1
Exhibit 4
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
This Agreement and Plan of Reorganization (this "Agreement")
is made as of this 25th day of April, 2000, by and between Pacific Capital
Funds, a Massachusetts business trust (the "Trust"), on behalf of its U.S.
Treasury Securities Fund ("Treasury Fund"), and the Trust on behalf of its
Diversified Fixed Income Fund ("Diversified 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 Treasury Fund to Diversified Fund in exchange for shares
of Diversified Fund (the "Shares"), and the distribution of the Shares by
Treasury Fund to its shareholders in connection with the dissolution of Treasury
Fund.
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
Treasury Fund and Diversified 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 1
TRANSFER OF ASSETS AND LIABILITIES
1.1 Transfer of Assets and Liabilities. Subject to the terms and conditions
set forth herein, on the Closing Date (as hereafter defined) Treasury Fund shall
transfer all of its assets to Diversified Fund. In exchange therefor,
Diversified Fund shall assume all of the liabilities of Treasury Fund and
deliver to Treasury Fund a number of Class A and Class Y Shares which is equal
to (i) the aggregate net asset value attributable to each such Class of shares
of Treasury 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
Diversified Fund outstanding at the close of business on the day preceding the
Closing Date.
1.2 LIQUIDATION OF TREASURY FUND. Subject to the terms and conditions set
forth herein, on the Closing Date Treasury Fund shall liquidate and shall
distribute pro rata to each Class of its shareholders of record, determined as
of the close of business on the day preceding the Closing Date, the same Class
of Shares received by Treasury Fund pursuant to Section 1.1.
1.3 NO ISSUANCE OF SHARE CERTIFICATES. Treasury Fund shall accomplish the
liquidation and distribution provided for herein by opening accounts on the
books of Diversified Fund in the names of its shareholders and transferring to
its shareholders the Shares credited to the account of Treasury Fund on the
books of Diversified Fund. No certificates evidencing Shares shall be issued.
1
2
1.4 TIME AND DATE OF VALUATION. The number of Shares to be issued by
Diversified Fund to Treasury Fund shall be computed as of 4:30 p.m. (Eastern
time) on the date preceding the Closing Date in accordance with the regular
practices of Treasury Fund and the Trust.
1.5 CLOSING TIME AND PLACE. The Closing Date shall be July 7, 2000, or such
later date on which all of the conditions set forth in Article 2 have been
fulfilled or otherwise waived by the parties hereto, but in any event not later
than July 31, 2000, 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 the
Trust, 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, or such other time and/or place
as the parties may mutually agree.
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.
1.7 TERMINATION OF TREASURY FUND. As promptly as practicable after the
Closing, Treasury Fund shall dissolve.
ARTICLE 2
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THE 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:
2.1 SHAREHOLDER APPROVAL. On or prior to the Closing Date, the shareholders
of Treasury Fund shall have approved the transactions contemplated by this
Agreement in accordance with the provisions of Massachusetts law and the 1940
Act.
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.
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.
2
3
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.
2.5 TAX OPINION. The parties shall have received an opinion of Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP substantially to the effect that for Federal
income tax purposes:
(a) The transfer of Treasury Fund's assets to Diversified Fund in exchange
for Shares, and the distribution of the Shares to Treasury Fund's
shareholders in liquidation of Treasury Fund, will constitute a
"reorganization" (the "Reorganization") within the meaning of Section
368 of the Internal Revenue Code of 1986, as amended;
(b) No gain or loss will be recognized by Treasury Fund upon the receipt
of the assets of Diversified Fund solely in exchange for Shares;
(c) No gain or loss will be recognized by Treasury Fund upon the transfer
of its assets to Diversified Fund in exchange for Shares;
(d) No gain or loss will be recognized by any shareholders of Treasury
Fund upon exchange of their Treasury Fund shares for Shares;
(e) The tax basis of the assets of Treasury Fund acquired by Diversified
Fund will be the same as the tax basis of such assets to Treasury Fund
immediately prior to the Reorganization;
(f) The tax basis of the Shares received by each shareholder of Treasury
Fund pursuant to the Reorganization will be the same as the tax basis
of Treasury Fund shares held by such shareholder immediately prior to
the Reorganization;
(g) The holding period of the assets of Treasury Fund by Diversified Fund
will include the period during which those assets were held by
Treasury Fund; and
(h) The holding period of the Shares to be received by each shareholder of
Treasury Fund will include the period during which Treasury Fund
shares exchanged therefor were held by such shareholder.
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 of the Trust shall have executed a certificate to such effect.
3
4
2.7 STATEMENT OF ASSETS AND LIABILITIES. Treasury 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 3
REPRESENTATIONS AND WARRANTIES
The parties represent and warrant as follows:
3.1 STRUCTURE AND STANDING. Each party represents and warrants that it is
duly organized as a series of a business trust, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, and has the power
to own all of its properties and assets and conduct its business.
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.
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.
3.4 FUND ASSETS. Treasury Fund represents and warrants that on the Closing
Date the assets received by Diversified Fund from Treasury Fund will be
delivered to Diversified 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 Treasury Fund and without any restriction upon the
transfer thereof, except for such liabilities assumed as provided in Section
1.1.
3.5 THE SHARES. Diversified Fund represents and warrants that on the
Closing Date (a) the Shares to be delivered to Treasury Fund as contemplated in
this Agreement will be duly authorized, validly issued, fully paid and
nonassessable (recognizing that, under Massachusetts law, Diversified Fund
shareholders could, under certain circumstances, be held personally liable for
obligations of Diversified Fund); (b) no
4
5
shareholder of Diversified Fund or any other series of the Trust has any
preemptive right to subscription or purchase in respect thereof; (c) Treasury
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.
3.6 TAX STATUS AND FILINGS. Each party represents and warrants that it has
satisfied the requirements of Subchapter M of the Code for treatment as a
regulated investment company and has elected to be treated as such; it has filed
or furnished all federal, state, and other tax returns and reports required by
law to have been filed or furnished, and it has paid or made provision for
payment of, so far as due, all federal, state and other taxes, interest and
penalties; that no such return is currently being audited; and that no
assessment has been asserted with respect to any such returns or reports.
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.
3.8 ACQUISITION OF THE SHARES. Treasury 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.
3.9 FINANCIAL STATEMENTS. Each party represents and warrants that its
Statement of Assets and Liabilities of January 31, 2000 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.
3.10 NO ADVERSE CHANGES. Each party represents and warrants that since
January 31, 2000, 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).
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 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 materially misleading.
5
6
3.12 LITIGATION. Each party represents and warrants that there is no
material litigation or administrative proceeding or investigation of or before
any court or governmental body either pending or threatened against such party
or any of its properties or assets which, if adversely determined, would
materially affect its financial condition or the conduct of its business.
ARTICLE 4
COVENANTS
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.
4.2 SHAREHOLDERS MEETING. Treasury Fund shall call a special meeting of its
shareholders as soon as possible for the purpose of considering the
reorganization contemplated by this Agreement.
4.3 PREPARATION OF COMBINED PROSPECTUS AND PROXY STATEMENT. As soon as
reasonably practicable after the execution of this Agreement, Diversified 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 Treasury Fund as promptly as thereafter as practicable.
As soon a reasonably practicable, the parties shall also prepare and file any
other related filings required under applicable state securities laws.
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.
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.
4.6 TREASURY FUND LIABILITIES. Treasury Fund will use its best efforts to
discharge all of its financial liabilities and obligations prior to the Closing
Date.
ARTICLE 5
TERMINATION, AMENDMENT AND WAIVER
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
6
7
(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.
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.
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.
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 Treasury Fund or Diversified Fund,
respectively.
ARTICLE 6
GENERAL PROVISIONS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Massachusetts.
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.
6.3 RECOURSE. All persons dealing with Diversified Fund or Treasury Fund
must look solely to the property of Diversified Fund or Treasury Fund for the
enforcement of any claims against Diversified Fund or Treasury Fund,
respectively, as neither the trustees, directors, officers, agents nor
shareholders of Diversified Fund or Treasury Fund assume any personal liability
for obligations entered into on behalf of Diversified Fund or Treasury Fund,
respectively.
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 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, Attention: President.
7
8
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.
PACIFIC CAPITAL FUNDS, on behalf of
its U.S. Treasury Securities Fund Series
Attest: By: _______________________________
Irimga XxXxx
President
---------------------------
Xxxxxxx Xxxxxx
Secretary
PACIFIC CAPITAL FUNDS, on behalf of
its Diversified Fixed Income Fund Series
Attest: By: ________________________________
Irimga XxXxx
President
--------------------------
Xxxxxxx Xxxxxx
Secretary
8
