Contract
EX-99.4.a.
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the “Plan”), is made as of this 15th day of October, 2021, by and
between Dimensional Investment Group Inc., a corporation organized under the laws of the State of Maryland (“Acquiring Corporation”), with its principal place of business at 0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx, Xxxxxx, Xxxxx 00000, on behalf of one of
its portfolios, the Tax-Managed U.S. Marketwide Value Portfolio II (“Acquiring Portfolio”), and DFA Investment Dimensions Group Inc., a corporation organized under the laws of the State of Maryland ( “Target Corporation”), with its principal place
of business at 0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx, Xxxxxx, Xxxxx 00000, on behalf of one of its portfolios, the Tax-Managed U.S. Marketwide Value Portfolio (“Target Portfolio”).
The reorganization (hereinafter referred to as the “Plan of Reorganization”) will consist of the following: (i)
the acquisition by Acquiring Corporation, on behalf of Acquiring Portfolio, of substantially all of the property, assets, and goodwill of Target Portfolio in exchange solely for full and fractional shares of capital stock, with a par value of one
cent ($0.01) per share, of Acquiring Portfolio (“Acquiring Portfolio Shares”); (ii) the distribution of Acquiring Portfolio Shares to the holders of shares of capital stock of Target Portfolio (“Target Portfolio Shares”) according to their
respective interests in Target Portfolio, in complete liquidation of Target Portfolio; and (iii) the dissolution of Target Portfolio as soon as is practicable after the closing (as defined in Section 3, hereinafter called the “Closing”), all upon
and subject to the terms and conditions of the Plan hereinafter set forth.
AGREEMENT
In order to consummate the Plan of Reorganization and in consideration of the premises and of the covenants and
agreements hereinafter set forth, and intending to be legally bound, the parties hereto covenant and agree as follows:
1. Sale and Transfer of Assets, Liquidation, and
Dissolution of Target Portfolio.
Subject to the terms and conditions of the Plan, and in reliance on the representations and warranties of Acquiring Corporation, on
behalf of Acquiring Portfolio, herein contained, and in consideration of the delivery by Acquiring Corporation of the number of Acquiring Portfolio Shares hereinafter provided, Target Corporation, on behalf of Target Portfolio, agrees that, at the
time of Closing, it will convey, transfer, and deliver to Acquiring Corporation, for the benefit of Acquiring Portfolio, all of Target Portfolio’s then existing assets, free and clear of all liens, encumbrances, and claims whatsoever (other than
shareholders’ rights of redemption), except for cash, bank deposits, or cash equivalent securities in an estimated amount necessary to: (i) pay the costs and expenses of carrying out the Plan (including, but not limited to, fees of counsel and
accountants, and expenses of its liquidation and dissolution contemplated hereunder), in accordance with Section 9 of the Plan, which costs and expenses shall be established on Target Portfolio’s books as liability reserves; (ii) discharge its
unpaid liabilities on
A-1
its books at the closing date (as defined in Section 3, hereinafter called the “Closing Date”), including, but not limited to, its
income dividends and capital gains distributions, if any, payable for the period prior to, and through, the Closing Date; and (iii) pay such contingent liabilities as the Board of Directors of Target Corporation shall reasonably deem to exist
against Target Portfolio, if any, at the Closing Date, for which contingent and other appropriate liability reserves shall be established on Target Portfolio’s books (hereinafter “Net Assets”). Neither Acquiring Corporation nor Acquiring Portfolio
shall assume any liability of Target Portfolio or Target Corporation, and Target Portfolio shall use its reasonable best efforts to discharge all of its known liabilities, so far as may be possible, from the cash, bank deposits, and cash equivalent
securities described above.
Subject to the terms and conditions of the Plan, and in reliance on the representations and warranties of Target
Corporation, on behalf of Target Portfolio, herein contained, and in consideration of such sale, conveyance, transfer, and delivery, Acquiring Corporation agrees at the Closing to deliver to Target Corporation the number of Acquiring Portfolio
Shares, determined by dividing the net asset value per share of Target Portfolio by the net asset value per share of Acquiring Portfolio, and separately multiplying the result thereof by the number of outstanding shares of Target Portfolio as of
3:00 p.m., Central Time, on the Closing Date. Acquiring Portfolio Shares delivered to Target Corporation at the Closing
shall have an aggregate net asset value equal to the value of Target Portfolio’s Net Assets, all determined as provided in Section 2 of the Plan and as of the date and time specified herein.
Immediately following the Closing, Target Corporation shall dissolve Target Portfolio and distribute pro rata to
Target Portfolio’s shareholders of record, as of the close of business on the Closing Date, Acquiring Portfolio Shares received by Target Portfolio pursuant to this Section 1. Such dissolution and distribution shall be accomplished by the
establishment of accounts on the share records of Acquiring Portfolio in the amounts due such shareholders based on their respective holdings as of the close of business on the Closing Date. Fractional Acquiring Portfolio Shares shall be carried
to the third decimal place. As promptly as practicable after the Closing, each holder of any outstanding certificate or certificates representing shares of capital stock of Target Portfolio shall be entitled to surrender the same to the transfer
agent for Acquiring Portfolio in exchange for the number of Acquiring Portfolio Shares into which Target Portfolio Shares theretofore represented by the certificate or certificates so surrendered shall have been converted. Certificates for
Acquiring Portfolio Shares shall not be issued. Until so surrendered, each outstanding certificate, which prior to the Closing represented shares of capital stock of Target Portfolio, shall be deemed for all Acquiring Portfolio purposes to
evidence ownership of the number of Acquiring Portfolio Shares into which Target Portfolio Shares (which prior to the Closing were represented thereby) have been converted.
At the Closing, each shareholder of record of Target Portfolio as of the record date (the “Distribution Record
Date”) with respect to any unpaid dividends and other distributions that were declared prior to the Closing, including any dividend or distribution declared pursuant to
A-2
Section 8(d) hereof, shall have the right to receive such unpaid dividends and distributions with respect to the shares of Target
Portfolio that such person had on the Distribution Record Date.
All books and records relating to Target Portfolio, including all books and records required to be maintained
under the Investment Company Act of 1940, as amended (the “1940 Act”), and the rules and regulations thereunder, shall be available to Acquiring Corporation from and after the date of the Plan, and shall be turned over to Acquiring Corporation on
or prior to the Closing.
2. Valuation.
The net asset value of Acquiring Portfolio Shares and Target Portfolio Shares and the value of Target Portfolio’s
Net Assets to be acquired by Acquiring Portfolio hereunder shall in each case be computed as of 3:00 p.m., Central Time, on the Closing Date, unless on such date: the New York Stock Exchange (“NYSE”) is not open for unrestricted trading; or (b)
the reporting of trading on the NYSE or elsewhere is disrupted; or (c) any other extraordinary financial event or market condition occurs (all such events described in (a), (b), or (c) are each referred to as a “Market Disruption”). The net asset
value per share of Acquiring Portfolio Shares and Target Portfolio Shares and the value of Target Portfolio’s Net Assets shall be computed in accordance with the valuation procedures set forth in the most recent respective prospectuses of Acquiring
Portfolio and Target Portfolio or amendments thereto.
In the event of a Market Disruption on the proposed Closing Date, so that an accurate appraisal of the net asset
value of Acquiring Portfolio Shares or Target Portfolio Shares or the value of Target Portfolio’s Net Assets is impracticable, the Closing Date shall be postponed until the first business day when regular trading on the NYSE shall have been fully
resumed and reporting shall have been restored and other trading markets are otherwise stabilized.
All computations of value regarding the net asset value of the Acquiring Portfolio Shares and the Target
Portfolio Shares and the value of the Target Portfolio’s Net Assets shall be made by the administrator to the Portfolios.
3. Closing and Closing Date.
The Closing Date shall be October 15, 2021, or such later date as the parties may mutually agree. The Closing
shall take place at the principal office of Acquiring Corporation at 3:00 p.m., Central Time, on the Closing Date. Target Corporation, on behalf of Target Portfolio, shall have provided for delivery as of the Closing of those Net Assets of Target
Portfolio to be transferred to the account of Acquiring Portfolio’s custodian, State Street Bank and Trust Company, 0 Xxxxxxx Xxxxxx, Xxxxxx, XX 00000. Also, Target Corporation, on behalf of Target Portfolio, shall deliver at the Closing a list of
names and addresses of the shareholders of record of Target Portfolio Shares and the number of full and fractional shares of capital stock owned by each such shareholder, indicating thereon which such shares are represented by outstanding
certificates and which by book-entry accounts, all as of 3:00 p.m., Central Time, on the Closing Date, certified by its transfer agent or by its President to the best of its or his knowledge and
A-3
belief. Acquiring Corporation, on behalf of Acquiring Portfolio, shall provide evidence satisfactory to Target Corporation that such
Acquiring Portfolio Shares have been registered in an account on the books of Acquiring Portfolio, in such manner as the officers of Target Corporation, on behalf of Target Portfolio, may reasonably request.
4. Representations and
Warranties by Acquiring Corporation on behalf of Acquiring Portfolio.
Acquiring Corporation, on behalf of Acquiring Portfolio, represents and warrants to Target Corporation that:
(a) Acquiring Portfolio is a series of Acquiring Corporation, a Maryland corporation organized on March 19, 1990. Acquiring Corporation is duly
registered under the 1940 Act as an open-end, management investment company and all of Acquiring Portfolio Shares sold were sold pursuant to an effective registration statement filed under the Securities Act of 1933, as amended (the “1933 Act”),
except for those shares sold pursuant to the private offering exemption for the purposes of raising initial capital or obtaining any required initial shareholder approvals.
(b) Acquiring Corporation is authorized to issue shares of capital stock, with a par value of one cent ($0.01) per share of Acquiring Portfolio,
each outstanding share of which is, and each share of which when issued pursuant to and in accordance with the Plan will be, fully paid, non-assessable, and has or will have full voting rights. No shareholder of Acquiring Corporation shall have
any preemptive or other right to subscribe for Acquiring Portfolio Shares.
(c) The financial statements appearing in Acquiring Portfolio’s Annual Report to Shareholders for the fiscal year ended October 31, 2020, audited
by PricewaterhouseCoopers LLP, copies of which have been delivered to Target Corporation, and any interim unaudited financial statements, copies of which may be furnished to Target Corporation, fairly present the financial position of Acquiring
Portfolio as of their respective dates and the results of Acquiring Portfolio’s operations for the periods indicated in conformity with Generally Accepted Accounting Principles applied on a consistent basis.
(d) The books and records of Acquiring Portfolio accurately summarize the accounting data represented and contain no material omissions with
respect to the business and operations of Acquiring Portfolio.
(e) Acquiring Corporation, on behalf of Acquiring Portfolio, is not a party to or obligated under any provision of its Charter or Bylaws, or any
contract or any other commitment or obligation, and is not subject to any order or decree that would be violated by its execution of or performance under the Plan, and no consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by Acquiring Portfolio or Acquiring Corporation of the transactions contemplated by the Plan, except for the
A-4
registration of Acquiring Portfolio Shares under the 1933 Act, the 1940 Act, or as may otherwise be required under the federal and
state securities laws or the rules and regulations thereunder.
(f) Acquiring Corporation has elected to treat Acquiring Portfolio as a regulated investment company (“RIC”) for federal income tax purposes under
Part I of Subchapter M of the Internal Revenue Code of 1986, as amended (the “Code”). Acquiring Portfolio is a “fund,” as defined in Section 851(g)(2) of the Code, has qualified as a RIC for each taxable year since its inception, has no earnings
and profits accumulated in any taxable year to which the provisions of Subchapter M of the Code (or the corresponding provisions of prior law) did not apply, and intends to continue to qualify as a RIC as of the Closing Date, and consummation of
the transactions contemplated by the Plan will not cause it to fail to be qualified as a RIC as of the Closing Date.
(g) Acquiring Portfolio is not under jurisdiction of a Court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
(h) Acquiring Portfolio does not have any unamortized or unpaid organizational fees or expenses.
(i) Acquiring Portfolio does not have any known liabilities, costs, or expenses of a material amount, contingent or otherwise, other than those
incurred in the ordinary course of business as an investment company.
(j) There is no intercorporate indebtedness existing between Target Portfolio and Acquiring Portfolio that was issued, acquired, or will be settled
at a discount.
(k) The registration statement on Form N-14 referred to in Section 7(l) hereof (the “Registration Statement”) and any prospectus or statement of
additional information of Acquiring Portfolio contained or incorporated therein by reference, and any supplement or amendment to the Registration Statement or any such prospectus or statement of additional information, on the effective and
clearance dates of the Registration Statement 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, as amended (the “1934 Act”), the 1940 Act, the rules and
regulations thereunder, and all applicable state securities laws and the rules and regulations thereunder; and (ii) shall not contain 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 the statements were made, not misleading.
(l) Since October 31, 2020, there has not been any material adverse change to the Acquiring Portfolio’s financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business.
(m) It has duly and timely filed, on behalf the Acquiring Portfolio, all Tax (as defined below) returns and reports (including information
returns), which are required to be filed by the Acquiring Portfolio, and all such returns and reports accurately state the amount of Tax
A-5
owed for the periods covered by the returns, or, in the case of information returns, the amount and character of income required to
be reported by the Acquiring Portfolio, as applicable. Acquiring Corporation, on behalf of Acquiring Portfolio, has paid or made provision and properly accounted for all Taxes (as defined below) due or properly shown to be due on such returns and
reports. The amounts set up as provisions for Taxes in the books and records of Acquiring Portfolio, as of the Closing Date, will, to the extent required by generally accepted accounting principles, be sufficient for the payment of all Taxes of any
kind, whether accrued, due, absolute, contingent, or otherwise, which were or which may be payable by Acquiring Portfolio, for any periods or fiscal years prior to and including the Closing Date, including all Taxes imposed before or after the
Closing Date that are attributable to any such period or fiscal year. To its knowledge, no return filed by Acquiring Corporation, on behalf of Acquiring Portfolio, is currently being audited by the Internal Revenue Service (the “Service”) or by any
state or local taxing authority. As used in this Plan, “Tax” or “Taxes” means all federal, state, local and foreign (whether imposed by a country or political subdivision or authority thereunder) income, gross receipts, excise, sales, use, value
added, employment, franchise, profits, property, ad valorem or other taxes, stamp taxes and duties, fees, assessments or charges, whether payable directly or by withholding, together with any interest and any penalties, additions to tax or
additional amounts imposed by any taxing authority (foreign or domestic) with respect thereto. To its knowledge, there are no levies, liens, or encumbrances relating to Taxes existing, threatened, or pending with respect to the assets of Acquiring
Portfolio. There are no known actual or proposed deficiency assessments with respect to any Taxes payable by Acquiring Corporation, on behalf of Acquiring Portfolio.
(n) All information to be furnished by Acquiring Portfolio for use in preparing any registration statement (including the Registration Statement),
information statement, or other documents which may be necessary in connection with the transaction contemplated hereby shall be accurate and complete in all material respects.
(o) No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by Acquiring Corporation,
on behalf of Acquiring Portfolio, of the transactions contemplated by the Plan, except as may otherwise be required under the federal or state securities laws or the rules and regulations thereunder.
5. Representations and
Warranties by Target Corporation on behalf of Target Portfolio.
Target Corporation, on behalf of Target Portfolio, represents and warrants to Acquiring Corporation that:
(a) Target Portfolio is series of Target Corporation, a Maryland corporation organized on June 15, 1981. Target Corporation is duly registered
under the 1940 Act as an open-end, management investment company and all of Target Portfolio Shares sold were sold pursuant to an effective registration statement filed under the 1933 Act, except for those shares sold pursuant to the private
offering exemption for the purpose of raising the required initial capital or obtaining any required initial shareholder approvals.
A-6
(b) Target Corporation is authorized to issue shares of capital stock, with a par value of one cent ($0.01) per share, of Target Portfolio, each
outstanding share of which is fully paid, non-assessable, and has full voting rights. No shareholder of Target Corporation has or will have any option, warrant, or preemptive rights of subscription or purchase with respect to Target Portfolio
Shares.
(c) The financial statements appearing in Target Portfolio’s Annual Report to Shareholders for the fiscal year ended October 31, 2020, audited by
PricewaterhouseCoopers LLP, copies of which have been delivered to Acquiring Corporation, and any interim financial statements for Target Portfolio that may be furnished to Acquiring Corporation, fairly present the financial position of Target
Portfolio as of their respective dates and the results of Target Portfolio’s operations for the periods indicated in conformity with Generally Accepted Accounting Principles applied on a consistent basis.
(d) The books and records of Target Portfolio accurately summarize the accounting data represented and contain no material omissions with respect
to the business and operations of Acquiring Portfolio.
(e) Target Corporation, on behalf of Target Portfolio, is not a party to or obligated under any provision of its Charter or Bylaws, as amended, or
any contract or any other commitment or obligation, and is not subject to any order or decree, that would be violated by its execution of or performance under the Plan. Target Portfolio has no material contracts or other commitments (other than
the Plan or agreements for the purchase of securities entered into in the ordinary course of business and consistent with its obligations under the Plan) which will not be terminated by Target Portfolio in accordance with their terms at or prior
to the Closing Date, or which will result in a penalty or additional fee to be due or payable by Target Portfolio.
(f) Target Corporation has elected to treat Target Portfolio as a RIC for federal income tax purposes under Part I of Subchapter M of the Code.
Target Portfolio is a “fund,” as defined in Section 851(g)(2) of the Code, has qualified as a RIC for each taxable year since its inception, has no earnings and profits accumulated in any taxable year to which the provisions of Subchapter M of
the Code (or the corresponding provisions of prior law) did not apply, and will qualify as a RIC as of the Closing Date, and consummation of the transactions contemplated by the Plan will not cause it to fail to be qualified as a RIC as of the
Closing Date.
(g) Target Portfolio is not under jurisdiction of a Court in a Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
(h) Target Portfolio does not have any unamortized or unpaid organization fees or expenses.
(i) Target Portfolio does not have any known liabilities, costs, or expenses of a material amount, contingent or otherwise, other than those reflected in the financial statements
referred to in Section 5(c) hereof and those incurred in the ordinary course of
A-7
business as an investment company and of a nature and amount similar to, and consistent with, those shown in such financial
statements since the dates of those financial statements.
(j) Since October 31, 2020, there has not
been any material adverse change in Target Portfolio’s financial condition, assets, liabilities, or business other than changes occurring in the ordinary course of its business.
(k) No consent, approval, authorization, or order of any court or governmental authority is required for the consummation by Target Portfolio or
Target Corporation of the transactions contemplated by the Plan, except as may otherwise be required under the federal or state securities laws or the rules and regulations thereunder.
(l) There is no intercorporate indebtedness existing between Target Portfolio and Acquiring Portfolio that was issued, acquired, or will be settled
at a discount.
(m) As of the Closing Date, Target Portfolio will not have outstanding any warrants, options, convertible securities, or any other type of rights
pursuant to which any person could acquire shares of Target Portfolio, except for the right of investors to acquire its shares at the applicable stated offering price in the normal course of its business as an open-end management investment
company operating under the 1940 Act.
(n) It has duly and timely filed, on behalf of Target Portfolio, all Tax (as defined below) returns and reports (including information returns),
which are required to be filed by Target Portfolio, and all such returns and reports accurately state the amount of Tax owed for the periods covered by the returns, or, in the case of information returns, the amount and character of income
required to be reported by Target Portfolio. Target Corporation, on behalf of Target Portfolio, has paid or made provision and properly accounted for all Taxes (as defined below) due or properly shown to be due on such returns and reports. The
amounts set up as provisions for Taxes in the books and records of the Target Portfolio, as of the Closing Date, will, to the extent required by generally accepted accounting principles, be sufficient for the payment of all Taxes of any kind,
whether accrued, due, absolute, contingent, or otherwise, which were or which may be payable by Target Portfolio, for any periods or fiscal years prior to and including the Closing Date, including all Taxes imposed before or after the Closing
Date that are attributable to any such period or fiscal year. To its knowledge, no return filed by Target Corporation, on behalf of Target Portfolio, is currently being audited by the Internal Revenue Service (the “Service”) or by any state or
local taxing authority. As used in this Plan, “Tax” or “Taxes” means all federal, state, local and foreign (whether imposed by a country or political subdivision or authority thereunder) income, gross receipts, excise, sales, use, value added,
employment, franchise, profits, property, ad valorem or other taxes, stamp taxes and duties, fees, assessments or charges, whether payable directly or by withholding, together with any interest and any penalties, additions to tax or additional
amounts imposed by any taxing authority (foreign or domestic) with respect thereto. To its knowledge, there are no levies, liens, or encumbrances relating to Taxes existing, threatened, or pending with respect to the assets of Target Portfolio or
Acquiring Portfolio, as applicable. There are no known actual or
A-8
proposed deficiency assessments with respect to any Taxes payable by Target Corporation, on behalf of Target Portfolio, or Acquiring
Corporation, on behalf of Acquiring Portfolio.
(o) All information to be furnished by Acquiring Portfolio for use in preparing any registration statement (including the Registration Statement),
information statement, or other documents which may be necessary in connection with the transaction contemplated hereby shall be accurate and complete in all material respects.
(p) Target Corporation, on behalf of the Target Portfolio, will declare and pay or cause to be paid a dividend or dividends for Target Portfolio
prior to the Closing Date that, together with all previous dividends, shall have the effect of distributing to its shareholders: (i) all of Target Portfolio’s investment company taxable income for the taxable year ended prior to the Closing
Date, and substantially all of such investment company taxable income for the final taxable year ending with its complete liquidation (in each case determined without regard to any deductions for dividends paid), and (ii) all of Target
Portfolio’s net capital gain recognized in its taxable year ended prior to the Closing Date, and substantially all of any such net capital gain recognized in such final taxable year (in each case after reduction for any capital loss carryover).
6. Representations and
Warranties by Target Corporation and Acquiring Corporation.
Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of Acquiring Portfolio,
each represents and warrants to the other that:
(a) The statement of assets and liabilities to be furnished by it as of 3:00 p.m., Central Time, on the Closing Date for the purpose of determining
the number of Acquiring Portfolio Shares to be issued pursuant to Section 1 of the Plan, will accurately reflect Target Portfolio’s Net Assets and outstanding shares, as of such date, in conformity with generally accepted accounting principles
applied on a consistent basis.
(b) At the Closing, it will have good and marketable title to all of the securities and other assets shown on the statement of assets and
liabilities referred to in (a) above, free and clear of all liens or encumbrances of any nature whatsoever, except such imperfections of title or encumbrances as do not materially detract from the value or use of the assets subject thereto, or
materially affect title thereto.
(c) Except as disclosed in its currently effective prospectus relating to Target Portfolio, in the case of Target Corporation, and Acquiring
Portfolio, in the case of Acquiring Corporation, there is no material suit, judicial action, or legal or administrative proceeding pending or threatened against it. Neither Acquiring Corporation nor Target Corporation is a party to or subject to
the provisions of any order, decree, or judgment of any court or governmental body that materially and adversely affects Acquiring Portfolio’s or Target Portfolio’s business or their ability to consummate the transactions herein contemplated.
A-9
(d) There are no known actual or proposed deficiency assessments with respect to any taxes payable by it.
(e) The execution, delivery, and performance of the Plan have been duly authorized by all necessary action of its Board of Directors, and the Plan
constitutes a valid and binding obligation 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.
(f) It anticipates that consummation of the Plan will not cause either Target Portfolio, in the case of Target Corporation, or Acquiring Portfolio,
in the case of Acquiring Corporation, to fail to conform to the requirements of Subchapter M of the Code for federal income taxation qualification as a RIC at the end their respective fiscal years.
7. Covenants of Target
Corporation and Acquiring Corporation.
(a) Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of Acquiring Portfolio, each covenants to operate its
respective business as presently conducted between the date hereof and the Closing, it being understood that such ordinary course of business will include the distribution of customary dividends and distributions and any other distribution
necessary or desirable to minimize federal income or excise taxes.
(b) Target Corporation, on behalf of Target Portfolio, undertakes that it will not acquire Acquiring Portfolio Shares for the purpose of making
distributions thereof to anyone other than Target Portfolio’s shareholders.
(c) Target Corporation, on behalf of Target Portfolio, undertakes that, if the Plan is consummated, it will liquidate and dissolve Target
Portfolio.
(d) Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of Acquiring Portfolio, each agree that, by the
Closing, all of their federal and other Tax returns and reports required by law to be filed on or before such date shall have been filed, and all federal and other Taxes shown as due on said returns shall have either been paid or adequate
liability reserves shall have been provided for the payment of such taxes, and to the best of their knowledge no such tax return is currently under audit and no tax deficiency or liability has been asserted with respect to such tax returns or
reports by the Service or any state or local tax authority.
(e) Target Corporation, on behalf of the Target Portfolio, shall provide at the Closing a statement of the respective tax basis and holding period
of all investments to be transferred by the Target Portfolio to the Acquiring Portfolio.
(f) Target Corporation, on behalf of the Target Portfolio, shall provide at the Closing, a copy (which may be in electronic form) of the Target
Portfolio’s shareholder ledger accounts including, without limitation, the name, address and taxpayer identification number of each
A-10
shareholder of record, the number of shares of beneficial interest held by each shareholder, the dividend reinvestment elections
applicable to each shareholder, the backup withholding and nonresident alien withholding certifications, notices or records on file with FSS, with respect to each shareholder, and such information as the Acquiring Portfolio may reasonably request
concerning Target Portfolio shares or Target Portfolio shareholders in connection with Target Portfolio’s cost basis reporting and related obligations under Sections 1012, 6045, 6045A, and 6045B of the Code and related regulations issued by the
United States Treasury (“Treasury Regulations”) following the Closing for all of the holders of record of the Target Portfolio’s shares as of the close of business on the day of valuation as described in Section 2, who are to become holders of the
Acquiring Portfolio as a result of the transfer of assets that is the subject of this Plan (the “Target Portfolio Shareholder Documentation”).
(g) Target Corporation, on behalf of the Target Portfolio, shall provide at the Closing, copy of any other Tax books and records of the Target
Portfolio necessary for purposes of preparing any Tax Returns, schedules, forms, statements or related documents (including but not limited to any income, excise or information returns, as well as any transfer statements (as described in Treas.
Reg. § 1.6045A-1)) required by law to be filed by the Target Portfolio after the Closing.
(h) DFAIDG, on behalf of the Target Portfolio, if requested by the Acquiring Portfolio, will provide all FASB ASC 000-00-00 (formerly, FIN 48) work
papers and supporting statements pertaining to the Target Portfolio.
(i) As promptly as practicable, but in any case within sixty days after the date of Closing, the Target Portfolio shall furnish the Acquiring
Portfolio, in such form as is reasonably satisfactory to the Acquiring Portfolio, a statement of the earnings and profits of the Target Portfolio for federal income tax purposes that will be carried over by the Acquiring Portfolio as a result of
Section 381 of the Code.
(j) At the Closing, Target Corporation, on behalf of Target Portfolio, will provide Acquiring Portfolio with a copy of the shareholder ledger
accounts, certified by Target Portfolio’s transfer agent or its President to the best of its or his knowledge and belief, for all the shareholders of record of Target Portfolio Shares as of 3:00 p.m., Central Time, on the Closing Date who are to
become shareholders of Acquiring Portfolio as a result of the transfer of assets that is the subject of the Plan.
(k) As of the Closing, the Board of Target Corporation shall have taken all actions reasonably necessary to obtain approval of the transactions
contemplated herein. Target Corporation shall have mailed to each shareholder of record of Target Portfolio, in sufficient time to comply with requirements as to notice thereof, a combined Information Statement/Prospectus that complies in all
material respects with the applicable provisions of the 1933 Act, Section 14(a) of the 1934 Act and Section 20(a) of the 1940 Act, and the rules and regulations thereunder.
A-11
(l) Acquiring Corporation has filed the Registration Statement with the SEC and used its best efforts to provide that the Registration Statement
became effective as promptly as practicable. At the time it became effective, the Registration Statement: (i) complied in all material respects with the applicable provisions of the 1933 Act and the rules and regulations promulgated thereunder;
and (ii) did not contain any untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. At the time the Registration Statement became effective and
at the Closing Date, the prospectus and statement of additional information included in the Registration Statement did not and will not contain any untrue statement of a material fact, or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.
(m) Subject to the provisions of the Plan, Acquiring Corporation and Target Corporation each shall take, or cause to be taken, all action, and do
or cause to be done, all things reasonably necessary, proper or advisable to consummate the transactions contemplated by the Plan.
(n) Target Corporation and Acquiring Corporation each intends that the Reorganization will qualify as a reorganization within the meaning of
Section 368(a)(1) of the Code. Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of Acquiring Portfolio, shall not take any action or cause any action to be taken (including, without limitation the filing of
any Tax Return) that is inconsistent with such treatment or results in the failure of such Reorganization to qualify as a reorganization within the meaning of Section 368(a)(1) of the Code.
8. Conditions Precedent to
be Fulfilled by Target Corporation and Acquiring Corporation.
The consummation of the Plan hereunder shall be subject to the following respective conditions:
(a) That: (i) all the representations and warranties of the other party contained herein shall be true and correct as of the Closing with the same
effect as though made as of and at such date; (ii) the other party shall have performed all obligations required by the Plan to be performed by it prior to the Closing; and (iii) the other party shall have delivered to such party a certificate
signed by the President and by the Secretary or equivalent officer to the foregoing effect.
(b) That each party shall have delivered to the other party a copy of the resolutions approving the Plan adopted and approved by the appropriate
action of the Board of Directors certified by its Secretary or equivalent officer of each of the Corporations.
(c) That the SEC shall have declared effective the Registration Statement and not have issued an unfavorable management report under Section 25(b)
of the 1940 Act or instituted or threatened to institute any proceeding seeking to enjoin consummation of the Plan under Section 25(c) of the 1940 Act. And further, no other legal, administrative, or other
A-12
proceeding shall have been instituted or threatened that would materially affect the financial condition of either party or would
prohibit the transactions contemplated hereby.
(d) Target Corporation, on behalf of the Target Portfolio, shall have declared and paid or cause to have been paid a dividend or dividends for
Target Portfolio prior to the Closing Date that, together with all previous dividends, shall have the effect of distributing to its shareholders: (i) all of Target Portfolio’s investment company taxable income for the taxable year ended prior to
the Closing Date, and substantially all of such investment company taxable income for the final taxable year ending with its complete liquidation (in each case determined without regard to any deductions for dividends paid), and (ii) all of
Target Portfolio’s net capital gain recognized in its taxable year ended prior to the Closing Date, and substantially all of any such net capital gain recognized in such final taxable year (in each case after reduction for any capital loss
carryover).
(e) That all required consents of other parties and all other consents, orders, and permits of federal, state, and local authorities (including
those of the SEC and of state Blue Sky securities authorities, including any necessary “no-action” positions or exemptive orders from such federal and state authorities) to permit consummation of the transaction contemplated hereby shall have
been obtained, except where failure to obtain any such consent, order, or permit would not involve a risk of material adverse effect on the assets and properties of Target Portfolio or Acquiring Portfolio.
(f) That there shall be delivered to Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of Acquiring
Portfolio, an opinion in form and substance satisfactory to them from the law firm of Xxxxxxxx Ronon Xxxxxxx & Xxxxx, LLP, counsel to Acquiring Corporation and Target Corporation, to the effect that, provided the transaction contemplated
hereby is carried out in accordance with the Plan, the laws of the State of Maryland, and based upon certificates of the officers of Target Corporation and Acquiring Corporation with regard to matters of fact:
| 1) |
The acquisition by the Acquiring Portfolio of substantially all of the Assets of Target Portfolio, as provided for herein, in exchange for the Acquiring Portfolio
Shares followed by the distribution by Target Portfolio to its shareholders of Acquiring Portfolio Shares in complete liquidation of Target Portfolio will qualify as a reorganization within the meaning of Section 368(a)(1) of the Code, and
Target Portfolio and Acquiring Portfolio each will be a “party to the reorganization,” within the meaning of Section 368(b) of the Code;
|
| 2) |
No gain or loss will be recognized by Target Portfolio upon the transfer of substantially all of its assets to the Acquiring Portfolio in exchange solely for
Acquiring Portfolio Shares pursuant to Sections 361(a) and 357(a) of the Code);
|
| 3) |
No gain or loss will be recognized by the Acquiring Portfolio upon the receipt by it of substantially all of the assets of Target Portfolio in exchange solely for
Acquiring Portfolio Shares pursuant to Section 1032(a) of the Code;
|
A-13
| 4) |
No gain or loss will be recognized by Target Portfolio upon the distribution of Acquiring Portfolio Shares to its shareholders in complete liquidation of Target
Portfolio in pursuance of the Plan pursuant to Section 361(c)(1) of the Code;
|
| 5) |
The tax basis of the assets of Target Portfolio received by Acquiring Portfolio will be the same as the tax basis of such assets to Target Portfolio immediately prior
to the Reorganization pursuant to Section 362(b) of the Code;
|
| 6) |
The holding period of the assets of Target Portfolio received by Acquiring Portfolio will include the period during which such assets were held by Target Portfolio
pursuant to Section 1223(2) of the Code;
|
| 7) |
No gain or loss will be recognized by the shareholders of Target Portfolio upon the exchange of Target Portfolio Shares for Acquiring Portfolio Shares (including
fractional shares to which they may be entitled) pursuant to Section 354(a) of the Code;
|
| 8) |
The aggregate tax basis of Acquiring Portfolio Shares to be received by the shareholders of Target Portfolio (including fractional shares to which they may be
entitled) shall be the same as the aggregate tax basis of Target Portfolio Shares exchanged therefor pursuant to Section 358(a)(1) of the Code;
|
| 9) |
The holding period of Acquiring Portfolio Shares to be received by shareholders of Target Portfolio (including fractional shares to which they may be entitled) will
include the holding period of Target Portfolio Shares surrendered in exchange therefor, provided that the shareholder held Target Portfolio Shares as a capital asset on the effective date of the Reorganization pursuant to Section 1223(1) of
the Code; and
|
10) For purposes of Section 381 of the Code, Acquiring Portfolio will succeed to and take into account as of the date of the transfer (as defined
in Section 1.381(b)-1(b) of the regulations issued by the United States Treasury (“Treasury Regulations”)) the items of Target Portfolio described in Section 381(c) of the Code as if there had been no Reorganization, subject to the conditions and
limitations specified in Sections 381, 382, 383 and 384 of the Code, if applicable, and the Treasury Regulations thereunder.
The foregoing opinion may state that no opinion is expressed as to the effect of the Reorganization on the Target Portfolio, the
Acquiring Portfolio, or any Shareholder of the Target Portfolio with respect to any asset as to which any unrealized gain or loss is required to be recognized for federal income tax purposes at the end of a taxable year (or on the termination or
transfer thereof) under a mark-to-market system of accounting.
| (g) |
That there shall be delivered to Acquiring Corporation, on behalf of Acquiring Portfolio, an opinion in form and substance satisfactory to it from Xxxxxxxx Xxxxx
Xxxxxxx &
|
A-14
Young, LLP, counsel to Target Corporation, on behalf of Target Portfolio, to the effect that, subject in all respects to the effects
of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and other laws now or hereafter affecting generally the enforcement of creditors’ rights:
| 1) |
Target Portfolio is a series of Target Corporation and that Target Corporation is a validly existing corporation in good standing under the laws of the State of
Maryland;
|
| 2) |
Target Corporation is an open-end investment company of the management type registered as such under the 1940 Act;
|
| 3) |
The execution and delivery of the Plan and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the
part of Target Corporation on behalf of Target Portfolio; and
|
| 4) |
The Plan is the legal, valid and binding obligation of Target Corporation, on behalf of Target Portfolio, and is enforceable against Target Corporation, on behalf of
Target Portfolio, in accordance with its terms.
|
In giving the opinions set forth above, this counsel may state that it is relying on certificates of the officers
of Target Corporation with regard to matters of fact, and certain certifications and written statements of governmental officials with respect to the good standing of Target Corporation.
(h) That there shall be delivered to Target Corporation, on behalf of Target Portfolio, an opinion in form and substance satisfactory to it from
the law firm of Stradley, Ronon, Xxxxxxx & Xxxxx, LLP, counsel to Acquiring Corporation, on behalf of Acquiring Portfolio, to the effect that, subject in all respects to the effects of bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other laws now or hereafter affecting generally the enforcement of creditors’ rights:
| 1) |
Acquiring Portfolio is a series of Acquiring Corporation and Acquiring Corporation is a validly existing corporation in good standing under the laws of the State of
Maryland;
|
| 2) |
Acquiring Corporation is authorized to issue shares of capital stock, with a par value of one cent ($0.01) per share, of Acquiring Portfolio;
|
| 3) |
Acquiring Corporation is an open-end investment company of the management type registered as such under the 1940 Act;
|
| 4) |
Acquiring Portfolio Shares to be issued pursuant to the terms of the Plan have been duly authorized and, when issued and delivered as provided in the Plan and
|
A-15
the Registration Statement, will have been validly issued and fully paid and will be non-assessable by Acquiring
Corporation, on behalf of Acquiring Portfolio;
| 5) |
The execution and delivery of the Plan and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the
part of Acquiring Corporation, on behalf of Acquiring Portfolio;
|
| 6) |
The Plan is the legal, valid and binding obligation of Acquiring Corporation, on behalf of Acquiring Portfolio, and is enforceable against Acquiring Corporation, on
behalf of Acquiring Portfolio, in accordance with its terms; and
|
In giving the opinions set forth above, this counsel may state that it is relying on certificates of the officers
of Acquiring Corporation with regard to matters of fact, and certain certifications and written statements of governmental officials with respect to the good standing of Acquiring Corporation.
(i) That Acquiring Corporation’s prospectus contained in the Registration Statement with respect to Acquiring Portfolio Shares delivered to Target
Portfolio’s shareholders in accordance with the Plan shall be effective, and no stop order suspending the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued prior to the Closing Date or shall
be in effect at Closing, and no proceedings for the issuance of such an order shall be pending or threatened on that date.
(j) That Acquiring Portfolio Shares to be delivered hereunder shall be eligible for sale with each state commission or agency with which such
eligibility is required in order to permit Acquiring Portfolio Shares lawfully to be delivered to each holder of Target Portfolio Shares.
9. Expenses.
The expenses of entering into and carrying out the provisions of the Plan shall be borne by the Target Portfolio.
10. Final Tax Returns and Forms 1099 of Target Portfolio.
(a) After the Closing, Target Corporation shall or shall cause its agents to prepare any federal, state, or local Tax returns, including any Forms
1099, required to be filed by Target Corporation with respect to Target Portfolio’s final taxable year ending with its complete liquidation and for any prior periods or taxable years and shall further cause such Tax returns and Forms 1099 to be
duly filed with the appropriate taxing authorities.
(b) Notwithstanding the provisions of Section 9 hereof, any expenses incurred by Target Corporation or Target Portfolio (other than for payment of Taxes) in connection with the
preparation and filing of said Tax returns and Forms 1099 after the Closing, shall be borne by
A-16
Target Portfolio to the extent such expenses have been or should have been accrued by Target Portfolio in the ordinary course
without regard to the Plan contemplated by this Agreement; any excess expenses shall be borne by the Acquiring Portfolio, at the time such Tax returns and Forms 1099 are prepared.
11. Cooperation and Exchange of Information.
Each party will provide each other and their respective representatives with such cooperation, assistance and
information as either of them reasonably may request of the other in filing any Tax returns, amended return or claim for refund, determining a liability for Taxes, or in determining the financial reporting of any Tax position, or a right to a
refund of Taxes or participating in or conducting any audit or other proceeding in respect of Taxes. Each party or their respective agents will retain for a period of six (6) years following the Closing all returns, schedules and work papers and
all material records or other documents relating to Tax matters and financial reporting of Tax positions of Target Portfolio and Acquiring Portfolio for its taxable period first ending after the Closing and for all prior taxable periods.
12. Termination;
Postponement; Waiver; Order.
(a) Anything contained in the Plan to the contrary notwithstanding, the Plan may be terminated and the Plan of Reorganization abandoned at any
time, prior to the Closing, or the Closing may be postponed as follows:
| 1) |
by mutual consent of Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of Acquiring Portfolio;
|
| 2) |
by Acquiring Corporation, on behalf of Acquiring Portfolio, if any condition of its obligations set forth in Section 8 has not been fulfilled or waived and it
reasonably appears that such condition or obligation will not or cannot be met; or
|
| 3) |
by Target Corporation, on behalf of Target Portfolio, if any conditions of its obligations set forth in Section 8 has not been fulfilled or waived and it reasonably
appears that such condition or obligation will not or cannot be met.
|
(b) If the transactions contemplated by the Plan have not been consummated by November 30, 2021, the Plan shall automatically terminate on that
date, unless a later date is agreed to by both Acquiring Corporation and Target Corporation.
(c) In the event of termination of the Plan prior to its consummation, pursuant to the provisions hereof, the Plan shall become void and have no
further effect, and neither Target Corporation, Acquiring Corporation, Target Portfolio nor Acquiring Portfolio, nor their directors, officers, or agents or the shareholders of Target Portfolio or Acquiring Portfolio shall have any liability in
respect of the Plan, but all expenses incidental to the preparation and carrying out of the Plan shall be paid as provided in Section 9 hereof.
A-17
(d) At any time prior to the Closing, any of the terms or conditions of the Plan may be waived by the party who is entitled to the benefit thereof
if, in the judgment of such party, such action or waiver will not have a material adverse effect on the benefits intended under the Plan to its shareholders, on behalf of whom such action is taken.
(e) The respective representations and warranties contained in Sections 4 to 6 hereof shall expire with and be terminated by the Plan on the
Closing Date, and neither Target Corporation nor Acquiring Corporation, nor any of their officers, directors, agents or shareholders shall have any liability with respect to such representations or warranties after the Closing Date.
(f) If any order or orders of the SEC with respect to the Plan shall be issued prior to the Closing and shall impose any terms or conditions that
are determined by action of the Board of Directors of Target Corporation, on behalf of Target Portfolio, or the Board of Directors of Acquiring Corporation, on behalf of Acquiring Portfolio, to be acceptable, such terms and conditions shall be
binding as if a part of the Plan.
13. Liability of Acquiring
Corporation and Target Corporation.
(a) Each party acknowledges and agrees that all obligations of Acquiring Corporation under the Plan are binding only with respect to Acquiring Portfolio; that any liability of
Acquiring Corporation under the Plan with respect to Acquiring Portfolio, or in connection with the transactions contemplated herein with respect to Acquiring Portfolio, shall be discharged only out of the assets of Acquiring Portfolio; that no
other series of Acquiring Corporation shall be liable with respect to the Plan or in connection with the transactions contemplated herein; and that neither Target Corporation nor Target Portfolio shall seek satisfaction of any such obligation or
liability from the shareholders of Acquiring Corporation, the directors, officers, employees or agents of Acquiring Corporation, or any of them.
(b) Each party acknowledges and agrees that all obligations of Target Corporation under the Plan are binding only with respect to Target Portfolio;
that any liability of Target Corporation under the Plan with respect to Target Portfolio, or in connection with the transactions contemplated herein with respect to Target Portfolio, shall be discharged only out of the assets of Target Portfolio;
that no other series of Target Corporation shall be liable with respect to the Plan or in connection with the transactions contemplated herein; and that neither Acquiring Corporation nor Acquiring Portfolio shall seek satisfaction of any such
obligation or liability from the shareholders of Target Corporation, the directors, officers, employees or agents of Target Corporation, or any of them.
14. Entire Agreement and
Amendments.
The Plan embodies the entire agreement between the parties and there are no agreements, understandings,
restrictions, or warranties relating to the transactions contemplated by the Plan other than those set forth herein or herein provided for. The Plan
A-18
may be amended only by mutual consent of the parties in writing. Neither the Plan nor any interest herein may be assigned without
the prior written consent of the other party.
15. Counterparts.
The Plan may be executed in any number of counterparts, each of which shall be deemed to be an original, but all
such counterparts together shall constitute but one instrument.
16. Notices.
Any notice, report, or demand required or permitted by any provision of the Plan shall be in writing and shall be
deemed to have been given if delivered or mailed, first class postage prepaid, addressed to U.S. Tax-Managed U.S. Marketwide Value Portfolio II, at Dimensional Investment Group Inc. 0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx, Xxxxxx, Xxxxx 00000, Attention:
Secretary, and U.S. Tax-Managed U.S. Marketwide Value Portfolio, at DFA Investment Dimensions Group Inc., 0000 Xxx Xxxx Xxxx, Xxxxxxxx Xxx, Xxxxxx, Xxxxx, 00000, Attention: Secretary, as the case may be.
17. Governing Law.
The Plan shall be governed by and carried out in accordance with the laws of the State of Maryland.
A-19
IN WITNESS WHEREOF, Target Corporation, on behalf of Target Portfolio, and Acquiring Corporation, on behalf of
Acquiring Portfolio, have each caused the Plan to be executed on its behalf by its duly authorized officers, all as of the date and year first-above written.
on behalf of
TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO II
By:/s/ Xxxxxxx X. O
Name: Xxxxxxx X. O
Title: Vice President and Secretary
DFA INVESTMENT DIMENSIONS GROUP INC.,
on behalf of TAX-MANAGED U.S. MARKETWIDE VALUE PORTFOLIO
By: /s/ Xxxxxxx X. O
Name: Xxxxxxx X. O
Title: Vice President and Secretary
A-20
