AGREEMENT AND PLAN OF REORGANIZATION
AGREEMENT
AND PLAN OF REORGANIZATION
The Board
of Trustees of MainStay Funds Trust, a Delaware statutory trust, and the Board
of Directors of ICAP Funds, Inc., a Maryland corporation, (collectively, the
“Boards”), deem it advisable that each series of the MainStay Funds Trust listed
on Schedule A (each an “Acquiring Fund”), and each corresponding series of ICAP
Funds, Inc. listed on Schedule A (each an “Acquired Fund”), engage in the
reorganizations described below.
This
agreement is intended to be and is adopted as a plan of reorganization and
liquidation (the “Plan”) within the meaning of Section 368(a)(1) of the United
States Internal Revenue Code of 1986, as amended (the “Code”). The
reorganization and liquidation will consist of the transfer of all of the assets
of each Acquired Fund to the corresponding Acquiring Fund in exchange solely for
(as applicable) Investor Class, Class A, Class B, Class I, Class R1, Class R2,
and Class R3 shares of beneficial interest of the Acquiring Fund (“Acquiring
Fund Shares”), the assumption by the Acquiring Fund of all liabilities of the
Acquired Fund, and the distribution of the Acquiring Fund Shares to the
shareholders of the Acquired Fund in complete liquidation of the Acquired Fund,
as provided herein (“Reorganization”), all upon the terms and conditions
hereinafter set forth in this Plan.
WHEREAS,
each Acquired Fund and Acquiring Fund is a series of an open-end, registered
investment company of the management type and each Acquired Fund owns securities
that generally are assets of the character in which the corresponding Acquiring
Fund is permitted to invest;
WHEREAS,
the Board of Trustees of MainStay Funds Trust has determined, with respect to
each Acquiring Fund, that the exchange of all of the assets of the corresponding
Acquired Fund for Acquiring Fund Shares and the assumption of all liabilities of
the Acquired Fund by the Acquiring Fund is in the best interests of such
Acquiring Fund and its shareholders and that the interests of the existing
shareholders of the Acquiring Fund would not be diluted as a result of this
transaction; and
WHEREAS,
the Board of Directors of ICAP Funds, Inc. has determined, with respect to each
Acquired Fund, that the exchange of all of the assets of the Acquired Fund for
Acquiring Fund Shares and the assumption of all liabilities of the Acquired Fund
by the corresponding Acquiring Fund is in the best interests of the Acquired
Fund and its shareholders and that the interests of the existing shareholders of
the Acquired Fund would not be diluted as a result of this
transaction;
NOW,
THEREFORE, in consideration of the premises and of the covenants and agreements
hereinafter set forth, the parties hereto covenant and agree as
follows:
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1.
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Transfer
of Assets of each Acquired Fund to the corresponding Acquiring Fund in
Exchange for Acquiring Fund Shares, the Assumption of all of the Acquired
Fund’s Liabilities and the Liquidation of the Acquired
Fund
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1.1 Subject
to the requisite approvals and the other terms and conditions herein set forth
and on the basis of the representations and warranties contained herein, each
Acquired Fund agrees to transfer all of its respective assets, as set forth in
paragraph 1.2, to the corresponding Acquiring Fund, and the Acquiring Fund
agrees in exchange therefor: (i) to deliver to the Acquired Fund the number
of full and fractional Investor Class, Class A, Class B, Class I, Class R1,
Class R2, and Class R3 Acquiring Fund Shares (as applicable), determined by
dividing the value of the Acquired Fund’s net assets, computed in the manner and
as of the time and date set forth in paragraph 2.1, by the net asset value of
one Acquiring Fund Share of the corresponding class, computed in the manner and
as of the time and date set forth in paragraph 2.2; and (ii) to assume all
liabilities of the Acquired Fund, as set forth in paragraph 1.3. Such
transactions shall take place on the date of the closing provided for in
paragraph 3.1 (“Closing Date”).
1.2 The
assets of each Acquired Fund to be acquired by the corresponding Acquiring Fund
shall consist of all assets and property, including, without limitation, all
cash, securities, commodities and futures interests and dividends or interests
receivable that are owned by the Acquired Fund and any deferred or prepaid
expenses shown as an asset on the books of the Acquired Fund on the Closing Date
(collectively, “Assets”).
1.3 Each
Acquired Fund will endeavor to discharge all of its liabilities and obligations
prior to the Closing Date. Each Acquiring Fund shall also assume all
of the liabilities of the corresponding Acquired Fund, whether accrued or
contingent, known or unknown, existing at the Valuation Date as defined in
paragraph 2.1 (collectively, “Liabilities”).
1.4 Immediately
after the transfer of assets provided for in paragraph 1.1, each Acquired Fund
will distribute to its respective shareholders of record with respect to each
class of shares, determined as of immediately after the close of business on the
Closing Date (“Acquired Fund Shareholders”), on a pro rata basis within that
class, the Acquiring Fund Shares of the corresponding class received by the
Acquired Fund pursuant to paragraph 1.1, and will completely
liquidate. Such distribution and liquidation will be accomplished,
with respect to each class of the Acquired Fund’s shares, by the transfer of the
Acquiring Fund Shares then credited to the account of the Acquired Fund on the
books of the Acquiring Fund to open accounts on the share records of the
Acquiring Fund in the names of the Acquired Fund Shareholders. The
aggregate net asset value of Investor Class, Class A, Class B, Class I, Class
R1, Class R2, and Class R3 Acquiring Fund Shares (as applicable), to
be so credited to Investor Class, Class A, Class B, Class I, Class R1, Class R2,
and Class R3 Acquired Fund Shareholders, respectively, shall, with respect to
each class, be equal to the aggregate net asset value of the shares of common
stock of the Acquired Fund (“Acquired Fund Shares”) of the corresponding class
owned by Acquired Fund Shareholders on the Closing Date. All issued
and outstanding shares of the Acquired Funds will simultaneously be redeemed and
canceled on the books of the Acquired Funds, although share certificates
representing interests in Investor Class, Class A, Class B, Class I, Class R1,
Class R2, and Class R3 shares of the Acquired Funds will represent a number of
the corresponding class of Acquiring Fund Shares after the Closing Date, as
determined in accordance with paragraph 2.3. The Acquiring Funds
shall not issue certificates representing the Investor Class, Class A, Class B,
Class I, Class R1, Class R2, and Class R3 Acquiring Fund Shares in connection
with such exchange.
1.5 Ownership
of Acquiring Fund Shares will be shown on the books of the Acquiring Funds’
Transfer Agent, as defined in paragraph 3.3. Shares of each Acquiring
Fund will be issued in the manner described in the Acquiring Fund’s current
prospectus.
1.6 Any
reporting responsibility of the Acquired Funds, including, but not limited to,
the responsibility for filing regulatory reports, tax returns, or other
documents with the Securities and Exchange Commission (“SEC”), any state
securities commission, and any Federal, state or local tax authorities or any
other relevant regulatory authority, is and shall remain the responsibility of
the Acquired Funds up to and including the Closing Date.
2. Valuation
2.1 The
value of the Assets shall be the value of such Assets computed as of immediately
after the close of business of the New York Stock Exchange and after the
declaration of any dividends on the Closing Date (such time and date being
hereinafter called the “Valuation Date”), using the valuation procedures set
forth in the then-current prospectuses and statements of additional information
with respect to the Acquired Funds, and valuation procedures established by the
Acquired Funds’ Board of Directors.
2.2 The
net asset value of an Acquiring Fund Share shall be the net asset value per
share computed with respect to that class as of the Valuation Date, using the
valuation procedures set forth in the Acquiring Funds’ then-current prospectuses
and statements of additional information, each as may be supplemented, and
valuation procedures established by the Acquiring Funds’ Board.
2.3 The
number of the Investor Class, Class A, Class B, Class I, Class R1, Class R2, and
Class R3 Acquiring Fund Shares (as applicable), to be issued (including
fractional shares, if any) in exchange for each Acquired Fund’s Assets shall be
determined with respect to each such class by dividing the value of the net
assets with respect to the Investor Class, Class A, Class B, Class I, Class R1,
Class R2, and Class R3 Acquired Fund Shares, as the case may be, determined
using the same valuation procedures referred to in paragraph 2.1, by the net
asset value of an Acquiring Fund Share of the same class, determined in
accordance with paragraph 2.2.
2.4 All
computations of value shall be made by New York Life Investment Management LLC
(“New York Life Investments”), in its capacity as administrator for the Acquired
Funds and the Acquiring Funds, and shall be subject to confirmation by each
Fund’s record keeping agent and by each Fund’s independent
accountants.
3. Closing
and Closing Date
3.1 The
Closing Date shall be February 26, 2010 or such other date as the parties may
agree. All acts taking place at the closing of the transactions
provided for in this Plan (“Closing”) shall be deemed to take place
simultaneously as of immediately after the close of business on the Closing Date
unless otherwise agreed to by the parties. The close of business on
the Closing Date shall be as of 4:00 p.m. Eastern time. The Closing
shall be held at the offices of the Funds or at such other time and/or place as
the parties may agree.
3.2 ICAP
Funds, Inc. shall direct State Street Bank and Trust Company as custodian for
the Acquired Funds (“Custodian”), to deliver, at the Closing, a certificate of
an authorized officer stating that the Assets of each Acquired Fund shall have
been delivered in proper form to the corresponding Acquiring Fund within two
business days prior to or on the Closing Date. The Acquired Funds’
portfolio securities represented by a certificate or other written instrument
shall be presented by the Custodian to those persons at the Custodian who have
primary responsibility for the safekeeping of the assets of the Acquiring Funds,
which Custodian also serves as the custodian for the Acquiring
Fund. Such presentation shall be made for examination no later than
five business days preceding the Closing Date, and shall be transferred and
delivered by the Acquired Funds as of the Closing Date for the accounts of the
respective Acquiring Funds duly endorsed in proper form for transfer in such
condition as to constitute good delivery thereof. The Custodian shall
deliver to those persons at the Custodian who have primary responsibility for
the safekeeping of the assets of the Acquiring Funds as of the Closing Date by
book entry, in accordance with the customary practices of the Custodian and of
each securities depository, as defined in Rule 17f-4 under the Investment
Company Act of 1940, as amended (“1940 Act”), in which the Acquired Funds’
Assets are deposited, the Acquired Funds’ Assets deposited with such
depositories. The cash to be transferred by the Acquired Funds shall
be delivered by wire transfer of Federal funds on the Closing Date.
3.3 ICAP
Funds, Inc. shall direct NYLIM Service Company LLC, in its capacity as transfer
agent for the Acquired Funds (“Transfer Agent”), to deliver at the Closing a
certificate of an authorized officer stating that its records contain the names
and addresses of the Acquired Fund Shareholders and the number and percentage
ownership of outstanding Investor Class, Class A, Class B, Class I, Class R1,
Class R2, and Class R3 shares owned by each such shareholder immediately prior
to the Closing. The Acquiring Funds shall issue and deliver to the
Secretary of the Acquired Funds prior to the Closing Date a confirmation
evidencing that the appropriate number of Acquiring Fund Shares will be credited
to the respective Acquired Funds on the Closing Date, or provide other evidence
satisfactory to the Acquired Funds as of the Closing Date that such Acquiring
Fund Shares have been credited to the Acquired Funds’ accounts on the books of
the Acquiring Funds. At the Closing each party shall deliver to the
other such bills of sale, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
3.4 In
the event that on the Valuation Date (a) the New York Stock Exchange or
another primary trading market for portfolio securities of the Acquiring Funds
or the Acquired Funds (each, an “Exchange”) shall be closed to trading or
trading thereupon shall be restricted, or (b) trading or the reporting of
trading on such Exchange or elsewhere shall be disrupted so that, in the
judgment of the Boards, accurate appraisal of the value of the net assets of the
Acquired Funds or the Acquiring Funds 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.
3.5 Prior
to Closing, with respect to each Acquiring Fund, the MainStay Funds Trust shall
have authorized the issuance of and shall have issued an Acquiring Fund Share to
New York Life Investments in consideration of the payment of the offering price
of such Acquiring Fund Share, as determined by the MainStay Funds Trust’s Board,
for the purpose of enabling New York Life Investments (a) to vote to approve (i)
the investment management agreement and any investment subadvisory agreement
applicable to such Acquiring Fund, (ii) approve any plan adopted by an Acquiring
Fund pursuant to Rule 12b-1 under the 1940 Act; and (iii) to the
extent that an Acquired Fund’s shareholders has previously authorized such
Acquired Fund to operate in accordance with the terms and conditions of the
Funds’ “manager of managers” exemptive order received from the SEC, approve the
operations of the corresponding Acquiring Fund in accordance with the terms and
conditions of the Funds’ “manager of managers” exemptive order received from the
SEC; and (b) take such other steps related to the inception of operations of
such Acquiring Fund as deemed necessary or appropriate by the Board of the
MainStay Funds Trust. At the effective time of Closing, the Acquiring Fund Share
issued pursuant to this paragraph 3.5 shall be redeemed by the Acquiring Fund at
the offering price of an Acquiring Fund Share.
4. Representations
and Warranties
4.1 Except
as has been fully disclosed to the Acquiring Funds in a written instrument
executed by an officer of ICAP Funds, Inc., ICAP Funds, Inc., on behalf of the
Acquired Funds, represents and warrants to the Acquiring Funds, as
follows:
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(a)
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The
Acquired Funds are each duly organized as a series of ICAP Funds, Inc.,
which is a corporation duly organized, validly existing and in good
standing under the laws of the State of Maryland, with power under ICAP
Funds, Inc.’s Articles of Incorporation and By-Laws, as amended from time
to time, to own all of its Assets and to carry on its business as it is
now being conducted; and
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(b)
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ICAP
Funds, Inc. is a registered investment company classified as a management
company of the open-end type, and its registration with the SEC as an
investment company under the 1940 Act, and the registration of Investor
Class, Class A, Class B, Class I, Class R1, Class R2, and Class R3
Acquired Fund Shares under the Securities Act of 1933, as amended (“1933
Act”), is in full force and effect;
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(c)
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No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by the Acquired Funds of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the Securities Exchange Act of 1934, as amended (“1934
Act”), and the 1940 Act, and such as may be required by state securities
laws;
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(d)
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The
current prospectuses and statements of additional information of the
Acquired Funds and each prospectus and statement of additional information
of the Acquired Funds used at all times prior to the date of this Plan
conforms or conformed at the time of its use in all material respects to
the applicable requirements of the 1933 Act and the 1940 Act and the rules
and regulations of the SEC thereunder and does not or did not at the time
of its use 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 materially
misleading;
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(e)
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On
the Closing Date, ICAP Funds, Inc., on behalf of the Acquired Funds, will
have good and marketable title to the Assets and full right, power, and
authority to sell, assign, transfer and deliver such Assets hereunder free
of any liens or other encumbrances, and upon delivery and payment for such
Assets, MainStay Funds Trust, on behalf of the Acquiring Funds, 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
Funds;
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(f)
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ICAP
Funds, Inc. is not engaged currently, and the execution, delivery and
performance of this Plan will not result, in (i) a material violation
of its Articles of Incorporation or By-Laws, or of any agreement,
indenture, instrument, contract, lease or other undertaking to which ICAP
Funds, Inc., on behalf of the Acquired Funds, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition
of any penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which ICAP Funds, Inc., on behalf of the
Acquired Funds, is a party or by which it is
bound;
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(g)
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All
material contracts or other commitments of the Acquired Funds (other than
this Plan and certain investment contracts, including options, futures,
and forward contracts) will terminate without liability to the Acquired
Funds on or prior to the Closing
Date;
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(h)
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Except
as otherwise disclosed in writing to and accepted by MainStay Funds Trust,
on behalf of the Acquiring Funds, no litigation or administrative
proceeding or investigation of or before any court or governmental body is
presently pending or, to its knowledge, threatened against any Acquired
Fund or any of its properties or assets that, if adversely determined,
would materially and adversely affect its financial condition or the
conduct of its business. ICAP Funds, Inc., on behalf of the
Acquired Funds, 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 and adversely affects its business or its ability to
consummate the transactions herein
contemplated;
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(i)
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The
Statement of Assets and Liabilities, Statements of Operations and Changes
in Net Assets, and Schedule of Investments of the Acquired Funds dated
October 31, 2009 have been audited by KPMG LLP, independent accountants,
and are in accordance with accounting principles generally accepted in the
United States of America (“GAAP”) consistently applied, and such
statements (copies of which have been furnished to the Acquiring Funds)
present fairly, in all material respects, the financial condition of the
Acquired Funds as of such date in accordance with GAAP, and there are no
known contingent liabilities of the Acquired Funds required to be
reflected on a balance sheet (including the notes thereto) in accordance
with GAAP as of such date not disclosed
therein;
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(j)
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Since
October 31, 2009, there has not been any material adverse change in any
Acquired Fund’s financial condition, assets, liabilities or business,
other than changes occurring in the ordinary course of business, or any
incurrence by the Acquired Fund of indebtedness maturing more than one
year from the date such indebtedness was incurred, except as otherwise
disclosed to and accepted by the Acquiring Funds. For the
purposes of this subparagraph (j), a decline in net asset value per share
of Acquired Fund Shares due to declines in market values of securities
held by an Acquired Fund, the discharge of an Acquired Fund’s liabilities,
or the redemption of an Acquired Fund’s shares by shareholders of the
Acquired Fund shall not constitute a material adverse
change;
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(k)
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On
the Closing Date, all Federal and other tax returns, dividend reporting
forms, and other tax-related reports of the Acquired Funds required by law
to have been filed by such date (including any extensions) shall have been
filed and are or will be correct in all material respects, and all Federal
and other taxes shown as due or required to be shown as due on said
returns and reports shall have been paid or provision shall have been made
for the payment thereof, and to the best of the Acquired Funds’ knowledge,
no such return is currently under audit and no assessment has been
asserted with respect to such
returns;
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(l)
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For
each taxable year of its operation, each Acquired Fund has met (or will
meet) the requirements of Subchapter M of the Code for qualification as a
regulated investment company, has been (or will be) eligible to and has
computed (or will compute) its Federal income tax under Section 852 of the
Code;
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(m)
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All
issued and outstanding shares of the Acquired Funds are, and on the
Closing Date will be, duly and validly issued and outstanding, fully paid
and non-assessable by ICAP Funds, Inc. and have been offered and sold in
every state and the District of Columbia in compliance in all material
respects with applicable registration requirements of the 1933 Act and
state securities laws. All of the issued and outstanding shares
of the Acquired Funds will, at the time of Closing, be held by the persons
and in the amounts set forth in the records of the Transfer Agent, on
behalf of the Acquired Funds, as provided in paragraph 3.3. The
Acquired Funds do not have outstanding any options, warrants or other
rights to subscribe for or purchase any of the shares of the Acquired
Funds, nor is there outstanding any security convertible into any of the
Acquired Funds’ shares;
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(n)
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The
execution, delivery and performance of this Plan will have been duly
authorized prior to the Closing Date by all necessary action, if any, on
the part of the Board of Directors, on behalf of the Acquired Funds, and,
this Plan will constitute a valid and binding obligation of ICAP Funds,
Inc., on behalf of the Acquired Funds, enforceable 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 equity principles;
and
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(o)
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The
information to be furnished by the Acquired Funds for use in registration
statements and other documents filed or to be filed with any Federal,
state or local regulatory authority (including the Financial Industry
Regulatory Authority), which may be necessary in connection with the
transactions contemplated hereby, shall be accurate and complete in all
material respects and shall comply in all material respects with Federal
securities and other laws and regulations thereunder applicable
thereto.
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4.2 Except
as has been fully disclosed to the Acquired Funds in a written instrument
executed by an officer of MainStay Funds Trust, MainStay Funds Trust, on behalf
of the Acquiring Funds, represents and warrants to the Acquired Funds, as
follows:
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(a)
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The
Acquiring Funds are each duly organized as series of MainStay Funds Trust,
which is a statutory trust duly organized, validly existing, and in good
standing under the laws of the State of Delaware with power under its
Declaration of Trust and By-Laws to own all of its properties and assets
and to carry on its business as it is now being
conducted;
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(b)
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MainStay
Funds Trust is a registered investment company classified as a management
company of the open-end type, and its registration with the SEC as an
investment company under the 1940 Act and the registration of the Investor
Class, Class A, Class B, Class I, Class R1, Class R2, and Class R3
Acquiring Fund Shares under the 1933 Act, is in full force and
effect;
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(c)
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No
consent, approval, authorization, or order of any court or governmental
authority is required for the consummation by the Acquiring Funds of the
transactions contemplated herein, except such as have been obtained under
the 1933 Act, the 1934 Act and the 1940 Act and such as may be required by
state securities laws;
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(d)
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The
current prospectuses and statements of additional information of the
Acquiring Funds and each prospectus and statement of additional
information of the Acquiring Funds used at all times prior to the date of
this Plan conforms or conformed at the time of its use in all material
respects to the applicable requirements of the 1933 Act and the 1940 Act
and the rules and regulations of the SEC thereunder and does not or did
not at the time of its use 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 materially
misleading;
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(e)
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On
the Closing Date, MainStay Funds Trust, on behalf of the Acquiring Funds,
will have good and marketable title to the Acquiring Funds’ assets, free
of any liens or other encumbrances, except those liens or encumbrances as
to which the Acquired Funds have received notice and necessary
documentation at or prior to the
Closing;
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(f)
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MainStay
Funds Trust is not engaged currently, and the execution, delivery and
performance of this Plan will not result, in (i) a material violation
of its Declaration of Trust or By-Laws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which MainStay Funds
Trust, on behalf of the Acquiring Funds, is a party or by which it is
bound, or (ii) the acceleration of any obligation, or the imposition
of any penalty, under any agreement, indenture, instrument, contract,
lease, judgment or decree to which MainStay Funds Trust, on behalf of the
Acquiring Funds, is a party or by which it is
bound;
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(g)
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Except
as otherwise disclosed in writing to and accepted by ICAP Funds, Inc., on
behalf of the Acquired Funds, no litigation or administrative proceeding
or investigation of or before any court or governmental body is presently
pending or, to the Acquiring Funds’ knowledge, threatened against any
Acquiring Fund or any of its properties or assets that, if adversely
determined, would materially and adversely affect the Acquiring Fund’s
financial condition or the conduct of its business. MainStay
Funds Trust, on behalf of the Acquiring Funds, 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 and adversely affects the
Acquiring Funds’ business or its ability to consummate the transactions
herein contemplated;
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(h)
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Prior
to the Closing Date, the Acquiring Funds will have carried on no business
activity and will have had no assets or liabilities other than the payment
received from New York Life Investments with respect to the initial
Acquiring Fund Shares issued to New York Life Investments pursuant to
paragraph 3.5 above.
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(i)
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The
Acquiring Funds intend to meet the requirements of Subchapter M of the
Code for qualification and treatment of each of the Acquiring Funds as a
regulated investment company and shall not take any actions inconsistent
with so qualifying as regulated investment companies under the Code in the
future;
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(j)
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All
issued and outstanding Acquiring Fund Shares are, and on the Closing Date
will be, duly and validly issued and outstanding, fully paid and
non-assessable by MainStay Funds Trust and have been offered and sold in
every state and the District of Columbia in compliance in all material
respects with applicable registration requirements of the 1933 Act and
state securities laws. The Acquiring Funds do not have
outstanding any options, warrants or other rights to subscribe for or
purchase any Acquiring Fund Shares, nor is there outstanding any security
convertible into any Acquiring Fund
Shares;
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(k)
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The
execution, delivery and performance of this Plan will have been duly
authorized prior to the Closing Date by all necessary action, if any, on
the part of the Board of Trustees of MainStay Funds Trust, on behalf of
the Acquiring Funds, and this Plan will constitute a valid and binding
obligation of the Acquiring Funds, enforceable 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 equity
principles;
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(l)
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The
Investor Class, Class A, Class B, Class I, Class R1, Class R2, and Class
R3 Acquiring Fund Shares to be issued and delivered to the Acquired Fund,
for the account of the Acquired Fund Shareholders, pursuant to the terms
of this Plan, will on the Closing Date have been duly authorized and, when
so issued and delivered, will be duly and validly issued Acquiring Fund
Shares, and will be fully paid and non-assessable by the Acquiring Fund;
and
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(m)
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The
information to be furnished by the Acquiring Fund for use in the
registration statements and other documents that may be necessary in
connection with the transactions contemplated hereby shall be accurate and
complete in all material respects and shall comply in all material
respects with Federal securities and other laws and regulations applicable
thereto.
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5. Covenants
of the Acquiring Funds and the Acquired Funds
5.1 The
Acquiring Funds and the Acquired Funds each will operate its business in the
ordinary course between the date hereof and the Closing Date, it being
understood that such ordinary course of business will include the declaration
and payment of customary dividends and distributions, and any other distribution
that may be advisable.
5.2 The
Acquired Funds covenant that the Investor Class, Class A, Class B, Class I,
Class R1, Class R2, and Class R3 Acquiring Fund Shares to be issued hereunder
are not being acquired for the purpose of making any distribution thereof, other
than in accordance with the terms of this Plan.
5.3 The
Acquired Funds will assist the Acquiring Funds in obtaining such information as
the Acquiring Funds reasonably request concerning the beneficial ownership of
the Acquired Funds’ shares.
5.4 Subject
to the provisions of this Plan, the Acquiring Funds and the Acquired Funds will
each take, or cause to be taken, all action, and do or cause to be done all
things, reasonably necessary, proper or advisable to consummate and make
effective the transactions contemplated by this Plan.
5.5 As
soon as is reasonably practicable after the Closing, each Acquired Fund will
make a liquidating distribution to its respective shareholders consisting of the
Investor Class, Class A, Class B, Class I, Class R1, Class R2, and Class R3
Acquiring Fund Shares (as applicable) received at the Closing.
5.6 The
Acquiring Funds and the Acquired Funds shall each use its reasonable best
efforts to fulfill or obtain the fulfillment of the conditions precedent to
effect the transactions contemplated by this Plan as promptly as
practicable.
5.7 ICAP
Funds, Inc., on behalf of the Acquired Funds, covenants that it will, from time
to time, as and when reasonably requested by the Acquiring Funds, execute and
deliver or cause to be executed and delivered all such assignments and other
instruments, and will take or cause to be taken such further action as MainStay
Funds Trust, on behalf of the Acquiring Funds, may reasonably deem necessary or
desirable in order to vest in and confirm (a) each Acquired Fund’s title to
and possession of the Acquiring Fund Shares to be delivered hereunder, and
(b) each Acquiring Fund’s title to and possession of all the Assets and
otherwise to carry out the intent and purpose of this Plan.
5.8 The
Acquiring Funds will use all reasonable efforts to obtain the approvals and
authorizations required by the 1933 Act, the 1940 Act and such of the state blue
sky or securities laws as may be necessary in order to continue its operations
after the Closing Date.
6. Conditions
Precedent to Obligations of the Acquired Funds
The
obligations of ICAP Funds, Inc., on behalf of the Acquired Fund, to consummate
the transactions provided for herein shall be subject, at ICAP Funds, Inc.’s
election, to the performance by MainStay Funds Trust, on behalf of the Acquiring
Funds, of all the obligations to be performed by it hereunder on or before the
Closing Date, and, in addition thereto, the following further
conditions:
6.1 All
representations and warranties of MainStay Funds Trust, on behalf of the
Acquiring Funds, contained in this Plan 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 Plan, as of the Closing Date, with the
same force and effect as if made on and as of the Closing Date;
6.2 MainStay
Funds Trust, on behalf of the Acquiring Funds, shall have delivered to the
Acquired Funds a certificate executed in the name of the Acquiring Funds by its
President or Vice President and its Treasurer or Assistant Treasurer, in a form
reasonably satisfactory to ICAP Funds, Inc., and dated as of the Closing Date,
to the effect that the representations and warranties of MainStay Funds Trust,
on behalf of the Acquiring Funds, made in this Plan are true and correct at and
as of the Closing Date, except as they may be affected by the transactions
contemplated by this Plan, and as to such other matters as ICAP Funds, Inc.
shall reasonably request;
6.3 MainStay
Funds Trust, on behalf of the Acquiring Funds, shall have performed all of the
covenants and complied with all of the provisions required by this Plan to be
performed or complied with by MainStay Funds Trust, on behalf of the Acquiring
Funds, on or before the Closing Date; and
6.4 The
Acquired Funds and the Acquiring Funds each shall have agreed on the number of
full and fractional Investor Class, Class A, Class B, Class I, Class R1, Class
R2, and Class R3 Acquiring Fund Shares (as applicable) to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
7. Conditions
Precedent to Obligations of the Acquiring Fund
The
obligations of MainStay Funds Trust, on behalf of the Acquiring Funds, to
complete the transactions provided for herein shall be subject, at MainStay
Funds Trust’s election, to the performance by ICAP Funds, Inc., on behalf of the
Acquired Funds, of all of the obligations to be performed by it hereunder on or
before the Closing Date and, in addition thereto, the following
conditions:
7.1 All
representations and warranties of ICAP Funds, Inc., on behalf of the Acquired
Funds, contained in this Plan 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 Plan, as of the Closing Date, with the same force and
effect as if made on and as of the Closing Date;
7.2 ICAP
Funds, Inc. shall have delivered to the Acquiring Funds a statement of each
Acquired Fund’s Assets and Liabilities, as of the Closing Date, certified by the
Treasurer of ICAP Funds, Inc.;
7.3 ICAP
Funds, Inc., on behalf of the Acquired Funds, shall have delivered to the
Acquiring Funds a certificate executed in the names of the Acquired Funds by its
President or Vice President and its Treasurer or Assistant Treasurer, in a form
reasonably satisfactory to the Acquiring Funds and dated as of the Closing Date,
to the effect that the representations and warranties of ICAP Funds, Inc., on
behalf of the Acquired Funds, made in this Plan are true and correct at and as
of the Closing Date, except as they may be affected by the transactions
contemplated by this Plan, and as to such other matters as MainStay Funds Trust
shall reasonably request;
7.4 ICAP
Funds, Inc., on behalf of the Acquired Funds, shall have performed all of the
covenants and complied with all of the provisions required by this Plan to be
performed or complied with by ICAP Funds, Inc., on behalf of the Acquired Funds,
on or before the Closing Date; and
7.5 The
Acquired Funds and the Acquiring Funds each shall have agreed on the number of
full and fractional Investor Class, Class A, Class B, Class I, Class R1, Class
R2, and Class R3 Acquiring Fund Shares (as applicable) to be issued in
connection with the Reorganization after such number has been calculated in
accordance with paragraph 1.1.
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8.
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Further
Conditions Precedent to Obligations of the Acquiring Funds and the
Acquired Funds
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If any of
the conditions set forth below have not been satisfied on or before the Closing
Date with respect to ICAP Funds, Inc., on behalf of the Acquired Funds, or
MainStay Funds Trust, on behalf of the Acquiring Funds, the other party to this
Plan shall, at its option, not be required to consummate the transactions
contemplated by this Plan:
8.1 On
the Closing Date no action, suit or other proceeding shall be pending or, to
ICAP Funds, Inc.’s or MainStay Funds Trust’s knowledge, threatened before any
court or governmental agency in which it is sought to restrain or prohibit, or
obtain damages or other relief in connection with, this Plan or the transactions
contemplated herein;
8.2 All consents of other parties and all
other consents, orders and permits of Federal, state and local regulatory
authorities deemed necessary by ICAP Funds, Inc. and MainStay Funds 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 Acquiring Funds or the Acquired Funds,
provided that either party hereto may for itself waive any of such conditions;
and
8.3 The
parties shall have received the opinion of counsel to ICAP Funds, Inc., on
behalf of the Acquired Funds, substantially to the effect that, based upon
certain facts, assumptions, and representations, the transaction contemplated by
this Plan shall constitute a tax-free reorganization for Federal income tax
purposes. The delivery of such opinion is conditioned upon receipt by
counsel to ICAP Funds, Inc. of representations it shall request of MainStay
Funds Trust. Notwithstanding anything herein to the contrary, ICAP
Funds, Inc. and MainStay Funds Trust, on behalf of either the Acquired Fund or
the Acquiring Fund, respectively, may not waive the condition set forth in this
paragraph 8.3.
8.4 The parties shall have
received the opinion of Xxxxxxx LLP, counsel to ICAP Funds, Inc., on behalf of
the Acquired Funds, dated as of the Closing Date, substantially to the effect
that, based upon certain facts, assumptions, and
representations: (a) ICAP Funds, Inc. is
a corporation duly incorporated and validly existing under and by virtue of the
laws of the State of Maryland and is in good standing with the State Department
of Assessments and Taxation of Maryland; (b) the execution and delivery of the
Agreement, and the consummation of the transactions contemplated thereby, have
been duly authorized by all necessary corporate action of the ICAP Funds, Inc.,
on behalf of each Acquired Fund, and no approval by the stockholders of the
ICAP Funds, Inc.
is required in connection with the execution and delivery of the
Agreement or the consummation of the transactions contemplated
thereby; (c) the execution and delivery of the Agreement by ICAP Funds, Inc.,
on behalf of each Acquired Fund, did not, and the consummation by the ICAP Funds, Inc. of
the transactions contemplated thereby will not, violate any Maryland law, or the
Charter or the Bylaws of ICAP Funds, Inc.;
and (d) no consent, approval, authorization or order of any Maryland
governmental authority is required to be made or obtained by the Company, on
behalf of each Acquired Fund, in connection with (i) the execution and delivery
of the Agreement by the Company, on behalf of each Acquired Fund, or (ii) the
performance by the Company, on behalf of each Acquired Fund, of its obligations
thereunder, except such as have been obtained or made. Notwithstanding anything
herein to the contrary, ICAP Funds, Inc. and MainStay Funds Trust, on behalf of
either the Acquired Funds or the Acquiring Funds, respectively, may not waive
the condition set forth in this paragraph 8.4.
9. Indemnification
9.1 MainStay
Funds Trust, out of an Acquiring Fund’s assets and property, agrees to indemnify
and hold harmless the corresponding Acquired Fund from and against any and all
losses, claims, damages, liabilities or expenses (including, without limitation,
the payment of reasonable legal fees and reasonable costs of investigation) to
which the Acquired Fund may become subject, insofar as such loss, claim, damage,
liability or expense (or actions with respect thereto) arises out of or is based
on any breach by such Acquiring Fund of any of its representations, warranties,
covenants or agreements set forth in this Plan.
9.2 ICAP
Funds, Inc., out of an Acquired Fund’s assets and property, agrees to indemnify
and hold harmless the corresponding Acquiring Fund from and against any and all
losses, claims, damages, liabilities or expenses (including, without limitation,
the payment of reasonable legal fees and reasonable costs of investigation) to
which the Acquiring Fund may become subject, insofar as such loss, claim,
damage, liability or expense (or actions with respect thereto) arises out of or
is based on any breach by such Acquired Fund of any of its representations,
warranties, covenants or agreements set forth in this Plan.
10. Brokerage
Fees and Expenses
10.1 The
Acquiring Funds and the Acquired Funds 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, other than any brokerage fees and
expenses incurred in connection with the Reorganization.
10.2 The
expenses relating to the proposed Reorganization will be borne by the Acquired
Funds. The costs of the Reorganization shall include, but not be
limited to, costs associated with obtaining any necessary order of exemption
from the 1940 Act, if any, legal fees, accounting fees and securities
registration fees. Notwithstanding any of the foregoing, expenses
will in any event be paid by the party directly incurring such expenses if and
to the extent that the payment by another person of such expenses would result
in the disqualification of such party as a “regulated investment company” within
the meaning of Section 851 of the Code.
11. Entire
Agreement; Survival of Warranties
11.1 MainStay
Funds Trust and ICAP Funds, Inc. agree that they have not made any
representation, warranty or covenant, on behalf of either the Acquiring Funds or
the Acquired Funds, respectively, not set forth herein and that this Plan
constitutes the entire agreement between the parties.
11.2 The
representations, warranties and covenants contained in this Plan or in any
document delivered pursuant hereto or in connection herewith shall survive the
consummation of the transactions contemplated hereunder. The
covenants to be performed after the Closing and the obligations of the Acquired
Funds and Acquiring Funds in Sections 9.1 and 9.2 shall survive the
Closing.
12. Termination
This Plan
may be terminated and the transactions contemplated hereby may be abandoned by
resolution of the Boards of MainStay Funds Trust and ICAP Funds, Inc., on behalf
of any Acquiring Fund or Acquired Fund, respectively, at any time prior to the
Closing Date, if circumstances should develop that, in the opinion of the
Boards, make proceeding with the Plan with respect to such Acquiring Fund or
Acquired Fund inadvisable.
13. Amendments
This Plan
may be amended, modified or supplemented in such manner as may be deemed
necessary or advisable by the authorized officers of MainStay Funds Trust and
ICAP Funds, Inc., on behalf of either the Acquiring Funds or the Acquired Funds,
respectively.
14. Notices
Any
notice, report, statement or demand required or permitted by any provisions of
this Plan shall be in writing and shall be given by facsimile, electronic
delivery (i.e., e-mail) personal service or prepaid or certified mail addressed
to the Funds, 160 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000, Attn:
Xxxxxxxxxx X. X. Xxxxxxxx, in each case with a copy to Dechert LLP, 1700 X
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, Attn: Sander M. Bieber.
15. Headings;
Governing Law; Assignment; Limitation of Liability
15.1 The
Article and paragraph headings contained in this Plan are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Plan.
15.2 This
Plan shall be governed by and construed in accordance with the laws of the State
of New York without regard to its principles of conflicts of laws.
15.3 This
Plan shall bind 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
Plan. Except as expressly provided otherwise in this Plan, the
parties hereto will bear the expenses relating to the Reorganization as set
forth in Section 10.2.
IN
WITNESS WHEREOF, each of the parties hereto has caused this Plan to be executed
as of the 26th day of
February, 2010.
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MAINSTAY
FUNDS TRUST
On
behalf of each Acquiring Fund listed on Schedule A:
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ICAP
FUNDS, INC.
On
behalf of each Acquired Fund listed on Schedule A:
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By:
/s/ Xxxxxxx X.
Xxxxxx
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By:
/s/ Xxxxxxx X.
Xxxxxx
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Name:
Xxxxxxx X. Xxxxxx
Title:
President
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Name:
Xxxxxxx X. Xxxxxx
Title:
President
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SCHEDULE
A
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Acquired
Funds, each a series of ICAP Funds, Inc.
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Corresponding
Acquiring Funds, each a series of MainStay Funds Trust
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MainStay
ICAP Equity Fund
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MainStay
ICAP Equity Fund
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MainStay
ICAP Global Fund
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MainStay
ICAP Global Fund
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MainStay
ICAP International Fund
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MainStay
ICAP International Fund
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MainStay
ICAP Select Equity Fund
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MainStay
ICAP Select Equity Fund
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