EXHIBIT A
DRAFT
2/08/00
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Plan") is made as of this
____ day of _____________, 2000 by and between Countrywide Investment Trust
("Investment Trust") for itself and on behalf of its series, Intermediate Bond
Fund (hereinafter, the "Acquiring Fund"), and Touchstone Series Trust
("Touchstone Trust ") for itself and on behalf of its series, Touchstone Bond
Fund (hereinafter, the "Acquired Fund").
This Plan governs the proposed issuance of shares of the Acquiring Fund in
exchange for all of the assets and liabilities of the Acquired Fund.
This Plan is intended to be and is adopted as a plan of reorganization and
liquidation within the meaning of Section 368(a)(1)(C) of the Internal Revenue
Code of 1986, as amended (the "Code"). A reorganization (each a
"Reorganization") will comprise the transfer of all of the assets of the
Acquired Fund to the Acquiring Fund in exchange solely for the Acquiring Fund's
shares and the assumption by the Acquiring Fund of certain liabilities of the
Acquired Fund, and the constructive distribution after the Closing Date (as
hereinafter defined) of such shares to the shareholders of the Acquired Fund in
liquidation of the Acquired Fund, all upon the terms and conditions hereinafter
set forth in this Plan.
WHEREAS, Investment Trust and Touchstone Trust are each (a) a Massachusetts
business trust duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, and (b) registered as an open-end
series investment company under the Investment Company Act of 1940, as amended(
the "1940 Act"); and the
Acquired Fund owns securities which generally are assets of the character in
which the Acquiring Fund is permitted to invest; and
WHEREAS, effective as of the Closing Date, the shares of beneficial
interest of the Acquiring Fund will consist of two separate classes, designated
as Class A shares of beneficial interest ("Class A") and Class C shares of
beneficial interest ("Class C"). The shares of each class of the Acquiring Fund
(the "Acquiring Class") that the Acquiring Fund will issue to the shareholders
of the corresponding Acquired Fund class (the "Corresponding Acquired Class")
are set forth in the Corresponding Classes Table in Schedule A; and
WHEREAS the Board of Trustees of Touchstone Trust has determined that an
exchange of all of the assets of the Acquired Fund for shares of the Acquiring
Fund and the assumption of the liabilities of the Acquired Fund by the Acquiring
Fund is in the best interests of the Acquired Fund's Shareholders (as defined
below) and that the interests of the existing shareholders of the Acquired Fund
will not be diluted as a result of this transaction; and
WHEREAS, the execution, delivery and performance of this Plan will have
been duly authorized prior to the Closing Date by all necessary action on the
part of Investment Trust and Touchstone Trust, respectively, and this Plan
constitutes a valid and binding obligation of each of the parties hereto
enforceable in accordance with its terms, subject to the requisite approval of
the shareholders of the Acquired Fund.
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
1. Transfer of Assets and Liabilities of the Acquired Fund to the
Acquiring Fund in Exchange for the Acquiring Fund's Shares;
Liquidation of the Acquired Fund.
1.1 Transfer and Exchange of Assets for Shares. Subject to the
requisite approval of the shareholders of the Acquired Fund and to the other
terms and conditions set forth
2
herein and on the basis of the representations and warranties contained herein,
Touchstone Bond Fund series of Touchstone Trust shall transfer to Countrywide
Intermediate Bond Fund series of Investment Trust, and Countrywide Bond Fund
series of Investment Trust shall acquire from Touchstone Bond Fund series of
Touchstone Trust, as of the Closing Date, all of the Assets (as hereinafter
defined) (a) of the Touchstone Bond Fund in exchange for that number of
Acquiring Class shares of Countrywide Intermediate Bond Fund determined in
accordance with Section 2.2 hereof and the assumption by Countrywide
Intermediate Bond Fund of the Liabilities (as hereinafter defined) of the
Touchstone Bond Fund. Such transaction shall take place at the closing provided
for in Article 3 of this Plan (the "Closing").
Touchstone Trust will (a) pay or cause to be paid to Investment Trust
any interest received on or after the Closing Date with respect to the Assets of
each Acquired Fund and (b) transfer to Investment Trust any distributions,
rights, stock dividends or other property received by Touchstone Trust after the
Closing Date as distributions on or with respect to the Assets of the Acquired
Fund. Any such interest, distributions, rights, stock dividends or other
property so paid or transferred or received directly by Investment Trust shall
be allocated by Investment Trust to the account of the Acquiring Fund and the
Acquiring Class that acquired the Assets to which such property relates.
1.2 Description of Assets to be Acquired. The assets of the Acquired
Fund to be acquired by the Acquiring Fund shall consist of all property,
including without limitation, all cash, cash equivalents, securities,
commodities and future interests, receivables (including interest or dividends
receivable), any claims or rights of action or rights to register shares under
applicable securities laws, and other property owned by the Acquired Fund and
any deferred or
3
prepaid expenses shown as an asset on the books of the Acquired Fund at the
Effective Time (the "Assets").
1.3 Liabilities to be Assumed. The Acquiring Fund shall assume from
the Acquired Fund all liabilities, expenses, costs, charges and reserves of such
Acquired Fund of whatever kind or nature, whether absolute, accrued, contingent
or otherwise, whether or not arising in the ordinary course of business, whether
or not determinable as of the Effective Time and whether or not specifically
referred to in this Plan; provided, however, that it is understood and agreed by
the parties hereto that the Acquired Fund will utilize its best efforts to
discharge all of its known debts, liabilities, obligations and duties (the
"Liabilities") prior to the Effective Time.
1.4 Liquidation of the Acquired Fund. As provided in Section 3.3 of
this Plan, as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), Touchstone Trust will effect the termination and
liquidation of the Acquired Fund in the manner provided in its Declaration of
Trust and in accordance with applicable law. On the Closing Date, the Acquired
Fund will distribute pro rata to its shareholders of record, determined as of
the close of business on the Valuation Date (the "Acquired Fund's
Shareholders"), Acquiring Class shares received by the Acquired Fund pursuant to
Section 1.1 in exchange for each such shareholder's interest in the
Corresponding Acquired Class evidenced by such shareholder's shares of
beneficial interest in the Acquired Fund. Such liquidation and distribution will
be accomplished by opening accounts on the books of the Acquiring Fund in the
names of the Acquired Fund's Shareholders and transferring the shares credited
to the account of the Acquired Fund on the books of the Acquiring Fund. Each
account opened shall represent the respective pro rata number of Acquiring Class
shares due each Acquired Fund Shareholder. Fractional
4
shares of each Acquiring Class shall be rounded to the nearest thousandth of one
share. All issued and outstanding shares of each Acquired Fund shall
simultaneously be cancelled on the books of the Acquired Fund.
1.5 No Issuance of Certificates. The Acquiring Fund will not issue
certificates representing its Acquiring Class shares issued in connection with
the exchange described in Section 1.1 hereof.
1.6 Transfer Agent's Records. Ownership of Acquiring Class shares will
be shown on the books of Investment Trust's transfer agent. Acquiring Class
shares will be issued in the manner described in the then-effective Prospectus
and Statement of Additional Information of Investment Trust relating to
Acquiring Class shares.
1.7 Transfer Taxes. Any transfer taxes payable upon the issuance of
Acquiring Class shares in a name other than the registered holder of the shares
on the books of the Acquired Fund as of the time of issuance shall be paid by
the person to whom such shares are to be issued as a condition of such transfer.
1.8 Reporting Responsibilities of the Acquired Fund. Any reporting
obligations relating to the Acquired Fund are and shall remain the
responsibility of Touchstone Trust up to and including the Closing Date and such
later date on which the Acquired Fund is liquidated and Touchstone Trust is
dissolved.
1.9 Operating Plan. From and after the Closing Date, the rights and
privileges of the Class A and Class C shares of the Acquiring Fund shall be
determined under the provisions of Massachusetts law, Investment Trust's
Declaration of Trust, as amended from time to time, Investment Trust's Bylaws
and the operating plan adopted by Investment Trust's Board of Trustees which
establishes policies and procedures for allocating income and expenses
5
between the Acquiring Fund's Class A shares and Class C shares which further
defines the relative voting rights of the Class A and Class C shares and which
otherwise delineates the relative rights, privileges and liabilities of the
Class A and Class C shares.
2. Valuation.
2.1 Net Asset Value of the Acquired Fund. The value of the net assets
to be acquired by the Acquiring Fund hereunder shall be the value of the Assets
of the Acquired Fund, less the Liabilities of the Acquired Fund, and shall be
computed at the time and in the manner set forth in Investment Trust's
then-current Prospectus and Statement of Additional Information on the Closing
Date or such other date as the parties may agree in writing (such time and date
being hereinafter called the "Valuation Date").
2.2 Exchange Ratio. The number of Acquiring Class shares to be issued
(including fractional shares, if any) in exchange for the Assets of the Acquired
Fund and the assumption of its Liabilities shall be [EQUIVALENT TO THE NUMBER OF
SHARES OF THE CORRESPONDING ACQUIRED CLASS OUTSTANDING AS OF THE CLOSE OF
BUSINESS ON THE VALUATION DATE.] [SUCH A NUMBER OF SHARES OF THE CORRESPONDING
ACQUIRING CLASS SO THAT SHAREHOLDERS OF EACH CORRESPONDING ACQUIRED CLASS WILL
OWN SHARES OF THE CORRESPONDING ACQUIRING CLASS EQUAL IN VALUE TO THE SHARES OF
THE CORRESPONDING ACQUIRED CLASS AT THE CLOSING DATE.]
2.3 Documentation. All computations of value shall be made by
[Countrywide] in accordance with its regular practice as pricing agent for
Investment Trust. In addition, Touchstone Trust shall furnish to Investment
Trust within 60 days of the Closing Date a statement of the Acquired Fund's
assets and liabilities as of the Effective Time, which statement shall be
prepared in accordance with generally accepted accounting principles
consistently
6
applied and shall be certified by the Treasurer of Touchstone Trust. In
addition, Touchstone Trust shall supply to Investment Trust in such form as is
reasonably satisfactory to Investment Trust, a statement of earnings and profits
of the Acquired Fund for federal income tax purposes which may be carried over
to the shares of each Acquiring Class as a result of Section 381 of the Code.
This statement shall be provided within 180 days of the Closing Date.
3. Closing and Closing Date.
3.1 Establishment of Closing Dates; Description of Closing. The
"Closing Date" shall be the next full business day following the Valuation Date
or such later date as the parties may agree in writing. All acts taking place at
the Closing shall be deemed to take place simultaneously as of the close of
business on the last business day immediately preceding the Closing Date (the
"Effective Time"), unless otherwise provided. The Closing shall be held on the
Closing Date at 9:00 a.m. at the principal offices of Frost & Xxxxxx LLP, or
such other time and/or place as the parties may agree.
3.2 Deliveries by Transfer Agent. Investors Bank & Trust Company, as
custodian for Touchstone Trust shall deliver at the Closing a certificate of an
authorized officer stating that: (a) the Acquired Fund's portfolio securities,
cash and any other assets shall have been delivered in proper form to Investment
Trust on the Closing Date; and (b) all necessary taxes, including all applicable
federal and state stock transfer stamps, if any, shall have been paid, or
provision for payment shall have been made in connection with the delivery of
portfolio securities.
3.3 Closing of New York Stock Exchange. In the event that on the
Valuation Date: (a) the New York Stock Exchange is closed to trading or trading
thereon is restricted; or (b) trading or the reporting of trading on said
Exchange or elsewhere is disrupted so that accurate
7
appraisal of the value of the total net assets of the Acquired Fund is
impracticable, then 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.
3.4 List of the Acquired Fund's Shareholders. Touchstone Trust shall
deliver at the Closing a list of names and addresses of the shareholders of the
Acquired Fund and the class, number and percentage ownership of outstanding
shares owned by each such shareholder, all as of the Effective Time, certified
by the Secretary or Assistant Secretary of Touchstone Trust. Investment Trust
shall issue and deliver to said Secretary or Assistant Secretary of Touchstone
Trust a confirmation evidencing Acquiring Class shares to be credited to the
Acquired Fund as soon as practicable after the Closing, or provide other
evidence satisfactory to Touchstone Trust that such Acquiring Class shares have
been credited to the account of the Acquired Fund on the records of Investment
Trust's transfer agent maintained with respect to the Acquiring Class shares. At
the Closing, each party shall deliver to the other such bills of sale, checks,
assignments, share certificates, receipts or other transfer documents as such
other party may reasonably request.
4. Representations and Warranties.
4.1 Touchstone Trust, on behalf of the Acquired Fund, represents and
warrants to Investment Trust, on behalf of the Acquiring Fund, as follows:
(a) Touchstone Trust is a voluntary association with transferable
shares of the type commonly referred to as a Massachusetts business trust, duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts;
(b) Touchstone Trust is registered as an investment company
classified as a management company of the open-end type and its registration
with the Securities and
8
Exchange Commission (the "Commission") as an investment company under the 1940
Act is in full force and effect;
(c) The current prospectus and statement of additional
information of Touchstone Trust relating to the Acquired Fund conform in all
material respects to the applicable requirements of the Securities Act of 1933,
as amended (the "1933 Act"), and the 1940 Act and the rules and regulations of
the Commission 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;
(d) Touchstone Trust is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of its
Declaration of Trust or By-Laws, as each may have been amended to the date
hereof, or of any agreement, indenture, instrument, contract, lease or other
undertaking to which Touchstone Trust is a party or by which it is bound;
(e) Touchstone Trust has no material contracts or other
commitments (other than this Agreement) which, if terminated prior to the
Closing Date, would result in an additional liability of the Acquired Fund;
(f) No litigation or administrative proceedings or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against Touchstone Trust or the Acquired Fund or any of
their respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Touchstone Trust knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to the
provisions of any
9
order, decree or judgment of any court or governmental body which materially or
adversely affects its business or its ability to consummate the transactions
herein contemplated.
(g) At the Closing Date, all federal and other tax returns and
reports of the Acquired Fund required by law to have been filed by such date
shall have been filed, and all federal and other taxes shall have been paid so
far as due, or provisions shall have been made for the payment thereof and, to
the best of Touchstone Trust's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(h) Touchstone Trust's Financial Statements, copies of which have
been previously delivered to Investment Trust, fairly present the financial
positions of the Acquired Fund as of the Fund's most recent fiscal year-end and
the results of the Fund's operations and changes in the Fund's net Assets for
the periods indicated. Touchstone Trust's Financial Statements are in accordance
with generally accepted accounting principals consistently applied. For purposes
of this Agreement, the Financial Statements include the audited financial
statements of the Acquired Fund for its most recently completed fiscal year and,
if applicable, the un-audited financial statements of the Acquired Fund for its
most recently completed semi-annual period.
(i) For each fiscal year of its operation, the Acquired Fund has
(i) met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and (ii) been treated as a separate
corporation for federal income tax purposes pursuant to Section 851(h) of the
Code, and the Acquired Fund intends to be so treated as a separate corporation
and meet such qualification requirements for its current taxable year;
(j) All issued and outstanding shares of the Acquired Fund are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable
10
with no personal liability attaching to the ownership thereof (recognizing that,
under Massachusetts law, the Acquired Fund's Shareholders could, under certain
circumstances, be held personally liable for obligations of the Acquired Fund);
(k) At the Closing Date, Touchstone Trust, on behalf of the
Acquired Fund, will have good and marketable title to the Assets to be
transferred to the Acquiring Fund pursuant hereto and full right, power and
authority to sell, assign, transfer and deliver such Assets hereunder and, upon
delivery and payment for such Assets, the Acquiring Fund will acquire good and
marketable title thereto, subject to no restrictions on the full transfer
thereof, including such restrictions as might arise under the 1933 Act, other
than as disclosed to the Acquiring Fund.
(l) 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 Touchstone Trust's Board of Trustees, and on the date hereof and on the
Closing Date this Agreement will constitute a valid and binding obligation of
Touchstone Trust on behalf of the Acquired Fund enforceable against Touchstone
Trust in accordance with its terms, subject as to enforcement to bankruptcy,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights and to general principles of equity;
(m) On the Closing Date, the performance of this Agreement shall
have been duly authorized by all necessary action by the shareholders of the
Acquired Fund.
(n) Since the date of Touchstone Trust's Financial Statements,
there has been no material adverse change in the financial condition, result of
operations, business, properties or Assets of the Acquired Fund.
11
4.2 Investment Trust, on behalf of the Acquiring Fund, represents and
warrants to Touchstone Trust on behalf of the Acquired Fund as follows:
(a) Investment Trust is a voluntary association with transferable
shares of the type commonly referred to as a Massachusetts business trust, duly
organized, validly existing in good standing under the laws of the Commonwealth
of Massachusetts;
(b) Investment Trust is registered as an investment company
classified as a management company of the open-end type and its registration
with the Commission as an investment company under the 1940 Act, is in full
force and effect;
(c) The current prospectus and statement of additional
information of Investment Trust relating to the Acquiring Fund conform in all
material respects to the applicable requirements of the 1933 Act and the 1940
Act and the rules and regulations of the Commission 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;
(d) Investment Trust is not, and the execution, delivery and
performance of this Agreement will not result, in a material violation of its
Declaration of Trust or Bylaws, as each may have been amended to the date
hereof, or of any agreement, indenture, instrument, contract, lease or other
undertaking to which Investment Trust is a party or by which it is bound;
(e) Investment Trust has no material contracts or other
commitments (other than by this Agreement) which, if terminated prior to the
Closing Date, would result in an additional liability of the Acquiring Fund;
12
(f) No litigation or administrative proceeding or investigation
of or before any court or governmental body is presently pending or to its
knowledge threatened against Investment Trust or the Acquiring Fund or any of
their respective properties or assets which, if adversely determined, would
materially and adversely affect their financial condition or the conduct of
their business. Investment Trust knows of no facts which might form the basis
for the institution of such proceedings and is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially or adversely affects its business or its ability to consummate
the transactions herein contemplated;
(g) At the Closing Date, all federal and other tax returns and
reports of the Acquiring Fund required by law to have been filed by such date
shall have been filed, and all federal and other taxes shall have been paid so
far as due, or provision shall have been made for the payment thereof and, to
the best of Investment Trust's knowledge, no such return is currently under
audit and no assessment has been asserted with respect to such returns;
(h) For each fiscal year of its operation, the Acquiring Fund has
(i) met the requirements of Subchapter M of the Code for qualification and
treatment as a regulated investment company and (ii) been treated as a separate
corporation for federal income tax purposes pursuant to Section 851(h) of the
Code, and the Acquiring Fund intends to be so treated as a separate corporation
and meet such qualification requirements for its current taxable year;
(i) All issued and outstanding shares of the Acquiring Fund are,
and at the Closing Date will be, duly and validly issued and outstanding, fully
paid and non-assessable with no personal liability attaching to the ownership
thereof (recognizing that, under Massachusetts law, the Acquiring Fund's
Shareholders could, under certain circumstances, be held personally liable for
obligations of the Acquiring Fund);
13
(j) 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 the Investment Trust's Board of Trustees, and on the date hereof and on
the Closing Date this Agreement will constitute a valid and binding obligation
of Investment Trust on behalf of the Acquiring Fund enforceable against
Investment Trust in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and to general principles of equity.
(k) Since [_________________], there has been no material adverse
change in the financial condition, business, properties or Assets of the
Acquiring Fund.
5. Conditions Precedent to Obligations of the Parties.
5.1 Representations and Warranties. All representations and warranties
of each of Investment Trust and Touchstone Trust set forth herein shall be true
and correct in all material respects as of the date hereof and, except as may be
affected by the transactions contemplated by this Plan, as of the Effective Time
with the same force and effect as if made on and as of the Effective Time.
5.2 Approval of Plan by the Acquired Fund's Shareholders. This Plan
and the transactions contemplated hereby shall have been approved by the
requisite vote of the holders of the outstanding shares of the Acquired Fund in
accordance with the provisions of the law of business trusts of the Commonwealth
of Massachusetts, the provisions of the 1940 Act and the provisions of
Touchstone Trust's Declaration of Trust and By-laws;
5.3 No Adverse Actions. On the Closing Date, no action, suit or other
proceeding shall be pending before any court or governmental agency in which it
is sought to
14
restrain or prohibit or obtain damages or other relief in connection with this
Plan or the transactions contemplated hereby;
5.4 Consents and Approvals.
(a) All consents of other parties and all other consents, orders
and permits of federal, state and local regulatory authorities (including those
of the Commission and of state securities authorities, including "no-action"
positions of such federal or state authorities) deemed necessary by Investment
Trust or Touchstone Trust to permit consummation, in all material respects, of
the transactions contemplated hereby, 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 the Acquired Fund or
the Acquiring Fund, provided that either party hereby may for itself waive any
such conditions; and
(b) The Board of Trustees of Investment Trust and Touchstone
Trust shall have approved the terms of the Reorganization and this Plan and
shall have determined that (i) participation by the Acquiring Fund and the
Acquired Fund, respectively, in the Reorganization is in the best interests of
such funds, (ii) the interests of existing shareholders of each of the Acquiring
Fund and the Acquired Fund, respectively, will not be diluted as a result of the
Reorganization, (iii) the terms of the Reorganization, including the
consideration to be paid or received, are reasonable and fair and do not involve
overreaching on the part of any person, and (iv) the Reorganization is
consistent with the policies of Investment Trust and Touchstone Trust,
respectively, as recited in its respective registration statement and reports
filed under the 1940 Act.
5.5 Effectiveness of Registration Statement on Form N-14; Exemptive
Order. A Registration Statement on Form N-14 relating to the Acquiring Class
shares issuable
15
hereunder, including the combined Proxy Statement of the Acquired Fund and the
Prospectus of Investment Trust (relating to the Acquiring Class shares issuable
pursuant to the terms of this Plan) constituting a part thereof, shall have
become effective under the 1933 Act and no stop order 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 under the 1933 Act.
Additionally, in response to an application for exemption to be submitted by
Investment Trust, Touchstone Trust and certain affiliated persons, the
Commission shall have issued an order exempting Investment Trust, Touchstone
Trust and the other applicants from certain provisions of the 1940 Act or the
issues raised in the application shall have otherwise been resolved to the
mutual satisfaction of the parties.
5.6 Tax Opinions. Each of Investment Trust and Touchstone Trust shall
have obtained an opinion of Frost & Xxxxxx LLP, legal counsel to Investment
Trust and Touchstone Trust, in form and substance reasonably satisfactory to
their respective Boards, to the effect that:
(a) The transfer of all of the Acquired Fund's Assets solely in
exchange for the Acquiring Class shares and the assumption by the Acquiring Fund
of the Liabilities of the Acquired Fund, and the distribution of such Acquiring
Class shares to the shareholders of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368 (a)(1)(C) of the Code and the
Acquiring Fund and the Acquired Fund are each a "party to a reorganization"
within the meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by the Acquired Fund upon
the transfer of the Acquired Fund's Assets to the Acquiring Fund in exchange for
the Acquiring Class shares and the assumption by the Acquiring Fund of the
Liabilities of the Acquired Fund or
16
upon the distribution (whether actual or constructive) of the Acquiring Class
shares to the Acquired Fund's Shareholders in exchange for their shares of the
Acquired Fund;
(c) The tax basis of the Acquired Fund's Assets acquired by the
Acquiring Fund will be the same to the Acquiring Fund as the tax basis of such
Assets to the Acquired Fund immediately prior to the Reorganization, and the
holding period of the Assets of the Acquired Fund in the hands of the Acquiring
Fund will include the period during which those assets were held by the Acquired
Fund;
(d) No gain or loss will be recognized by the Acquiring Fund upon
the receipt of the Assets of the Acquired Fund solely in exchange for the
Acquiring Class shares and the assumption by the Acquiring Fund of the
Liabilities of the Acquired Fund;
(e) No gain or loss will be recognized by shareholders of the
Acquired Fund upon the distribution of the Acquiring Class shares to such
shareholders, provided such shareholders receive solely such Acquiring Class
shares (including fractional shares) in exchange for their Corresponding
Acquired Class shares; and
(f) The aggregate tax basis for the Acquiring Class shares,
including any fractional shares, received by each shareholder of the Acquired
Fund pursuant to the Reorganization will be the same as the aggregate tax basis
of the Corresponding Acquired Class shares held by such shareholder immediately
prior to the Reorganization, and the holding period of the Acquiring Class
shares, including any fractional shares, to be received by each shareholder of
the Acquired Fund will include the period during which the Corresponding
Acquired Class shares exchanged therefor were held by such shareholder (provided
that the Corresponding Acquired Class shares were held as a capital asset on the
date of the Reorganization).
17
6. Expenses.
The expenses incurred in connection with the entering into and
carrying out the provisions of this Plan will be borne and paid by Touchstone
Advisors, Inc., and not by the Acquiring Fund or the Acquired Fund.
7. Termination.
7.1 Mutual Agreement. This Plan may be terminated by the mutual
agreement of Investment Trust and Touchstone Trust.
7.2 Material Breach. In addition, either Investment Trust or
Touchstone Trust may, at its option, terminate this Plan at or prior to the
Closing Date on account of a material breach by the other of any agreement
contained herein to be performed by such other party at or prior to the Closing
Date.
7.3 Failure of Condition Precedent. In addition, either Investment
Trust or Touchstone Trust may, at its option, terminate this Plan at or prior to
the Closing Date on account of a condition herein expressed to be precedent to
the obligation of such party which has not been met and which appears cannot
reasonably, or will not, be met.
7.4 Effects of Termination. In the event of any such termination,
there shall be no liability for damage on the part of Investment Trust or
Touchstone Trust or their respective Trustees or officers.
8. Limitation on Liabilities. The obligations of Investment Trust,
Touchstone Trust and each Fund shall not bind any of the trustees, shareholders,
nominees, officers, agents, or employees of Investment Trust or Touchstone Trust
personally, but shall bind only the Assets and property of the Acquiring Fund
and the Acquired Fund. The execution and delivery of this Plan by the parties'
officers shall not be deemed to have been made by any of them individually
18
or to impose any liability on any of them personally, but shall bind only the
Assets and the property of the Acquiring Fund or the Acquired Fund, as
appropriate.
9. Amendment.
This Plan may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the parties hereto; provided, however,
that following the meeting of the shareholders of the Acquired Fund described in
Section 5.2 of this Plan, no such amendment may have the effect of changing the
provisions for determining the number of shares of each corresponding Acquiring
Class shares to be issued to an Acquired Fund's Shareholders under this Plan to
the detriment of such shareholders without their further approval.
10. Miscellaneous.
10.1 Headings. The section headings contained in this Plan will have
reference purposes only and shall not affect in any way the meaning or
interpretation of this Plan.
10.2 Governing Law. This Plan shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts.
19
IN WITNESS WHEREOF, each of the parties hereto has caused this Plan to be
executed on its behalf by its duly authorized officer as of the day and year
first written above.
TOUCHSTONE SERIES TRUST
By: /s/
------------------------------
Xxxxxx X. Xxxxxxx, President
COUNTRYWIDE INVESTMENT TRUST
By: /s/
------------------------------
Xxxxxx X. Xxxxxxx, President
TOUCHSTONE ADVISORS, INC.
(SOLELY TO EVIDENCE ITS CONCURRENCE
WITH SECTION 6 HEREOF)
By:/s/
------------------------------
, President
SCHEDULE A
I. CORRESPONDING CLASSES TABLE
Acquiring Fund Classes Corresponding Acquired Fund Classes
---------------------- -----------------------------------
Intermediate Bond Fund Touchstone Bond Fund
A Shares A Shares
C Shares C Shares
