FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is dated as of February 20, 2001
(the "Agreement"), by and between the STI Classic Funds (the "Trust") Capital
Appreciation Fund (the "Acquiring Fund"), and Core Equity Fund (the "Selling
Fund").
WHEREAS, the Trust was organized under Massachusetts law as a business
trust under a Declaration of Trust dated January 15, 1992, 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;
NOW, THEREFORE, in consideration of the mutual premises herein contained,
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) beneficial shares of the
Acquiring Fund followed by the distribution, at the Effective Time (as defined
in Section 9 of this Agreement), of such beneficial shares of the Acquiring Fund
to the holders of beneficial shares of the Selling Fund on the terms and
conditions hereinafter set forth in liquidation of the Selling Fund (the
"Reorganization"). The beneficial 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 beneficial shares of the Selling Fund that
are held by the holders of such shares at the Effective Time are referred to
hereinafter as the "Selling Fund Shares." The parties hereto 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 thereto, free and clear of all liens, encumbrances and adverse claims
except as provided in this Agreement, and assign certain stated liabilities as
are 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
and the Acquiring Fund shall acquire all such assets, and shall assume all such
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 as set out in Appendix A
attached hereto. 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.
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) 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. Such
liquidation and distribution will be accompanied 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 such shareholder.
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 hereby.
(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 thereof, 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 such 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 such
assets, the Acquiring Fund will have good and marketable title to such
assets without restriction on the transfer thereof free and clear of all
liens, encumbrances and adverse claims.
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(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 hereby.
(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 thereof, 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 Funds 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:
(a) Such authority from the 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.
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(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 counsel satisfactory to the Selling Fund
and the Acquiring Fund substantially to the effect that the Reorganization,
as a tax-free reorganization, will have the following 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 therefor, provided that
said Selling Fund Shares were held as capital assets on the date of
the Reorganization.
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(e) A vote approving this Agreement and the Reorganization contemplated
hereby shall have been adopted by at least a majority of the outstanding
shares of the Selling Funds 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.
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 on May 21, 2001, 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.
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 such 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.
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13. 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 Prospectus/Proxy
Statement 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.
14. 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 hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder
shall be made by any 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, firm or corporation (other than the parties
hereto and their respective successors and assigns) any rights or remedies
under or by reason of this Agreement.
15. Entire Agreement. The Acquiring Fund and Selling Fund agree that
neither party has made any representation, warranty or covenant not set forth
herein and that this Agreement constitutes the entire agreement between the
parties. The representations, warranties and covenants contained herein or in
any document delivered pursuant hereto or in connection herewith shall survive
the consummation of the transactions contemplated hereunder.
16. 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 hereby.
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17. 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 FUNDS,
on behalf of its series,
CORE EQUITY FUND
By ___________________________________
Name:
Title: Vice President
STI CLASSIC FUNDS,
on behalf of its series,
CAPITAL APPRECIATION FUND
By ___________________________________
Name:
Title: Vice President
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Appendix A
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Before: Core Equity Fund After: Capital Appreciation Fund
--------------------------------------------------------------
Trust Class --> Trust Class
Flex Class --> Flex Class
