AGREEMENT AND PLAN OF REORGANIZATION
Exhibit 4(a)(ii)
This Agreement and Plan of Reorganization (this “Agreement”) is made as of this 5th
day of September 2008, by and between WT Mutual Fund, a Delaware statutory trust (the “Trust”), on
behalf of its Wilmington Fundamentally Weighted Small Company Fund (the “FWSC Fund”), and the Trust
on behalf of its Wilmington Multi-Manager Small-Cap Fund (the “Small-Cap Fund”).
WHEREAS, the parties wish to enter into a plan of reorganization (the “Plan”) which will
consist, among other things, of the transfer of assets of the FWSC Fund to the Small-Cap Fund in
exchange for shares of the Small-Cap Fund (the “Shares”) and the assumption by the Small-Cap Fund
of the FWSC Fund’s liabilities, followed by the distribution of the Shares by the FWSC Fund to its
shareholders in complete liquidation and termination of the FWSC Fund; and
WHEREAS, the parties intend that the transactions described in the preceding paragraph
constitute a reorganization described in Section 368(a) of the Internal Revenue Code of 1986, as
amended (the “Code”); and
WHEREAS, the reorganization is subject to, and shall be effected in accordance with, the terms
of this Agreement, which is intended to be and is adopted by the Trust, on its own behalf and on
behalf of each of the FWSC Fund and the Small-Cap Fund, as a “plan of reorganization” within the
meaning of Section 368 of the Code;
WHEREAS, the Board of Trustees of the Trust, including a majority of the Trustees who are not
“interested persons” of the Trust, as defined in the Investment Company Act of 1940, as amended
(the “1940 Act”), has determined that the Plan is in the best interests of the shareholders of the
FWSC Fund and the Small-Cap Fund, respectively, and that their interests would not be diluted as a
result of the transactions contemplated thereby.
NOW THEREFORE, in consideration of the agreements contained in this Agreement, the parties
agree as follows:
ARTICLE I
TRANSFER OF ASSETS AND LIABILITIES
Section 1.1. Transfer of Assets and Liabilities. Subject to the terms and conditions set forth
herein, on the Closing Date (as hereafter defined), the FWSC Fund shall transfer all of its assets
to the Small-Cap Fund. In exchange therefor, the Small-Cap Fund shall assume all of the liabilities
of the FWSC Fund and deliver to the FWSC Fund a number of “A Shares” and “Institutional Shares” of
the Small-Cap Fund which is equal to (i) the aggregate net asset value attributable to each such
Class of shares of the FWSC Fund at the close of business on the day preceding the Closing Date,
divided by (ii) the net asset value per share of such Class of shares of the Small-Cap Fund
outstanding at the close of business on the day preceding the Closing Date.
Section 1.2. Liquidation of FWSC Fund. Immediately after the transfer of assets provided for in
Section 1.1, the FWSC Fund shall completely liquidate and shall distribute pro rata to each Class
of its shareholders of record in proportion to their respective numbers of shares of each Class
held by such shareholders, determined as of the close of business on the day preceding the Closing
Date, the same Class of Shares received by the FWSC Fund pursuant to Section 1.1.
Section 1.3. No Issuance of Share Certificates. The FWSC Fund shall accomplish the liquidation and
distribution provided for herein by opening accounts on the books of the Small-Cap Fund in the
names of its shareholders and transferring to its shareholders the Shares credited to the account
of the FWSC Fund on the books of the Small-Cap Fund. No certificates evidencing Shares shall be
issued.
Section 1.4. Time and Date of Valuation. The number of Shares to be issued by the Small-Cap Fund to the FWSC Fund shall be computed as of
4:00 p.m. (Eastern time) on the date preceding the Closing Date in accordance with the regular
practices of the FWSC Fund, the Small-Cap Fund and the Trust.
Section 1.5. Closing Time and Place. The Closing Date shall be October 20, 2008, or such later
date on which all of the conditions set forth in Article II have been fulfilled or otherwise waived
by the
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parties hereto, but in any event not later than October 27, 2008, or such later date as the
parties may mutually agree. All acts taking place on the Closing Date shall be deemed to be taking
place simultaneously as of the commencement of business on the Closing Date, unless otherwise
provided. The closing of the reorganization contemplated by the Plan (the “Closing”) shall be held
at 10:00 a.m. (Eastern time) at the offices of Xxxxxx Xxxxxxxx LLP, 3000 Two Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, or such other time and/or place as the parties may mutually
agree.
Section 1.6. Delay of Valuation. If on the day preceding the Closing Date (a) the primary trading
market for portfolio securities of either party is closed to trading or trading thereon is
restricted, or (b) trading or the reporting of trading is disrupted so that an accurate appraisal
of the value of the net assets of either party and an accurate calculation of the number of shares
held by each shareholder is impracticable, the Closing Date shall be postponed until the first
business day after the day when trading shall have been fully resumed and reporting shall have been
restored.
Section 1.7. Termination of FWSC Fund. As promptly as practicable after the Closing, the FWSC Fund
shall dissolve.
Section 1.8. Transfer Taxes. Any transfer taxes payable upon issuance of the Shares in a name
other than the registered holder of the FWSC Fund shares on the books of the FWSC Fund as of that
time shall, as a condition of such issuance and transfer, be paid by the person to whom such Shares
are to be issued and transferred.
Section 1.9. Reporting Responsibility. Any reporting responsibility of the FWSC Fund (including
regulatory and tax reporting responsibility) shall become the responsibility of the Small-Cap Fund
at the Closing Date.
ARTICLE II
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THE
REORGANIZATION.
REORGANIZATION.
The respective obligation of each party to effect the reorganization contemplated by this
Agreement is subject to the satisfaction or waiver on or prior to the Closing Date of the following
conditions:
Section 2.1. Shareholder Approval. On or prior to the Closing Date, the shareholders of the FWSC
Fund shall have approved the transactions contemplated by this Agreement in accordance with the
provisions of Delaware law and the 1940 Act.
Section 2.2. No Injunctions or Restraints. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or government agency which seeks to restrain or
prohibit or obtain damages or other relief in connection with this Agreement or the transactions
contemplated hereby.
Section 2.3. Consents. All consents of the other party and all other consents, orders and permits of Federal, state and
local regulatory authorities deemed necessary by the Trust to permit consummation, in all material
respects, of the transactions contemplated herein shall have been obtained, except where failure to
obtain any such consent, order or permit would not involve a risk of a material adverse effect on
the assets or properties of either party or the Trust.
Section 2.4. Effective Registration Statement. The Form N-1A Registration Statement of the Trust
and the Form N-14 Registration Statement of the Trust with respect to the Shares shall continue to
be effective and no stop orders suspending the effectiveness thereof shall have been issued and, to
the best knowledge of the parties hereto, no investigation or proceeding for that purpose shall
have been instituted or be pending, threatened or contemplated.
Section 2.5. Tax Opinion. Each of the FWSC Fund and the Small-Cap Fund shall have received an
opinion of Xxxxxx Xxxxxxxx LLP substantially to the effect that, based on certain representations,
qualifications and assumptions, for federal income tax purposes:
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| (i) | The transfer of all of the assets of the FWSC Fund solely in exchange for Shares and the assumption by the Small-Cap Fund of all of the liabilities of the FWSC Fund, followed by the distribution of the Shares by the FWSC Fund to its shareholders in complete liquidation and termination of the FWSC Fund, will constitute a reorganization within the meaning of Section 368(a) of the Code, and each of the Small-Cap Fund and the FWSC Fund will be a party to a reorganization within the meaning of Section 368(b) of the Code; | ||
| (ii) | No gain or loss will be recognized by the Small-Cap Fund upon the receipt of the assets of the FWSC Fund solely in exchange for Shares and the assumption by the Small-Cap Fund of the liabilities of the FWSC Fund. | ||
| (iii) | No gain or loss will be recognized by the FWSC Fund upon the transfer of all of its assets to the Small-Cap Fund solely in exchange for the Shares and the assumption by the Small-Cap Fund of the liabilities of the FWSC Fund, or upon the distribution of the Shares to the FWSC Fund’s shareholders in complete liquidation in exchange for their shares of the FWSC Fund. | ||
| (iv) | No gain or loss will be recognized by the FWSC Fund’s shareholders upon the exchange of their shares of the FWSC Fund for Shares in the Reorganization; | ||
| (v) | The aggregate tax basis of the Shares received by each shareholder of the FWSC Fund pursuant to the Reorganization will be the same as the aggregate tax basis of the shares of the FWSC Fund held by such shareholder immediately prior to the Reorganization, and the holding period of the Shares received by a shareholder of the FWSC Fund will include the period during which the shares of the FWSC Fund exchanged therefor were held by such shareholder (provided that the shares of the FWSC Fund were held as a capital asset on the date of the Reorganization); and | ||
| (vi) | The tax basis of the assets of the FWSC Fund acquired by the Small-Cap Fund will be the same as the tax basis of such assets to the FWSC Fund immediately prior to the Reorganization, and the holding period of such assets in the hands of the Small-Cap Fund will include the period during which the assets were held by the FWSC Fund. |
No opinion, however, will be expressed as to: (1) the effect of the Reorganization on (i) the
FWSC Fund or the Small-Cap Fund (x) 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 the taxable year
(or on the termination or transfer thereof) under a xxxx-to-market system of accounting, or (y)
with respect to any stock held of a passive foreign investment company as defined in Section
1297(a) of the Code or (ii) any shareholder of the FWSC Fund that is required to recognize
unrealized gains and losses for federal income tax purposes under a xxxx-to-market system of
accounting and (2) any other federal tax issues (except those set forth above) and all state, local or
foreign tax issues of any kind.
Section 2.6. Covenants, Representations and Warranties. Each party shall have performed all of its
covenants set forth in Article 4, and its representations and warranties set forth in Article 3
shall be true and correct in all material respects on and as of the Closing Date as if made on such
date, and the President or a Vice-President of the Trust shall have executed a certificate to such
effect.
Section 2.7. Statement of Assets and Liabilities. The FWSC Fund shall have delivered to the Trust
on the Closing Date a statement of its assets and liabilities, prepared in accordance with
generally accepted accounting principles consistently applied, together with a certificate of its
Treasurer or Assistant Treasurer as to its portfolio securities and the federal income tax basis
and holding period as of the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The parties represent and warrant as follows:
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Section 3.1. Structure and Standing. Each party represents and warrants that it is duly organized
as a series of a statutory trust, validly existing and in good standing under the laws of the State
of Delaware, and has the power to own all of its properties and assets and conduct its business.
Section 3.2. Power. Each party represents and warrants that it has full power and authority to
enter into and perform its obligations under this Agreement; the execution, delivery and
performance of this Agreement has been duly authorized by all necessary action of the Board of
Trustees of the Trust; this Agreement does not violate, and its performance will not result in
violation of, any provision of the Declaration of Trust of the Trust, or any agreement, instrument
or other undertaking to which it is a party or by which it is bound; and this Agreement constitutes
its valid and binding contract enforceable in accordance with its terms, subject to the effects of
bankruptcy, moratorium, fraudulent conveyance and similar laws relating to or affecting creditors’
rights generally and court decisions with respect thereto.
Section 3.3. Litigation. Each party represents and warrants that no litigation or administrative
proceeding or investigation of or before any court or governmental body is currently pending
against it and, to the best of its knowledge, none is threatened against it or any of its
properties or assets, which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; it knows of no facts which might form the basis
for the institution of such proceedings; and it is not a party to or subject to the provisions of
any order, decree or judgment of any court or governmental body which materially and adversely
affects its business or its ability to consummate the transactions herein contemplated.
Section 3.4. Fund Assets. The FWSC Fund represents and warrants that on the Closing Date the
assets received by the Small-Cap Fund from the FWSC Fund will be delivered to the Small-Cap Fund as
provided in Section 1.1 free and clear of all liens, pledges, security interests, charges or other
encumbrances of any nature whatsoever created by the FWSC Fund and without any restriction upon the
transfer thereof, except for such liabilities assumed as provided in Section 1.1.
Section 3.5. The Shares. The Small-Cap Fund represents and warrants that on the Closing Date (a) the Shares to be delivered
to the FWSC Fund as contemplated in this Agreement will be duly authorized, validly issued, fully
paid and nonassessable; (b) no shareholder of the Small-Cap Fund or any other series of the Trust
has any preemptive right to subscription or purchase in respect thereof; (c) the FWSC Fund will
acquire the Shares free and clear of all liens pledges, security interests, charges or other
encumbrances of any nature whatsoever created by the Trust and without any restriction on the
transfer thereof; and (d) the Shares will be duly qualified for offering to the public in all of
the states of the United States in which such qualification is required or an exemption from such
requirement shall have been obtained.
Section 3.6. Tax Status and Filings. Each of the FWSC Fund and the Small-Cap Fund (the “Funds”)
represents and warrants that:
(a) At the Closing Date, all federal and other tax returns and reports of the Funds required
by law to have been filed by such date shall have been filed, and all federal and other taxes due
and payable shall have been paid, or provision shall have been made for the payment thereof. To
the best of the Funds knowledge, no such return is currently under audit by the IRS or any state or
local tax authority, and no assessment has been asserted with respect to such returns.
(b) For each fiscal year of its operation, the Funds have met, and will continue to meet
through the Closing Date, the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and has distributed in each such year all net
investment company taxable income (computed without regard to any deduction for dividends paid) and
net realized capital gains (after reduction for any capital loss carryforward). In furtherance
thereof, and not in limitation, each of the Funds has less than 25% of its non cash assets in the
stock or securities of any one issuer and has less than 50% of the total value of its assets
invested in five or fewer issuers.
Section 3.7. Accuracy of Information. Each party represents and warrants that all information
furnished by it to the other party for use in any documents which may be necessary in connection
with the transactions contemplated by this Agreement will be accurate and complete and will comply
in all material respects with federal securities and other laws and regulations applicable thereto.
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Section 3.8. Acquisition of the Shares. The FWSC Fund represents and warrants that the Shares it
acquires pursuant to this Agreement are not being acquired for the purpose of making any
distribution thereof, except in accordance with the terms of this Agreement.
Section 3.9. Financial Statements. Each party represents and warrants that its Statement of Assets
and Liabilities as of June 30, 2008, provided to the other party has been prepared in accordance
with generally accepted accounting principles consistently applied, and fairly reflects the
financial condition of such party as of such date, and there are no known contingent liabilities of
such party as of such date not disclosed therein.
Section 3.10. No Adverse Changes. Each party represents and warrants that since June 30, 2008,
there has not been any material adverse change in its financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of business except as otherwise
disclosed in writing to and accepted by the other party (for the purposes of this paragraph, a
decline in net asset value per share of a party shall not constitute a material adverse change).
Section 3.11. Proxy Statement. Each party represents and warrants that the Combined Proxy
Statement and Prospectus contained in the Registration Statement on Form N-14 to be used in
connection with the transaction contemplated hereby (only insofar as it relates to such party)
will, on its effective date and on the Closing Date, not contain any untrue statement of material
fact with respect to such party or omit to state a material fact required to be stated therein with
respect to such party or necessary to make the statements therein with respect to such party, in
light of the circumstances under which such statements were made, not materially misleading.
ARTICLE IV
COVENANTS
Section 4.1. Conduct of Business. During the period from the date of this Agreement and continuing
until the earlier of the termination of this Agreement or the Closing Date, each party shall
operate its business in the ordinary course except as contemplated by this Agreement.
Section 4.2. Shareholder Meeting. The FWSC Fund shall call a special meeting of its shareholders
as soon as possible for the purpose of considering the reorganization contemplated by this
Agreement.
Section 4.3. Preparation of Combined Proxy Statement and Prospectus. As soon as reasonably
practicable after the execution of this Agreement, the Trust, on behalf of the FWSC Fund, shall
prepare and file a combined prospectus and proxy statement with respect to the reorganization with
the United States Securities and Exchange Commission in form and substance satisfactory to both
parties, and shall use its best efforts to provide that the combined prospectus and proxy statement
can be distributed to the shareholders of the FWSC Fund as promptly thereafter as is practicable.
As soon as reasonably practicable, the parties shall also prepare and file any other related
filings required under applicable state securities laws.
Section 4.4. Fees and Expenses. Whether or not this Agreement is consummated, each party shall
bear its respective costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby.
Section 4.5. Provision of Documents. Each party agrees that it will, from time to time as and when
reasonably requested by the other party, provide or cause to be provided to the other party such
information, execute and deliver or cause to be executed and delivered to the other party such
documents, and take or cause to be taken such further action, as the other party may deem necessary
in order to carry out the intent of this Agreement.
Section 4.6. FWSC Fund Liabilities. The FWSC Fund will use its best efforts to discharge all of
its financial liabilities and obligations prior to the Closing Date.
Immediately prior to the closing, the FWSC Fund will have declared a dividend which, together with
all previous dividends, will have the effect of distributing to its shareholders all of the FWSC
Fund’s investment company
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taxable income for taxable years ending on or prior to closing, and all
of its net capital gains, if any, realized in taxable years ending on or prior to closing.
Section 4.7. Subject to the provisions of this Agreement, the Small-Cap Fund and the FWSC
Fund will each take, or cause to be taken, all action, and do or cause to be done, all things
reasonably necessary, proper or advisable to consummate and make effective the transactions
contemplated by this Agreement.
Section 4.8. The Small-Cap Fund and the FWSC Fund shall each use its reasonable best efforts to fulfill or
obtain the fulfillment of the conditions precedent to effect the transactions contemplated by this
Agreement as promptly as practicable.
Section 4.9. The Small-Cap Fund will use all reasonable efforts to obtain the approvals and
authorizations required by the Securities Act of 1933, as amended, the 1940 Act and such of the
state blue sky or securities laws as may be necessary in order to continue its operations after the
Closing Date.
ARTICLE V
TERMINATION, AMENDMENT AND WAIVER
Section 5.1. Termination. This Agreement may be terminated by resolution of the Board of Trustees
of the Trust at any time prior to the Closing Date, if
(a) either party shall have breached any material provision of this Agreement; or
(b) circumstances develop that, in the opinion of such Board, make proceeding with the Plan
inadvisable; or
(c) any governmental body shall have issued an order, decree or ruling having the effect of
permanently enjoining, restraining or otherwise prohibiting the consummation of this Agreement.
Section 5.2. Effect of Termination. In the event of any termination pursuant to Section 5.1, there
shall be no liability for damage on the part of either party to the other party.
Section 5.3. Amendment. This Agreement contains the entire agreement of the parties with respect
to the reorganization contemplated by the Plan and may be amended prior to the Closing Date by the
parties in writing at any time; provided, however, that there shall not be any amendment that by
law requires approval by the shareholders of a party without obtaining such approval.
Section 5.4. Waiver. At any time prior to the Closing Date, any of the terms or conditions of this
Agreement may be waived by the Board of Trustees of the Trust if, in its judgment after
consultation with legal counsel, such action or waiver will not have a material adverse effect on
the benefits intended under this Agreement to the shareholders of the FWSC Fund or the Small-Cap
Fund, respectively.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1. Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
Section 6.2. Assignment. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, but no assignment or transfer hereof or
of any rights or obligations hereunder shall be made by either party without the written consent of the other party. Nothing herein expressed or implied is
intended or shall be construed to confer upon or give any person other than the parties hereto and
their respective successors and assigns any rights or remedies under or by reason of this
Agreement.
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Section 6.3. Recourse. All persons dealing with the Small-Cap Fund or the FWSC Fund must look
solely to the property of the Small-Cap Fund or the FWSC Fund for the enforcement of any claims
against the Small-Cap Fund or the FWSC Fund, respectively, as neither the trustees, directors,
officers, agents nor shareholders of the Small-Cap Fund or the FWSC Fund assume any personal
liability for obligations entered into on behalf of the Small-Cap Fund or the FWSC Fund,
respectively.
Section 6.4. Notices. Any notice, report, statement or demand required or permitted by any
provisions of this Agreement shall be in writing and shall be given by prepaid telegraph, telecopy
or certified mail addressed to either party at:
with a copy to:
Xxxxxx Xxxxxxxx LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Del Xxxx
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Del Xxxx
IN WITNESS WHEREOF, each party has caused this Agreement to be executed and attested on its
behalf by its duly authorized representatives as of the date first above written.
| WT MUTUAL FUND, on behalf of its Wilmington Fundamentally Weighted Small Company Fund |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx, President | ||||
| WT MUTUAL FUND, on behalf of its Wilmington Multi-Manager Small-Cap Fund |
||||
| By: | /s/ Xxxx X. Xxxxxx | |||
| Xxxx X. Xxxxxx, President | ||||
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