FORM OF AGREEMENT AND PLAN
OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is dated as of , 1999 (the
"Agreement"), by and between the STI Classic Funds (the "Trust") on behalf of
its Sunbelt Equity Fund and Emerging Markets Equity Fund (the "Transferring
Funds"), and the Trust on behalf of its Small Cap Growth Stock Fund and
International Equity Fund (the "Acquiring Funds"), respectively.
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 Reorganizing and Transferring Funds are duly
organized and validly existing series of the Trust;
NOW, THEREFORE, the parties hereto agree to effect (i) the transfer of all
of the assets of each Transferring Fund solely in exchange for (a) the
assumption by its corresponding Acquiring Fund of certain stated liabilities of
such Transferring Fund and (b) beneficial shares of such Acquiring Fund followed
by the distribution, at the Effective Time (as defined in Section 9 of this
Agreement), of such beneficial shares of such Acquiring Fund to the holders of
beneficial shares of the Transferring Fund on the terms and conditions
hereinafter set forth in liquidation of such Transferring Fund (the
"Reorganization"). The beneficial shares of each Acquiring Fund that are given
in exchange for the assets of its corresponding Transferring Fund are referred
to hereinafter as the "Acquiring Fund Shares," and the beneficial shares of each
Transferring Fund that are held by the holders of such shares at the Effective
Time are referred to hereinafter as the "Transferring Fund Shares." The parties
hereto covenant and agree as follows:
1. PLAN OF REORGANIZATION. At the Effective Time, each Transferring 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
its corresponding Acquiring Fund and the Acquiring Fund shall acquire all such
assets, and shall assume all such liabilities of the Transferring Fund, in
exchange for delivery to the Transferring Fund by the Acquiring Fund of a number
of its Acquiring Fund Shares (both full and fractional) equivalent in value to
the Transferring Fund Shares of the Transferring Fund outstanding immediately
prior to the Effective Time. The assets and stated liabilities of the
Transferring Fund, as set forth in a statement of assets and liabilities shall
be exclusively assigned to and assumed by the Acquiring Fund. All debts,
liabilities, obligations and duties of the Transferring Fund, to the extent that
they exist at or after the Effective Time and are stated in a 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.
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2. TRANSFER OF ASSETS. The assets of each Transferring Fund to be
transferred to its corresponding Acquiring Fund shall include, without
limitation, all cash, cash equivalents, securities, receivables (including
interest and dividends receivable) as set forth in a 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 such
Transferring Fund and other property owned by such Transferring Fund at the
Effective Time.
3. REORGANIZATION OF THE TRANSFERRING FUND. At the Effective Time, each
Transferring Fund will liquidate and the Acquiring Fund Shares (both full and
fractional) received by the Transferring Fund will be distributed to the
shareholders of record of the Transferring Fund as of the Effective Time in
exchange for Transferring Fund Shares and in complete liquidation of the
Transferring Fund. Each shareholder of the Transferring Fund will receive a
number of Acquiring Fund Shares equal in value to the Transferring 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 Transferring Fund and
representing the respective number of Acquiring Fund Shares due such
shareholder. As soon as practicable after the Effective Time, but not later than
December 13, 1999, the Trust shall take all steps as shall be necessary and
proper to effect a complete termination of the Transferring Fund.
4. REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING FUNDS. Each Acquiring
Fund represents and warrants to its corresponding Transferring 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
Transferring 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 Transferring 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 any of the Acquiring Fund or its assets or business or
which would prevent or hinder in any material respect consummation of the
reorganization 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.
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5. REPRESENTATIONS AND WARRANTIES OF THE TRANSFERRING FUNDS. Each
Transferring Fund represents and warrants to its corresponding Acquiring Fund as
follows:
(a) MARKETABLE TITLE TO ASSETS. The Transferring 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.
(b) LIABILITIES. There are no liabilities of the Transferring Fund,
whether or not determined or determinable, other than liabilities
disclosed or provided for in the Transferring 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 Transferring 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 Transferring Fund, threatened which would materially
adversely affect the Transferring Fund or its assets or business or which
would prevent or hinder in any material respect consummation of the
reorganization contemplated hereby.
(d) TAXES. As of the Effective Time, all federal and other tax returns and
reports of the Transferring 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 Transferring 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 FUNDS. All
representations and warranties of the Transferring 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 reorganization 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 TRANSFERRING FUNDS. All
representations and warranties of the Acquiring 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 reorganization 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 TRANSFERRING FUNDS
AND THE ACQUIRING FUNDS. The obligations of the Transferring Funds and the
Acquiring Funds to effectuate this Agreement shall be subject to the
satisfaction of each of the following conditions:
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(a) Such authority from the Securities and Exchange Commission (the "SEC")
as may be necessary to permit the parties to carry out the reorganization
contemplated by this Agreement shall have been received.
(b) The Registration Statement on Form N-1A of the Acquiring Funds shall
be effective under the Securities Act of 1933 (the "1933 Act"), and, to
the best knowledge of the Acquiring Funds, no investigation or proceeding
for that purpose shall have been instituted or be pending, threatened or
contemplated under the 1933 Act.
(c) The Acquiring Funds have filed all documents and paid all fees
required to permit their 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) Each Transferring Fund and Acquiring Fund shall have received on or
before the Effective Time an opinion of counsel satisfactory to the
Transferring 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 Transferring Fund shareholders, each
Transferring Fund, and its corresponding Acquiring Fund:
1. No gain or loss will be recognized by the Transferring Fund upon the
transfer of its assets in exchange solely for Acquiring Fund Shares
and the assumption by the Acquiring Fund of the Transferring Fund's
stated liabilities;
2. No gain or loss will be recognized by the Acquiring Fund on its
receipt of the Transferring Fund's assets in exchange for Acquiring
Fund Shares and the assumption by the Acquiring Fund of the
Transferring Fund's liabilities;
3. The basis of the Transferring Fund's assets in the Acquiring Fund's
hands will be the same as the basis of those assets in the
Transferring Fund's hands immediately before the Reorganization;
4. The Acquiring Fund's holding period for the assets transferred to
the Acquiring Fund by the Transferring Fund will include the holding
period of those assets in the Transferring Fund's hands immediately
before the Reorganization;
5. No gain or loss will be recognized by the Transferring Fund on the
distribution of Acquiring Fund Shares to the Transferring Fund's
shareholders in exchange for Transferring Fund Shares;
6. No gain or loss will be recognized by the Transferring Fund's
shareholders as a result of the Transferring Fund's distribution of
Acquiring Fund Shares
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to the Transferring Fund's shareholders in exchange for the
Transferring Fund's shareholders' Transferring Fund Shares;
7. The basis of the Acquiring Fund Shares received by the Transferring
Fund's shareholders will be the same as the adjusted basis of that
Transferring Fund's shareholders' Transferring Fund Shares
surrendered in exchange therefor; and
8. The holding period of the Acquiring Fund Shares received by the
Transferring Fund's shareholders will include the Transferring
Fund's shareholders' holding period for the Transferring Fund's
shareholders' Transferring Fund Shares surrendered in exchange
therefor, provided that said Transferring Fund Shares were held as
capital assets on the date of the Reorganization.
(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 Transferring 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 each Acquiring Fund of
Acquiring Fund Shares at the Effective Time in exchange for the assets of
its corresponding Transferring Fund pursuant to the terms and provisions
of this Agreement.
9. EFFECTIVE TIME OF THE REORGANIZATION. The exchange of the Transferring
Funds' assets for corresponding Acquiring Fund Shares shall be effective as of
the close of business on December 13, 1999, 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 reorganization contemplated hereby
may be terminated and abandoned with respect to the Acquiring Fund and/or the
Transferring 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 Transferring Funds' shareholders under this Agreement to the
detriment of the Transferring Funds' 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).
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12. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the Commonwealth of Massachusetts.
13. FEES AND EXPENSES.
(a) Each Acquiring Fund and corresponding Transferring Fund represent and
warrant to each other that there are no brokers or finders entitled to
receive any payments in connection with the reorganization provided for
herein.
(b) Except as otherwise provided for herein, all expenses of the
reorganization contemplated by this Agreement incurred by each Fund will
be borne by SunTrust Banks, 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
Transferring Funds' 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. Each Acquiring Fund and Transferring 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 reorganization contemplated hereunder.
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16. FURTHER ASSURANCES. Each Acquiring Fund and Transferring Fund shall
take such further action as may be necessary or desirable and proper to
consummate the reorganization contemplated hereby.
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 Funds and the
Transferring Funds, 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,
SUNBELT EQUITY FUND, and
EMERGING MARKETS EQUITY FUND
By ___________________________________
Name:
Title:
STI CLASSIC FUNDS,
on behalf of its series,
SMALL CAP GROWTH STOCK FUND, and
INTERNATIONAL EQUITY FUND
By ___________________________________
Name:
Title:
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