FORM OF PLAN OF REORGANIZATION AND LIQUIDATION
THIS PLAN OF REORGANIZATION AND LIQUIDATION is dated as of [___________
__,] 2002 (the "Agreement"), by and between the STI Classic Variable Trust (the
"Trust") Capital Appreciation Fund (the "Acquiring Fund"), and Quality Growth
Stock Fund (the "Selling Fund").
WHEREAS, the Trust was organized under Massachusetts law as a business
trust under a Declaration of Trust dated April 18, 1995, as amended and
restated;
WHEREAS, the Trust is an open-end management investment company
registered under the 1940 Act and the Acquiring and Selling Fund are each duly
organized and validly existing series of the Trust;
WHEREAS, the Trust's Board of trustees has determined that the
Reorganization (as defined below) is in the best interests of the existing
shareholders of each Fund and that the interests of the existing shareholders of
each Fund would not be diluted as a result of the Reorganization.
NOW, THEREFORE, this Agreement is intended to be and is adopted as a
plan of reorganization and liquidation within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code"). In consideration of
the mutual promises contained in this Agreement, the parties hereto agree to
effect (i) the transfer of all of the assets of the Selling Fund solely in
exchange for (a) the assumption by the Acquiring Fund of certain stated
liabilities of the Selling Fund and (b) shares of the Acquiring Fund followed by
the distribution, at the Effective Time (as defined in Section 9 of this
Agreement), of such shares of the Acquiring Fund to shareholders of the Selling
Fund on the terms and conditions in this Agreement in liquidation of the Selling
Fund (the "Reorganization"). The shares of the Acquiring Fund that are given in
exchange for the assets of the Selling Fund are referred to hereinafter as the
"Acquiring Fund Shares," and the shares of the Selling Fund that are held by the
holders of such shares at the Effective Time are referred to as the "Selling
Fund Shares." The parties to this Agreement covenant and agree as follows:
1. PLAN OF REORGANIZATION. At the Effective Time, the Selling Fund will assign,
deliver and otherwise transfer all of its assets and good and marketable title
to the assets, free and clear of all liens, encumbrances and adverse claims
except as provided in this Agreement, and assign the stated liabilities as set
forth in a statement of assets and liabilities, to be prepared as of the
Effective Time (the "Statement of Assets and Liabilities") to the Acquiring
Fund. The Acquiring Fund shall acquire these assets, and shall assume these
liabilities of the Selling Fund, in exchange for delivery to the Selling Fund by
the Acquiring Fund of a number of its Acquiring Fund Shares (both full and
fractional) equivalent in value to the Selling Fund Shares of the
Selling Fund outstanding immediately prior to the Effective Time. The assets and
stated liabilities of the Selling Fund, as set forth in the Statement of Assets
and Liabilities shall be exclusively assigned to and assumed by the Acquiring
Fund. All debts, liabilities, obligations and duties of the Selling Fund, to the
extent that they exist at or after the Effective Time and are stated in the
Statement of Assets and Liabilities, shall after the Effective Time attach to
the Acquiring Fund and may be enforced against the Acquiring Fund to the same
extent as if the same had been incurred by the Acquiring Fund. If the Selling
Fund is unable to make delivery of any of its portfolio securities pursuant to
this Section to the Acquiring Fund for the reason that any of such securities
purchased by the Selling Fund have not yet been delivered to it by the Selling
Fund's broker or brokers, then in lieu of such delivery, the Selling Fund shall
deliver to the Acquiring Fund, with respect to these securities, executed copies
of an agreement of assignment and due bills executed on behalf of said broker or
brokers, together with such other documents as may be required by the Acquiring
Fund, including brokers' confirmation slips.
2. TRANSFER OF ASSETS. The assets of the Selling Fund to be acquired by
the Acquiring Fund shall include, without limitation, all cash, cash
equivalents, securities, receivables (including interest and dividends
receivable), goodwill and intangible property, and deferred or prepaid expenses
as set forth in the Statement of Assets and Liabilities, as well as any claims
or rights of action or rights to register shares under applicable securities
laws, any books or records of the Selling Fund and other property owned by the
Selling Fund at the Effective Time.
3. LIQUIDATION AND DISSOLUTION OF THE SELLING FUND. At the Effective
Time, the Selling Fund will liquidate and the Acquiring Fund Shares (both full
and fractional) received by the Selling Fund will be distributed to the
shareholders of record of the Selling Fund as of the Effective Time in exchange
for Selling Fund Shares and in complete liquidation of the Selling Fund. Each
shareholder of the Selling Fund will receive a number of Acquiring Fund Shares
equal in value to the Selling Fund Shares held by that shareholder. This
liquidation and distribution will be accomplished by the establishment of an
open account on the share records of the Acquiring Fund in the name of each
shareholder of record of the Selling Fund and representing the respective number
of Acquiring Fund Shares due that shareholder. Each Selling Fund shareholder
shall also have the right to receive any dividends or other distributions that
were declared prior to the Effective Time, but unpaid at that time, with respect
to the Selling Fund Shares that are held by such Selling Fund shareholders at
the Effective Time. All issued and outstanding shares of the Selling Fund shall
then be cancelled on the books of the Selling Fund.
4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUND. The Acquiring
Fund represents and warrants to the Selling Fund as follows:
(a) SHARES TO BE ISSUED UPON REORGANIZATION. The Acquiring Fund Shares
to be issued in connection with the Reorganization have been duly
authorized and upon consummation of the Reorganization will be validly
issued, fully paid and nonassessable.
(b) LIABILITIES. There are no liabilities of the Acquiring Fund,
whether or not determined or determinable, other than liabilities
disclosed or provided for in the Acquiring Fund's statement of assets
and liabilities, if any, and liabilities incurred in the ordinary
course of business prior to the Effective Time or otherwise previously
disclosed to the Selling Fund, none of which has been materially
adverse to the business, assets or results of operations of the
Acquiring Fund.
(c) LITIGATION. Except as previously disclosed to the Selling Fund,
there are no claims, actions, suits or proceedings pending or, to the
actual knowledge of the Acquiring Fund, threatened which would
materially adversely affect the Acquiring Fund or its assets or
business or which would prevent or hinder in any material respect
consummation of the transactions contemplated by this Agreement.
(d) TAXES. As of the Effective Time, all federal and other tax returns
and reports of the Acquiring Fund required by law to have been filed
shall have been filed, and all other taxes shall have been paid so far
as due, or provision shall have been made for the payment of them, and
to the best of the Acquiring Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect
to any of these returns.
5. REPRESENTATIONS AND WARRANTIES OF THE SELLING FUND. The Selling
Fund represents and warrants to the Acquiring Fund as follows:
(a) MARKETABLE TITLE TO ASSETS. The Selling Fund will have, at the
Effective Time, good and marketable title to, and full right, power and
authority to sell, assign, transfer and deliver, the assets to be
transferred to the Acquiring Fund. Upon delivery and payment for these
assets, the Acquiring Fund will have good and marketable title to the
assets without restriction on the transfer of the assets free and clear
of all liens, encumbrances and adverse claims.
(b) LIABILITIES. There are no liabilities of the Selling Fund, whether
or not determined or determinable, other than liabilities disclosed or
provided for in the Selling Fund's Statement of Assets and Liabilities,
and liabilities incurred in the ordinary course of business prior to
the Effective Time or otherwise previously disclosed to the Acquiring
Fund, none of which has been materially adverse to the business, assets
or results of operations of the Selling Fund.
(c) LITIGATION. Except as previously disclosed to the Acquiring Fund,
there are no claims, actions, suits or proceedings pending or, to the
knowledge of the Selling Fund, threatened which would materially
adversely affect the Selling Fund or its assets or business or which
would prevent or hinder in any material respect consummation of the
transactions contemplated by this Agreement.
(d) TAXES. As of the Effective Time, all federal and other tax returns
and reports of the Selling Fund required by law to have been filed
shall have been filed, and all other taxes shall have been paid so far
as due, or provision shall have been made for the payment of them, and
to the best of the Selling Fund's knowledge, no such return is
currently under audit and no assessment has been asserted with respect
to any of such returns.
6. CONDITION PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND. All
representations and warranties of the Selling Fund contained in this Agreement
shall be true and correct in all material respects as of the date hereof and,
except as they may be affected by the transactions contemplated by this
Agreement, as of the Effective Time, with the same force and effect as if made
on and as of the Effective Time.
7. CONDITION PRECEDENT TO OBLIGATIONS OF THE SELLING FUND. All
representations and warranties of the Acquiring Fund contained in this Agreement
shall be true and correct in all material respects as of the date hereof and,
except as they may be affected by the transactions contemplated by this
Agreement, as of the Effective Time, with the same force and effect as if made
on and as of the Effective Time.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE SELLING FUND AND
THE ACQUIRING FUND. The obligations of the Selling Fund and the Acquiring Fund
to effectuate this Agreement shall be subject to the satisfaction of each of the
following conditions as of the Effective Time:
(a) Any authority from the U.S. Securities and Exchange Commission (the
"SEC") as may be necessary to permit the parties to carry out the
transactions contemplated by this Agreement shall have been received.
(b) The Registration Statement on Form N-1A of the Acquiring Fund shall
be effective under the Securities Act of 1933 (the "1933 Act"), and, to
the best knowledge of the Acquiring Fund, no investigation or
proceeding for that purpose shall have been instituted or be pending,
threatened or contemplated under the 1933 Act.
(c) The Acquiring Fund has filed all documents and paid all fees
required to permit its shares to be offered to the public in all states
of the United States, the Commonwealth of Puerto Rico and the District
of Columbia (except where such qualifications are not required) so as
to permit the transfer contemplated by this Agreement to be
consummated.
(d) The Selling Fund and Acquiring Fund shall have received on or
before the Effective Time an opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP,
based upon customary representations made by the Trust, satisfactory to
the Selling Fund and the Acquiring Fund substantially to the effect
that the Reorganization, as a tax-free reorganization within the
meaning of Section 368(a) of the Code, will have the following U.S.
federal income tax consequences for Selling Fund shareholders, the
Selling Fund, and the Acquiring Fund:
1. No gain or loss will be recognized by the Selling Fund upon
the transfer of its assets in exchange solely for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the
Selling Fund's stated liabilities;
2. No gain or loss will be recognized by the Acquiring Fund
on its receipt of the Selling Fund's assets in exchange for
Acquiring Fund Shares and the assumption by the Acquiring
Fund of the Selling Fund's liabilities;
3. The basis of the Selling Fund's assets in the Acquiring Fund's
hands will be the same as the basis of those assets in the
Selling Fund's hands immediately before the Reorganization;
4. The Acquiring Fund's holding period for the assets transferred
to the Acquiring Fund by the Selling Fund will include the
holding period of those assets in the Selling Fund's hands
immediately before the Reorganization;
5. No gain or loss will be recognized by the Selling Fund on the
distribution of Acquiring Fund Shares to the Selling Fund's
shareholders in exchange for Selling Fund Shares;
6. No gain or loss will be recognized by the Selling Fund's
shareholders as a result of the Selling Fund's distribution of
Acquiring Fund Shares to the Selling Fund's shareholders in
exchange for the Selling Fund's shareholders' Selling Fund
Shares;
7. The basis of the Acquiring Fund Shares received by the Selling
Fund's shareholders will be the same as the adjusted basis of
that Selling Fund's shareholders' Selling Fund Shares
surrendered in exchange therefor; and
8. The holding period of the Acquiring Fund Shares received by
the Selling Fund's shareholders will include the Selling
Fund's shareholders' holding period for the Selling Fund's
shareholders' Selling Fund Shares surrendered in exchange for
the Acquiring Fund Shares, provided that the Selling Fund
Shares were held as capital assets on the date of the
Reorganization.
(e) A vote approving this Agreement and the Reorganization contemplated
by this Agreement shall have been adopted by at least a majority of the
outstanding shares of the Selling Fund entitled to vote at an annual or
special meeting.
(f) The Board of Trustees of the Trust, at a meeting duly called for
such purpose, shall have authorized the issuance by the Acquiring Fund
of Acquiring Fund Shares at the Effective Time in exchange for the
assets of the Selling Fund pursuant to the terms and provisions of this
Agreement.
(g) Neither the Selling Fund nor the Acquiring Fund (nor the Trust)
will take any action or cause any action to be taken that is
inconsistent with the treatment of the Reorganization as a
reorganization within the meaning of Section 368(a) of the Code or
results in the failure of the transaction to qualify as a
reorganization with the meaning of Section 368(a) of the Code. At or
prior to the Effective Time, the parties will take such action, or
cause such action to be taken, as is reasonably necessary to enable
Xxxxxx, Xxxxx & Bockius LLP to deliver the tax opinion contemplated in
this Agreement.
9. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of the Selling
Funds' assets for corresponding Acquiring Fund Shares shall be effective as of
the close of business at 5:00 p.m., Eastern Time on September 6, 2002, or at
such other time and date as fixed by the mutual consent of the parties (the
"Effective Time").
10. TERMINATION. This Agreement and the transactions contemplated
hereby may be terminated and abandoned with respect to the Acquiring Fund and/or
the Selling Fund, without penalty, by resolution of the Board of Trustees of the
Trust or at the discretion of any duly authorized officer of the Trust, at any
time prior to the Effective Time, if circumstances should develop that, in the
opinion of such Board or officer, make proceeding with the Agreement
inadvisable. In the event of any such termination, there shall be no liability
for damages on the part of the Acquiring Fund, the Selling Fund, the Trust or
its Board of trustees or officers.
11. AMENDMENT AND WAIVER. This Agreement may be amended, modified or
supplemented in such manner as may be mutually agreed upon in writing by the
parties; pROVIDED, THAT no amendment may have the effect of changing the
provisions for determining the number or value of Acquiring Fund Shares to be
paid to the Selling Fund's shareholders under this Agreement to the detriment of
the Selling Fund's shareholders without their further approval. Furthermore,
either party may waive any breach by the other party or the failure to satisfy
any of the conditions to its obligations (such waiver to be in writing and
authorized by the President or any Vice President of the waiving party with or
without the approval of such party's shareholders).
12. GOVERNING LAW. This Agreement shall be governed and construed
in accordance with the laws of the Commonwealth of Massachusetts.
13. INDEMNIFICATION.
(a) The Acquiring Fund shall indemnify, defend and hold harmless the
Selling Fund, its directors, officers, employees and agents against all
losses, claims, demands, liabilities and expenses, including reasonable
legal and other expenses incurred in defending third party claims,
actions, suits or proceedings, arising from any of its representations,
warranties, covenants or agreements set forth in this Agreement.
(b) The Selling Fund, with respect to any claim asserted prior to the
Effective Time, shall indemnify, defend and hold harmless the Acquiring
Fund, its directors, officers, employees and agents against all losses,
claims, demands, liabilities and expenses, including reasonable legal
and other expenses incurred in defending third party claims, actions,
suits or proceedings, arising from any of its representations,
warranties, covenants or agreements set forth in this Agreement.
14. FEES AND EXPENSES.
(a) The Acquiring Fund and Selling Fund represent and warrant to each
other that there are no brokers or finders entitled to receive any
payments in connection with the transactions provided for herein.
(b) Except as otherwise provided for herein, all expenses of the
transactions contemplated by this Agreement incurred by each Fund will
be borne by Trusco Capital Management, Inc. Such expenses include,
without limitation, (i) expenses incurred in connection with the
entering into and the carrying out of the provisions of this Agreement;
(ii) expenses associated with the preparation and filing of the Proxy
Statement/Prospectus on Form N-14 under the 1933 Act; (iii)
registration or qualification fees and expenses of preparing and filing
such forms as are necessary under applicable state securities laws to
qualify the Acquiring Fund Shares to be issued in connection herewith
in each state in which the Selling Fund's shareholders are resident as
of the date of the mailing of the Proxy Statement to such shareholders;
(iv) postage; (v) printing; (vi) accounting fees; (vii) legal fees; and
(viii) solicitation costs of the transaction.
15. HEADINGS, COUNTERPARTS, ASSIGNMENT.
(a) The article and paragraph headings contained in this Agreement are
for reference purposes only and shall not effect in any way the meaning
or interpretation of this Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original.
(c) This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and assigns, but no
assignment or transfer of any rights or obligations shall be made by
any party without the written consent of the other party. Nothing in
this Agreement expressed or implied is intended nor shall be construed
to confer upon or give any person, firm or corporation (other than the
parties and their respective successors and assigns) any rights or
remedies under or by reason of this Agreement.
16. ENTIRE AGREEMENT. The Acquiring Fund and Selling Fund agree that
neither party has made any representation, warranty or covenant not set forth in
this Agreement and that this Agreement constitutes the entire agreement between
the parties. The representations, warranties and covenants contained in this
Agreement or in any document delivered pursuant to this Agreement or in
connection with this Agreement shall survive the consummation of the
transactions contemplated under this Agreement.
17. FURTHER ASSURANCES. The Acquiring Fund and Selling Fund shall
take such further action as may be necessary or desirable and proper to
consummate the transactions contemplated by this Agreement.
18. BINDING NATURE OF AGREEMENT. As provided in the Trust's Declaration
of Trust, as amended and supplemented to date, this Agreement was executed by
the undersigned officers of the Trust, on behalf of the Acquiring Fund and the
Selling Fund, as officers and not individually, and the obligations of this
Agreement are not binding upon the undersigned officers individually, but are
binding only upon the assets and property of the Trust. Moreover, no series of
the Trust shall be liable for the obligations of any other series of the Trust.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
STI CLASSIC VARIABLE TRUST,
on behalf of its series,
QUALITY GROWTH STOCK FUND
By ___________________________________
Name:
Title: Vice President
STI CLASSIC VARIABLE TRUST,
on behalf of its series,
CAPITAL APPRECIATION FUND
By ___________________________________
Name:
Title: Vice President
TRUSCO CAPITAL MANAGEMENT, INC.,
with respect to Section 14(b)herein only
By ___________________________________
Name:
Title:
APPENDIX A
STI CLASSIC VARIABLE TRUST
BEFORE: QUALITY GROWTH STOCK FUND AFTER: CAPITAL APPRECIATION FUND
Quality Growth Stock Fund Shares -> Capital Appreciation Fund Shares
