AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
October 26, 2003 by and between Nations Separate Account Trust (the "Trust"), a
Delaware statutory trust, for itself and on behalf of its Nations Capital Growth
Portfolio (the "Target Fund") and the Trust, for itself and on behalf of its
Nations Xxxxxxx Growth Portfolio (the "Acquiring Fund").
WHEREAS, The Trust is an open-end management investment company registered
with the Securities and Exchange Commission (the "SEC") under the Investment
Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that the Fund Assets and Liabilities (as
defined below) of the Target Fund be conveyed to and assumed by the Acquiring
Fund in exchange for shares of equal U.S. dollar value of such Acquiring Fund
which shall thereafter promptly be distributed to the shareholders of the Target
Fund in connection with its liquidation as described in this Agreement and set
forth in Schedule A attached hereto (the acquisition and assumption of the
Target Fund's Fund Assets and Liabilities by the Acquiring Fund is the
"Reorganization"); and
WHEREAS, the parties intend that the Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that the Acquiring Fund and Target
Fund will each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to the Reorganization.
NOW, THEREFORE, in accordance with the terms and conditions described
herein, the Target Fund and Acquiring Fund shall be consolidated as follows:
1. Conveyance of Fund Assets and Liabilities of the Target Fund.
(a) Except as provided below, at the Effective Time of the
Reorganization (as defined in Section 8) all assets of every kind,
and all interests, rights, privileges and powers of the Target Fund
(the "Fund Assets"), subject to all liabilities of the Target Fund
existing as of the Effective Time of the Reorganization (the
"Liabilities"), shall be transferred by the Target Fund to the
Acquiring Fund and shall be accepted and assumed by such Acquiring
Fund, as more particularly set forth in this Agreement, such that at
and after the Effective Time of the Reorganization: (i) all Fund
Assets of the Target Fund shall become the assets of the Acquiring
Fund; and (ii) all Liabilities of the Target Fund shall attach to
the Acquiring Fund, enforceable against the Acquiring Fund to the
same extent as if originally incurred by the Acquiring Fund.
(b) It is understood and agreed that the Fund Assets shall include all
property and assets of any nature whatsoever, including, without
limitation, all cash, cash equivalents, securities, claims (whether
absolute or contingent, known or unknown, accrued or unaccrued) and
receivables (including dividend and interest receivables) owned or
exercisable by the Target Fund, and any deferred or prepaid expenses
shown as an asset on such Target Fund's books, that the Liabilities
of the Target Fund shall include all liabilities, whether known or
unknown, accrued or unaccrued, absolute or contingent, in all cases,
existing at the Effective Time of the Reorganization.
(c) At least fifteen (15) business days prior to the Closing Date (as
defined in Section 8), the Target Fund will provide to, or cause to
be provided to, the Acquiring Fund, a schedule of its securities,
other assets and its known liabilities. It is understood and agreed
that the Target Fund may sell any of the securities or other assets
shown on such schedule prior to the Effective Time of the
Reorganization but will not, without the prior approval of the
Acquiring Fund, acquire any additional securities other than
securities that such
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Acquiring Fund is permitted to purchase in accordance with its
stated investment objective and policies. At least ten (10) business
days prior to the Closing Date, the Acquiring Fund will advise the
Target Fund of any investments of the Target Fund shown on such
schedule that the Acquiring Fund would not be permitted to hold,
pursuant to its stated investment objective and policies or
otherwise. The Target Fund, if requested by the Acquiring Fund, will
dispose of any such securities prior to the Closing Date to the
extent practicable and consistent with applicable legal
requirements. In addition, if it is determined that the investment
portfolios of the Target Fund and its Acquiring Fund, when
aggregated, would contain investments exceeding certain percentage
limitations applicable to the Acquiring Fund, the Target Fund, if
requested by the Acquiring Fund, will dispose of a sufficient amount
of such investments as may be necessary to avoid violating such
limitations as of the Effective Time of the Reorganization.
(d) The Fund Assets shall be transferred and conveyed to the Acquiring
Fund on the following basis:
(1) In exchange for the transfer of the Fund Assets, the Acquiring
Fund shall simultaneously issue to the Target Fund at the
Effective Time of the Reorganization full and fractional shares
of such Acquiring Fund, as set forth in Schedule A attached
hereto, having an aggregate net asset value equal to the net
value of the Fund Assets minus Liabilities so conveyed and
assumed, all determined in accordance with this Agreement. In
this regard, the number of full and fractional shares of the
Acquiring Fund delivered to the Target Fund shall be determined
by dividing the value of the Fund Assets minus Liabilities,
computed in the manner and as of the time and date set forth in
this Agreement, by the net asset value of one Acquiring Fund
share, computed in the manner and as of the time and date set
forth in this Agreement.
(2) The net asset value of shares to be delivered by the Acquiring
Fund, and the net value of the Fund Assets minus Liabilities to
be conveyed by the Target Fund and assumed by the Acquiring
Fund, shall, in each case, be determined as of the Valuation
Time as defined in Section 3. The net asset value of shares of
the Acquiring Fund shall be computed in accordance with its then
current valuation procedures. In determining the value of the
Fund Assets, each security to be included in the Fund Assets
shall be priced in accordance with the Acquiring Fund's then
current valuation procedures.
2. Liquidation of the Target Fund. At the Effective Time of the
Reorganization, the Target Fund shall make a liquidating
distribution to its shareholders as follows: Shareholders of record
of the Target Fund shall be credited with full and fractional shares
of the respective shares that are issued by the Acquiring Fund in
connection with the Reorganization corresponding to the Target Fund
shares that are held of record by the shareholder at the Effective
Time of the Reorganization. Each such shareholder also shall have
the right to receive any unpaid dividends or other distributions
which were declared before the Effective Time of the Reorganization
with respect to the Target Fund shares that are held of record by
the shareholder at the Effective Time of the Reorganization, and the
Trust shall record on its books the ownership of the Acquiring Fund
shares by such shareholders (the "Transferor Record Holders"). All
of the issued and outstanding shares of the Target Fund at the
Effective Time of the Reorganization shall be redeemed and canceled
on the books of the Trust at such time. As soon as reasonably
possible after the Effective Time of the Reorganization, shall wind
up the affairs of the Target Fund and shall file any final
regulatory reports, including but not limited to any Form N-SAR and
Rule 24f-2 filings, with respect to the Target Fund, and also shall
take all other steps as are necessary and proper to effect the
termination or declassification of the Target Fund in accordance
with all applicable laws.
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3. Valuation Time. The "Valuation Time" shall be the time as of which
the net asset value of the shares of the Target Fund and the
Acquiring Fund is determined pursuant to their respective valuation
procedures on the Closing Date or such earlier or later time as may
be mutually agreed to in writing by the parties hereto.
4. Certain Representations, Warranties and Agreements of the Trust on
behalf of the Target Fund. The Trust, for itself and, where
appropriate, on behalf of the Target Fund, represents and warrants
to, and agrees with, the Trust, on behalf of the Acquiring Fund as
follows, with such representations, warranties and agreements made
on behalf of the Target Fund on a several (and not joint, or joint
and several) basis:
(a) The Trust is a statutory trust, duly formed, validly existing
and in good standing under the laws of the State of Delaware.
The Trust is registered with the SEC as an open-end management
investment company under the 1940 Act, and such registration is
in full force and effect.
(b) The Trust has the power to own all of its properties and assets
and to consummate the transactions contemplated herein, and has
all necessary federal, state and local authorizations to carry
on its business as now being conducted and to consummate the
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Trustees
of the Trust on behalf of the Target Fund, and has been executed
and delivered by duly authorized officers of the Trust, and
represents a valid and binding contract, enforceable in
accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium,
and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement
will not, violate the Amended and Restated Declaration of Trust
of the Trust, or any material agreement or arrangement to which
the Trust is a party or by which it is bound.
(d) The Target Fund has qualified as a "regulated investment
company" under Part I of Subchapter M of Subtitle A, Chapter 1,
of the Code (a "RIC"), in respect of each taxable year since the
commencement of its operations, and will continue to so qualify
until the Effective Time.
(e) The Trust has valued, and will continue to value, the portfolio
securities and other assets of the Target Fund in accordance
with applicable legal requirements.
(f) All of the issued and outstanding shares of the Target Fund have
been validly issued and are fully paid and non-assessable, and
were offered for sale and sold in conformity with the
registration requirements of all applicable federal and state
securities laws.
(g) The Trust shall operate the business of the Target Fund in the
ordinary course between the date hereof and the Effective Time
of the Reorganization, except that the Trust shall complete all
measures in respect of the Target Fund prior to the Effective
Time of the Reorganization to ensure that each Reorganization
qualifies as a "reorganization" within the meaning of Section
368(a) of the Code, regardless of whether such measures are in
the ordinary course. It is understood that such ordinary course
of business will include the declaration and payment of
customary dividends and distributions and any other dividends
and distributions deemed advisable in anticipation of the
Reorganization. Notwithstanding anything herein to the contrary,
the Trust shall take all appropriate action necessary in order
for it to receive the opinion provided for in Sections 7(f) and
8(d).
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(h) At the Effective Time of the Reorganization, the Target Fund
will have good and marketable title to the Fund Assets and full
right, power and authority to assign, deliver and otherwise
transfer such assets.
(i) At the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Target Fund required by law
to have been filed by such time 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 knowledge of management of the Trust, no such return or
report shall be currently under audit and no assessment shall
have been asserted with respect to such returns or reports.
5. Certain Representations, Warranties and Agreements of the Trust on
behalf of the Acquiring Fund. The Trust, on behalf of itself and
where appropriate, on behalf of the Acquiring Fund, represents and
warrants to, and agrees with, the Trust on behalf of the Target Fund
as follows:
(a) The Trust is a statutory business trust duly formed, validly
existing and in good standing under the laws of the State of
Delaware and is registered with the SEC as an open-end
management investment company under the 1940 Act and such
registration is in full force and effect.
(b) The Trust has the power to own all of its properties and assets
and to consummate the transactions contemplated herein, and has
all necessary federal, state and local authorizations to carry
on its business as now being conducted and to consummate the
transactions contemplated by this Agreement.
(c) This Agreement has been duly authorized by the Board of Trustees
of the Trust on behalf of the Acquiring Fund, and executed and
delivered by duly authorized officers of the Trust, and
represents a valid and binding contract, enforceable in
accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, arrangement, moratorium
and other similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated by this Agreement
will not, violate the Amended and Restated Declaration of Trust
of the Trust or any material agreement or arrangement to which
it is a party or by which it is bound.
(d) The Acquiring Fund has qualified as a RIC in respect of each
taxable year since the commencement of its operations and will
continue to so qualify for its current taxable year.
(e) The Trust has valued, and will continue to value, the portfolio
securities and other assets of the Acquiring Fund in accordance
with applicable legal requirements.
(f) The shares of the Acquiring Fund to be issued and delivered to
the Target Fund for the account of the shareholders of the
Target Fund, pursuant to the terms hereof, shall have been duly
authorized as of the Effective Time of the Reorganization and,
when so issued and delivered, shall be duly and validly issued,
fully paid and non-assessable, and no shareholder of the
Acquiring Fund shall have any preemptive right of subscription
or purchase in respect thereto.
(g) All of the issued and outstanding shares of the Acquiring Fund
have been validly issued and are fully paid and non-assessable,
and were offered for sale and sold in conformity with the
registration requirements of all applicable federal and state
securities laws.
(h) The Trust shall operate the business of the Acquiring Fund in
the ordinary course between the date hereof and the Effective
Time of the Reorganization, it being
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understood that such ordinary course of business will include
the declaration and payment of customary dividends and
distributions and any other dividends and distributions deemed
advisable in anticipation of the Reorganization. Notwithstanding
anything herein to the contrary, the Trust shall take all
appropriate action necessary in order for the Trust to receive
the opinion provided for in Section 8(d).
(i) At the Effective Time of the Reorganization, all federal and
other tax returns and reports of the Acquiring Fund required by
law to have been filed by such time 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 knowledge of management of the Trust, no such return
or report shall be currently under audit and no assessment shall
have been asserted with respect to such returns or reports.
6. Closing Date, Effective Time of the Reorganization. The "Closing
Date" shall be December 12, 2003, or, such earlier or later date as
may be mutually agreed in writing by the parties hereto. Delivery of
the Fund Assets of the Acquiring Fund to be issued pursuant to
Section 1 and the liquidation of the Target Fund pursuant to Section
2 shall occur on the day following the Closing Date, whether or not
such day is a business day, or on such other date, and at such place
and time, as may be mutually agreed in writing, by the parties
hereto. The date and time at which such actions are taken are
referred to herein as the "Effective Time of the Reorganization." To
the extent any Fund Assets are, for any reason, not transferred at
the Effective Time of the Reorganization, the Trust shall cause such
Fund Assets to be transferred in accordance with this Agreement at
the earliest practicable date thereafter.
7. Conditions to the Trust's Obligations on Behalf of the Acquiring
Fund. The obligations of the Trust hereunder shall be subject to the
following conditions precedent:
(a) This Agreement and the Reorganization shall have been approved
by the Board of Trustees of the Trust in the manner required by
the Trust's Amended and Restated Declaration of Trust,
applicable law and this Agreement.
(b) All representations and warranties of the Trust made in this
Agreement shall be true and correct in all material respects as
if made at and as of the Valuation Time and the Effective Time
of the Reorganization.
(c) The Trust shall have delivered to the Trust, on behalf of the
Acquiring Fund, a statement of assets and liabilities of the
Target Fund, showing the tax basis of such assets for federal
income tax purposes by lot and the holding periods of such
assets, as of the Valuation Time.
(d) The Trust shall have duly executed and delivered to the Trust,
on behalf of the Acquiring Fund, such bills of sale,
assignments, certificates and other instruments of transfer
("Transfer Documents") as the Trust may deem necessary or
desirable to transfer all of the Target Fund's rights, title and
interest in and to the Fund Assets.
(e) The Trust shall have delivered a certificate executed in its
name executed by an appropriate officer, in a form reasonably
satisfactory to the Trust, on behalf of the Acquiring Fund, and
dated as of the Closing Date, to the effect that the
representations and warranties of the Trust on behalf of the
Target Fund made in this Agreement are true and correct at and
as of the Valuation Time and that, to the best of its knowledge,
the Fund Assets include only assets which the Acquiring Fund may
properly acquire under its investment objective, policies and
limitations.
(f) The Trust shall have received an opinion of Xxxxxxxx & Xxxxxxxx
LLP dated as of the Closing Date in a form reasonably
satisfactory to it, upon which the Acquiring Fund and its
shareholders may rely, based upon representations reasonably
acceptable to
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Xxxxxxxx & Xxxxxxxx LLP made in certificates provided by the
Trust, its affiliates and/or principal shareholders to Xxxxxxxx
& Xxxxxxxx LLP, substantially to the effect that, although not
free from doubt, the Reorganization should qualify as a
"reorganization," within the meaning of Section 368(a) of the
Code, and the Acquiring Fund and Target Fund should each be a
"party to a reorganization," within the meaning of Section
368(b) of the Code, with respect to the Reorganization.
(g) The N-14 Registration Statement shall have become effective and
no stop order suspending the effectiveness shall have been
instituted, or to the knowledge of the Trust, contemplated by
the SEC.
(h) No action, suit or other proceeding shall be threatened or
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.
(i) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act.
(j) The Trust, on behalf of the Target Fund, shall have performed
and complied in all material respects with each of its
agreements and covenants required by this Agreement to be
performed or complied with by it prior to or at the Valuation
Time and the Effective Time of the Reorganization.
(k) The Trust shall have received a duly executed instrument whereby
the Acquiring Fund assumes all of the liabilities of the Target
Fund.
(l) Except to the extent prohibited by Rule 19b-1 under the 1940
Act, prior to the Valuation Time, the Target Fund shall have
declared a dividend or dividends, with a record date and
ex-dividend date prior to the Valuation Time, which, together
with all previous dividends, shall have the effect of
distributing to the Target Fund shareholders all of its
previously undistributed (i) "investment company taxable income"
within the meaning of Section 852(b) of the Code (determined
without regard to Section 852(b)(2)(D) of the Code), (ii) excess
of (A) the amount specified in Section 852(a)(1)(B)(i) of the
Code over (B) the amount specified in Section 852(a)(1)(B)(ii)
of the Code, and (iii) "net capital gain" (within the meaning of
Section 1222(11) of the Code), if any, realized in taxable
periods or years ending on or before the Effective Time.
8. Conditions to the Trust's Obligations on behalf of the Target Fund.
The obligations of the Trust hereunder shall be subject to the
following conditions precedent:
(a) This Agreement and the Reorganization shall have been approved
by the Board of Trustees of the Trust on behalf of the Acquiring
Fund.
(b) All representations and warranties of the Trust made in this
Agreement shall be true and correct in all material respects as
if made at and as of the Valuation Time and the Effective Time
of the Reorganization.
(c) The Trust shall have delivered a certificate executed in its
name by an appropriate officer, in a form reasonably
satisfactory to the Trust, on behalf of the Target 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 as of the Valuation
Time.
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(d) The Trust shall have received an opinion of Xxxxxxxx & Xxxxxxxx
LLP dated as of the Closing Date in a form reasonably
satisfactory to it, upon which the Target Fund and its
shareholders may rely, based upon representations reasonably
acceptable to Xxxxxxxx & Xxxxxxxx LLP made in certificates
provided by the Trust, its affiliates and/or principal
shareholders to Xxxxxxxx & Xxxxxxxx LLP, with respect to the tax
matters specified in Subsection 9(f)
(e) The N-14 Registration Statement shall have become effective and
no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of the Trust, contemplated by
the SEC.
(f) No action, suit or other proceeding shall be threatened or
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.
(g) The SEC shall not have issued any unfavorable advisory report
under Section 25(b) of the 1940 Act nor instituted any
proceeding seeking to enjoin consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940
Act.
(h) The Trust on behalf of the Acquiring Fund shall have performed
and complied in all material respects with each of its
agreements and covenants required by this Agreement to be
performed or complied with by it prior to or at the Valuation
Time and the Effective Time of the Reorganization.
9. Tax Matters
(a) The Trust hereby represents and warrants that it shall use its
best efforts to cause the Reorganization to qualify, and will
not (whether before or after consummation of the Reorganization)
take any actions that could prevent the Reorganization from
qualifying, as a "reorganization" under the provisions of
Section 368 of the Code.
(b) Except where otherwise required by law, the parties shall not
take a position on any tax returns inconsistent with the
treatment of the Reorganization for tax purposes as a
"reorganization," within the meaning of Section 368(a) of the
Code and the Acquiring Fund and the Target Fund will comply with
the record keeping and information filing requirements of
Section 1.368-3 of the Treasury Regulation in accordance
therewith.
10. Survival of Representations and Warranties. The representations and
warranties of the Trust on behalf of the Acquiring Fund and the
Target Fund set forth in this Agreement shall survive the delivery
of the Fund Assets to the Acquiring Fund and the issuance of the
shares of the Acquiring Fund at the Effective Time of the
Reorganization to Target Fund shareholders.
11. Termination of Agreement. This Agreement may be terminated by a
party at or, in the case of Subsection 11(c), below, at any time
prior to, the Effective Time of the Reorganization by a vote of a
majority of its Board members as provided below:
(a) By the Trust on behalf of the Acquiring Fund if the conditions
set forth in Section 9 are not satisfied as specified in said
Section;
(b) By the Trust on behalf of the Target Fund if the conditions set
forth in Section 10 are not satisfied as specified in said
Section;
(c) By mutual written consent of the parties.
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12. Governing Law. This Agreement and the transactions contemplated
hereby shall be governed, construed and enforced in accordance with
the laws of the State of Delaware, except to the extent preempted by
federal law.
13. Brokerage Fees and Expenses.
(a) The Trust represents and warrants that there are no brokers or
finders entitled to receive any payments in connection with the
transactions provided for herein.
(b) The Target Fund will be responsible for the expenses related to
entering into and carrying out the provisions of this Agreement,
whether or not the transactions contemplated hereby are
consummated. To the extent that such expenses exceed contractual
total operating expense ratio caps in place for the Target Fund,
Banc of America Capital Management, LLC or any of its affiliates
will bear such excess expenses.
14. Amendments. This Agreement may be amended, modified or supplemented
in such manner as may be mutually agreed upon in writing by the
authorized officers of the Trust, acting on behalf of the Target
Fund or the Trust, acting on behalf of the Acquiring Fund:
(a) The Trust on behalf of the Target Fund, may waive any breach by
the Trust, on behalf of the Acquiring Fund, or the failure to
satisfy any of the conditions to its obligations (such waiver to
be in writing and signed by an officer of such registered
investment company);
(b) The Trust, on behalf of the Acquiring Fund, may waive any breach
by the Trust on behalf of the Target Fund, or the failure to
satisfy any of the conditions to either of their obligations
(such waiver to be in writing and signed by an officer of such
registered investment company).
15. Miscellaneous. The Reorganization of the Target Fund into the
Acquiring Fund (including the representations and warranties and
conditions precedent made or required to occur in connection
therewith) shall not be conditioned on any other Reorganization
contemplated either under this Agreement or any other agreement and
plan of reorganization.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below as of the date first
written above.
NATIONS SEPARATE ACCOUNT TRUST
On behalf of the Target Fund identified
on Schedule A
By:
-------------------------------------
Xxxxx Xxxxxx
Chief Financial Officer (interim)
and Treasurer
NATIONS SEPARATE ACCOUNT TRUST
On behalf of the Acquiring Fund
identified on Schedule A
By:
-------------------------------------
Xxxxx Xxxxxx
Chief Financial Officer (interim)
and Treasurer
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SCHEDULE A
Shareholders Owning Shares of the Would Receive Shares of The Following
Following Target Fund of the Trust: Acquiring Fund of the Trust:
Nations Capital Growth Portfolio Nations Xxxxxxx Growth Portfolio
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