4.3 Aggressive Equity will call a meeting of its shareholders to consider and act upon this Agreement and to take all other action necessary to obtain approval of the transactions contemplated herein. Aggressive Equity will prepare the notice of meeting, form of proxy and proxy statement (collectively, ‘‘Proxy Materials’’) to be used in connection with such meeting; provided that Capital Opportunities will furnish Aggressive Equity with its currently effective prospectus for inclusion in the Proxy Materials and with such other information relating to Capital Opportunities as is reasonably necessary for the preparation of the Proxy Materials.
4.4 Aggressive Equity will assist Capital Opportunities in obtaining such information as Capital Opportunities reasonably requests concerning the beneficial ownership of Aggressive Equity shares.
4.5 Subject to the provisions of this Agreement, Capital Opportunities and Aggressive Equity 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 Agreement.
4.6 Aggressive Equity shall furnish or cause to be furnished to Capital Opportunities within 30 days after the Closing Date a statement of Aggressive Equity’s assets and liabilities as of the Closing Date, which statement shall be certified by Aggressive Equity’s Treasurer and shall be in accordance with generally accepted accounting principles consistently applied. As promptly as practicable, but in any case within 60 days after the Closing Date, Aggressive Equity shall furnish Capital Opportunities, in such form as is reasonably satisfactory to Capital Opportunities, a statement certified by Aggressive Equity’s Treasurer of Aggressive Equity’s earnings and profits for federal income tax purposes that will be carried over to Capital Opportunities pursuant to Section 381 of the Code.
4.7 As soon after the Closing Date as is reasonably practicable, Aggressive Equity (a) shall prepare and file all federal and other tax returns and reports of Aggressive Equity required by law to be filed with respect to all periods ending on or before the Closing Date but not theretofore filed and (b) shall pay all federal and other taxes shown as due thereon and/or all federal and other taxes that were unpaid as of the Closing Date, including without limitation, all taxes for which the provision for payment was made as of the Closing Date (as represented in paragraph 5.2(k)).
4.8 Capital Opportunities agrees to use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act and the 1940 Act and to make such filings required by the state Blue Sky and securities laws as it may deem appropriate in order to continue its operations after the Closing Date.
5.1 Capital Opportunities represents and warrants to Aggressive Equity as follows:
(a) Capital Opportunities is a validly existing Massachusetts business trust with full power to carry on its business as presently conducted;
(b) Capital Opportunities is a duly registered, open-end, management investment company, and its registration with the Commission as an investment company under the 1940 Act and the registration of its shares under the 1933 Act are in full force and effect;
(c) All of the issued and outstanding shares of Capital Opportunities have been offered and sold in compliance in all material respects with applicable registration requirements of the 1933 Act and state securities laws. Shares of Capital Opportunities are registered in all jurisdictions in which they are required to be registered under state securities laws and other laws, and said registrations, including any periodic reports or supplemental filings, are complete and current, all fees required to be paid have been
Table of Contentspaid, and Capital Opportunities is not subject to any stop order and is fully qualified to sell its shares in each state in which its shares have been registered;
(d) The current Prospectus and Statement of Additional Information of Capital Opportunities conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the regulations thereunder and do not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(e) Capital Opportunities is not in, and the execution, delivery and performance of this Agreement will not result in a, material violation of any provision of Capital Opportunities’ Declaration of Trust or By-Laws or of any agreement, indenture, instrument, contract, lease or other undertaking to which Capital Opportunities is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or, to its knowledge, threatened against Capital Opportunities 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; and Capital Opportunities knows of no facts that 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, or is reasonably likely to materially and adversely affect, its business or its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations, Statement of Changes in Net Assets and Financial Highlights for the fiscal year ended November 30, 2005, of Capital Opportunities audited by , Capital Opportunities’ independent registered public accounting firm (copies of which will be furnished to Aggressive Equity), fairly present, in all material respects, Capital Opportunities’ financial condition as of such date in accordance with generally accepted accounting principles, and its results of such operations, changes in its net assets and financial highlights for such period, and as of such date there will be no known liabilities of Capital Opportunities (contingent or otherwise) not disclosed therein that would be required in accordance with generally accepted accounting principles to be disclosed therein;
(h) All issued and outstanding Capital Opportunities Shares are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and nonassessable with no personal liability attaching to the ownership thereof, except as set forth under the caption ‘‘Capital Stock and Other Securities’’ in Capital Opportunities’ current Statement of Additional Information [to be incorporated by reference] in the Statement of Additional Information that forms a part of the Registration Statement. Capital Opportunities does not have outstanding any options, warrants or other rights to subscribe for or purchase any of its shares;
(i) The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of Capital Opportunities, and this Agreement constitutes a valid and binding obligation of Capital Opportunities 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. No other consents, authorizations or approvals are necessary in connection with Capital Opportunities performance of this Agreement;
(j) Capital Opportunities Shares to be issued and delivered to Aggressive Equity, for the account of the Aggressive Equity Shareholders, pursuant to the terms of this Agreement will at the Closing Date have been duly authorized and, when so issued and delivered, will be duly and validly issued
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Table of ContentsCapital Opportunities Shares, and will be fully paid and non-assessable with no personal liability attaching to the ownership thereof, except as set forth under the caption ‘‘Capital Stock and Other Securities’’ in Capital Opportunities’ current Statement of Additional Information [to be incorporated by reference] in the Statement of Additional Information to the Registration Statement;
(k) All material federal and other tax returns and reports of Capital Opportunities required by law to be filed on or before the Closing Date have been filed and are correct, and all federal and other taxes shown as due or required to be shown as due on said returns and reports have been paid or provision has been made for the payment thereof, and to the best of Capital Opportunities’ knowledge, no such return is currently under audit and no assessment has been asserted with respect to any such return;
(l) For each taxable year since its inception, Capital Opportunities has met the requirements of Subchapter M of the Code for qualification and treatment as a ‘‘regulated investment company’’ and neither the execution or delivery of nor the performance of its obligations under this Agreement will adversely affect, and no other events are reasonably likely to occur which will adversely affect the ability of Capital Opportunities to continue to meet the requirements of Subchapter M of the Code;
(m) Since November 30, 2005, there has been no change by Capital Opportunities in accounting methods, principles, or practices, including those required by generally accepted accounting principles;
(n) The information furnished or to be furnished by Capital Opportunities for use in registration statements, proxy materials and other documents 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 applicable thereto; and
(o) The Proxy Materials to be included in the Registration Statement (only insofar as they relate to Capital Opportunities) will, on the effective date of the Registration Statement and on the Closing Date, not contain any untrue statement of a 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.
5.2 Aggressive Equity represents and warrants to Capital Opportunities as follows:
(a) Aggressive Equity is a validly existing Massachusetts business trust with full power to carry on its business as presently conducted;
(b) Aggressive Equity is a duly registered, open-end, management investment company, and its registration with the Commission as an investment company under the 1940 Act and the registration of its shares under the 1933 Act are in full force and effect;
(c) All of the issued and outstanding shares of beneficial interest of Aggressive Equity have been offered and sold in compliance in all material respects with applicable requirements of the 1933 Act and state securities laws. Shares of Aggressive Equity are registered in all jurisdictions in which they are required to be registered and said registrations, including any periodic reports or supplemental filings, are complete and current, all fees required to be paid have been paid, and Aggressive Equity is not subject to any stop order and is fully qualified to sell its shares in each state in which its shares have been registered;
(d) The current Prospectus and Statement of Additional Information of Aggressive Equity conform in all material respects to the applicable requirements of the 1933 Act and the 1940 Act and the regulations thereunder and do not include any untrue statement of a material fact or omit to state any
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Table of Contentsmaterial fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(e) Aggressive Equity is not in, and the execution, delivery and performance of this Agreement will not result in a, material violation of any provision of Aggressive Equity’s Declaration of Trust or By-Laws or of any agreement, indenture, instrument, contract, lease or other undertaking to which Aggressive Equity is a party or by which it is bound;
(f) No litigation or administrative proceeding or investigation of or before any court or governmental body is presently pending or, to its knowledge, threatened against Aggressive Equity 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; and Aggressive Equity knows of no facts that 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, or is reasonably likely to materially and adversely affect, its business or its ability to consummate the transactions herein contemplated;
(g) The Statement of Assets and Liabilities, Statement of Operations, Statement of Changes in Net Assets and Financial Highlights of Aggressive Equity for the fiscal year ended July 31, 2005, audited by , Aggressive Equity’s independent registered public accounting firm (copies of which have been or will be furnished to Capital Opportunities) fairly present, in all material respects, Aggressive Equity’s financial condition as of such date, and its results of operations, changes in its net assets and financial highlights for such period in accordance with generally accepted accounting principles, and as of such date there were no known liabilities of Aggressive Equity (contingent or otherwise) not disclosed therein that would be required in accordance with generally accepted accounting principles to be disclosed therein;
(h) Aggressive Equity has no material contracts or other commitments (other than this Agreement) that will be terminated with liability to it prior to the Closing Date;
(i) All issued and outstanding shares of Aggressive Equity are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and nonassessable with no personal liability attaching to the ownership thereof, except as set forth under the caption ‘‘Capital Stock and Other Securities’’ in Aggressive Equity’s current Statement of Additional Information [to be incorporated by reference] in the Statement of Additional Information to the Registration Statement. Aggressive Equity does not have outstanding any options, warrants or other rights to subscribe for or purchase any of its shares, nor is there outstanding any security convertible to any of its shares. All such shares will, at the time of Closing, be held by the persons and in the amounts set forth in the list of shareholders submitted to Capital Opportunities pursuant to paragraph 3.4;
(j) The execution, delivery and performance of this Agreement will have been duly authorized prior to the Closing Date by all necessary action on the part of Aggressive Equity, and subject to the approval of Aggressive Equity’s shareholders, this Agreement constitutes a valid and binding obligation of Aggressive Equity, 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. No other consents, authorizations or approvals are necessary in connection with Aggressive Equity’s performance of this Agreement;
(k) All material federal and other tax returns and reports of Aggressive Equity required by law to be filed on or before the Closing Date shall have been filed and are correct and all federal and other taxes shown as due or required to be shown as due on said returns and reports have been paid or provision
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Table of Contentshas been made for the payment thereof, and to the best of Aggressive Equity’s knowledge, no such return is currently under audit and no assessment has been asserted with respect to any such return;
(l) For each taxable year since its inception, Aggressive Equity has met all the requirements of Subchapter M of the Code for qualification and treatment as a ‘‘regulated investment company’’ and neither the execution or delivery of nor the performance of its obligations under this Agreement will adversely affect, and no other events are reasonably likely to occur which will adversely affect the ability of Aggressive Equity to continue to meet the requirements of Subchapter M of the Code;
(m) At the Closing Date, Aggressive Equity will have good and valid title to the Aggressive Equity Assets, subject to no liens (other than the obligation, if any, to pay the purchase price of portfolio securities purchased by Aggressive Equity which have not settled prior to the Closing Date), security interests or other encumbrances, and full right, power and authority to assign, deliver and otherwise transfer such assets hereunder, and upon delivery and payment for such assets, Capital Opportunities will acquire good and marketable title thereto, subject to no restrictions on the full transfer thereof, including any restrictions as might arise under the 1933 Act;
(n) On the effective date of the Registration Statement, at the time of the meeting of Aggressive Equity’s shareholders and on the Closing Date, the Proxy Materials (exclusive of the currently effective Capital Opportunities Prospectus contained therein) will (i) comply in all material respects with the provisions of the 1933 Act, the Securities Exchange Act of 1934, as amended (the ‘‘1934 Act’’), and the 1940 Act and the regulations thereunder and (ii) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Any other information furnished by Aggressive Equity for use in the Registration Statement or in any other manner that may be necessary in connection with the transactions contemplated hereby shall be accurate and complete and shall comply in all material respects with applicable federal securities and other laws and regulations thereunder;
(o) Aggressive Equity will, on or prior to the Valuation Date, declare one or more dividends or other distributions to shareholders that, together with all previous dividends and other distributions to shareholders, shall have the effect of distributing to the shareholders substantially all of its investment company taxable income and net capital gain, if any, through the Valuation Date (computed without regard to any deduction for dividends paid);
(p) Aggressive Equity has maintained or has caused to be maintained on its behalf all books and accounts as required of a registered investment company in compliance with the requirements of Section 31 of the 1940 Act and the rules thereunder; and
(q) Aggressive Equity is not acquiring Capital Opportunities Shares to be issued hereunder for the purpose of making any distribution thereof other than in accordance with the terms of this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF AGGRESSIVE EQUITY
The obligations of Aggressive Equity to consummate the transactions provided for herein shall be subject, at its election, to the performance by Capital Opportunities of all the obligations to be performed by it hereunder on or before the Closing Date and, in addition thereto, the following conditions:
6.1 All representations and warranties of Capital Opportunities 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 Closing Date with the same force and effect as if made on and as of the Closing Date;
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Table of Contents6.2 Capital Opportunities shall have delivered to Aggressive Equity at the Closing a certificate of its President and Treasurer, in a form and substance reasonably satisfactory to Aggressive Equity and dated as of the Closing Date, to the effect that the representations and warranties of Capital Opportunities made in this Agreement are true and correct at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as Aggressive Equity shall reasonably request;
6.3 Aggressive Equity shall have received a favorable opinion from Clifford Chance US LLP, counsel to Capital Opportunities, dated as of the Closing Date, to the effect that:
(a) Capital Opportunities is a validly existing Massachusetts business trust, and has the power to own all of its properties and assets and to carry on its business as presently conducted (Massachusetts counsel may be relied upon in delivering such opinion); (b) Capital Opportunities is a duly registered, open-end, management investment company, and its registration with the Commission as an investment company under the 1940 Act is in full force and effect; (c) this Agreement has been duly authorized, executed and delivered by Capital Opportunities and, assuming that the Registration Statement complies with the 1933 Act, the 1934 Act and the 1940 Act and regulations thereunder and assuming due authorization, execution and delivery of this Agreement by Aggressive Equity, is a valid and binding obligation of Capital Opportunities enforceable against Capital Opportunities 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; (d) Capital Opportunities Shares to be issued to Aggressive Equity Shareholders as provided by this Agreement are duly authorized and upon such delivery will be validly issued, fully paid and non-assessable (except as set forth under the caption ‘‘Capital Stock and Other Securities’’ in Capital Opportunities’ current Statement of Additional Information), and no shareholder of Capital Opportunities has any preemptive rights to subscription or purchase in respect thereof (Massachusetts counsel may be relied upon in delivering such opinion); (e) the execution and delivery of this Agreement did not, and the consummation of the transactions contemplated hereby will not, violate Capital Opportunities’ Declaration of Trust or By-Laws; and (f) to the knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority of the United States or any state is required for the consummation by Capital Opportunities 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 under state securities laws; and
6.4 As of the Closing Date, there shall have been no material change in the investment objective, policies and restrictions nor any increase in the investment advisory fees or annual fees pursuant to Capital Opportunities’ 12b-1 plan of distribution from those described in Capital Opportunities’ Prospectus dated March 30, 2006 and Statement of Additional Information dated March 30, 2006.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF CAPITAL OPPORTUNITIES
The obligations of Capital Opportunities to complete the transactions provided for herein shall be subject, at its election, to the performance by Aggressive Equity of all 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 Aggressive Equity 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 Closing Date with the same force and effect as if made on and as of the Closing Date;
7.2 Aggressive Equity shall have delivered to Capital Opportunities at the Closing a certificate of its President and its Treasurer, in form and substance reasonably satisfactory to Capital Opportunities and
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Table of Contentsdated as of the Closing Date, to the effect that the representations and warranties of Aggressive Equity made in this Agreement are true and correct at and as of the Closing Date, except as they may be affected by the transactions contemplated by this Agreement, and as to such other matters as Capital Opportunities shall reasonably request;
7.3 Aggressive Equity shall have delivered to Capital Opportunities a statement of the Aggressive Equity Assets and its liabilities, together with a list of Aggressive Equity’s portfolio securities and other assets showing the respective adjusted bases and holding periods thereof for income tax purposes, as of the Closing Date, certified by the Treasurer of Aggressive Equity;
7.4 Capital Opportunities shall have received at the Closing a favorable opinion from Clifford Chance US LLP, counsel to Aggressive Equity, dated as of the Closing Date to the effect that:
(a) Aggressive Equity is a validly existing Massachusetts business trust and has the power to own all of its properties and assets and to carry on its business as presently conducted (Massachusetts counsel may be relied upon in delivering such opinion); (b) Aggressive Equity is a duly registered, open-end, management investment company under the 1940 Act, and its registration with the Commission as an investment company under the 1940 Act is in full force and effect; (c) this Agreement has been duly authorized, executed and delivered by Aggressive Equity and, assuming that the Registration Statement complies with the 1933 Act, the 1934 Act and the 1940 Act and the regulations thereunder and assuming due authorization, execution and delivery of this Agreement by Capital Opportunities, is a valid and binding obligation of Aggressive Equity enforceable against Aggressive Equity 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; (d) the execution and delivery of this Agreement did not, and the consummation of the transactions contemplated hereby will not, violate Aggressive Equity’s Declaration of Trust or By-Laws; and (e) to the knowledge of such counsel, no consent, approval, authorization or order of any court or governmental authority of the United States or any state is required for the consummation by Aggressive Equity 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 under state securities laws; and
7.5 On the Closing Date, the Aggressive Equity Assets shall include no assets that Capital Opportunities, by reason of limitations of the fund’s Declaration of Trust or otherwise, may not properly acquire.
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| 8. | FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF CAPITAL OPPORTUNITIES AND AGGRESSIVE EQUITY |
The obligations of Aggressive Equity and Capital Opportunities hereunder are each subject to the further conditions that on or before the Closing Date:
8.1 This Agreement and the transactions contemplated herein shall have been approved by the requisite vote of the holders of the outstanding shares of Aggressive Equity in accordance with the provisions of Aggressive Equity’s Declaration of Trust, and certified copies of the resolutions evidencing such approval shall have been delivered to Capital Opportunities;
8.2 On the Closing Date, no action, suit or other proceeding shall be pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, this Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and permits of federal, state and local regulatory authorities (including those of the Commission and of state Blue Sky and securities authorities,
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Table of Contentsincluding ‘‘no-action’’ positions of and exemptive orders from such federal and state authorities) deemed necessary by Capital Opportunities or Aggressive Equity 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 risk of a material adverse effect on the assets or properties of Capital Opportunities or Aggressive Equity;
8.4 The Registration Statement shall have become effective under the 1933 Act, 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 under the 1933 Act;
8.5 Aggressive Equity shall have declared and paid a dividend or dividends and/or other distribution or distributions that, together with all previous such dividends or distributions, shall have the effect of distributing to the Aggressive Equity Shareholders substantially all of Aggressive Equity’s investment company taxable income (computed without regard to any deduction for dividends paid) and substantially all of its net capital gain (after reduction for any capital loss carry-forward and computed without regard to any deduction for dividends paid) for all taxable years ending on or before the Closing Date; and
8.6 The parties shall have received the opinion of the law firm of Clifford Chance US LLP (based on such representations as such law firm shall reasonably request), addressed to Capital Opportunities and Aggressive Equity, which opinion may be relied upon by the shareholders of Aggressive Equity, substantially to the effect that, for federal income tax purposes:
(a) The transfer of Aggressive Equity’s assets in exchange for Capital Opportunities Shares and the assumption by Capital Opportunities of certain stated liabilities of Aggressive Equity followed by the distribution by Aggressive Equity of Capital Opportunities Shares to the Aggressive Equity Shareholders in exchange for their Aggressive Equity shares pursuant to and in accordance with the terms of the Reorganization Agreement will constitute a ‘‘reorganization’’ within the meaning of Section 368(a)(1)(C) of the Code, and Aggressive Equity and Capital Opportunities will each be a ‘‘party to a reorganization’’ within the meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by Capital Opportunities upon the receipt of the assets of Aggressive Equity solely in exchange for Capital Opportunities Shares and the assumption by Capital Opportunities of the stated liabilities of Aggressive Equity;
(c) No gain or loss will be recognized by Aggressive Equity upon the transfer of the assets of Aggressive Equity to Capital Opportunities in exchange for Capital Opportunities Shares and the assumption by Capital Opportunities of the stated liabilities or upon the distribution of Capital Opportunities Shares to the Aggressive Equity Shareholders in exchange for their Aggressive Equity shares;
(d) No gain or loss will be recognized by the Aggressive Equity Shareholders upon the exchange of the Aggressive Equity shares for Capital Opportunities Shares;
(e) The aggregate tax basis for Capital Opportunities Shares received by each Aggressive Equity Shareholder pursuant to the Reorganization will be the same as the aggregate tax basis of the Aggressive Equity shares held by each such Aggressive Equity Shareholder immediately prior to the Reorganization;
(f) The holding period of Capital Opportunities Shares to be received by each Aggressive Equity Shareholder will include the period during which the Aggressive Equity shares surrendered in exchange therefor were held (provided such Aggressive Equity shares were held as capital assets on the date of the Reorganization);
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Table of Contents(g) The tax basis of the assets of Aggressive Equity acquired by Capital Opportunities will be the same as the tax basis of such assets to Aggressive Equity immediately prior to the Reorganization; and
(h) The holding period of the assets of Aggressive Equity in the hands of Capital Opportunities will include the period during which those assets were held by Aggressive Equity.
Notwithstanding anything herein to the contrary, neither Capital Opportunities nor Aggressive Equity may waive the conditions set forth in this paragraph 8.6.
9. FEES AND EXPENSES
9.1 (a) Capital Opportunities shall bear its expenses incurred in connection with the entering into, and carrying out of, the provisions of this Agreement, including legal, accounting, Commission registration fees and Blue Sky expenses. Aggressive Equity shall bear its expenses incurred in connection with the entering into and carrying out of the provisions of this Agreement, including legal and accounting fees, printing, filing and proxy solicitation expenses and portfolio transfer taxes (if any) incurred in connection with the consummation of the transactions contemplated herein.
(b) In the event the transactions contemplated herein are not consummated by reason of Aggressive Equity being either unwilling or unable to go forward (other than by reason of the nonfulfillment or failure of any condition to Aggressive Equity’s obligations specified in this Agreement), Aggressive Equity’s only obligation hereunder shall be to reimburse Capital Opportunities for all reasonable out-of-pocket fees and expenses incurred by Capital Opportunities in connection with those transactions.
(c) In the event the transactions contemplated herein are not consummated by reason of Capital Opportunities being either unwilling or unable to go forward (other than by reason of the nonfulfillment or failure of any condition to Capital Opportunities’ obligations specified in this Agreement), Capital Opportunities’ only obligation hereunder shall be to reimburse Aggressive Equity for all reasonable out-of-pocket fees and expenses incurred by Aggressive Equity in connection with those transactions.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement between the parties.
10.2 The representations, warranties and covenants contained in this Agreement or in any document delivered pursuant hereto or in connection herewith shall survive the consummation of the transactions contemplated herein, except that the representations, warranties and covenants of Aggressive Equity hereunder shall not survive the dissolution and complete liquidation of Aggressive Equity in accordance with Section 1.9.
11. TERMINATION
11.1 This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing:
(a) by the mutual written consent of Aggressive Equity and Capital Opportunities;
(b) by either Capital Opportunities or Aggressive Equity by notice to the other, without liability to the terminating party on account of such termination (providing the terminating party is not otherwise in material default or breach of this Agreement), if the Closing shall not have occurred on or before February 28, 2007; or
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Table of Contents(c) by either Capital Opportunities or Aggressive Equity, in writing without liability to the terminating party on account of such termination (provided the terminating party is not otherwise in material default or breach of this Agreement), if (i) the other party shall fail to perform in any material respect its agreements contained herein required to be performed on or prior to the Closing Date, (ii) the other party materially breaches any of its representations, warranties or covenants contained herein, (iii) the Aggressive Equity shareholders fail to approve this Agreement at any meeting called for such purpose at which a quorum was present or (iv) any other condition herein expressed to be precedent to the obligations of the terminating party has not been met and it reasonably appears that it will not or cannot be met.
11.2 (a) Termination of this Agreement pursuant to paragraphs 11.1(a) or (b) shall terminate all obligations of the parties hereunder and there shall be no liability for damages on the part of Capital Opportunities or Aggressive Equity, or the trustees or officers of Capital Opportunities or Aggressive Equity, to any other party or its trustees or officers.
(b) Termination of this Agreement pursuant to paragraph 11.1(c) shall terminate all obligations of the parties hereunder and there shall be no liability for damages on the part of Capital Opportunities or Aggressive Equity, or the trustees or officers of Capital Opportunities or Aggressive Equity, except that any party in breach of this Agreement shall, upon demand, reimburse the non-breaching party for all reasonable out-of-pocket fees and expenses incurred in connection with the transactions contemplated by this Agreement, including legal, accounting and filing fees.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as may be mutually agreed upon in writing by the parties.
13. MISCELLANEOUS
13.1 The article and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
13.2 This Agreement may be executed in any number of counterparts, each of which shall be deemed an original.
13.3 This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts.
13.4 This Agreement 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 Agreement.
13.5 The obligations and liabilities of Capital Opportunities hereunder are solely those of Capital Opportunities. It is expressly agreed that no shareholder, nominee, trustee, officer, agent, or employee of Capital Opportunities shall be personally liable hereunder. The execution and delivery of this Agreement have been authorized by the trustees of Capital Opportunities and signed by authorized officers of Capital Opportunities acting as such, and neither such authorization by such trustees nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally.
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Table of Contents13.6 The obligations and liabilities of Aggressive Equity hereunder are solely those of Aggressive Equity. It is expressly agreed that no shareholder, nominee, trustee, officer, agent, or employee of Aggressive Equity shall be personally liable hereunder. The execution and delivery of this Agreement have been authorized by the trustees of Aggressive Equity and signed by authorized officers of Aggressive Equity acting as such, and neither such authorization by such trustees nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed by a duly authorized officer.
| | | | | | | | | | |
| | | MORGAN STANLEY AGGRESSIVE EQUITY FUND |
| | | By: | | |
| | | | | Name: Ronald E. Robison
Title: President and Principal Executive Officer |
| | | MORGAN STANLEY CAPITAL OPPORTUNITIES TRUST |
| | | By: | | |
| | | | | Name: Amy R. Doberman
Title: Vice President |
|
A-15
Table of ContentsEXHIBIT B
Prospectus of Morgan Stanley Capital Opportunities Trust
dated March 30, 2006
[To come]
Table of ContentsMORGAN STANLEY CAPITAL OPPORTUNITIES TRUST
PART B
STATEMENT OF ADDITIONAL INFORMATION
This Statement of Additional Information relates to the shares of Morgan Stanley Capital Opportunities Trust (‘‘Capital Opportunities’’) to be issued pursuant to an Agreement and Plan of Reorganization, dated , 2006, between Capital Opportunities and Morgan Stanley Aggressive Equity Fund (‘‘Aggressive Equity’’) in connection with the acquisition by Capital Opportunities of substantially all of the assets, subject to stated liabilities, of Aggressive Equity. This Statement of Additional Information does not constitute a prospectus. This Statement of Additional Information does not include all information that a shareholder should consider before voting on the proposals contained in the Proxy Statement and Prospectus, and, therefore, should be read in conjunction with the related Proxy Statement and Prospectus, dated [June 8], 2006. A copy of the Proxy Statement and Prospectus may be obtained without charge by mailing a written request to Morgan Stanley Capital Opportunities Trust, c/o Morgan Stanley Trust, Harborside Financial Center, Plaza Two, Jersey City, NJ 07311 or by calling (800) 869-NEWS (toll-free). Please retain this document for future reference.
The date of this Statement of Additional Information is [June 8], 2006.
B-1
TABLE OF CONTENTS
B-2
Table of ContentsINTRODUCTION
This Statement of Additional Information is intended to supplement the information provided in the Proxy Statement and Prospectus dated [June 8], 2006 (the ‘‘Proxy Statement and Prospectus’’). The Proxy Statement and Prospectus has been sent to Aggressive Equity's shareholders in connection with the solicitation of proxies by the Board of Trustees of Aggressive Equity to be voted at the Special Meeting of Shareholders of Aggressive Equity to be held on August 1, 2006. This Statement of Additional Information incorporates by reference the Statement of Additional Information of Capital Opportunities dated March 30, 2006 and the Statement of Additional Information of Aggressive Equity dated November 30, 2005.
ADDITIONAL INFORMATION ABOUT CAPITAL OPPORTUNITIES
Fund History
For additional information about Capital Opportunities' history, see ‘‘Fund History’’ in Capital Opportunities' Statement of Additional Information.
Investment Objective, Policies and Risks
For additional information about Capital Opportunities' investment objective, policies and risks, see ‘‘Description of the Fund and Its Investments and Risks’’ in Capital Opportunities' Statement of Additional Information.
Portfolio Holdings
For additional information about Capital Opportunities' policies and procedures with respect to the disclosure of Capital Opportunities' portfolio securities to any person, see ‘‘Description of the Fund and Its Investments and Risks’’ in Capital Opportunities' Statement of Additional Information.
Management
For additional information about the Board of Trustees, officers and management personnel of Capital Opportunities, see ‘‘Management of the Fund’’ and ‘‘Investment Advisory and Other Services’’ in Capital Opportunities' Statement of Additional Information.
Investment Advisory and Other Services
For additional information about Capital Opportunities' investment adviser, Capital Opportunities' independent registered public accounting firm and other services provided to Capital Opportunities, see ‘‘Investment Advisory and Other Services’’ in Capital Opportunities' Statement of Additional Information.
Codes of Ethics
For additional information about the Codes of Ethics adopted by Capital Opportunities, Capital Opportunities' investment adviser and Capital Opportunities' distributor, see ‘‘Investment Advisory and Other Services — Codes of Ethics’’ in Capital Opportunities' Statement of Additional Information.
Proxy Voting Policies
For additional information about the voting of proxies held by Capital Opportunities, see ‘‘Investment Advisory and Other Services — Proxy Voting Policy and Proxy Voting Record’’ in Capital Opportunities' Statement of Additional Information.
B-3
Table of ContentsPortfolio Managers
For additional information about the portfolio managers primarily responsible for the day-to-day management of Capital Opportunities, their compensation structure and their holdings in Capital Opportunities, see ‘‘Investment Advisory and Other Services — Fund Management’’ in Capital Opportunities' Statement of Additional Information.
Portfolio Transactions and Brokerage
For additional information about brokerage allocation practices, see ‘‘Brokerage Allocation and Other Practices’’ in Capital Opportunities' Statement of Additional Information.
Description of Fund Shares
For additional information about the voting rights and other characteristics of the shares of Capital Opportunities, see ‘‘Capital Stock and Other Securities’’ in Capital Opportunities' Statement of Additional Information.
Purchase, Redemption and Pricing of Shares
For additional information about the purchase and redemption of Capital Opportunities' shares and the determination of net asset value, see ‘‘Purchase, Redemption and Pricing of Shares’’ in Capital Opportunities' Statement of Additional Information.
Dividends, Distributions and Tax Status
For additional information about Capital Opportunities' policies regarding dividends and distributions and tax matters affecting Capital Opportunities and its shareholders, see ‘‘Taxation of the Fund and Shareholders’’ in Capital Opportunities' Statement of Additional Information.
Distribution of Shares
For additional information about Capital Opportunities' distributor and the distribution agreement between Capital Opportunities and its distributor, see ‘‘Investment Advisory and Other Services’’ and ‘‘Underwriters’’ in Capital Opportunities' Statement of Additional Information.
Performance Data
For additional information about Capital Opportunities' performance, see ‘‘Performance Data’’ in Capital Opportunities' Statement of Additional Information.
ADDITIONAL INFORMATION ABOUT AGGRESSIVE EQUITY
Fund History
For additional information about Aggressive Equity's history, see ‘‘Fund History’’ in Aggressive Equity's Statement of Additional Information.
Investment Objective and Policies
For additional information about Aggressive Equity's investment objective and policies, see ‘‘Description of the Fund and Its Investments and Risks’’ in Aggressive Equity's Statement of Additional Information.
B-4
Table of ContentsPortfolio Holdings
For additional information about Aggressive Equity's policies and procedures with respect to the disclosure of Aggressive Equity's portfolio securities to any person, see ‘‘Description of the Fund and Its Investments and Risks — Disclosure of Portfolio Holdings’’ in Aggressive Equity's Statement of Additional Information.
Management
For additional information about the Board of Trustees, officers and management personnel of Aggressive Equity, see ‘‘Management of the Fund’’ and ‘‘Investment Advisory and Other Services’’ in Aggressive Equity's Statement of Additional Information.
Investment Advisory and Other Services
For additional information about Aggressive Equity's investment adviser, independent registered public accounting firm and other services provided to Aggressive Equity, see ‘‘Investment Advisory and Other Services’’ in Aggressive Equity's Statement of Additional Information.
Codes of Ethics
For additional information about the Codes of Ethics adopted by Aggressive Equity, Aggressive Equity's investment adviser and Aggressive Equity's distributor, see ‘‘Investment Advisory and Other Services — Codes of Ethics’’ in Aggressive Equity's Statement of Additional Information.
Proxy Voting Policies
For additional information about the voting of proxies held by Aggressive Equity, see ‘‘Investment Advisory and Other Services — Proxy Voting Policy and Proxy Voting Record’’ in Aggressive Equity's Statement of Additional Information.
Portfolio Managers
For additional information about the portfolio managers primarily responsible for the day-to-day management of Aggressive Equity, their compensation structure and their holdings in Aggressive Equity, see ‘‘Investment Advisory and Other Services — Fund Management’’ in Aggressive Equity's Statement of Additional Information.
Portfolio Transactions and Brokerage
For additional information about brokerage allocation practices, see ‘‘Brokerage Allocation and Other Practices’’ in Aggressive Equity's Statement of Additional Information.
Description of Fund Shares
For additional information about the voting rights and other characteristics of the shares of Aggressive Equity, see ‘‘Capital Stock and Other Securities’’ in Aggressive Equity's Statement of Additional Information.
Purchase, Redemption and Pricing of Shares
For additional information about the purchase and redemption of Aggressive Equity's shares and the determination of net asset value, see ‘‘Purchase, Redemption and Pricing of Shares’’ in Aggressive Equity's Statement of Additional Information.
B-5
Table of ContentsDividends, Distributions and Tax Status
For additional information about Aggressive Equity's policies regarding dividends and distributions and tax matters affecting Aggressive Equity and its shareholders, see ‘‘Taxation of the Fund and Shareholders’’ in Aggressive Equity's Statement of Additional Information.
Distribution of Shares
For additional information about Aggressive Equity's distributor and the distribution agreement between Aggressive Equity and its distributor, see ‘‘Investment Advisory and Other Services’’ and ‘‘Underwriters’’ in Aggressive Equity's Statement of Additional Information.
Performance Data
For additional information about Aggressive Equity's performance, see ‘‘Performance Data’’ in Aggressive Equity's Statement of Additional Information.
FINANCIAL STATEMENTS
Capital Opportunities' most recent audited financial statements are set forth in Capital Opportunities' Annual Report for the fiscal year ended November 30, 2005. A copy of the Annual Report accompanies, and is incorporated by reference in, the Proxy Statement and Prospectus. Aggressive Equity's most recent audited financial statements are set forth in Aggressive Equity's Annual Report for the fiscal year ended July 31, 2005, which is incorporated by reference in the Proxy Statement and Prospectus.
Shown below are Financial Statements for both Aggressive Equity and Capital Opportunities and Pro Forma Financial Statements for the Combined Fund at January 31, 2006, as though the reorganization occurred as of that date. The first table presents Portfolio of Investments (unaudited) for both Aggressive Equity and Capital Opportunities and pro forma figures for the Combined Fund. The second table presents Statements of Assets and Liabilities (unaudited) for both Aggressive Equity and Capital Opportunities and pro forma figures for the Combined Fund. The third table presents Statements of Operations (unaudited) for both Aggressive Equity and Capital Opportunities and pro forma figures for the Combined Fund. The tables are followed by the Notes to the Pro Forma Financial Statements (unaudited).
B-6
Table of ContentsMorgan Stanley Capital Opportunities Trust
Pro Forma Portfolio of Investments as of January 31, 2006
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley Capital
Opportunities Trust | | Morgan Stanley Aggressive
Equity Fund | | Combined |
| | | Number of Shares | | Value | | Number of Shares | | Value | | Number of Shares | | Value |
| COMMON STOCKS (99.4%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Advertising/Marketing Services (3.5%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Getty Images, Inc.* | | | 162,800 | | | $ | 13,292,620 | | | | 143,300 | | | $ | 11,700,445 | | | | 306,100 | | | $ | 24,993,065 | |
| Air Freight/Couriers (3.8%) | | | | | | | | | | | | | | | | | | | | | | | | |
| C.H. Robinson Worldwide, Inc. | | | 178,900 | | | | 7,238,294 | | | | 157,500 | | | | 6,372,450 | | | | 336,400 | | | | 13,610,744 | |
| Expeditors International of Washington, Inc. | | | 102,000 | | | | 7,501,080 | | | | 89,800 | | | | 6,603,892 | | | | 191,800 | | | | 14,104,972 | |
| | | | | | | | 14,739,374 | | | | | | | | 12,976,342 | | | | | | | | 27,715,716 | |
| Casino/Gaming (4.3%) | | | | | | | | | | | | | | | | | | | | | | | | |
| International Game Technology | | | 214,900 | | | | 7,689,122 | | | | 187,100 | | | | 6,694,438 | | | | 402,000 | | | | 14,383,560 | |
| Station Casinos, Inc. | | | 132,500 | | | | 8,857,625 | | | | 116,700 | | | | 7,801,395 | | | | 249,200 | | | | 16,659,020 | |
| | | | | | | | 16,546,747 | | | | | | | | 14,495,833 | | | | | | | | 31,042,580 | |
| Chemicals: Agricultural (4.2%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Monsanto Co. | | | 190,530 | | | | 16,120,743 | | | | 166,230 | | | | 14,064,720 | | | | 356,760 | | | | 30,185,463 | |
| Discount Stores (6.8%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Costco Wholesale Corp. | | | 299,500 | | | | 14,942,055 | | | | 260,500 | | | | 12,996,345 | | | | 560,000 | | | | 27,938,400 | |
| Sears Holdings Corp.* | | | 93,500 | | | | 11,354,640 | | | | 81,600 | | | | 9,909,504 | | | | 175,100 | | | | 21,264,144 | |
| | | | | | | | 26,296,695 | | | | | | | | 22,905,849 | | | | | | | | 49,202,544 | |
| Electronic Production Equipment (1.6%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Tessera Technologies, Inc.* | | | 194,100 | | | | 6,265,548 | | | | 170,900 | | | | 5,516,652 | | | | 365,000 | | | | 11,782,200 | |
| Financial Conglomerates (3.8%) | | | | | | | | | | | | | | | | | | | | | | | | |
Brookfield Asset Management Inc.
(Class A) (Canada) | | | 277,600 | | | | 14,868,256 | | | | 241,800 | | | | 12,950,808 | | | | 519,400 | | | | 27,819,064 | |
| Gas Distributors (1.0%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Questar Corp. | | | 46,900 | | | | 3,821,412 | | | | 41,300 | | | | 3,365,124 | | | | 88,200 | | | | 7,186,536 | |
| Home Building (3.1%) | | | | | | | | | | | | | | | | | | | | | | | | |
Desarrolladora Homex S.A. de C.V.
(ADR) (Mexico)* | | | 165,300 | | | | 5,737,563 | | | | 145,500 | | | | 5,050,305 | | | | 310,800 | | | | 10,787,868 | |
| NVR, Inc.* | | | 7,694 | | | | 6,110,960 | | | | 6,754 | | | | 5,364,364 | | | | 14,448 | | | | 11,475,324 | |
| | | | | | | | 11,848,523 | | | | | | | | 10,414,669 | | | | | | | | 22,263,192 | |
| Hotels/Resorts/Cruiselines (2.9%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Carnival Corp. (Panama) | | | 217,000 | | | | 11,231,920 | | | | 191,100 | | | | 9,891,336 | | | | 408,100 | | | | 21,123,256 | |
| Internet Retail (1.7%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Amazon.com, Inc.* | | | 150,600 | | | | 6,749,892 | | | | 132,600 | | | | 5,943,132 | | | | 283,200 | | | | 12,693,024 | |
| Internet Software/Services (8.6%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Google, Inc. (Class A)* | | | 51,600 | | | | 22,355,700 | | | | 45,400 | | | | 19,669,550 | | | | 97,000 | | | | 42,025,250 | |
| Yahoo!, Inc.* | | | 310,000 | | | | 10,645,400 | | | | 272,900 | | | | 9,371,386 | | | | 582,900 | | | | 20,016,786 | |
| | | | | | | | 33,001,100 | | | | | | | | 29,040,936 | | | | | | | | 62,042,036 | |
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B-7
Table of ContentsMorgan Stanley Capital Opportunities Trust
Pro Forma Portfolio of Investments as of January 31, 2006
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley Capital
Opportunities Trust | | Morgan Stanley Aggressive
Equity Fund | | Combined |
| | | Number of Shares | | Value | | Number of Shares | | Value | | Number of Shares | | Value |
| Investment Banks/Brokers (4.7%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Chicago Mercantile Exchange Holdings, Inc. | | | 19,590 | | | $ | 8,291,467 | | | | 17,255 | | | $ | 7,303,179 | | | | 36,845 | | | $ | 15,594,646 | |
| Greenhill & Co., Inc. | | | 173,194 | | | | 9,903,233 | | | | 152,499 | | | | 8,719,893 | | | | 325,693 | | | | 18,623,126 | |
| | | | | | | | 18,194,700 | | | | | | | | 16,023,072 | | | | | | | | 34,217,772 | |
| Medical Specialties (2.2%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Dade Behring Holdings, Inc. | | | 212,400 | | | | 8,311,212 | | | | 187,000 | | | | 7,317,310 | | | | 399,400 | | | | 15,628,522 | |
| Miscellaneous Commercial Services (5.9%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Corporate Executive Board Co. (The) | | | 202,450 | | | | 17,034,143 | | | | 178,200 | | | | 14,993,748 | | | | 380,650 | | | | 32,027,891 | |
| Iron Mountain Inc.* | | | 138,794 | | | | 5,784,934 | | | | 122,187 | | | | 5,092,754 | | | | 260,981 | | | | 10,877,688 | |
| | | | | | | | 22,819,077 | | | | | | | | 20,086,502 | | | | | | | | 42,905,579 | |
| Motor Vehicles (1.3%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Harley-Davidson, Inc. | | | 95,100 | | | | 5,090,703 | | | | 83,700 | | | | 4,480,461 | | | | 178,800 | | | | 9,571,164 | |
| Oil & Gas Production (11.1%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Southwestern Energy Co.* | | | 157,238 | | | | 6,783,248 | | | | 138,486 | | | | 5,974,286 | | | | 295,724 | | | | 12,757,534 | |
| Ultra Petroleum Corp. (Canada)* | | | 521,780 | | | | 35,893,246 | | | | 459,420 | | | | 31,603,502 | | | | 981,200 | | | | 67,496,748 | |
| | | | | | | | 42,676,494 | | | | | | | | 37,577,788 | | | | | | | | 80,254,282 | |
| Other Consumer Services (6.6%) | | | | | | | | | | | | | | | | | | | | | | | | |
| eBay, Inc.* | | | 443,600 | | | | 19,119,160 | | | | 390,600 | | | | 16,834,860 | | | | 834,200 | | | | 35,954,020 | |
| Strayer Education, Inc. | | | 68,900 | | | | 6,101,784 | | | | 60,700 | | | | 5,375,592 | | | | 129,600 | | | | 11,477,376 | |
| | | | | | | | 25,220,944 | | | | | | | | 22,210,452 | | | | | | | | 47,431,396 | |
| Packaged Software (3.3%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Red Hat, Inc.* | | | 199,800 | | | | 5,784,210 | | | | 175,900 | | | | 5,092,305 | | | | 375,700 | | | | 10,876,515 | |
| Salesforce.com Inc.* | | | 169,400 | | | | 6,953,870 | | | | 149,100 | | | | 6,120,555 | | | | 318,500 | | | | 13,074,425 | |
| | | | | | | | 12,738,080 | | | | | | | | 11,212,860 | | | | | | | | 23,950,940 | |
| Personnel Services (2.1%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Monster Worldwide, Inc.* | | | 186,700 | | | | 7,964,622 | | | | 164,400 | | | | 7,013,304 | | | | 351,100 | | | | 14,977,926 | |
| Property – Casualty Insurers (2.9%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Berkshire Hathaway, Inc. (Class B)* | | | 3,772 | | | | 11,059,504 | | | | 3,284 | | | | 9,628,688 | | | | 7,056 | | | | 20,688,192 | |
| Recreational Products (2.3%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Electronic Arts, Inc.* | | | 165,500 | | | | 9,032,990 | | | | 145,700 | | | | 7,952,306 | | | | 311,200 | | | | 16,985,296 | |
| Restaurants (1.4%) | | | | | | | | | | | | | | | | | | | | | | | | |
| P.F. Chang's China Bistro, Inc.* | | | 102,335 | | | | 5,245,692 | | | | 90,100 | | | | 4,618,526 | | | | 192,435 | | | | 9,864,218 | |
| Semiconductors (1.7%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Marvell Technology Group, Ltd. (Bermuda)* | | | 96,000 | | | | 6,568,320 | | | | 84,500 | | | | 5,781,490 | | | | 180,500 | | | | 12,349,810 | |
| Services to the Health Industry (2.1%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Stericycle, Inc.* | | | 136,461 | | | | 8,156,274 | | | | 120,184 | | | | 7,183,398 | | | | 256,645 | | | | 15,339,672 | |
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B-8
Table of ContentsMorgan Stanley Capital Opportunities Trust
Pro Forma Portfolio of Investments as of January 31, 2006
(unaudited)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley Capital
Opportunities Trust | | Morgan Stanley Aggressive
Equity Fund | | Combined |
| | | Number of Shares | | Value | | Number of Shares | | Value | | Number of Shares | | Value |
| Specialty Telecommunications (2.9%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Crown Castle International Corp.* | | | 350,016 | | | $ | 11,071,006 | | | | 308,116 | | | $ | 9,745,709 | | | | 658,132 | | | $ | 20,816,715 | |
| Wireless Telecommunications (3.6%) | | | | | | | | | | | | | | | | | | | | | | | | |
America Movil S.A. de C.V. (Series L)
(ADR) (Mexico) | | | 415,600 | | | | 14,018,188 | | | | 361,200 | | | | 12,183,276 | | | | 776,800 | | | | 26,201,464 | |
| Total Common Stocks (Cost $281,822,843, $251,502,437 | | | | | | | | | | | | | | | | | | | | |
| and $533,325,280, respectively) | | | | | | | 382,950,636 | | | | | | | | 336,280,988 | | | | | | | | 719,231,624 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Principal
Amount in
Thousands | | | | Principal
Amount in
Thousands | | | | Principal
Amount in
Thousands | | |
| SHORT-TERM INVESTMENTS (1.2%) | | | | | | | | | | | | | | | | | | | | | | | | |
| Repurchase Agreements | | | | | | | | | | | | | | | | | | | | | | | | |
Joint repurchase agreement account 4.445% due 02/01/06 (dated 01/31/06; proceeds $5,662,699, $3,327,411 and $8,990,110,
respectively) (a)
(Cost $5,662,000, $3,327,000 and $8,989,000, respectively) | | $ | 5,662 | | | | 5,662,000 | | | $ | 3,327 | | | | 3,327,000 | | | $ | 8,989 | | | | 8,989,000 | |
| Total Investments | | | | | | | | | | | | | | | | | | | | | | | | |
| (Cost$287,484,843,$254,829,437and$542,314,280,respectively)(b) | | | 100.6 | % | | $ | 388,612,636 | | | | | | | $ | 339,607,988 | | | | | | | $ | 728,220,624 | |
|
| |
| ADR | American Depositary Receipt. |
| |
| * | Non-income producing security. |
| |
| (a) | Collateralized by federal agency and U.S. Treasury obligations. |
| |
| (b) | The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. |
| | | | | | | | | | | | | | |
| | | Gross
Unrealized
Appreciation | | Gross
Unrealized
Depreciation | | Net
Unrealized
Appreciation |
| Morgan Stanley Capital Opportunities Trust | | $ | 103,632,713 | | | $ | 2,504,920 | | | $ | 101,127,793 | |
| Morgan Stanley Aggressive Equity Fund | | | 85,242,690 | | | | 464,139 | | | | 84,778,551 | |
| Combined | | $ | 188,875,403 | | | $ | 2,969,059 | | | $ | 185,906,344 | |
|
B-9
Table of ContentsMorgan Stanley Capital Opportunities Trust
Pro-Forma Financial Statements
Statement of Assets And Liabilities
January 31, 2006 (unaudited)
| | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley
Capital
Opportunities Trust | | Morgan Stanley
Aggressive
Equity Fund | | Pro-Forma
Adjustments | | Combined |
| ASSETS: | | | | | | | | | | | | | | | | |
| Investments in securities, at value (cost $287,484,843, $254,829,437 and $542,314,280, respectively) | | $ | 388,612,636 | | | $ | 339,607,988 | | | | — | | | $ | 728,220,624 | |
| Cash | | | 731 | | | | 970 | | | | — | | | | 1,701 | |
| Receivable for: | | | | | | | | | | | | | | | | |
| Investments sold | | | 834,711 | | | | 712,907 | | | | — | | | | 1,547,618 | |
| Shares of beneficial interest sold | | | 873,402 | | | | 347,480 | | | | — | | | | 1,220,882 | |
| Dividends | | | 34,575 | | | | 30,150 | | | | — | | | | 64,725 | |
| Foreign withholding taxes reclaimed | | | — | | | | 7,071 | | | | — | | | | 7,071 | |
| Prepaid expenses and other assets | | | 21,760 | | | | 68,935 | | | | — | | | | 90,695 | |
| Receivable from affiliate | | | 106,208 | | | | 2,732 | | | | — | | | | 108,940 | |
| TOTAL ASSETS | | | 390,484,023 | | | | 340,778,233 | | | | — | | | | 731,262,256 | |
| LIABILITIES: | | | | | | | | | | | | | | | | |
| Payable for: | | | | | | | | | | | | | | | | |
| Securities purchased | | | 2,770,604 | | | | 2,400,846 | | | | — | | | | 5,171,450 | |
| Shares of beneficial interest redeemed | | | 574,926 | | | | 487,514 | | | | — | | | | 1,062,440 | |
| Distribution fee | | | 168,924 | | | | 255,520 | | | | — | | | | 424,444 | |
| Investment advisory fee | | | 224,012 | | | | 194,976 | | | | — | | | | 418,988 | |
| Transfer agent fee | | | 33,999 | | | | 27,876 | | | | — | | | | 61,875 | |
| Administration fee | | | 26,748 | | | | 23,281 | | | | — | | | | 50,029 | |
| Accrued expenses and other payables | | | 116,668 | | | | 44,009 | | | $ | 367,349 | (1) | | | 528,026 | |
| TOTAL LIABILITIES | | | 3,915,881 | | | | 3,434,022 | | | | 367,349 | | | | 7,717,252 | |
| NET ASSETS | | $ | 386,568,142 | | | $ | 337,344,211 | | | $ | (367,349 | ) | | $ | 723,545,004 | |
| COMPOSITION OF NET ASSETS: | | | | | | | | | | | | | | | | |
| Paid-in-capital | | $ | 1,005,173,338 | | | $ | 630,134,281 | | | | — | | | $ | 1,635,307,619 | |
| Net unrealized appreciation | | | 101,127,793 | | | | 84,780,502 | | | | — | | | | 185,908,295 | |
| Accumulated net investment loss | | | (511,020 | ) | | | (2,261,442 | ) | | $ | (367,349) | (1) | | | (3,139,811 | ) |
| Accumulated net realized loss | | | (719,221,969 | ) | | | (375,309,130 | ) | | | — | | | | (1,094,531,099 | ) |
| NET ASSETS | | $ | 386,568,142 | | | $ | 337,344,211 | | | $ | (367,349 | ) | | $ | 723,545,004 | |
| CLASS A SHARES: | | | | | | | | | | | | | | | | |
| Net Assets | | $ | 130,655,618 | | | $ | 51,428,386 | | | $ | (124,160) | (1) | | $ | 181,959,844 | |
| Shares Outstanding (unlimited authorized, $.01 par value) | | | 6,610,237 | | | | 4,085,640 | | | | (1,484,305 | )(2) | | | 9,211,572 | |
| NET ASSET VALUE PER SHARE | | $ | 19.77 | | | $ | 12.59 | | | | | | | $ | 19.75 | |
Maximum Offering Price Per Share,
(net asset value plus 5.54% of net asset value) | | $ | 20.87 | | | $ | 13.29 | | | | | | | $ | 20.84 | |
|
B-10
Table of Contents
| | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley
Capital
Opportunities Trust | | Morgan Stanley
Aggressive
Equity Fund | | Pro-Forma
Adjustments | | Combined |
| CLASS B SHARES: | | | | | | | | | | |
| Net Assets | | $146,079,568 | | $249,506,249 | | $ | (138,817) | (1) | | $ | 395,447,000 | |
| Shares Outstanding (unlimited authorized, $.01 par value) | | 7,846,493 | | 20,936,392 | | | (7,536,486) | (2) | | | 21,246,399 | |
| NET ASSET VALUE PER SHARE | | $18.62 | | $11.92 | | | | $ | 18.61 | |
| CLASS C SHARES: | | | | | | | | | | |
| Net Assets | | $15,887,468 | | $31,680,325 | | $ | (15,097) | (1) | | $ | 47,552,696 | |
| Shares Outstanding (unlimited authorized, $.01 par value) | | 856,972 | | 2,655,164 | | | (946,409) | (2) | | | 2,565,727 | |
| NET ASSET VALUE PER SHARE | | $18.54 | | $11.93 | | | | $ | 18.53 | |
| CLASS D SHARES: | | | | | | | | | | |
| Net Assets | | $93,945,488 | | $4,729,251 | | $ | (89,275) | (1) | | $ | 98,585,464 | |
| Shares Outstanding (unlimited authorized, $.01 par value) | | 4,670,027 | | 369,476 | | | (134,424) | (2) | | | 4,905,079 | |
| NET ASSET VALUE PER SHARE | | $20.12 | | $12.80 | | | | $ | 20.10 | |
|
| |
| (1) | Represents a non-recurring cost in connection with the reorganization which will be borne by Morgan Stanley Capital Opportunities Trust. |
| |
| (2) | Represents the difference between total additional shares to be issued (see Note 2) and current Morgan Stanley Aggressive Equity Fund shares outstanding. |
See Notes to Pro Forma Financial Statements
B-11
Table of ContentsMorgan Stanley Capital Opportunities Trust
Pro-Forma Financial Statements
Statement of Operations
For the Twelve Months Ended January 31, 2006 (unaudited)
| | | | | | | | | | | | | | | | | | |
| | | Morgan Stanley
Capital
Opportunities Trust | | Morgan Stanley
Aggressive
Equity Fund | | Pro-Forma
Adjustments | | Combined |
| NET INVESTMENT INCOME: | | | | | | | | | | | | | | | | |
| INCOME | | | | | | | | | | | | | | | | |
| Dividends (net of $14,881, $0 and $14,881, foreign withholding tax, respectively) | | $ | 1,790,822 | | | $ | 1,822,430 | | | | — | | | $ | 3,613,252 | |
| Interest | | | 163,879 | | | | 129,121 | | | | — | | | | 293,000 | |
| TOTAL INCOME | | | 1,954,701 | | | | 1,951,551 | | | | — | | | | 3,906,252 | |
| EXPENSES | | | | | | | | | | | | | | | | |
| Investment advisory fee | | | 2,373,681 | | | | 2,117,050 | | | $ | (42,565) | (1) | | | 4,448,166 | |
| Distribution fee (Class A shares) | | | 187,849 | | | | 107,460 | | | | — | | | | 295,309 | |
| Distribution fee (Class B shares) | | | 1,641,263 | | | | 2,398,466 | | | | — | | | | 4,039,729 | |
| Distribution fee (Class C shares) | | | 169,708 | | | | 300,035 | | | | — | | | | 469,743 | |
| Transfer agent fees and expenses | | | 1,340,714 | | | | 966,988 | | | | — | | | | 2,307,702 | |
| Administration fee | | | 283,424 | | | | 252,782 | | | | — | | | | 536,206 | |
| Shareholder reports and notices | | | 147,328 | | | | 129,793 | | | | (51,917 | )(2) | | | 225,204 | |
| Professional fees | | | 115,485 | | | | 69,268 | | | | (89,126 | )(2) | | | 95,627 | |
| Registration fees | | | 52,277 | | | | 49,023 | | | | (19,116 | )(2) | | | 82,184 | |
| Custodian fees | | | 26,293 | | | | 25,659 | | | | — | | | | 51,952 | |
| Trustees' fees and expenses | | | 5,497 | | | | 3,285 | | | | — | | | | 8,782 | |
| Other | | | 29,118 | | | | 19,726 | | | | (610 | )(2) | | | 48,234 | |
| TOTAL EXPENSES | | | 6,372,637 | | | | 6,439,535 | | | | (203,334 | ) | | | 12,608,838 | |
| NET INVESTMENT LOSS | | | (4,417,936 | ) | | | (4,487,984 | ) | | | 203,334 | | | | (8,702,586 | ) |
| NET REALIZED AND UNREALIZED GAIN: | | | | | | | | | | | | | | | | |
| Net realized gain | | | 57,508,792 | | | | 40,520,319 | | | | — | | | | 98,029,111 | |
| Net change in unrealized appreciation/depreciation | | | 49,408,438 | | | | 49,120,823 | | | | — | | | | 98,529,261 | |
| NET GAIN | | | 106,917,230 | | | | 89,641,142 | | | | — | | | | 196,558,372 | |
| Net Increase | | $ | 102,499,294 | | | $ | 85,153,158 | | | $ | 203,334 | | | $ | 187,855,786 | |
|
| |
| (1) | Reflects adjustment to investment management fees based on Morgan Stanley Capital Opportunities Trust's fee schedule. |
| |
| (2) | Reflects elimination of duplicate services or fees. |
See Notes to Pro Forma Financial Statements
B-12
Table of ContentsMorgan Stanley Capital Opportunities Trust
Notes to Pro Forma Financial Statements
(unaudited)
1. Basis of Combination — The Pro Forma Statement of Assets and Liabilities, including the Portfolio of Investments, at January 31, 2006 and the related Statement of Operations (‘‘Pro Forma Statements’’) for the twelve months ended January 31, 2006, reflect the accounts of Morgan Stanley Capital Opportunities Trust (‘‘Capital Opportunities’’) and Morgan Stanley Aggressive Equity Fund (‘‘Aggressive Equity’’).
The Pro Forma Statements give effect to the proposed transfer of all assets and liabilities of Aggressive Equity in exchange for shares in Capital Opportunities. The Pro Forma Statements should be read in conjunction with the historical financial statements of each Fund included in its Statement of Additional Information.
2. Shares of Beneficial Interest — The pro forma net asset value per share assumes the issuance of additional shares of Capital Opportunities which would have been issued on January 31, 2006 in connection with the proposed reorganization. Shareholders of Aggressive Equity would become shareholders of Capital Opportunities receiving shares of the corresponding class of Capital Opportunities equal to the value of their holdings in Aggressive Equity. The amount of additional shares assumed to be issued was calculated based on the January 31, 2006 net assets of Aggressive Equity and the net asset value per share of Capital Opportunities as follows:
| | | | | | | | | | | | | | | | | | |
| | | Class A | | Class B | | Class C | | Class D |
| Aggressive Equity pre-merger shares | | | 4,085,640 | | | | 20,936,392 | | | | 2,655,164 | | | | 369,476 | |
| Aggressive Equity net assets | | $ | 51,428,386 | | | $ | 249,506,249 | | | $ | 31,680,325 | | | $ | 4,729,251 | |
| Net asset value per share — Capital Opportunities | | $ | 19.77 | | | $ | 18.62 | | | $ | 18.54 | | | $ | 20.12 | |
| Capital Opportunities merger shares issued | | | 2,601,335 | | | | 13,399,906 | | | | 1,708,755 | | | | 235,052 | |
| Difference between total additional shares to be issued and pre-merger Aggressive Equity shares outstanding | | | (1,484,305 | ) | | | (7,536,486 | ) | | | (946,409 | ) | | | (134,424 | ) |
|
3. Pro Forma Operations — The Pro Forma Statement of Operations assumes similar rates of gross investment income for the investments of each Fund. Accordingly, the combined gross investment income is equal to the sum of each Fund's gross investment income. Certain expenses have been adjusted to reflect the expected expenses of the combined entity. The pro-forma investment management fees and plan of distribution fees of the combined Fund are based on the fee schedule in effect for Capital Opportunities at the combined level of average net assets for the twelve months ended January 31, 2006. The Pro Forma Statement of Operations does not include the effect of any realized gains or losses, or transaction fees incurred in connection with the realignment of the portfolio.
B-13
Table of ContentsMORGAN STANLEY CAPITAL OPPORTUNITIES TRUST
PART C
OTHER INFORMATION
| |
| Item 15. | Indemnification |
The response to this item is incorporated by reference to Exhibits 1 and 2 under Item 16 below and by reference to Item 25 of Post-Effective Amendment No. 16 to the Registrant's Registration Statement on Form N-1A, dated March 30, 2006, which was filed electronically pursuant to Regulation S-T on March 28, 2006 as an amendment to Registrant's Registration Statement on Form N-1A (File Nos. 811-7377 and 33-63685).
| |
| Item 16. | Exhibits |
| |
| (1) | Form of Declaration of Trust of the Registrant, dated October 16, 1995, is incorporated by reference to Exhibit 1 of the Initial Registration Statement on Form N-1A, filed on October 25, 1995; Instrument Establishing and Designating Additional Classes is incorporated by reference to Exhibit 1 of Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A, filed on July 15, 1997; Form of Amendment dated June 25, 1999 to the Declaration of Trust of the Registrant, is incorporated by reference to Exhibit 1(c) of Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A, filed on June 24, 1999; Amendment to the Declaration of Trust of the Registrant, dated June 18, 2001, is incorporated by reference to Exhibit 1(d) of Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A, filed on January 29, 2002; Amendment to the Declaration of Trust of the Registrant, dated January 29, 2002, is incorporated by reference to Exhibit 1(e) of Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A, filed on January 29, 2002. |
| |
| (2) | Amended and Restated By-Laws of the Registrant, dated April 24, 2003, is incorporated by reference to Exhibit (b) of Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A, filed on February 27, 2004. |
| |
| (3) | Not Applicable. |
| |
| (4) | Copy of Agreement and Plan of Reorganization (filed herewith as Exhibit A to the Proxy Statement and Prospectus). |
| |
| (5) | Not Applicable. |
| |
| (6) | Amended and Restated Investment Advisory Agreement between the Registrant and Morgan Stanley Investment Advisors Inc., dated November 1, 2004, is incorporated by reference to Exhibit (d) of Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A of Morgan Stanley Small-Mid Special Value Fund, filed on June 24, 2005. |
| | |
| (7) | (a) | Amended Distribution Agreement, dated June 22, 1998, is incorporated by reference to Exhibit 5(a) of Post-Effective Amendment No. 8 to the Registration Statement on Form N-1A, filed on June 24, 1999. |
| | |
| (b) | Selected Dealers Agreement between Morgan Stanley Distributors Inc. and Morgan Stanley DW Inc., dated as of April 1, 2005, is incorporated by reference to Exhibit e(2) of Post-Effective Amendment No. 4 to the Registration Statement on Form N-1A of Morgan Stanley Fundamental Value Fund, filed on January 25, 2006. |
C-1
Table of Contents | |
| (8) | Not Applicable. |
| | |
| (9) | (a) | Custody Agreement between The Bank of New York and the Registrant is incorporated by reference to Exhibit 8(a) of Pre-Effective Amendment No. 1 to the Registration Statement on Form N-1A, filed on December 6, 1995; Amendment dated April 17, 1996 to the Custody Agreement of this Registrant is incorporated by reference to Exhibit 8 of Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A, filed on July 1, 1996; Amendment dated June 15, 2001 to the Custody Agreement of the Registrant is incorporated by reference to Exhibit 7(c) of Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A, filed on January 29, 2002. |
| | |
| (b) | Foreign Custody Manager Agreement between the Bank of New York and the Registrant, dated June 15, 2001, is incorporated by reference to Exhibit 7(d) of Post-Effective Amendment No. 11 to the Registration Statement on Form N-1A, filed on January 29, 2002. |
| | |
| (10) | (a) | Amended and Restated Plan of Distribution Pursuant to Rule 12b-1, dated May 1, 2004, is incorporated by reference to Exhibit (m) of Post-Effective Amendment No. 14 to the Registration Statement on Form N-1A, filed on January 28, 2005. |
| | |
| (b) | Amended Multi-Class Plan Pursuant to Rule 18f-3, dated October 28, 2004, is incorporated by reference to Exhibit (n) of Post-Effective Amendment No. 14 to the Registration Statement on Form N-1A filed on January 28, 2005. |
| | |
| (11) | (a) | Opinion and consent of Clifford Chance US LLP, to be filed by amendment. |
| | |
| (b) | Opinion and consent of Dechert LLP, to be filed by amendment. |
| |
| (12) | Opinion and consent of Clifford Chance US LLP regarding tax matters, to be filed by amendment. |
| | |
| (13) | (a) | Amended and Restated Transfer Agency and Service Agreement, dated November 1, 2004, between the Registrant and Morgan Stanley Trust, is incorporated by reference to Exhibit (h)(1) of Post-Effective Amendment No. 14 to the Registration Statement on Form N-1A, filed on January 28, 2005. |
| | |
| (b) | Administration Agreement, dated November 1, 2004, between Morgan Stanley Services Company Inc. and the Registrant, is incorporated by reference to Exhibit (h)(2) of Post-Effective Amendment No. 14 to the Registration Statement, filed on January 28, 2005. |
| |
| (14) | Consent of Independent Registered Public Accounting Firm, to be filed by amendment. |
| |
| (15) | Not Applicable. |
| |
| (16) | Powers of Attorney of Trustees, dated February 6, 2006, is incorporated by reference to Exhibit (q) of Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A of Morgan Stanley European Equity Fund Inc., filed on February 28, 2006. |
| |
| (17) | Form of Proxy, filed herewith. |
| |
| Item 17. | Undertakings |
1. The undersigned Registrant agrees that prior to any public reoffering of the securities registered through the use of the prospectus which is a part of this registration statement on Form N-14 by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act of 1933, the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form.
C-2
Table of Contents2. The undersigned Registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to this registration statement on Form N-14 and will not be used until the amendment is effective, and that, in determining any liability under the Securities Act of 1933, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them.
C-3
Table of ContentsSIGNATURES
As required by the Securities Act of 1933, this registration statement has been signed on behalf of the registrant, in the City of New York and State of New York, on this 1st day of May, 2006.
| MORGAN STANLEY CAPITAL OPPORTUNITIES TRUST |
| | | | | | | | | | |
| | | | By: | | | /s/ Ronald E. Robison
Ronald E. Robison
President |
|
As required by the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
| | | | | | | | | | |
| Signature | | Title | | Date |
| 1. Principal Executive Officer | | | | |
/s/ Ronald E. Robison
Ronald E. Robison | | Executive Vice President and
Principal Executive Officer | | May 1, 2006 |
| 2. Principal Financial Officer | | | | |
/s/ Francis J. Smith
Francis J. Smith | | Chief Financial Officer | | May 1, 2006 |
| 3. Majority of the Trustees | | | | |
| INDEPENDENT TRUSTEES | | | | |
Michael Bozic
Edwin J. Garn
Wayne E. Hedien
Manuel H. Johnson | | Joseph J. Kearns
Michael E. Nugent
Fergus Reid | | |
By: /s/ Carl Frischling
Carl Frischling
Attorney-in-Fact for the
Independent Trustees | | | | May 1, 2006 |
| MANAGEMENT TRUSTEES | | | | |
Charles A. Fiumefreddo (Chairman)
James F. Higgins | | | | |
By: /s/ Barry Fink
Barry Fink
Attorney-in-Fact for the
Management Trustees | | | | May 1, 2006 |
|
C-4
Table of ContentsEXHIBIT INDEX
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
YOUR PROXY VOTE IS IMPORTANT!
AND NOW YOU CAN VOTE YOUR PROXY ON THE
PHONE OR THE INTERNET.
IT SAVES MONEY! TELEPHONE AND INTERNET
VOTING SAVES POSTAGE COSTS. SAVINGS WHICH
CAN HELP MINIMIZE FUND EXPENSES.
IT SAVES TIME! TELEPHONE AND INTERNET
VOTING IS INSTANTANEOUS - 24 HOURS A DAY.
IT'S EASY! JUST FOLLOW THESE SIMPLE
STEPS:
1. READ YOUR PROXY STATEMENT AND HAVE IT
AT HAND.
2. CALL TOLL-FREE [________] OR GO TO
WEBSITE: [________]
3. ENTER THE 14-DIGIT NUMBER LOCATED IN
THE SHADED BOX FROM YOUR PROXY CARD.
4. FOLLOW THE RECORDED OR ON-SCREEN
DIRECTIONS.
5. DO NOT MAIL YOUR PROXY CARD WHEN YOU
VOTE BY PHONE OR INTERNET.
Please detach at perforation before mailing.
MORGAN STANLEY AGGRESSIVE EQUITY FUND
PROXY
PROXY PROXY FOR SPECIAL MEETING OF SHAREHOLDERS TO BE HELD [AUGUST 1], 2006
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
The undersigned hereby appoints Ronald E. Robison, Barry Fink and Stefanie V.
Chang Yu, and each of them, as proxies for the undersigned, with full power of
substitution and resubstitution, and hereby authorizes said proxies, and each of
them to represent and vote, as designated on the reverse side, all shares of the
above Fund held of record by the undersigned on [May 30], 2006 at the Special
Meeting of Shareholders of Morgan Stanley Aggressive Equity Fund to be held at
1221 Avenue of the Americas, New York, New York 10020 on [August 1], 2006 and at
any adjournment thereof. The undersigned hereby revokes any and all proxies with
respect to such shares heretofore given by the undersigned.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER, AND, IN THE DISCRETION OF SUCH PROXIES, UPON ANY
AND ALL OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1.
VOTE VIA THE INTERNET:
HTTPS://VOTE.PROXY-DIRECT.COM
VOTE VIA THE TELEPHONE: 1-866-241-6192
999 99999 999 999
NOTE: Please sign exactly as your name
appears on this proxy card. All joint
owners should sign. When signing as
executor, administrator, attorney,
trustee or guardian or as custodian for
a minor, please give full title as such.
If a corporation, please sign in full
corporate name and indicate the signer's
office. If a partner, sign in the
partnership name.
----------------------------------------
Signature
----------------------------------------
Signature (if held jointly)
----------------------------------------
Date 16251_MTR
EVERY SHAREHOLDER'S VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR
PROXY TODAY
Please detach at perforation before mailing.
TO VOTE BY MAIL, PLEASE COMPLETE AND RETURN THIS CARD.
YOU ALSO MAY VOTE A PROXY BY TOUCH-TONE PHONE OR BY INTERNET (SEE ENCLOSED
VOTING INFORMATION CARD FOR FURTHER INSTRUCTIONS).
THE BOARD OF TRUSTEES OF MORGAN STANLEY AGGRESSIVE EQUITY FUND RECOMMENDS THAT
YOU VOTE IN FAVOR OF THE REORGANIZATION.
PLEASE MARK VOTES AS IN THIS EXAMPLE: [O]
[SHADED BOX OMITTED]
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
1. Approval of an Agreement and Plan of Reorganization, dated [________],
2006, between Morgan Stanley Aggressive Equity Fund and Morgan Stanley
Capital Opportunities Fund, pursuant to which substantially all of the
assets of Morgan Stanley Aggressive Equity Fund would be combined with
those of Morgan Stanley Capital Opportunities Fund and shareholders of
Morgan Stanley Aggressive Equity Fund would become shareholders of Morgan
Stanley Capital Opportunities Fund receiving shares of Morgan Stanley
Capital Opportunities Fund with a value equal to the value of their
holdings in Morgan Stanley Aggressive Equity.
16251_MTR
WE URGE YOU TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY.
![[X]](https://capedge.com/proxy/N-14/0000950136-06-003336/xbox.gif){kind=small}
![[ ]](https://capedge.com/proxy/N-14/0000950136-06-003336/ebox.gif){kind=small}
