000 4,800,000 4,800,000 4,800,000
3.300%, due
09/06/95............ -- -- 3,500,000 3,500,000 3,500,000 3,500,000
North Carolina
Industrial
Facilities &
Pollution Control
Finance Authority,
Comm. Cable, Inc.,
PUT,
5.100%, due
12/01/95............ 530,000 530,000 -- -- 530,000 530,000
Jasper Textiles,
Inc., PUT,
5.650%, due
12/01/95............ 385,000 385,000 -- -- 385,000 385,000
Nash Brick Co., PUT,
5.650%, due
12/01/95............ 715,000 715,000 -- -- 715,000 715,000
Scotland Container
Corp., PUT,
5.500%, due
03/01/96............ 1,200,000 1,200,000 -- -- 1,200,000 1,200,000
Athol Mfg. Corp PUT,
5.550%, due
03/01/96............ 1,250,000 1,250,000 -- -- 1,250,000 1,250,000
University North
Carolina University.
Kenan Memorial
Stadium, FRDN,
3.450%, due
09/06/95............ 3,500,000 3,500,000 -- -- 3,500,000 3,500,000
Wake County North
Carolina Industrial
Facilities &
Pollution Control
Financing FRDN,
3.650%, due
09/01/95............ 900,000 900,000 -- -- 900,000 900,000
---------------- ---------------- ----------------
9,480,000 9,700,000 19,180,000
---------------- ---------------- ----------------
North Dakota--
Fargo North Dakota
Sales Tax, Rev.,
5.000%, due
01/01/96............ 1,000,000 1,004,169 -- -- 1,000,000 1,004,169
Ohio--
Butler County Ohio
Hospital Facilities,
Middletown Regional
Hospital Project
Rev., 8.250%, due
11/01/95............ 1,000,000 1,037,480 -- -- 1,000,000 1,037,480
Clermont County Ohio
Hospital Facilities
Rev., Mercy Health
Systems, Ser. B,
FRDN,
3.700%, due
09/06/95............ 1,800,000 1,800,000 -- -- 1,800,000 1,800,000
Toledo City Services
Special Obligations
Project Series 1995
3.900%, due
06/01/96............ -- -- 3,000,000 3,003,071 3,000,000 3,003,071
---------------- ---------------- ----------------
2,837,480 3,003,071 5,840,551
---------------- ---------------- ----------------
</TABLE>
See notes to financial statements.
PF-27
<PAGE> 116
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Oregon--
Klamath Falls City
Electric RB Salt
Caves Hydroelectric
Project Series 1986D
Escrowed to Maturity
Pre-refunded U.S.
Government
Securities
Collateral.......... $ -- $ -- $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000
---------------- ---------------- ----------------
Pennsylvania--
Montgomery County
(Deutsche Bank A.G.)
3.850%, due
11/16/95............ -- -- 3,500,000 3,500,000 3,500,000 3,500,000
Philadelphia,
Pennsylvania
Authority for
Industrial
Development FRDN,
3.850%, due
09/06/95............ 2,700,000 2,700,000 -- -- 2,700,000 2,700,000
Philadelphia,
Pennsylvania School
District, TRAN,
4.500%, due
06/28/96............ 5,000,000 5,021,805 -- -- 5,000,000 5,021,805
Philadelphia TRANS
Series 1995A
4.500%, due
06/27/96............ -- -- 4,800,000 4,820,509 4,800,000 4,820,509
---------------- ---------------- ----------------
7,721,805 13,320,509 21,042,314
---------------- ---------------- ----------------
South Carolina--
South Carolina Jobs,
Economic Development
Authority,
Brown Packing Co.,
FRDN,
3.750%, due
09/06/95............ 50,000 50,000 -- -- 50,000 50,000
Consolidated
Fabricators, PUT,
5.050%, due
12/01/95............ 1,100,000 1,100,000 -- -- 1,100,000 1,100,000
Edens 321
Partnership, FRDN,
3.750%, due
09/06/95............ 50,000 50,000 -- -- 50,000 50,000
Florence Housing
Project, FRDN,
3.750%, due
09/06/95............ 2,300,000 2,300,000 -- -- 2,300,000 2,300,000
Jewish Community
Center, FRDN,
3.750%, due
09/06/95............ 950,000 950,000 -- -- 950,000 950,000
Osmose Wood
Preserving, FRDN,
3.750%, due
09/06/95............ 85,000 85,000 -- -- 85,000 85,000
Phoenix Finishing
Co., FRDN,
3.750%, due
09/06/95............ 200,000 200,000 -- -- 200,000 200,000
South Carolina State
Ports Authority,
FRDN, 3.700%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
---------------- ---------------- ----------------
5,735,000 -- 5,735,000
---------------- ---------------- ----------------
South Dakota--
South Dakota Housing
Development
Authority,
Homeownership
Mortgage PUT,
4.950%, due
12/13/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
South Dakota State
Health &
Educational, Sioux
Valley Hospital,
FRDN,
3.800%, due
09/06/95............ 2,900,000 2,900,000 -- -- 2,900,000 2,900,000
---------------- ---------------- ----------------
4,900,000 -- 4,900,000
---------------- ---------------- ----------------
Tennessee--
Carter County IDB,
Industrial
Development RB
Inland Container
Corp. Project Series
1983 (Temple Inland,
Inc.)
3.950%, due
09/01/95............ -- -- 3,000,000 3,000,000 3,000,000 3,000,000
Franklin, Tennessee
Health & Education,
Facilities Board
Industrial
Development FRDN,
4.000%, due
09/06/95............ 1,065,000 1,065,000 -- -- 1,065,000 1,065,000
McMinn County
Tennessee IRB,
Thomas & Betts Corp.
Project, FRDN,
3.875%, due
09/06/95............ 2,400,000 2,400,000 -- -- 2,400,000 2,400,000
Shelby County
Tennessee Health
Educational &
Housing Facilities
Board Rev.,
3.700%, due
09/06/95............ 6,155,000 6,155,000 -- -- 6,155,000 6,155,000
</TABLE>
See notes to financial statements.
PF-28
<PAGE> 117
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Shelby County Health
Educational and
Housing Facility
Board Multifamily
Housing Revenue RFB
Wyndridge II
Apartments Project
Series 1994 (Credit
Suisse)
3.600%, due
09/06/95............ $ -- $ -- $ 7,635,000 $ 7,635,000 $ 7,635,000 $ 7,635,000
Tullahoma Tennessee
IDA Board, Rock
Tennessee
Converting, FRDN,
3.900%, due
09/06/95............ 4,000,000 4,000,000 -- -- 4,000,000 4,000,000
---------------- ---------------- ----------------
13,620,000 10,635,000 24,255,000
---------------- ---------------- ----------------
Texas--
Abilene Texas Health
Facilities
Development Corp.,
Hendrick Medical
Center Rev., 4.400%,
due 09/01/95........ 755,000 755,000 -- -- 755,000 755,000
Angelina & Neches
River Authority,
Texas Solid Waste
Disposal, Temple
Eastex CP, 3.950%,
due 11/15/95........ 10,000,000 10,000,000 -- -- 10,000,000 10,000,000
Austin City Combined
Utility Systems
Revenue RFB Refunded
Balance Pre-refunded
U.S. Government
Securities
Collateral
10.250%, due
11/15/95............ -- -- 3,630,000 3,745,060 3,630,000 3,745,060
Bell County Texas,
IDA, Franklin
Industries, FRDN,
3.650%, due
09/06/95............ 2,500,000 2,500,000 -- -- 2,500,000 2,500,000
Brazos River PCR,
Monsanto Co. Project
Series 1990
(Monsanto Co.)
3.550%, due
09/06/95............ -- -- 1,100,000 1,100,000 1,100,000 1,100,000
Calhoun County
Navigation IDA PCR,
Aluminum Co. of
America Project
3.750%, due
09/06/95............ -- -- 2,575,000 2,575,000 2,575,000 2,575,000
Corsicana, Texas IDA,
Kent Paper Co.,
FRDN,
3.700%, due
09/06/95............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
Dallas Texas
Waterworks & Sewer
Improvements, Ser.
A, Rev.,
7.000%, due
10/01/95............ 885,000 887,585 -- -- 885,000 887,585
Greater East Texas
Higher Education
Project Series 1992A
(SLMA)
3.650%, due
09/07/95............ -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Guadalupe-Blanco River
Authority IDC, IDR
RFB The BOC Group,
Inc. Project
3.750%, due
09/07/95............ -- -- 3,000,000 3,000,000 3,000,000 3,000,000
Harris County, Texas
Health Facilities
Development Corp.
Rev. FRDN,
3.600%, due
09/06/95............ 2,900,000 2,900,000 -- -- 2,900,000 2,900,000
Harris County, Texas,
Housing Finance
Authority, PUT,
4.200%, due
10/01/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Houston Texas
Airports, CP,
3.850%, due
09/06/95............ 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Houston Texas Hotel
Occupancy, Houston
Hotel, Senior Lien,
Rev.,
5.000%, due
07/01/96............ 500,000 504,432 -- -- 500,000 504,432
Lone Star Texas Air,
Improvement
Authority, American
Airlines, CP,
3.750%, due
09/12/95............ 6,600,000 6,600,000 -- -- 6,600,000 6,600,000
Plano Texas Health
Facilities,
Childrens &
Presbyterian
Hospital, CP,
3.300%, due
10/11/95............ 1,100,000 1,100,000 -- -- 1,100,000 1,100,000
Port of Corpus Christi
IDC, IDR RFB Lantana
Corp. Project Series
1992
3.650%, due
09/07/95............ -- -- 3,085,000 3,085,000 3,085,000 3,085,000
</TABLE>
See notes to financial statements.
PF-29
<PAGE> 118
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Red River Authority
PCR, RFB
Southwestern Public
Service Co. Project
Series 1991 ARTS
(SPA-Union Bank of
Switzerland) 3.450%,
due 09/07/95........ $ -- $ -- $ 5,300,000 $ 5,300,000 $ 5,300,000 $ 5,300,000
San Antonio City
Higher Education
Authority, Inc.
Educational
Facilities UTSA
Phase I Dormitory
Project Series 1985
(Lloyds Bank PLC)
3.750%, due
09/01/95............ -- -- 3,085,000 3,085,000 3,085,000 3,085,000
Shenandoah City HFDC,
Hospital RB
Southwood Ltd.
Project I Series
1984 4.104%, due
09/07/95............ -- -- 4,300,000 4,300,000 4,300,000 4,300,000
Texas Small Business
Industrial
Development Corp.,
Texas Public
Facilities FRDN,
3.600%, due
09/06/95............ 7,500,000 7,500,000 -- -- 7,500,000 7,500,000
Texas State, Ser. A,
TRAN,
4.750%, due
08/30/96............ 5,000,000 5,034,500 -- -- 5,000,000 5,034,500
Texas State TRANS
Series 1995A
4.750%, due
08/30/96............ -- -- 5,000,000 5,031,936 5,000,000 5,031,936
---------------- ---------------- ----------------
44,281,517 33,221,996 77,503,513
---------------- ---------------- ----------------
Utah--
Davis County School
District TANS Series
1995
4.250%, due
06/28/96............ -- -- 3,000,000 3,009,226 3,000,000 3,009,226
Emery County Utah PCR
Rev., Pacificorp
Proj., CP,
3.100%, due
09/13/95............ 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Intermountain Power
Agency Utah Power
Supply Revenue RB
Series 1985E
3.150%, due
09/15/95............ -- -- 2,500,000 2,500,000 2,500,000 2,500,000
Series 1985F
4.150%, due
09/15/95............ -- -- 1,250,000 1,250,000 1,250,000 1,250,000
Ogden, Utah Industrial
Development, Boyer
McKay Dee, FRDN,
3.850%, due
09/06/95............ 355,000 355,000 -- -- 355,000 355,000
Salt Lake City Utah,
Pooled Hospital
Financing Program,
CP,
3.700%, due
11/21/95............ 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
Salt Lake County HFA,
Elderly Housing
Revenue RB Sandy
Retirement Center
3.750%, due
09/07/95............ -- -- 4,900,000 4,900,000 4,900,000 4,900,000
Tooele, County Utah
Hazardous Waste
Treatment,
Westinghouse
Electric Project,
Ser. A, CP, 3.950%,
due 10/17/95........ 5,800,000 5,800,000 -- -- 5,800,000 5,800,000
Union Pacific, USPCI
Project A, CP,
4.150%, due
11/15/95............ 3,600,000 3,600,000 -- -- 3,600,000 3,600,000
---------------- ---------------- ----------------
17,755,000 11,659,226 29,414,226
---------------- ---------------- ----------------
Vermont--
Vermont State Student
Assistance Corp.,
FRDN,
3.700%, due
09/06/95............ 800,000 800,000 -- -- 800,000 800,000
---------------- ---------------- ----------------
Virginia--
Fairfax County,
Virginia IDA,
Fairfax Hospital,
FRDN,
3.650%, due
09/06/95............ 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Prince William County
Virginia Lease
Partnership
Certificates, COP,
4.000%, due
12/01/95............ 400,000 400,269 -- -- 400,000 400,269
---------------- ---------------- ----------------
1,400,269 -- 1,400,269
---------------- ---------------- ----------------
</TABLE>
See notes to financial statements.
PF-30
<PAGE> 119
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
TAX FREE TAX FREE TAX FREE TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE PRINCIPAL AMOUNT VALUE
- ---------------------- ---------------- ---------------- ---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Washington--
Port Kalama,
Washington Public
Corporation,
Conagra, Inc., FRDN,
3.450%, due
09/06/95............ $1,400,000 $ 1,400,000 $ -- $ -- $ 1,400,000 $ 1,400,000
Seattle Washington
Municipal Light &
Power, Ser. B, CP,
3.250%, due
09/05/95............ 4,000,000 4,000,000 -- -- 4,000,000 4,000,000
Tacoma Washington
Electric Systems
Rev., Rev.,
6.750%, due
01/01/96............ 1,000,000 1,010,230 -- -- 1,000,000 1,010,230
---------------- ---------------- ----------------
6,410,230 -- 6,410,230
---------------- ---------------- ----------------
West Virginia--
Marion County, West
Virginia County
Community Solid
Waste Disposal
Facility FRDN,
3.800%, due
09/06/95............ 1,300,000 1,300,000 -- -- 1,300,000 1,300,000
West Virginia Public
Energy, Morgantown
Association Project,
FRDN,
3.200%, due
09/13/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
---------------- ---------------- ----------------
3,300,000 -- 3,300,000
---------------- ---------------- ----------------
Wisconsin--
Alma Wisconsin
Pollution Control,
Dairyland Power
Corp., FRDN,
3.800%, due
09/06/95............ 5,600,000 5,600,000 -- -- 5,600,000 5,600,000
Grand Chute, Wisconsin
Industrial Revenue,
Kent Paper Co.,
FRDN,
3.700%, due
09/06/95............ 1,440,000 1,440,000 -- -- 1,440,000 1,440,000
Lacrosse, Industrial
Development,
Dairyland Power Coop
Project, FRDN,
3.800%, due
09/06/95............ 1,900,000 1,900,000 -- -- 1,900,000 1,900,000
Menomonee Falls
Wisconsin IDA,
Butler Paper Co.
Project, Rev.,
3.650%, due
09/06/95............ 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Milwaukee Revenue
School Order Notes
Series 1995B
4.500%, due
08/22/96............ -- -- 6,000,000 6,028,288 6,000,000 6,028,288
Milwaukee Wisconsin,
Housing Authority,
Yankee Hill
Apartments, FRDN,
3.550%, due
09/06/95............ 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
Wisconsin State Health
& Educational
Updates, Alexian
Village Milwaukee
Inc., CP,
3.850%, due
11/21/95............ 2,500,000 2,500,000 -- -- 2,500,000 2,500,000
Wisconsin State
Operating Notes, GO,
4.500%, due
06/17/96............ 3,800,000 3,820,720 -- -- 3,800,000 3,820,720
---------------- ---------------- ----------------
18,760,720 6,028,288 24,789,008
---------------- ---------------- ----------------
Wyoming--
Rock Springs, Wyoming
Industrial
Development,
Safeway, Inc.
Project,
PUT, 3.850%, due
03/01/96............ 2,475,000 2,475,000 -- -- 2,475,000 2,475,000
PUT, 4.500%, due
09/01/95............ 2,475,000 2,475,000 -- -- 2,475,000 2,475,000
Sweetwater County
Wyoming,
Environmental
Improvement, Pacific
Corp. CP,
3.650%, due
10/03/95............ 1,480,000 1,480,000 -- -- 1,480,000 1,480,000
Green River City PCR,
RB Texasgulf Project
Series 1984
2.900%, due
09/07/95............ -- -- 1,800,000 1,800,000 1,800,000 1,800,000
---------------- ---------------- ----------------
6,430,000 1,800,000 8,230,000
---------------- ---------------- ----------------
Mutual Funds:
Aim Tax Free Inv.
Tr. ................ -- -- 12,596,000 12,596,000 12,596,000 12,596,000
---------------- ---------------- ----------------
TOTAL INVESTMENTS..... $ 435,412,477 $ 323,661,817 $ 759,074,294
=========== =========== ===========
</TABLE>
See notes to financial statements.
PF-31
<PAGE> 120
VISTA TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<S> <C> <C>
BAN = Bond Anticipation Note
COP = Certificate of Participation
CP = Commercial Paper
GO = General Obligation
IDA = Industrial Development Authority
PCR = Pollution Control Revenue
RAN = Revenue Anticipation Note
Rev. = Revenue Bond
TAN = Tax Anticipation Note
TRAN = Tax and Revenue Anticipation Note
FRDN = Floating Rate Demand Notes: The maturity date shown is the next interest reset date; the rate shown is
the rate in effect at August 31, 1995.
</TABLE>
See notes to financial statements.
PF-32
<PAGE> 121
VISTA TAX FREE MONEY MARKET FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER PRO FORMA PRO FORMA
TAX FREE MMF TAX FREE MMF ADJUSTMENTS COMBINED
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value.......... $435,412,477 $323,661,817 $ 0 $759,074,294
Cash..................................... 46,802 5,369,091 0 5,415,893
Receivables
Interest............................ 2,792,413 2,014,870 0 4,807,283
Shares of beneficial interest
sold.............................. 418,787 0 0 418,787
Other assets............................. 0 125 0 125
------------ ------------ ----------- -----------
Total assets.................... 438,670,479 331,045,903 0 769,716,382
------------ ------------ ----------- -----------
LIABILITIES:
Payable for investment securities
purchased.............................. 13,611,812 5,032,550 0 18,644,362
Dividends payable........................ 787,678 880,953 0 1,668,631
Accrued liabilities:
Administration fee.................. 19,106 15,643 0 34,749
Advisory fee........................ 38,214 34,700 0 72,914
Professional Fee.................... 0 (17,964 ) 0 (17,964)
Trustee Fee......................... 0 (789 ) 0 (789)
Printing Fee........................ 0 4,253 0 4,253
Transfer Payable.................... 0 1,612 0 1,612
Registration Fee Payable............ 0 19,270 0 19,270
Custodian fees...................... 72,592 45,465 0 118,057
Distribution fee.................... 42,171 0 0 42,171
Fund servicing fees................. 14,550 11,872 0 26,422
Shareholder servicing fees.......... 57,288 101,207 0 158,495
Sub-administration fee.............. 19,107 8,675 0 27,782
Other............................... 163,249 3,190 0 166,439
------------ ------------ ----------- -----------
Total liabilities............... 14,825,767 6,140,637 0 20,966,404
------------ ------------ ----------- -----------
NET ASSETS
Paid in capital.......................... 423,878,995 325,010,058 0 748,889,053
Accumulated undistributed net investment
income................................. 7,496 0 0 7,496
Accumulated undistributed net realized
gain (loss) on investment
transactions........................... (41,779 ) (104,792 ) 0 (146,571)
------------ ------------ ----------- -----------
Net assets...................... 423,844,712 $324,905,266 $ 0 $748,749,978
============== ============== ============= =============
Net assets by class
Vista............................... $166,930,012 $324,905,266 $ 0 $491,835,278
------------ ------------ ----------- -----------
Premier............................. 148,419,574 0 0 148,419,574
------------ ------------ ----------- -----------
Institutional....................... 108,495,126 0 0 108,495,126
------------ ------------ ----------- -----------
Total combined net assets by
class......................... $423,844,712 $324,905,266 $ 0 $748,749,978
============== ============== ============= =============
Shares of beneficial interest outstanding
(no par value; unlimited number of
shares authorized):
Vista Shares........................ 166,943,238 325,010,058 0 491,953,296
============== ============== ============= =============
Premier Shares...................... 148,431,333 0 0 148,431,333
============== ============== ============= =============
Institutional Shares................ 108,503,722 0 0 108,503,722
============== ============== ============= =============
Net asset value, offering and redemption
price per share, Vista, Premier and
Institutional (net assets/shares
outstanding)........................... $ 1.00 $ 1.00 $ 0.00 $ 1.00
============== ============== ============= =============
Cost of Investments...................... $435,412,477 $323,661,817 $ 0 $759,074,294
============== ============== ============= =============
</TABLE>
See notes to financial statements.
PF-33
<PAGE> 122
VISTA TAX FREE MONEY MARKET FUND
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA HANOVER PRO FORMA PRO FORMA
TAX FREE MMF TAX FREE MMF ADJUSTMENTS COMBINED
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
INTEREST INCOME........................ $16,692,909 $13,037,751 $ 0 $29,730,660
------------ ------------ ---------- ------------
EXPENSES
Distribution fees
Vista Shares.................. 293,807 0 178,002(1),(3) 471,809
Premier Shares................ 258,709 0 (258,709)(3) 0
Institutional Shares.......... 0 0 0 0
Fund Servicing fees
Vista Shares.................. 146,903 32,342 (179,245)(2) 0
Premier Shares................ 172,473 0 (172,473)(2) 0
Institutional Shares.......... 0 0 0 0
Shareholder Servicing fees
Vista Shares.................. 367,259 1,208,546 75,526(1),(3) 1,651,331
Premier Shares................ 344,945 0 86,236(3) 431,181
Institutional Shares.......... 0 0 0 0
Administration fees................ 220,141 150,835 11,618(1) 382,594
Advisory fees...................... 440,282 517,948 (193,043)(1) 765,187
Sub-Administration fees............ 220,141 103,589 58,864(1) 382,594
Professional fees 69,285 19,283 (19,283)(6) 69,285
Custodian fees..................... 250,141 48,126 (112,080)(4) 186,187
Printing and postage............... 15,002 7,687 0 22,689
Registration costs................. 77,642 92,143 0 169,785
Transfer agent fees
Vista Shares.................. 60,063 16,883 13,720(5) 90,666
Premier Shares................ 54,344 0 (11,544)(5) 42,800
Institutional Shares.......... 44,721 0 (18,039)(5) 26,682
Trustee fees....................... 24,959 4,923 7,449(7) 37,331
Amortization of organizational
costs............................ 0 21,495 (21,495)(6) 0
Other.............................. 182,303 16,890 0 199,193
------------ ------------ ---------- ------------
Total expenses............ 3,243,120 2,240,690 (554,497) 4,929,313
------------ ------------ ---------- ------------
Less amounts waived by the
Administrator, Shareholder
Servicing Agents, Adviser
and Distributor............. (602,795) (103,589) 17,815(8) (688,569)
Less expenses borne by
Distributor................. (10,639) 0 10,639(8) 0
------------ ------------ ---------- ------------
Net expenses.................. 2,629,686 2,137,101 (526,043) 4,240,744
------------ ------------ ---------- ------------
Net investment income..... 14,063,223 10,900,650 526,043 25,489,916
------------ ------------ ---------- ------------
REALIZED AND UNREALIZED GAIN/ (LOSS) ON
INVESTMENTS
Realized gain (loss) on investment
transactions..................... (31,361) (95,628) 0 (126,989)
------------ ------------ ---------- ------------
Net increase in net assets from
operations....................... $14,031,862 $10,805,022 $ 526,043 $25,362,927
============== ============== ============ ==============
</TABLE>
See notes to financial statements.
PF-34
<PAGE> 123
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Bond Anticipation Notes --
Brockport CSD BANS
4.250%, due 06/27/96....................... $ -- $ -- $ 4,000,000 $ 4,015,308 $ 4,000,000 $ 4,015,308
Broome County New York,
4.750%, due 04/19/96....................... 5,000,000.. 5,012,089 -- -- 5,000,000 5,012,089
Hempstead Town New York, Ser. A,
5.250%, due 03/01/96....................... 3,000,000 3,009,221 3,500,000 3,510,594 6,500,000 6,519,815
Hempstead Town New York, Ser. A,
5.500%, due 03/01/96....................... -- -- 500,000 502,105 500,000 502,105
Nassau County New York,
Ser. B, 5.250%, due 11/15/95............... 2,000,000 2,006,345 -- -- 2,000,000 2,006,345
Ser. E, 4.250%, due 03/15/96............... -- -- 1,570,000 1,575,286 1,570,000 1,575,286
Ser. F, 4.500%, due 03/15/96............... 5,000,000 5,013,116 -- -- 5,000,000 5,013,116
Oyster Bay BANS
4.000%, due 07/12/96....................... -- -- 4,000,000 4,011,564 4,000,000 4,011,564
Rochester, New York, Ser. I,
5.250%, due 03/12/96....................... 3,000,000 3,011,708 -- -- 3,000,000 3,011,708
------------ ------------ ------------
Total Bond Anticipation Notes................ 18,052,479 13,614,857 31,667,336
------------ ------------ ------------
General Obligations --
Nassau County New York, Ser. P,
6.300%, due 11/01/95....................... 3,000,000 3,009,705 -- -- 3,000,000 3,009,705
------------ ------------ ------------
Total General Obligations.................... 3,009,705 -- 3,009,705
------------ ------------ ------------
Total Government Backed Securities --
MTA Series F Pre-Funded U.S. Gov't
Securities
8.375%, due 07/01/96....................... -- -- 3,000,000 3,171,660 3,000,000 3,171,660
NYC Municipal Assistance Corp. Series 56
Pre-Funded 8.100%, due 07/01/96............ -- -- 500,000 527,840 500,000 527,840
NYS Urban Development Correctional Facility
Series A Pre-Funded
9.200%, due 01/01/96....................... -- -- 250,000 258,856 250,000 258,856
UNited Nations Development Corp. Revenue
Phase 2&3
7.875%, due 07/01/96....................... -- -- 1,300,000 1,369,038 1,300,000 1,369,038
------------ ------------ ------------
Total Government Backed Securities........... -- 5,327,394 5,327,394
------------ ------------ ------------
Revenue Anticipation Notes --
Central Square New York, Central School
District, 4.000%, due 11/15/95............. 2,500,000 2,501,749 -- -- 2,500,000 2,501,749
Metropolitan Transportation Authority of New
York, Ser. A, 5.500%, due 12/14/95......... 2,500,000 2,507,517 -- -- 2,500,000 2,507,517
Nassau County New York,
Ser. A, 4.250%, due 12/28/95............... 4,000,000 4,008,214 -- -- 4,000,000 4,008,214
Ser. B, 4.250%, due 03/15/96............... 5,000,000 5,013,054 -- -- 5,000,000 5,013,054
RANS 4.250%, due 06/27/96.................. -- -- 2,000,000 2,007,638 2,000,000 2,007,638
New York City, New York, Ser. A,
4.500%, due 04/11/96....................... 5,000,000 5,021,375 -- -- 5,000,000 5,021,375
------------ ------------ ------------
Total Revenue Anticipation Notes............. 19,051,909 2,007,638 21,059,547
------------ ------------ ------------
</TABLE>
See notes to financial statements.
PF-35
<PAGE> 124
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Revenue Bonds --
City of Hudson, New York IDA, Emsig Project,
PUT 5.200%, due 12/15/95................... $ 1,050,000 $ 1,050,000 $ -- $ -- $ 1,050,000 $ 1,050,000
New York State Dormitory Authority Rev., St.
Vincents Hospital 4.000%, due 02/01/96..... 1,645,000 1,647,637 -- -- 1,645,000 1,647,637
New York State ERDA, PCR:
New York State Electric and Gas Corp. RB:
4.650%, due 03/15/96....................... -- -- 1,500,000 1,500,000 1,500,000 1,500,000
(Morgan Guaranty Trust Co.)
4.650%, due 03/15/96....................... -- -- 1,000,000 1,000,000 1,000,000 1,000,000
Series D (Union Bank of Switzerland)
4.600%, due 12/01/96....................... -- -- 2,500,000 2,500,000 2,500,000 2,500,000
LILCO Project Series B (Deutsche Bank A.G.)
NYS Research and Energy Authority
4.700%, due 03/01/96....................... 1,250,000 1,250,000 1,250,000 1,250,000
NYS Housing Finance Agency RFB University
Construction Series
7.000%, due 05/01/96....................... -- -- 200,000 203,722 200,000 203,722
New York State Medical Care Facilities
Financing Agency, Beth Israel Medical
Center, Ser. A,
7.000%, due 11/01/95....................... 1,025,000 1,030,213 -- -- 1,025,000 1,030,213
Israel Medical Center Project, Ser. A,
4.000%, due 11/01/95....................... 1,000,000 1,000,140 -- -- 1,000,000 1,000,140
New York State Power Authority, Rev. &
General Purpose, PUT 4.400%, due
09/01/95................................... 9,300,000 9,300,000 7,000,000 7,000,000 16,300,000 16,300,000
Triborough Bridge and Tunnel Authority, Ser.
H, PUT 8.375%, due 01/01/96................ 3,400,000 3,520,061 -- -- 3,400,000 3,520,061
------------ ------------ ------------
Total Revenue Bonds.......................... 18,798,051 12,203,722 31,001,773
------------ ------------ ------------
Tax Anticipation Notes --
Bedford New York Central School District,
3.750%, due 11/16/95....................... 1,500,000 1,500,763 -- -- 1,500,000 1,500,763
Clarence CSD TANS
4.000%, due 06/28/96....................... -- -- 2,000,000 2,004,648 2,000,000 2,004,648
Deer Park New York Unified Free School
District,
4.250%, due 06/27/96....................... 5,000,000 5,018,061 -- -- 5,000,000 5,018,061
East Islip New York Unified Free School
District,
4.500%, due 06/28/96....................... 3,000,000 3,014,251 -- -- 3,000,000 3,014,251
East Meadow UFSD TANS
4.250%, due 06/27/96....................... -- -- 2,000,000 2,009,316 2,000,000 2,009,316
Edgemont New York Unified Free School
District, Greenburgh, 4.000%, due
11/30/95................................... 1,000,000 1,000,726 -- -- 1,000,000 1,000,726
Greece CSD Monroe County TANS
4.000%, due 06/28/96....................... -- -- 3,000,000 3,004,613 3,000,000 3,004,613
Harborfields Central School District, New
York,
4.250%, due 06/27/96....................... 1,550,000 1,551,659 -- -- 1,550,000 1,551,659
Katonah-Lewisboro New York Union Free School
District, 3.750%, due 10/19/95............. 5,000,000 5,001,600 -- -- 5,000,000 5,001,600
Longwood Central School District at Middle
Island New York, 4.500%, due 06/26/96...... 3,000,000 3,010,601 -- -- 3,000,000 3,010,601
Merrick UFSD TANS
4.250%, due 06/26/96....................... -- -- 1,000,000 1,004,378 1,000,000 1,004,378
Nassau County, New York, Ser. C,
5.400%, due 09/28/95....................... 2,635,000 2,636,913 -- -- 2,635,000 2,636,913
New York City, New York Ser. A,
4.500%, due 02/15/96....................... 10,000,000 10,033,012 -- -- 10,000,000 10,033,012
Ossining New York Union Free School District,
4.000%, due 09/29/95....................... 1,700,000 1,700,635 -- -- 1,700,000 1,700,635
Port Washington UFSD TANS
4.250%, due 06/13/96....................... -- -- 2,000,000 2,008,668 2,000,000 2,008,668
Saint Lawrence County New York,
4.750%, due 10/20/95....................... 2,700,000 2,701,201 -- -- 2,700,000 2,701,201
Scarsdale UFSD TANS
4.000%, due 06/13/96....................... -- -- 3,000,000 3,009,307 3,000,000 3,009,307
</TABLE>
See notes to financial statements.
PF-36
<PAGE> 125
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
South Huntington UFSD TANS
4.500%, due 06/28/96....................... $ -- $ -- $ 2,000,000 $ 2,009,338 $ 2,000,000 $ 2,009,338
Southhampton County of Suffolk UFSD TANS
4.500%, due 06/28/96....................... -- -- 4,350,000 4,372,011 4,350,000 4,372,011
Suffolk County New York, Ser. II,
4.500%, due 09/14/95....................... 3,275,000 3,275,534 -- -- 3,275,000 3,275,534
Three Village CSD TANS
4.250%, due 06/28/96....................... -- -- 1,600,000 1,610,103 1,600,000 1,610,103
Town of Hempstead UFSD
4.500%, due 06/28/96....................... -- -- 2,000,000 2,010,978 2,000,000 2,010,978
Ulster County New York,
5.500%, due 03/28/96....................... 5,000,000 5,008,680 -- -- 5,000,000 5,008,680
Westchester County New York,
5.000%, due 12/14/95....................... 2,000,000 2,002,757 -- -- 2,000,000 2,002,757
------------ ------------ ------------
Total Tax Anticipation Notes................. 47,456,393 23,043,360 70,499,753
------------ ------------ ------------
Commercial Paper --
City of New York Water Authority:
3.800%, due 09/19/95....................... -- -- 3,000,000 3,000,000 3,000,000 3,000,000
3.850%, due 10/26/95....................... -- -- 1,800,000 1,800,000 1,800,000 1,800,000
3.550%, due 11/15/95....................... -- -- 1,000,000 1,000,000 1,000,000 1,000,000
3.750%, due 11/15/95....................... -- -- 2,000,000 2,000,000 2,000,000 2,000,000
3.750%, due 11/16/95....................... -- -- 2,000,000 2,000,000 2,000,000 2,000,000
3.550%, due 09/08/95....................... 9,300,000 9,300,000 -- -- 9,300,000 9,300,000
3.100%, due 09/15/95....................... 3,200,000 3,200,000 -- -- 3,200,000 3,200,000
3.100%, due 09/15/95....................... 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
City of New York,
3.450%, due 09/06/95....................... 2,100,000 2,100,000 -- -- 2,100,000 2,100,000
4.150%, due 10/02/95....................... 10,500,000 10,500,000 -- -- 10,500,000 10,500,000
3.700%, due 10/03/95....................... 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
3.800%, due 09/06/95....................... 2,200,000 2,200,000 -- -- 2,200,000 2,200,000
3.750%, due 03/14/96....................... 4,700,000 4,700,000 -- -- 4,700,000 4,700,000
NYC UTGO Fiscal 1994H Subseries H-3
4.150%, due 10/03/95....................... -- -- 2,200,000 2,200,000 2,200,000 2,200,000
3.700%, due 10/04/95....................... -- -- 1,000,000 1,000,000 1,000,000 1,000,000
3.850%, due 10/27/95....................... -- -- 2,000,000 2,000,000 2,000,000 2,000,000
3.650%, due 11/17/95....................... -- -- 1,000,000 1,000,000 1,000,000 1,000,000
3.750%, due 11/20/95....................... -- -- 1,000,000 1,000,000 1,000,000 1,000,000
3.550%, due 11/27/95....................... -- -- 2,800,000 2,800,000 2,800,000 2,800,000
3.750%, due 12/07/95....................... -- -- 2,000,000 2,000,000 2,000,000 2,000,000
New York State Dormitory Authority,
Columbia University,
3.650%, due 11/17/95....................... 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Memorial Sloan Kettering, Ser. A,
3.650%, due 11/17/95....................... 4,700,000 4,700,000 -- -- 4,700,000 4,700,000
New York State Environmental Facilities Corp.
Solid Waste Disposal GE Corp.
3.600%, due 09/07/95....................... 4,100,000 4,100,000 -- -- 4,100,000 4,100,000
3.550%, due 10/16/95....................... -- -- 2,300,000 2,300,000 2,300,000 2,300,000
3.550%, due 10/17/95....................... -- -- 2,150,000 2,150,000 2,150,000 2,150,000
3.600%, due 10/24/95....................... -- -- 2,500,000 2,500,000 2,500,000 2,500,000
3.700%, due 11/10/95....................... -- -- 2,750,000 2,750,000 2,750,000 2,750,000
3.550%, due 11/21/95....................... 1,200,000 1,200,000 -- -- 1,200,000 1,200,000
New York State, BAN,
Series Q 3.650%, due 09/06/95.............. -- -- 1,350,000 1,350,000 1,350,000 1,350,000
Series R 3.650%, due 09/06/95.............. -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Series P 3.750%, due 09/07/95.............. -- -- 2,000,000 2,000,000 2,000,000 2,000,000
3.500%, due 09/13/95....................... -- -- 1,650,000 1,650,000 1,650,000 1,650,000
3.800%, due 10/02/95....................... 5,000,000 5,000,000 -- -- 5,000,000 5,000,000
3.650%, due 10/02/95....................... 4,300,000 4,300,000 -- -- 4,300,000 4,300,000
3.700%, due 10/02/95....................... 8,000,000 8,000,000 -- -- 8,000,000 8,000,000
3.850%, due 10/05/95....................... -- -- 2,000,000 2,000,000 2,000,000 2,000,000
</TABLE>
See notes to financial statements.
PF-37
<PAGE> 126
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Series Q 3.550%, due 10/26/95.............. $ -- $ -- $ 2,200,000 $ 2,200,000 $ 2,200,000 $ 2,200,000
Series Q 3.600%, due 10/26/95.............. -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Series R 3.800%, due 11/16/95.............. -- -- 3,100,000 3,100,000 3,100,000 3,100,000
------------ ------------ ------------
Total Commercial Paper....................... 65,800,000 47,800,000 113,600,000
------------ ------------ ------------
Floating Rate Demand Notes --
Babylon GO Series 1994B (AMBAC/SPA-Bank of
Nova Scotia) 3.200%, due 09/06/95.......... -- -- 500,000 500,000 500,000 500,000
Babylon New York IDA,
General Microwave Corp.,
3.350%, due 09/06/95....................... 600,000 600,000 -- -- 600,000 600,000
J. D'Addario & Co. Project,
3.550%, due 09/06/95....................... 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Napco Security Systems, Inc.,
3.400%, due 09/01/95....................... 700,000 700,000 -- -- 700,000 700,000
Broome County New York IDA, Binghamton Realty
Project, 3.650%, due 09/06/95.............. 950,000 950,000 -- -- 950,000 950,000
Cortland County New York IDA, Saulsbury Fire
Equipment Corp., 3.800%, due 09/06/95...... 1,285,000 1,285,000 -- -- 1,285,000 1,285,000
Duchess County IDA, MR Associates,
3.750%, due 09/06/95....................... 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Electric and Gas Series 1994D
3.000%, due 09/07/95....................... -- -- 4,300,000 4,300,000 4,300,000 4,300,000
Erie County IDA, Rosina Food Products, Inc.,
3.750%, due 09/06/95....................... 2,335,000 2,335,000 -- -- 2,335,000 2,335,000
Erie County New York Water Authority,
Ser. A, 3.250%, due 09/06/95............... 2,500,000 2,500,000 -- -- 2,500,000 2,500,000
Ser. B, 3.250%, due 09/06/95............... 900,000 900,000 -- -- 900,000 900,000
Glens Falls New York IDA,
Namic Project, 3.650%, due 09/06/95........ 2,110,000 2,110,000 -- -- 2,110,000 2,110,000
Broad Street Plaza Project,
3.750%, due 09/06/95....................... 1,405,000 1,405,000 -- -- 1,405,000 1,405,000
Indian Trace Community Development District
Florida Basin 1 Series A UPDATES
(MBIA/SPA-Swiss Bank Corp.)
3.400%, due 09/06/95....................... -- -- 4,000,000 4,000,000 4,000,000 4,000,000
Lewis County New York IDA, Climax
Manufacturing Co., 3.750%, due 09/06/95.... 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Metropolitan Transportation Authority of New
York, Commuter Facilities, 3.450%, due
09/06/95................................... 8,900,000 8,900,000 -- -- 8,900,000 8,900,000
Monroe County IDA, Columbia Sussex Corp.,
5.000%, due 09/06/95....................... 4,665,000 4,663,965 -- -- 4,665,000 4,663,965
3.850%, due 09/06/95....................... 400,000 400,000 -- -- 400,000 400,000
Mount Pleasant New York IDA, General Motors
Corp., 3.700%, due 09/06/95................ 2,095,000 2,095,000 -- -- 2,095,000 2,095,000
Nassau County IDA CFR, Cold Spring Harbor
Laboratory Project (Morgan Guaranty Trust
Co.) Series 1989 3.300%, due 09/01/95...... -- -- 4,000,000 4,000,000 4,000,000 4,000,000
New York City Housing Development Corp.,
East 96th Street Project, Ser. A,
3.500%, due 09/06/95....................... 1,000,000 1,000,000 1,000,000 1,000,000
1984 Ser. A, Carnegie Park Project,
3.800%, due 09/06/95....................... 1,990,000 1,990,000 -- -- 1,990,000 1,990,000
Columbus Green Project, Ser. A,
5.100%, due 09/06/95....................... 3,475,000 3,475,000 3,475,000 3,475,000
Mortgage Revenue Multifamily Columbus
Garden Projects 3.450%, due 09/01/95....... -- -- 200,000 200,000 200,000 200,000
Mortgage Rev., Parkgate Tower, Ser. 1,
3.400%, due 09/06/95....................... 3,260,000 3,260,000 -- -- 3,260,000 3,260,000
Multifamily, James Tower,
3.400%, due 09/06/95....................... 4,800,000 4,800,000 -- -- 4,800,000 4,800,000
York Ave. Development Project,
3.500%, due 09/06/95....................... 8,000,000 8,000,000 -- -- 8,000,000 8,000,000
</TABLE>
See notes to financial statements.
PF-38
<PAGE> 127
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
New York City IDA,
1990 Goodwill Industries,
3.400%, due 09/06/95....................... $ 1,080,000 $ 1,080,000 $ -- $ -- $ 1,080,000 $ 1,080,000
Andin International, Inc.,
3.600%, due 09/06/95....................... 500,000 500,000 -- -- 500,000 500,000
Calhoun School Inc. Project
3.300%, due 09/07/95....................... -- -- 1,800,000 1,800,000 1,800,000 1,800,000
Children's Oncology Society
3.350%, due 09/06/95....................... -- -- 2,000,000 2,000,000 2,000,000 2,000,000
Civil Facility, Childrens Oncology Society,
3.350%, due 09/06/95....................... 900,000 900,000 -- -- 900,000 900,000
Compagnie Nationale Air Project,
3.350%, due 09/06/95....................... 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Field Hotel Association JFK Project,
3.350%, due 09/06/95....................... 1,000,000 1,000,000 9,700,000 9,700,000 10,700,000 10,700,000
Japan Airlines Co.,
3.650%, due 09/06/95....................... 4,000,000 4,000,000 -- -- 4,000,000 4,000,000
LaGuardia Association Project,
3.350%, due 09/06/95....................... 3,800,000 3,800,000 11,000,000 11,000,000 14,800,000 14,800,000
National Audubon Society,
3.250%, due 09/01/95....................... 2,300,000 2,300,000 4,000,000 4,000,000 6,300,000 6,300,000
Ser. B, Tomsed Realty Corp.,
3.600%, due 09/06/95....................... 400,000 400,000 -- -- 400,000 400,000
Ser. D, Kenner Printing Co., Inc.,
3.600%, due 09/06/95....................... 750,000 750,000 -- -- 750,000 750,000
Ser. E, 3.600%, due 09/06/95............... 700,000 700,000 -- -- 700,000 700,000
Ser. F, Marion Glass and Window Shade
Corp.,
3.600%, due 09/06/95....................... 600,000 600,000 -- -- 600,000 600,000
Ser. G, Monarch Construction Corp.,
3.600%, due 09/01/95....................... 450,000 450,000 -- -- 450,000 450,000
Ser. N, Spreading Machine Exchange, Inc.,
3.600%, due 09/06/95....................... 500,000 500,000 -- -- 500,000 500,000
White Plains Auto Project,
3.600%, due 09/06/95....................... 600,000 600,000 -- -- 600,000 600,000
New York City, New York Municipal Water
Financing Authority
3.600%, due 09/01/95....................... 200,000 200,000 5,700,000 5,700,000 5,900,000 5,900,000
New York City, New York,
Ser. A-7, 3.350%, due 09/01/95............. 3,400,000 3,400,000 -- -- 3,400,000 3,400,000
Ser. A-9, 3.500%, due 09/06/95............. 8,000,000 8,000,000 -- -- 8,000,000 8,000,000
Ser B, Sub-Ser. B-2, 3.600%, due
09/01/95................................... 400,000 400,000 -- -- 400,000 400,000
Ser. B through Sub-Ser. B-10, GO, 3.550%,
due 09/01/95............................... 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Ser. C through Sub-Ser. c-4, GO, 3.500%,
due 09/01/95............................... 100,000 100,000 -- -- 100,000 100,000
Ser. E-3, GO, 3.500%, due 09/06/95......... 200,000 200,000 -- -- 200,000 200,000
Ser. F-6, GO, 3.550%, due 09/01/95......... 3,600,000 3,600,000 -- -- 3,600,000 3,600,000
Sub-Ser. A-5, GO, 3.350%, due 09/06/95..... 100,000 100,000 -- -- 100,000 100,000
Sub-Ser. B-2, GO, 3.350%, due 09/01/95..... 900,000 900,000 -- -- 900,000 900,000
Sub-Ser. B-4, GO 3.650%, due 09/01/95...... 400,000 400,000 -- -- 400,000 400,000
Sub-Ser. B-8, GO, 3.600%, due 09/06/95..... 4,900,000 4,900,000 -- -- 4,900,000 4,900,000
New York City Trust for Cultural Resources,
Museum of Natural History
3.200%, due 09/06/95....................... 3,000,000 3,000,000 550,000 550,000 3,550,000 3,550,000
New York City Trust for Cultural Resources,
Solomon Guggenheim
3.250%, due 09/01/95....................... -- -- 1,000,000 1,000,000 1,000,000 1,000,000
NYC UTGO
Subseries 1993B-4
3.600%, due 09/01/95..................... -- -- 2,700,000 2,700,000 2,700,000 2,700,000
Subseries 1994B-3
3.350%, due 09/01/95....................... -- -- 1,100,000 1,100,000 1,100,000 1,100,000
Subseries 1994B-4
3.350%, due 09/01/95....................... -- -- 4,900,000 4,900,000 4,900,000 4,900,000
</TABLE>
See notes to financial statements.
PF-39
<PAGE> 128
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Subseries 1994B-7
3.350%, due 09/01/95....................... $ -- $ -- $ 100,000 $ 100,000 $ 100,000 $ 100,000
New York State Dormitory Authority,
Miriam Osborn Memorial Home, Ser. A,
3.300%, due 09/06/95....................... 1,600,000 1,600,000 -- -- 1,600,000 1,600,000
Cornell University, Ser B,
3.250%, due 09/01/95....................... 300,000 300,000 6,000,000 6,000,000 6,300,000 6,300,000
New York State Energy Research & Development
Authority PCR, Hudson Gas & Electric Co.,
[Hanover] 3.450%, due 09/06/95............. 3,000,000 3,000,000 -- -- 3,000,000 3,000,000
Series 1985b 3.350%, due 09/07/95.......... -- -- 3,500,000 3,500,000 3,500,000 3,500,000
Series 1987B 3.350%, due 09/07/95.......... -- -- 800,000 800,000 800,000 800,000
Long Island Lighting Co., Ser. B,
3.500%, due 09/06/95....................... 4,800,000 4,800,000 -- -- 4,800,000 4,800,000
New York Electric & Gas, Ser. B,
3.150%, due 09/01/95....................... 2,900,000 2,900,000 -- -- 2,900,000 2,900,000
Niagra Mohawk Power Corp.:
Project A 3.300%, due 09/01/95............. 2,200,000 2,200,000 -- -- 2,200,000 2,200,000
Series 1985A 3.500%, due 09/01/95.......... -- -- 4,000,000 4,000,000 4,000,000 4,000,000
Series B 3.450%, due 09/01/95.............. -- -- 3,300,000 3,300,000 3,300,000 3,300,000
Series C 3.450%, due 09/01/95.............. 1,700,000 1,700,000 2,150,000 2,150,000 3,850,000 3,850,000
Series 1986A 3.550%, due 09/01/95.......... -- -- 4,000,000 4,000,000 4,000,000 4,000,000
Series 1987A 3.300%, due 09/01/95.......... -- -- 4,700,000 4,700,000 4,700,000 4,700,000
Rochester Gas & Electric,
3.500%, due 09/30/95....................... 6,100,000 6,100,000 -- -- 6,100,000 6,100,000
New York State Housing Finance Agency,
Multifamily, Ser. E,
3.600%, due 09/06/95....................... 1,100,000 1,100,000 -- -- 1,100,000 1,100,000
Normandte Court I, Ser. A,
3.400%, due 09/06/95....................... -- -- 12,800,000 12,800,000 12,800,000 12,800,000
Normandte Court II, Ser. A,
3.500%, due 09/06/95....................... 3,060,000 3,060,000 -- -- 3,060,000 3,060,000
Residential Insured, Ser. A,
3.600%, due 09/06/95....................... 2,050,000 2,050,000 -- -- 2,050,000 2,050,000
New York State Job Development Authority,
Ser. A-1 through A-21,
3.450%, due 09/01/95....................... 6,120,000 6,120,000 -- -- 6,120,000 6,120,000
Ser. A-1 through A-42,
3.750%, due 09/01/95....................... 2,620,000 2,620,000 -- -- 2,620,000 2,620,000
Ser. B-1 through B-21,
3.750%, due 09/01/95....................... 3,130,000 3,130,000 -- -- 3,130,000 3,130,000
Ser. B-1 through B-9,
3.450%, due 09/01/95....................... 1,310,000 1,310,000 -- -- 1,310,000 1,310,000
Ser. E-1 through E-55,
3.700%, due 09/30/95....................... 555,000 555,000 -- -- 555,000 555,000
Ser. G-1 to G-33,
3.700%, due 09/30/95....................... 590,000 590,000 -- -- 590,000 590,000
Ser. H-1 through H-11,
3.700%, due 09/30/95....................... 140,000 140,000 -- -- 140,000 140,000
Special Purpose Ser. A-1,
3.800%, due 09/30/95....................... 65,000 65,000 -- -- 65,000 65,000
Special Purpose, Ser. A-1 through A-13,
3.750%, due 09/01/95....................... 100,000 100,000 -- -- 100,000 100,000
Special Purpose Ser. B-1,
3.800%, due 09/30/95....................... 1,080,000 1,080,000 -- -- 1,080,000 1,080,000
Special Purpose, Ser. B-1 thru B-9,
3.750%, due 09/01/95....................... 800,000 800,000 -- -- 800,000 800,000
Special Purpose Ser. C-1,
3.800%, due 09/30/95....................... 320,000 320,000 -- -- 320,000 320,000
New York State Local Assistance Corp.,
Ser. A, 3.400%, due 09/06/95............... 13,500,000 13,500,000 9,700,000 9,700,000 23,200,000 23,200,000
Ser. B, 3.300%, due 09/06/95............... 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Ser. G, 3.300%, due 09/06/95............... -- -- 4,000,000 4,000,000 4,000,000 4,000,000
New York State Medical Care Facilities
Financing Agency 3.450%, due 09/06/95...... 5,600,000 5,600,000 -- -- 5,600,000 5,600,000
</TABLE>
See notes to financial statements.
PF-40
<PAGE> 129
VISTA NY TAX FREE MONEY MARKET FUND
PORTFOLIO OF INVESTMENTS -- (CONTINUED)
AUGUST 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA VISTA HANOVER HANOVER PRO-FORMA PRO-FORMA
NY TAX FREE NY TAX FREE NY TAX FREE NY TAX FREE COMBINED COMBINED
ISSUER PRINCIPAL VALUE PRINCIPAL VALUE PRINCIPAL VALUE
- --------------------------------------------- ----------- ------------ ----------- ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
New York State Thruway Authority General
Revenue 3.500%, due 09/06/95............... $ -- $ -- $ 2,700,000 $ 2,700,000 $ 2,700,000 $ 2,700,000
Newburgh New York IDA, Civic Facility, Mt.
St. Mary College, 3.650%, due 09/06/95..... 2,000,000 2,000,000 -- -- 2,000,000 2,000,000
Niagara Falls New York Bridge Commission,
Ser. A, 3.250%, due 09/06/95............... 3,200,000 3,200,000 -- -- 3,200,000 3,200,000
North Hempstead Solid Waste Management
Authority Series 1993A
3.500%, due 09/06/95....................... -- -- 3,500,000 3,500,000 3,500,000 3,500,000
Onondaga County New York IDA,
First Republic Corp. of America, 3.400%,
due 09/06/95............................... 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
Southern Container Project, Ser. B,
3.650%, due 09/06/95....................... 3,250,000 3,250,000 -- -- 3,250,000 3,250,000
Port Authority of New York & New Jersey,
3.450%, due 09/06/95....................... 3,358,000 3,358,000 -- -- 3,358,000 3,358,000
Puerto Rico Industrial, Medical, &
Environmental, Higher Education 3.600%, due
09/06/95................................... 5,400,000 5,400,000 -- -- 5,400,000 5,400,000
Rockland County New York IDA, X Products
Corp., 3.650%, due 09/06/95................ 1,150,000 1,150,000 -- -- 1,150,000 1,150,000
Seneca County IDA, CFR New York Chiropractic
College 3.300%, due 09/06/95............... -- -- 9,200,000 9,200,000 9,200,000 9,200,000
ST. Lawrence County IDA, PCR Reynolds Metals
Co. Project Series 1985 3.350%, due
09/01/95................................... -- -- 4,750,000 4,750,000 4,750,000 4,750,000
Suffolk County New York IDA,
Cold Spring Harbor Laboratories
3.300%, due 09/01/95....................... -- -- 200,000 200,000 200,000 200,000
Nissequogue Cogen Partners,
3.550%, due 09/06/95....................... 5,900,000 5,900,000 -- -- 5,900,000 5,900,000
YWHA Suffolk Inc., Civic,
3.650%, due 09/06/95....................... 1,000,000 1,000,000 -- -- 1,000,000 1,000,000
Syracuse IDA CFR RB Multi-Modal Syracuse
University Project 3.250%, due 09/01/95.... -- -- 9,900,000 9,900,000 9,900,000 9,900,000
Triborough Bridge & Tunnel Authority of New
York, Special Obligation 3.300%, due
09/06/95................................... 4,700,000 4,700,000 4,000,000 4,000,000 8,700,000 8,700,000
Warren & Washington Counties New York, IDA,
Stevens & Thompson 4.000%, due 09/30/95.... 754,300 754,300 -- -- 754,300 754,300
Westchester County New York IDA,
Elba Enterprises,
3.550%, due 09/06/95....................... 350,000 350,000 -- -- 350,000 350,000
Hitachi America Ltd,
3.700%, due 09/30/95....................... 1,500,000 1,500,000 -- -- 1,500,000 1,500,000
Yonkers New York IDA Civic Facilities,
Consumers Union Facility 3.550%, due
09/06/95................................... 1,700,000 1,700,000 -- -- 1,700,000 1,700,000
------------ ------------ ------------
Total Floating Rate Demand Notes............. 204,651,265 146,750,000 351,401,265
------------ ------------ ------------
TOTAL INVESTMENTS............................ $376,819,802 $250,746,971 $627,566,773
============ ============ ============
</TABLE>
- ---------------
BAN = Bond Anticipation Note
COP = Certificate of Participation
GO = General Obligation
IDA = Industrial Development Authority
PCR = Pollution Control Revenue
Rev. = Revenue Bond
See notes to financial statements.
PF-41
<PAGE> 130
VISTA NEW YORK TAX FREE MONEY MARKET FUND
PRO FORMA STATEMENT OF ASSETS AND LIABILITIES
8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA NEW YORK HANOVER NEW YORK PRO FORMA PRO FORMA
TAX FREE MMF TAX FREE MMF ADJUSTMENTS COMBINED
-------------- ---------------- ----------- ------------
<S> <C> <C> <C> <C>
ASSETS:
Investment securities, at value....... $376,819,802 $250,746,971 $ 0 $627,566,773
Receivables
Investment securities sold....... 4,300,000 0 0 4,300,000
Interest......................... 2,683,436 1,293,180 0 3,976,616
Shares of beneficial interest
sold........................... 206,919 0 0 206,919
Other receivables................ 0 4,320 0 4,320
-------------- ---------------- ----------- ------------
Total assets................ 384,010,157 252,044,471 0 636,054,628
-------------- ---------------- ----------- ------------
LIABILITIES:
Payable for investment securities
purchased.......................... 4,300,000 0 0 4,300,000
Payable for shares of beneficial
interest redeemed.................. 226,198 0 0 226,198
Payable to Custodian.................. 54,578 292,695 0 347,273
Dividends payable..................... 548,569 648,330 0 1,196,899
Accrued liabilities:
Administration fee............... 16,215 11,264 0 27,479
Advisory fee..................... 32,429 25,581 0 58,010
Custodian fees................... 65,762 0 0 65,762
Distribution fee................. 64,647 0 0 64,647
Fund servicing fees.............. 32,324 13,400 0 45,724
Shareholder servicing fees....... 81,075 74,612 0 155,687
Sub-administration fee........... 16,215 6,395 0 22,610
Other............................ 172,127 30,165 0 202,292
-------------- ---------------- ----------- ------------
Total liabilities........... 5,610,139 1,102,442 0 6,712,581
-------------- ---------------- ----------- ------------
NET ASSETS
Paid in capital....................... 378,291,880 250,989,653 0 629,281,533
Accumulated undistributed net
investment income.................. 101,382 0 0 101,382
Accumulated undistributed net realized
gain (loss) on investment
transactions....................... 6,756 (47,624) 0 (40,868)
-------------- ---------------- ----------- ------------
Net assets.................. $378,400,018 $250,942,029 0 $629,342,047
============== ================ ========== =============
Shares of beneficial interest
outstanding (no par value;
unlimited number of shares
authorized):
Vista Shares..................... 378,387,312 250,989,653 0 629,376,965
============== ================ ========== =============
Net asset value, offering and
redemption price per share (net
assets/shares outstanding)......... $ 1.00 $ 1.00 $ 0 $ 1.00
============== ================ ========== =============
Cost of Investments................... $376,819,802 $250,746,972 $ 0 $627,566,774
============== ================ ========== =============
</TABLE>
See notes to financial statements.
PF-42
<PAGE> 131
VISTA NEW YORK TAX FREE MONEY MARKET FUND
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED 8/31/95
(UNAUDITED)
<TABLE>
<CAPTION>
VISTA NEW YORK HANOVER NEW YORK PRO FORMA PRO FORMA
TAX FREE MMF TAX FREE MMF ADJUSTMENTS COMBINED
-------------- ---------------- ----------- ----------
<S> <C> <C> <C> <C>
INTEREST INCOME................... $14,112,221 $7,103,484 $ 0 $21,215,705
-------------- ---------------- ----------- ----------
EXPENSES
Distribution fees
Vista Shares............ 763,294 0 (174,066)(1),(3) 589,228
Fund Servicing fees
Vista Shares............ 381,647 32,052 (413,699)(2) 0
Shareholder Servicing fees
Vista Shares............ 954,117 686,005 422,174(1),(3) 2,062,296
Administration fees.......... 190,823 85,875 17,915(1) 294,613
Advisory fees................ 381,647 294,002 (190,212)(1) 485,437
Sub-Administration fees...... 190,823 58,800 44,990(1) 294,613
Professional fees............ 58,709 10,441 (10,441)(6) 58,709
Custodian fees............... 190,823 36,944 (84,150)(4) 143,617
Printing & Postage........... 12,494 3,895 0 16,389
Registration costs........... 12,541 16,149 0 28,690
Transfer agent fees
Vista Shares............ 254,679 28,230 (982)(5) 281,927
Trustee fees................. 21,623 2,440 (11,553)(7) 12,510
Insurance.................... 0 4,059 0 4,059
Other........................ 214,216 3,896 0 218,112
-------------- ---------------- ----------- ----------
Total expenses..... 3,627,436 1,262,788 (400,023) 4,490,201
-------------- ---------------- ----------- ----------
Less amounts waived by
the Administrator,
Shareholder Servicing
Agents, Adviser and
Distributor........... 354,383 88,651 500,979(8) 944,013
-------------- ---------------- ----------- ----------
Net expenses............ 3,273,053 1,174,137 (901,002) 3,546,188
-------------- ---------------- ----------- ----------
Net investment
income........... 10,839,168 5,929,347 901,002 17,669,517
-------------- ---------------- ----------- ----------
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
Realized gain (loss) on
investment transactions.... 6,756 (4,660) 0 2,096
-------------- ---------------- ----------- ----------
Net increase in net assets
from operations............ $10,845,924 $5,924,687 $ 901,002 $17,671,613
============ ============== ========= ==========
</TABLE>
See notes to financial statements.
PF-43
<PAGE> 132
MUTUAL FUND TRUST
EXPLANATION OF NOTE REFERENCES:
(1) Reflects adjustment of additional Hanover assets at the Vista contractual
rate.
(2) Reflects new contractual percentages, which have grouped shareholder and
fund servicing together, therefore eliminating the current fund servicing
line items.
(3) Reflects adjustment to amounts based on a new contractual rate or
combination of rates as stated in (2) above.
(4) Reflects adjustment to the fees based on the newly contracted fees plus out
of pocket expenses.
(5) Reflects adjustment based on new per account fee and out of pocket expenses
as contracted.
(6) Reflects elimination of duplicative services, fees or organizational costs.
(7) Reflects the new structure of the board of the surviving fund, the
elimination of duplicative expenses and the allocation of complex-wide fees
based on the relative net assets of the newly combined fund.
(8) Adjustment to reflect the elimination or addition of expense waivers and
expenses borne.
PF-44
<PAGE> 133
MUTUAL FUND TRUST
NOTES TO THE PRO-FORMA FINANCIAL STATEMENTS
1. BASIS OF COMBINATION
The Pro Forma Combining Portfolio of Investments, Statement of Assets and
Liabilities and Statement of Operations ("Pro Forma Statements") reflect the
accounts of the Vista Portfolios and the Hanover Portfolios at August 31,
1995 and for the year then ended.
The Pro Forma Statements give effect to the proposed transfer of all assets
and liabilities of each portfolio of Hanover to the corresponding portfolio
of Vista in exchange for shares of such Vista Portfolio.
The Pro Forma Statements should be read in conjunction with the historical
financial statements of each Portfolio included in their respective Statement
of Additional Information.
2. SHARES OF BENEFICIAL INTEREST -- Share issuance of Vista shares in
connection with the proposed reorganization is done on a one for one basis
as both Vista and Hanover Portfolios maintained a net asset value per share
of one dollar throughout the period ended August 31, 1995.
3. PRO FORMA OPERATING EXPENSES
The Pro Forma Combining Statement of Operations assumes similar rates of
gross investment income for the investments of each Portfolio. Accordingly,
the combined gross investment income is equal to the sum of each Portfolio's
gross investment income. Certain expenses have been adjusted to reflect the
expected expenses of the combined entities more closely. Pro forma operating
expenses include the actual expenses of the Portfolio and the combined
Portfolio adjusted for certain items which are factually supportable. For the
combined Portfolios certain expenses are expected to be waived by the
Shareholder Servicing Agents, and those expenses are adjusted to reflect
expected waivers.
PF-45
<PAGE> 134
MUTUAL FUND TRUST
PART C
OTHER INFORMATION
ITEM 15. INDEMNIFICATION.
The response to this item is incorporated by reference to Item 27 of Part C
of Post-Effective Amendment No. 4, filed December 28, 1995 ("Post-Effective
Amendment No. 4"), to the Registrant's Registration Statement on Form N-1A,
filed on February 14, 1994, Registration No. 33-75250 (the "Registration
Statement").
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -------------------------------------------------------------------------------
<C> <S>
1 Declaration of Trust. (1)
2 By-laws. (1)
3 None.
4 Agreement and Plan of Reorganization and Liquidation between Registrant and The
Hanover Funds, Inc. (filed herewith as Exhibit A to the Prospectus/Proxy
Statement).
5 Specimen share certificate. (4)
6 (a) Forms of Investment Advisory Agreement. (1) (3)
6 (b) Form of Interim Investment Advisory Agreement. (6)
6 (c) Form of Proposed Investment Advisory Agreement. (6)
6 (d) Form of Proposed Investment Sub-Advisory Agreement between The Chase Manhattan
Bank and [Chase Asset Management, Inc./Texas Commerce Bank, National
Association] (6)
7 (a) Form of Distribution and Sub-Administration Agreement. (1)
7 (b) Distribution and Sub-Administration Agreement dated August 21, 1995. (6)
8 (a) Retirement Plan for Eligible Trustees. (6)
8 (b) Deferred Compensation Plan for Eligible Trustees. (6)
9 Form of Custodian Agreement. (1)
10 (a) Forms of Rule 12b-1 Distribution Plans including Selected Dealer Agreements and
Shareholder Service Agreements. (1) and (3)
10 (b) Form of Proposed Rule 12b-1 Distribution Plan (including forms of Selected
Dealer Agreement and Shareholder Servicing Agreement). (6)
10 (c) Form of Rule 18f-3 Multi-Class Plan. (6)
11 Opinion of Counsel regarding legality of issuance of shares and other matters.
(7)
12 Form of Opinion of Counsel on tax matters. (7)
13 (a) Form of Transfer Agency Agreement. (1)
13 (b) Form of Shareholder Servicing Agreement. (1)
13 (c) Form of Shareholder Servicing Agreement. (6)
13 (d) Form of Administration Agreement. (1)(3)
13 (e) Form of Administration Agreement. (6)
14 (a) Consent of Price Waterhouse LLP, Independent Accountants. (7)
14 (b) Consent of KPMG Peat Marwick LLP, Independent Auditors. (7)
</TABLE>
C-1
<PAGE> 135
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -------------------------------------------------------------------------------
<S> <C>
14 (c) Consent of Kramer, Levin, Naftalis, Nessen, Kamin & Frankel (included in
Exhibit 11 hereto).
14 (d) Consent of Simpson Thacher & Bartlett. (8)
15 Inapplicable.
16 Inapplicable.
17 (a) Copy of Registrant's Declaration pursuant to Rule 24f-2 under the Investment
Company Act of 1940. (7)
17 (b) Form of Proxy. (7)
</TABLE>
- ---------------
(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 as an Exhibit to Post-Effective Amendment No. 4.
(7) Filed herewith.
(8) To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a
part of this Registration Statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act, the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(b) The undersigned Registrant agrees that every prospectus that is filed
under paragraph (a) above will be filed as part of an amendment to the
Registration Statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
C-2
<PAGE> 136
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on behalf of the registrant, in the City
of New York and State of New York on the 29th 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
registration statement has been signed below by the following persons in the
capacities indicated on the 29th day of December, 1995.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ---------------------------------------- ----------------------------------------
<S> <C>
/s/ FERGUS REID, III Chairman and Trustee
- ----------------------------------------
Fergus Reid, III
/s/ WILLIAM J. ARMSTRONG Trustee
- ----------------------------------------
William J. Armstrong
/s/ JOHN R.H. BLUM Trustee
- ----------------------------------------
John R.H. Blum
/s/ JOSEPH J. HARKINS Trustee
- ----------------------------------------
Joseph J. Harkins
/s/ RICHARD E. TEN HAKEN Trustee
- ----------------------------------------
Richard E. Ten Haken
/s/ STUART W. CRAGIN, JR. Trustee
- ----------------------------------------
Stuart W. Cragin, Jr.
/s/ IRV THODE Trustee
- ----------------------------------------
Irv Thode
/s/ H. RICHARD VARTABEDIAN President and Trustee and Principal
- ---------------------------------------- Executive Officer
H. Richard Vartabedian
/s/ MARTIN R. DEAN Treasurer and Principal Financial
- ---------------------------------------- Officer
Martin R. Dean
</TABLE>
C-3
<PAGE> 137
MUTUAL FUND TRUST
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ -----------------------------------------------------------------------------------
<C> <S>
11 Opinion of Counsel regarding legality of issuance of shares and other matters.
12 Form of Opinion of Counsel on tax matters.
14 (a) Consent of Price Waterhouse LLP, Independent Accountants.
14 (b) Consent of KPMG Peat Marwick LLP, Independent Auditors.
17 (a) Copy of Registrant's Declaration pursuant to Rule 24f-2 under the Investment
Company Act of 1940.
17 (b) Form of Proxy.
</TABLE>
<PAGE> 1
EXHIBIT 11
[LETTERHEAD OF KRAMER, LEVIN, NAFTALIS, NESSEN, KAMIN & FRANKEL]
December 28, 1995
Mutual Fund Trust
125 West 55th Street
New York, New York 10019
Re: Registration Statement on Form N-14
Gentlemen:
Reference is made to the Registration Statement on Form N-14 under the
Securities Act of 1933, as amended (the "Registration Statement"), to be filed
with the Securities and Exchange Commission (the "Commission") to register
shares of beneficial interest, without par value ("Shares") of Mutual Fund Trust
(the "Trust"), a Massachusetts business trust. Such shares are to be issued in
connection with an Agreement and Plan of Reorganization and Liquidation (the
"Agreement") whereby all of the then-existing assets of the following series of
The Hanover Funds, Inc. (the "Company"): 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 (the "Hanover Portfolios") will be transferred to the
following corresponding series of the Trust: Vista 100% U.S. Treasury Securities
Money Market Fund, 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 (the "Vista Funds") in
exchange for (i) the assumption of all the obligations and liabilities of the
corresponding Hanover Portfolio by the respective Vista Fund and (ii) the
issuance and delivery to the corresponding Hanover Portfolio of full and
fractional shares of that series and class of the Trust's shares of beneficial
interest, representing Vista shares of the respective Vista Fund (the "Shares"),
and such Shares shall be distributed by the respective Hanover Portfolio pro
rata to its shareholders upon its liquidation. The Agreement was approved by the
Board of Directors of the Company and the Board of Trustees of the Trust on
December 13, 1995, and December 14, 1995, respectively and is to become
effective upon its approval by shareholders of the Hanover Portfolios.
We have reviewed the Declaration of Trust of the Trust, its By-Laws,
resolutions of the Trustees of the Trust, and the Registration Statement
(including exhibits thereto). We have also made such inquiries and have examined
originals, certified copies or copies otherwise identified to our satisfaction
of such documents, records and other instruments as we have deemed necessary or
appropriate for the purposes of this opinion. For purposes of such examination,
we have assumed the genuineness of all signatures on original documents and the
conformity to the original documents of all copies submitted. In addition, we
have assumed that the representations to be made as of the closing date by the
Trust, Company, and Chase will be made by such parties in the form acceptable to
us and that the Trust's and the Company's activities in connections with the
Agreement and the transactions contemplated therein have been and will be
conducted in the manner provided in such documents and as set forth herein.
The opinions expressed herein are limited to matters of law which govern
the due organization of the Trust and the authorization and issuance of the
Shares. We are members of the Bar of the State of New York and do not hold
ourselves out as experts as to the law of any other state or jurisdiction. Based
upon and subject to the foregoing and provided that the terms of Reorganization
occur in accordance with the terms of the Agreement, as of the date of the
closing, we are of the opinion that, and so advise you as follows:
<PAGE> 2
i. The Trust has been duly organized in its state of organization,
with authority to issue the Shares; and
ii. The Shares, when issued in accordance with the terms of the
Agreement and the Trust's Registration Statement on Form N-1A, will be
validly issued, fully paid and non-assessable by the Trust.
This opinion is solely for your information and is not to be quoted in
whole or in part, summarized or otherwise referred to, nor is it to be filed
with or supplied to or relied upon by any governmental agency or other person
without the prior written consent of this firm. This opinion is as of the date
hereof. We disclaim any responsibility to update or supplement this opinion to
reflect any events or state of facts which may hereafter come to our attention,
or any changes in statutes or regulations or any court decisions which may
hereafter occur.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the references therein to our firm as Counsel to the Trust.
Very truly yours,
/s/ Kramer, Levin, Naftalis, Nessen, Kamin
& Frankel
<PAGE> 1
EXHIBIT 12
[Simpson Thacher & Bartlett]
, 1996
Re: Agreement and Plan of Reorganization and Liquidation dated as of December
, 1995 between The Hanover Funds, Inc. and Mutual Fund Trust
The Hanover Funds, Inc.
237 Park Avenue
New York, New York 10017
Mutual Fund Trust
125 West 55th Street
New York, New York 10019
Ladies and Gentlemen:
You have requested our opinion with respect to the federal income tax
consequences of certain aspects of the proposed transfer by each Hanover
Portfolio1/ of all of its assets to its Corresponding MFT Portfolio solely in
exchange for MFT Portfolio Shares of the Corresponding MFT Portfolio and the
assumption of all its obligations and liabilities by the Corresponding MFT
Portfolio (as described in Section 2(a)(1) of the Agreement) followed by the
liquidation of the Hanover Portfolio and the distribution pro rata of such MFT
Portfolio Shares to the shareholders of the Corresponding Hanover Portfolio. The
series of steps that will occur to effect such transaction are hereinafter
referred to as the "Reorganization". This opinion is being delivered pursuant to
Sections 7(d) and 8(e) of the Agreement.
Hanover is a Maryland corporation registered under the Investment Company
Act of 1940, as amended (the "Act"), as an open-end investment company of the
management type and is 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"). The authorized capital stock of
Hanover as of the date hereof consists of ten billion shares of common stock,
each having a par value of $.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.
MFT is registered under the Act as an open-end diversified investment
company of the management type and is organized as 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, Vista 100% U.S. Treasury Securities Money Market Fund (each, an
"MFT Portfolio"). MFT's investment portfolios other than the
- ---------------
1/ Where relevant, capitalized terms not otherwise defined herein have the
meanings they have for the purposes of the Agreement and Plan of
Reorganization and liquidation, dated as of December , 1995, between
Hanover and MFT (the "Agreement").
<PAGE> 2
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.
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.
The Agreement was approved by the Board of Trustees of MFT on December 14,
1995 and by the Board of Directors of Hanover on December 13, 1995.
Upon satisfaction of all conditions precedent set forth in the Agreement,
the Reorganization will be effected as set forth in the following summary:
1. Pursuant to the Agreement, Hanover will cause each Hanover
Portfolio to convey, transfer and deliver at the Closing to the MFT
Portfolio set forth opposite its name in the table attached to the
Agreement 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) 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, all of the obligations and liabilities of its Corresponding
Hanover Portfolio and (ii) to issue and deliver to the Corresponding
Hanover Portfolio the number of 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"), as determined in Section
2(c) of the Agreement. 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 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 Section 2(a) of the Agreement. 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 of
the Corresponding MFT Portfolio due such shareholder. Fractional
Corresponding 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 Act.
In acting as special counsel to MFT and Hanover with respect to the
Reorganization, we have, among other things, reviewed the following documents:
1. The Agreement;
2. The proxy statement of MFT dated , 1996; and
<PAGE> 3
3. MFT's Registration Statement on Form N-14 under the Securities Act
of 1933, as amended and declared effective by the Securities and Exchange
Commission.
In preparing our opinion, as hereinafter set forth, we have reviewed such
other documents and representations by Hanover and MFT relating to the
Reorganization and such federal income tax authorities as we deemed relevant
under the circumstances. Further, for purposes of this opinion, we have assumed,
with your permission and without independent investigation, the following:
1. Each of the Hanover Portfolios and the Corresponding MFT Portfolios
is treated as a separate corporation in accordance with section 851(h) of
the Internal Revenue Code of 1986, as amended (the "Code"), and each
qualifies as a "regulated investment company" for federal income tax
purposes pursuant to section 851 of the Code.
2. The fair market value of the MFT Portfolio Shares received by the
shareholders of each Hanover Portfolio will be approximately equal to the
fair market value of the Hanover Portfolio Shares of such Hanover Portfolio
surrendered by the shareholders of such Hanover Portfolio in the
Reorganization.
3. There is no plan or intention by the shareholders of the Hanover
Portfolios who own 5 percent or more of the shares of any Hanover
Portfolio, and to the best of the knowledge of management of the Hanover
Portfolios, there is no plan or intention on the part of the remaining
shareholders of each Hanover Portfolio as a group, to sell, exchange, or
otherwise dispose of a number of MFT Portfolio Shares that would reduce the
Hanover shareholders' ownership of such MFT Portfolio Shares to a number of
shares having a value, as of the date of the Reorganization, of less than
50% of the value of all of the formerly outstanding Hanover Portfolio
Shares of such Hanover Portfolio. In this connection, Hanover Portfolio
Shares or MFT Portfolio Shares held by Hanover shareholders and otherwise
sold, redeemed or disposed of prior or subsequent to the Reorganization
will be considered, except for shares which are required to be redeemed at
the demand of shareholders by a Hanover Portfolio or MFT Portfolio in the
ordinary course of its business as required by Section 22(e) of the Act
("Section 22(e) Redemptions").
4. No cash or consideration other than MFT Portfolio Shares will be
received by the Hanover Portfolios from the MFT Portfolios or distributed
to any shareholders of the Hanover Portfolios in liquidation of the
Corresponding Hanover Portfolios.
5. Each MFT Portfolio will acquire at least 90 percent of the fair
market value of the net assets and at least 70 percent of the fair market
value of the gross assets held by the Corresponding Hanover Portfolios
immediately prior to the Reorganization. In this connection, amounts used
by any Hanover Portfolio to pay its reorganization expenses, amounts paid
by the Hanover Portfolios to shareholders who receive cash or other
property, and all redemptions and distributions (except for Section 22(e)
Redemptions and regular, normal dividends) made by the Hanover Portfolios
immediately preceding the transfer will be included as assets of the
Hanover Portfolios held immediately prior to the Reorganization. The
Hanover Portfolios will pay no amounts to dissenters.
6. None of the MFT Portfolios has any plan or intention to reacquire
any of its shares issued in the Reorganization, subject to the right of MFT
Portfolios' shareholders to receive Section 22(e) Redemptions.
7. Neither Chemical Banking Corporation, The Chase Manhattan
Corporation nor any of their affiliates has any plan or intention to sell,
redeem or otherwise dispose of any Hanover Portfolio Shares or MFT
Portfolio Shares in connection with the Reorganization.
8. None of the MFT Portfolios has any plan or intention to sell or
otherwise dispose of any of the assets of the Corresponding Hanover
Portfolios acquired in the Reorganization, except for dispositions made in
the ordinary course of business.
9. The obligations and liabilities of the Hanover Portfolios, if any,
to be assumed by the Corresponding MFT Portfolios pursuant to the
Reorganization and the liabilities, if any, to which the
<PAGE> 4
transferred assets of the Hanover Portfolios are subject were incurred by
the Hanover Portfolios in the ordinary course of their businesses.
10. Following the consummation of the Reorganization, each of the MFT
Portfolios will continue the historic business of the Corresponding Hanover
Portfolio or use a significant portion of the Corresponding Portfolio's
historic business assets in a business.
11. The shareholders of the Hanover Portfolios will pay their
respective expenses, if any, incurred in connection with the
Reorganization.
12. Only certain expenses of Hanover and MFT which are directly
related to the Reorganization will be paid by Chemical Banking Corporation
and/or The Chase Manhattan Corporation pursuant to section 10 of the
Agreement.
13. There is no intercorporate indebtedness existing between any
Hanover Portfolio and the Corresponding MFT Portfolio that was issued,
acquired, or will be settled at a discount.
14. None of the MFT Portfolios owns, directly or indirectly, nor has
owned during the past five years, directly or indirectly, any shares of the
Corresponding Hanover Portfolios.
15. The fair market value of the assets of each of the Hanover
Portfolios to be transferred to the Corresponding MFT Portfolios will equal
or exceed the sum of the liabilities assumed by the Corresponding MFT
Portfolios, plus the amount of liabilities, if any, to which the
transferred assets are subject.
Based on the foregoing, and assuming that the Reorganization is effected in
accordance with the terms of the Agreement (and exhibits thereto) and that the
representations made pursuant thereto by the parties are true at the Effective
Time, it is our opinion that 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
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 certain expenses of Hanover and MFT which are directly related to
the Reorganization (referred to in section 10 of the Agreement) will not affect
the opinions set forth above regarding the federal income tax consequences of
the exchanges by Hanover and the shareholders of Hanover. However, no opinion is
expressed as to any other 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.
We express our opinion herein only as to those matters specifically set
forth above and such opinion may be relied upon solely by you for the exclusive
purpose of ascertaining the federal income tax consequences of
<PAGE> 5
the Reorganization contemplated in the Agreement to the Hanover Portfolios, the
MFT Portfolios and the shareholders of the Corresponding Hanover Portfolios on
their receipt of the MFT Portfolio Shares pursuant to the Agreement.
Very truly yours,
<PAGE> 1
EXHIBIT 14(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Statement of
Additional Information and Combined Proxy Statement/Prospectus constituting
parts of this registration statement on Form N-14 (the "N-14 Registration
Statement") of our report, dated October 13, 1995, relating to the financial
statements of Vista Treasury Plus Money Market Fund, Vista U.S. Government Money
Market Fund, Vista Global Money Market Fund (subsequently renamed Vista Cash
Management Fund), Vista Tax Free Money Market Fund and Vista New York Tax Free
Money Market Fund (separately managed portfolios of Mutual Fund Trust),
appearing in the Annual Report to Shareholders for the fiscal year ended August
31, 1995, which are incorporated by reference in such Combined Proxy
Statement/Prospectus and Statement of Additional Information. We also consent to
the incorporation by reference of our report dated October 11, 1994 in the
Statement of Additional Information of Post Effective Amendment No. 2 of Mutual
Fund Trust (the "N-1A Registration Statement"), relating to the financial
statements of Vista Treasury Plus Money Market Fund, Vista U.S. Government Money
Market Fund, Vista Global Money Market Fund (subsequently renamed Vista Cash
Management Fund), Vista Tax Free Money Market Fund and Vista New York Tax Free
Money Market Fund (separately managed portfolios of Mutual Fund Trust),
appearing in the Annual Report to Shareholders for the fiscal year ended August
31, 1994, which are incorporated by reference in the Combined Proxy
Statement/Prospectus and Statement of Additional Information of the N-14
Registration Statement. We also consent to the references to us under the
heading "Financial Statements and Experts" in the N-14 Registration Statement,
and under the headings "Condensed Financial Information -- Per Share Data and
Capital Changes" in the Prospectuses and "Independent Accountants" in the
Statement of Additional Information, of the N-1A Registration Statement.
/s/ PRICE WATERHOUSE LLP
1177 Avenue of the Americas
New York, New York 10036
December 27, 1995
<PAGE> 1
EXHIBIT 14(b)
INDEPENDENT AUDITORS' CONSENT
To the Shareholders and Board of Directors of The Hanover Funds, Inc.:
We consent to the use of our report dated January 20, 1995 with respect to the
financial statements and financial highlights of the following portfolios of
The Hanover Funds, Inc. incorporated herein by reference:
- - The 100% U.S. Treasury Securities Money Market Fund -- the statement of
assets and liabilities as of November 30, 1994 and the related statements
of operations for the year then ended, changes in net assets for the
two-years then ended and financial highlights for the three-years then ended
and for the period from July 1, 1991 (commencement of operations) to
November 30, 1991;
- - The U.S. Treasury Money Market Fund -- the statement of assets and
liabilities as of November 30, 1994 and the related statements of operations
for the year then ended, changes in net assets for the two-years then ended
and financial highlights for the two-years then ended and for the period
from October 1, 1992 (commencement of operations) to November 30, 1992;
- - The Government Money Market Fund -- the statement of assets and liabilities
as of November 30, 1994 and the related statements of operations for the
year then ended, changes in net assets for the two-years then ended and
financial highlights for the five-years then ended;
- - The Cash Management Fund -- the statement of assets and liabilities as of
November 30, 1994 and the related statements of operations for the year
then ended, changes in net assets for the two-years then ended and
financial highlights for the five-years then ended;
- - The Tax Free Money Market Fund -- the statement of assets and liabilities
as of November 30, 1994 and the related statements of operations for the
year then ended, changes in net assets for the two-years then ended and
financial highlights for the five-years then ended;
- - The New York Tax Free Money Market Fund -- the statement of assets and
liabilities as of November 30, 1994 and the related statements of operations
for the year then ended, changes in net assets for the two-years then ended
and financial highlights for the five-years then ended.
We also consent to the references to our firm under the headings "Financial
Highlights" and "Financial Statements and Experts" in the Prospectus.
/s/ KPMG PEAT MARWICK LLP
New York, New York
December 29, 1995
<PAGE> 1
EXHIBIT 17(a)
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 11, 1994
FILE NO. 811-
REGISTRATION NO. 33-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A
/X/ REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
/ / Pre-Effective Amendment No.
/ / Post-Effective Amendment No.
and
/X/ REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
/ / Amendment No.
------------------------
MUTUAL FUND TRUST
(Exact Name of Registrant as Specified in Charter)
125 WEST 55TH STREET
NEW YORK, NEW YORK 10022
(Address of Principal Executive Office) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 426-1600
JAMES BERNAICHE
125 WEST 55TH STREET
NEW YORK, NEW YORK 10022
(Name and Address of Agent for Service)
Copy to:
CARL FRISCHLING, ESQ.
REID & PRIEST
40 WEST 57TH STREET
NEW YORK, NEW YORK 10019
------------------------
Approximate date of proposed public offering: As soon as practicable after
this registration statement becomes effective.
------------------------
An indefinite number of shares of common stock of the Registrant is being
registered by this Registration Statement pursuant to Rule 24f-2 under the
Investment Company Act of 1940. The registration fee is $500.00.
------------------------
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
This filing consists of pages.
INDEX TO EXHIBITS ON PAGE .
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- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 17(b)
[Preliminary Proxy Material]
THE HANOVER FUNDS, INC.
[Name of Fund]
This proxy is solicited on behalf of the Board of Directors of The Hanover
Funds, Inc. for the Special Meeting of Shareholders to be held on ,
1996.
The undersigned hereby appoints , AND , and each
of them, attorneys and proxies for the undersigned, with full power of
substitution, and revocation to represent the undersigned and to vote on behalf
of the undersigned all shares of [Name of Fund] which the undersigned is
entitled to vote at the Special Meeting of Shareholders to be held at 237 Park
Avenue, 13th Floor, New York 10017, on , 1996, at , and at any
adjournments thereof. The undersigned hereby acknowledges receipt of the Notice
of the Special Meeting of Shareholders and accompanying Prospectus/Proxy
Statement of Mutual Fund Trust and hereby instructs said attorneys and proxies
to vote said shares as indicated hereon. In their discretion, the proxies are
authorized to vote upon such other business as may properly come before the
Special Meeting of Shareholders. A majority of the proxies present and acting at
the Special Meeting of Shareholders in person or by substitute (or, if only one
shall be so present, then that one) shall have and may exercise all of the power
and authority of said proxies hereunder. The undersigned hereby revokes any
proxy previously given.
NOTE: Please sign exactly as your name
appears on this proxy. If joint
owners, EITHER may sign this proxy.
When signing as attorney, executor,
administrator, trustee, guardian or
corporate officer, please give your
full title.
Date , 1996
--------------------------------------
--------------------------------------
Signature(s), Title(s) (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY
IN THE ENCLOSED ENVELOPE
<PAGE> 2
THE HANOVER FUNDS, INC.
[Name of Fund]
PLEASE INDICATE YOUR VOTE BY AN "X" IN THE APPROPRIATE BOX BELOW.
This proxy, if properly executed, will be voted in the manner directed by the
stockholder.
If no direction is made, this proxy will be voted FOR the proposal.
Please refer to the Prospectus/Proxy Statement for a discussion of the Proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE FOLLOWING PROPOSAL.
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Proposal to approve the Agreement and Plan of Reogranization and Liquidation.
FOR / / AGAINST / / ABSTAIN / /
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PLEASE SIGN AND DATE THIS PROXY ON THE REVERSE SIDE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.