EXHIBIT 4
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is made as of
February 15, 2002, between Hartford Series Fund, Inc., a Maryland corporation
("Hartford"), on behalf of each segregated portfolio of assets thereof
("series") listed on Schedule A to this Agreement ("Schedule A") (each, an
"Acquiring Fund"), and Fortis Series Fund, Inc., a Minnesota corporation
("Fortis"), on behalf of each series thereof listed on Schedule A (each, a
"Target Fund"). (Each Acquiring Fund and Target Fund is sometimes referred to
herein individually as a "Fund" and collectively as the "Funds," and Hartford
and Fortis are sometimes referred to herein individually as an "Investment
Company" and collectively as the "Investment Companies.") All agreements,
representations and warranties, actions, and obligations described herein made
or to be taken or undertaken by a Fund are made and shall be taken or undertaken
by Hartford on behalf of each Acquiring Fund and by Fortis on behalf of each
Target Fund.
The Investment Companies wish to effect three separate reorganizations,
each described in section 368(a)(1) of the Internal Revenue Code of 1986, as
amended ("Code"), and intend this Agreement to be, and adopt it as, a "plan of
reorganization" within the meaning of the regulations under section 368 of the
Code ("Regulations"). Each Target Fund has a single class of shares and each
Acquiring Fund has two classes of shares, Class IA shares and Class IB shares.
Each reorganization will involve the transfer of the assets of a Target Fund,
subject to the liabilities of such Target Fund, to the corresponding Acquiring
Fund listed on Schedule A, in exchange solely for Class IA shares of common
stock of such Acquiring Fund ("Acquiring Fund Shares"), followed by the
constructive distribution of those shares pro rata to the holders of shares of
that Target Fund ("Target Fund Shares"), all on the terms and conditions set
forth herein. (All such transactions involving each Target Fund and its
corresponding Acquiring Fund are referred to herein as a "Reorganization.") For
convenience, the balance of this Agreement refers only to a single
Reorganization, one Acquiring Fund, and one Target Fund, but the provisions of
this Agreement shall apply separately to each Reorganization. The consummation
of one Reorganization shall not be contingent on the consummation of any other
Reorganization.
In consideration of the mutual promises contained herein, the parties
agree as follows:
1. PLAN OF REORGANIZATION
1.1. Subject to the requisite approval by Target Fund shareholders and
to the other terms and conditions set forth herein and on the basis of the
representations and warranties contained herein, Target Fund agrees to assign,
sell, convey, transfer, and deliver all of its assets described in paragraph 1.2
("Assets") to Acquiring Fund and Acquiring Fund agrees in exchange therefor (a)
to assume all of the liabilities of Target Fund described in paragraph 1.3
("Liabilities"), and (b) to issue and deliver to Target Fund the number of full
and fractional (rounded to the third decimal place) Acquiring Fund Shares
determined by dividing the value of the Assets of the Target Fund less the
Liabilities of the Target Fund by the net asset value ("NAV") of an Acquiring
Fund Share
(both computed as set forth in paragraph 2.1). Such transactions shall take
place at the Closing (as defined in paragraph 3.1).
1.2. The Assets shall include all cash, cash equivalents, securities,
receivables (including interest and dividends receivable), claims and rights of
action, rights to register shares under applicable securities laws, books and
records, deferred and prepaid expenses shown as assets on Target Fund's books,
and other property owned by Target Fund at the Effective Time (as defined in
paragraph 3.1).
1.3. The Liabilities shall include all liabilities, debts, obligations,
and duties of whatever kind or nature of the Target Fund at the Effective Time,
whether absolute, accrued, contingent, or otherwise, whether or not arising in
the ordinary course of business, and whether or not specifically referred to in
this Agreement, including any obligation to indemnify the directors of Fortis,
acting in their capacities as such, to the fullest extent permitted by law and
the amended and restated articles of incorporation ("Articles of Incorporation")
and bylaws of Fortis (collectively "Liabilities").
1.4. In order to bind all holders of Target Fund shares to the
transactions contemplated hereby, and in particular in order to bind them to the
cancellation and retirement of the outstanding Target Fund shares held by them,
Fortis shall, prior to the Effective Time, (a) obtain approval pursuant to
Minnesota law of an amendment substantially in the form attached hereto as
Schedule B (the "Amendment") to its Articles of Incorporation, and (b) file the
Amendment with the Secretary of State of Minnesota.
1.5. At or immediately before the Effective Time, Target Fund shall
declare and pay to its shareholders a dividend and/or other distribution in an
amount large enough so that it will have distributed all of its investment
company taxable income (as defined in section 852(b)(2) of the Code but computed
without regard to any deduction for dividends paid) and substantially all of its
net capital gain (as defined in section 852(b)(3) of the Code, but computed
without regard to any deduction for capital gain dividends) for the current
taxable year through the Effective Time.
1.6. At the Effective Time (or as soon thereafter as is reasonably
practicable), Target Fund shall distribute the Acquiring Fund Shares it receives
pursuant to paragraph 1.1 to Target Fund's shareholders of record, determined as
of the Effective Time (each, a "Shareholder"), in constructive exchange for
their Target Fund Shares. Such distribution shall be accomplished by Hartford's
transfer agent's opening accounts on Acquiring Fund's share transfer books in
the Shareholders' names and transferring such Acquiring Fund Shares thereto.
Each Shareholder's account shall be credited with the respective pro rata number
of full and fractional (rounded to the third decimal place) Acquiring Fund
Shares due that Shareholder. All outstanding Target Fund Shares, including any
represented by certificates, shall simultaneously be canceled on Target Fund's
share transfer books. Acquiring Fund shall not issue certificates representing
the Acquiring Fund Shares issued in connection with the Reorganization.
1.7. As soon as reasonably practicable after distribution of the
Acquiring Fund Shares pursuant to paragraph 1.6, Fortis shall wind up the
affairs of Target Fund and shall file any required final regulatory reports,
including but not limited to any Form N-SAR and Rule 24f-2 filings with respect
to Target Fund.
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1.8. Any transfer taxes payable on issuance of Acquiring Fund Shares in
a name other than that of the registered holder on Target Fund's books of the
Target Fund Shares constructively exchanged therefor shall be paid by the person
to whom such Acquiring Fund Shares are to be issued, as a condition of such
transfer.
2. VALUATION
2.1. For purposes of paragraph 1.1(b), the value of the Assets and the
Liabilities and the NAV of an Acquiring Fund Share shall be computed as of the
close of business on the date of the Closing ("Valuation Time"). The NAV of an
Acquiring Fund Share shall be computed using the valuation procedures set forth
in the Acquiring Fund's then current prospectus and statement of additional
information ("SAI"). The value of the Assets and Liabilities shall be computed
using the valuation procedures set forth in the Target Fund's then current
prospectus and SAI, subject to adjustment by the amount, if any, agreed to by
Hartford and Fortis. Hartford and Fortis agree to use all commercially
reasonable efforts to resolve any material differences between the value of the
Assets and Liabilities determined in accordance with the valuation procedures of
the Target Fund and the value of the Assets and Liabilities determined in
accordance with the valuation procedures of the Acquiring Fund prior to the
Valuation Time.
2.2. All computations pursuant to paragraph 2.1 shall be made by or
under the direction of Hartford Administrative Services Company.
3. CLOSING AND EFFECTIVE TIME
3.1. The Reorganization, together with related acts necessary to
consummate the same ("Closing"), shall occur at the offices of Xxxxxx & Xxxxxxx
LLP, 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, on or about April 30,
2002, or at such other place and/or on such other date as to which the
Investment Companies may agree. All acts taking place at the Closing shall be
deemed to take place simultaneously as of the close of business on the date
thereof or at such other time as to which the Investment Companies may agree
("Effective Time"). If, immediately before the Valuation Time, (a) the New York
Stock Exchange is closed to trading or trading thereon is restricted or (b)
trading or the reporting of trading on that exchange or elsewhere is disrupted,
so that accurate appraisal of the value of the Assets and Liabilities and the
NAV of an Acquiring Fund Share is impracticable, the Effective Time shall be
postponed until the first business day after the day when such trading has fully
resumed and such reporting has been restored.
3.2. Fortis shall deliver to Hartford at the Closing a schedule of the
Assets and Liabilities as of the Effective Time, which shall set forth for all
portfolio securities included therein and all other Assets, their adjusted basis
and holding period, by lot, for federal income tax purposes. Fortis' custodian
shall deliver at the Closing a certificate of an authorized officer stating that
(a) the Assets held by the custodian will be transferred to Acquiring Fund at
the Effective Time and (b) all necessary taxes in conjunction with the delivery
of the Assets, including all applicable federal and state stock transfer stamps,
if any, have been paid or provision for payment has been made.
3.3. Fortis' transfer agent shall deliver to Hartford at the Closing a
statement of an authorized officer thereof certifying that its records contain
the names and addresses of the Shareholders and the number and percentage
ownership of outstanding Target Fund Shares owned
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by each Shareholder, all as of the Effective Time. Hartford's transfer agent
shall deliver at the Closing a certificate as to the opening on Acquiring Fund's
share transfer books of accounts in the Shareholders' names. Hartford shall
issue and deliver a confirmation to Fortis evidencing the Acquiring Fund Shares
to be credited to Target Fund at the Effective Time or provide evidence
satisfactory to Fortis that such Acquiring Fund Shares have been credited to
Target Fund's account on Acquiring Fund's books. At the Closing, each Investment
Company shall deliver to the other bills of sale, checks, assignments, stock
certificates, receipts, or other documents the other Investment Company or its
counsel reasonably requests.
3.4. Each Investment Company shall deliver to the other at the Closing
a certificate executed in its name by its President or a Vice President in form
and substance satisfactory to the recipient and dated the Effective Time, to the
effect that the representations and warranties it made in this Agreement are
true and correct at the Effective Time except as they may be affected by the
transactions contemplated by this Agreement.
4. REPRESENTATIONS AND WARRANTIES
4.1. Fortis represents and warrants as follows:
4.1.1. Fortis is a corporation that is duly organized, validly
existing, and in good standing under the laws of the State of
Minnesota; and its Articles of Incorporation are on file with the
Secretary of the State of Minnesota;
4.1.2. Fortis is duly registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
("1940 Act"), and such registration is in full force and effect;
4.1.3. Target Fund is a duly established and designated series
of Fortis; and all Target Fund Shares outstanding at the Effective Time
will have been duly authorized and duly and validly issued and
outstanding shares of Target Fund, fully paid and non-assessable;
4.1.4. At the Closing, Target Fund will have good and
marketable title to the Assets and full right, power, and authority to
sell, assign, transfer, and deliver the Assets free of any liens or
other encumbrances; and on delivery and payment for the Assets,
Acquiring Fund will acquire good and marketable title thereto;
4.1.5. Target Fund's current prospectus and SAI conform in all
material respects to the applicable requirements of the Securities Act
of 1933, as amended ("1933 Act"), and the 1940 Act and the rules and
regulations 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 misleading;
4.1.6. Target Fund is not in violation of, and the execution
and delivery of this Agreement and consummation of the transactions
contemplated hereby will not conflict with or violate, applicable law
or any provision of Fortis' Articles of Incorporation or By-
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Laws or of any agreement, instrument, lease, or other undertaking to
which Target Fund is a party or by which it is bound or result in the
acceleration of any obligation, or the imposition of any penalty, under
any agreement, judgment, or decree to which Target Fund is a party or
by which it is bound, except as previously disclosed in writing to and
accepted by Hartford;
4.1.7. Except as otherwise disclosed in writing to and
accepted by Hartford, all material contracts and other commitments of
or applicable to Target Fund (other than this Agreement and investment
contracts, including options, futures, and forward contracts) will be
terminated, or provision for discharge of any liabilities of Target
Fund thereunder will be made, at or prior to the Effective Time,
without either Fund's incurring any liability or penalty with respect
thereto and without diminishing or releasing any rights Target Fund may
have had with respect to actions taken or omitted or to be taken by any
other party thereto prior to the Closing;
4.1.8. Except as otherwise disclosed in writing to and
accepted by Hartford, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Fortis' knowledge) threatened against Fortis or any of
its properties or assets that, if adversely determined, would
materially and adversely affect Target Fund's financial condition or
the conduct of its business; and Fortis knows of no facts that might
form the basis for the institution of any such litigation, proceeding,
or investigation and is not a party to or subject to the provisions of
any order, decree, or judgment of any court or governmental body that
materially or adversely affects its business or its ability to
consummate the transactions contemplated hereby;
4.1.9. The execution, delivery, and performance of this
Agreement have been duly authorized and the Amendment shall have been
duly approved as of the date hereof by all necessary action on the part
of Fortis' board of directors; and, subject to approval by Target
Fund's shareholders, this Agreement constitutes a valid and legally
binding obligation of Target Fund, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium, and similar laws
relating to or affecting creditors' rights and by general principles of
equity;
4.1.10. At the Effective Time, the performance of this
Agreement shall have been duly authorized and the Amendment shall have
been duly approved by all necessary action by Target Fund's
shareholders;
4.1.11. No governmental consents, approvals, authorizations,
or filings are required under the 1933 Act, the Securities Exchange Act
of 1934, as amended ("1934 Act"), the 1940 Act, or applicable state
securities laws for the execution or performance of this Agreement by
Fortis, except for (a) the filing with the Securities and Exchange
Commission ("SEC") of a registration statement by Hartford on Form N-14
relating to the Acquiring Fund Shares issuable hereunder, and any
supplement or amendment thereto ("Registration Statement"), including
therein a prospectus/proxy statement ("Proxy Statement"), and (b) such
consents, approvals, authorizations, and filings as have been made or
received or as may be required subsequent to the Effective Time;
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4.1.12. On the effective date of the Registration Statement,
at the time of the shareholders' meeting referred to in paragraph 5.2,
and at the Effective Time, the Proxy Statement will (a) comply in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, and the 1940 Act and the rules and regulations thereunder and
(b) 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, in light of the circumstances under which
such statements were made, not misleading; provided that the foregoing
shall not apply to statements in or omissions from the Proxy Statement
made in reliance on and in conformity with information furnished by
Hartford for use therein;
4.1.13. There are no Liabilities other than Liabilities
disclosed or provided for in Fortis' financial statements referred to
in paragraph 4.1.16 and Liabilities incurred by Target Fund in the
ordinary course of its business subsequent to December 31, 2001, or
otherwise previously disclosed to Hartford, none of which has been
materially adverse to the business, assets, or results of Target Fund's
operations;
4.1.14. Target Fund is a "fund" as defined in section
851(g)(2) of the Code; it qualified for treatment as a regulated
investment company under Subchapter M of the Code ("RIC") for each past
taxable year since it commenced operations and will continue to meet
all the requirements for such qualification for its current taxable
year; the Assets will be invested at all times through the Effective
Time in a manner that ensures compliance with the foregoing; and Target
Fund has no earnings and profits accumulated in any taxable year in
which the provisions of Subchapter M did not apply to it;
4.1.15. Target Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years through
and including the taxable year ended December 31, 2000 have been timely
filed and all taxes payable pursuant to such returns have been timely
paid; and
4.1.16. Fortis' financial statements for the year ended
December 31, 2001 to be delivered to Hartford, fairly represent Target
Fund's financial position as of such date and the results of its
operations and changes in its net assets for the period then ended.
4.2. Hartford represents and warrants as follows:
4.2.1. Hartford is a corporation that is duly organized,
validly existing, and in good standing under the laws of the State of
Maryland; and its articles of incorporation ("Articles of
Incorporation") are on file with the Secretary of the State of
Maryland;
4.2.2. Hartford is duly registered as an open-end management
investment company under the 1940 Act, and such registration will be in
full force and effect at the Effective Time;
4.2.3. Acquiring Fund is a duly established and designated
series of Hartford;
4.2.4. No consideration other than Acquiring Fund Shares will
be issued in exchange for the Assets in the Reorganization;
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4.2.5. The Acquiring Fund Shares to be issued and delivered to
Target Fund hereunder will, at the Effective Time, have been duly
authorized and, when issued and delivered as provided herein, will be
duly and validly issued and outstanding shares of Acquiring Fund, fully
paid and non-assessable;
4.2.6. Acquiring Fund's current prospectus and SAI conform in
all material respects to the applicable requirements of the 1933 Act
and the 1940 Act and the rules and regulations 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 misleading;
4.2.7. Acquiring Fund is not in violation of, and the
execution and delivery of this Agreement and consummation of the
transactions contemplated hereby will not conflict with or violate,
applicable law or any provision of Hartford's Articles of Incorporation
or By-Laws or of any provision of any agreement, instrument, lease, or
other undertaking to which Acquiring Fund is a party or by which it is
bound or result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Acquiring Fund is a party or by which it is bound, except as
previously disclosed in writing to and accepted by Fortis;
4.2.8. Except as otherwise disclosed in writing to and
accepted by Fortis, no litigation, administrative proceeding, or
investigation of or before any court or governmental body is presently
pending or (to Hartford's knowledge) threatened against Hartford or any
of its properties or assets that, if adversely determined, would
materially and adversely affect Acquiring Fund's financial condition or
the conduct of its business; and Hartford knows of no facts that might
form the basis for the institution of any such litigation, proceeding,
or investigation and is not a party to or subject to the provisions of
any order, decree, or judgment of any court or governmental body that
materially or adversely affects its business or its ability to
consummate the transactions contemplated hereby;
4.2.9. The execution, delivery, and performance of this
Agreement have been duly authorized as of the date hereof by all
necessary action on the part of Hartford's board of directors (together
with Fortis' board of directors, the "Boards"); no approval of this
Agreement by Acquiring Fund's shareholders is required under Hartford's
Articles of Incorporation or By-Laws, or applicable law; and this
Agreement constitutes a valid and legally binding obligation of
Acquiring Fund, enforceable in accordance with its terms, except as the
same may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;
4.2.10. No governmental consents, approvals, authorizations,
or filings are required under the 1933 Act, the 1934 Act, the 1940 Act,
or applicable state securities laws for the execution or performance of
this Agreement by Hartford, except for (a) the filing with the SEC of
the Registration Statement and (b) such consents, approvals,
authorizations, and filings as have been made or received or as may be
required subsequent to the Effective Time;
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4.2.11. On the effective date of the Registration Statement,
at the time of the shareholders' meeting referred to in paragraph 5.2,
and at the Effective Time, the Proxy Statement will (a) comply in all
material respects with the applicable provisions of the 1933 Act, the
1934 Act, and the 1940 Act and the rules and regulations thereunder and
(b) 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, in light of the circumstances under which
such statements were made, not misleading; provided that the foregoing
shall not apply to statements in or omissions from the Proxy Statement
made in reliance on and in conformity with information furnished by
Fortis for use therein;
4.2.12. Acquiring Fund is a "fund" as defined in section
851(g)(2) of the Code; it qualified for treatment as a RIC for each
past taxable year since it commenced operations and will continue to
meet all the requirements for such qualification for its current
taxable year; Acquiring Fund intends to continue to meet all such
requirements for the next taxable year; and it has no earnings and
profits accumulated in any taxable year in which the provisions of
Subchapter M of the Code did not apply to it;
4.2.13. Acquiring Fund's federal income tax returns, and all
applicable state and local tax returns, for all taxable years through
and including the taxable year ended December 31, 2000 have been timely
filed and all taxes payable pursuant to such returns have been timely
paid; and
4.2.14. Hartford's financial statements for the year ended
December 31, 2001 to be delivered to Fortis, fairly represent Acquiring
Fund's financial position as of that date and the results of its
operations and changes in its net assets for the year then ended.
4.3. Each Investment Company represents and warrants as follows:
4.3.1. The fair market value of the Acquiring Fund Shares
received by each Shareholder will be approximately equal to the fair
market value of its Target Fund Shares constructively surrendered in
exchange therefor;
4.3.2. The Shareholders will pay their own expenses, if any,
incurred in connection with the Reorganization;
4.3.3. There is no intercompany indebtedness between the Funds
that was issued or acquired, or will be settled, at a discount.
5. COVENANTS
5.1. Each Fund covenants to operate its respective business in the
ordinary course between the date hereof and the Closing, it being understood
that such ordinary course will include declaring and paying customary dividends
and other distributions (including the dividend and/or other distribution
referred to in paragraph 1.4) and changes in operations contemplated by each
Fund's normal business activities.
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5.2. Target Fund covenants to call a shareholders' meeting to consider
and act on this Agreement and the Amendment and to take all other action
necessary to obtain approval of the transactions contemplated hereby.
5.3. Target Fund covenants that the Acquiring Fund Shares to be
delivered hereunder are not being acquired for the purpose of making any
distribution thereof, other than in accordance with the terms hereof.
5.4. Target Fund covenants that it will assist Hartford in obtaining
information Hartford reasonably requests concerning the beneficial ownership of
Target Fund Shares.
5.5. Target Fund covenants that its books and records (including all
books and records required to be maintained under the 1940 Act and the rules and
regulations thereunder) will be turned over to Hartford at the Closing.
5.6. Each Fund covenants to cooperate in preparing the Proxy Statement
in compliance with applicable federal and state securities laws.
5.7. Each Fund covenants that it will, from time to time, as and when
requested by the other Fund, execute and deliver or cause to be executed and
delivered all such assignments and other instruments, and will take or cause to
be taken such further action, as the other Fund may deem necessary or desirable
in order to vest in, and confirm to, (a) Acquiring Fund, title to and possession
of all the Assets, and (b) Target Fund, title to and possession of the Acquiring
Fund Shares to be delivered hereunder, and otherwise to carry out the intent and
purpose hereof.
5.8. Acquiring Fund covenants to use all reasonable efforts to obtain
the approvals and authorizations required by the 1933 Act, the 1940 Act, and
state securities laws it deems appropriate to continue its operations after the
Effective Time.
5.9. Subject to this Agreement, each Fund covenants to take or cause to
be taken all actions, and to do or cause to be done all things, reasonably
necessary, proper, or advisable to consummate and effectuate the transactions
contemplated hereby.
6. CONDITIONS PRECEDENT
Each Fund's obligations hereunder shall be subject to (a) performance
by the corresponding Fund of all its obligations to be performed hereunder at or
before the Effective Time, (b) all representations and warranties of the
corresponding Fund contained herein being true and correct in all material
respects as of the date hereof and, except as they may be affected by the
transactions contemplated hereby, as of the Effective Time, with the same force
and effect as if made at and as of the Effective Time, and (c) the following
further conditions that, at or before the Effective Time:
6.1. This Agreement and the transactions contemplated hereby shall have
been duly adopted and approved by each Board and shall have been approved by
Target Fund's shareholders in accordance with Fortis' Articles of Incorporation
and By-Laws and applicable law.
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6.2. The Amendment shall have been duly approved by Fortis' board of
directors and shall have been approved by Target Fund's shareholders in
accordance with Fortis' Articles of Incorporation and By-Laws and applicable
law, and the Amendment shall have been duly filed with the Minnesota Secretary
of State.
6.3. All necessary filings shall have been made with the SEC and state
securities authorities, and no order or directive shall have been received that
any other or further action is required to permit the parties to carry out the
transactions contemplated hereby. The Registration Statement shall have become
effective under the 1933 Act, no stop orders suspending the effectiveness
thereof shall have been issued, and the SEC shall not have issued an unfavorable
report with respect to the Reorganization under section 25(b) of the 1940 Act
nor instituted any proceedings seeking to enjoin consummation of the
transactions contemplated hereby under section 25(c) of the 1940 Act. All
consents, orders, and permits of federal, state, and local regulatory
authorities (including the SEC and state securities authorities) deemed
necessary by either Investment Company to permit consummation, in all material
respects, of the transactions contemplated hereby shall have been obtained,
except where failure to obtain same would not involve a risk of a material
adverse effect on either Fund's assets or properties, provided that either
Investment Company may for itself waive any of such conditions.
6.4. At the Effective Time, 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 to obtain damages or other relief in connection with,
the transactions contemplated hereby.
6.5. Fortis shall have received an opinion of counsel to Hartford
substantially to the effect that:
6.5.1. Acquiring Fund is a duly established series of
Hartford, a corporation duly organized, validly existing, and in good
standing under the laws of the State of Maryland with power under its
Articles of Incorporation to own all its properties and assets and, to
the knowledge of such counsel, to carry on its business as presently
conducted;
6.5.2. This Agreement has been duly authorized, executed, and
delivered by Hartford on behalf of Acquiring Fund; no approval of this
Agreement by Acquiring Fund's shareholders is required under Hartford's
Articles or Incorporation or By-Laws, or applicable law; and assuming
due authorization, execution, and delivery of this Agreement by Fortis
on behalf of Target Fund, this Agreement is a valid and legally binding
obligation of Hartford with respect to Acquiring Fund, enforceable in
accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and similar laws relating to or affecting creditors' rights
and by general principles of equity;
6.5.3. The Acquiring Fund Shares to be issued and distributed
to the Shareholders under this Agreement, assuming their due delivery
as contemplated by this Agreement, will be duly authorized, validly
issued and outstanding, and fully paid and non-assessable;
6.5.4. The execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated hereby will not,
violate Hartford's Articles of Incorporation
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or By-Laws or any provision of any agreement (known to such counsel,
without any independent inquiry or investigation) to which Hartford
(with respect to Acquiring Fund) is a party or by which it is bound or
(to the knowledge of such counsel, without any independent inquiry or
investigation) result in the acceleration of any obligation, or the
imposition of any penalty, under any agreement, judgment, or decree to
which Hartford (with respect to Acquiring Fund) is a party or by which
it is bound, except as set forth in such opinion or as previously
disclosed in writing to and accepted by Fortis;
6.5.5. No consent, approval, authorization, or order of any
court or governmental authority is required for the consummation by
Hartford (on behalf of Acquiring Fund) of the transactions contemplated
herein, except those obtained under the 1933 Act, the 1934 Act, and the
1940 Act and those that may be required under state securities laws;
6.5.6. Hartford is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued
or proceeding instituted to suspend such registration; and
6.5.7. To the knowledge of such counsel (without any
independent inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of or before any court or
governmental body is pending or threatened as to Hartford (with respect
to Acquiring Fund) or any of its properties or assets attributable or
allocable to Acquiring Fund and (b) Hartford (with respect to Acquiring
Fund) is not 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 Fund's business, except as set forth in
such opinion or as otherwise disclosed in writing to and accepted by
Fortis.
In rendering such opinion, such counsel may (1) rely, as to matters governed by
the laws of the State of Maryland, on an opinion of competent Maryland counsel,
(2) make assumptions regarding the authenticity, genuineness, and/or conformity
of documents and copies thereof without independent verification thereof, (3)
limit such opinion to applicable federal and state law, and (4) define the word
"knowledge" and related terms to mean the knowledge of attorneys then with such
counsel who have devoted substantive attention to matters directly related to
this Agreement and the Reorganization.
6.6. Hartford shall have received an opinion of Xxxxxx & Xxxxxxx LLP,
counsel to Fortis, substantially to the effect that:
6.6.1. Target Fund is a duly established series of Fortis, a
corporation duly organized, validly existing, and in good standing
under the laws of the State of Minnesota with power under its Articles
of Incorporation to own all its properties and assets and, to the
knowledge of such counsel, to carry on its business as presently
conducted.;
6.6.2. This Agreement (a) has been duly authorized, executed,
and delivered by Fortis on behalf of Target Fund and (b) assuming due
authorization, execution, and delivery of this Agreement by Hartford on
behalf of Acquiring Fund, is a valid and legally binding obligation of
Fortis with respect to Target Fund, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
fraudulent transfer,
11
reorganization, moratorium, and similar laws relating to or affecting
creditors' rights and by general principles of equity;
6.6.3. The execution and delivery of this Agreement did not,
and the consummation of the transactions contemplated hereby will not,
violate Fortis' Articles of Incorporation or By-Laws or any provision
of any agreement (known to such counsel, without any independent
inquiry or investigation) to which Fortis (with respect to Target Fund)
is a party or by which it is bound or (to the knowledge of such
counsel, without any independent inquiry or investigation) result in
the acceleration of any obligation, or the imposition of any penalty,
under any agreement, judgment, or decree to which Fortis (with respect
to Target Fund) is a party or by which it is bound, except as set forth
in such opinion or as previously disclosed in writing to and accepted
by Hartford;
6.6.4. No consent, approval, authorization, or order of any
court or governmental authority is required for the consummation by
Fortis (on behalf of Target Fund) of the transactions contemplated
herein, except those obtained under the 1933 Act, the 1934 Act, and the
1940 Act and those that may be required under state securities laws;
6.6.5. Fortis is registered with the SEC as an investment
company, and to the knowledge of such counsel no order has been issued
or proceeding instituted to suspend such registration; and
6.6.6. To the knowledge of such counsel (without any
independent inquiry or investigation), (a) no litigation,
administrative proceeding, or investigation of or before any court or
governmental body is pending or threatened as to Fortis (with respect
to Target Fund) or any of its properties or assets attributable or
allocable to Target Fund and (b) Fortis (with respect to Target Fund)
is not 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 Target Fund's business, except as set forth in such
opinion or as otherwise disclosed in writing to and accepted by
Hartford.
In rendering such opinion, such counsel may (1) make assumptions regarding the
authenticity, genuineness, and/or conformity of documents and copies thereof
without independent verification thereof, (2) limit such opinion to applicable
federal and state law, and (3) define the word "knowledge" and related terms to
mean the knowledge of attorneys then with such counsel who have devoted
substantive attention to matters directly related to this Agreement and the
Reorganization.
6.7. Each Investment Company shall have received an opinion of Xxxxxx &
Whitney LLP, addressed to and in form and substance reasonably satisfactory to
it, as to the federal income tax consequences mentioned below ("Tax Opinion").
In rendering the Tax Opinion, such counsel may rely as to factual matters,
exclusively and without independent verification, on the representations and
warranties made in this Agreement, which such counsel may treat as
representations and warranties made to it, and in separate letters addressed to
such counsel and the certificates delivered pursuant to paragraph 3.4. The Tax
Opinion shall be substantially to the effect that, based on the facts and
assumptions stated therein and conditioned on consummation of the Reorganization
in accordance with this Agreement, for federal income tax purposes:
12
6.7.1. Acquiring Fund's acquisition of the Assets in exchange
solely for Acquiring Fund Shares, followed by Target Fund's
distribution of those shares pro rata to the Shareholders in exchange
for their Target Fund Shares, will qualify as a reorganization within
the meaning of section 368(a)(1) of the Code, and each Fund will be "a
party to a reorganization" within the meaning of section 368(b) of the
Code;
6.7.2. Target Fund will recognize no gain or loss on the
transfer of the Assets to Acquiring Fund in exchange solely for
Acquiring Fund Shares or on the subsequent distribution of those shares
to the Shareholders in exchange for their Target Fund Shares;
6.7.3. Acquiring Fund will recognize no gain or loss on its
receipt of the Assets in exchange solely for Acquiring Fund Shares and
the assumption by Acquiring Fund of the liabilities of Target Fund;
6.7.4. Acquiring Fund's basis in the Assets will be the same
as Target Fund's basis therein immediately before the Reorganization,
and Acquiring Fund's holding period for the Assets will include Target
Fund's holding period therefor;
6.7.5. A Shareholder will recognize no gain or loss on the
exchange of all its Target Fund Shares solely for Acquiring Fund Shares
pursuant to the Reorganization. Shareholders subject to taxation will
recognize income upon receipt of any net investment income or net
capital gains of Target Fund which are distributed by Target Fund prior
to the Closing;
6.7.6. A Shareholder's aggregate basis in the Acquiring Fund
Shares to be received by it in the Reorganization will be the same as
the aggregate basis in its Target Fund Shares to be constructively
surrendered in exchange for those Acquiring Fund Shares, and its
holding period for those Acquiring Fund Shares will include its holding
period for those Target Fund Shares, provided the Shareholder held them
as capital assets at the Effective Time; and
6.7.7. Acquiring Fund will succeed to and take into account
the items of Target Fund described in Section 381(c) of the Code.
Acquiring Fund will take these items into account subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384
of the Code and the Regulations thereunder.
Notwithstanding subparagraphs 6.7.2 and 6.7.4, the Tax Opinion may state that no
opinion is expressed as to the effect of the Reorganization on the Funds or any
Shareholder 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 xxxx-to-market
system of accounting.
At any time before the Closing, either Investment Company may waive any of the
foregoing conditions (except those set forth in paragraphs 6.1 and 6.2) if, in
the judgment of its Board, such waiver will not have a material adverse effect
on its Fund's shareholders' interests.
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7. BROKERAGE FEES
Each Investment Company represents and warrants to the other that there
are no brokers or finders entitled to receive any payments in connection with
the transactions provided for herein.
8. EXPENSES; INDEMNIFICATION
8.1 The parties hereto understand and agree that the cost of
the transactions contemplated by this Agreement are being borne by Hartford Life
and Accident Insurance Company and/or its affiliates, to the extent not borne by
the Acquiring Funds.
8.2 Hartford and Acquiring Fund agree to indemnify and hold
harmless Fortis, Target Fund and each of Fortis' directors and officers from and
against any and all losses, claims, damages, liabilities or expenses (including,
without limitation, the payment of reasonable legal fees and reasonable costs of
investigation) to which, jointly or severally, Fortis, Target Fund or any of
Fortis' directors or officers may become subject, insofar as any such loss,
claim, damage, liability or expense (or actions with respect thereto) arises out
of or is based on any breach by Hartford or Acquiring Fund of any of their
representations, warranties, covenants or agreements set forth in this
Agreement.
8.3 Fortis and Target Fund agree to indemnify and hold
harmless Hartford, Acquiring Fund and each of Hartford's directors and officers
from and against any and all losses, claims, damages, liabilities or expenses
(including, without limitation, the payment of reasonable legal fees and
reasonable costs of investigation) to which, jointly or severally, Hartford,
Acquiring Fund or any of Hartford's directors or officers may become subject,
insofar as any such loss, claim, damage, liability or expense (or actions with
respect thereto) arises out of or is based on any breach by the Fortis or Target
Fund of any of its representations, warranties, covenants or agreements set
forth in this Agreement.
9. ENTIRE AGREEMENT; NO SURVIVAL
Neither party has made any representation, warranty, or covenant not
set forth herein, and this Agreement constitutes the entire agreement between
the parties. The representations, warranties, and covenants contained herein or
in any document delivered pursuant hereto or in connection herewith shall not
survive the Closing.
10. TERMINATION OF AGREEMENT
This Agreement may be terminated at any time at or prior to the
Effective Time, whether before or after approval by Target Fund's shareholders:
10.1. By either Fund (a) in the event of the other Fund's material
breach of any representation, warranty, or covenant contained herein to be
performed at or prior to the Effective Time, (b) if a condition to its
obligations has not been met and it reasonably appears that such
14
condition will not or cannot be met, or (c) if the Closing has not occurred on
or before December 31, 2002; or
10.2. By the parties' mutual agreement.
In the event of termination under paragraphs 10.1(c) or 10.2, there shall be no
liability for damages on the part of either Fund to the other Fund.
11. AMENDMENT
This Agreement may be amended, modified, or supplemented at any time,
notwithstanding approval thereof by Target Fund's shareholders, in any manner
mutually agreed on in writing by the parties; provided that following such
approval no such amendment may have the effect of changing the provisions for
determining the number of Acquiring Fund shares to be issued to Target Fund
shareholders under this Agreement to the detriment of such shareholders without
their further approval.
12. MISCELLANEOUS
12.1. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Minnesota; provided that, in the case of
any conflict between such laws and the federal securities laws, the latter shall
govern.
12.2. Nothing expressed or implied herein is intended or shall be
construed to confer upon or give any person, firm, trust, or corporation other
than the parties and their respective successors and assigns any rights or
remedies under or by reason of this Agreement.
12.3. This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same agreement, and shall become
effective when one or more counterparts have been executed by each Investment
Company and delivered to the other party hereto. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
and delivered by its duly authorized officers as of the day and year first
written above.
HARTFORD SERIES FUND, INC.
on behalf of its series,
Hartford Global Leaders HLS Fund
Hartford Growth and Income HLS Fund
Hartford High Yield HLS Fund
By: /s/ Xxxxx X. Xxxxxxxxxxxx
------------------------------
Its: President
15
FORTIS SERIES FUND, INC.
on behalf of its series,
Global Growth Series
Growth & Income Series
High Yield Series
By: /s/ Xxxxx X. Xxxxxxxxxxxx
------------------------------
Its: President
16
SCHEDULE A
CORRESPONDING ACQUIRING
TARGET FUND FUND
----------- ----
Fortis Global Growth Series Hartford Global Leaders HLS Fun
Fortis Growth & Income Series Hartford Growth and Income HLS Fund
Fortis High Yield Series Hartford High Yield HLS Fund
17
SCHEDULE B
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
FORTIS SERIES FUND, INC.
The undersigned officer of Fortis Series Fund, Inc. (the
"Corporation"), a Minnesota corporation which is subject to the provisions of
Minnesota Statutes, Chapter 302A, hereby certifies that the following amendment
to the Corporation's amended and restated articles of incorporation has been
adopted by the Board of Directors and by the requisite vote of shareholders of
the Corporation pursuant to said Chapter 302A:
WHEREAS, the Corporation is registered as an open end management
investment company (i.e., a mutual fund) under the Investment Company
Act of 1940 and offers its shares to the public in several series, each
of which represents a separate and distinct portfolio of assets; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series C ("Money Market Series"), Series D ("Asset Allocation
Series"), Series E ("Diversified Income Series"), Series F ("Global
Growth Series"), Series G ("High Yield Series"), Series H ("Growth &
Income Series") and Series N ("S&P 500 Index Series") shares of the
Corporation (hereinafter, the "Acquired Funds") that the assets
belonging to each Acquired Fund be sold to , in exchange for Class IA
shares of the respective Acquiring Fund, which shares will be
distributed pro rata to the former shareholders of the Acquired Funds;
and
WHEREAS, it is desirable and in the best interests of the holders of
the Series C shares of the Corporation (also known as the "Money Market
Series") that the assets belonging to such Series be sold to Hartford
Money Market HLS Fund, Inc., a Maryland Corporation ("Hartford Money
Market Fund"), in exchange for Class IA shares of Hartford Money Market
Fund, which shares will be distributed pro rata to the former
shareholders of Money Market Series; and
WHEREAS, the Corporation and Hartford Money Market Fund have entered
into an Agreement and Plan of Reorganization dated ______, 2002
providing for the foregoing transactions; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series D shares of the Corporation (also known as the "Asset
Allocation Series") that the assets belonging to such Series be sold to
Hartford Advisers HLS Fund, Inc., a Maryland Corporation ("Hartford
Advisers Fund"), in exchange for Class IA shares of Hartford Advisers
Fund, which shares will be distributed pro rata to the former
shareholders of Asset Allocation Series; and
18
WHEREAS, the Corporation and Hartford Advisers Fund have entered into
an Agreement and Plan of Reorganization dated ______, 2002 providing
for the foregoing transactions; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series E shares of the Corporation (also known as the "Diversified
Income Series") that the assets belonging to such Series be sold to
Hartford Bond HLS Fund, Inc., a Maryland Corporation ("Hartford Bond
Fund"), in exchange for Class IA shares of Hartford Bond Fund, which
shares will be distributed pro rata to the former shareholders of
Diversified Income Series; and
WHEREAS, the Corporation and Hartford Bond Fund have entered into an
Agreement and Plan of Reorganization dated ______, 2002 providing for
the foregoing transactions; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series F, Series G and Series H shares of the Corporation (also
known as "Global Growth Series," "High Yield Series" and "Growth &
Income Series," respectively) that the assets belonging to such Series
be sold to Hartford Global Leaders HLS Fund ("Hartford Global Leaders
Fund"), Hartford High Yield HLS Fund ("Hartford High Yield Fund") and
Hartford Growth and Income HLS Fund ("Hartford Growth and Income
Fund"), respectively, each of which is a series of Hartford Series
Fund, Inc., a Maryland Corporation ("Hartford Series Fund"), in
exchange for Class IA shares of Hartford Global Leaders Fund, Hartford
High Yield Fund or Hartford Growth and Income Fund, as the case may be,
which shares will be distributed pro rata to the former shareholders of
Global Growth Series, High Yield Series or Growth & Income Series, as
the case may be; and
WHEREAS, the Corporation and Hartford Series Fund have entered into an
Agreement and Plan of Reorganization dated ______, 2002 providing for
the foregoing transactions; and
WHEREAS, it is desirable and in the best interests of the holders of
the Series N shares of the Corporation (also known as the "S&P 500
Index Series") that the assets belonging to such Series be sold to
Hartford Index HLS Fund, Inc., a Maryland Corporation ("Hartford Index
Fund"), in exchange for Class IA shares of Hartford Index Fund, which
shares will be distributed pro rata to the former shareholders of S&P
500 Index Series; and
WHEREAS, each Reorganization Agreement requires that, in order to bind
all holders of shares of the respective series of the Corporation to
the foregoing transactions, and in particular to bind such holders to
the cancellation and retirement of their outstanding shares of the
Corporation, it is necessary to adopt an amendment to the Corporation's
amended and restated articles of incorporation.
NOW, THEREFORE, BE IT RESOLVED, that the Corporation's amended and
restated articles of incorporation be, and the same hereby are, amended
to add the following Article 5A immediately following Article 5
thereof:
19
5A. (a) For purposes of this Article 5, the following terms
shall have the following meanings:
"Acquired Funds" means the Series C, Series D, Series E,
Series F, Series G, Series H and Series N shares of the Corporation
(also known as "Money Market Series," "Asset Allocation Series,"
"Diversified Income Series," "Global Growth Series," "High Yield
Series," "Growth & Income Series" and "S&P 500 Index Series,"
respectively).
"Acquiring Funds" means Hartford Money Market HLS Fund, Inc.,
a Maryland corporation, with respect to the Series C shares of the
Corporation; Hartford Advisers HLS Fund, Inc., a Maryland corporation,
with respect to the Series D shares of the Corporation; Hartford Bond
HLS Fund, Inc., a Maryland corporation, with respect to the Series E
shares of the Corporation; Hartford Global Leaders HLS Fund, Hartford
High Yield HLS Fund and Hartford Growth and Income HLS Fund, each a
series of Hartford Series Fund, Inc., a Maryland corporation, with
respect to the Series F, Series G and Series H shares of the
Corporation, respectively; and Hartford Index HLS Fund, Inc., a
Maryland corporation, with respect to the Series N shares of the
Corporation.
"Exchange Date" has the meaning set forth in the
Reorganization Agreements.
"Reorganization Agreements" means the five Agreements and
Plans of Reorganization dated _________, 2002, to which the Corporation
and Hartford Money Market HLS Fund, Inc., Hartford Advisers HLS Fund,
Inc., Hartford Bond HLS Fund, Inc., Hartford Series Fund, Inc. or
Hartford Index HLS Fund, Inc. are parties, each of which relates to one
or more specific Acquired Funds and the corresponding Acquiring Fund or
Funds. Each such agreement is referred to as a "Reorganization
Agreement."
(b) At the Exchange Date, the assets belonging to each
Acquired Fund, the Special Liabilities associated therewith, and the
General Assets and General Liabilities allocated to such Acquired Fund,
shall be transferred to the corresponding Acquiring Fund listed in the
applicable Reorganization Agreement in exchange for shares of such
Acquiring Fund, all as set forth in the Reorganization Agreement. Such
Acquiring Fund shares shall be distributed to Acquired Fund
shareholders as set forth in (c) below. For purposes of the foregoing,
the terms "assets belonging to," "Special Liabilities," "General
Assets" and "General Liabilities" have the meanings assigned to them in
Articles 7(b), 7(c) and 7(d) of the Corporation's amended and restated
articles of incorporation.
(c) At the Exchange Date, each issued and outstanding share of
each Acquired Fund shall be, without further action, exchanged for that
number of the Class IA shares of the corresponding Acquiring Fund
determined in accordance with Sections 3 and 4 of the Reorganization
Agreement, and such Acquired Fund shares shall be cancelled and
retired. The distribution of such Acquiring Fund shares to Acquired
Fund shareholders shall be accomplished in the manner set forth in
Section 4(a) of the applicable Reorganization Agreement.
20
(d) From and after the Exchange Date, the Acquired Fund shares
cancelled and retired pursuant to (c) above shall have the status of
authorized and unissued shares of the Corporation, without designation
as to series or class.
IN WITNESS WHEREOF, the undersigned officer of the Corporation has
executed these Articles of Amendment on behalf of the Corporation on
____________, 2002.
FORTIS SERIES FUND, INC.
By _______________________________
Its Secretary
