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As filed with the Securities and Exchange Commission
on December 5, 2001
- --------------------------------------------------------------------------------
Registration No. 333-_______
UNITED STATES
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. __
CREDIT SUISSE WARBURG PINCUS CAPITAL FUNDS
(formerly, DLJ Focus Funds)
(Exact Name of Registrant as Specified in Charter)
Area Code and Telephone Number: (212) 875-3000
466 Lexington Avenue
New York, New York 10017-3147
-----------------------------------------------
(Address of Principal Executive Offices) (Zip code)
Hal Liebes, Esq.
Credit Suisse Warburg Pincus Capital Funds
466 Lexington Avenue
New York, New York 10017-3147
with copy to:
Rose F. DiMartino, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
Approximate date of public offering: Registrant proposes that the
Registration Statement become effective on January 5, 2002 pursuant to Rule
488 under the Securities Act of 1933, as amended.
Title of Securities Being Registered: Shares of beneficial interest, $.01 par
value per share.
Registrant has registered an indefinite amount of securities pursuant to Rule
24f-2 under the Investment Company Act of 1940, as amended; accordingly, no fee
is payable herewith in reliance upon Section 24(f).
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CONTENTS OF
REGISTRATION STATEMENT
This Registration Statement contains the following pages and documents:
Front Cover
Contents Page
Letter to Shareholders
Notice of Special Meeting
Part A - Prospectus/Proxy Statement
Part B - Statement of Additional Information
Part C - Other Information
Signature Page
Exhibits
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CREDIT SUISSE BALANCED FUND, INC.
YOUR VOTE IS IMPORTANT
Dear Shareholder:
We are pleased to invite you to attend a special meeting (the "Special
Meeting") of the shareholders of Credit Suisse Balanced Fund, Inc. (the
"Acquired Fund"). The Board of Directors of the Acquired Fund has recently
reviewed and unanimously endorsed a proposal for the acquisition of the Acquired
Fund by Credit Suisse Large Cap Value Fund (formerly, DLJ Growth and Income
Fund) (the "Acquiring Fund" and together with the Acquired Fund, the "Funds"),
a series of Credit Suisse Capital Funds (formerly, the DLJ Focus Funds) (the
"Acquiring Trust"). The Acquiring Fund is a fund managed by your Fund's
investment adviser, Credit Suisse Asset Management, LLC ("CSAM"). Under the
terms of the proposal, the Acquiring Fund would acquire all of the assets and
liabilities of the Acquired Fund. You are being asked to approve an Agreement
and Plan of Reorganization (the "Plan") pursuant to which the acquisition of
the Acquired Fund by the Acquiring Fund would be effected (the "Acquisition").
The Acquired Fund's Board of Directors and CSAM believe that the
Acquisition is in the best interests of the Acquired Fund and its shareholders.
As disclosed in the attached Prospectus/Proxy Statement, the
Acquisition will result in certain material changes to the investment philosophy
of the Acquired Fund since the Acquired Fund and the Acquiring Fund have
different investment objectives and investment policies, and the Acquiring Fund
has certain different investment limitations as compared to the Acquired Fund.
THE MOST SIGNIFICANT DIFFERENCE IN THE WAY THE FUNDS ARE MANAGED IS THAT THE
ACQUIRING FUND INVESTS AT LEAST 65% OF ITS ASSETS IN COMMON STOCKS OF COMPANIES
WITH LARGE MARKET CAPITALIZATIONS, WHILE THE ACQUIRED FUND IS NORMALLY REQUIRED
TO ALLOCATE AT LEAST 25% OF ITS ASSETS IN FIXED INCOME SECURITIES AND AT LEAST
25% OF ITS ASSETS IN EQUITY SECURITIES. CSAM is the investment adviser for each
of the Funds, and both Funds have the same co-administrators, custodian,
transfer agent, distributor, independent accountant and counsel. The closing of
the Acquisition (the "Closing Date") is expected to be on or about April ___,
2002.
If shareholders of the Acquired Fund approve the Plan, the Acquired
Fund will be liquidated upon consummation of the Acquisition and subsequently
dissolved. Upon consummation of the Acquisition, you will become a shareholder
of the Acquiring Fund, having received Class A shares of the Acquiring Fund with
an aggregate net asset value equal to the aggregate net asset value of your
investment in the Acquired Fund immediately prior to the Acquisition. No sales
or other charges will be imposed in connection with the Acquisition. The
Acquisition will, in the opinion of counsel, be free from federal income taxes
to you, the Acquired Fund and the Acquiring Fund. CSAM or its affiliates will
bear all expenses incurred in connection with the Acquisition.
The Special Meeting will be held on March 19, 2002 to consider this
transaction. We strongly invite your participation by asking you to review,
complete and return your proxy promptly.
Detailed information about the proposal is described in the attached
Prospectus/Proxy Statement. THE BOARD OF DIRECTORS OF THE ACQUIRED FUND
UNANIMOUSLY RECOMMENDS THAT YOU VOTE IN FAVOR OF THE PROPOSAL. On behalf of the
Board of Directors, I thank you for your participation as a shareholder and urge
you to please exercise your right to vote by completing, dating and signing the
enclosed proxy card(s). A self-addressed, postage-paid envelope has been
enclosed for your convenience; if you prefer, you can fax the proxy card to D.F.
King & Co, Inc., the Acquired Fund's proxy solicitor, Attn.: Dominick F.
Maurillo, at (212) 269-2796. We also encourage you to vote by telephone or
through the Internet. Proxies may be voted by telephone by calling
1-(800) 714-3312
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between the hours of 9:00 a.m. and 10:00 p.m. (Eastern time) Monday through
Saturday or through the Internet using the Internet address located on your
proxy card.
Voting by fax, telephone or through the Internet will reduce the time
and costs associated with the proxy solicitation. When the Acquired Fund records
proxies by telephone or through the Internet, it will use procedures designed to
(i) authenticate shareholders' identities, (ii) allow shareholders to authorize
the voting of their shares in accordance with their instructions and (iii)
confirm that their instructions have been properly recorded. We have been
advised that Internet voting procedures that have been made available to you are
consistent with the requirements of applicable law. Shareholders voting via the
Internet should understand that there may be costs associated with electronic
access, such as usage charges from Internet access providers and telephone
companies, that must be borne by the shareholder.
Whichever voting method you choose, please read the full text of the
proxy statement before you vote.
If you have any questions regarding the proposed Acquisition, please
feel free to call D.F. King & Co., Inc. at 1-(800) 714-3314 who will be pleased
to assist you.
IT IS VERY IMPORTANT THAT YOUR VOTING INSTRUCTIONS BE RECEIVED
PROMPTLY.
Sincerely,
Hal Liebes
Secretary
January __, 2002
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January __, 2002
CREDIT SUISSE BALANCED FUND, INC.
IMPORTANT NEWS FOR FUND SHAREHOLDERS
While we encourage you to read the full text of the enclosed
Prospectus/Proxy Statement, here is a brief overview of the proposal you are
being asked to vote on.
Q & A: QUESTIONS AND ANSWERS
Q: WHAT IS HAPPENING?
A: Credit Suisse Asset Management, LLC ("CSAM") is proposing to combine
the assets of Credit Suisse Balanced Fund, Inc. (the "Acquired Fund")
with Credit Suisse Large Cap Value Fund (the "Acquiring Fund"), a
series of Credit Suisse Capital Funds, with the Acquiring Fund
surviving the acquisition.
You are being asked to vote on an Agreement and Plan of Reorganization
(the "Plan") for the assets and liabilities of the Acquired Fund to be
acquired by the Acquiring Fund in a tax-free exchange of shares (the
"Acquisition"). If the Plan is approved and the Acquisition
consummated, you would no longer be a shareholder of the Acquired Fund,
but would become a shareholder of the Acquiring Fund.
Q: WHAT ARE THE DIFFERENCES BETWEEN THE ACQUIRED FUND AND THE ACQUIRING
FUND?
A: As disclosed in the attached Prospectus/Proxy Statement, the
Acquisition will result in certain material changes to the investment
philosophy of the Acquired Fund since the Acquired Fund and the
Acquiring Fund have different investment objectives and investment
policies, and the Acquiring Fund has certain different investment
limitations as compared to the Acquired Fund. THE MOST SIGNIFICANT
DIFFERENCE IN THE WAY THE FUNDS ARE MANAGED IS THAT THE ACQUIRING FUND
INVESTS AT LEAST 65% OF ITS ASSETS IN COMMON STOCKS OF COMPANIES WITH
LARGE MARKET CAPITALIZATIONS, WHILE THE ACQUIRED FUND IS NORMALLY
REQUIRED TO ALLOCATE AT LEAST 25% OF ITS ASSETS IN FIXED INCOME
SECURITIES AND AT LEAST 25% OF ITS ASSETS IN EQUITY SECURITIES. The
Acquiring Fund has the same investment adviser, custodian,
co-administrators, transfer agent, distributor, independent accountant
and counsel as the Acquiring Fund.
Q: WHAT WILL HAPPEN TO FUND EXPENSES?
A: The Acquisition will result in lower gross and net operating expenses
for former Acquired Fund shareholders. For the fiscal year ended
October 31, 2001, the Acquired Fund's Common Class and Advisor Class
shares had total net annual expenses of 1.35% and 1.60%, respectively,
of average daily net assets. The pro forma net expense ratio of the
Acquiring Fund's Class A shares is estimated to be approximately 1.03%
of average daily net assets.
Q: WHAT ARE THE BENEFITS OF THE TRANSACTION?
A: The members of the Acquired Fund's Board of Directors believe that you
may benefit from the proposed Acquisition, in part, because it will
result in a single larger fund with a potentially lower expense ratio.
In addition, as the Credit Suisse family of funds is reoriented for
sales in load
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channels, a balanced fund like the Acquired Fund is a less attractive
product since brokers perform the asset allocation function. As a
consequence, the Acquired Fund's size may well remain small, which
tends to result in a comparatively higher expense ratio. The proposed
Acquisition may result in efficiencies due to a larger asset base. The
following pages give you additional information on the proposed
Acquisition on which you are being asked to vote.
Q: WILL I INCUR TAXES AS A RESULT OF THE TRANSACTION?
A: The Acquisition is expected to be a tax-free event. Generally,
shareholders of the Acquired Fund will not incur capital gains or
losses on the conversion from the Acquired Fund to the Acquiring Fund.
Shareholders will incur capital gains or losses if they sell their
shares in the Acquired Fund before the Acquisition becomes effective or
sell or exchange their Acquiring Fund shares after the Acquisition
becomes effective. Shareholders will also be responsible for tax
obligations associated with periodic dividend and capital gains
distributions that occur prior to and after the Acquisition. The
Acquired Fund will pay a dividend on its Common Class shares of any
undistributed net investment income and capital gains, which may be
substantial, immediately prior to the closing date. Please note that
retirement accounts are exempt from such tax consequences.
Q: WHAT HAPPENS IF THE PLAN IS NOT APPROVED?
A: In the event the Plan is not approved, you will continue to be a
shareholder of the Acquired Fund and the Board will consider other
possible courses of action available to it, including resubmitting the
Acquisition proposal to shareholders.
Q: HOW DO THE BOARD MEMBERS OF MY FUND RECOMMEND THAT I VOTE?
A: AFTER CAREFUL CONSIDERATION, THE BOARD OF DIRECTORS OF THE ACQUIRED
FUND, INCLUDING THOSE DIRECTORS WHO ARE NOT AFFILIATED WITH THE
ACQUIRED FUND OR CSAM, RECOMMEND THAT YOU VOTE FOR THE PROPOSAL.
Q: WHOM DO I CALL FOR MORE INFORMATION?
A: Please call D.F. King & Co., Inc., the Acquired Fund's proxy solicitor,
at 1-(800) 714-3314
Q: HOW CAN I VOTE MY SHARES?
A: Please choose one of the following options to vote your shares:
- By mail, with the enclosed proxy card;
- By telephone, with a toll-free call to the telephone number
that appears on your proxy card or, if no toll-free telephone
number appears on your proxy card, to D.F. King & Co., Inc.,
the Acquired Fund's proxy solicitor, at 1-(800) 714-3312;
- By faxing the enclosed proxy card to D.F. King & Co., Inc.
Attn: Dominick F. Maurillo, at (212)-269-2796;
- Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site; or
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- In person at the Special Meeting.
Q: WILL THE ACQUIRED FUND PAY FOR THIS PROXY SOLICITATION?
A: No. CSAM or its affiliates will bear these costs.
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CREDIT SUISSE BALANCED FUND, INC.
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3147
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To Be Held on March 19, 2002
Notice is hereby given that a Special Meeting of Shareholders (the
"Special Meeting") of Credit Suisse Balanced Fund, Inc. (the "Acquired Fund")
will be held at the offices of the Acquired Fund, 466 Lexington Avenue, ___
Floor, New York, New York 10017-3147 on March 19, 2002, commencing at ___
a.m. for the following purposes:
1. To approve an Agreement and Plan of Reorganization (the "Plan")
providing that (i) the Acquired Fund would transfer to Credit
Suisse Large Cap Value Fund (formerly, DLJ Growth and Income Fund)
(the "Acquiring Fund"), a series of Credit Suisse Capital Funds,
all of its assets in exchange for shares of the Acquiring Fund
and the assumption by the Acquiring Fund of the Acquired Fund's
liabilities, (ii) such shares of the Acquiring Fund would be
distributed to shareholders of the Acquired Fund in liquidation
of the Acquired Fund, and (iii) the Acquired Fund would
subsequently be dissolved;
2. To transact such other business as may properly come before the
Special Meeting or any adjournment or adjournments thereof.
THE BOARD OF DIRECTORS OF THE ACQUIRED FUND UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS OF THE ACQUIRED FUND VOTE TO APPROVE THE PLAN.
The Board of Directors of the Acquired Fund has fixed the close of
business on January 11, 2002 as the record date for the determination of
shareholders of the Acquired Fund entitled to notice of and to vote at the
Special Meeting and any adjournment or adjournments thereof. As a convenience to
shareholders, you can now vote in any one of five ways:
- By mail, with the enclosed proxy card(s);
- By telephone, with a toll-free call to the telephone number
that appears on your proxy card or, if no toll-free telephone
number appears on your proxy card, to D.F. King & Co., Inc.,
the Acquired Fund's proxy solicitor, at 1-(800) 714-3312;
- By faxing the enclosed proxy card to D.F. King & Co., Inc.,
Attn: Dominick F. Maurillo, at (212) 269-2796;
- Through the Internet, by using the Internet address located on
your proxy card and following the instructions on the site; or
- In person at the Special Meeting.
If you have any questions regarding the proposals, please feel free to
call D.F. King & Co., Inc. at 1-(800) 714-3314.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
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SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE SPECIAL MEETING ARE URGED TO (A)
SIGN AND RETURN WITHOUT DELAY THE ENCLOSED PROXY CARD(S) IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES, (B) VOTE BY
TELEPHONE WITH A TOLL-FREE CALL TO 1-(800) 714-3312, (C) VOTE THROUGH THE
INTERNET USING THE ADDRESS LOCATED ON THE PROXY CARD OR (D) FAX THE ENCLOSED
PROXY CARD(S) TO D.F. KING & CO., INC. AT (212) 269-2796, SO THAT THEIR SHARES
MAY BE REPRESENTED AT THE SPECIAL MEETING. INSTRUCTIONS FOR THE PROPER EXECUTION
OF PROXY CARDS ARE SET FORTH ON THE FOLLOWING PAGE. PROXIES MAY BE REVOKED AT
ANY TIME BEFORE THEY ARE EXERCISED BY THE SUBSEQUENT EXECUTION AND SUBMISSION OF
A REVISED PROXY, BY GIVING WRITTEN NOTICE OF REVOCATION TO THE ACQUIRED FUND AT
ANY TIME BEFORE THE PROXY IS EXERCISED OR BY VOTING IN PERSON AT THE SPECIAL
MEETING.
By Order of the Board of Directors
Hal Liebes
Secretary
January __, 2002
YOUR PROMPT ATTENTION TO THE ENCLOSED PROXY WILL HELP TO
AVOID THE EXPENSE OF FURTHER SOLICITATION.
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INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of assistance to you
and avoid the time and expense involved in validating your vote if you fail to
sign your proxy card properly.
1. Individual Accounts: Sign your name exactly as it appears in the
registration on the proxy card.
2. Joint Accounts: Either party may sign, but the name of the party
signing should conform exactly to the name shown in the
registration on the proxy card.
3. All Other Accounts: The capacity of the individual signing the
proxy card should be indicated unless it is reflected in the form
of registration. For example:
4. Registration Valid Signatures
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Corporate Accounts
(1) ABC Corp. ABC Corp.
(2) ABC Corp. John Doe, Treasurer
(3) ABC Corp. John Doe
c/o John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan John Doe, Trustee
Trust Accounts
(1) ABC Trust. Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee
u/t/d 12/28/78 Jane B. Doe
Custodial or Estate Accounts
(1) John B. Smith, Cust.
f/b/o John B. Smith, Jr. UGMA John B. Smith
(2) John B. Smith John B. Smith, Jr., Executor
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SUBJECT TO COMPLETION, DATED DECEMBER 5, 2001
PRELIMINARY PROSPECTUS/PROXY STATEMENT
JANUARY __, 2002
PROXY STATEMENT
CREDIT SUISSE BALANCED FUND, INC.
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3147
800-927-2874
PROSPECTUS
CREDIT SUISSE LARGE CAP VALUE FUND,
A SERIES OF CREDIT SUISSE CAPITAL FUNDS
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3147
800-927-2874
This Prospectus/Proxy Statement is being furnished to shareholders of
Credit Suisse Balanced Fund, Inc. (the "Acquired Fund"), an open-end,
diversified management investment company organized as a Maryland corporation,
in connection with the solicitation of proxies by its Board of Directors for use
at a Special Meeting of Shareholders to held on March 19, 2002 at ___
a.m. (the "Special Meeting"), at the offices of the Acquired Fund located
at 466 Lexington Avenue, ___ Floor, New York, New York 10017-3147, or any
adjournment(s) thereof. The only proposals to be considered are set forth below:
1. to approve an Agreement and Plan of Reorganization (the
"Plan"); and
2. to transact such other business as may properly come before
the Special Meeting and any adjournment(s) thereof.
Pursuant to the Plan, the Acquired Fund would transfer to Credit
Suisse Large Cap Value Fund (formerly, DLJ Growth and Income Fund) (the
"Acquiring Fund" and, together with the Acquired Fund, the "Funds"), a series
of Credit Suisse Capital Funds (formerly, DLJ Focus Funds) (the "Acquiring
Trust"), an open-end, diversified management investment company organized as
a Massachusetts business trust, all of the Acquired Fund's assets in exchange
for Class A shares of the Acquiring Fund and the assumption by the Acquiring
Fund of the Acquired Fund's liabilities; such shares of the Acquiring Fund
would be distributed to shareholders of the Acquired Fund in liquidation of
the Acquired Fund; and the Acquired Fund would subsequently be dissolved
(hereinafter collectively referred to as the "Acquisition").
As disclosed in the attached Prospectus/Proxy Statement, the
Acquisition will result in certain material changes to the investment philosophy
of the Acquired Fund since the Acquired Fund and the Acquiring Fund have
different investment objectives and investment policies, and the Acquiring Fund
has certain different investment limitations as compared to the Acquired Fund.
THE MOST SIGNIFICANT DIFFERENCE IN THE WAY THE FUNDS ARE MANAGED IS THAT THE
ACQUIRING FUND INVESTS AT LEAST 65% OF ITS ASSETS IN COMMON STOCKS OF COMPANIES
WITH LARGE MARKET CAPITALIZATIONS, WHILE THE ACQUIRED FUND IS NORMALLY REQUIRED
TO ALLOCATE AT LEAST 25% OF ITS ASSETS IN FIXED INCOME SECURITIES AND AT LEAST
25% OF ITS ASSETS IN EQUITY SECURITIES. The investment objective of the
Acquiring Fund is long-term capital appreciation and continuity of income. The
Acquiring Fund seeks to achieve its objective by investing principally in
dividend-paying common stock of companies with large market capitalizations that
appear
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to be undervalued. The investment objective of the Acquired Fund is to maximize
total return (through a combination of long-term growth of capital and current
income) consistent with preservation of capital. In choosing equity securities,
the Acquired Fund seeks to identify companies that are attractively valued
relative to their projected growth rates and/or intrinsic value and, in choosing
fixed income investments, the Acquired Fund favors investment grade debt
securities.
Credit Suisse Asset Management, LLC, the investment adviser for the
Acquiring Fund ("CSAM"), and Credit Suisse Asset Management Securities, Inc.
("CSAMSI") and PFPC, Inc. ("PFPC"), co-administrators of the Acquiring Fund,
serve in the same capacities for the Acquired Fund. In addition, each Fund's
custodian, transfer agent, independent accountant and counsel are the same.
As a result of the proposed Acquisition, each Common Class and Advisor
Class shareholder of the Acquired Fund will receive that number of Class A
shares of the Acquiring Fund having an aggregate net asset value equal to the
aggregate net asset value of such shareholder's shares of the Acquired Fund
immediately prior to the Acquisition. All expenses of the Acquisition and of
this solicitation will be borne by CSAM, or its affiliates. No sales or other
charges will be imposed on the shares of the Acquiring Fund received by the
shareholders of the Acquired Fund in connection with the Acquisition. This
transaction is structured to be tax-free for federal income tax purposes to
shareholders of the Acquired Fund and to each of the Acquired Fund and the
Acquiring Fund.
This Prospectus/Proxy Statement, which should be retained for future
reference, sets forth concisely the information about the Acquiring Fund that a
prospective investor should know before voting. This Prospectus/Proxy Statement
is expected to first be sent to shareholders on or about January __, 2002. A
Statement of Additional Information dated January __, 2002, relating to this
Prospectus/Proxy Statement and the Acquisition, has been filed with the
Securities and Exchange Commission (the "SEC") and is incorporated by reference
into this Prospectus/Proxy Statement. A copy of such Statement of Additional
Information is available upon oral or written request and without charge by
writing to the Acquiring Fund at the address listed on the cover page of this
Prospectus/Proxy Statement or by calling (800)-225-8011.
The following documents, which have been filed with the SEC, are
incorporated herein in their entirety by reference.
- The current Class A Prospectus of the Acquiring Fund, dated
__________, as supplemented as of the date hereof. The Acquiring
Fund's Class A Prospectus accompanies this Prospectus/Proxy
Statement.
- The current Common Class and Advisor Class Prospectuses of the
Acquired Fund, each dated February 28, 2001, each as supplemented
as of the date hereof. Copies may be obtained without charge by
writing to the address on the cover page of this Prospectus/Proxy
Statement or by calling (800) 225-8011.
- The Annual Report of each of the Acquired Fund and the Acquiring
Fund for the fiscal year ended October 31, 2001. The Annual Report
of the Acquiring Fund accompanies this Prospectus/Proxy Statement.
Accompanying this Prospectus/Proxy Statement as Exhibit A is a copy of
the form of the Plan for the proposed Acquisition.
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
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COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. 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 PROSPECTUS/PROXY STATEMENT
AND IN THE MATERIALS EXPRESSLY INCORPORATED HEREIN BY REFERENCE AND, IF GIVEN OR
MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUNDS.
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TABLE OF CONTENTS
APPROVAL OF THE PLAN 3
Summary 3
Risk Factors 6
Reasons for the Acquisition 6
FEE TABLE 8
Examples 9
Information About the Acquisition 9
Total Returns 12
Share Ownership of the Funds 14
Comparison Of Investment Objectives And Policies 15
Determination of Net Asset Value of Shares of the Acquiring Fund 20
Management of Each Fund 20
Interest of CSAM in the Acquisition 21
Information on Shareholders' Rights 22
Conclusion 24
Required Vote 24
ADDITIONAL INFORMATION 24
VOTING INFORMATION 25
OTHER BUSINESS 26
FINANCIAL STATEMENTS AND EXPERTS 26
ADDITIONAL MATERIALS 26
LEGAL MATTERS 26
EXHIBIT A: AGREEMENT AND PLAN OF REORGANIZATION A-1
i
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APPROVAL OF THE PLAN
SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE ADDITIONAL
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS/PROXY STATEMENT, THE PLAN (A
COPY OF THE FORM OF WHICH IS ATTACHED TO THIS PROSPECTUS/PROXY STATEMENT AS
EXHIBIT A), THE PROSPECTUSES OF THE ACQUIRED FUND, THE STATEMENT OF ADDITIONAL
INFORMATION OF THE ACQUIRED FUND, THE CLASS A PROSPECTUS OF THE ACQUIRING FUND
AND THE STATEMENT OF ADDITIONAL INFORMATION OF THE ACQUIRING FUND.
PROPOSED ACQUISITION. The Plan provides for the acquisition of all of
the assets and liabilities of the Acquired Fund by the Acquiring Fund in
exchange for Class A shares of the Acquiring Fund. The Plan also calls for
the distribution of Class A shares of the Acquiring Fund to the Acquired
Fund's Common Class and Advisor Class shareholders in liquidation of the
Acquired Fund. As a result of the Acquisition, each shareholder of Common
Class and Advisor Class shares of the Acquired Fund will become the owner of
that number of full and fractional Class A shares of the Acquiring Fund
having an aggregate net asset value equal to the aggregate net asset value of
the shareholder's shares of the Acquired Fund as of the close of business on
the date the Acquired Fund's assets and liabilities are exchanged for shares
of the Acquiring Fund. See "Information About the Acquisition -- Agreement
and Plan of Reorganization."
Because the Acquiring Fund is a series of the Acquiring Trust, it does
not have a Board of Trustees separate from the other series of the Acquiring
Trust. Accordingly, when we refer to the "Trustees of the Acquiring Fund" or the
"Board of Trustees of the Acquiring Fund" elsewhere in this Prospectus/Proxy
Statement, we mean the Trustees and Board of Trustees of the Acquiring Trust.
For the reasons set forth below under "Reasons for the Acquisition,"
the Board of Directors of the Acquired Fund, including the Directors of the
Acquired Fund who are not "interested persons" (the "Independent Directors"), as
that term is defined in the Investment Company Act of 1940, as amended (the
"1940 Act"), has unanimously concluded that the Acquisition would be in the best
interests of the shareholders of the Acquired Fund and that the interests of the
Acquired Fund's existing shareholders will not be diluted as a result of the
transaction contemplated by the Acquisition. The Board of Directors therefore
has submitted the Plan for approval by the Acquired Fund's shareholders. The
Board of Trustees of the Acquiring Fund has also reached similar conclusions and
approved the Acquisition with respect to the Acquiring Fund.
Approval of the Acquisition will require the affirmative vote of a
majority of the Acquired Fund's outstanding shares, in the aggregate without
regard to class, present in person or represented by proxy. See "Voting
Information." In the event that the Plan is not approved by shareholders of
the Acquired Fund, the Board of Directors will consider other possible
courses of action available to it, including resubmitting the Acquisition
proposal to shareholders.
TAX CONSEQUENCES. Prior to completion of the Acquisition, the Acquired
Fund and the Acquiring Fund will have received an opinion of counsel that, upon
the closing of the Acquisition and the transfer of the assets of the Acquired
Fund, no gain or loss will be recognized by the Acquired Fund or its
shareholders for federal income tax purposes. The holding period and aggregate
tax basis of the Acquiring Fund shares received by a Acquired Fund shareholder
will be the same as the holding period and aggregate tax basis of the shares of
the Acquired Fund previously held by such shareholder. In addition, the holding
period and aggregate tax basis of the assets of the Acquired Fund in the hands
of the
3
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Acquiring Fund as a result of the Acquisition will be the same as in the hands
of the Acquired Fund immediately prior to the Acquisition.
INVESTMENT OBJECTIVES AND POLICIES. As disclosed herein, the
Acquisition will result in certain material changes to the investment philosophy
of the Acquired Fund since the Acquired Fund and the Acquiring Fund have
different investment objectives and investment policies, and the Acquiring
Fund has certain different investment limitations as compared to the Acquired
Fund. THE MOST SIGNIFICANT DIFFERENCE IN THE WAY THE FUNDS ARE MANAGED IS
THAT THE ACQUIRING FUND INVESTS AT LEAST 65% OF ITS ASSETS IN COMMON STOCKS
OF COMPANIES WITH LARGE MARKET CAPITALIZATIONS, WHILE THE ACQUIRED FUND IS
NORMALLY REQUIRED TO ALLOCATE AT LEAST 25% OF ITS ASSETS IN FIXED INCOME
SECURITIES AND AT LEAST 25% OF ITS ASSETS IN EQUITY SECURITIES. The
investment objective of the Acquiring Fund is long-term capital appreciation
and continuity of income. The Acquiring Fund seeks to achieve its objective
by investing principally in dividend-paying common stock of companies with
large market capitalizations that appear to be undervalued and by
diversifying its investments among different industries and different
companies. The Acquiring Fund selects securities on the basis of their
investment merit and their potential for appreciation in value and/or income,
with a focus on stability. The investment objective of the Acquired Fund is
to maximize total return (through a combination of long-term growth of
capital and current income) consistent with preservation of capital. In
choosing equity securities, the Acquired Fund seeks to identify companies
that are attractively valued relative to their projected growth rates and/or
intrinsic value. For its fixed-income investments, the Acquired Fund favors
investment-grade debt securities. Consequently, the investment policies of
the Acquiring Fund with respect to investments in equity securities are
similar to those of the Acquired Fund, except as otherwise described herein.
The investment objective of each Fund is a fundamental policy which means
that it cannot be changed without shareholder approval. The other investment
policies and fundamental and non-fundamental investment limitations of the
Acquiring Fund are similar to those of the Acquired Fund except for
differences noted below under "Comparison of Investment Objectives and
Policies."
PURCHASE AND REDEMPTION PROCEDURES. Except as otherwise indicated in
this section, the Funds have similar policies with respect to purchases and
redemptions of shares. Common Class and Advisor Class shares of the Acquired
Fund may be purchased directly from the Acquired Fund or through a variety of
financial services firms. Class A shares of the Acquiring Fund may be purchased
from the Acquiring Fund directly, through the Acquiring Fund's distributor or
through securities dealers. Class A shares of the Acquiring Fund may be
purchased at the net asset value per share plus an initial sales charge imposed
at the time of purchase and may be subject to a contingent deferred sales charge
in cases where the initial sales charge was not applied because of the size of
the purchase. However, the Class A shares acquired by Acquired Fund shareholders
will not be subject to any sales charge and Acquired Fund shareholders will be
able to acquire additional Class A shares of the Acquiring Fund without a sales
charge being assessed. The Acquired Fund requires holders of Common Class shares
to maintain a minimum account balance of $500, while the minimum account size
for the Class A shares of the Acquiring Fund is $250.
In addition, both Funds offer automatic investment and withdrawal
programs. The Acquired Fund's automatic investment program requires a minimum
purchase of $50 on Common Class shares. The Acquiring Fund's automatic
investment program on its Class A shares requires a minimum purchase of $25. The
Acquired Fund offers Common Class and Advisor Class shareholders automatic
withdrawal plans of $250 or more. Any Class A shareholder of the Acquiring Fund
who owns or purchases shares having a current net asset value of at least
$10,000 may establish a systematic withdrawal plan under which the shareholder
or a third party will receive payment in amounts of $50 or greater. The
Acquiring Fund also offers an automatic exchange plan pursuant to which a
shareholder may authorize, in advance, the exchange of a set dollar amount of
shares in one of the Credit Suisse family of funds for shares of the
4
<Page>
same class of another fund in the Credit Suisse family of funds. The minimum
exchange amount under the automatic exchange plan is $50.
You should also note that certain brokers who distribute shares of the
Acquired Fund may not distribute shares of the Acquiring Fund. The
Prospectus(es) of the Acquiring Fund provides additional information on
purchasing shares of the Acquiring Fund.
SALES CHARGES. Common Class shares of the Acquired Fund are sold at net
asset value per share and without an initial or contingent deferred sales
charge, but are subject to a 12b-1 fee of 0.25% per annum of average daily net
assets. Advisor Class shares of the Acquired Fund are subject to a 12b-1 fee of
up to 0.50% per annum. Class A shares of the Acquiring Fund are sold at an
offering price equal to net asset value plus an initial sales charge. The Class
A shares issued to Acquired Fund shareholders will be "load-waived," meaning
that they are not subject to any sales charge. Former Acquired Fund shareholders
will continue to be able to purchase additional Class A shares of the Acquiring
Fund on a load-waived basis. Class A shares of the Acquiring Fund are also
subject to a 12b-1 fee of 0.25% per annum of average daily net assets. Each Fund
has compensation type 12b-1 plans in which the distributor receives the
distribution fee regardless of the cost of the distribution activities
performed. See "Fee Table" below.
EXCHANGE PRIVILEGES. The exchange privileges available to shareholders
of the Acquiring Fund are similar to those available to shareholders of the
Acquired Fund. Shareholders of each Fund may exchange at net asset value all or
a portion of their shares for shares of the same class of other funds in the
Credit Suisse family of funds at their respective net asset values. Exchanges of
Common Class and Advisor Class shares may be effected by mail or by telephone;
exchanges of Class A shares may be effected through an investor's financial
representative. Exchanges will be effected without a sales charge but must
satisfy the minimum dollar amount necessary for new purchases in the fund in
which shares are being purchased. The Funds reserve the right to refuse exchange
purchases by any person or group if, in CSAM's judgment, a Fund would be unable
to invest the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected. Examples of when
an exchange purchase could be refused are when the Fund receives or anticipates
receiving large exchange orders at or about the same time and/or when a pattern
of exchanges within a short period of time (often associated with a "market
timing" strategy) is discerned. The exchange privilege may be modified or
terminated at any time upon 30 days' notice to shareholders.
The exchange privilege is available to shareholders residing in any
state in which the relevant fund's shares being acquired may legally be sold.
When an investor effects an exchange of shares, the exchange is treated for
federal income tax purposes as a redemption. Therefore, the investor may realize
a taxable gain or loss in connection with the exchange. No initial sales charge
is imposed on the shares being acquired in an exchange.
DIVIDENDS. The Acquiring Fund and the Acquired Fund each distribute
substantially all of their respective net investment income and net realized
capital gains, if any, to their respective shareholders. All distributions are
reinvested in the form of additional full and fractional shares of the relevant
Fund unless a shareholder elects otherwise. Each Fund typically declares and
pays dividends, if any, from net investment income quarterly. Net realized
capital gains (including net short-term capital gains), if any, of each Fund are
typically distributed annually.
It is expected that the Acquired Fund will pay a dividend on its
Common Class shares of any undistributed net investment income and capital
gains, which may be substantial, immediately prior to the Closing Date. If
paid as of December 5, 2001, the amount of this dividend would have been
$0.0308 per Common Class share of the Acquired Fund, consisting of $0.0308
per share of net investment income and $0.00 per share of net realized
5
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capital gains. The Acquired Fund does not expect to pay a dividend on its
Advisor Class shares prior to the Closing Date. The amount of any dividend
actually paid prior to the Closing Date may be higher or lower than this
amount (perhaps materially so), depending on a number of factors, such as
changes in the value of the Acquired Fund's holdings and net redemptions of
the Acquired Fund's shares. See "Distributions" in the accompanying
Prospectus of the Acquiring Fund.
APPRAISAL RIGHTS. Under the laws of the Commonwealth of Massachusetts,
shareholders of the Acquiring Fund do not have appraisal rights in connection
with a combination or acquisition of the assets of the Acquiring Fund. In
addition, under the laws of the State of Maryland, shareholders of the Acquired
Fund do not have appraisal rights in connection with a combination or
acquisition of the assets of the Acquired Fund by another entity. Shareholders
of the Acquired Fund may, however, redeem their shares at net asset value prior
to the date of the Acquisition (subject only to certain restrictions set forth
in the 1940 Act). See "Information on Shareholders' Rights -- Voting Rights."
RISK FACTORS
The investment objectives of the Acquiring Fund (i.e., long-term
capital appreciation and continuity of income) and the Acquired Fund (i.e., to
maximize total return (through a combination of long-term growth of capital and
current income) consistent with preservation of capital) are similar. The
principal risk factors affecting both the Acquiring Fund and the Acquired Fund
are (i) market risk and (ii) interest-rate risk. Because the Acquiring Fund
invests primarily in equity securities, its return could be more volatile than
that of the Acquired Fund. The Acquiring Fund may be subject to fewer risks due
to its more restrictive limitations regarding borrowing, options, futures and
options on futures, securities lending, special situation companies and
warrants. In addition, the Acquired Fund has greater exposure to the risks
associated with investing in non-U.S. securities than the Acquiring Fund as the
Acquiring Fund may invest up to 10% of its total assets in non-U.S. securities,
while the Acquired Fund may invest up to 15% of its total assets in non-U.S.
issuers. The Acquired Fund also has greater exposure to risks associated with
investing in securities of start-up and other small companies than the Acquiring
Fund as the Acquiring Fund may invest up to 10% of its total assets in such
companies, while the Acquired Fund may invest in such companies without
limitation. The Acquired Fund also has greater exposure to the risks associated
with illiquid or restricted securities than the Acquiring Fund as the Acquiring
Fund may invest up to 10% of its net assets in illiquid or restricted
securities, while the Acquired Fund may invest up to 15% of its net assets in
such securities. The Acquired Fund may also invest up to 10% of its net assets
in non-investment grade debt securities, while the Acquiring Fund is not
permitted to invest in non-investment grade debt securities. Investing in
non-investment grade debt securities carries additional risks, including an
increased risk of default. See the accompanying Class A Prospectus of the
Acquiring Fund for a complete discussion of the risks of investing in the
Acquiring Fund.
REASONS FOR THE ACQUISITION
The Board of Directors of the Acquired Fund has unanimously determined
that it is in the best interests of the Acquired Fund to effect the Acquisition.
In reaching this conclusion, the Board of Directors considered a number of
factors, including the following:
1. the Acquisition will result in a single larger fund focused on
long-term capital appreciation and continuity of income
through investments in large cap companies that are
attractively valued relative to their projected growth rates;
2. the Acquisition may increase efficiencies, eliminating one of
the two sets of prospectuses, annual reports and other
documents required for two funds, although there is no
guarantee that the combined fund will realize such
efficiencies;
6
<Page>
3. in a load environment, brokers tend to perform the asset
allocation function so that a balanced fund like the Acquired
Fund becomes unattractive as an investment vehicle and,
consequently, the Acquired Fund may not be viable as a
stand-alone fund with its current policies.
4. a larger asset base could provide portfolio management
benefits, such as greater diversification to mitigate the
risks of investing in a limited number of equity securities
and the ability to command more attention from brokers and
underwriters of portfolio securities;
5. the performance record of the Acquiring Fund;
6. the terms and conditions of the Acquisition;
7. the similar investment strategy and policies of the Acquiring
Fund in relation to those of the Acquired Fund with regard to
equity investments;
8. that the investment adviser, co-administrators, transfer
agent, custodian, distributor, independent accountant and
counsel for the Acquiring Fund are the same as that of the
Acquired Fund;
9. the federal tax consequences of the Acquisition to the
Acquired Fund, the Acquiring Fund and the shareholders of each
Fund, and that a legal opinion will be rendered that no
recognition of gain or loss for federal income tax purposes
will occur as a result of the Acquisition to any of them;
10. that the interests of shareholders of the Acquired Fund will
not be diluted as a result of the Acquisition;
11. that the expenses of the Acquisition will be borne by CSAM
and/or its affiliates; and
12. that no sales or other charges will be imposed in connection
with the Acquisition.
The Board also considered the potentially higher volatility of the
Acquiring Fund due to the fact that it invests primarily in equity securities
and that equity securities tend to fluctuate more in value than bonds. See the
Risk/Return summary in the Acquiring Fund's Class A Prospectus for a graphical
presentation of the Fund's varying returns over time.
In light of the foregoing, the Board of Directors of the Acquired Fund,
including the Independent Directors, has determined that it is in the best
interests of the Acquired Fund and its shareholders to effect the Acquisition.
The Board of Directors of the Acquired Fund has also determined that the
Acquisition would not result in a dilution of the interests of the Acquired
Fund's shareholders. In making these determinations, the Board did not give
equal weight to each factor.
The Board of Trustees of the Acquiring Fund has also determined that it
is advantageous to the Acquiring Fund to effect the Acquisition. The Acquiring
Fund's Board of Trustees considered, among other things, the terms and
conditions of the Acquisition and representations that the Acquisition would be
effected as a tax-free reorganization. Accordingly, the Board of Trustees of the
Acquiring Fund, including a majority of the Independent Trustees, has determined
that the Acquisition is in the best interests of the Acquiring Fund's
shareholders and that the interests of the Acquiring Fund's shareholders would
not be diluted as a result of the Acquisition.
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<Page>
FEE TABLE
Following are two tables showing current fees and expenses of Common
Class and Advisor Class shares of the Acquired Fund, holders of which will
receive Class A shares of the Acquiring Fund upon closing of the Acquisition and
the fees and expenses of Class A shares of the Acquiring Fund before and after
giving effect to the Acquisition. The tables do not reflect charges that
institutions and financial intermediaries may impose on their customers.
<Table>
<Caption>
CREDIT
SUISSE
ACQUIRED FUND ACQUIRING LARGE CAP
FUND VALUE FUND
PRO FORMA
BEFORE FEE WAIVERS AND CLASS A AFTER
REIMBURSEMENTS COMMON CLASS* ADVISOR CLASS* CLASS A* ACQUISITION
Shareholder Transaction Expenses:
Maximum sales charge imposed
on purchases (as a percentage
of offering price) None None None** None**
Maximum deferred sales charge (as a
percentage of original purchase price,
or redemption proceeds, as applicable) None None None None
Annual Fund Operating Expenses
(expenses that are deducted from
fund assets)
Management fees .90% .90% .58% .57%
12b-1 fees .25% .50% .25% .25%
Other expenses .97% .97% .31% .34%
TOTAL ANNUAL FUND
OPERATING EXPENSES 2.12% 2.37% 1.14% 1.16%
</Table>
* Actual fees and expenses for the fiscal year ended October 31, 2001 are
shown below. Fee waivers and expense reimbursements or credits reduced expenses
for each of the Funds during their most recent fiscal years but may be
discontinued at any time.
** Although the Class A shares impose a maximum sales charge of 5.75%,
this charge does not apply to Class A shares received in the Acquisition or
additional Class A shares of the Acquiring Fund purchased by former Acquired
Fund shareholders.
<Table>
<Caption>
CREDIT
SUISSE
ACQUIRED FUND ACQUIRING LARGE CAP
FUND VALUE FUND
PRO FORMA
AFTER FEE WAIVERS AND CLASS A AFTER
REIMBURSEMENTS COMMON CLASS ADVISOR CLASS CLASS A ACQUISITION
Annual Fund Operating Expenses
(expenses that are deducted from
fund assets)
Management fees .13% .13% .47% .44%
12b-1 fees .25% .50% .25% .25%
Other expenses .97% .97% .31% .34%
TOTAL ANNUAL FUND
OPERATING EXPENSES 1.35% 1.60% 1.03%* 1.03%
</Table>
* Effective February 1, 2001, CSAMSI and PFPC began providing administrative
services to the Acquiring Fund. Administrative services previously were
provided by DLJ Asset Management Group, Inc. ("DLJAM"),
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the Acquiring Fund's previous investment adviser and CSAM without charge.
Although these services are now provided for a total asset rate not to
exceed .18% of average daily net assets, CSAM, in connection with the Credit
Suisse Group's acquisition of Donaldson, Lufkin & Jenrette ("DLJ"), agreed
to limit average annual expenses of the Acquiring Fund from the date of the
acquisition, November 3, 2000, until November 3, 2002 to annualized levels
previously paid by the Acquiring Fund, measured over the 60-day period ended
November 3, 2000. This limit is not reflected in the fee table above.
EXAMPLES
The following examples are intended to assist an investor in understanding the
various costs that an investor in each Fund will bear directly or indirectly.
The examples assume payment of operating expenses at the levels set forth in the
first table above (i.e., before fee waivers and expense reimbursements and
credits). The examples also assume that all dividends and distributions are
reinvested.
Assume you invest $10,000, each Fund returns 5% annually and you close your
account at the end of each of the time periods shown. Based on these
assumptions, your cost would be:
<Table>
<Caption>
ACQUIRED FUND ACQUIRING CREDIT SUISSE LARGE
FUND CAP VALUE FUND PRO
FORMA
COMMON CLASS ADVISOR CLASS CLASS A* CLASS A AFTER ACQUISITION*
1 Year $215 $240 $115 $118
3 Years 664 739 359 368
5 Years 1,139 1,265 623 638
10 Years 2,452 2,706 1,375 1,409
</Table>
* The examples exclude the effect of sales charges, as Class A shares will be
available to former Acquired Fund shareholders on a load-waived basis.
The examples provide a means for an investor to compare expense levels of funds
with different fee structures over varying investment periods. To facilitate
such comparison, all funds are required to utilize a 5.00% annual return
assumption. However, each fund's actual return will vary and may be greater or
less than 5.00%. These examples should not be considered representations of past
or future expenses and actual expenses may be greater or less than those shown.
INFORMATION ABOUT THE ACQUISITION
AGREEMENT AND PLAN OF REORGANIZATION. The following summary of the Plan
is qualified in its entirety by reference to the form of the Plan (Exhibit A
hereto). The Plan provides that the Acquiring Fund will acquire all
of the assets of the Acquired Fund in exchange for shares of
the Acquiring Fund and the assumption by the Acquiring Fund of the liabilities
of the Acquired Fund on the Closing Date. The Closing Date is expected to be on
or about April ___, 2002.
Prior to the Closing Date, the Acquired Fund will endeavor to discharge
all of its known liabilities and obligations, other than those liabilities and
obligations which would otherwise be discharged at a later date in the ordinary
course of business. The Acquiring Fund will assume all
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<Page>
liabilities, expenses, costs, charges and reserves, including those liabilities
reflected on an unaudited statement of assets and liabilities of the Acquired
Fund as of the close of regular trading on The New York Stock Exchange, Inc.,
currently 4:00 p.m. New York City time, on the Closing Date, in accordance with
generally accepted accounting principles consistently applied from the prior
audited period. The net asset value per share of each class of each Fund will be
calculated by determining the total assets attributable to such class,
subtracting the relevant class' pro rata share of the actual and accrued
liabilities of a Fund and the liabilities specifically allocated to that class
of shares, and dividing the result by the total number of outstanding shares of
the relevant class. Each Fund will utilize the procedures set forth in its
respective current Prospectus(es) or Statement of Additional Information to
determine the value of their respective portfolio securities and to determine
the aggregate value of each Fund's portfolio.
On or as soon after the Closing Date as conveniently practicable, the
Acquired Fund will liquidate and distribute pro rata to shareholders of record
as of the close of business on the Closing Date Class A shares of the Acquiring
Fund received by the Acquired Fund. Such liquidation and distribution will be
accomplished by the establishment of accounts in the names of the Acquired
Fund's shareholders on the share records of the Acquiring Fund's transfer agent.
Each account will represent the number of Class A shares of the Acquiring Fund
due to each of the Acquired Fund's shareholders calculated in accordance with
the Plan. After such distribution and the winding up of its affairs, the
Acquired Fund will terminate as a management investment company and dissolve as
a Maryland corporation.
The consummation of the Acquisition is subject to the conditions set
forth in the Plan, including approval of the Plan by the shareholders of the
Acquired Fund. Notwithstanding approval by the shareholders of the Acquired
Fund, the Plan may be terminated at any time at or prior to the Closing Date:
(i) by mutual agreement of the Acquired Fund and the Acquiring Fund; (ii) by the
Acquired Fund in the event the Acquiring Fund shall, or by the Acquiring Fund,
in the event the Acquired Fund shall, materially breach any representation,
warranty or agreement contained in the Plan to be performed at or prior to the
Closing Date; or (iii) if a condition to the Plan expressed to be precedent to
the obligations of the terminating party has not been met and it reasonably
appears that it will not or cannot be met within a reasonable time.
Pursuant to the Plan, the Acquiring Fund has agreed to indemnify and
advance expenses to each Director or officer of the Acquired Fund against money
damages incurred in connection with any claim arising out of such person's
services as a Director or officer with respect to matters specifically relating
to the Acquisition.
Approval of the Plan with respect to the Acquired Fund will require the
affirmative vote of a majority of the Acquired Fund's outstanding shares in the
aggregate without regard to class, in person or by proxy, if a quorum is
present. Shareholders of the Acquired Fund are entitled to one vote for each
share. If the Acquisition is not approved by shareholders of the Acquired Fund,
the Board of Directors of the Acquired Fund will consider other possible courses
of action available to it, including resubmitting the Acquisition proposal to
shareholders.
DESCRIPTION OF THE ACQUIRING FUND SHARES. Shares of the Acquiring
Fund will be issued to the Acquired Fund in accordance with the procedures
detailed in the Plan and as described in the Acquiring Fund's Class A
Prospectus and Statement of Additional Information. The Acquiring Fund, like
the Acquired Fund, will not issue share certificates to its shareholders. See
"Information on Shareholders' Rights" and the Class A Prospectus of the
Acquiring Fund for additional information with respect to the shares of the
Acquiring Fund.
The Acquiring Fund has authorized six classes of beneficial interests,
called Class A, Class B, Class C, Class D, Common Class and Advisor Class. Class
A shares of the Acquiring Fund will be issued
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to holders of Common Class and Advisor Class shares of the Acquired Fund. The
Acquiring Fund intends to continuously offer Class A shares after consummation
of the Acquisition. Class A shares are available for purchase directly from the
Acquiring Fund, through CSAMSI, the Acquiring Fund's distributor, or through
securities dealers. Shares of each class of the Acquiring Fund represent equal
pro rata interests in the Acquiring Fund and accrue dividends and calculate net
asset value and performance quotations in the same manner.
FEDERAL INCOME TAX CONSEQUENCES. The exchange of assets of the Acquired
Fund for shares of the Acquiring Fund, followed by the distribution of these
shares, is intended to qualify for federal income tax purposes as a tax-free
reorganization under Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). As a condition to the closing of the Acquisition, the
Acquiring Fund and the Acquired Fund will receive an opinion from Willkie Farr &
Gallagher, counsel to each Fund, to the effect that, on the basis of the
existing provisions of the Code, U.S. Treasury regulations issued thereunder,
current administrative rules, pronouncements and court decisions, for federal
income tax purposes, upon consummation of the Acquisition:
1. the transfer of all of the Acquired Fund's assets in exchange for
the Acquiring Fund shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund, and the distribution of the Acquiring Fund
shares to the shareholders of the Acquired Fund in exchange for their shares of
the Acquired Fund, will constitute a "reorganization" within the meaning of
Section 368(a) of the Code, and the Acquiring Fund and the Acquired Fund will
each be a "party to a reorganization" within the meaning of Section 368(b) of
the Code;
2. no gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the Acquiring
Fund shares and the assumption by the Acquiring Fund of the liabilities of the
Acquired Fund;
3. no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange for the
Acquiring Fund shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund or upon the distribution of the Acquiring Fund
shares to the Acquired Fund's shareholders;
4. no gain or loss will be recognized by shareholders of the Acquired
Fund upon the exchange of their shares for Acquiring Fund shares or upon the
assumption by the Acquiring Fund of the liabilities of the Acquired Fund;
5. the aggregate tax basis of the Acquiring Fund shares received by
each shareholder of the Acquired Fund pursuant to the Acquisition will be the
same as the aggregate tax basis of the shares of the Acquired Fund held by such
shareholder immediately prior to the Acquisition, and the holding period of the
Acquiring Fund shares to be received by each shareholder of the Acquired Fund
will include the period during which the shares of the Acquired Fund exchanged
therefor were held by such shareholder (provided that such shares of the
Acquired Fund were held as capital assets on the date of the Acquisition); and
6. the tax basis of the Acquired Fund's assets acquired by the
Acquiring Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the Acquisition, and the holding period of the assets
of the Acquired Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired Fund.
YOU SHOULD RECOGNIZE THAT AN OPINION OF COUNSEL IS NOT BINDING ON THE
INTERNAL REVENUE SERVICE ("IRS") OR ANY COURT. NEITHER THE ACQUIRED FUND NOR THE
ACQUIRING FUND WILL SEEK TO OBTAIN A RULING
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FROM THE IRS REGARDING THE TAX CONSEQUENCES OF THE ACQUISITION. ACCORDINGLY, IF
THE IRS SOUGHT TO CHALLENGE THE TAX TREATMENT OF THE ACQUISITION AND WAS
SUCCESSFUL, NEITHER OF WHICH IS ANTICIPATED, THE ACQUISITION COULD BE TREATED,
IN WHOLE OR IN PART, AS A TAXABLE SALE OF ASSETS OF THE ACQUIRED FUND, FOLLOWED
BY THE TAXABLE LIQUIDATION THEREOF.
SHAREHOLDERS OF THE ACQUIRED FUND SHOULD CONSULT THEIR TAX ADVISORS
REGARDING THE EFFECT, IF ANY, OF THE PROPOSED ACQUISITION IN LIGHT OF THEIR
INDIVIDUAL CIRCUMSTANCES. SINCE THE FOREGOING DISCUSSION ONLY RELATES TO THE
FEDERAL INCOME TAX CONSEQUENCES OF THE ACQUISITION, SHAREHOLDERS OF THE ACQUIRED
FUND SHOULD ALSO CONSULT THEIR TAX ADVISORS AS TO STATE AND LOCAL TAX
CONSEQUENCES, IF ANY, OF THE ACQUISITION.
CAPITALIZATION. The following table shows the capitalization of each
Fund as of October 31, 2001 and the capitalization of the Acquiring Fund on a
pro forma basis as of the Closing Date, after giving effect to the
Acquisition.(1)
<Table>
<Caption>
CREDIT SUISSE
LARGE
CAP VALUE
ACQUIRED FUND ACQUIRING FUND PRO FORMA FUND
(ACTUAL) (ACTUAL) ADJUSTMENTS PRO FORMA
Net Assets - Fund Level $19,505,570 $213,763,911 ($14,009) $233,255,472
Common Class (2) 19,435,241 3,420,848 (19,435,240) 3,420,848
Advisor Class(3) 70,329 -- (70,329) --
Class A -- 133,664,652 19,491,561 153,156,213
Class B -- 33,087,080 -- 33,087,080
Class C (2) -- 1,916,046 -- 1,916,046
Class D -- 41,675,285 -- 41,675,285
Net Asset Value
Common Class (2) $9.49 $19.95 -- 19.95
Advisor Class(3) 9.48 -- -- --
Class A -- 19.96 -- 19.96
Class B -- 19.78 -- 19.78
Class C (2) -- 19.71 -- 19.71
Class D -- 19.98 -- 19.98
Shares Outstanding
Common Class (2) 2,048,225 171,442 (2,048,225) 171,442
Advisor Class (3) 7,422 -- (7,422) --
Class A -- 6,695,850 977,223 7,672,281
Class B -- 1,672,580 -- 1,672,580
Class C (2) -- 97,204 -- 97,204
Class D -- 2,086,207 -- 2,086,207
</Table>
- -----------------
(1) Assumes the Acquisition had been consummated on October 31, 2001 and is
for information purposes only. No assurance can be given as to how many
Acquiring Fund shares will be received by shareholders of the Acquired
Fund on the date the Acquisition takes place, and the foregoing should
not be relied upon to reflect the number of Acquiring Fund shares that
actually will be received on or after such date.
(2) The Acquiring Fund commenced offering Class C and Common Class shares
on February 28, 2000 and August 1, 2000, respectively.
(3) The Acquiring Fund commenced offering Advisor Class shares on
__________, 2001.
TOTAL RETURNS
Performance information is shown separately for each class of a Fund.
Total return is a measure of the change in value of an investment in a fund over
the period covered, which assumes that any dividends or capital gains
distributions are automatically reinvested in shares of the fund rather than
paid to the investor in cash. The formula for total return used by a fund is
prescribed by the SEC and includes
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<Page>
three steps: (1) adding to the total number of shares of the fund that would be
purchased by a hypothetical $1,000 investment in the fund all additional shares
that would have been purchased if all dividends and distributions paid or
distributed during the period had been automatically reinvested; (2) calculating
the redeemable value of the hypothetical initial investment as of the end of the
period by multiplying the total number of shares owned at the end of the period
by the net asset value per share on the last trading day of the period; and (3)
dividing this account value for the hypothetical investor by the amount of the
initial investment, and annualizing the result for periods of less than one
year. It is assumed that with respect to Class A shares of the Acquiring Fund,
the maximum initial sales charge of 5.75% was deducted at the time of
investment. Total return may be stated with or without giving effect to any
expense limitations in effect for a fund.
The following table reflects the average annual total return (excluding
sales charges) for the 1-, 3-, 5- and 10-year and since inception periods ending
October 31, 2001 for each Fund:
<Table>
<Caption>
ACQUIRED FUND (3) ACQUIRING FUND (2)
COMMON CLASS ADVISOR CLASS CLASS A
-----------------------------------------------------------------------------
Average Annual Total
Return(1):
1-year -13.67% -13.87% -10.48%
3-year 2.10% 1.77% 3.55%
5-year 6.02% 5.67% 11.54%
10-year 9.33% 9.11% 12.41%
Since Inception 10.22% 10.05% 11.79%
</Table>
(1) If CSAM or its predecessor had not temporarily waived fees and
reimbursed expenses, the cumulative total return of each Fund for the
periods shown would have been lower.
(2) Inception Date [___] for Class A shares.
(3) Inception Date October 6, 1988 for Common Class shares and July 31,
1995 for Advisor Class shares.
13
<Page>
SHARE OWNERSHIP OF THE FUNDS
As of January 11, 2002 (the "Record Date"), the officers, Trustees or
Directors of the Acquired Fund and the Acquiring Fund beneficially owned as a
group less than 1% of the outstanding securities of the relevant Fund. To the
best knowledge of a Fund, as of the Record Date, no shareholder or "group" (as
that term is used in Section 13(d) of the Securities Exchange Act of 1934 (the
"1934 Act")), except as set forth below, owned beneficially or of record more
than 5% of the outstanding shares of a class of the funds.
<Table>
<Caption>
NAME PERCENT OWNED AS OF RECORD DATE
- ---- -------------------------------
ACQUIRING FUND CLASS A CLASS B CLASS C CLASS D COMMON CLASS ADVISOR CLASS
------- ------- ------- ------- ------------ -------------
NAME PERCENT OWNED AS OF RECORD DATE
- ----- -------------------------------
ACQUIRED FUND COMMON CLASS ADVISOR CLASS
------------ -------------
</Table>
14
<Page>
* Each Fund believes that these entities are not the beneficial owners of
shares held of record by them.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
The following discussion is based upon and qualified in its entirety by
the disclosures in the respective Prospectuses and Statements of Additional
Information of the Acquiring Fund and the Acquired Fund.
INVESTMENT OBJECTIVES. The investment objective of the Acquired Fund is
to maximize total return (through a combination of long-term growth of capital
and current income) consistent with preservation of capital. The investment
objective of the Acquiring Fund is long-term capital appreciation and continuity
of income. Each Fund's investment objective is a fundamental policy that cannot
be changed without the approval of the respective shareholders. There can be no
assurance that either Fund will achieve its investment objective.
PRIMARY INVESTMENTS. The Acquired Fund seeks to achieve its investment
objective by allocating its assets among a diversified mix of equity and
fixed-income securities. The Acquired Fund is normally required to allocate at
least 25% of its assets in equity securities and at least 25% of its assets in
fixed-income securities, and the Acquired Fund typically invests more than 25%
of its assets in fixed-income securities. In choosing equity securities, the
Acquired Fund employs both growth and value investment styles, seeking to invest
in companies that are attractively valued relative to their projected growth
rates and/or intrinsic value of their assets. The Acquired Fund focuses on large
U.S. companies comparable in size to those in the S&P 500. For its fixed income
investments, the Acquired Fund favors investment-grade debt securities.
The Acquiring Fund seeks to achieve its objective by investing in
securities based on their investment merit and their potential for appreciation
in value and/or income, with a focus on stability. The Acquiring Fund invests
principally in dividend paying common stock of companies with large market
capitalizations, at the time of investment, and diversifies its investments
among different industries and different companies. The Acquiring Fund considers
a large company to be one whose market
15
<Page>
capitalization exceeds that of the smallest company in the Russell 1000 Index at
the time of purchase. Some companies may decline in value after the Acquiring
Fund has purchased their securities. These companies would continue to be
considered large companies, and the Acquiring Fund is not required to dispose of
them. A portion of the Acquiring Fund's assets may be invested in debt
securities that are investment-grade.
INVESTMENT LIMITATIONS. The Acquired Fund and the Acquiring Fund have
adopted certain fundamental and non-fundamental investment limitations.
Fundamental investment limitations may not be changed without the affirmative
vote of the holders of a "majority" (within the meaning of the 1940 Act) of the
relevant Fund's outstanding shares. Each Fund has substantially similar
investment limitations with respect to: investing in a single industry;
investing in a single issuer; making loans; underwriting securities; purchasing
or selling real estate; making investments for the purpose of exercising control
or management, investing in commodities and purchasing securities on margin.
Each Fund has different fundamental investment limitations with respect to
borrowing as the Acquiring Fund is limited to 15% of its total assets (5% if the
borrowing is for purposes other than to meet redemptions), while the Acquired
Fund's borrowing is limited to 30% of its total assets. While the Acquired Fund
has fundamental limitations which prohibits investing more than 15% of its net
assets in securities which may be illiquid because of legal or contractual
restrictions on resale for which there are no readily available market
quotations, the Acquiring Fund is subject to a 10% fundamental limitation in
restricted securities or other instruments not having a ready market. While
the Acquiring Fund has fundamental investment limitations which prohibits
investing more than 10% of its total assets in securities of any issuer which
has a record of less than three years of continuous operations, the Acquired
Fund has no stated limitation in this context. While the Acquired Fund has
fundamental investment limitations which prohibits making short sales of
securities or maintaining a short position, except in limited circumstances, the
Acquiring Fund has no stated fundamental limitation in this context.
CERTAIN INVESTMENT PRACTICES. For each of the following practices, this
table shows the applicable investment limitation. Risks are indicated for each
practice. The specific risks associated with each of the investment practices
described below are defined for the Acquiring Fund in the Acquiring Fund's Class
A Prospectus, which accompanies this Prospectus/Proxy Statement, and for the
Acquired Fund in the Acquired Fund's Prospectuses.
16
<Page>
KEY TO TABLE:
/x/ Permitted without limitation; does not indicate actual use
20%[I] Italic type (e.g., 20%[I]) represents an investment limitation
as a percentage of net fund assets; does not indicate actual
use
20% Roman type (e.g. 20%) represents an investment limitation as
a percentage of total fund assets; does not indicate actual
use
/ / Permitted, but not expected to be used to a significant extent
- -- Not permitted
<Table>
<Caption>
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE LIMIT
- -------------------------------------------------------------------------------------------------------------------
ACQUIRING
FUND ACQUIRED FUND
---------------- ------------------
BORROWING. The borrowing of money from banks to meet redemptions or for other
temporary or emergency purposes. SPECULATIVE EXPOSURE RISK. 15% 30%
FOREIGN SECURITIES. Securities of foreign issuers. May include depositary 10% 15%
receipts. CURRENCY, INFORMATION, LIQUIDITY, MARKET, OPERATIONAL, POLITICAL,
VALUATION RISKS.
FUTURES AND OPTIONS ON FUTURES. Exchange-traded contracts that enable a fund to -- / /
hedge against or speculate on future changes in currency values, interest rates
or stock indexes. Futures obligate the fund (or give it the right, in the case
of options) to receive or make payment at a specific future time based on those
future changes.(1) CORRELATION, CURRENCY, HEDGED EXPOSURE, INTEREST-RATE,
MARKET, SPECULATIVE EXPOSURE RISKS.(2)
INVESTMENT-GRADE DEBT SECURITIES. Debt securities rated within the four highest /x/ 75%
grades (AAA/Aaa through BBB/Baa) by Standard & Poor's or Moody's rating service,
and unrated securities of comparable quality. CREDIT, INTEREST-RATE, MARKET
RISKS.
MORTGAGE-BACKED AND ASSET-BACKED SECURITIES. Debt securities backed by pools of /x/ 75%
mortgages, including pass-through certificates and other senior classes of (investment
collateralized mortgage obligations (CMOs), or other receivables. CREDIT, grade)
EXTENSION, INTEREST-RATE, LIQUIDITY, PREPAYMENT RISKS.
NON-INVESTMENT-GRADE DEBT SECURITIES. Debt securities and convertible securities -- 10%[I]
rated below the fourth-highest grade (BBB/Baa) by Standard & Poor's or Moody's
rating service, and unrated securities of comparable quality. Commonly referred
to as junk bonds. CREDIT, INFORMATION, INTEREST-RATE,
17
<Page>
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE LIMIT
- -------------------------------------------------------------------------------------------------------------------
LIQUIDITY, MARKET, VALUATION RISKS.
OPTIONS. Instruments that provide a right to buy (call) or sell (put) a / / 25%
particular security or an index of securities at a fixed price within a certain
time period. A fund may purchase and write both put and call options for hedging
or speculative purposes.(1) CORRELATION, CREDIT, HEDGED EXPOSURE, LIQUIDITY,
MARKET, SPECULATIVE EXPOSURE RISKS.
REAL-ESTATE INVESTMENT TRUSTS (REITS). Pooled investment vehicles that invest -- / /
primarily in income-producing real estate or real-estate-related loans or
interests. CREDIT, INTEREST RATE, MARKET RISKS.
RESTRICTED AND OTHER ILLIQUID SECURITIES. Securities with restrictions on 10%[I] 15%[I]
trading, or those not actively traded. May include private placements.
LIQUIDITY, MARKET, VALUATION RISKS.
SECURITIES LENDING. Lending portfolio securities to financial institutions; a -- 33 1/3%
fund receives cash, U.S. government securities or bank letters of credit as
collateral. CREDIT, LIQUIDITY, MARKET, OPERATIONAL RISKS.
SHORT SALES "AGAINST THE BOX". A short sale where the fund owns enough shares of 10%[I] 10%[I]
the security involved to cover the borrowed securities, if necessary. LIQUIDITY,
MARKET, SPECULATIVE EXPOSURE RISKS.
SPECIAL-SITUATION COMPANIES. Companies experiencing unusual developments -- / /
affecting their market values. Special situations may include acquisition,
consolidation, reorganization, recapitalization, merger, liquidation, special
distribution, tender or exchange offer, or potentially favorable litigation.
Securities of a special-situation company could decline in value and hurt a
fund's performance if the anticipated benefits of the special situation do not
materialize. INFORMATION, MARKET RISKS.
START-UP AND OTHER SMALL COMPANIES. Companies with small relative market 10% /x/
capitalizations, including those with continuous operations of less than three
years. INFORMATION, LIQUIDITY, MARKET, VALUATION RISKS.
TEMPORARY DEFENSIVE TACTICS. Placing some or all of a fund's assets in -- / /
investments such as money-market obligations and investment-grade debt
securities for defensive purposes. Although intended to avoid losses in adverse
market, economic, political or other conditions, defensive tactics might be
inconsistent with a fund's principal investment strategies and might prevent a
fund from achieving its goal.
18
<Page>
- -------------------------------------------------------------------------------------------------------------------
INVESTMENT PRACTICE LIMIT
- -------------------------------------------------------------------------------------------------------------------
WARRANTS. Options issued by a company granting the holder the right to buy -- 15%[I]
certain securities, generally common stock, at a specified price and usually for
a limited time. LIQUIDITY, MARKET, SPECULATIVE EXPOSURE RISKS.
WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS. The purchase or sale of / / 20%
securities for delivery at a future date; market value may change before
delivery. LIQUIDITY, MARKET, SPECULATIVE EXPOSURE RISKS.
ZERO-COUPON BONDS. Debt securities that pay no cash income until maturity and -- / /
are issued at a discount from maturity value. At maturity, the entire return
comes from the difference between purchase price and maturity value.
INTEREST-RATE, MARKET RISKS.
</Table>
- ---------------
(1) The Funds are not obligated to pursue any hedging strategy and do not
represent that these techniques are available now or will be available
at any time in the future.
(2) The Acquired Fund is limited to 5% of net assets for initial margin and
premium amounts on futures positions considered to be speculative by
the Commodity Futures Trading Commission.
19
<Page>
DETERMINATION OF NET ASSET VALUE OF SHARES OF THE ACQUIRING FUND
The net asset value ("NAV") of each class of shares of the Acquiring
Fund is determined at the close of regular trading on the New York Stock
Exchange ("NYSE") (usually 4 p.m. Eastern Time) each day the NYSE is open for
business. It is calculated by taking the sum of a class's total assets,
subtracting liabilities, and dividing by the total number of shares of each
class outstanding. The Acquiring Fund values its securities based on market
quotations when it calculates its NAV. If market quotations are not readily
available, securities and other assets are valued by another method the Board of
Trustees believes accurately reflects fair value. Debt obligations that will
mature in 60 days or less are valued on the basis of amortized cost, unless the
Board determines that using this method would not reflect an investment's value.
Some securities of the Acquiring Fund may be listed on foreign exchanges that
are open on days (such as U.S. holidays) when the Acquiring Fund does not
compute its price. This could cause the value of the Acquiring Fund's portfolio
investments to be affected by trading on days when you cannot buy or sell
shares.
MANAGEMENT OF EACH FUND
CSAM, located at 466 Lexington Avenue, 16th Floor, New York, New York
10017-3174, provides investment advisory services to both Funds under separate
advisory agreements. CSAM became the investment adviser to the Acquiring Fund on
November 3, 2000 in connection with the Credit Suisse Group's acquisition of
DLJ. Prior to that time, the investment adviser to the Acquiring Fund was DLJAM.
The specific persons at CSAM who are responsible for the day-to-day management
of the Acquiring Fund are described in the Class A Prospectus of the Acquiring
Fund, which accompanies this Prospectus/Proxy Statement.
In addition, PFPC and CSAMSI provide accounting and co-administrative
services as applicable to each Fund. PFPC and CSAMSI provide certain financial
administration, accounting, administrative, personnel and other services
necessary to operate the Acquired Fund. CSAMSI and PFPC became the
co-administrators of the Acquiring Fund effective February 1, 2001. CSAMSI and
PFPC became the co-administrators to the Acquired Fund on November 1, 1999.
Prior to that, Counsellors Funds Service, Inc. served as administrator to the
Acquired Fund. CSAMSI is the distributor of both Funds, having served in that
capacity for the Acquiring Fund since December 18, 2000. PFPC serves as the
shareholder servicing, transfer and dividend disbursing agent to the Class A, B,
C and D shares of the Acquiring Fund. Boston Financial Data Services, Inc.
serves as the shareholder servicing, transfer and dividend disbursing agent
to the Common Class and Advisor Class shares of the Acquiring Fund and in the
same capacity for all shares of the Acquired Fund. PricewaterhouseCoopers LLP
serves as auditor for both Funds and the Funds' custodian is State Street
Bank and Trust Company.
The Acquired Fund pays a management fee to CSAM of .90% of average
daily net assets on both is Common Class and Advisor Class shares and the
Acquiring Fund pays a management fee to CSAM of .58% of average net assets on
its Class A shares. In addition to the .90% advisory fee payable to CSAM, the
Acquired Fund pays a co-administration fee to CSAMSI of .10% of average daily
net assets of its shares. On February 1, 2001, the Board of Trustees of the
Acquiring Fund approved the same fee structure for the Acquiring Fund. CSAM and
CSAMSI have, however, agreed to waive their respective fees as described below.
On February 1, 2001, the Board of Trustees of the Acquiring Fund approved the
payment to PFPC of a fee calculated at an annual rate of .075% of its first $500
million, .065% of the next $1 billion and .055% over $1.5 billion of the average
daily net assets (exclusive of out-of-pocket expenses). The fees payable to PFPC
by the Acquired Fund are identical to the fees payable to PFPC by the Acquiring
Fund. In connection with the Credit Suisse Group's acquisition of DLJ and its
subsidiary DLJAM, CSAM agreed to limit the average annual expenses of the
Acquiring Fund from the
20
<Page>
date of the acquisition, November 3, 2000, until November 3, 2002 to the
annualized levels previously paid by the Acquiring Fund, measured over the
60-day period ended on November 3, 2000.
Each class of shares of a Fund bears its proportionate share of fees payable
to CSAM, CSAMSI and PFPC in the proportion that its assets bear to the
aggregate assets of the Fund at the time of calculation. These fees are
calculated at an annual rate based on a percentage of a Fund's average daily
net assets.
INTEREST OF CSAM IN THE ACQUISITION
CSAM may be deemed to have an interest in the Plan and the
Acquisition because it provides investment advisory services to each Fund.
CSAM receives compensation from each Fund for services it provides pursuant
to separate advisory agreements. The terms and provisions of these
arrangements are described in each Fund's Prospectus and Statement of
Additional Information. Future growth of the assets of the Acquiring Fund, if
any, can be expected to increase the total amount of fees payable to CSAM and
its affiliates and to reduce the amount of fees and expenses required to be
waived to maintain total fees and expenses of the Acquiring Fund at agreed
upon levels. CSAM may also be deemed to have an interest in the Plan and the
Acquisition because, as of the Record Date, it or one or more of its
affiliates possessed or shared voting power or investment power as a
beneficial owner or as a fiduciary on behalf of its customers or employees in
the Acquired Fund (see "Information About the Acquisition--Share Ownership of
the Funds" above). CSAM and its affiliates have advised the Acquired Fund
that they intend to vote the shares over which they have voting power at the
Special Meeting (i) in the manner instructed by customers for which such
shares are held or (ii) in the event that such instructions are not received
or where shares are held directly on behalf of employees, in the same
proportion as votes cast by other shareholders. As of January 11, 2001, CSAM
had discretionary power to dispose of securities over accounts, which held in
the aggregate __________ shares or ___% of the Acquired Fund's outstanding
shares. See "Voting Information."
21
<Page>
CSAM may also be deemed to have an interest in the Plan and Acquisition
because its affiliate, CSAMSI, serves as the co-administrator and distributor
for both of the Funds. As such, CSAMSI receives compensation for its services.
INFORMATION ON SHAREHOLDERS' RIGHTS
GENERAL. The Funds are both open-end management investment companies
registered under the 1940 Act. The Acquiring Fund is a series of a
Massachusetts business trust, governed by its Amended and Restated Agreement
and Declaration of Trust, dated February 22, 1996 (the "Declaration of
Trust"), By-Laws and Board of Trustees. The Acquired Fund is a Maryland
corporation organized on January 29, 1996 and is governed by its Articles of
Incorporation, By-Laws and Board of Directors. Each Fund is also governed by
applicable state and federal law. The Acquiring Fund has an unlimited number
of transferable shares of beneficial interest with par value of $.01 per
share. The Acquired Fund has an authorized capital of three billion shares of
common stock with a par value of $.001 per share, of which one billion are
designated Common Class and two billion are designated Advisor Class. In each
Fund, shares represent interests in the assets of the relevant Fund and have
identical voting, dividend, liquidation and other rights (other than as set
forth below) on the same terms and conditions except that expenses related to
the distribution of each class of shares of the relevant Fund are borne
solely by such class and each class of shares has exclusive voting rights
with respect to provisions of such Fund's Rule 12b-1 distribution plan, if
any, pertaining to that particular class.
MULTI-CLASS STRUCTURE. Each Fund is authorized to offer multiple
classes. The Acquired Fund offers Common Class and Advisor Class shares. The
Acquiring Fund offers Class A, Class B, Class C, Class D, Common Class and
Advisor Class shares and expects to continue to offer shares of each class
(other than Common Class) following the Acquisition.
TRUSTEES/DIRECTORS. The Declaration of Trust of the Acquiring Fund and
the By-Laws of the Acquired Fund provide that the term of office of each Trustee
or Director, respectively, shall be from the time of his or her election and
qualification until his or her successor shall have been elected and shall have
qualified. In the case of the Acquiring Fund, the Trustees have the power to set
and alter their terms of office, and at any time to lengthen or shorten their
own terms or make their terms of unlimited duration. Trustees of the Acquiring
Fund may be removed by at least two-thirds of the shares entitled to vote.
Directors of the Acquired Fund may be removed by a majority of the shares
entitled to vote. Vacancies on the Boards of either Fund may be filled by the
Trustees/Directors remaining in office, provided that no vacancy or vacancies
may be filled by action of the remaining Trustees/Directors if, after the
filling of the vacancy or vacancies, fewer than two-thirds of the
Trustees/Directors then holding office shall have been elected by the
shareholders of the relevant Fund. A meeting of shareholders will be
22
<Page>
required for the purpose of electing Trustees/Directors whenever (a) fewer than
a majority of the Trustees/Directors then in office were elected by shareholders
of the relevant Fund or (b) a vacancy exists that may not be filled by the
remaining Trustees/Directors and must be filled.
VOTING RIGHTS. Neither Fund holds a meeting of shareholders annually,
and there normally is no meeting of shareholders for the purpose of electing
Trustees/Directors unless and until such time as less than a majority of the
Trustees/Directors of the relevant Fund holding office have been elected by
shareholders or a vacancy exists that may not be filled by the remaining
Trustees/Directors. At such times, the Trustees or Directors then in office will
call a shareholders' meeting for the election of Trustees/Directors.
In addition, the Acquired Fund's By-Laws provide that a special meeting
of shareholders will be called at the written request of shareholders
entitled to cast at least 10% percent of the votes entitled to be cast at the
meeting, provided, however, if the matter to be considered at such special
meeting is substantially the same as another voted on at any special meeting
of stockholders held in the last twelve months, the Acquired Fund does not
have to hold the meeting unless requested to do so by a majority of the
stockholders entitled to vote. Payment by such shareholders of the reasonably
estimated cost of preparing and mailing a notice of the meeting is required
in advance of the meeting. The Acquiring Fund's Declaration of Trust
provides that a special meeting of shareholders will be called at the written
request of shareholders holding at least 10% of the outstanding shares of the
Acquiring Fund. To the extent required by law, each Fund will assist in
shareholder communications in such matters. The presence, in person or by
proxy, of at least one-third of the outstanding shares of the Acquired Fund
entitled to vote at a shareholder meeting will constitute a quorum whereas
the presence, in person or by proxy, of at least a majority of shares of the
Acquiring Fund entitled to vote at a meeting will constitute a quorum.
LIQUIDATION OR TERMINATION. In the event of the liquidation or
termination of either Fund, the shareholders of the relevant Fund are entitled
to receive, when and as declared by the Trustees or Directors, the excess of the
assets over the liabilities belonging to such Fund. In either case, the assets
so distributed to shareholders will be distributed among the shareholders in
proportion to the number of shares held by them and recorded on the books of
such Fund.
LIABILITY OF TRUSTEES OR DIRECTORS. The constituent documents of each
Fund provide that its Trustees/Directors and officers shall not be liable in
such capacity for monetary damages for breach of fiduciary duty as a
Trustee/Director or officer, except for willful misfeasance, bad faith, gross
negligence or reckless disregard of duties in the conduct of his office or the
discharge of his functions on the part of such Trustee, Director or officer. The
constituent instruments of each Fund provide that the relevant Fund shall
indemnify each Trustee/Director and officer and permit advances for the payment
of expenses relating to the matter for which indemnification is sought, in the
case of the Acquired Fund, to the fullest extent permitted by applicable law
and, in the case of both Funds, except for bad faith, willful misfeasance, gross
negligence or reckless disregard of duties in the conduct of his office or the
discharge of his functions on the part of such Trustee/Director or officer.
RIGHTS OF INSPECTION. Maryland law permits any shareholder of the
Acquired Fund or any agent of such shareholder to inspect and copy, during usual
business hours, the By-Laws, minutes of shareholder proceedings, annual
statements of the affairs and voting trust agreements of the Acquired Fund on
file at its principal offices. Massachusetts business trust law does not have
such provisions. However, the Acquiring Fund's Declaration of Trust provides
that the records of the Acquiring Fund shall be open to inspection by
shareholders to the same extent as is permitted to stockholders of a corporation
under the Massachusetts business corporation statute.
23
<Page>
SHAREHOLDER LIABILITY. Under Maryland law, shareholders of the Acquired
Fund do not have personal liability for corporate acts and obligations.
Massachusetts law provides that shareholders of the Acquiring Fund could, under
certain circumstances, be held personally liable for the obligation of the
Acquiring Fund. However, the Declaration of Trust of the Acquiring Fund
disclaims shareholder liability for acts or obligations of the Acquiring Fund
and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by such Fund or a Trustee. The
Plan contains such a disclaimer. The Declaration of Trust of the Acquiring Fund
provides for indemnification from the Acquiring Fund's property for all losses
and expenses arising from such liability. Thus, the risk of shareholder
liability is limited to circumstances in which the Acquiring Fund would be
unable to meet its obligations. Upon payment of any liability incurred by the
Acquiring Fund, the shareholder paying the liability will be entitled to
reimbursement from the general assets of the Acquiring Fund.
THE FOREGOING IS ONLY A SUMMARY OF CERTAIN CHARACTERISTICS OF THE
OPERATIONS OF THE ACQUIRING FUND AND THE ACQUIRED FUND. THE FOREGOING IS NOT A
COMPLETE DESCRIPTION OF THE DOCUMENTS CITED. SHAREHOLDERS SHOULD REFER TO THE
PROVISIONS OF THE CONSTITUENT DOCUMENTS AND STATE LAWS GOVERNING EACH FUND FOR A
MORE THOROUGH DESCRIPTION.
CONCLUSION
The Plan was approved by the Board of Directors of the Acquired Fund
and by the Board of Trustees of the Acquiring Fund on November 12, 2001. The
Boards of each Fund determined that the Acquisition is in the best interests of
shareholders of their respective Fund and that the interests of existing
shareholders of the Acquired Fund and the Acquiring Fund would not be diluted as
a result of the Acquisition. If the shareholders of the Acquired Fund do not
approve the Plan or if the Acquisition is not completed, the Acquired Fund will
continue to engage in business as a registered investment company and the Board
of the Acquired Fund will consider other possible courses of action available to
it, including resubmitting the Acquisition proposal to shareholders.
REQUIRED VOTE
Approval of the Plan requires the affirmative vote of a majority of the
Acquired Fund's outstanding shares in the aggregate without regard to class, in
person or by proxy, if a quorum is present.
In the event that shareholder approval of the Plan is not obtained, the
Board of the Acquired Fund will consider other possible courses of action
available to it, including resubmitting the Acquisition proposal to
shareholders.
THE BOARD OF DIRECTORS OF THE ACQUIRED FUND, INCLUDING THE DIRECTORS
WHO ARE NOT "INTERESTED PERSONS" (AS THAT TERM IS DEFINED IN THE 1940 ACT)
RECOMMENDS THAT YOU VOTE FOR THIS PROPOSAL.
ADDITIONAL INFORMATION
The Acquiring Fund and the Acquired Fund are each subject to the
informational requirements of the 1934 Act and the 1940 Act and in accordance
therewith file reports and other information including proxy material, reports
and charter documents, with the SEC. These materials can be inspected and copies
obtained at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the New York Regional Office of the
SEC at 233 Broadway New York, New York. Copies of such material can also be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington, D.C. 20549 at prescribed rates. The Class
A
24
<Page>
Prospectus and the Statement of Additional Information for the Acquiring Fund,
along with related information, may be found on the SEC website as well
(http://www.sec.gov).
VOTING INFORMATION
This Prospectus/Proxy Statement is furnished in connection with a
solicitation of proxies by the Board of Directors of the Acquired Fund to be
used at the Special Meeting of Shareholders of the Acquired Fund to be held
at ___ a.m. on March 19, 2002, at the offices of the Acquired Fund, 466
Lexington Avenue, ___ Floor, New York, New York 10017-3147 and at any
adjournment(s) thereof. This Prospectus/Proxy Statement, along with a Notice
of the Special Meeting and proxy card(s), is first being mailed to
shareholders of the Acquired Fund on or about January __, 2002. Only
shareholders of record as of the close of business on January 11, 2002 (the
"Record Date") will be entitled to notice of, and to vote at, the Special
Meeting or any adjournment thereof. As of January 11, 2002, the Acquired Fund
had the following shares outstanding and entitled to vote: ___________ Common
Class shares and __________ Advisor Class shares. The holders of a majority
of the shares of the Acquired Fund outstanding at the close of business on
Record Date present in person or represented by proxy will constitute a
quorum for the Special Meeting of the Acquired Fund. For purposes of
determining a quorum for transacting business at the Special Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the
beneficial owner or other persons entitled to vote shares on a particular
matter with respect to which the brokers or nominees do not have
discretionary power) will be treated as shares that are present but which
have not been voted. For this reason, abstentions and broker non-votes will
have the effect of a vote against the Plan for purposes of obtaining the
requisite approval of the Plan because they are not affirmative votes. If the
enclosed proxy is properly executed and returned in time to be voted at the
Special Meeting, the proxies named therein will vote the shares represented
by the proxy in accordance with the instructions marked thereon. Executed,
but unmarked proxies (i.e., executed proxies in which there is no indication
of the shareholder's voting instructions) will be voted FOR approval of the
Plan and FOR approval of any other matters deemed appropriate. A proxy may be
revoked at any time on or before the Special Meeting by the subsequent
execution and submission of a revised proxy, by written notice to Hal Liebes,
Secretary of the Acquired Fund, 466 Lexington Avenue, New York, New York
10017-3147 or by voting in person at the Special Meeting.
CSAM has retained D.F. King & Co. to solicit proxies. Proxy
solicitations will be made primarily by mail, but proxy solicitations also may
be made by telephone, facsimile or personal interviews conducted by officers and
employees of CSAM and its affiliates. All expenses of the Acquisition, which are
currently estimated to be $[_________], including the costs of the proxy
solicitation and the preparation of enclosures to the Prospectus/Proxy
Statement, reimbursement of expenses of forwarding solicitation material to
beneficial owners of shares of the Acquired Fund and expenses incurred in
connection with the preparation of this Prospectus/Proxy Statement, will be
borne by CSAM or its affiliates (excluding extraordinary expenses not normally
associated with transactions of this type). It is anticipated that banks,
brokerage houses and other institutions, nominees and fiduciaries will be
requested to forward proxy materials to beneficial owners and to obtain
authorization for the execution of proxies. CSAM or its affiliates, may, upon
request, reimburse banks, brokerage houses and other institutions, nominees and
fiduciaries for their expenses in forwarding proxy materials to beneficial
owners.
In the event that a quorum necessary for the Special Meeting is not
present or sufficient votes to approve any proposal are not received prior to
___ a.m. on March 19, 2002, the persons named as proxies may propose one or
more adjournments of the Special Meeting to permit further solicitation of
proxies. In determining whether to adjourn the Special Meeting, the following
factors may be considered: the percentage of votes actually cast, the
percentage of negative votes actually cast, the
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nature of any further solicitation and the information to be provided to
shareholders with respect to the reasons for the solicitation. Any such
adjournment will require an affirmative vote by the holders of a majority of the
shares of the Acquired Fund present in person or by proxy and entitled to vote
at the Special Meeting. The persons named as proxies will vote upon a decision
to adjourn the Special Meeting after consideration of the best interests of all
shareholders of the Acquired Fund.
As of January 11, 2002, CSAM (or its affiliates) possessed or shared
voting power or investment power as a fiduciary on behalf of its customers, with
respect to the Acquired Fund as set forth above under "Information About the
Acquisition -- Share Ownership of the Acquired Fund."
OTHER BUSINESS
The Board of Directors knows of no other business to be brought before
the Special Meeting. However, if any other matters come before the Special
Meeting, proxies that do not contain specific restrictions to the contrary will
be voted on such matters in accordance with the judgment of the persons named in
the enclosed Proxy Card(s).
The approval of shareholders of the Acquiring Fund is not required in
order to affect the Acquisition and, accordingly, the votes of the shareholders
of the Acquiring Fund are not being solicited by this Prospectus/Proxy
Statement.
FINANCIAL STATEMENTS AND EXPERTS
The audited Statement of Assets and Liabilities of each Fund as of
October 31, 2001, including their respective schedules of portfolio investments
and the related statements of operations for the year and/or period then ended,
the statement of changes in net assets for each of the two years in the period
then ended and the financial highlights for each of the five years (or such
shorter period as the relevant Fund, or share class, has been in existence) in
the period then ended, have been incorporated by reference into this
Prospectus/Proxy Statement in reliance upon the reports of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
such firm as experts in accounting and auditing.
ADDITIONAL MATERIALS
The following additional materials, which have been incorporated by
reference into the Statement of Additional Information, dated January__, 2002,
relating to this Prospectus/Proxy Statement and the Acquisition, will be sent to
all shareholders of the Acquired Fund requesting a copy of such Statement of
Additional Information.
1. The current Statement of Additional Information for the Acquiring
Fund, dated February 28, 2001, as supplemented as of the date
hereof.
2. The current Statement of Additional Information for the Acquired
Fund, dated February 28, 2001, as supplemented as of the date
hereof.
LEGAL MATTERS
Certain legal matters concerning the issuance of shares of the
Acquiring Fund will be passed upon by Willkie Farr & Gallagher, 787 Seventh
Avenue, New York, New York 10019-6099, counsel to the Acquiring Fund. In
rendering such opinion, Willkie Farr & Gallagher may rely on an opinion of
Sullivan & Worcester LLP as to certain matters under Massachusetts law.
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as
of this ___ day of January 2002, between and among Credit Suisse Capital
Funds (formerly the DLJ Focus Funds), a Massachusetts business trust (the
"Acquiring Trust"), for and on behalf of its series, Credit Suisse Large Cap
Value Fund (formerly the DLJ Value Fund) (the "Acquiring Fund"), Credit Suisse
Balanced Fund, Inc., a Maryland corporation (the "Acquired Fund") and, solely
for purposes of Section 4.3, 5.8 and 9.2 hereof, Credit Suisse Asset Management,
LLC, a limited liability company organized under the laws of the State of
Delaware ("CSAM").
This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a) of the United States
Internal Revenue Code of 1986, as amended (the "Code"). The reorganization of
the Acquired Fund (collectively, the "Reorganization") will consist of the
transfer of all of the assets of the Acquired Fund in exchange solely for Class
A shares of beneficial interest (the "Shares") of the Acquiring Fund, and the
assumption by the Acquiring Fund of liabilities of the Acquired Fund, and the
distribution, on or after the Closing Date hereinafter referred to, of Shares of
the Acquiring Fund ("Acquiring Fund Shares") to the shareholders of the Acquired
Fund in liquidation of the Acquired Fund as provided herein, all upon the terms
and conditions hereinafter set forth in this Agreement.
As the Acquiring Fund is a series of the Acquiring Trust, all parties
to this Agreement acknowledge and accept that the Acquiring Fund does not have a
Board of Trustees or officers separate from the other series of the Acquiring
Trust. Accordingly, all representations, warranties, covenants and/or other
obligations made by the Acquiring Fund in this Agreement are expressly
understood by all parties to this Agreement as being made by the Trustees or
officers of the Acquiring Trust, as applicable, in their respective capacities
as Trustees or officers (and not in their individual capacities) for, and on
behalf of, the Acquiring Fund.
WHEREAS, the Board of Directors of the Acquired Fund has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares and the assumption of the liabilities of the Acquired Fund by the
Acquiring Fund is in the best interests of the Acquired Fund and that the
interests of the existing shareholders of the Acquired Fund would not be diluted
as a result of this transaction; and
WHEREAS, the Board of Trustees of the Acquiring Trust has determined
that the exchange of all of the assets of the Acquired Fund for Acquiring Fund
Shares is in the best interests of the Acquiring Fund's shareholders and that
the interests of the existing shareholders of the Acquiring Fund would not be
diluted as a result of this transaction.
NOW, THEREFORE, in consideration of the premises and of the covenants
and agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Transfer of Assets of the Acquired Fund in Exchange for Acquiring
Fund Shares and Assumption of the Acquired Fund's Liabilities and Liquidation of
the Acquired Fund
1.1 Subject to the terms and conditions herein set forth and on the
basis of the representations and warranties contained herein, the Acquired Fund
agrees to transfer its assets as set forth in paragraph 1.2 to the Acquiring
Fund, and the Acquiring Fund agrees in exchange therefor: (i) to deliver to the
Acquired Fund the number of Acquiring Fund Shares, including fractional
Acquiring Fund Shares, of each class of the Acquired Fund determined by dividing
the value of the Acquired Fund's net assets
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attributable to each such class of shares, computed in the manner and as of the
time and date set forth in paragraph 2.1, by the net asset value of one
Acquiring Fund Share of the applicable class; and (ii) to assume the liabilities
of the Acquired Fund, as set forth in paragraph 1.3. Such transactions shall
take place at the closing provided for in paragraph 3.1 (the "Closing").
1.2 (a) The assets of the Acquired Fund to be acquired by the Acquiring
Fund shall consist of all property including, without limitation, all cash,
securities and dividend or interest receivables that are owned by or owed to the
Acquired Fund and any deferred or prepaid expenses shown as an asset on the
books of the Acquired Fund on the Closing date provided in paragraph 3.1 (the
"Closing Date").
(b) The Acquired Fund has provided the Acquiring Fund with a list of
all of the Acquired Fund's assets as of the date of execution of this Agreement.
The Acquired Fund reserves the right to sell any of these securities but will
not, without the prior approval of the Acquiring Fund, acquire any additional
securities other than securities of the type in which the Acquiring Fund is
permitted to invest. The Acquired Fund will, within a reasonable time prior to
the Closing Date, furnish the Acquiring Fund with a list of the securities, if
any, on the Acquired Fund's list referred to in the first sentence of this
paragraph which do not conform to the Acquiring Fund's investment objective,
policies and restrictions. In the event that the Acquired Fund holds any
investments which the Acquiring Fund may not hold, the Acquired Fund will
dispose of such securities prior to the Closing Date. In addition, if it is
determined that the portfolios of the Acquired Fund and the Acquiring Fund, when
aggregated, would contain investments exceeding certain percentage limitations
imposed upon the Acquiring Fund with respect to such investments, the Acquired
Fund, if requested by the Acquiring Fund, will dispose of and/or reinvest a
sufficient amount of such investments as may be necessary to avoid violating
such limitations as of the Closing Date.
1.3 The Acquired Fund will endeavor to discharge all of the known
liabilities and obligations of the Acquired Fund prior to the Closing Date,
other than those liabilities and obligations which would otherwise be discharged
at a later date in the ordinary course of business. The Acquiring Fund shall
assume all liabilities, expenses, costs, charges and reserves, including those
liabilities reflected on unaudited statements of assets and liabilities of the
Acquired Fund and the Acquiring Fund prepared by PFPC, Inc. ("PFPC"), the
accounting agent of each Fund, as of the Valuation Date (as defined in paragraph
2.1), in accordance with generally accepted accounting principles consistently
applied from the prior audited period. The Acquiring Fund shall also assume any
liabilities, expenses, costs or charges incurred by or on behalf of the Acquired
Fund specifically arising from or relating to the operations and/or transactions
of the Acquired Fund prior to and including the Closing Date but which are not
reflected on the above-mentioned statement of assets and liabilities, including
any liabilities, expenses, costs or charges arising under paragraph 5.10 hereof.
1.4 As soon on or after the Closing Date as is conveniently practicable
(the "Liquidation Date"), the Acquired Fund will liquidate and distribute pro
rata to the Acquired Fund's shareholders of record determined as of the close of
business on the Closing Date (the "Fund Shareholders") the Acquiring Fund Shares
it receives pursuant to paragraph 1.1. Such liquidation and distribution will be
accomplished by the transfer of the Acquiring Fund Shares then credited to the
account of the Acquired Fund on the books of the Acquiring Fund to open accounts
on the share records of the Acquiring Fund in the name of the Acquired Fund's
shareholders representing the respective pro rata number of the Acquiring Fund
Shares due such shareholders. All issued and outstanding shares of the Acquired
Fund will simultaneously be canceled on the books of the Acquired Fund, although
share certificates representing interests in the Acquired Fund will represent a
number of Acquiring Fund Shares after the Closing Date as determined in
accordance with Section 2.2. The Acquiring Fund shall not issue certificates
representing the Acquiring Fund Shares in connection with such exchange.
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1.5 Ownership of Acquiring Fund Shares will be shown on the books of
the Acquiring Fund's transfer agent. Shares of the Acquiring Fund will be issued
in the manner described in the Acquiring Fund's current prospectuses and
statement of additional information.
1.6 Any transfer taxes payable upon issuance of the Acquiring Fund
Shares in a name other than the registered holder of the Acquired Fund Shares on
the books of the Acquired Fund as of that time shall, as a condition of such
issuance and transfer, be paid by the person to whom such Acquiring Fund Shares
are to be issued and transferred.
1.7 Any reporting responsibility of the Acquired Fund is and shall
remain the responsibility of the Acquired Fund up to and including the
applicable Closing Date and such later date on which the Fund is terminated.
2. Valuation
2.1 The value of the Acquired Fund's assets to be acquired hereunder
shall be the value of such assets computed as of the close of regular trading on
The New York Stock Exchange, Inc. (the "NYSE") on the Closing Date (such time
and date being hereinafter called the "Valuation Date"), using the valuation
procedures set forth in the Acquired Fund's then current prospectus or statement
of additional information.
2.2 (a) The number of Shares of the Class A of the Acquiring Fund to be
issued (including fractional shares, if any) in exchange for Common Class shares
of the Acquired Fund shall be determined by dividing the value of the net assets
of the Acquired Fund attributable to its Common Class shares determined using
the same valuation procedures referred to in paragraph 2.1 by the net asset
value per Share of the Class A of the Acquiring Fund computed as of the close of
regular trading on the NYSE on the Closing Date, using the valuation procedures
set forth in the Acquiring Fund's then current prospectuses or statement of
additional information.
(b) The number of Shares of the Class A of the Acquiring Fund to be
issued (including fractional shares, if any) in exchange for Advisor Class
shares of the Acquired Fund shall be determined by dividing the value of the net
assets of the Acquired Fund attributable to its Advisor Class shares determined
using the same valuation procedures referred to in paragraph 2.1 by the net
asset value per Share of the Class A of the Acquiring Fund computed as of the
close of regular trading on the NYSE on the Closing Date, using the valuation
procedures set forth in the Acquiring Fund's then current prospectuses or
statement of additional information.
2.3 All computations of value with respect to the Acquiring Fund and
the Acquired Fund shall be made by PFPC in accordance with its regular practice
as pricing agent for the Acquiring Fund.
3. Closing and Closing Date
3.1 The Closing Date for the Reorganization shall be March 19, 2002, or
such other date as the parties to such Reorganization may agree to in writing.
All acts taking place at the Closing shall be deemed to take place
simultaneously as of the close of trading on the NYSE on the Closing Date unless
otherwise provided. The Closing shall be held as of ___ [a.m./p.m.], at the
offices of Willkie Farr & Gallagher or at such other time and/or place as the
parties may agree.
3.2 The custodian for the Acquiring Fund (the "Custodian") shall
deliver at the Closing a certificate of an authorized officer stating that: (a)
the Acquired Fund's portfolio securities, cash and any other assets have been
delivered in proper form to the Acquiring Fund on the Closing Date and (b) all
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necessary taxes, including all applicable federal and state stock transfer
stamps, if any, have been paid, or provision for payment has been made, in
conjunction with the delivery of portfolio securities.
3.3 In the event that on the Valuation Date (a) the NYSE or another
primary trading market for portfolio securities of the Acquiring Fund or the
Acquired Fund shall be closed to trading or trading thereon shall be restricted
or (b) trading or the reporting of trading on the NYSE or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the applicable Closing
Date shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored.
3.4 The Acquired Fund shall deliver at the Closing a list of the names
and addresses of the Acquired Fund's shareholders and the number and class of
outstanding Shares owned by each such shareholder immediately prior to the
Closing or provide evidence that such information has been provided to the
Acquiring Fund's transfer agent. The Acquiring Fund shall issue and deliver a
confirmation evidencing the Acquiring Fund Shares to be credited to the Acquired
Fund's account on the Closing Date to the Secretary of the Acquired Fund or
provide evidence satisfactory to the Acquired Fund that such Acquiring Fund
Shares have been credited to the Acquired Fund's account on the books of the
Acquiring Fund. At the Closing, each party shall deliver to the relevant other
parties such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
4. Representations and Warranties
4.1 The Acquired Fund represents and warrants to the Acquiring
Fund as follows:
(a) The Acquired Fund is a duly organized, validly existing corporation
in good standing under the laws of the State of Maryland;
(b) The Acquired Fund is a registered investment company classified as
a management company of the open-end type and its registration with the
Securities and Exchange Commission (the "Commission") as an investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), is in
full force and effect;
(c) The Acquired Fund is not, and the execution, delivery and
performance of this Agreement by the Acquired Fund will not result, in a
violation of its Articles of Incorporation or By-Laws or any material agreement,
indenture, instrument, contract, lease or other undertaking to which the
Acquired Fund is a party or by which the Acquired Fund or its property is bound
or affected;
(d) There are no contracts or other commitments (other than this
Agreement) of the Acquired Fund which will be terminated with liability to the
Acquired Fund prior to the Closing Date;
(e) Except as previously disclosed in writing to and accepted by the
Acquiring Fund, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or to its
knowledge threatened against the Acquired Fund or any of its properties or
assets which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business. The Acquired Fund knows of
no facts which might form the basis for the institution of such proceedings and
is not party to or subject to the provisions of any order, decree or judgment of
any court or governmental body which materially and adversely affects its
business or the business of the Acquired Fund or its ability to consummate the
transactions herein contemplated;
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(f) The Statements of Assets and Liabilities, including the Investment
Portfolio, Operations, and Changes in Net Assets, and the Financial Highlights
of the Acquired Fund at October 31, 2001 and for the period from __________
(commencement of operations) to October 31, 2001 have been audited by
PricewaterhouseCoopers LLP (or one of its legacy firms), independent
accountants, and are in accordance with generally accepted accounting principles
consistently applied, and such statements (copies of which have been furnished
to the Acquiring Fund) fairly reflect the financial condition of the Acquired
Fund as of such dates, and there are no known contingent liabilities of the
Acquired Fund as of such dates not disclosed therein;
(g) Since October 31, 2001, there has not been any material adverse
change in the Acquired Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one year from
the date such indebtedness was incurred except as otherwise disclosed to and
accepted in writing by the Acquiring Fund. For purposes of this subsection (g),
a decline in net asset value per share of the Acquired Fund due to declines in
market values of securities in the Acquired Fund's portfolio, the discharge of
Acquired Fund liabilities, or the redemption of the Acquired Fund shares by
Acquired Fund shareholders shall not constitute a material adverse change;
(h) At the date hereof and the Closing Date, all federal and other tax
returns and reports, including extensions, of the Acquired Fund required by law
to have been filed by such dates shall have been filed, and all federal and
other taxes shall have been paid so far as due, or provision shall have been
made for the payment thereof and, to the best of the Acquired Fund's knowledge,
no such return is currently under audit and no assessment has been asserted with
respect to such returns;
(i) For each taxable year of its operation (including the taxable year
ending on the Closing Date), the Acquired Fund has met the requirements of
Subchapter M of the Code for qualification and treatment as a regulated
investment company; all of the Acquired Fund's issued and outstanding shares
have been offered and sold in compliance in all material respects with
applicable federal and state securities laws;
(j) All issued and outstanding shares of each class of the Acquired
Fund are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable. All of the issued and outstanding
shares of the Acquired Fund will, at the time of Closing, be held by the persons
and in the amounts set forth in the records of the transfer agent as provided in
paragraph 3.4. The Acquired Fund does not have outstanding any options, warrants
or other rights to subscribe for or purchase any of the Acquired Fund's shares,
nor is there outstanding any security convertible into any of the Acquired
Fund's shares;
(k) At the Closing Date, the Acquired Fund will have good and
marketable title to the Acquired Fund's assets to be transferred to the
Acquiring Fund pursuant to paragraph 1.2 and full right, power and authority to
sell, assign, transfer and deliver such assets hereunder and, upon delivery and
payment for such assets, the Acquiring Fund will acquire good and marketable
title thereto, subject to no restrictions on the full transfer thereof, except
such restrictions as might arise under the Securities Act of 1933, as amended
(the "1933 Act"), and the 1940 Act with respect to privately placed or otherwise
restricted securities that the Acquired Fund may have acquired in the ordinary
course of business and of which the Acquiring Fund has received notice and
necessary documentation at or prior to the Closing;
(l) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary actions on the part of the Acquired Fund's
Board of Directors, and subject to the approval of the Acquired Fund's
shareholders, this Agreement will constitute a valid and binding obligation of
the Acquired Fund enforceable in accordance with its terms, subject to the
effect of bankruptcy, insolvency,
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fraudulent conveyance, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general equity principles;
(m) The information to be furnished by Acquired Fund for use in
applications for orders, registration statements or proxy materials or for use
in any other document filed or to be filed with any federal, state or local
regulatory authority (including the National Association of Securities Dealers,
Inc.), which may be necessary in connection with the transactions contemplated
hereby, shall be accurate and complete in all material respects and shall comply
in all material respects with federal securities and other laws and regulations
applicable thereto;
(n) The current prospectuses and statement of additional information of
the Acquired Fund conform in all material respects to the applicable
requirements of the 1933 Act and the 1940 Act and the rules and regulations of
the Commission thereunder and do not include any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not materially misleading; and
(o) Insofar as the following relate to the Acquired Fund, the
registration statement filed by the Acquiring Fund on Form N-14 relating to
Acquiring Fund Shares that will be registered with the Commission pursuant to
this Agreement, which, without limitation, shall include a proxy statement of
the Fund (the "Proxy Statement") and the prospectus of the Acquiring Fund with
respect to the transactions contemplated by this Agreement, and any supplement
or amendment thereto, and the documents contained or incorporated therein by
reference (the "N-14 Registration Statement"), on the effective date of the N-14
Registration Statement, at the time of any shareholders' meeting referred to
herein, on the Valuation Date and on the Closing Date: (i) shall comply in all
material respects with the provisions of the 1933 Act, the Securities Exchange
Act of 1934 (the "1934 Act") and the 1940 Act and the rules and regulations
under those Acts, and (ii) shall not contain any 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; provided, however, that the
representations and warranties in this section shall not apply to statements in
or omissions from the Proxy Statement and the N-14 Registration Statement made
in reliance upon and in conformity with information that was furnished or should
have been furnished by the Acquiring Fund for use therein.
4.2 The Acquiring Fund represents and warrants to the Fund as
follows:
(a) The Acquiring Fund is a duly established series of the Acquiring
Trust; the Acquiring Trust is a Massachusetts business trust duly organized,
validly existing and in good standing under the laws of The Commonwealth of
Massachusetts;
(b) The Acquiring Trust is a registered investment company classified
as a management company of the open-end type and its registration with the
Commission as an investment company under the 1940 Act is in full force and
effect;
(c) The current prospectus and statement of additional information
filed as part of the Acquiring Fund registration statement on Form N-1A (the
"Acquiring Fund Registration Statement") conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the rules and
regulations of the Commission under those Acts and do not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not materially misleading;
(d) At the Closing Date, the Acquiring Fund will have good and
marketable title to its assets;
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(e) The Acquiring Fund is not, and the execution, delivery and
performance of this Agreement will not result, in a violation of the Acquiring
Trust's Amended and Restated Agreement and Declaration of Trust (the "Agreement
and Declaration of Trust") or By-Laws or any material agreement, indenture,
instrument, contract, lease or other undertaking to which the Acquiring Fund is
a party or by which the Acquiring Fund or its property is bound;
(f) Except as previously disclosed in writing to and accepted by the
Acquired Fund, no litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or to its knowledge
threatened against the Acquiring Fund or any of its properties or assets which,
if adversely determined, would materially and adversely affect its financial
condition or the conduct of its business. The Acquiring Fund knows of no facts
which might form the basis for the institution of such proceedings and is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions contemplated herein;
(g) Since October 31, 2001, there has not been any material adverse
change in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business, or any
incurrence by the Acquiring Fund of indebtedness maturing more than one year
from the date such indebtedness was incurred except as otherwise disclosed to
and accepted in writing by the Acquired Fund. For purposes of this subsection
(g), a decline in net asset value per share of the Acquiring Fund due to
declines in market values of securities in the Acquiring Fund's portfolio, the
discharge of Acquiring Fund liabilities, or the redemption of Acquiring Fund
Shares by Acquiring Fund Shareholders shall not constitute a material adverse
change;
(h) At the Closing Date, all federal and other tax returns and reports,
including extensions, of the Acquiring Fund required by law then to be filed
shall have been filed, and all federal and other taxes shown as due on said
returns and reports shall have been paid or provision shall have been made for
the payment thereof;
(i) For each taxable year of its operation, the Acquiring Fund has met
the requirements of Subchapter M of the Code for qualification as a regulated
investment company and has elected to be treated as such, has been eligible to
and has computed its federal income tax under Section 852 of the Code;
(j) At the date hereof, all issued and outstanding Acquiring Fund
Shares are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and non-assessable, except as set forth in the Acquiring
Trust's Agreement and Declaration of Trust. The Acquiring Fund does not have
outstanding any options, warrants or other rights to subscribe for or purchase
any Acquiring Fund Shares, nor is there outstanding any security convertible
into any Acquiring Fund Shares;
(k) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary actions on the part of the Acquiring Trust's
Board of Trustees, and this Agreement will constitute a valid and binding
obligation of the Acquiring Fund enforceable in accordance with its terms,
subject to the effect of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other laws relating to or affecting creditors'
rights and to general equity principles;
(l) The Acquiring Fund Shares to be issued and delivered to the
Acquired Fund, for the account of the Acquired Fund's shareholders, pursuant to
the terms of this Agreement, will at the Closing Date have been duly authorized
and when so issued and delivered, will be duly and validly issued Acquiring Fund
Shares, and will be fully paid and non-assessable, except as set forth in the
Acquiring Trust's Agreement and Declaration of Trust;
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(m) Insofar as the following relate to the Acquiring Fund, the N-14
Registration Statement, on the effective date of the N-14 Registration
Statement, at the time of any shareholders' meeting referred to herein, on the
Valuation Date and on the Closing Date: (i) shall comply in all material
respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and
the rules and regulations under those Acts, and (ii) shall not contain any
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;
provided, however, that the representations and warranties in this section shall
not apply to statements in or omissions from the Proxy Statement and the N-14
Registration Statement made in reliance upon and in conformity with information
that was furnished by the Acquired Fund for use therein; and
(n) The Acquiring Fund agrees to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act and such
of the state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
4.3 CSAM represents and warrants to the Acquiring Trust as follows: To
the knowledge of CSAM (i) there are no claims, actions, suits or proceedings
pending against the Acquired Fund, and (ii) there are no claims, actions, suits
or proceedings threatened, or circumstances that have been identified by the
Management Committee of CSAM and the Secretary thereof as reasonably likely to
give rise to any claims, actions, suits or proceedings, against the Acquired
Fund that would materially adversely affect the Acquired Fund or its assets or
business.
5. Covenants of the Acquired Fund, the Acquiring Fund and CSAM
5.1 The Acquiring Fund and the Acquired Fund will operate their
respective businesses in the ordinary course between the date hereof and the
Closing Date. It is understood that such ordinary course of business will
include the declaration and payment of customary dividends and distributions.
5.2 The Acquired Fund will call a meeting of the shareholders of the
Acquired Fund to consider and act upon this Agreement and to take all other
actions necessary to obtain approval of the transactions contemplated herein.
5.3 The Acquired Fund covenants that the Acquiring Fund Shares to be
issued hereunder are not being acquired for the purpose of making any
distribution thereof other than in accordance with the terms of this Agreement.
5.4 The Acquired Fund will assist the Acquiring Fund in obtaining such
information as the Acquiring Fund reasonably requests concerning the beneficial
ownership of the Acquired Fund's Shares.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and
the Acquired Fund will each take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
5.6 The Acquired Fund will provide the Acquiring Fund with information
reasonably necessary for the preparation of a prospectus (the "Prospectus")
which will include the Proxy Statement referred to in paragraph 4.1(o), all to
be included in the N-14 Registration Statement, in compliance with the 1933 Act,
the 1934 Act and the 1940 Act in connection with the meeting of the Acquired
Fund's shareholders to consider approval of this Agreement and the transactions
contemplated herein.
5.7 The Acquiring Fund agrees to indemnify and advance expenses to each
person who at the time of the execution of this Agreement serves as a Director
or Officer ("Indemnified Person") of the Acquired Fund, against money damages
actually and reasonably incurred by such Indemnified Person in
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connection with any claim that is asserted against such Indemnified Person
arising out of such person's service as a Director or officer of the Acquired
Fund with respect to matters specifically relating to the Reorganization,
provided that such indemnification and advancement of expenses shall be
permitted to the fullest extent that is available under applicable law. This
paragraph 5.7 shall not protect any such Indemnified Person against any
liability to the Acquired Fund, the Acquiring Fund or their shareholders to
which he would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or from reckless disregard of the duties involved in the
conduct of his office. An Indemnified Person seeking indemnification shall be
entitled to advances from the Acquiring Fund for payment of the reasonable
expenses incurred by him in connection with the matter as to which he is seeking
indemnification in the manner and to the fullest extent permissible under
applicable law. Such Indemnified Person shall provide to the Acquiring Fund a
written affirmation of his good faith belief that the standard of conduct
necessary for indemnification by the Acquiring Fund has been met and a written
undertaking to repay any advance if it should ultimately be determined that the
standard of conduct has not been met. In addition, at least one of the following
additional conditions shall be met: (a) the Indemnified Person shall provide
security in form and amount acceptable to the Acquiring Fund for its
undertaking; (b) the Acquiring Fund is insured against losses arising by reason
of the advance; or (c) either a majority of a quorum of disinterested non-party
trustees of the Acquiring Trust (collectively, the "Disinterested Trustees"), or
independent legal counsel experienced in mutual fund matters, selected by the
Indemnified Person, in a written opinion, shall have determined, based on a
review of facts readily available to the Acquiring Fund at the time the advance
is proposed to be made, that there is reason to believe that the Indemnified
Person will ultimately be found to be entitled to indemnification.
5.8 CSAM agrees that the Acquiring Trust will succeed to all rights
that the Acquired Fund has, or would have but for the Reorganization, against
CSAM or its affiliates by reason of any act or failure to act by CSAM or any of
its affiliates prior to the Closing Date.
6. Conditions Precedent to Obligations of the Acquired Fund
The obligations of the Acquired Fund to consummate the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquiring Fund of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following further
conditions:
6.1 All representations and warranties of the Acquiring Fund contained
in this Agreement shall be true and correct in all material respects as of the
date hereof and, except as they may be affected by the actions contemplated by
this Agreement, as of the Closing Date with the same force and effect as if made
on and as of the Closing Date;
6.2 The Acquiring Fund shall have delivered to the Acquired Fund a
certificate executed in its name by its Chairman, Vice President, Secretary,
Treasurer or Assistant Treasurer, in a form reasonably satisfactory to the
Acquired Fund and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquiring Fund made in this Agreement are
true and correct at and
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as of the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement and as to such other matters as the Acquired Fund
shall reasonably request; and
6.3 The Acquired Fund shall have received on the Closing Date a
favorable opinion from Willkie Farr & Gallagher, counsel to the Acquiring Fund,
dated as of the Closing Date, in a form reasonably satisfactory to the Acquired
Fund, covering the following points:
That (a) the Acquiring Trust is a validly existing business trust in
good standing under the laws of The Commonwealth of Massachusetts, has the
statutory power to own all of its properties and assets and to carry on its
business as a registered investment company and the Acquiring Fund is a duly
established series of the Acquiring Trust; (b) the Agreement has been duly
authorized, executed and delivered by the Acquiring Trust and, assuming due
authorization, execution and delivery of the Agreement by the other parties
thereto, is a valid and binding obligation of the Acquiring Trust enforceable
against the Acquiring Trust in accordance with its terms, subject to the effect
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to general
equity principles; (c) the Acquiring Fund Shares to be issued to the Acquired
Fund's shareholders as provided by this Agreement are duly authorized and upon
such delivery will be validly issued, fully paid and nonassessable (except as
set forth in the Acquiring Trust's Agreement and Declaration of Trust) and no
shareholder of the Acquiring Fund has any preemptive rights to subscription or
purchase in respect thereof; (d) the execution and delivery of this Agreement
did not, and the consummation of the transactions contemplated hereby will not,
conflict with the Acquiring Trust's Agreement and Declaration of Trust or
By-Laws or result in a material violation of any provision of any material
agreement (known to such counsel) to which the Acquiring Trust on behalf of the
Acquiring Fund is a party or by which it or its property is bound or, to the
knowledge of such counsel, result in the acceleration of any obligation or the
imposition of any penalty, under any material agreement, judgment or decree to
which the Acquiring Trust on behalf of the Acquiring Fund is a party or by which
it or its property is bound; (e) to the knowledge of such counsel, no consent,
approval, authorization or order of any court or governmental authority of the
United States or The Commonwealth of Massachusetts is required for the
consummation by the Acquiring Fund of the actions contemplated herein, except
such as have been obtained under the 1933 Act, the 1934 Act and the 1940 Act,
and such as may be required under state securities laws; (f) only insofar as
they relate to the Acquiring Trust or the Acquiring Fund, the descriptions in
the Proxy Statement to our knowledge of statutes, legal and governmental
proceedings, investigations, orders, decrees or judgments of any court or
governmental body in the United States and contracts or other documents, if any,
are accurate and fairly present the information required to be shown; (g) to the
knowledge of such counsel, there is no legal, administrative or governmental
proceeding, investigation, order, decree or judgment of any court or
governmental body, only insofar as they relate to the Acquiring Fund or its
assets or properties, pending, threatened or otherwise existing on or before the
effective date of the N-14 Registration Statement or the Closing Date, which are
required to be described in the N-14 Registration Statement or to be filed as
exhibits to the N-14 Registration Statement which are not described and filed as
required or which materially and adversely affect the Acquiring Fund's business;
(h) the Acquiring Trust is registered as an investment company under the 1940
Act and to the knowledge of such counsel, its registration with the Commission
as an investment company under the 1940 Act is in full force and effect; (i) the
Proxy Statement, as of its date, appeared on its face to be appropriately
responsive in all material respects to the requirements of the 1933 Act, the
1934 Act and the 1940 Act and the rules and regulations thereunder; provided,
however, that such counsel shall be entitled to state that it does not assume
any responsibility for the accuracy, completeness or fairness of the Prospectus;
and (i) to the knowledge of such counsel the Acquiring Fund Registration
Statement is effective under the 1933 Act and the 1940 Act and no stop-order
suspending its effectiveness or order pursuant to section 8(e) of the 1940 Act
has been issued.
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With respect to all matters of Massachusetts law, such counsel shall be
entitled to state that, with the approval of the Acquired Fund, they have relied
upon the opinion of Sullivan & Worcester LLP, and that their opinion is subject
to the same assumptions, qualifications and limitations with respect to such
matters as are contained in the opinion of Sullivan & Worcester LLP. Such
opinion also shall include such other matters incident to the transaction
contemplated hereby as the Acquired Fund may reasonably request.
In this paragraph 6.3, references to the Proxy Statement include and
relate only to the text of such Proxy Statement and not, except as specifically
stated above, to any exhibits or attachments thereto or to any documents
incorporated by reference therein.
7. Conditions Precedent to Obligations of the Acquiring Fund
The obligations of the Acquiring Fund to complete the transactions
provided for herein shall be subject, at its election, to the performance by the
Acquired Fund of all the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following conditions:
7.1 All representations and warranties by or on behalf of the Acquired
Fund contained in this Agreement shall be true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated by this Agreement, as of the Closing Date with the
same force and effect as if made on and as of the Closing Date;
7.2 The Acquired Fund shall have delivered to the Acquiring Fund a
statement of the Acquired Fund's assets and liabilities as of the Closing Date,
certified by the Treasurer or Assistant Treasurer of the Acquired Fund;
7.3 The Acquired Fund shall have delivered to the Acquiring Fund on the
Closing Date a certificate executed in its name by its Chairman, Vice President,
Secretary, Treasurer or Assistant Treasurer, in form and substance satisfactory
to the Acquiring Trust and dated as of the Closing Date, to the effect that the
representations and warranties of the Acquired Fund made in this Agreement are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other matters
as the Acquiring Fund shall reasonably request; and
7.4 The Acquiring Fund shall have received on the Closing Date a
favorable opinion of Willkie Farr & Gallagher, counsel to the Acquired Fund, in
a form satisfactory to the Secretary of the Acquiring Fund, covering the
following points:
That (a) the Acquired Fund is a validly existing corporation and in
good standing under the laws of the State of Maryland and has the corporate
power to own all of its properties and assets and to carry on its business as a
registered investment company; (b) the Agreement has been duly authorized,
executed and delivered by the Acquired Fund and, assuming due authorization,
execution and delivery of the Agreement by the other parties hereto, is a valid
and binding obligation of the Acquired Fund enforceable against the Acquired
Fund in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles; (c)
the execution and delivery of the Agreement did not, and the consummation of the
transactions contemplated hereby will not, conflict with the Acquired Fund's
Articles of Incorporation or By-Laws or result in a material violation of any
provision of any material agreement (known to such counsel) to which the
Acquired Fund is a party or by which it or its property is bound or, to the
knowledge of such counsel, result in the acceleration of any obligation or the
imposition of any penalty, under any material agreement, judgment, or decree to
which the Acquired Fund is a party or by which it or its property is bound; (d)
to the knowledge of such counsel, no consent, approval,
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authorization or order of any court or governmental authority of the United
States or the State of Maryland is required for the consummation by the Acquired
Fund of the transactions contemplated herein, except such as have been obtained
under the 1933 Act, the 1934 Act and the 1940 Act, and such as may be required
under state securities laws; (e) the Proxy Statement (except as to financial and
statistical data contained therein, as to which no opinion need be given), as of
its date, appeared on its face to be appropriately responsive in all material
respects to the 1934 Act and the 1940 Act and the rules and regulations
thereunder; provided, however, that such counsel shall be entitled to state that
it does not assume any responsibility for the accuracy, completeness or fairness
of the Proxy Statement; (f) to the knowledge of such counsel, there is no legal,
administrative or governmental proceeding, investigation, order, decree or
judgment of any court or governmental body, only insofar as they relate to the
Acquired Fund or its assets or properties, pending, threatened or otherwise
existing on or before the effective date of the N-14 Registration Statement or
the Closing Date, which is required to be described in the N-14 Registration
Statement or to be filed as an exhibit to the N-14 Registration Statement which
is not described or filed as required or which materially and adversely affect
the Acquired Fund's business; and (g) the Acquired Fund is registered as an
investment company under the 1940 Act, and, to our knowledge, its registration
with the Commission as an investment company under the 1940 Act is in full force
and effect.
With respect to all matters of Maryland law, such counsel shall be
entitled to state that, with the approval of the Acquiring Fund, they have
relied upon the opinion of Venable, Baetjer and Howard and that their opinion is
subject to the same assumptions, qualifications and limitations with respect to
such matters as are contained in the opinion of Venable, Baetjer and Howard.
Such opinion also shall include such other matters incident to the transaction
contemplated hereby as the Acquiring Fund may reasonably request.
In this paragraph 7.4, references to the Proxy Statement include and
relate only to the text of such Proxy Statement and not to any exhibits or
attachments thereto or to any documents incorporated by reference therein.
7.5 The Acquiring Fund shall have received from PricewaterhouseCoopers
LLP a letter addressed to the Acquiring Fund dated as of the effective date of
the N-14 Registration Statement in form and substance satisfactory to the
Acquiring Fund, to the effect that:
(a) they are independent public accountants with respect to the
Acquired Fund within the meaning of the 1933 Act and the applicable regulations
thereunder; and
(b) in their opinion, the financial statements and financial highlights
of the Acquired Fund included or incorporated by reference in the N-14
Registration Statement and reported on by them comply as to form in all material
aspects with the applicable accounting requirements of the 1933 Act and the
rules and regulations thereunder.
7.6 The Acquired Fund shall have received from Ernst & Young LLP a
letter addressed to the Acquired Fund dated as of the effective date of the
N-14 Registration Statement in form and substance satisfactory to the Acquired
Fund, to the effect that:
(a) in their opinion, the financial statements and financial highlights
included or incorporated by reference in the N-14 Registration
Statement and reported on by them comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act
and the rules and regulations thereunder.
7.7 The Acquired Fund shall have received from PricewaterhousrCoopers
LLP a letter addressed to the Acquired Fund dated as of the effective date of
the N-14 Registration Statement in form and substance satisfactory to the
Acquiried Fund, to the effect that:
(a) they are independent public accountants with respect to the
Acquiring Fund within the meaning of the 1933 Act and the applicable regulations
thereunder;
(b) in their opinion, the financial statements and financial highlights
of the Acquiring Fund included or incorporated by reference in the N-14
Registration Statement and reported on by them comply
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as to form in all material aspects with the applicable accounting requirements
of the 1933 Act and the rules and regulations thereunder.
7.8 The Acquiring Fund and the Acquired Fund shall have received from
PricewaterhouseCoopers LLP a letter addressed to both Funds and dated as of the
effective date of the N-14 Registration Statement in form and substance
satisfactory to each Fund, to the effect that:
(a) on the basis of limited procedures agreed upon by the Acquiring
Fund and the Acquired Fund and described in such letter (but not an examination
in accordance with generally accepted auditing standards), specified information
relating to each Fund appearing in the N-14 Registration Statement and the Proxy
Statement has been obtained from the accounting records of each Fund or from
schedules prepared by officers of each Fund having responsibility for financial
and reporting matters and such information is in agreement with such records,
schedules or computations made therefrom.
7.7 The Acquiring Fund shall have received from PricewaterhouseCoopers
LLP a letter addressed to the Acquiring Fund and dated as of the Closing Date
stating that, as of a date no more than three (3) business days prior to the
Closing Date, PricewaterhouseCoopers LLP performed limited procedures and that
on the basis of those procedures it confirmed the matters set forth in paragraph
7.6.
7.8 The Board of Directors of the Acquired Fund, including a majority
of the directors who are not "interested persons" of the Acquired Fund (as
defined by the 1940 Act), shall have determined that this Agreement and the
transactions contemplated hereby are in the best interests of the Acquired Fund
and that the interests of the shareholders in the Acquired Fund would not be
diluted as a result of such transactions, and the Acquired Fund shall have
delivered to the Acquiring Fund at the Closing, a certificate, executed by an
officer, to the effect that the condition described in this subparagraph has
been satisfied.
8. Further Conditions Precedent to Obligations of the Acquiring Fund
and the Acquired Fund
If any of the conditions set forth below do not exist on or before the
Closing Date with respect to the Acquiring Fund, the Acquired Fund shall, and if
any of such conditions do not exist on or before the Closing Date with respect
to the Acquired Fund, the Acquiring Fund shall, at their respective option, not
be required to consummate the transactions contemplated by this Agreement.
8.1 The Agreement and the transactions contemplated herein shall have
been approved by the requisite vote of the holders of the outstanding shares of
the Acquired Fund in accordance with the provisions of the Acquired Fund's
Articles of Incorporation and applicable law and certified copies of the votes
evidencing such approval shall have been delivered to the Acquiring Fund.
8.2 On the Closing Date no action, suit or other proceeding shall be
pending before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in connection with, this
Agreement or the transactions contemplated herein.
8.3 All consents of other parties and all other consents, orders and
permits of federal, state and local regulatory authorities (including those of
the Commission and of state blue sky and securities authorities, including
"no-action" positions of and exemptive orders from such federal and state
authorities) deemed necessary by the Acquiring Fund or the Acquired Fund to
permit consummation, in all material respects, of the transactions contemplated
hereby shall have been obtained, except where failure to obtain any such
consent, order or permit would not involve a risk of a material adverse effect
on the assets or properties of the Acquiring Fund or the Acquired Fund, provided
that either party hereto may for itself waive any of such conditions.
8.4 The N-14 Registration Statement and the Acquiring Fund Registration
Statement shall each have become or be effective under the 1933 Act and no stop
orders suspending the effectiveness
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thereof shall have been issued and, to the best knowledge of the parties hereto,
no investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 1933 Act.
8.5 The parties shall have received a favorable opinion of Willkie Farr
& Gallagher, addressed to, and in form and substance satisfactory to, the
Acquired Fund and the Acquiring Fund, substantially to the effect that for
federal income tax purposes:
(a) The transfer of all of the Acquired Fund's assets in exchange for
the Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund, and the distribution of such Acquiring Fund
Shares to shareholders of the Acquired Fund in exchange for their shares of the
Acquired Fund, will constitute a "reorganization" within the meaning of Section
368(a) of the Code, and the Acquiring Fund and the Acquired Fund will each be a
"party to a reorganization" within the meaning of Section 368(b) of the Code;
(b) no gain or loss will be recognized by the Acquiring Fund on the receipt of
the assets of the Acquired Fund solely in exchange for the Acquiring Fund Shares
and the assumption by the Acquiring Fund of the liabilities of the Acquired
Fund; (c) no gain or loss will be recognized by the Acquired Fund upon the
transfer of the Acquired Fund's assets to the Acquiring Fund in exchange for the
Acquiring Fund Shares and the assumption by the Acquiring Fund of the
liabilities of the Acquired Fund or upon the distribution of the Acquiring Fund
Shares to the Acquired Fund's shareholders in exchange for their shares of the
Acquired Fund; (d) no gain or loss will be recognized by shareholders of the
Acquired Fund upon the exchange of their Acquired Fund shares for the Acquiring
Fund Shares or upon the assumption by the Acquiring Fund of the liabilities of
the Acquired Fund; (e) the aggregate tax basis for the Acquiring Fund Shares
received by each of the Acquired Fund's shareholders pursuant to the
Reorganization will be the same as the aggregate tax basis of the Acquired Fund
Shares held by such shareholder immediately prior to the Reorganization, and the
holding period of the Acquiring Fund Shares to be received by each Acquired Fund
shareholder will include the period during which the Acquired Fund Shares
exchanged therefor were held by such shareholder (provided that such Acquired
Fund Shares were held as capital assets on the date of the Reorganization); and
(f) the tax basis of the Acquired Fund's assets acquired by the Acquiring Fund
will be the same as the tax basis of such assets to the Acquired Fund
immediately prior to the Reorganization, and the holding period of the assets of
the Acquired Fund in the hands of the Acquiring Fund will include the period
during which those assets were held by the Acquired Fund.
Notwithstanding anything herein to the contrary, neither the Acquiring
Fund nor the Acquired Fund may waive the conditions set forth in this paragraph
8.5.
9. Brokerage Fees and Expenses; Other Agreements
9.1 The Acquiring Fund represents and warrants to the Acquired Fund,
and the Acquired Fund represents and warrants to the Acquiring Fund, that there
are no brokers or finders or other entities to receive any payments in
connection with the transactions provided for herein.
9.2 CSAM or its affiliates agrees to bear the reasonable expenses
incurred in connection with the transactions contemplated by this Agreement,
whether or not consummated (excluding extraordinary expenses such as litigation
expenses, damages and other expenses not normally associated with transactions
of the type contemplated by this Agreement). These expenses consist of: (i)
expenses associated with preparing this Agreement, the N-14 Registration
Statement and expenses of the shareholder meeting; (ii) preparing and filing the
N-14 Registration Statement covering the Acquiring Fund Shares to be issued in
the Reorganization; (iii) registration or qualification fees and expenses of
preparing and filing such forms, if any, necessary under applicable state
securities laws to qualify the Acquiring Fund Shares to be issued in connection
with the Reorganization; (iv) postage; printing;
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accounting fees; and legal fees incurred by the Acquiring Fund and by the
Acquired Fund in connection with the transactions contemplated by this
Agreement; (v) solicitation costs incurred in connection with the shareholders
meeting referred to in clause (i) above and paragraph 5.2 hereof and (vi) any
other reasonable Reorganization expenses.
9.3 Any other provision of this Agreement to the contrary
notwithstanding, any liability of either Fund under this Agreement, or in
connection with the transactions contemplated herein with respect to such Fund,
shall be discharged only out of the assets of such Fund.
10. Entire Agreement; Survival of Warranties
10.1 The Acquiring Fund and the Acquired Fund agree that neither party
has made any representation, warranty or covenant not set forth herein and that
this Agreement constitutes the entire agreement among the parties.
10.2 The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
11. Termination
11.1 This Agreement may be terminated at any time at or prior to the
Closing Date by: (1) mutual agreement of the Acquired Fund and the Acquiring
Fund; (2) the Acquired Fund in the event the Acquiring Fund shall, or the
Acquiring Fund, in the event the Acquired Fund shall, materially breach any
representation, warranty or agreement contained herein to be performed at or
prior to the Closing Date; or (3) the Acquired Fund or the Acquiring Fund in the
event a condition herein expressed to be precedent to the obligations of the
terminating party or parties has not been met and it reasonably appears that it
will not or cannot be met within a reasonable time.
11.2 In the event of any such termination, there shall be no liability
for damages on the part of either the Acquiring Fund, the Acquiring Trust or the
Acquired Fund, or their respective Trustees, Directors or officers, to the other
party or parties.
12. Amendments
This Agreement may be amended, modified or supplemented in writing in
such manner as may be mutually agreed upon by the authorized officers of the
Acquired Fund and the Acquiring Fund; provided, however, that following the
meeting of the Acquired Fund's shareholders called by the Acquired Fund pursuant
to paragraph 5.2 of this Agreement no such amendment may have the effect of
changing the provisions for determining the number of the Acquiring Fund Shares
to be issued to the Acquired Fund's Shareholders under this Agreement to the
detriment of such shareholders without their further approval.
13. Notices
13.1 Any notice, report, statement or demand required or permitted by
any provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy or certified mail addressed to the Acquiring Trust
at:
466 Lexington Avenue
New York, NY 10017
Attention: Hal Liebes, Esq.
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with a copy to:
Rose F. DiMartino, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
or to the Acquiring Fund at:
466 Lexington Avenue
New York, NY 10017
Attention: Hal Liebes, Esq.
with a copy to:
Rose F. DiMartino, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, NY 10019-6099
14. Headings; Counterparts; Governing Law; Assignment; Limitation of
Liability
14.1 The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
14.4 This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors and assigns, but no assignment or
transfer hereof or of any rights or obligations hereunder shall be made by any
party without the written consent of the other party. Nothing herein expressed
or implied is intended or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective
successors and assigns, any rights or remedies under or by reason of this
Agreement.
14.5 Notice is hereby given that this Agreement is entered into on
behalf of the Acquiring Fund by an officer of the Acquiring Trust in such
officer's capacity as an officer and not individually. It is understood and
expressly stipulated that none of the Trustees, officers or shareholders of the
Acquiring Trust are personally liable hereunder. All persons dealing with the
Acquiring Trust shall look solely to the property of the Acquiring Trust for the
enforcement of any claims against the Acquiring Trust.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its Chairman, President or Vice President and
attested to by its Secretary or Assistant Secretary.
CREDIT SUISSE CAPITAL FUNDS, For and on Behalf of CREDIT SUISSE LARGE CAP VALUE
FUND
By:
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Name: Hal Liebes
Title: Vice President
Attestation By:
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Name: Stuart Cohen
Title: Assistant Secretary
CREDIT SUISSE BALANCED FUND, INC.
By:
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Name: Hal Liebes
Title: Vice President
Attestation By:
----------------------------------------------------------------
Name: Stuart Cohen
Title: Assistant Secretary
Solely with respect to paragraphs 4.3, 5.8 and 9.2 hereof:
CREDIT SUISSE ASSET MANAGEMENT, LLC
By:
----------------------------------------------------------------------------
Name: Hal Liebes
Title: Managing Director
Attestation By:
----------------------------------------------------------------
Name: Gregory Bressler
Title: Vice President
A-17
<Page>
PROXY
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
CREDIT SUISSE BALANCED FUND, INC.
VOTE THIS CARD TODAY
BY MAIL, BY FAX AT 1-212-269-2796, BY PHONE AT 1-800-714-3312
OR ON-LINE AT WWW.CREDITSUISSEFUNDS.COM
CONTROL NUMBER:
Please be sure to sign and date this Proxy. Date____________________
Shareholder sign here___________________ Co-owner sign here ____________________
<Table>
<Caption>
1. To approve the Agreement and Plan of Reorganization (the "Plan") providing For Against Abstain
that (i) Credit Suisse Balanced Fund, Inc. (the "Acquired Fund") would [ ] [ ] [ ]
transfer to Credit Suisse Large Cap Value Fund (the "Acquiring Fund"), a
series of Credit Suisse Capital Funds, all of its assets in exchange for
shares of the Acquiring Fund and the assumption by the Acquiring Fund of
the Acquired Fund's liabilities, (ii) such shares of the Acquiring Fund
would be distributed to shareholders of the Acquired Fund in liquidation of
the Acquired Fund, and (iii) the Acquired Fund would subsequently be
dissolved.
</Table>
The proxies are authorized to vote upon such other business as may properly come
before the Special Meeting or any adjournment or adjournments thereof.
Mark box at right if an address change or comment has been noted on the reverse
side of this card.
RECORD DATE SHARES:
<Page>
CREDIT SUISSE BALANCED FUND, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
SPECIAL MEETING OF SHAREHOLDERS - MARCH 19, 2002
The undersigned hereby appoints Rocco Del Guercio and Gregory
Bressler, each with the power of substitution, as proxies for the undersigned
to vote all shares of Credit Suisse Balanced Fund, Inc. which the undersigned
is entitled to vote at the Special Meeting of Shareholders of the Fund to be
held at the offices of the Fund, 466 Lexington Avenue, ___ Floor, New York,
New York 10017, on March 19, 2002 at ___ a.m., Eastern time, and at any
adjournments thereof.
UNLESS OTHERWISE SPECIFIED IN THE BOXES PROVIDED, THE UNDERSIGNED'S
VOTE WILL BE CAST FOR EACH ITEM LISTED ON THE REVERSE SIDE. A PROPERLY EXECUTED
PROXY IN WHICH NO SPECIFICATION IS MADE WILL BE VOTED IN FAVOR OF THE PROPOSAL.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE.
NOTE: Please sign exactly as name(s) appear(s) hereon. Joint owners
should each sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- ------------------------------------ --------------------------------
- ------------------------------------ --------------------------------
- ------------------------------------ --------------------------------
<Page>
CLASS A PROSPECTUS OF THE ACQUIRING FUND IS
INCORPORATED BY REFERENCE TO ITS
N-1A REGISTRATION STATEMENT
<Page>
PART B
SUBJECT TO COMPLETION, DATED DECEMBER 5, 2001
STATEMENT OF ADDITIONAL INFORMATION DATED JANUARY __, 2002
ACQUISITION OF THE ASSETS OF
CREDIT SUISSE BALANCED FUND, INC.
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3147
800-927-2874
BY AND IN EXCHANGE FOR SHARES OF
CREDIT SUISSE LARGE CAP VALUE FUND, A SERIES OF CREDIT SUISSE CAPITAL FUNDS
466 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3147
800-927-2874
This Statement of Additional Information, relating specifically to
the proposed transfer of all of the assets of Credit Suisse Balanced Fund,
Inc. (the "Acquired Fund") to Credit Suisse Large Cap Value Fund (the
"Acquiring Fund"), a series of Credit Suisse Capital Funds (the "Acquiring
Trust") in exchange for shares of the Acquiring Fund and the assumption by
the Acquiring Fund of liabilities of the Acquiring Fund (the "Acquisition"),
consists of this cover page and the following described documents, each of
which accompanies this Statement of Additional Information and is
incorporated herein by reference.
1. Statement of Additional Information for each of the Acquiring
Fund and the Acquired Fund, each dated February 28, 2001,
each as supplemented as of the date hereof.
2. Annual Reports of the Acquiring Fund and the Acquired Fund for
the fiscal year ended October 31, 2001.
This Statement of Additional Information is not a prospectus. Extra
copies of the Prospectus/Proxy Statement, dated January ___, 2002, relating to
the above-referenced matter may be obtained without charge by calling or writing
the Acquiring Fund at the telephone number or address set forth above. This
Statement of Additional Information should be read in conjunction with the
Prospectus/Proxy Statement.
FINANCIAL STATEMENTS
The Annual Reports of the Acquiring Fund and the Acquired
Fund, for the fiscal year ended October 31, 2001, and each including audited
financial statements, notes to the financial statements and report of the
independent auditors, are incorporated by reference herein. To obtain a copy of
the Annual Reports without charge, please call (800) 927-2874.
<Page>
PRO FORMA FINANCIAL STATEMENTS (UNAUDITED)
The following tables set forth the unaudited pro forma condensed
Statement of Assets and Liabilities and Schedule of Investments as of October
31, 2001 and the unaudited pro forma condensed Statements of Operations for the
fiscal year ended October 31, 2001 for each of the Acquiring Fund and the
Acquired Fund, as adjusted, giving effect to the Acquisition.
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Statement of Assets and Liabilities (unaudited)
<Table>
<Caption>
ACQUIRED FUND ACQUIRING FUND CREDIT SUISSE
CREDIT SUISSE CREDIT SUISSE LARGE CAP
BALANCED FUND LARGE CAP VALUE FUND VALUE FUND
OCTOBER 31, 2001 OCTOBER 31, 2001 ADJUSTMENTS PRO FORMA
------------------------ -------------------------- ----------- ----------------------------
COST VALUE COST VALUE COST VALUE
---------- ------------ ------------ ------------- ------------ -------------
ASSETS
Investment at value 21,569,816 19,408,439 168,755,738 206,312,465 190,325,554 225,720,904
Cash -- 711 -- 985 -- 1,696
Receivable for investment sold
unsettled -- 100,779 -- 7,241,412 -- 7,342,191
Receivable for Fund shares sold -- 1,904 128,023 -- 129,927
Dividends and interest
receivable 5,313 143,970 -- 351,053 5,313 495,023
Prepaid expenses and other
assets -- 14,009 -- 49,329 (14,009)(a) -- 49,329
Receivable from advisor -- 17,795 -- -- -- 17,795
------------ ------------- -------------
Total Assets 19,687,607 214,083,267 233,756,865
------------ ------------- -------------
LIABILITIES
Payable for investments
purchased unsettled 80,024 -- 80,024
Advisory fee payable -- 94,615 94,615
Administration fee payable 6,966 72,600 79,566
Distribution fee payable 4,507 60,425 64,932
Payable for Fund shares redeemed 60,675 3,070 63,745
Accrued expenses payable 29,865 88,646 118,511
------------ ------------- -------------
Total Liabilities 182,037 319,356 501,393
------------ ------------- -------------
NET ASSETS 19,505,570 213,763,911 233,255,472
============ ============= =============
COMMON CLASS
Net Assets 19,435,241 3,420,848 (19,435,241) 3,420,890
Shares outstanding 2,048,225 171,442 (2,048,225) 171,442
Net assets value, offering
price and redemption price
per share 9.49 19.95 -- 19.95
ADVISOR CLASS
Net Assets 70,329 -- (70,329) --
Shares outstanding 7,422 -- (7,422) --
Net assets value, offering
price and redemption price
per share 9.48 -- -- --
CLASS A SHARES
Net Asset -- 133,664,652 19,491,561 153,156,213
Shares outstanding -- 6,695,850 977,233 7,672,281
Net assets value, offering
price and redemption
price per share -- 19.96 -- 19.96
Maximum offering price per
share (net asset value
plus maximum sales charge) -- 21.18 -- 21.18
CLASS B SHARES
Net Assets -- 33,087,080 -- 33,087,080
Shares outstanding -- 1,672,580 -- 1,672,580
Net assets value, offering
price and redemption
price per share -- 19.78 -- 19.78
</Table>
<Table>
<Caption>
ACQUIRED FUND ACQUIRING FUND
CS BALANCED CS LARGE CAP VALUE
OCTOBER 31, 2001 OCTOBER 31, 2001 ADJUSTMENTS PRO FORMA
------------------------ -------------------------- ----------- ----------------------------
COST VALUE COST VALUE COST VALUE
---------- ------------ ------------ ------------- ------------ -------------
CLASS C SHARES
Net Assets -- 1,916,046 -- 1,916,046
Shares outstanding -- 97,204 -- 97,204
Net assets value, offering
price and redemption
price per share -- 19.71 -- 19.71
CLASS D SHARES
Net Assets -- 41,675,285 -- 41,675,235
Shares outstanding -- 2,086,207 -- 2,086,207
Net assets value, offering
price and redemption
price per share -- 19.98 19.98
</Table>
See notes to Pro Forma Financial Statements
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Schedule of Investments (unaudited)
As of October 31, 2001
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
Agilent Technologies, Inc.* 92,000 2,048,840
ALLTEL Corp. 94,800 5,416,872
American Express Co. 87,000 2,560,410
American International Group, Inc. 66,746 5,246,235
Avery-Dennison Corp. 84,000 3,889,200
Avon Products, Inc. 74,500 3,488,835
Bank of America Corp. 77,337 4,562,110
Berkshire Hathaway, Inc. Class A 55 3,916,000
Burlington Northern Santa Fe Corp. 159,100 4,275,017
Burlington Resources, Inc. 95,000 3,538,750
Cardinal Health, Inc. 80,700 5,415,777
Cedar Fair LP 36,400 722,540
Chevron Texaco Corp. 49,280 4,363,744
Citigroup, Inc. 107,333 4,885,798
Comcast Corp. Special Class A * 116,600 4,178,944
Costco Wholesale Corp.* 145,000 5,485,350
Emerson Electric Co. 50,000 2,451,000
Engelhard Corp. 134,700 3,526,446
Exxon Mobil Corp. 124,000 4,891,800
Federated Department Stores, Inc. * 116,000 3,710,840
Freddie Mac 67,400 4,571,068
General Dynamics Corp. 76,700 6,258,720
General Mills, Inc. 154,200 7,080,864
Heinz (H.J.) Co. 88,000 3,734,720
Hewlett-Packard Co. 130,200 2,191,266
Household International, Inc. 61,000 3,190,300
</Table>
<Table>
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
Abbott Laboratories 4,500 238,410
Abercrombie & Fitch Co.* 2,700 50,814
Adelphia Communications Corp.
Class A * 4,000 88,520
Adobe Systems, Inc. 4,600 121,440
American Home Products Corp. 3,000 167,490
American International Group, Inc. 2,968 233,285
Anheuser-Busch Companies, Inc. 4,000 166,640
AOL Time Warner, Inc.* 7,500 234,075
Apple Computers, Inc. 7,500 131,700
Barr Laboratories, Inc. * 2,000 145,600
Baxter International, Inc. 2,400 116,088
BEA Systems, Inc. * 5,400 65,556
BellSouth Corp. 3,500 129,500
Citigroup, Inc. 6,700 304,984
Comcast Corp. Special Class A * 1,600 57,344
Comverse Technology, Inc.* 4,000 75,240
Conoco, Inc. 7,200 185,040
Cooper Cameron Corp. * 1,800 70,200
Dell Computer Corp.* 3,000 71,940
Edison International 10,000 142,100
eFunds Corp.* 10,000 155,000
EMC Corp.* 6,500 80,080
Express Scripts, Inc. Class A * 3,600 147,384
Federated Department Stores, Inc. * 3,500 111,965
FleetBoston Financial Corp. 5,200 170,872
Gemstar-TV Guide International, Inc.* 5,700 115,539
Genentech, Inc.* 5,000 261,250
General Electric Co. 7,000 254,870
Harley Davidson, Inc. 5,200 235,352
Home Depot, Inc. 5,200 198,796
Honeywell International, Inc. 5,500 162,525
IDEC Pharmaceuticals Corp.* 3,000 179,940
Intel Corp. 10,000 244,200
</Table>
<Table>
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
Abbott Laboratories 4,500 238,410
Abercrombie & Fitch Co.* 2,700 50,814
Adelphia Communications Corp.
Class A * 4,000 88,520
Adobe Systems, Inc. 4,600 121,440
Agilent Technologies, Inc. 92,000 2,048,840
ALLTEL Corp. 94,800 5,416,872
American Express Co. 87,000 2,560,410
American Home Products Corp. 3,000 167,490
American International Group, Inc. 69,714 5,479,520
Anheuser-Busch Companies, Inc. 4,000 166,640
AOL Time Warner, Inc.* 7,500 234,075
Apple Computers, Inc. 7,500 131,700
Avery-Dennison Corp. 84,000 3,889,200
Avon Products, Inc. 74,500 3,488,835
Bank of America Corp. 77,337 4,562,110
Barr Laboratories, Inc. * 2,000 145,600
Baxter International, Inc. 2,400 116,088
BEA Systems, Inc. * 5,400 65,556
BellSouth Corp. 3,500 129,500
Berkshire Hathaway, Inc. Class A 55 3,916,000
Burlington Northern Santa Fe Corp. 159,100 4,275,017
Burlington Resources, Inc. 95,000 3,538,750
Cardinal Health, Inc. 80,700 5,415,777
Cedar Fair LP 36,400 722,540
Chevron Texaco Corp. 49,280 4,363,744
Citigroup, Inc. 114,033 5,190,782
Comcast Corp. Special Class A * 118,200 4,236,288
Comverse Technology, Inc.* 4,000 75,240
Conoco, Inc. 7,200 185,040
Cooper Cameron Corp. * 1,800 70,200
Costco Wholesale Corp. 145,000 5,485,350
Dell Computer Corp.* 3,000 71,940
Edison International 10,000 142,100
eFunds Corp.* 10,000 155,000
EMC Corp.* 6,500 80,080
Emerson Electric Co. 50,000 2,451,000
Engelhard Corp. 134,700 3,526,446
Express Scripts, Inc. Class A * 3,600 147,384
Exxon Mobil Corp. 124,000 4,891,800
Federated Department Stores, Inc. * 119,500 3,822,805
FleetBoston Financial Corp. 5,200 170,872
Freddie Mac 67,400 4,571,068
Gemstar-TV Guide International,
Inc.* 5,700 115,539
Genentech, Inc.* 5,000 261,250
General Dynamics Corp. 76,700 6,258,720
General Electric Co. 7,000 254,870
General Mills, Inc. 154,200 7,080,864
Harley Davidson, Inc. 5,200 235,352
Heinz (H.J.) Co. 88,000 3,734,720
Hewlett-Packard Co. 130,200 2,191,266
Home Depot, Inc. 5,200 198,796
Honeywell International, Inc. 5,500 162,525
Household International, Inc. 61,000 3,190,300
IDEC Pharmaceuticals Corp.* 3,000 179,940
Intel Corp. 10,000 244,200
</Table>
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Schedule of Investments (unaudited)
As of October 31, 2001
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
International Business Machines Corp. 23,500 2,539,645
Johnson & Johnson 104,000 6,022,640
Kimberly-Clark Corp. 93,500 5,190,185
Leggett & Platt, Inc. 137,600 2,981,792
Merck & Co., Inc. 50,400 3,216,024
Minnesota Mining & Manufacturing Co. 48,200 5,031,116
Modine Manufacturing Co. 97,000 2,012,750
National Fuel Gas Co. 180,000 4,213,800
PerkinElmer, Inc. 120,800 3,250,728
Pharmacia Corp. 47,352 1,918,703
Philip Morris Companies, Inc. 46,000 2,152,800
Phillips Petroleum Co. 78,000 4,243,980
Progress Energy, Inc. 110,000 4,638,700
Public Service Enterprise Group, Inc. 52,700 2,074,272
Rohm & Haas Co. 127,000 4,123,690
Safeway, Inc.* 126,500 5,268,725
San Juan Basin Royalty Trust 30,000 343,500
Sysco Corp. 151,000 3,640,610
Transocean Sedco Forex, Inc. 67,000 2,020,050
Tribune Co. 133,200 4,022,640
Tyco International, Ltd. 85,100 4,181,814
U.S. Bancorp 204,937 3,643,780
Unisys Corp. 60,000 535,800
United Technologies Corp. 98,000 5,281,220
Verizon Communications, Inc. 121,300 6,041,953
Viacom, Inc. Class B * 35,000 1,277,850
Washington Mutual, Inc. 190,800 5,760,252
WGL Holdings, Inc. 150,000 4,059,000
</Table>
<Table>
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
International Business Machines Corp. 1,300 140,491
Johnson & Johnson 3,300 191,103
King Pharmaceuticals, Inc. * 2,600 101,374
L-3 Communications Holdings, Inc. * 3,600 312,732
Leap Wireless International, Inc.* 6,500 96,655
Liberty Media Corp. Class A * 29,000 339,010
Mattel, Inc. 15,200 287,736
MBIA, Inc. 3,000 138,180
Medtronic, Inc. 6,300 253,890
Merrill Lynch & Co., Inc. 4,800 209,808
Microsoft Corp.* 5,500 319,825
Northern Trust Corp. 2,100 106,029
Openwave Systems, Inc. * 6,200 47,926
PepsiCo, Inc. 1,900 92,549
Pfizer, Inc. 7,025 294,347
Pharmacia Corp. 6,199 251,183
Procter & Gamble Co. 2,000 147,560
Public Service Enterprise Group, Inc. 4,900 192,864
Qwest Communications International,
Inc. 3,210 41,570
Redback Networks, Inc. * 14,500 58,145
Reinsurance Group of America, Inc. 4,400 138,908
Sanmina Corp.* 6,500 98,410
Sprint Corp. (PCS Group) * 2,600 57,980
SPX Corp.* 2,300 229,080
Talbots, Inc. 2,100 59,850
Telefonaktiebolaget LM Ericsson ADR 14,000 59,780
Texas Instruments, Inc. 5,000 139,950
Timberland Co. (The) Class A * 3,300 107,184
Time Warner Telecom, Inc. Class A * 4,700 51,512
Transocean Sedco Forex, Inc. 6,250 188,438
Tyco International, Ltd. 5,400 265,356
United Technologies Corp. 4,700 253,283
Universal Health Services, Inc.
Class B * 1,900 76,741
USA Networks, Inc.* 5,000 92,200
VERITAS Software Corp.* 4,400 124,872
Viacom, Inc. Class B * 4,877 178,059
Washington Mutual, Inc. 4,000 120,760
Wells Fargo & Co. 2,600 102,700
Western Wireless Corp. Class A * 6,800 198,356
</Table>
<Table>
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
International Business Machines
Corp. 24,800 2,680,136
Johnson & Johnson 107,300 6,213,743
Kimberly-Clark Corp. 93,500 5,190,185
King Pharmaceuticals, Inc. * 2,600 101,374
L-3 Communications Holdings, Inc. * 3,600 312,732
Leap Wireless International, Inc.* 6,500 96,655
Leggett & Platt, Inc. 137,600 2,981,792
Liberty Media Corp. Class A * 29,000 339,010
Mattel, Inc. 15,200 287,736
MBIA, Inc. 3,000 138,180
Medtronic, Inc. 6,300 253,890
Merck & Co., Inc. 50,400 3,216,024
Merrill Lynch & Co., Inc. 4,800 209,808
Microsoft Corp.* 5,500 319,825
Minnesota Mining & Manufacturing
Co. 48,200 5,031,116
Modine Manufacturing Co. 97,000 2,012,750
National Fuel Gas Co. 180,000 4,213,800
Northern Trust Corp. 2,100 106,029
Openwave Systems, Inc. * 6,200 47,926
PepsiCo, Inc. 1,900 92,549
PerkinElmer, Inc. 120,800 3,250,728
Pfizer, Inc. 7,025 294,347
Pharmacia Corp. 53,551 2,169,886
Philip Morris Companies, Inc. 46,000 2,152,800
Phillips Petroleum Co. 78,000 4,243,980
Procter & Gamble Co. 2,000 147,560
Progress Energy, Inc. 110,000 4,638,700
Public Service Enterprise Group,
Inc. 57,600 2,267,136
Qwest Communications International,
Inc. 3,210 41,570
Redback Networks, Inc. * 14,500 58,145
Reinsurance Group of America, Inc. 4,400 138,908
Rohm & Haas Co. 127,000 4,123,690
Safeway, Inc. 126,500 5,268,725
San Juan Basin Royalty Trust 30,000 343,500
Sanmina Corp.* 6,500 98,410
Sprint Corp. (PCS Group) * 2,600 57,980
SPX Corp.* 2,300 229,080
Sysco Corp. 151,000 3,640,610
Talbots, Inc. 2,100 59,850
Telefonaktiebolaget LM Ericsson ADR 14,000 59,780
Texas Instruments, Inc. 5,000 139,950
Timberland Co. (The) Class A * 3,300 107,184
Time Warner Telecom, Inc. Class A * 4,700 51,512
Transocean Sedco Forex, Inc. 73,250 2,208,488
Tribune Co. 133,200 4,022,640
Tyco International, Ltd. 90,500 4,447,170
U.S. Bancorp 204,937 3,643,780
Unisys Corp. 60,000 535,800
United Technologies Corp. 102,700 5,534,503
Universal Health Services, Inc.
Class B * 1,900 76,741
USA Networks, Inc.* 5,000 92,200
VERITAS Software Corp.* 4,400 124,872
Verizon Communications, Inc. 121,300 6,041,953
Viacom, Inc. Class B * 39,877 1,455,909
Washington Mutual, Inc. 194,800 5,881,012
Wells Fargo & Co. 2,600 102,700
Western Wireless Corp. Class A * 6,800 198,356
WGL Holdings, Inc. 150,000 4,059,000
</Table>
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Schedule of Investments (unaudited)
As of October 31, 2001
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
</Table>
<Table>
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
WorldCom, Inc. - WorldCom Group * 6,600 88,770
Xilinx, Inc.* 2,000 60,840
Liberty Media Corp. Class A * 29,000 339,010
</Table>
<Table>
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME SHARES VALUE
- ------------- ------ -----
WorldCom, Inc. - WorldCom Group * 6,600 88,770
Xilinx, Inc.* 2,000 60,840
Liberty Media Corp. Class A * 29,000 339,010
</Table>
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
</Table>
<Table>
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
Abitibi-Consolidated Yankee, Inc. 100 106,947
Adelphia Communications Corp.,
Senior Notes 10 9,200
Adelphia Communications Corp.,
Senior Notes 50 45,250
Advanta Mortgage Loan Trust 70 75,282
Alamosa PCS Holdings, Inc., Company
Guaranteed (Callable 02/15/05 @
$106.44) ** 20 11,400
Allied Waste North America, Inc.,
Series B 50 51,500
Allied Waste North America, Series
B, Company Guaranteed (Callable
08/01/04 @ $105.00) 50 50,875
American Express Credit Account
Master Trust, Series 2000-1,
Class A 35 38,606
American Lawyer Media, Series B,
Company Guaranteed (Callable
12/15/02 @ $104.87) 10 7,363
Ameristar Casinos, Inc., Company
Guaranteed (Callable 02/15/06 @
$105.37) 20 21,000
Amresco Commercial Mortgage Funding
Series 1997-C1, Class A1 338 355,191
AOL Time Warner, Inc. 110 114,797
AT&T Corp., Global Notes 35 34,082
AT&T Wireless Group Series 144A 50 53,418
Aztar Corp., Senior Subordinated
Notes (Callable 05/15/03 @
$104.44) 10 10,150
Bank of America Corp., Global
Subordinated Notes 5 5,519
Bank One Corp. 80 85,086
Bear Stearns Cos., Inc. 40 42,176
Boyd Gaming Corp., Series 144A
(Callable 08/01/05 @ $104.63) 35 35,175
British Telecommunications PLC,
Global Notes 80 88,395
Cablevision SA, Yankee Notes 20 6,850
California Infrastructure PG&E,
Series 1997-1, Class A7
(Callable 09/25/06 @ $100.00) 170 183,099
Calpine Corp., Senior Notes 20 20,158
Cendant Mortgage Corp., Series
2000-9, Class A1 52 53,661
Chesapeake Energy Corp., Global
Company Guaranteed, Senior
Notes (Callable 04/01/06 @
$104.06) 15 14,700
Citizens Communications 45 48,655
Citizens Communications 70 78,598
Citizens Communications Co., Rule
144A, Notes 50 51,770
CMS Energy Corp., Senior Notes 50 51,352
CMS Energy Corp., Series B, Senior
Notes 10 9,920
Coaxial LLC, Company Guaranteed,
(Callable 08/15/03 @ $106.44)
** 10 7,450
</Table>
<Table>
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
Abitibi-Consolidated Yankee, Inc. 100 106,947
Adelphia Communications Corp., Senior
Notes 10 9,200
Adelphia Communications Corp., Senior
Notes 50 45,250
Advanta Mortgage Loan Trust 70 75,282
Alamosa PCS Holdings, Inc., Company
Guaranteed (Callable 02/15/05 @
$106.44) ** 20 11,400
Allied Waste North America, Inc.,
Series B 50 51,500
Allied Waste North America, Series B,
Company Guaranteed (Callable
08/01/04 @ $105.00) 50 50,875
American Express Credit Account
Master Trust, Series 2000-1,
Class A 35 38,606
American Lawyer Media, Series B,
Company Guaranteed (Callable
12/15/02 @ $104.87) 10 7,363
Ameristar Casinos, Inc., Company
Guaranteed (Callable 02/15/06 @
$105.37) 20 21,000
Amresco Commercial Mortgage Funding
Series 1997-C1, Class A1 338 355,191
AOL Time Warner, Inc. 110 114,797
AT&T Corp., Global Notes 35 34,082
AT&T Wireless Group Series 144A 50 53,418
Aztar Corp., Senior Subordinated
Notes (Callable 05/15/03 @
$104.44) 10 10,150
Bank of America Corp., Global
Subordinated Notes 5 5,519
Bank One Corp. 80 85,086
Bear Stearns Cos., Inc. 40 42,176
Boyd Gaming Corp., Series 144A
(Callable 08/01/05 @ $104.63) 35 35,175
British Telecommunications PLC,
Global Notes 80 88,395
Cablevision SA, Yankee Notes 20 6,850
California Infrastructure PG&E,
Series 1997-1, Class A7
(Callable 09/25/06 @ $100.00) 170 183,099
Calpine Corp., Senior Notes 20 20,158
Cendant Mortgage Corp., Series
2000-9, Class A1 52 53,661
Chesapeake Energy Corp., Global
Company Guaranteed, Senior Notes
(Callable 04/01/06 @ $104.06) 15 14,700
Citizens Communications 45 48,655
Citizens Communications 70 78,598
Citizens Communications Co., Rule
144A, Notes 50 51,770
CMS Energy Corp., Senior Notes 50 51,352
CMS Energy Corp., Series B, Senior
Notes 10 9,920
Coaxial LLC, Company Guaranteed,
(Callable 08/15/03 @ $106.44) ** 10 7,450
</Table>
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Schedule of Investments (unaudited)
As of October 31, 2001
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
</Table>
<Table>
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
Comcast Cable Communications,
Senior Notes 50 51,934
Consolidated Natural Gas Co.,
Senior Notes 40 42,695
Cox Communications, Inc. 95 104,423
Crown Castle International Corp.
(Callable 08/01/06 @ $104.69) 10 8,750
Csc Holdings, Inc. Senior Notes 60 60,762
CSC Holdings, Inc., Senior Notes 30 31,806
DaimlerChrysler NA Holding Corp.,
Company Guaranteed, Global
Notes 100 103,887
DaimlerChrysler NA Holdings Corp. 100 103,493
Discover Card Master Trust 1,
Series 2001-6, Class A 55 58,214
Dobson Communications Corp., Senior
Notes (Callable 07/01/05 @
$105.44) 10 10,775
Dominion Resources, Inc. 75 77,304
Dominion Resources, Inc. 85 97,266
Domtar, Inc. 15 15,383
Duke Capital Corp. 100 108,350
Duke Energy Field Services, Notes 55 59,540
Enron Corp., Notes 55 45,224
Enterprise Products Partners LP,
Company Guaranteed 35 37,038
EOP Operating LP 35 36,915
Federal Republic of Brazil
(Callable 10/17/01 @ $100.00) 44 31,875
First Union Corp. (Callable
04/15/08 @ $100.00) 260 264,982
Fitzgeralds Gaming Corp., Series B,
Company Guaranteed (Callable
12/15/01 @ $106.25) *** 9 4,919
Fleming Companies, Inc., Company
Guaranteed (Callable 04/01/05 @
$105.06) 10 10,500
Ford Motor Credit Co., Global Bonds 200 203,364
Forest Oil Corp. 25 25,375
Four M Corp., Series B, Senior
Secured Notes (Callable
06/01/02 @ $104.00) 10 8,650
France Telecom, Rule 144A, Private
Placement 70 74,813
Frontiervision Holdings LP, Senior
Discount Notes (Callable
09/15/02 @ $105.937) 10 10,450
General Motors Acceptance Corp. 160 164,091
Ginnie Mae Pool #002217X 2 1,657
Global Crossing Holdings, Ltd.,
Company Guaranteed, Senior
Unsecured Notes 20 3,200
Global Crossing Holdings, Ltd.,
Yankee Company Guaranteed
(Callable 11/01/04 @ $104.75) 60 10,200
Goldman Sachs Group, Inc., Series
EMTN, Global Senior
Unsubordinated 90 100,426
HCA, Inc. 15 15,693
Hidroelectrica Piedra del Aguila
SA, Series QP, Collateral Trust 9 5,459
Hilton Hotels Corp., Notes 30 28,778
IMC Global, Inc. 10 9,984
Intermedia Communications, Inc.,
Series B, Senior Discount Notes
(Callable 07/15/02 @ $105.63)
** 25 24,875
Intermedia Communications, Inc.,
Series B, Senior Notes
(Callable 06/01/03 @ $104.30) 10 10,200
Intrawest Corp., Yankee Senior
Notes (Callable 02/01/05 @
$105.25) 10 9,500
ITT Corp. 25 23,772
John Hancock Global Funding II 105 120,486
Koninklijke (Royal) KPN NV, Global
Senior Unsubordinated 50 42,522
Lehman Brothers Holdings, Inc. 80 86,992
Lehman Brothers Holdings, Inc. 105 112,588
Level 3 Communications, Inc.,
Senior Notes (Callable 05/01/03
@ $104.56) 50 22,750
Levi Strauss & Co. 10 6,850
Magellan Health Services, Inc.,
Senior Subordinated Notes
(Callable 02/15/03 @ $104.50) 10 9,750
</Table>
<Table>
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
Comcast Cable Communications, Senior
Notes 50 51,934
Consolidated Natural Gas Co., Senior
Notes 40 42,695
Cox Communications, Inc. 95 104,423
Crown Castle International Corp.
(Callable 08/01/06 @ $104.69) 10 8,750
Csc Holdings, Inc. Senior Notes 60 60,762
CSC Holdings, Inc., Senior Notes 30 31,806
DaimlerChrysler NA Holding Corp.,
Company Guaranteed, Global Notes 100 103,887
DaimlerChrysler NA Holdings Corp. 100 103,493
Discover Card Master Trust 1, Series
2001-6, Class A 55 58,214
Dobson Communications Corp., Senior
Notes (Callable 07/01/05 @
$105.44) 10 10,775
Dominion Resources, Inc. 75 77,304
Dominion Resources, Inc. 85 97,266
Domtar, Inc. 15 15,383
Duke Capital Corp. 100 108,350
Duke Energy Field Services, Notes 55 59,540
Enron Corp., Notes 55 45,224
Enterprise Products Partners LP,
Company Guaranteed 35 37,038
EOP Operating LP 35 36,915
Federal Republic of Brazil (Callable
10/17/01 @ $100.00) 44 31,875
First Union Corp. (Callable 04/15/08
@ $100.00) 260 264,982
Fitzgeralds Gaming Corp., Series B,
Company Guaranteed (Callable
12/15/01 @ $106.25) *** 9 4,919
Fleming Companies, Inc., Company
Guaranteed (Callable 04/01/05 @
$105.06) 10 10,500
Ford Motor Credit Co., Global Bonds 200 203,364
Forest Oil Corp. 25 25,375
Four M Corp., Series B, Senior
Secured Notes (Callable 06/01/02
@ $104.00) 10 8,650
France Telecom, Rule 144A, Private
Placement 70 74,813
Frontiervision Holdings LP, Senior
Discount Notes (Callable
09/15/02 @ $105.937) 10 10,450
General Motors Acceptance Corp. 160 164,091
Ginnie Mae Pool #002217X 2 1,657
Global Crossing Holdings, Ltd.,
Company Guaranteed, Senior
Unsecured Notes 20 3,200
Global Crossing Holdings, Ltd.,
Yankee Company Guaranteed
(Callable 11/01/04 @ $104.75) 60 10,200
Goldman Sachs Group, Inc., Series
EMTN, Global Senior
Unsubordinated 90 100,426
HCA, Inc. 15 15,693
Hidroelectrica Piedra del Aguila SA,
Series QP, Collateral Trust 9 5,459
Hilton Hotels Corp., Notes 30 28,778
IMC Global, Inc. 10 9,984
Intermedia Communications, Inc.,
Series B, Senior Discount Notes
(Callable 07/15/02 @ $105.63) ** 25 24,875
Intermedia Communications, Inc.,
Series B, Senior Notes (Callable
06/01/03 @ $104.30) 10 10,200
Intrawest Corp., Yankee Senior Notes
(Callable 02/01/05 @ $105.25) 10 9,500
ITT Corp. 25 23,772
John Hancock Global Funding II 105 120,486
Koninklijke (Royal) KPN NV, Global
Senior Unsubordinated 50 42,522
Lehman Brothers Holdings, Inc. 80 86,992
Lehman Brothers Holdings, Inc. 105 112,588
Level 3 Communications, Inc., Senior
Notes (Callable 05/01/03 @
$104.56) 50 22,750
Levi Strauss & Co. 10 6,850
Magellan Health Services, Inc.,
Senior Subordinated Notes
(Callable 02/15/03 @ $104.50) 10 9,750
</Table>
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Schedule of Investments (unaudited)
As of October 31, 2001
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
SSB Euro TD 2.500% 11/01/01 1,023 1,023,000
</Table>
<Table>
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
MGM Mirage, Inc., Company
Guaranteed 35 35,304
MGM Mirage, Inc., Company
Guaranteed 40 40,000
Mirant Americas Generation Corp.
Senior Notes 55 57,682
Mohegan Tribal Gaming, Rule 144A,
Senior Subordinated Notes
(Callable 07/01/06 @ $104.188) 25 26,000
Monumental Global Funding, Rule
144A, Secured, Private
Placement 90 94,386
Morgan Stanley Dean Witter, Global
Notes 45 49,940
Morgan Stanley Dean Witter, Global
Unsubordinated 55 57,836
Morgan Stanley Mortgage Trust,
Series 40, Class 8 168 171,266
Motorola, Inc. 35 35,189
National City Corp. 140 140,365
NBTY, Inc., Series B, Senior
Subordinated Notes (Callable
09/15/02 @ $104.31) 10 9,500
Nextel Communications, Inc., Senior
Notes (Callable 11/15/04 @
$104.688) 25 17,625
Park Place Entertainment, Senior
Subordinated Notes 40 39,100
PG&E National Energy Group Global
Senior Notes 50 56,497
Progress Energy, Inc., Senior Notes 30 32,009
PSEG Power LLC, Rule 144A, Senior
Notes 35 37,008
Qwest Capital Funding 50 51,293
Republic of Argentina, Global Bonds 1 354
Republic of Argentina, Series 2008 210 97,125
Republic of Argentina, Series 2018
** 40 16,575
Republic of Argentina, Series 2031
** 1 238
Republic of Brazil, Series 20Yr 18 12,503
Republic of Philippines, Series B 39 33,347
Russian Federation, Rule 144A,
Unsubordinated **** 45 21,544
Russian Ministry of Finance, Series
VI, Debentures 100 62,500
SBA Communications Corp., Global
Senior Notes (Callable 02/01/05
@ $105.125) 20 16,100
Simmons Co., Series B, Senior
Subordinated Notes (Callable
03/15/04 @ $105.125) 10 8,713
Sovereign Bancorp, Inc., Senior
Notes 10 11,063
Sprint Capital Corp., 144A 40 39,988
Standard Credit Card Master Trust,
Series 1994-2, Class A 115 128,043
SSB Euro TD 2.500% 11/01/01 170 170,000
Sun International Hotels, Ltd.,
Rule 144A, Senior Subordinated
Notes (Callable 08/15/06 @
$104.438) 10 8,900
Telefonica Europe BV, Global
Company Guaranteed 5 5,448
Telemundo Holdings, Inc., Series B
(Callable 08/15/03 @ $105.75) 10 9,463
Telus Corp., Yankee Notes 25 26,899
Telus Corp., Yankee Notes 40 43,677
Texas Utilities Holdings Corp.,
Series J, Senior Notes 65 67,734
Tricon Global Restaurant, Senior
Notes 55 58,575
Tyson Foods, Inc., Rule 144A,
Private Placement Notes 40 41,378
Tyson Foods, Inc., Rule 144A,
Private Placement Notes 25 26,813
U.S. Treasury Notes 40 40,263
U.S. Treasury Notes 130 140,918
U.S. Treasury Notes 320 338,688
U.S. Treasury Notes 400 411,547
U.S. Treasury Notes 500 523,281
Verizon Global Funding Corp., Rule
144A 125 134,695
Visteon Corp., Global Senior Notes 30 31,503
Voicestream Wireless Corp., Senior
Notes (Callable 11/15/04 @
$105.19) 50 57,250
</Table>
<Table>
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
MGM Mirage, Inc., Company Guaranteed 35 35,304
MGM Mirage, Inc., Company Guaranteed 40 40,000
Mirant Americas Generation Corp.
Senior Notes 55 57,682
Mohegan Tribal Gaming, Rule 144A,
Senior Subordinated Notes
(Callable 07/01/06 @ $104.188) 25 26,000
Monumental Global Funding, Rule 144A,
Secured, Private Placement 90 94,386
Morgan Stanley Dean Witter, Global
Notes 45 49,940
Morgan Stanley Dean Witter, Global
Unsubordinated 55 57,836
Morgan Stanley Mortgage Trust, Series
40, Class 8 168 171,266
Motorola, Inc. 35 35,189
National City Corp. 140 140,365
NBTY, Inc., Series B, Senior
Subordinated Notes (Callable
09/15/02 @ $104.31) 10 9,500
Nextel Communications, Inc., Senior
Notes (Callable 11/15/04 @
$104.688) 25 17,625
Park Place Entertainment, Senior
Subordinated Notes 40 39,100
PG&E National Energy Group Global
Senior Notes 50 56,497
Progress Energy, Inc., Senior Notes 30 32,009
PSEG Power LLC, Rule 144A, Senior
Notes 35 37,008
Qwest Capital Funding 50 51,293
Republic of Argentina, Global Bonds 1 354
Republic of Argentina, Series 2008 210 97,125
Republic of Argentina, Series 2018 ** 40 16,575
Republic of Argentina, Series 2031 ** 1 238
Republic of Brazil, Series 20Yr 18 12,503
Republic of Philippines, Series B 39 33,347
Russian Federation, Rule 144A,
Unsubordinated **** 45 21,544
Russian Ministry of Finance, Series
VI, Debentures 100 62,500
SBA Communications Corp., Global
Senior Notes (Callable 02/01/05
@ $105.125) 20 16,100
Simmons Co., Series B, Senior
Subordinated Notes (Callable
03/15/04 @ $105.125) 10 8,713
Sovereign Bancorp, Inc., Senior Notes 10 11,063
Sprint Capital Corp., 144A 40 39,988
Standard Credit Card Master Trust,
Series 1994-2, Class A 115 128,043
State Street Bank and Trust Co. Euro
Time Deposit 2.500% 11/01/01
(Cost $170,000) 1,193 1,193,000
Sun International Hotels, Ltd., Rule
144A, Senior Subordinated Notes
(Callable 08/15/06 @ $104.438) 10 8,900
Telefonica Europe BV, Global Company
Guaranteed 5 5,448
Telemundo Holdings, Inc., Series B
(Callable 08/15/03 @ $105.75) 10 9,463
Telus Corp., Yankee Notes 25 26,899
Telus Corp., Yankee Notes 40 43,677
Texas Utilities Holdings Corp.,
Series J, Senior Notes 65 67,734
Tricon Global Restaurant, Senior
Notes 55 58,575
Tyson Foods, Inc., Rule 144A, Private
Placement Notes 40 41,378
Tyson Foods, Inc., Rule 144A, Private
Placement Notes 25 26,813
U.S. Treasury Notes 40 40,263
U.S. Treasury Notes 130 140,918
U.S. Treasury Notes 320 338,688
U.S. Treasury Notes 400 411,547
U.S. Treasury Notes 500 523,281
Verizon Global Funding Corp., Rule
144A 125 134,695
Visteon Corp., Global Senior Notes 30 31,503
Voicestream Wireless Corp., Senior
Notes (Callable 11/15/04 @
$105.19) 50 57,250
</Table>
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Schedule of Investments (unaudited)
As of October 31, 2001
<Table>
<Caption>
ACQUIRING FUND
CREDIT SUISSE LARGE CAP VALUE FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
-----------
206,312,465
===========
<Caption>
ACQUIRED FUND
CREDIT SUISSE BALANCED FUND
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
Wells Fargo & Co. 60 67,500
Werner Holdings Co., Inc., Series
A, Company Guaranteed (Callable
11/15/02 @ $105.00) 10 9,100
Weyerhaeuser Co., Notes 20 20,711
WorldCom, Inc. 10 10,836
WorldCom, Inc., Global Notes 30 32,387
XO Communications, Inc., Senior
Discount Notes (Callable
04/15/03 @ $104.72) ** 50 5,250
XO Communications, Inc., Senior
Notes (Callable 12/01/04 @
$105.25) 55 9,625
YankeeNets LLC, Rule 144A, Senior
Notes (Callable 03/01/04 @
$106.37) 10 12,625
Young Broadcasting, Inc., Global
Company Guaranteed (Callable
03/01/06 @ $105.00) 10 8,450
-----------
19,408,439
===========
<Caption>
CREDIT SUISSE LARGE CAP VALUE FUND
PRO-FORMA
- --------------------------------------------------------
MARKET
SECURITY NAME PAR VALUE
- ------------- ------ -------
(000)
Wells Fargo & Co. 60 67,500
Werner Holdings Co., Inc., Series A,
Company Guaranteed (Callable
11/15/02 @ $105.00) 10 9,100
Weyerhaeuser Co., Notes 20 20,711
WorldCom, Inc. 10 10,836
WorldCom, Inc., Global Notes 30 32,387
XO Communications, Inc., Senior
Discount Notes (Callable
04/15/03 @ $104.72) ** 50 5,250
XO Communications, Inc., Senior Notes
(Callable 12/01/04 @ $105.25) 55 9,625
YankeeNets LLC, Rule 144A, Senior
Notes (Callable 03/01/04 @
$106.37) 10 12,625
Young Broadcasting, Inc., Global
Company Guaranteed (Callable
03/01/06 @ $105.00) 10 8,450
-----------
225,720,904
===========
</Table>
* Non-income producing security.
** Step Bond - The interest as of October 31, 2001 is 0% and will reset to the
interest rate shown at a future date.
*** Security in default.
**** Variable rate obligations - The interest rate shown is the rate as of
October 31, 2001.
See notes to Pro Forma Financial Statements
<Page>
Credit Suisse Large Cap Value Fund
Pro Forma Combined Statements of Operations (unaudited)
<Table>
<Caption>
ACQUIRED FUND AQUIRING FUND
CREDIT SUISSE CREDIT SUISSE
CREDIT SUISSE LARGE CAP LARGE CAP
BALANCED FUND VALUE FUND VALUE FUND
OCTOBER 31, 2001 OCTOBER 31, 2001 ADJUSTMENTS PRO-FORMA
---------------- ---------------- ----------- -------------
INVESTMENT INCOME
Dividends $ 129,338 $ 4,544,988 - $ 4,674,326
Interest 745,325 236,773 - 982,098
Foreign tax withheld (453) - - (453)
----------- ------------ -------- ------------
Total Investment Income 874,210 4,781,761 - 5,655,971
----------- ------------ -------- ------------
EXPENSES
Investment advisory services 222,936 1,400,402 (103,770)(b) 1,522,568
Distribution fees - Class A - 385,304 61,929 447,233
Distribution fees - Class B - 384,100 - 384,100
Distribution fees - Class C - 12,123 - 12,123
Distribution fees - Class D - - - -
Distribution fees - Common Class 61,760 4,739 (61,760)(c) 4,739
Distribution fees - Advisor Class 332 - (332)(c) -
Transfer agent 47,975 204,395 (29,338)(d) 223,032
Custodian 11,606 20,843 (9,705)(e) 22,744
Administrative and accounting fees 32,350 158,670 9,240 (f) 200,260
Administrative services fees 24,771 179,008 63,235 267,014
Registration fees 36,259 30,060 (36,259)(g) 30,060
Interest 330 1,557 (330)(g) 1,557
Legal 29,143 27,207 (29,143)(g) 27,207
Directors'/Trustees' fees 17,857 3,209 (17,857)(g) 3,209
Audit 17,325 20,214 (16,539)(g) 21,000
Printing 15,692 86,925 (15,692)(g) 86,925
Insurance expense 3,718 6,999 (3,718)(g) 6,999
Miscellaneous 4,455 21,123 (4,455)(g) 21,123
----------- ------------ -------- ------------
526,509 2,946,878 (191,494) 3,281,893
Less: Expenses waived and reimbursed by CSAM (190,518) (254,834) 93,898 (h) (349,301)
Less: Expenses offset by Transfer Agent (1,420) (71) (1,491)
----------- ------------ -------- ------------
Net Expenses 334,571 2,691,973 (95,643) 2,930,901
----------- ------------ -------- ------------
Net Investment Income 539,639 2,089,788 95,643 2,725,070
----------- ------------ -------- ------------
NET REALIZED AND UNREALIZED GAIN/(LOSS) FROM INVESTMENTS:
Net realized gain/(loss) from investments (372,336) 15,244,162 - 14,871,826
Net change in unrealized appreciation/(depreciation) from (3,725,551) (42,695,915) - (46,421,466)
investments
Net change in unrealized appreciation/(depreciation) from
foreign currency translations 31 - - 31
----------- ------------ -------- ------------
Net realized and unrealized loss from
investments (4,097,856) (27,451,753) - (31,549,609)
----------- ------------ -------- ------------
Net increase/(decrease) in net assets resulting
from operations $(3,558,217) $(25,361,965) 95,643 $(28,824,539)
=========== ============ ======== ============
</Table>
See notes to Pro Forma Financial Statements
<Page>
Credit Suisse Large Cap Value Fund
Credit Suisse Balanced Fund, Inc.
Notes to Pro Forma Financial Statements (unaudited)
October 31, 2001
1. BASIS OF COMBINATION
The unaudited Pro Forma Combined Portfolio of Investments, Pro Forma
Combined Statement of Assets and Liabilities and Pro Forma Combined Statement
of Operations give effect to the proposed merger of the Credit Suisse
Balanced Fund, Inc. ("Balanced") into the Credit Suisse Large Cap Value Fund
("Large Cap Value"). The proposed merger will be accounted for by the method
of accounting for tax-free mergers of investment companies. The merger
provides for the transfer of all of the assets and liabilities of Balanced to
Large Cap Value and the subsequent liquidation of Balanced. The accounting
survivor in the proposed merger will be Large Cap Value. This is because
although Balanced has a similar investment objective as Large Cap Value with
respect to equity investments, the surviving fund will invest in a style that
is similar to the way in which Large Cap Value is currently operated.
Additionally, Large Cap Value has a significantly larger asset base than
Balanced.
The pro forma combined statements should be read in conjunction with
the historical financial statements of the constituent fund and the notes
thereto incorporated by reference in the Registration Statement filed on Form
N-14.
Balanced and Large Cap Value are both, open-end, management
investment companies registered under the Investment Company Act of 1940, as
amended.
PRO FORMA ADJUSTMENTS:
The Pro Forma adjustments below reflect the impact of the merger
between Balanced and Large Cap Value.
(a) Elimination of Prepaid expenses from Balanced.
(b) To decrease Investment Advisory Services Fee to reflect the revised fee
schedule.
(c) To re-class Distribution fees from Balanced Common Class Shares and
Advisor Class Shares to Large Cap Value Class A Shares.
(d) Adjustment based on the contractual agreement with the transfer agent for
the combined fund.
(e) Adjustment based on the contractual agreements with the custodian for the
combined fund.
(f) Adjustment based on the revised contractual agreement with the fund
accountant/administrator dated, February 5, 2001.
(g) Assumes elimination of duplicate charges in combination, and reflects
management's estimates of combined pro-forma operations.
(h) Adjustment to decrease CSAM waiver and reduce total expense ratio.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Following is a summary of significant accounting policies, which are
consistently followed by Balanced / Large Cap Value in the preparation of
their financial statements. The policies are in conformity with generally
accepted accounting principles. Preparation of the financial statements includes
the use of management estimates. Actual results could differ from those
estimates.
<Page>
SECURITY VALUATION - Securities traded on a U.S. or foreign stock
exchange, or the Nasdaq Stock Market Inc. ("Nasdaq") system, are valued at
the last quoted sale price reported as of the close of regular trading on the
exchange the security is traded most extensively. If there is no such sale,
the security is valued at the calculated mean between the last bid and asked
price on the exchange. Securities not traded on an exchange or Nasdaq, but
traded in another over-the-counter market are valued at the average between
the current bid and asked price in such markets. Short-term obligations and
commercial paper are valued at amortized cost, which approximates market.
Debt securities (other than short-term obligations and commercial paper) are
valued on the basis of valuations furnished by a pricing service authorized
by the Board of Trustees/Directors (the "Board"), which determines valuations
based upon market transactions for normal, institutional-size trading units
of such securities. All other securities are valued at their fair value as
determined in good faith by the Valuation Committee of the Board.
SECURITY TRANSACTIONS AND INVESTMENT INCOME - Security transactions are
accounted for on the trade date. Dividend income is recorded on the ex-dividend
date, and interest income is accrued on a daily basis. Corporate actions,
including dividends, on foreign securities are recorded on the ex-dividend date.
If such information is not available on the ex-dividend date, corporate actions
are recorded as soon as reliable information is available from the Fund's
sources. Realized gains and losses from security transactions are calculated on
an identified cost basis.
FEDERAL INCOME TAXES - Balanced / Large Cap Value intends to
qualify for tax treatment applicable to regulated investment companies under the
Internal Revenue Code of 1986 (the "Code"), as amended, and distribute all of
its taxable income to its shareholders. Therefore, no provision has been
recorded for Federal income or excise taxes.
DISTRIBUTIONS TO SHAREHOLDERS - Distributions from net investment
income and net realized capital gains, if any, are declared in December.
<Page>
PART C
OTHER INFORMATION
Item 15. Indemnification. The response to this item is incorporated by reference
to "Plan of Reorganization" under the caption "Proposal - Information about the
Reorganization" and to "Liability of Trustees or Directors" under the caption
"Proposal - Information on Shareholders' Rights" in Part A of this Registration
Statement.
Item 16. Exhibits
(1)(a) Registrant's Amended and Restated Declaration of Trust is incorporated by
reference to Post-Effective Amendment No. 14 to Registrant's Registration
Statement on Form N-1A (File No. 33-3706) filed on December 29, 1995.
(1)(b) Registrant's Amendment to Amended and Restated Declaration of Trust is
incorporated by reference to Post-Effective Amendment No. 16 to Registrant's
Registration Statement on Form N-1A (File No. 33-3706) filed on February 20,
1997.
(1)(c) Registrant's Amendment No. 2 to Amended and Restated Declaration of Trust
is incorporated by reference to Post-Effective Amendment No. 23 to Registrant's
Registration Statement on Form N-1A (File No. 33-3706) filed on February 28,
2000.
(1)(d) Registrant's Amendment No. 3 to Amended and Restated Declaration of Trust
is incorporated by reference to Post-Effective Amendment No. 27 to Registrant's
Registration Statement on Form N-1A (File No. 33-3706) filed on January 24,
2001.
(1)(e) Registrant's Amendment No. 4 to Amended and Restated Declaration of Trust
is incorporated by reference to Post-Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A (File No. 33-3706) filed on February 28,
2001.
(2)(a) By-Laws of the Registrant are incorporated by reference to Registrant's
Registration Statement on Form N-1A (File No. 33-3706) filed on March 4, 1986.
(2)(b) Amendments to the By-Laws are incorporated by reference to Post-Effective
Amendment No. 28 to Registrant's Registration Statement on Form N-1A (File No.
33-3706) filed on February 28, 2001.
(3) Not Applicable.
(4) Plan of Reorganization (included as Exhibit A to Registrant's
Prospectus/Proxy Statement contained in Part A of this Registration Statement).
(5) Specimen Stock Certificate is incorporated by reference to Post-Effective
Amendment No. 8 to Registrant's Registration Statement on Form N-1A (File No.
33-3706) filed on February 24, 1992.
(6)(a) Form of Investment Advisory Agreement is incorporated by reference to the
Registrant's Definitive Proxy Statement on Form 14A filed on February 15, 2001.
(7) Not Applicable.
(8) Not Applicable.
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(9) Custodial Services Agreement is incorporated by reference to Post-Effective
Amendment No. 9 to Registrant's Registration Statement on Form N-1A (File No.
33-3706) filed on December 31, 1992.
(10)(a) Form of Distribution Plan pursuant to Rule 12b-1 under the 1940 Act is
incorporated by reference; material provisions, other than the fee rate, as set
forth under "Summary - Sales Charges" in Part A of this Registration Statement
are substantially similar to those of the corresponding exhibit in
Post-Effective Amendment No. 25 to Registrant's Registration Statement on Form
N-1A (File No. 33-3706) filed on August 1, 2000.
(10)(b) Distribution Agreement dated as of December 18, 2000 is incorporated by
reference to Post-Effective Amendment No. 26 to Registrant's Registration
Statement on Form N-1A (File No. 33-3706) filed on December 29, 2000.
(10)(c) Registrant's Plan for Multiple Classes of Shares pursuant to Rule 18f-3
is incorporated by reference to Post-Effective Amendment No. 28 to Registrant's
Registration Statement on Form N-1A (File No. 33-3706) filed on February 28,
2001.
(11) Form of Opinion and Consent of Willkie Farr & Gallagher, counsel to
Registrant, with respect to validity of shares.
(12) Form of Opinion of Willkie Farr & Gallagher with respect to tax matters.
(13)(a) Form of Transfer Agency Agreement is incorporated by reference to
Post-Effective Amendment No. 28 to Registrant's Registration Statement on Form
N1-A (File No. 33-3706) filed on February 28, 2001.
(13)(b) Form of Co-Administration Agreement with Credit Suisse Asset Management
Securities, Inc. is incorporated by reference to Post-Effective Amendment No. 28
to Registrant's Registration Statement on Form N-1A (File No. 33-3706) filed on
February 28, 2001.
(13)(c) Form of Co-Administration Agreement with PFPC, Inc. is incorporated by
reference to Post-Effective Amendment No. 28 to Registrant's Registration
Statement on Form N-1A (File No. 33-3706) filed on February 28, 2001.
(14)(a) Consent of PricewaterhouseCoopers LLP*.
(14)(b) Consent of Ernst & Young LLP*.
(15) Not Applicable.
(16) Powers of Attorney (included in the signature page of this Registration
Statement).
(17)(a) Form of Proxy Card (included as an exhibit to Registrant's
Prospectus/Proxy Statement contained in Part A of this Registration Statement).
(17)(b) Prospectus and Statement of Additional Information of the Registrant is
incorporated herein by reference.
(17)(c) Prospectuses and Statement of Additional Information of the Acquired
Fund is incorporated herein by reference.
(17)(d) Annual Report of the Registrant is incorporated herein by reference.
(17)(e) Annual Report of the Acquired Fund is incorporated herein by reference.
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* To be filed by amendment.
Item 17. Undertakings
(1) The undersigned Registrant agrees that prior to any public reoffering of the
securities registered through the use of a prospectus which is a part of this
Registration Statement by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c) of the Securities Act (17 CFR 230.145c), the
reoffering prospectus will contain the information called for by the applicable
registration form for reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other items of the applicable
form.
(2) The undersigned Registrant agrees that every prospectus that is filed under
paragraph (1) above will be filed as a part of an amendment to the Registration
Statement and will not be used until the amendment is effective, and that, in
determining any liability under the Securities Act of 1933, as amended, each
post-effective amendment shall be deemed to be a new registration statement for
the securities offered therein, and the offering of the securities at that time
shall be deemed to be the initial bona fide offering of them.
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SIGNATURES
As required by the Securities Act of 1933, as amended, this
Registration Statement has been signed on behalf of the registrant, in the City
of New York and State of New York, on the 5th day of December, 2001.
Credit Suisse Warburg Pincus Capital Funds
By: /s/ James P. Mccaughan
---------------------------------------
James P. McCaughan
Chairman (Chief Executive Officer)
POWER OF ATTORNEY
Each person whose signature appears below, hereby makes, constitutes
and appoints each of Hal Liebes and Michael A. Pignataro, with full power to act
without the other, as his agent and attorney-in-fact for the purpose of
executing in his name, in his capacity as a Trustee of the Credit Suisse Warburg
Pincus Capital Funds, this registration statement on Form N-14 (including
amendments thereto) to be filed with the United States Securities and Exchange
Commission pursuant to the Securities Act of 1933, as amended, and the
Investment Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated:
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ William W. Priest Trustee December 5, 2001
- ----------------------------
William W. Priest
/s/ James P. McCaughan Chairman (Chief December 5, 2001
- ---------------------------- Executive Officer)
James P. McCaughan
/s/ Michael A. Pignataro Treasurer and
- ---------------------------- Chief Financial Officer December 5, 2001
Michael A. Pignataro
/s/ Richard H. Francis Trustee December 5, 2001
- ----------------------------
Richard H. Francis
/s/ Jack W. Fritz Trustee December 5, 2001
- ----------------------------
Jack W. Fritz
/s/ Jeffrey E. Garten Trustee December 5, 2001
- ----------------------------
Jeffrey E. Garten
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SIGNATURE TITLE DATE
- --------- ----- ----
/s/ James S. Pasman, Jr. Trustee December 5, 2001
- ----------------------------
James S. Pasman, Jr.
/s/ Steven N. Rappaport Trustee December 5, 2001
- ----------------------------
Steven N. Rappaport
/s/ Peter F. Krogh Trustee December 5, 2001
- ----------------------------
Peter F. Krogh
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INDEX TO EXHBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
---------- ---------------------
(11) Form of Opinion and Consent
of Willkie Farr & Gallagher,
counsel to the Registrant,
with respect to validity of
Shares.
(12) Form of Opinion of Willkie
Farr & Gallagher, with
respect to tax matters.