As filed with the Securities and Exchange Commission on July 31, 2009
1933 Act No.___________
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ______
Post-Effective Amendment No. _____
(Check appropriate box or boxes)
ABERDEEN FUNDS
(Exact Name of Registrant as Specified in Charter)
1735 Market Street, 32nd Floor
Philadelphia, PA 19103
(Address of Principal Executive Offices) (Zip Code)
(215) 405-2055
(Registrant's Telephone Number, including Area Code)
Lucia Sitar, Esquire
c/o Aberdeen Asset Management Inc.
1735 Market Street, 32nd Floor
Philadelphia, PA 19103
(Name and Address of Agent for Service of Process)
With Copies to:
Barbara A. Nugent, Esquire
Stradley Ronon Stevens & Young, LLP
2600 One Commerce Square
Philadelphia, PA 19103
Approximate Date of Proposed Public Offering: As soon as practical after this
Registration Statement becomes effective under the Securities Act of 1933.
Title of Securities Being Registered: Shares of Beneficial Interest, no par
value.
It is proposed that this filing will become effective on August 30, 2009,
pursuant to Rule 488.
An indefinite amount of Registrant's securities has been registered under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. In reliance upon such Rule, no filing fee is being paid at this time.
THE ADVISORS' INNER CIRCLE FUND II
ABERDEEN EMERGING MARKETS FUND
--------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
--------------------
Dear Shareholder:
This is to notify you that a special meeting (the "Meeting") of
shareholders of the Aberdeen Emerging Markets Fund (the "Acquired Fund"), a
series of The Advisors' Inner Circle Fund II (the "AIC II Trust"), will be held
on September 25, 2009 at [insert time]. The Meeting will be held at the offices
of SEI Investments Global Fund Services, One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
The purpose of the Meeting is to consider the proposal set forth below
(the "Proposal") and to transact such other business as may be properly brought
before the Meeting or any adjournment(s) thereof. The specifics of the Proposal,
which are more fully described in the attached combined prospectus/proxy
statement dated August __, 2009 ("Prospectus/Proxy Statement"), are as follows:
To vote on an Agreement and Plan of Reorganization between the AIC II
Trust, on behalf of the Acquired Fund, and Aberdeen Funds, on behalf of
the Aberdeen Emerging Markets Institutional Fund (the "Surviving
Fund"), that provides for: (i) the acquisition of all of the assets,
subject to the liabilities of the Acquired Fund in exchange for
Institutional Class Shares of the Surviving Fund; (ii) the PRO RATA
distribution of Institutional Class Shares of the Surviving Fund to the
shareholders of the Acquired Fund; and (iii) the subsequent liquidation
and termination of the Acquired Fund.
Only shareholders of record at the close of business on [insert record
date] are entitled to notice of, and to vote at, the Meeting or any adjourned
session thereof. All record date shareholders are invited to attend the Meeting
in-person. However, if you are unable to be present at the Meeting, you are
requested to mark, sign, and date the enclosed proxy card and return it promptly
in the enclosed postage-paid envelope so that the Meeting may be held and a
maximum number of shares may be voted. You may also vote by telephone or through
the Internet. Shareholders are encouraged to vote their shares by telephone or
through the Internet. Please see your proxy card for more information and
instructions on how to vote.
Shares represented by duly executed proxies will be voted in accordance
with the instructions given. A shareholder may revoke a previously submitted
proxy at any time prior to the Meeting by (i) a written revocation, which must
be signed and include the shareholder's name and account number, received by the
Secretary of the Acquired Fund at One Freedom Valley Drive, Oaks, Pennsylvania
19456; (ii) properly executing a later-dated proxy; or (iii) attending the
Meeting and voting in person. In accordance with their own discretion, the
proxies are authorized to vote on such other business as may properly come
before the Meeting or any adjourned session(s) thereof.
THE AIC II TRUST'S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU
VOTE IN FAVOR OF THE PROPOSAL.
The enclosed Questions and Answers attachment is provided to assist you
in understanding the Proposal.
The notice and related Prospectus/Proxy Statement are first being
mailed to shareholders on or about [insert date], 2009.
By Order of the Board of Trustees
Philip T. Masterson
President
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, IT IS IMPORTANT THAT
YOUR SHARES BE REPRESENTED AND VOTED AT THE MEETING. IT IS IMPORTANT THAT YOU
PROMPTLY CAST YOUR VOTE BY MAIL, BY TELEPHONE OR THROUGH THE INTERNET IN ORDER
TO AVOID THE ADDITIONAL EXPENSE OF FURTHER SOLICITATION.
THE ADVISORS' INNER CIRCLE FUND II
ABERDEEN EMERGING MARKETS FUND
ABERDEEN FUNDS
ABERDEEN EMERGING MARKETS INSTITUTIONAL FUND
AUGUST __, 2009
QUESTIONS & ANSWERS
FOR SHAREHOLDERS OF THE ABERDEEN EMERGING MARKETS FUND OF THE ADVISORS' INNER
CIRCLE FUND II:
The following questions and answers provide an overview of the proposal
to reorganize the Aberdeen Emerging Markets Fund (the "Acquired Fund") of The
Advisors' Inner Circle Fund II ("AIC II Trust") into the Aberdeen Emerging
Markets Institutional Fund (the "Surviving Fund") of the Aberdeen Funds (the
"Aberdeen Trust"). We also encourage you to read the full text of the combined
Prospectus/Proxy Statement dated August __, 2009 (the "Prospectus/Proxy
Statement") that follows.
Q: WHAT ARE SHAREHOLDERS BEING ASKED TO VOTE UPON?
A: Shareholders are being asked in the attached Prospectus/Proxy Statement
to consider and approve a proposal to reorganize the Acquired Fund
offered by the AIC II Trust into the Surviving Fund offered by the
Aberdeen Trust. Acquired Fund shareholders will vote on an Agreement
and Plan of Reorganization dated as of _______, 2009 (the "Plan").
Q: WHY HAS THE REORGANIZATION OF THE ACQUIRED FUND INTO THE SURVIVING FUND
BEEN RECOMMENDED?
A: The Acquired Fund was launched in May 2007 to provide an investment
vehicle for institutional clients of Aberdeen Asset Management PLC and
its affiliates and subsidiaries ("Aberdeen"). The Acquired Fund was
placed on SEI Investment Company's already established platform - the
AIC II Trust. In June 2008, the Aberdeen Trust commenced operations. In
connection with the creation of the Aberdeen Trust, Aberdeen
established its own distributor, Aberdeen Fund Distributors LLC and
distribution platform. Given its proprietary fund complex and in-house
distribution capabilities, Aberdeen proposed that the Acquired Fund be
reorganized into the Aberdeen Trust. The AIC II Trust's Board of
Trustees (the "AIC II Board") considered and approved the Plan at a
meeting held on June 24, 2009. In approving the Plan, the AIC II Board
determined that (i) participation in the reorganization is in the best
interest of the Acquired Fund's shareholders; and (ii) the
reorganization will not result in the dilution of the interests of the
Acquired Fund's shareholders.
Q: HOW IS THE ACQUIRED FUND PROPOSED TO BE REORGANIZED?
A: The Plan for the Acquired Fund, approved by the AIC II Board,
contemplates the reorganization of the Institutional Class Shares of
the Acquired Fund into Institutional Class Shares of the Surviving
Fund. The Acquired Fund and the Surviving Fund have substantially
similar investment objectives and policies.
1
If the reorganization is approved by shareholders, Acquired Fund
shareholders who do not wish to have their Acquired Fund shares
exchanged for shares of the Surviving Fund as part of the
reorganization should redeem their shares prior to the consummation of
the reorganization. If you redeem your shares, you may recognize a
taxable gain or loss based on the difference between your tax basis in
the shares and the amount you receive for them. In addition, if you
redeem your shares of the Acquired Fund prior to the reorganization and
your shares are subject to the 2.00% redemption fee because they have
been held for 90 calendar days or less, your redemption proceeds will
be reduced by the redemption fee.
Q: WHAT IS THE ANTICIPATED TIMING OF THE REORGANIZATION?
A: The special meeting of shareholders to consider the proposal is
scheduled to occur on September 25, 2009. If all necessary approvals
are obtained, the proposed reorganization will likely take place on or
about November 2, 2009.
In the event the Acquired Fund fails to receive sufficient votes for
approval of the reorganization, management will consider whether to
continue further solicitations. If the shareholders of the Acquired
Fund do not approve the Plan, the AIC II Board will consider other
possible courses of action for the Acquired Fund.
Q: ARE THERE ANY SIGNIFICANT DIFFERENCES BETWEEN THE INVESTMENT OBJECTIVE
AND POLICIES OF THE ACQUIRED FUND AND THE SURVIVING FUND?
A: The Surviving Fund is a shell fund created for the purpose of acquiring
the assets and liabilities of the Acquired Fund and has substantially
similar investment objective, policies and restrictions as the Acquired
Fund.
Q: ARE THERE ANY SIGNIFICANT DIFFERENCES IN THE ANNUAL FUND OPERATING
EXPENSES OF THE ACQUIRED FUND AND SURVIVING FUND?
A: Aberdeen Asset Management Inc. ("AAMI"), the investment adviser to the
Acquired Fund and the Surviving Fund, has agreed for a period of two
years following the consummation of the reorganization to waive a
portion of its management fees and bear certain expenses so that the
operating expenses do not exceed 0.95%, which mirrors the current
expense ratio after waivers and expense reimbursements for the Acquired
Fund.
Q: WILL THERE BE ANY SALES LOAD, COMMISSION OR OTHER TRANSACTIONAL FEE IN
CONNECTION WITH THE REORGANIZATION?
A: No. The full value of your Institutional Class Shares of the Acquired
Fund will be exchanged for Institutional Class Shares of the Surviving
Fund without any sales load, commission or other transactional fee
being imposed.
Q: WHAT EFFECT WILL THE REORGANIZATION HAVE ON ME AS AN ACQUIRED FUND
SHAREHOLDER?
A: Immediately after the reorganization, shareholders of the Acquired Fund
will own Institutional Class Shares of the Surviving Fund that are
equal in value to the Institutional Class Shares of the Acquired Fund
that were held by those shareholders immediately prior to the closing
of the reorganization.
2
The Surviving Fund will offer similar shareholder services as the
Acquired Fund. In addition, AAMI does not contemplate instituting any
fundamental changes to the manner it has provided advisory services.
The following table outlines the service provider changes to your
Acquired Fund that will result from the reorganization. Although certain service
providers will be changing, the Surviving Fund will continue to have the same
investment adviser and investment sub-advisers as the Acquired Fund.
ACQUIRED FUND SURVIVING FUND
------------- --------------
ADVISER: Aberdeen Asset Management Inc. Aberdeen Asset Management Inc.
SUB-ADVISERS: Aberdeen Asset Management Investment Aberdeen Asset Management
Services Limited Investment Services Limited
Aberdeen Asset Management Asia Limited Aberdeen Asset Management Asia
Limited
ADMINISTRATOR: SEI Investments Global Fund Services Aberdeen Asset Management Inc.
SUB-ADMINISTRATOR: Not Applicable Citi Fund Services Ohio, Inc.
TRANSFER AGENT: DST Systems, Inc. Citi Fund Services Ohio, Inc.
CUSTODIAN: The Northern Trust Company JP Morgan Chase Bank, N.A.
DISTRIBUTOR: SEI Investments Distribution Co. Aberdeen Fund Distributors LLC
AUDITOR: PricewaterhouseCoopers LLP KPMG LLP
Q: WHAT ARE THE INTENDED FEDERAL INCOME TAX CONSEQUENCES OF THE
REORGANIZATION?
A: As a condition to the Acquired Fund's obligation to consummate the
reorganization, the Acquired Fund and the Surviving Fund will receive
an opinion from legal counsel to AIC II Trust to the effect that, on
the basis of the existing provisions of the Internal Revenue Code of
1986, as amended, current administrative rules, court decisions
and certain representations and warranties of the AIC II Trust and
Aberdeen Trust, the transactions contemplated by the Plan will
constitute a tax-free reorganization for federal income tax purposes
(although there can be no assurances that the Internal Revenue
Service will take a similar position).
Q: WHAT ARE THE COSTS IN CONNECTION WITH THE PROPOSED REORGANIZATION?
A: Neither AIC II Trust nor Aberdeen Trust will bear any fees or
expenses that are directly related to the reorganization. Under the
Plan, AAMI or an affiliate have agreed to bear and pay all of the
fees and expenses that are solely and directly related to the
reorganization in connection with entering into and carrying out the
transaction contemplated by the Plan whether or not the transaction
contemplated is concluded.
Q: WHO WILL RECEIVE THE PROSPECTUS/PROXY STATEMENT MATERIAL?
A: The Prospectus/Proxy Statement has been mailed to all persons and
entities that held shares of record in the Acquired Fund on [record
date], 2009 and accordingly have the right to vote on the proposed
reorganization. Please note that in some cases record ownership of
and/or voting authority over Acquired Fund shares may reside with a
fiduciary or other agent. In these cases, the fiduciary or other agent
may receive the Prospectus/Proxy Statement.
3
Q. WHY ARE YOU SENDING ME THIS INFORMATION?
A. You are receiving this Prospectus/Proxy Statement because you own
shares in the Acquired Fund and have the right to vote on the very
important proposal concerning your investment.
4
ACQUISITION OF THE ASSETS AND LIABILITIES OF
ABERDEEN EMERGING MARKETS FUND
A SERIES OF THE ADVISORS' INNER CIRCLE FUND II
101 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
1-800-932-7781
IN EXCHANGE FOR SHARES OF
ABERDEEN EMERGING MARKETS INSTITUTIONAL FUND
A SERIES OF ABERDEEN FUNDS
1735 MARKET STREET
32ND FLOOR
PHILADELPHIA, PENNSYLVANIA 19103
1-215-405-2055
COMBINED PROSPECTUS/PROXY STATEMENT DATED AUGUST __, 2009
INTRODUCTION
This combined prospectus/proxy statement ("Prospectus/Proxy Statement")
is being furnished to shareholders of the Aberdeen Emerging Markets Fund (the
"Acquired Fund"), a series of The Advisors' Inner Circle Fund II (the "AIC II
Trust"), in connection with the solicitation of proxies by the AIC II Trust's
Board of Trustees (the "AIC II Trustees" or the "AIC II Board") for use at a
special meeting of shareholders to be held on September 25, 2009 at [insert
time] at the offices of SEI Investments Global Fund Services, One Freedom Valley
Drive, Oaks, Pennsylvania 19456, and at any adjourned session(s) thereof (such
meeting and any adjournments thereof are hereinafter referred to as, the
"Meeting"). Shareholders of record of the Acquired Fund at the close of business
on [insert record date], 2009 are entitled to vote at the Meeting. The proxy
card and this Prospectus/Proxy Statement are being distributed to shareholders
on or about August __, 2009.
At the Meeting, the shareholders of the Acquired Fund are being asked
to vote on a proposal to approve an Agreement and Plan of Reorganization (the
"Plan") between the AIC II Trust, on behalf of the Acquired Fund, and Aberdeen
Funds (the "Aberdeen Trust"), on behalf of the Aberdeen Emerging Markets
Institutional Fund (the "Surviving Fund"), that would result in the
reorganization of the Acquired Fund into the Surviving Fund, a newly organized
series of the Aberdeen Trust (the "Proposal"). The Acquired Fund and the
Surviving Fund are both open-end registered management investment companies. The
Plan has been approved by the AIC II Board. The Plan is attached to this
Prospectus/Proxy Statement as Appendix A.
If shareholders of the Acquired Fund approve the Plan, all of the
Acquired Fund's assets (subject to its liabilities) will be transferred to the
Surviving Fund in exchange for an equal value of shares of the Surviving Fund.
These shares of the Surviving Fund will then be distributed to the Acquired
Fund's shareholders. Shareholders of the Institutional Class shares of the
Acquired Fund will receive shares of the Institutional Class shares of the
Surviving Fund (each, and collectively, the "Institutional Class Shares") equal
in value to their investment in the Acquired Fund immediately prior to the
reorganization, and then the Acquired Fund will be liquidated and terminated.
This transaction is referred to as the "Reorganization." As the result of the
Reorganization, each shareholder of the Acquired Fund would no longer hold
shares of the Acquired Fund, and instead would be a shareholder of the Surviving
Fund. The Reorganization is expected to be effective on or about November 2,
2009.
1
The AIC II Trustees believe that the Reorganization is in the best
interest of the Acquired Fund and its shareholders, and that the interests of
the Acquired Fund's shareholders will not be diluted as a result of the
Reorganization. For federal income tax purposes, the Reorganization is intended
to be structured as a tax-free transaction for the Acquired Fund and its
shareholders (although there can be no assurance that the Internal Revenue
Service ("IRS") will take a similar position). The Acquired Fund and the
Surviving Fund have an identical investment objective that seeks long-term
capital appreciation by investing primarily in equity securities of emerging
market country issuers.
This Prospectus/Proxy Statement, which you should read carefully and
retain for future reference, sets forth concisely the information that you
should know about the Acquired Fund, the Surviving Fund and the Reorganization
before voting on the Reorganization and investing in the Surviving Fund. The
Prospectus/Proxy Statement is accompanied by the prospectus of the Surviving
Fund dated August 15, 2009 and is incorporated herein by reference. The
Surviving Fund is newly-organized and currently has no assets or liabilities.
The Surviving Fund has been created in connection with the Plan and will not
commence operations until the date of the Reorganization.
The following documents have been filed with the U.S. Securities and
Exchange Commission (the "SEC"), and are incorporated herein by reference into
(each legally forms a part of) this Prospectus/Proxy Statement:
o The statement of additional information ("SAI") dated August__,
2009, that relates to this Prospectus/Proxy Statement
o The prospectus of the Acquired Fund dated March 1, 2009
o The prospectus of the Surviving Fund dated August 15, 2009
The following documents have been filed with the SEC and contain
additional information relating to the Acquired Fund and the Surviving Fund.
o The SAI of the Acquired Fund dated March 1, 2009
o The Annual Report of the Acquired Fund for the fiscal year end
October 31, 2008
o The Semi-Annual Report of the Acquired Fund for the fiscal period
ended April 30, 2009
o The SAI of the Surviving Fund dated August 15, 2009
--------------------------------------------------------------------------------
Copies of the foregoing and any more recent reports filed after the date hereof
may be obtained without charge by calling or writing:
----------------------------------------------------------- ---------------------------------------------------------
Aberdeen Emerging Markets Fund (The Advisors' Inner Circle Aberdeen Emerging Markets Institutional Fund (Aberdeen
Fund II) Funds)
P.O. Box 219009 P.O. Box 183148
Kansas City, MO 64121 Columbus, Ohio 43218-3148
1-866-392-2626 1-866-667-9231
------------------------------------------------------------ ---------------------------------------------------------
You may also obtain these documents by accessing the Internet site for
the Aberdeen Trust at http://www.[ ].com and the Internet site for the Acquired
Fund (AIC II Trust) at http://www.aberdeen-asset.com/aam.nsf/usmutual/home. In
addition, these documents, as well as proxy materials and other reports, may be
obtained from the EDGAR database on the SEC's Internet site at www.sec.gov. You
may review and copy documents at the SEC Public Reference Room in Washington, DC
(for information on the operation of the Public Reference Room, call
1-202-551-8090). You may request documents by mail from the SEC, upon payment of
a duplication fee, by writing to: Securities and Exchange Commission, Public
Reference Section, Washington, DC 20549-0102. You may also obtain this
information upon payment of a duplicating fee, by e-mailing the SEC at the
following address: publicinfo@sec.gov.
2
The AIC II Trustees have fixed the close of business on [insert record
date], 2009 as the record date ("Record Date") for the determination of
shareholders entitled to notice of, and to vote at, the Meeting. This combined
Prospectus/Proxy Statement is expected to be first sent to shareholders on or
about [insert date], 2009.
AN INVESTMENT IN THE ACQUIRED FUND OR THE SURVIVING FUND IS NOT A
DEPOSIT OF ANY BANK AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION ("FDIC") OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN
EITHER FUND INVOLVES INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED
THESE SECURITIES OR PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
3
TABLE OF CONTENTS
SYNOPSIS..............................................................................................................1
Background and Board Consideration.................................................................................1
The Reorganization.................................................................................................1
Federal Income Tax Consequences of the Reorganization..............................................................2
Comparison of the Fees and Expenses of the Acquired Fund and Surviving Fund........................................2
Comparison of Investment Objectives and Policies of the Acquired Fund and Surviving Fund...........................5
Comparison of the Service Providers of the Acquired Fund and Surviving Fund........................................5
Comparison of the Share Class Characteristics and Shareholder Transactions and Services of the Acquired and
Surviving Fund.....................................................................................................5
Voting Information.................................................................................................6
PRINCIPAL RISK FACTORS................................................................................................6
Comparison of the Principal Risks Associated with Investments in the Acquired Fund and Surviving Fund..............6
INFORMATION ABOUT THE REORGANIZATION AND THE PLAN.....................................................................8
Material Features of the Plan......................................................................................8
Description of the Securities to be Issued........................................................................10
Board Considerations..............................................................................................10
Federal Income Tax Consequences of the Reorganization.............................................................11
Comparative Information on Shareholder Rights.....................................................................12
CAPITALIZATION.......................................................................................................16
COMPARISON OF THE ACQUIRED FUND AND THE SURVIVING FUND...............................................................17
Comparison of the Investment Objective and Principal Investment Strategies........................................17
Comparison of the Fundamental Investment Policies.................................................................19
Comparison of the Distribution, Purchase, Exchange and Redemption Procedures......................................22
Comparison of Service Providers...................................................................................25
Performance History of the Acquired Fund..........................................................................27
Financial Highlights of the Acquired Fund.........................................................................28
VOTING INFORMATION...................................................................................................30
Shares Outstanding................................................................................................30
Proxy Solicitation Methods........................................................................................30
Proxy Solicitation Costs..........................................................................................30
Quorum............................................................................................................30
Vote Required.....................................................................................................30
Adjournment.......................................................................................................30
Voting by Broker-Dealers and Method of Tabulation.................................................................31
Revocation of Proxy...............................................................................................31
Shareholder Proposals.............................................................................................31
Other Matters.....................................................................................................31
ADDITIONAL INFORMATION ABOUT THE ACQUIRED FUND AND THE SURVIVING FUND................................................31
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES..................................................................32
SHAREHOLDER INQUIRIES................................................................................................33
APPENDIX A - FORM OF AGREEMENT AND PLAN OF REORGANIZATION...........................................................A-1
i
SYNOPSIS
This is only a synopsis of certain information contained in this
Prospectus/Proxy Statement and is qualified in its entirety by reference to the
additional information contained elsewhere in this Prospectus/Proxy Statement or
incorporated by reference into the Prospectus/Proxy Statement. You should read
the more complete information in the rest of this Prospectus/Proxy Statement,
including the Plan (a form of which is attached hereto as Appendix A) and the
information contained in the Surviving Fund's prospectus that accompanies this
Prospectus/Proxy Statement.
BACKGROUND AND BOARD CONSIDERATION
The Acquired Fund was launched in May 2007 to provide an investment
vehicle for institutional clients of Aberdeen Asset Management PLC and its
affiliates and subsidiaries ("Aberdeen"). The Acquired Fund was placed on SEI
Investment Company's already established platform - the AIC II Trust. In June
2008, the Aberdeen Trust commenced operations. In connection with the creation
of the Aberdeen Trust, Aberdeen established its own distributor, Aberdeen Fund
Distributors LLC, and distribution platform. Given its proprietary fund complex
and in-house distribution capabilities, Aberdeen proposed that the Acquired Fund
be reorganized into the Aberdeen Trust.
At a meeting held on June 24, 2009, the AIC II Trustees considered the
Plan and the Reorganization of the Acquired Fund into the Surviving Fund. Based
upon their evaluation of the information presented to them, and in light of
their fiduciary duties under federal and state law, the AIC II Trustees,
including all of the AIC II Trustees who are not "interested persons" (as
defined in the Investment Company Act of 1940, as amended (the "1940
Act"))(non-interested AIC II Trustees are referred to as "Independent AIC II
Trustees") determined that participation in the Reorganization, as contemplated
by the Plan, was in the best interests of the shareholders of the Acquired Fund
and that the interests of the existing shareholders of the Acquired Fund will
not be diluted as a result of the Reorganization. For additional information,
see "Information About the Reorganization and the Plan- Board Considerations."
Approval of the Reorganization requires the approval of the holders of
the lesser of (a) 67% or more of the shares of the Acquired Fund voted at the
Meeting, if holders of more than 50% of the outstanding shares of the Acquired
Fund are represented at the Meeting in person or by proxy or (b) more than 50%
of the outstanding shares of the Acquired Fund. If approved by shareholders of
the Acquired Fund, the Reorganization will occur as of the opening of business
on or about November 2, 2009, or another date selected by the officers of the
AIC II Trust and the Aberdeen Trust. See "Information about the Reorganization
and the Plan- Material Features of the Plan" and "Voting Information" below.
At a meeting held on June 10, 2009, the Board of Trustees of the
Aberdeen Funds (the "Aberdeen Board") similarly found that participation in the
Reorganization is in the best interests of the Surviving Fund.
THE REORGANIZATION
The Plan provides for the acquisition of all of the assets of the
Acquired Fund by the Surviving Fund and the assumption by the Surviving Fund of
all the liabilities of the Acquired Fund in exchange for the Institutional Class
Shares of the Surviving Fund having an aggregate value equal to the net asset
value of the Institutional Class Shares of the Acquired Fund as of the close of
business on the business day immediately preceding the closing date of the
Reorganization. The transfer of assets by the Acquired Fund will occur at its
then-current market value as determined in accordance with the Surviving Fund's
valuation procedures, and shares of the Surviving Fund to be issued to the
Acquired Fund will be valued at their then-current net asset value as determined
in accordance with the Surviving Fund's valuation procedures. Institutional
Class Shares of the Surviving Fund will be distributed to shareholders of the
Institutional Class of the Acquired Fund. After completion of the
Reorganization, each shareholder of the Acquired Fund will own shares of the
Surviving Fund equal in value to the total dollar value of such shareholder's
shares of the Acquired Fund immediately prior to the effectiveness of the
Reorganization. Following the completion of the Reorganization, the Acquired
Fund will be liquidated and terminated. For more information about the
Reorganization, see "Information About the Reorganization and the Plan- Material
Features of the Plan" below.
1
If the Reorganization is approved, Acquired Fund shareholders who do
not wish to have their Acquired Fund shares exchanged for shares of the
Surviving Fund as part of the Reorganization should redeem their shares prior to
the consummation of the Reorganization. If you redeem your shares, you may
recognize a taxable gain or loss based on the difference between your tax basis
in the shares and the amount you receive for them. In addition, if you redeem
your shares of the Acquired Fund prior to the Reorganization and your shares are
subject to the 2.00% redemption fee because they have been held for 90 calendar
days or less, your redemption proceeds will be reduced by the redemption fee.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
The Reorganization is intended to be tax-free for federal income tax
purposes for the Surviving Fund and the Acquired Fund (although there can be no
assurance that the IRS will take a similar position). This means that it is
intended that shareholders of the Acquired Fund will become shareholders of the
Surviving Fund without realizing any gain or loss for federal income tax
purposes.
The implementation of the Reorganization is subject to a number of
conditions set forth in the Plan. Among the more significant conditions is the
receipt by the Acquired Fund and the Surviving Fund of an opinion of counsel to
the AIC II Trust to the effect that the Reorganization will be treated as a
tax-free transaction to the Acquired Fund and its shareholders for federal
income tax purposes, as described further below. For more information about the
tax consequences of the Reorganization, see "Information About the
Reorganization and the Plan- Federal Income Tax Consequences of the
Reorganization" below.
COMPARISON OF THE FEES AND EXPENSES OF THE ACQUIRED FUND AND SURVIVING FUND
FEE TABLE FOR THE ACQUIRED FUND AND THE SURVIVING FUND
Expenses of mutual funds are often measured by their expense ratios
(I.E., the ratio of their total expenses for a year divided by their average
daily net asset value over the same year). The following table compares (1) the
fees and expenses for the Acquired Fund and the Surviving Fund based on actual
expenses of the Acquired Fund for its last completed fiscal year ended October
31, 2008, and estimated expenses for the current fiscal year ending October 31,
2009 for the Surviving Fund (which is a shell fund that will not commence
operations until the consummation of the Reorganization) and (2) shows the
estimated fees and expenses of the Surviving Fund on a PRO FORMA basis assuming
the Reorganization had taken place as of October 31, 2009. The purpose of this
table is to assist shareholders in understanding the various costs and expenses
that investors in the Funds will bear as shareholders. The table enables you to
compare the expense levels for the Acquired Fund and the Surviving Fund and
obtain a general idea of what the expense levels will be if the Reorganization
occurs. The table does not reflect any charges that may be imposed by
institutions directly on their customer accounts in connection with investments
in the funds. PRO FORMA expense levels shown should not be considered an actual
representation of future expenses or performance. Such PRO FORMA expense levels
project anticipated levels but actual expenses may be greater or less than those
shown.
2
----------------------- ----------------------------- ----------------------------- -------------------------------------
ACQUIRED FUND - SURVIVING FUND - PRO FORMA SURVIVING FUND AFTER
(INSTITUTIONAL CLASS SHARES) (INSTITUTIONAL CLASS SHARES) REORGANIZATION
(INSTITUTIONAL CLASS SHARES)
----------------------- ----------------------------- ----------------------------- -------------------------------------
SHAREHOLDER FEES (PAID DIRECTLY FROM YOUR INVESTMENT)(1)
-------------------------------------------------------------------------------------------------------------------------
Maximum front-end None None None
sales charge (load)
imposed on purchases
----------------------- ----------------------------- ----------------------------- -------------------------------------
Maximum contingent
deferred sales
charge (load) None None None
----------------------- ----------------------------- ----------------------------- -------------------------------------
Redemption (as a
percentage of amount
redeemed, if
applicable)/
Exchange Fee 2.00%(2) 2.00%(3) 2.00%(3)
----------------------- ----------------------------- ----------------------------- -------------------------------------
ANNUAL FUND OPERATING EXPENSES (DEDUCTED FROM FUND ASSETS)(4)
-------------------------------------------------------------------------------------------------------------------------
Management Fees 0.90% 0.90% 0.90%
----------------------- ----------------------------- ----------------------------- -------------------------------------
Other Expenses 0.29% 0.30% 0.30%
----------------------- ----------------------------- ----------------------------- -------------------------------------
Distribution and/or
Service (12b-1)
Fees None None None
----------------------- ----------------------------- ----------------------------- -------------------------------------
Acquired Fund Fees
and Expenses(5) 0.01% 0.00% 0.00%
----------------------- ----------------------------- ----------------------------- -------------------------------------
Total Annual Fund
Operating Expenses 1.20%(6) 1.20% 1.20%
----------------------- ----------------------------- ----------------------------- -------------------------------------
Less: Amount of
Fee Limitations/
Expense
Reimbursements (0.24)% (0.25)%(8) (0.25)%(8)
----------------------- ----------------------------- ----------------------------- -------------------------------------
Net Annual Fund
Operating Expenses 0.96%(7) 0.95% 0.95%
----------------------- ----------------------------- ----------------------------- -------------------------------------
(1) If you buy and sell shares through a broker or other financial intermediary,
the intermediary may charge a separate transaction fee.
(2) For the Acquired Fund, a redemption fee is assessed on redemptions of shares
that have been held for less than 90 days. In addition, proceeds wired to a bank
account may be subject to a $10 fee.
(3) For the Surviving Fund, a redemption fee of 2.00% applies to shares redeemed
or exchanged within 90 calendar days after the date they were purchased. This
fee is intended to discourage frequent trading of Surviving Fund shares that can
negatively affect the Surviving Fund's performance. The fee does not apply to
shares purchased through reinvested dividends or capital gains or shares held in
certain omnibus accounts or retirement plans that cannot implement the fee.
Shares issued on the closing date of the Reorganization will not be subject to
the redemption fee. However, new purchases of shares of the Surviving Fund made
by former Acquired Fund shareholders on or after the closing date of the
Reorganization will be subject to the redemption fee.
(4) The "Annual Fund Operating Expenses" for the Acquired Fund are based on
actual expenses for the fiscal year ended October 31, 2008 and for the Surviving
Fund are annualized expenses based on anticipated fees and expenses payable by
the Surviving Fund for the current fiscal year.
3
(5) Acquired Fund Fees and Expenses are fees and expenses incurred as a result
of a Fund's investment in other registered or unregistered investment companies.
(6) The Total Annual Fund Operating Expenses and Net Annual Fund Operating
Expenses for the Acquired Fund in this fee table do not correlate to the expense
ratio in the Acquired Fund's financial statements (or the financial highlights
in its prospectus), because the financial statements include only the direct
operating expenses incurred by the Acquired Fund, not the indirect costs of
investing in acquired funds.
(7) For the Acquired Fund, Aberdeen Asset Management Inc. ("AAMI" or the
"Adviser") has contractually agreed to reduce fees and reimburse expenses to the
extent necessary to keep Net Annual Fund Operating Expenses for Institutional
Class Shares (excluding interest, taxes, brokerage commissions, "Acquired Fund
Fees and Expenses" and extraordinary expenses) from exceeding 0.95% of the
Institutional Class Shares' average daily net assets until April 16, 2010. In
addition, if at any point it becomes unnecessary for the Adviser to reduce fees
or make expense reimbursements, the AIC II Board may permit the Adviser to
retain the difference between the Total Annual Fund Operating Expenses and 0.95%
to recapture all or a portion of its prior fee reductions or expense
reimbursements made during the preceding three year period. Net Annual Fund
Operating Expenses shown include 0.01% of "Acquired Fund Fees and Expenses".
(8) For the Surviving Fund, Aberdeen Trust and the Adviser have entered into a
written contract limiting Net Annual Fund Operating Expenses to 0.95% for the
Institutional Class Shares through the Surviving Fund's first two years of
operations. This limit excludes certain Surviving Fund expenses, including any
taxes, interest, brokerage fees, short-sale dividend expenses and "Acquired Fund
Fees and Expenses". Aberdeen Trust is authorized to reimburse the Adviser for
management fees previously limited and/or for expenses previously paid by the
Adviser, provided, however that any reimbursements must be paid at a date not
more than three years after the fiscal year in which the Adviser limited the
fees or reimbursed the expenses and the reimbursements do not cause the
Surviving Fund to exceed the expense limitation in the agreement at the time the
expenses are waived.
EXAMPLE
The following Example is intended to help you compare the cost of
investing in (1) Institutional Class Shares of the Acquired Fund as it currently
exists; (2) Institutional Class Shares of the Surviving Fund as it currently
exists; and (3) the Institutional Class of the Surviving Fund assuming the
Reorganization takes place with the cost of investing in other mutual funds. The
Example assumes that you invest $10,000 in each Fund for the time periods
indicated and that you sell your shares at the end of those periods. The Example
also assumes that each year your investment has a 5% return, that each Fund's
total annual operating expenses remain the same and that all dividends and
distributions are reinvested. Although your actual costs and returns might be
different based on these assumptions, your costs would be:
------------------------------------------------------------------------ --------- ----------- ---------- ------------
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------------------------------------------------------------------------ --------- ----------- ---------- ------------
ACQUIRED FUND - INSTITUTIONAL CLASS $98 $354* $633* $1,430*
------------------------------------------------------------------------ --------- ----------- ---------- ------------
SURVIVING FUND - INSTITUTIONAL CLASS $97 $330 N/A N/A
------------------------------------------------------------------------ --------- ----------- ---------- ------------
PRO FORMA COMBINED SURVIVING FUND $97 $330 $610 $1,409
------------------------------------------------------------------------ --------- ----------- ---------- ------------
* The "3 Years," "5 Years" and "10 Years" cost figures in the examples (for
periods after April 16, 2010) are based on the Fund's Total Annual Fund
Operating Expenses, which do not reflect fee reductions or expense
reimbursements.
The projected post-Reorganization PRO FORMA Annual Operating Expenses
and Example Expenses presented above are based on numerous material assumptions,
including (1) that the current contractual agreements will remain in place; (2)
that certain fixed costs involved in operating the Acquired Fund will be
eliminated; and (3) that the contractual fee waiver will limit Net Annual Fund
Operating Expenses to 0.95% and will terminate after the Surviving Fund's first
two years of operations. Although these projections represent good faith
estimates, there can be no assurance that any particular level of expenses or
expense savings will be achieved because expenses depend on a variety of
factors, including the future level of the Surviving Fund's assets, many of
which are beyond the control of the Surviving Fund and the Adviser.
4
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES OF THE ACQUIRED FUND AND
SURVIVING FUND
The Surviving Fund is a shell fund created for the purpose of acquiring
the assets and liabilities of the Acquired Fund and has an identical investment
objective and substantially similar investment policies and restrictions as the
Acquired Fund. The following chart provides the investment objective of the
Acquired Fund and the Surviving Fund.
------------------------------------------------------------ ------------------
ACQUIRED FUND SURVIVING FUND
------------------------------------------------------------ ------------------
Seeks long term capital appreciation by investing Same
primarily in equity securities of emerging country issuers.
------------------------------------------------------------ ------------------
For a detailed description of the investment objectives, policies and
fundamental investment restrictions, see "Comparison of the Acquired Fund and
the Surviving Fund" below and the Surviving Fund's prospectus which accompanies
this Prospectus/Proxy Statement.
COMPARISON OF THE SERVICE PROVIDERS OF THE ACQUIRED FUND AND SURVIVING FUND
The Acquired Fund is, and the Surviving Fund will be, managed on a
day-to-day basis by AAMI and its affiliated sub-advisers (the "Sub-Advisers"),
Aberdeen Asset Management Asia Limited ("AAMAL") and Aberdeen Asset Management
Investment Services Limited ("AAMISL"). AAMI, AAMAL and AAMISL will continue to
manage the Surviving Fund after the Reorganization.
The Acquired Fund and Surviving Fund have different administrators,
distributors, transfer agents and other service providers. For a discussion of
the service providers to the Acquired Fund and the Surviving Fund, see
"Comparison of the Acquired Fund and the Surviving Fund- Comparison of Service
Providers" below and the Surviving Fund's prospectus which accompanies this
Prospectus/Proxy Statement.
COMPARISON OF THE SHARE CLASS CHARACTERISTICS AND SHAREHOLDER TRANSACTIONS AND
SERVICES OF THE ACQUIRED AND SURVIVING FUND
Institutional Class Shares of the Acquired Fund and the Surviving Fund
are both offered at net asset value with no front-end sales charge or contingent
deferred sales charge. Institutional Class Shares of both the Acquired Fund and
the Surviving Fund are subject to a 2.00% redemption fee on the redemption of
shares (including by exchange) held for 90 calendar days or less. Institutional
Class Shares of the Acquired Fund redeemed prior to the Reorganization will be
subject to the 2.00% redemption fee if they have been held for 90 calendar days
or less. Institutional Class Shares of the Surviving Fund issued to Acquired
Fund shareholders on the closing date of the Reorganization will not be subject
to the redemption fee. However, any new purchases of Institutional Class Shares
of the Surviving Fund will be subject to the redemption fee. Institutional Class
Shares of the Acquired Fund and the Surviving Fund are not subject to a
distribution plan or shareholder servicing plan.
The purchase, redemption, exchange, dividend and other policies and
procedures of the Acquired Fund and the Surviving Fund are generally similar.
There are, however, some differences. For more information, see "Comparison of
the Acquired Fund and the Surviving Fund- Comparison of Distribution, Purchase
and Redemption Procedures" below.
5
VOTING INFORMATION
The AIC II Trustees are furnishing this Prospectus/Proxy Statement in
connection with the solicitation of proxies. Only shareholders of record at the
close of business on [insert record date], 2009, will be entitled to vote at the
Meeting. Shares represented by a properly executed proxy will be voted in
accordance with the instructions thereon. If no instruction is made, the named
proxies will vote in favor of the Proposal set forth in the Notice of Meeting.
Proxies may be revoked at any time before they are exercised by submitting to
AIC II Trust a written notice of revocation or a subsequently executed proxy or
by attending the Meeting and voting in person. For additional information, see
"Voting Information" below.
PRINCIPAL RISK FACTORS
COMPARISON OF THE PRINCIPAL RISKS ASSOCIATED WITH INVESTMENTS IN THE ACQUIRED
FUND AND SURVIVING FUND
The principal risks of investments in the Acquired Fund and the
Surviving Fund are substantially similar. Below is a description of the risks of
investing in each of the Funds. The discussion below presents the risks as
disclosed in the Surviving Fund's prospectus. These risks may be disclosed
differently in the Acquired Fund's prospectus or be included in the Acquired
Fund's SAI.
FOREIGN INVESTMENT RISK. Foreign investments involve certain special
risks, including:
o POLITICAL RISK. Some foreign governments have limited the outflow
of profits to investors abroad, imposed restrictions on the
exchange or export of foreign currency, extended diplomatic
disputes to include trade and financial relations, seized foreign
investment and imposed higher taxes.
o INFORMATION RISK. Companies based in foreign markets are usually
not subject to accounting, auditing and financial reporting
standards and practices as stringent as those in the U.S.
Therefore, their financial reports may present an incomplete,
untimely or misleading picture of a company, as compared to the
financial reports required in the U.S.
o LIQUIDITY RISK. Investments that trade less can be more difficult
or more costly to buy, or to sell, than more liquid or active
investments. This liquidity risk is a factor of the trading volume
of a particular investment, as well as the size and liquidity of
the entire local market. On the whole, foreign exchanges are
smaller and less liquid than U.S. exchanges. This can make buying
and selling certain investments more difficult and costly.
Relatively small transactions in some instances can have a
disproportionately large effect on the price and supply of
securities. In certain situations, it may become virtually
impossible to sell an investment in an orderly fashion at a price
that approaches portfolio management's estimate of its value. For
the same reason, it may at times be difficult to value a Fund's
foreign investments.
o REGULATORY RISK. There is generally less government regulation of
foreign markets, companies and securities dealers than in the U.S.
o CURRENCY RISK. A Fund invests in securities denominated in
foreign currencies. Changes in exchange rates between foreign
currencies and the U.S. dollar may affect the U.S. dollar value
of foreign securities or the income or gain received on these
securities.
6
o DEPOSITARY RECEIPT RISK. While the use of American Depositary
Receipt ("ADRs"), European Depositary Receipts ("EDRs"), and
Global Depositary Receipts ("GDRs"), which are traded on exchanges
and represent an ownership in a foreign security, provide an
alternative to directly purchasing the underlying foreign
securities in their respective national markets and currencies,
investments in ADRs, EDRs, and GDRs continue to be subject to many
of the risks associated with investing directly in foreign
securities.
o LIMITED LEGAL RECOURSE RISK. Legal remedies for investors may be
more limited than the legal remedies available in the U.S.
o TRADING PRACTICE RISK. Brokerage commissions and other fees are
generally higher for foreign investments than for U.S.
investments. The procedures and rules governing foreign
transactions and custody may also involve delays in payment,
delivery or recovery of money or investments.
o TAXES. Foreign withholding and certain other taxes may reduce the
amount of income available to distribute to shareholders of
a Fund. In addition, special U.S. tax considerations may apply
to a Fund's foreign investments.
o ACCESS RISK. Some countries may restrict a Fund's access to
investments or offer terms that are less advantageous than
those for local investors. This could limit the attractive
investment opportunities available to a Fund.
o OPERATIONAL RISK. Some countries have less-developed securities
markets (and related transaction, registration and custody
practices) that could subject a Fund to losses from fraud,
negligence, delay or other actions.
EMERGING MARKETS RISK. All of the risks of investing in foreign
securities are increased in connection with investments in emerging markets.
Emerging markets are countries generally considered to be relatively less
developed or industrialized. Emerging markets often face economic problems that
could subject a Fund to increased volatility or substantial declines in value.
Deficiencies in regulatory oversight, market infrastructure, shareholder
protections and company laws could expose a Fund to risks beyond those generally
encountered in developed countries. In addition, profound social changes and
business practices that depart from norms in developed countries' economies have
hindered the orderly growth of emerging economies and their markets in the past
and have caused instability. High levels of debt tend to make emerging economies
heavily reliant on foreign capital and vulnerable to capital flight. Countries
in emerging markets are also more likely to experience high levels of inflation,
deflation or currency devaluation, which could also hurt their economies and
securities markets. For these and other reasons, investments in emerging markets
are often considered speculative.
MARKET RISK. Deteriorating market conditions might cause a general
weakness in the market that reduces the prices of securities in that market.
Developments in particular securities or the stock market could also adversely
affect a Fund by reducing the relative attractiveness of these securities as an
investment. Also, to the extent that a Fund emphasizes stocks from any given
industry, it could be hurt if that industry does not do well. Additionally, a
Fund could lose value if the individual stocks in which it maintains long
positions and/or the overall stock markets on which the stocks trade decline in
price. Stocks and stock markets may experience short-term volatility (price
fluctuation) as well as extended periods of price decline or increase.
Individual stocks are affected by many factors, including:
7
o corporate earnings;
o production;
o management;
o sales; and
o market trends, including investor demand for a particular type
of stock, such as growth or value stocks, small or large
stocks, or stocks within a particular industry.
Stock markets are affected by numerous factors, including interest
rates, the outlook for corporate profits, the health of the national and world
economies, national and world social and political events, and the fluctuation
of other stock markets around the world.
SELECTION RISK. The investment team may select securities that
underperform the stock market, the Morgan Stanley Capital International Emerging
Markets Free Index (MSCI EMF), or other funds with similar investment objectives
and strategies.
SMALL- AND MID-CAP SECURITIES RISK. In general, stocks of small- and
mid-cap companies may be more volatile and less liquid than larger company
stocks.
VALUATION RISK. The lack of an active trading market may make it
difficult to obtain an accurate price for a security held by a Fund.
FAIR VALUE PRICING RISK. When fair value pricing is used, the values
used by a Fund to price securities may be higher or lower than the quoted or
published prices for the same securities on their primary markets or exchanges.
This means that prices used by a Fund to value a security may be different
from the prices used by other investment companies or investors to price the
same security. Valuing securities at fair value involves greater reliance on
judgment than valuing securities that have readily available market quotations.
There can be no assurance that a Fund could obtain the fair value assigned to
a security if it were to sell the security at approximately the time at which
a Fund determines its net asset value per share. As a result, the sale or
redemption by a Fund of its shares at net asset value, at a time when a
holding or holdings are valued at fair value, may have the effect of diluting or
increasing the economic interest of existing shareholders.
INFORMATION ABOUT THE REORGANIZATION AND THE PLAN
MATERIAL FEATURES OF THE PLAN
The Plan sets forth the terms and conditions of the Reorganization.
Significant provisions of the Plan are summarized below; however, this summary
is qualified in its entirety by reference to the Plan, a form of which is
attached as Appendix A to this Prospectus/Proxy Statement and is incorporated
herein by reference.
First, the Reorganization must be approved by shareholders of the
Acquired Fund. Approval of the Reorganization requires the approval of the
holders the lesser of (a) 67% or more of the shares of the Acquired Fund voted
at the Meeting if more than 50% of the outstanding shares of the Acquired Fund
are represented at the Meeting in person of by proxy or (b) more than 50% of the
outstanding shares of the Acquired Fund. For more information see the section
entitled "Voting Information". In the event the Acquired Fund fails to receive
sufficient votes for approval of the Reorganization, management will consider
whether to continue further solicitations. If the shareholders of the Acquired
Fund do not approve the Plan, the AIC II Board, will consider other possible
courses of action for the Acquired Fund.
At the consummation of the Reorganization, which is expected to occur
immediately prior to the opening of business on or about November 2, 2009, (the
"Closing Date"), all of the assets and liabilities of the Acquired Fund will be
transferred to the Surviving Fund in exchange for Institutional Class Shares of
the Surviving Fund. At and after the Closing Date, the assets and liabilities of
the Acquired Fund will become the assets and liabilities of the Surviving Fund.
On the Closing Date the Acquired Fund will distribute in complete liquidation of
the Acquired Fund, PRO RATA to its shareholders of record, determined as of the
close of business of the New York Stock Exchange ("NYSE") (normally 4:00 p.m.
Eastern time) on the last business day immediately preceding the Closing Date,
all of the Institutional Class Shares of the Surviving Fund received by the
Acquired Fund pursuant to the Plan. After completion of the Reorganization, each
shareholder of the Acquired Fund will own Institutional Class Shares of the
Surviving Fund equal in value to the net asset value ("NAV") of such
shareholder's shares of the Acquired Fund immediately prior to the
Reorganization. The transfer of assets by the Acquired Fund will occur at their
then-current market value as determined in accordance with the Surviving Fund's
valuation procedures and shares of the Surviving Fund to be issued to the
Acquired Fund shall be valued at their then-current NAV determined in accordance
with the Surviving Fund's valuation procedures. The distribution will be
accomplished by the transfer of Surviving Fund shares credited to the account of
the Acquired Fund on the books of the Surviving Fund to open accounts on the
share records of the Surviving Fund in the name of the Acquired Fund
shareholders, with each such account being credited a number of Surviving Fund
shares representing the respective PRO RATA number of Surviving Fund shares due
the related shareholders. All issued and outstanding shares of the Acquired Fund
will simultaneously be canceled on the books of the Acquired Fund. Following the
completion of the Reorganization, the Acquired Fund will be liquidated and
terminated.
8
The Plan contains a number of representations and warranties made by
the AIC II Trust to the Aberdeen Trust related to, among other things, its legal
status, compliance with laws and regulations and financial position (section
4.1) and similar representations and warranties made by the Aberdeen Trust to
the AIC II Trust (section 4.2). The Plan contains a number of conditions
precedent that must occur before either the AIC II Trust or the Aberdeen Trust
are obligated to proceed with the Reorganization (Articles VI and VII). These
include, among others, that (1) the shareholders of the Acquired Fund approve
the Reorganization; (2) AIC II Trust receives from the Aberdeen Trust's legal
counsel and Aberdeen Trust receives from AIC II Trust's legal counsel, certain
opinions supporting the representations and warranties made by each party
regarding legal status and compliance with laws and regulations (including an
opinion from Aberdeen Trust counsel that the shares issued in the Reorganization
will be validly issued, fully paid and nonassessable); (3) both AIC II Trust and
Aberdeen Trust receive from AIC II Trust's legal counsel the tax opinion
discussed below under "Federal Income Tax Consequences;" and (4) the receipt of
certain certificates from AIC II Trust and Aberdeen Trust officers concerning
the continuing accuracy of representations and warranties in the Plan.
The Plan may be amended, modified or supplemented in such a manner as
may be mutually agreed upon in writing by the officers of the AIC II Trust and
the Aberdeen Trust. The officers of the AIC II Trust may change the valuation
time for assets and shares, the effective time and the Closing Date through an
agreement in writing without additional specific authorization by their
respective Boards. The Plan may be terminated by the mutual agreement of the AIC
II Trust and the Aberdeen Trust. Additionally, either the AIC II Trust or the
Aberdeen Trust may at its option terminate the Plan at or before the Closing
Date due to: 1) a breach by the other party of any representation, warranty, or
agreement occurs before the Closing Date and is not cured within 30 days; 2)
certain conditions required under the Plan having not been satisfied and it
reasonably appears that such condition will not or cannot be met; and 3) either
the AIC II Board or Aberdeen Board determining that the consummation of the
Reorganization is not in the best interest of the AIC II Trust or the Aberdeen
Trust, respectively, and notice is given to the other party.
AAMI and/or its affiliates, will bear all expenses that are solely
and directly related to the Reorganization.
If the Reorganization is approved, Acquired Fund shareholders who do
not wish to have their Acquired Fund shares exchanged for shares of a Surviving
Fund as part of the Reorganization should redeem their shares prior to the
consummation of the Reorganization. If you redeem your shares, you may recognize
a taxable gain or loss based on the difference between your tax basis in the
shares and the amount you receive for them. In addition, if you redeem your
shares of the Acquired Fund prior to the Reorganization and your shares are
subject to the 2.00% redemption fee because they have been held for 90 calendar
days or less, your redemption proceeds will be reduced by the redemption fee.
9
DESCRIPTION OF THE SECURITIES TO BE ISSUED
Shareholders of the Acquired Fund will receive full and/or fractional
Institutional Class Shares of the Surviving Fund in accordance with the
procedures provided for in the Plan, as described above. The Surviving Fund
shares to be issued in connection with the Reorganization will be fully paid and
non-assessable when issued, and will have no pre-emptive or conversion rights.
The rights of shareholders of AIC II Trust and Aberdeen Trust are comparable.
For more information see "Comparison of the Acquired Fund and the Surviving
Fund."
BOARD CONSIDERATIONS
The Acquired Fund was launched in May 2007 to provide an investment
vehicle for institutional clients of Aberdeen. The Acquired Fund was placed on
SEI Investment Company's already established platform - the AIC II Trust. In
June 2008, the Aberdeen Trust commenced operations. In connection with the
creation of the Aberdeen Trust, Aberdeen established its own distributor,
Aberdeen Fund Distributors LLC, and distribution platform. Given its proprietary
fund complex and in-house distribution capabilities, Aberdeen proposed that the
Acquired Fund be reorganized into the Aberdeen Trust.
The AIC II Board, including the AIC II Trust Independent Trustees, on
behalf of the Acquired Fund, considered the Reorganization at a meeting held on
June 24, 2009 and approved the Plan. In approving the Reorganization, the AIC II
Board determined that (i) participation in the Reorganization is in the best
interests of the Acquired Fund's shareholders; and (ii) the Reorganization will
not result in the dilution of the interests of the Acquired Fund's shareholders.
In making this determination, the AIC II Board considered a number of
factors, including:
o the investment objective of the Surviving Fund and the Acquired
Fund are identical;
o the investment strategies, restrictions, and risks of the
Surviving Fund are substantially similar to those of the Acquired
Fund;
o the continuity of investment management - if shareholders approve
the Reorganization, the Adviser and Sub-Advisers for the Acquired
Fund would continue to serve in their capacities for the Surviving
Fund;
o the Surviving Fund will have access to broader distribution
channels than the Acquired Fund, which may provide the potential
for the Surviving Fund's asset base to grow substantially, which
could provide economies of scale benefiting the Acquired Fund's
current shareholders;
o the Reorganization is intended to be tax-free for federal income
tax purposes for shareholders of the Acquired Fund (although there
can be no assurance that the IRS will take a similar position);
o the advisory fee of the Surviving Fund is identical to that of the
Acquired Fund;
o AAMI has agreed to an expense limitation agreement for a period of
at least two years from the date of the closing of the
Reorganization to waive a portion of its management fees and bear
certain expenses so that the operating expenses do not exceed
0.95%, which mirrors the current expense ratio after waivers and
expense reimbursement for the Acquired Fund; and
10
o the expenses of the Reorganization would not be borne by the
Acquired Fund's shareholders.
On June 10, 2009, the Aberdeen Board also determined that the
consummation of the Reorganization is in the best interest of the shareholders
of the Surviving Fund.
FEDERAL INCOME TAX CONSEQUENCES OF THE REORGANIZATION
The Acquired Fund and the Surviving Fund both intend to qualify, as of
the Closing Date, as a "regulated investment company" under the Internal Revenue
Code of 1986, as amended (the "Code"). Accordingly, each of the Funds has been,
and expects to continue to be, relieved of all or substantially all federal
income taxes. Consummation of the transaction is subject to the condition that
AIC II Trust and Aberdeen Trust receives an opinion from Morgan, Lewis and
Bockius, LLP, subject to appropriate factual assumption and customary
representations, to the effect that for federal income tax purposes:
a) The Reorganization will constitute a tax-free reorganization within
the meaning of Section 368(a) of the Code, and the Acquired Fund and the
Surviving Fund will each be a "party to the reorganization" within the meaning
of Section 368(b) of the Code.
b) No gain or loss will be recognized by the Surviving Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for Surviving Fund
shares and the assumption by the Surviving Fund of all of the liabilities of the
Acquired Fund.
c) No gain or loss will be recognized by the Acquired Fund upon the
transfer of all of its assets to the Surviving Fund solely in exchange for
Surviving Fund shares and the assumption by the Surviving Fund of all of the
liabilities of the Acquired Fund or upon the distribution of Surviving Fund
shares to shareholders of the Acquired Fund.
d) No gain or loss will be recognized by the shareholders of the
Acquired Fund upon the exchange of their shares of the Acquired Fund for
Surviving Fund shares (including fractional shares to which they may be
entitled) and the assumption by the Surviving Fund of the liabilities of the
Acquired Fund.
e) The aggregate tax basis of Surviving Fund shares received by each
shareholder of the Acquired Fund (including fractional shares to which they may
be entitled) will be the same as the aggregate tax basis of the Acquired Fund
shares exchanged therefor.
f) The holding period of the Surviving Fund shares received by the
shareholders of the Acquired Fund (including fractional shares to which they may
be entitled) will include the holding period of the Acquired Fund shares
surrendered in exchange therefor, provided that the Acquired Fund shares were
held as a capital asset as of the Closing Date of the Reorganization.
g) The tax basis of the assets of the Acquired Fund received by the
Surviving Fund will be the same as the tax basis of such assets to the Acquired
Fund immediately prior to the exchange.
h) The holding period of the assets of the Acquired Fund received by
the Surviving Fund will include the period during which such assets were held by
the Acquired Fund.
i) The Surviving Fund will succeed to and take into account, as of the
date of the transfer (as defined in Section 1.381(b)-1(b) of the Treasury
Regulations) the items of the Acquired Fund described in Section 381(c) of the
Code subject to the conditions and limitations specified in Sections 381(b) and
(c) of the Code and the regulations thereunder.
11
No opinion will be expressed as to the effect of the Reorganization on
(i) the Acquired Fund or the Surviving Fund with respect to any asset as to
which any unrealized gain or loss is required to be recognized for federal
income tax purposes at the end of a taxable year (or on the termination or
transfer thereof) under a mark-to-market system of accounting and (ii) any
Acquired Fund or the Surviving Fund shareholder that is required to recognize
unrealized gains and losses for federal income tax purposes under a
mark-to-market system of accounting.
Neither the Acquired Fund nor the Surviving Fund have sought a tax
ruling on the federal tax consequences of the Reorganization from the IRS. The
opinion to be received from Morgan, Lewis & Bockius, LLP, with respect to the
federal income tax consequences of the Reorganization described in this section
is not binding on the IRS and does not preclude the IRS from adopting a contrary
position.
Capital losses can generally be carried forward to each of the eight
(8) years succeeding the loss year to offset future capital gains. The Surviving
Fund will inherit the tax attributes of the Acquired Fund, including any
available capital loss carryforwards, as of the Closing Date. In general, it is
not expected that any such capital loss carryforwards will be subject to an
annual limitation for federal income tax purposes in connection with the
Reorganization because the Reorganization should either: (i) qualify as a type
"F" tax-free reorganization under the Code, including a mere change in identity,
form or place of reorganization of one corporation, however effected; or (ii)
not involve more than a 50% change of ownership.
After the Reorganization, shareholders will continue to be responsible
for tracking the adjusted tax basis and holding period for shares for federal
income tax purposes. Shareholders should consult their tax adviser regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Shareholders should also consult their own advisers concerning
the potential tax consequences to them, including state and local income tax
consequences.
COMPARATIVE INFORMATION ON SHAREHOLDER RIGHTS
The AIC II Trust is organized as a Massachusetts voluntary association
(commonly known as a business trust). Aberdeen Trust is organized as a Delaware
statutory trust. The following is only a summary of certain of the differences
between the provisions of the Amended and Restated Agreement and Declaration of
Trust of the AIC II Trust ("AIC II Declaration of Trust") and the Amended and
Restated Agreement and Declaration of Trust of the Aberdeen Trust ("Aberdeen
Declaration of Trust"). The rights of shareholders of the Acquired Fund are
defined by the AIC II Declaration of Trust and the rights of shareholders of the
Surviving Fund are defined by the Aberdeen Declaration of Trust. Although the
rights of an interestholder of a Massachusetts voluntary association may vary in
certain respects from the rights of an interestholder of a Delaware statutory
trust, the attributes of a share of beneficial interest are comparable (e.g.,
shares of both the Acquired Fund and Surviving Fund are entitled to one vote per
share held and fractional votes for fractional shares held). The discussion
below describes some of the differences between your rights as a shareholder of
the Acquired Fund and your rights as a shareholder of the Surviving Fund. It is
not a complete list of differences. The operations of both the Acquired Fund and
the Surviving Fund are also subject to the provisions of the 1940 Act, the rules
and regulations of the SEC thereunder and applicable state securities laws.
AMENDMENT OF CHARTER
The AIC II Declaration of Trust generally provides that the Declaration
of Trust may be amended at any time by an instrument in writing signed by a
majority of the then AIC II Trustees when authorized to do so by a vote of
shareholders holding a majority of the shares entitled to vote. Amendments
having the purpose of changing the name of the AIC II Trust or of supplying any
omission, curing any ambiguity or curing, correcting or supplementing any
defective or inconsistent provision contained in the AIC II Declaration of Trust
does not require authorization by shareholder vote.
12
The Aberdeen Declaration of Trust permits the Aberdeen Trustees to
amend or restate the Declaration of Trust by an instrument in writing signed by
not less than a majority of the trustees unless the Aberdeen Declaration of
Trust, the 1940 Act or the requirement of any securities exchange on which
shares are listed for trading requires shareholders approve such an amendment.
SHAREHOLDER LIABILITY
Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable as partners for
the obligations of the trust. However, the AIC II Declaration of Trust contains
an express disclaimer of shareholder liability for obligations of the AIC II
Trust and requires that notice of such disclaimer be given in each agreement,
obligation or instrument entered into or executed by or on behalf of the AIC II
Trust or the AIC II Trustees. The AIC II Declaration of Trust also provides for
indemnification out of the AIC II Trust property for any shareholder held
personally liable for the obligations of the AIC II Trust.
Under Delaware law, shareholders generally are not personally liable
for the obligations of a Delaware statutory trust. A shareholder is entitled to
the same limitation of liability extended to stockholders of private, for-profit
corporations. Similar statutory or other authority, however, limiting
shareholder liability does not exist in certain states. As a result, to the
extent that the Aberdeen Trust or a shareholder is subject to the jurisdiction
of courts in those states, the courts may not apply Delaware law, thereby
subjecting the shareholder to liability. To guard against this risk, the
Aberdeen Declaration of Trust: (1) contains a provision entitling the Surviving
Fund's shareholders to the same limitation of personal liability extended to
stockholders of a private corporation organized for profit under the general
corporate law of Delaware; and (2) provides for indemnification out of the
Surviving Fund property, as applicable, for any shareholder held personally
liable for the obligations of the Surviving Fund. In addition, notice of
disclaimer of shareholder liability will normally be given in each agreement,
obligation, or instrument entered into or executed by the Aberdeen Trust on
behalf of the Surviving Fund. Thus, the risk of a shareholder incurring
financial loss beyond his or her investment because of shareholder liability is
limited to circumstances in which (1) a court refuses to apply Delaware law; (2)
no contractual limitation of liability is in effect; and (3) the Surviving Fund
is unable to meet its obligations to indemnify a shareholder. In light of
Delaware law, the nature of the Surviving Fund's business and the nature of its
assets, the Aberdeen Board believes that the risk of personal liability to a
shareholder is extremely remote.
LIABILITY AND INDEMNIFICATION OF TRUSTEES AND OFFICERS
The AIC II Trustees are not responsible or liable in any event for any
neglect or wrongdoing of any officer, agent, employee, investment adviser or
administrator, principal underwriter or custodian, nor is any AIC II Trustee
responsible for the act or omission of any other AIC II Trustee, but nothing
contained in the AIC II Declaration of Trust protects any AIC II Trustee against
any liability to which he or she would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.
13
The AIC II Declaration of Trust also provides that each trustee and
officer of AIC II Trust shall be indemnified by AIC II Trust to the fullest
extent permitted by law against liability and against all expenses reasonably
incurred or paid by him in connection with any claim, action, suit or proceeding
in which he becomes involved as a party or otherwise by virtue of his being or
having been a trustee or officer and against amounts paid or incurred by him in
settlement thereof, except that no such indemnity is provided to a trustee or
officer (a) against any liability to the AIC II Trust or its shareholders by
reason of a final adjudication by the court or other body before which the
proceeding was brought that he engaged in willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office; (b) with respect to any matter as to which he has been finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interests of the AIC II Trust; (c) in the event of a
settlement or other disposition not involving a final adjudication (as provided
in paragraph (a) or (b)) and resulting in a payment by a trustee or officer,
unless there has been either a determination that such trustee or officer did
not engage in willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office by the court or
other body approving the settlement or other disposition or a reasonable
determination, based on a review of readily available facts (as opposed to a
full trial-type inquiry) that he did not engage in such conduct: (i) by a vote
of a majority of the disinterested trustees acting on the matter (provided that
a majority of the disinterested trustees then in office act on the matter); or
(ii) by written opinion of independent legal counsel.
The Aberdeen Declaration of Trust provides that to the fullest extent
that limitations on the liability of agents are permitted by the Delaware
Statutory Trust Act ("DSTA") and other applicable law, the trustees and officers
shall not be responsible or liable in any event for any act or omission of any
other agent of the Aberdeen Trust or any investment adviser or principal
underwriter of the Aberdeen Trust.
In addition, the Aberdeen Declaration of Trust provides that the
Aberdeen Trust, out of its property, shall indemnify and hold harmless each and
every officer and trustee from and against any and all claims and demands
whatsoever arising out of or related to such officer's or trustee's performance
of his or her duties as an officer or trustee of the Aberdeen Trust. Nothing in
the Aberdeen Declaration of Trust indemnifies, holds harmless or protects any
officer or trustee from or against any liability to the Aberdeen Trust or any
shareholder to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of such person's office.
VOTING RIGHTS OF SHAREHOLDERS
The AIC II Trust is not required to hold annual meetings of
shareholders and does not intend to hold such meetings. Notwithstanding any
other provisions of the Declaration of Trust, on any matter submitted to a vote
of shareholders, all shares of the AIC II Trust then entitled to vote shall be
voted by individual series or class, except (1) when required by the 1940 Act,
shares shall be voted in the aggregate and not by individual series or class,
and (2) when the AIC II Trustees have determined that the matter affects only
the interests of one or more series or class, then only shareholders of such
series or class shall be entitled to vote thereon. Each whole share is entitled
to one vote as to any matter on which it is entitled to vote and each fractional
Share is entitled to a proportionate fractional vote. There is no cumulative
voting in the election of AIC II Trustees.
Meetings of shareholders of the AIC II Trust or of any series or class
may be called by the AIC II Trustees, or such other person or persons as may be
specified in the by-laws, and held from time to time for the purpose of taking
action upon any matter requiring the vote or the authority of the shareholders
of the AIC II Trust or any series or class as provided in the AIC II Declaration
of Trust or upon any other matter deemed by the AIC II Trustees to be necessary
or desirable. If the AIC II Trustees fail to call or give notice of any meeting
of shareholders for a period of thirty days after written application by
shareholders holding at least 10% of the shares then outstanding requesting a
meeting to be called for a purpose requiring action by the shareholders as
provided in the AIC II Declaration of Trust or in the by-laws, then shareholders
holding at least 10% of the shares then outstanding may call and give notice of
such meeting, and thereupon the meeting shall be held in the manner provided for
in the AIC II Declaration of Trust in case of call thereof by the AIC II
14
Trustees. The shareholders of AIC II Trust have power to vote only (i) for the
election or removal of trustees as provided in the AIC II Declaration of Trust,
(ii) with respect to any investment adviser as provided in the AIC II
Declaration of Trust, (iii) with respect to any termination of the AIC II Trust
or any series to the extent and as provided in the AIC II Declaration of Trust,
(iv) with respect to any amendment of the Declaration of Trust to the extent and
as provided in the AIC II Declaration of Trust, (v) to the same extent as the
stockholders of a Massachusetts business corporation as to whether or not a
court action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the AIC II Trust or the
shareholders, and (vi) with respect to such additional matters relating to the
AIC II Trust as may be required by law, by this Declaration of Trust, by the
by-laws or by any registration of the AIC II Trust with the SEC or any state, or
as the AIC II Trustees may consider necessary or desirable.
A majority of the shares entitled to vote shall be a quorum for the
transaction of business at a shareholders' meeting, except that where any
provision of law or of the AIC II Declaration of Trust permits or requires that
holders of any series or class shall vote as a series or class, then a majority
of the aggregate number of shares of that series or class entitled to vote shall
be necessary to constitute a quorum for the transaction of business by that
series or class. Any lesser number, however, shall be sufficient for
adjournments. Any adjourned session or sessions may be held within a reasonable
time after the date set for the original meeting without the necessity of
further notice. Except when a larger vote is required by any provisions of the
AIC II Declaration of Trust or the by-laws, a majority of the shares voted on
any matter shall decide such matter and a plurality shall elect a trustee,
provided that where any provision of law or of the AIC II Declaration of Trust
permits or requires that the holders of any series or class shall vote as a
series or class, then a majority of the shares of that series or class voted on
the matter shall decide that matter insofar as that series or class is
concerned.
Aberdeen Trust is not required to hold annual meetings of shareholders
and does not intend to hold such meetings. In the event that a meeting of
shareholders is held, all shares of the Surviving Fund are entitled to vote on a
matter vote without differentiation between the separate series or classes;
provided however, (i) if any matter to be voted on affects only the interests of
some but not all series or classes, then only the shareholders of such affected
series or classes shall be entitled to vote on the matter or (ii) if the 1940
Act or other applicable law or regulation requires voting by series or by class,
then the shares shall vote as prescribed by such law or regulation. Each share
shall be entitled to one vote for each full share, and a fractional vote for
each fractional share. Shareholders of the Aberdeen Trust do not have cumulative
voting rights in the election of Aberdeen Trustees. Meetings of shareholders of
the Aberdeen Trust, or any, series or, class thereof, may be called by the
Aberdeen Trustees, the Chairman of the Board or President of the Aberdeen Trust
or upon the written request of holders of 10% or more of the shares entitled to
vote at such meetings. The Aberdeen Trustees will call a special meeting of
shareholders for the purpose of electing Aberdeen Trustees if, at any time, less
than a majority of Aberdeen Trustees holding office at the time were elected by
shareholders. The Aberdeen Declaration of Trust provides that the shareholders
have the power to, vote only with respect to: (1) the election of Aberdeen
Trustees to the extent and as provided therein; and (2) with respect to such
additional matters relating to the Aberdeen Trust as may be required by the
Aberdeen Declaration of Trust, the Aberdeen Trust's by-laws, the 1940 Act or any
registration statement of the Aberdeen Trust with the SEC; or (3) as the
Aberdeen Trustees may consider necessary or desirable. Generally, unless a lower
quorum is required by applicable law, thirty-three and one-third percent
(33-1/3%) of the shares present in person or represented by proxy and entitled
to vote at a shareholders' meeting constitute a quorum at the meeting.
Generally, subject to certain provisions of the Aberdeen Declaration of Trust,
the by-laws or applicable law which may require a different vote: (1) in all
matters other than the election of Aberdeen Trustees, the affirmative vote of
the majority of votes cast at a shareholders' meeting at which a quorum is
present shall be the act of the shareholders; and (2) trustees shall be elected
by a plurality of the votes cast at a shareholders' meeting at which a quorum is
present.
15
DERIVATIVE ACTION
There are no provisions relating to shareholder derivative actions in
the AIC II Declaration of Trust.
Generally, a shareholder may bring a derivative action on behalf of the
Aberdeen Trust only if the shareholder or shareholders first make a pre-suit
demand upon the trustees to bring the subject action unless an effort to cause
the trustees to bring such action is excused. A demand on the Aberdeen Trustees
is only excused if a majority of the Aberdeen Board, or a majority of any
committee established to consider the merits of such action, has a personal
financial interest in the action at issue.
FOR THE REASONS DISCUSSED ABOVE, THE AIC II BOARD UNANIMOUSLY
RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL.
CAPITALIZATION
The Reorganization is not expected to have an impact on the NAV of the
Acquired Fund. As indicated below, the Reorganization will not cause the value
of an Acquired Fund shareholder's account to go up or down. Any declared but
undistributed dividends or capital gains will carry over in the Reorganization.
The following table shows the capitalization of the Acquired Fund and
the Surviving Fund as of [Insert Date] and the capitalization of the Surviving
Fund on a PRO-FORMA basis as of that date after giving effect to the
Reorganization. The following are examples of the number of the Institutional
Class Shares of the Acquired Fund that would be exchanged for Institutional
Class Shares of the Surviving Fund if the Reorganization shown had been
consummated on [Insert Date], and do not reflect the number of such shares or
the value of such shares that would actually be received if the Reorganization
occurs. Each shareholder of the Acquired Fund will receive the number of full
and fractional shares of the Surviving Fund equal in value to the value (as of
the last business day prior to the Closing Date) of the shares of the Acquired
Fund. The Surviving Fund is a shell fund, without assets or liabilities, and is
being created for the purpose of acquiring the assets and liabilities of the
Acquired Fund. The Acquired Fund will be the accounting survivor for financial
statement purposes. Dollar amounts in the tables are in thousands, except for
net asset value per share.
----------------------------------- ---------------- ------------------- ---------------------
ACQUIRED FUND SURVIVING FUND* PRO FORMA COMBINED
SURVIVING FUND
----------------------------------- ---------------- ------------------- ---------------------
Total Net Assets................... XX $0 XX
----------------------------------- ---------------- ------------------- ---------------------
Shares Outstanding................. XX $0 XX
----------------------------------- ---------------- ------------------- ---------------------
Net Asset Value Per Share ......... XX $0 XX
----------------------------------- ---------------- ------------------- ---------------------
16
This information is for informational purposes only. There is, of
course, no assurance that the Reorganization will be consummated. Moreover, if
consummated, the capitalization of the Acquired Fund is likely to be different
at the effective time of the Reorganization as a result of daily share purchase
and redemption activity in the Acquired Fund. Accordingly, the foregoing should
not be relied upon to reflect the number of shares of the Surviving Fund that
actually will be received on or after such date.
* THE SURVIVING FUND IS A SHELL FUND THEREFORE NO ESTIMATED
CAPITALIZATION IS AVAILABLE.
COMPARISON OF THE ACQUIRED FUND AND THE SURVIVING FUND
COMPARISON OF THE INVESTMENT OBJECTIVE AND PRINCIPAL INVESTMENT STRATEGIES
------------------------------------------------------------- -------------------------------------------------------
ACQUIRED FUND SURVIVING FUND
------------------------------------------------------------- -------------------------------------------------------
INVESTMENT OBJECTIVES INVESTMENT OBJECTIVES
------------------------------------------------------------- -------------------------------------------------------
The Acquired Fund seeks long-term capital appreciation by Same.
investing primarily in equity securities of emerging
market country issuers.
------------------------------------------------------------- -------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL INVESTMENT STRATEGIES
------------------------------------------------------------- -------------------------------------------------------
The Fund will invest primarily in common stocks, but may Same.
also invest in other types of equity securities, including
preferred stocks, convertible securities, depositary receipts
and rights and warrants to buy common stocks. Under normal
circumstances, the Fund invests in equity securities of
issuers that:
Have their principal securities trading market in an
emerging market country;
Alone or on a consolidated basis derive 50% or more of
their annual revenue or assets from goods produced,
sales made or services performed in emerging market
countries; or
Are organized under the laws of, and have their
principal office in, an emerging market country.
------------------------------------------------------------- -------------------------------------------------------
17
------------------------------------------------------------- -------------------------------------------------------
ACQUIRED FUND SURVIVING FUND
------------------------------------------------------------- -------------------------------------------------------
An "emerging market" country is any country determined by
AAMI, AAMISL or AAMAL to have an emerging market economy,
considering factors such as the country's credit rating,
its political and economic stability and the development of
its financial and capital markets. Typically, emerging
markets are in countries that are in the process of
industrialization, with lower gross national products
("GNP") than more developed countries. There are currently
over 130 countries that the international financial
community considers to be emerging or developing,
approximately 40 of which currently have stock markets.
These countries generally include every nation in the world
except the United States, Canada, Japan, Australia, New
Zealand and most nations located in Western Europe. The
Acquired Fund's investments are ordinarily diversified
among regions, countries and currencies, as determined by
the Sub-Advisers.
The Acquired Fund may invest in securities denominated in
major currencies, including U.S. dollars, and currencies of
emerging market countries in which it is permitted to
invest. The Acquired Fund typically has full currency
exposure to those markets in which it invests. However,
from time to time, the Acquired Fund may hedge a portion of
its foreign currency exposure.
------------------------------------------------------------- -------------------------------------------------------
SECURITIES SELECTION PROCESS SECURITIES SELECTION PROCESS
------------------------------------------------------------- -------------------------------------------------------
The Sub-Advisers for the Acquired Fund select securities Substantially Similar.
from emerging market countries utilizing a disciplined The Surviving Fund's investment team employs a
investment process based on their proprietary research to fundamental, bottom-up equity investment style, which
determine security selection. The Sub-Advisers seek to is characterized by intensive, first-hand research
identify "quality" companies, based on factors such as and disciplined company evaluation. Stocks are
strength of management and business, that trade at identified for their long-term, fundamental value.
reasonable valuations, based on factors such as earnings The stock selection process contains two filters,
growth and other key financial measurements. The first quality and then price. In the quality filter,
Sub-Advisers make investments for the long-term, and their the investment team seeks to determine whether the
investment styles tend to result in relatively low company is a business that has good growth prospects
portfolio turnover. However, a Sub-Adviser may sell a and a balance sheet that supports expansion, and they
security when it perceives that a company's business evaluate other business risks. In the price filter,
direction or growth prospects have changed or the company's the investment team assesses the value of a company
valuations are no longer attractive. by reference to standard financial ratios, and
estimates the value of the company relative to its market
price and the valuations of companies within a relevant
universe. The investment team may sell a security when
they perceive that a company's business direction or
growth prospects have changed or the company's valuations
are no longer attractive.
------------------------------------------------------------- -------------------------------------------------------
18
COMPARISON OF THE FUNDAMENTAL INVESTMENT POLICIES
This section briefly compares and contrasts certain fundamental and
non-fundamental investment restrictions of the Acquired Fund with the Surviving
Fund. The fundamental and non-fundamental investment restrictions of the
Acquired Fund compared with the Surviving Fund are substantially similar
although the wording below may differ. More complete information may be found in
the respective SAIs for the Acquired Fund and the Surviving Fund.
Unless otherwise indicated, the restrictions discussed below are
fundamental policies of the Acquired Fund or the Surviving Fund. This means that
the policy cannot be changed without the approval of shareholders. Investment
restrictions that are non-fundamental may be changed by the respective Boards of
the Acquired Fund and Surviving Fund.
------------------------------------------------------------- ------------------------------------------------------------
ACQUIRED FUND SURVIVING FUND
------------------------------------------------------------- ------------------------------------------------------------
DIVERSIFICATION DIVERSIFICATION
------------------------------------------------------------- ------------------------------------------------------------
As a fundamental policy the Acquired Fund may not purchase Substantially Similar.
securities of an issuer that would cause the Fund to fail As a fundamental policy, the Surviving Fund may not
to satisfy the diversification requirement for a purchase securities of any one issuer, other than
diversified management company under the 1940 Act, the obligations issued or guaranteed by the U.S. government,
rules or regulations thereunder or any exemption therefrom, its agencies or instrumentalities, if, immediately after
as such statute, rules or regulations may be amended or such purchase, more than 5% of the Fund's total assets
interpreted from time to time. As a non-fundamental would be invested in such issuer or the Surviving Fund
policy, the Acquired Fund may not purchase securities of would hold more than 10% of the outstanding voting
any issuer (except securities of other investment securities of the issuer, except that 25% or less of the
companies, securities issued or guaranteed by the U.S. Surviving Fund's total assets may be invested without
government, its agencies or instrumentalities and regard to such limitations. There is no limit to the
repurchase agreements involving such securities) if, as a percentage of assets that may be invested in U.S. Treasury
result, more than 5% of the total assets of the Fund would bills, notes, or other obligations issued or guaranteed by
be invested in the securities of such issuer; or (ii) the U.S. government, its agencies or instrumentalities.
acquire more than 10% of the outstanding voting securities
of any one issuer. This restriction applies to 75% of the
Fund's total assets.
------------------------------------------------------------- ------------------------------------------------------------
BORROWING MONEY OR ISSUING SENIOR SECURITIES BORROWING MONEY OR ISSUING SENIOR SECURITIES
------------------------------------------------------------- ------------------------------------------------------------
As a fundamental policy, the Acquired Fund may not borrow Substantially Similar.
money or issue senior securities (as defined under the 1940 As a fundamental policy, the Surviving Fund may not borrow
Act), except to the extent permitted under the 1940 Act, money or issue senior securities, except that the
the rules and regulations thereunder or any exemption Surviving Fund may sell securities short, enter into
therefrom, as such statute, rules or regulations may be reverse repurchase agreements and may otherwise borrow
amended or interpreted from time to time. As a money and issue senior securities as and to the extent
non-fundamental policy, the Acquired Fund may not borrow permitted by the 1940 Act or any rule, order or
money in an amount exceeding 33-1/3% of the value of its interpretation thereunder.
total assets, provided that, for purposes of this limitation,
investment strategies that either obligate the Fund to
purchase securities or require the Fund to segregate assets
are not considered to be borrowing. Asset coverage of at
least 300% is required for all borrowing, except where the
Fund has borrowed money for temporary purposes in an amount
not exceeding 5% of its total assets.
------------------------------------------------------------- ------------------------------------------------------------
19
------------------------------------------------------------- ------------------------------------------------------------
ACQUIRED FUND SURVIVING FUND
------------------------------------------------------------- ------------------------------------------------------------
UNDERWRITING UNDERWRITING
------------------------------------------------------------- ------------------------------------------------------------
As a fundamental policy, the Acquired Fund may not Substantially Similar.
underwrite securities issued by other persons, except to As a fundamental policy, the Surviving Fund may not
the extent permitted under the 1940 Act, the rules and act as underwriter of another issuer's securities,
regulations thereunder or any exemption therefrom, as such except to the extent that the Surviving Fund may be
statute, rules or regulations may be amended or interpreted deemed an underwriter within the meaning of the
from time to time. Securities Act of 1933 in connection with the
purchase and sale of portfolio securities.
------------------------------------------------------------- ------------------------------------------------------------
COMMODITIES AND REAL ESTATE COMMODITIES AND REAL ESTATE
------------------------------------------------------------- ------------------------------------------------------------
As a fundamental policy, the Acquired Fund may not purchase Substantially Similar.
or sell commodities or real estate, except to the extent As a fundamental policy, the Surviving Fund may not
permitted under the 1940 Act, the rules and regulations purchase or sell commodities or commodities contracts,
thereunder or any exemption therefrom, as such statute, except to the extent disclosed in the current prospectus
rules or regulations may be amended or interpreted from and statement of additional information of the Surviving
time to time. As a non-fundamental policy, however, the Fund. Also as a fundamental restriction, the Surviving
Acquired Fund may not purchase or sell real estate, real Fund may not purchase or sell or real estate, except that
estate limited partnership interests, physical commodities the Surviving Fund may (i) acquire real estate through
or commodities contracts except that the Acquired Fund may ownership of securities or instruments and sell any real
purchase (i) marketable securities issued by companies estate acquired thereby, (ii) purchase or sell instruments
which own or invest in real estate (including real estate secured by real estate (including interests therein), and
investment trusts), commodities or commodities contracts; (iii) purchase or sell securities issued by entities or
and (ii) commodities contracts relating to financial investment vehicles that own or deal in real estate
instruments, such as financial futures contracts and (including interests therein).
options on such contracts.
------------------------------------------------------------- ------------------------------------------------------------
INDUSTRY CONCENTRATION INDUSTRY CONCENTRATION
------------------------------------------------------------- ------------------------------------------------------------
As a fundamental policy, the Acquired Fund may not Substantially Similar.
concentrate investments in a particular industry or group As a fundamental policy, the Surviving Fund may not
of industries, as concentration is defined under the 1940 purchase the securities of any issuer if, as a result, 25%
Act, the rules and regulations thereunder or any exemption or more (taken at current value) of the Surviving Fund's
therefrom, as such statute, rules or regulations may be total assets would be invested in the securities of
amended or interpreted from time to time. As a issuers, the principal activities of which are in the same
non-fundamental policy, the Acquired Fund may not purchase industry. This limitation does not apply to securities
any securities which would cause 25% or more of the total issued by the U.S. government or its agencies or
assets of the Acquired Fund to be invested in the instrumentalities or securities of other investment
securities of one or more issuers conducting their companies. The following industries are considered
principal business activities in the same industry, separate industries for purposes of this investment
provided that this limitation does not apply to investments restriction: electric, natural gas distribution, natural
in obligations issued or guaranteed by the U.S. government, gas pipeline, combined electric and natural gas, and
its agencies or instrumentalities and repurchase agreements telephone utilities, captive borrowing conduit, equipment
involving such securities. For purposes of this finance, premium finance, leasing finance, consumer
limitation, (i) utility companies will be classified finance and other finance.
according to their services, for example, gas distribution,
gas transmission, electric and telephone will each be
considered a separate industry; and (ii) financial service
companies will be classified according to the end users of
their services, for example, automobile finance, bank
finance and diversified finance will each be considered a
separate industry.
------------------------------------------------------------- ------------------------------------------------------------
20
------------------------------------------------------------- ------------------------------------------------------------
ACQUIRED FUND SURVIVING FUND
------------------------------------------------------------- ------------------------------------------------------------
LENDING LENDING
------------------------------------------------------------- ------------------------------------------------------------
As a fundamental policy, the Acquired Fund may not make Substantially Similar.
loans except to the extent permitted under the 1940 Act, As a fundamental policy, the Surviving Fund may not lend
the rules and regulations thereunder or any exemption any security or make any other loan, except that the
therefrom, as such statute, rules or regulations may be Surviving Fund may in accordance with its investment
amended or interpreted from time to time. As a objective and policies (i) lend portfolio securities, (ii)
non-fundamental restriction, the Acquired Fund may not make purchase and hold debt securities or other debt
loans if, as a result, more than 33 1/3% of its total instruments, including but not limited to loan
assets would be lent to other parties, except that the Fund participations and subparticipations, assignments, and
may (i) purchase or hold debt instruments in accordance structured securities, (iii) make loans secured by
with its investment objective and policies; (ii) enter into mortgages on real property, (iv) enter into repurchase
repurchase agreements; and (iii) lend its securities. agreements, and (v) make time deposits with financial
institutions and invest in instruments issued by financial
institutions, and enter into any other lending arrangement
as and to the extent permitted by the 1940 Act or any
rule, order or interpretation thereunder.
------------------------------------------------------------- ------------------------------------------------------------
21
COMPARISON OF THE DISTRIBUTION, PURCHASE, EXCHANGE AND REDEMPTION PROCEDURES
The chart below highlights the purchase, exchange, redemption features
of the Acquired Fund as compared to such features of the Surviving Fund.
-------------------------------- ---------------------------------------- ---------------------------------------------
ACQUIRED FUND SURVIVING FUND
-------------------------------- ---------------------------------------- ---------------------------------------------
PURCHASE, EXCHANGE AND
REDEMPTION FEATURES
-------------------------------- ---------------------------------------- ---------------------------------------------
Minimum initial $1,000,000/None $1,000,000/None
purchase/additional investment
-------------------------------- ---------------------------------------- ---------------------------------------------
Purchases By mail, wire, systematic investment By calling 866-667-9231, intermediary
plan, intermediary
-------------------------------- ---------------------------------------- ---------------------------------------------
Redemptions By mail, telephone, intermediary By calling 866-667-9231, intermediary
-------------------------------- ---------------------------------------- ---------------------------------------------
Involuntary Redemption If account falls below $100,000 If account falls below $100,000 after
after at least 30 days' written notice at least 60 days' written notice
-------------------------------- ---------------------------------------- ---------------------------------------------
Exchange Privileges None By calling 866-667-9231, intermediary
-------------------------------- ---------------------------------------- ---------------------------------------------
ELIGIBLE INVESTORS/MINIMUM INVESTMENT REQUIREMENTS
The Acquired Fund's Institutional Class Shares are offered to
"individual and institutional investors." The Surviving Fund's Institutional
Class Shares are available for purchase only by the following:
o "fund of funds" offered by affiliates of the Surviving Fund;
o retirement plans for which no third-party administrator receives
compensation from the Surviving Fund;
o institutional advisory accounts of the Adviser's affiliates, those
accounts which have client relationships with an affiliate of the
Adviser, its affiliates and their corporate
sponsors, subsidiaries, and related retirement plans;
o rollover individual retirement accounts from such institutional
advisory accounts;
o a bank, trust company or similar financial institution investing
for its own account or for trust accounts for which it has
authority to make investment decisions as long as the accounts are
not part of a program that requires payment of Rule 12b-1 or
administrative service fees to the financial institution;
o registered investment advisers investing on behalf of institutions
and high net-worth individuals where the advisers derive
compensation for advisory services exclusively from clients; or
o high net-worth individuals who invest directly without using the
services of a broker, investment adviser or other financial
intermediary.
The Acquired Fund and the Surviving Fund each require a minimum of
$1,000,000 to open an account. Each Fund does not require a minimum amount for
subsequent investments. The Acquired Fund reserves the right to waive the
minimum initial amount in its sole discretion. The Surviving Fund does not apply
minimum investment requirements to purchases by employees of the Adviser or its
affiliates (or their spouses, children or immediate relatives), or to certain
retirement plans, fee-based programs or omnibus accounts. Different minimum
account requirements may apply if purchases of the Surviving Fund are made
through an intermediary. The Surviving Fund reserves the right to waive the
investment minimums under certain circumstances.
22
EXCHANGE AND EXCHANGE PRIVILEGES
The Acquired Fund does not offer investors the option of exchanging
fund shares. The Surviving Fund permits exchange of fund shares for shares of
any other fund in the Aberdeen Trust (that is currently accepting new
investments) as long as:
o both accounts have the same registration;
o the first purchase in the new fund meets its minimum investments
requirement; and
o the investor purchases the same class of shares.
The Surviving Fund may also reject an exchange equaling 1% or more of
the Surviving Fund's NAV. The Surviving Fund's exchange privilege may be amended
or discontinued upon 60 days' written notice to shareholders. Generally, there
are no sales charges for exchanges of Institutional Class Shares.
REDEMPTION FEES
In an effort to discourage short-term trading and defray costs incurred
by shareholders as a result of such trading, the Acquired Fund assesses a
redemption fee of 2.00% on redemptions by shareholders of fund shares held for
less than 90 days. The fee is deducted from the sale proceeds and cannot be paid
separately, and any proceeds of the fee are credited to the assets of the
Acquired Fund. The fee does not apply to shares purchased with reinvested
dividends or distributions. In determining how long shares of the Acquired Fund
have been held, the Acquired Fund assumes that shares held by the investor the
longest period of time will be sold first.
Similarly, the Surviving Fund imposes an exchange and redemption fee of
2.00% of shares exchanged or redeemed within 90 calendar days. Like the Acquired
Fund, the redemption fee is paid directly to the fund from which the shares are
being redeemed and is designed to offset brokerage commissions, market impact
and other costs associated with short-term trading of fund shares. For purposes
of determining whether a redemption fee applies to an affected account, shares
that were held the longest are redeemed first. The Surviving Fund will waive the
application of the 2.00% redemption fee for the Acquired Fund shareholders on
the date of the Reorganization with respect to their shareholdings as of the
date of the Reorganization. Purchases of additional shares by the Acquired Fund
shareholders after the date of the Reorganization will be subject to the
Surviving Fund's redemption fee.
Each Fund reserves the right to waive the redemption fee in its
discretion where it believes such waiver is in the best interests of the
Acquired Fund. The Acquired Fund may waive the fee for certain categories of
redemptions that the Acquired Fund reasonably believes may not raise frequent
trading or market timing concerns. These categories include, but are not limited
to, the following:
o participants in certain group retirement plans whose processing
systems are incapable of properly applying the redemption fee to
underlying shareholders;
o redemptions resulting from certain transfers upon the death of a
shareholder;
o redemptions by certain pension plans as required by law or by
regulatory authorities;
o failed verifications;
o involuntary redemptions; and
o retirement loans and withdrawals.
The redemption fee will not be applied on redemptions made within the
90-day period because the account does not meet the applicable minimum account
size or because the Fund is unable to verify the accountholder's identity within
a reasonable time after the account is opened.
23
With respect to the Surviving Fund, redemption and exchange fees do not
apply to:
o shares redeemed or exchanged under regularly scheduled withdrawal
plans;
o shares purchased through reinvested dividends or capital gains;
o shares redeemed following the death or disability of a shareholder.
The disability, determination of disability and subsequent
redemption must have occurred during the period the fee applied;
o shares redeemed in connection with mandatory withdrawals from
traditional IRAs after age 70 1/2 and other required distributions
from retirement accounts;
o shares redeemed or exchanged from retirement accounts within 30
calendar days of an automatic payroll deduction; or
o shares redeemed or exchanged by any "fund of funds" that is
affiliated with the Fund.
With respect to the Surviving Fund's shares that are redeemed or
exchanged following the death or disability of a shareholder, mandatory
retirement plan distributions or redemption within 30 calendar days of an
automatic payroll deduction, the shareholder must inform the Surviving Fund's
Customer Service or the shareholder's intermediary that they qualify for a
waiver and that the redemption fee does not apply. The Surviving Fund
shareholder may be required to show evidence that they qualify for the waiver.
Redemption and exchange fees will be assessed unless or until the Surviving Fund
is notified that the redemption fee has been waived.
With respect to shares purchased through a financial intermediary, the
Acquired Fund requests that financial intermediaries assess the redemption fee
on customer accounts and collect and remit the proceeds to the Acquired Fund;
however, the Acquired Fund recognizes that the financial intermediaries' methods
for tracking and calculating the fee may be inadequate or differ in some
respects from the Acquired Fund's. With respect to Surviving Fund, only certain
intermediaries have agreed to collect the exchange and redemption fees from
their customer accounts. In addition, the fees do not apply to certain types of
accounts held through intermediaries, including certain:
o broker wrap fee and other fee-based programs;
o qualified retirement plan accounts;
o omnibus accounts where there is no capability to impose a
redemption fee on underlying customers' accounts; and
o intermediaries that do not or cannot
report sufficient information to impose an exchange fee on their
customer accounts.
OTHER TRANSACTION POLICIES
The Acquired Fund reserves the right to reject any purchase request by
any investor or group of investors for any reason without prior notice,
including, in particular, if the Acquired Fund or its Adviser reasonably
believes that the trading activity could be harmful or disruptive to the
Acquired Fund. Similarly, the Surviving Fund has sole discretion to: 1) restrict
purchases or exchanges that the Surviving Fund or its agents believe constitute
excessive trading and 2) reject transactions that violate the Surviving Fund's
excessive trading policies or its exchange limits.
Additionally, the Acquired Fund restricts shareholders from making more
than five "round trips" into or out of the Acquired Fund per calendar year. If a
shareholder exceeds this amount, the Acquired Fund and/or its service providers
may, at their discretion, reject any additional purchase orders. The Acquired
Fund defines a round trip as a purchase into the Acquired Fund by a shareholder,
followed by a subsequent redemption out of the Fund of an amount the Adviser
reasonably believes would be harmful or disruptive to the Acquired Fund.
24
INVOLUNTARY REDEMPTION OF FUND SHARES
The Acquired Fund and the Surviving Fund each reserve the right to
redeem an investor's shares if their account balance drops below $100,000. The
Acquired Fund will provide an investor with at least 30 days' written notice to
allow sufficient time for an investor to add to their account and avoid the
involuntary redemption. The Surviving Fund will notify an investor and give 60
days to an investor to purchase additional shares and avoid involuntary
redemption. With respect to the Acquired Fund, if shares are redeemed in this
manner within 90 days of their purchase, the redemption fee will not be applied.
PRICING OF SHARES
The Acquired Fund calculates its NAV once each business day as of the
regularly scheduled close of normal trading on the NYSE (generally, 4:00 p.m.
Eastern time). Similarly, the Surviving Fund calculates its NAV at the close of
regular trading on the NYSE.
DIVIDENDS AND DISTRIBUTIONS
The Acquired Fund normally distributes its net investment income and
makes distributions of its net realized capital gains, if any, at least
annually. The Acquired Fund will automatically reinvest dividends and
distributions in additional shares of the Acquired Fund, unless the investor
elects on their account application to receive them in cash. Similarly, the
Surviving Fund declares and distributes its net investment income annually, if
any, to shareholders as dividends. Capital gains, if any, may be distributed at
least annually. The Surviving Fund may distribute income dividends and capital
gains more frequently, if necessary, in order to reduce or eliminate federal
excise or income taxes on the Surviving Fund. All income and capital gain
distributions are automatically reinvested in shares of the Surviving Fund. An
investor may request in writing a payment in cash if the distribution is in
excess of $5.
COMPARISON OF SERVICE PROVIDERS
AAMI is the Adviser for the Acquired Fund and AAMISL and AAMAL are the
Sub-Advisers for the Acquired Fund. The Adviser and the Sub-Advisers will
continue in their capacities for the Surviving Fund. The Adviser and the
Sub-Advisers generally use a team-based approach to managing the Funds. Each
portfolio manager jointly and primarily responsible for the day-to-day
management of the Acquired Fund will continue in their capacities for the
Surviving Fund.
ADVISER
AAMI, a Delaware corporation formed in 1993, serves as the investment
adviser to the Acquired Fund and will continue to serve as Adviser to the
Surviving Fund. The Adviser's principal place of business is located at 1735
Market Street, 32nd Floor, Philadelphia, Pennsylvania 19103. The Adviser manages
and supervises the investment of the Acquired Fund's and the Surviving Fund's
assets on a discretionary basis.
SUB-ADVISERS
AAMISL, a United Kingdom corporation and AAMAL, a Singapore
corporation, serve as Sub-Advisers to the Acquired Fund and will continue to
serve as Sub-Adviser to the Surviving Fund. AAMISL's principal place of business
is located at One Bow Churchyard, London, England, EC4M9HH. AAMAL's principal
place of business is located at 21 Church Street, #01-01 Capital Square Two,
Singapore 049480. The Adviser and Sub-Advisers are responsible for the
day-to-day management of the Acquired Fund's and the Surviving Fund's
investments. To the extent that AAMISL or AAMAL do not have management over a
specific portion of a Fund's assets, AAMISL and AAMAL will assist the Adviser
with oversight for the Acquired Fund or the Surviving Fund. When a portfolio
management team from AAMISL or AAMAL is allocated a specific portion of any of a
Fund's assets to manage, it will receive a fee from the Adviser for its
investment decision services.
25
The Adviser and Sub-Advisers are each wholly-owned subsidiaries of
Aberdeen Asset Management PLC ("Aberdeen PLC"), which is the parent company of
an asset management group managing approximately $143 billion in assets as of
April 30, 2009 for a range of pension funds, financial institutions, investment
trusts, unit trusts, offshore funds, charities and private clients, in addition
to U.S. registered investment companies. Aberdeen PLC was formed in 1983 and was
first listed on the London Stock Exchange in 1991.
For its services to the Acquired Fund, the Adviser is entitled to a
fee, which is calculated daily and paid monthly, at an annual rate of 0.90%
based on the average daily net assets of the Acquired Fund. The advisory fees
for the Surviving Fund will be the same as the advisory fees for the Acquired
Fund. The Adviser, not the Acquired Fund or the Surviving Fund, will pay a
portion of the advisory fees it receives to the Sub-Advisers.
MULTI-MANAGER STRUCTURE OF THE SURVIVING FUND
The Adviser and the Aberdeen Trust have received an exemptive order
from the SEC for a multi-manager structure that allows the Adviser, subject to
the approval of the Aberdeen Board, to hire, replace or terminate a sub-adviser
(excluding hiring a sub-adviser which is an affiliate of the Adviser) without
the approval of shareholders. The order also allows the Adviser to revise a
subadvisory agreement with an unaffiliated sub-adviser with the approval of the
Board, but without shareholder approval.
If a new unaffiliated sub-adviser is hired for the Surviving Fund,
shareholders will receive information about the new sub-adviser within 90 days
of the change. The multi-manager structure allows the Surviving Fund greater
flexibility enabling them to operate more efficiently.
Under the multi-manager structure, the Adviser has ultimate
responsibility, subject to oversight by the Board, for overseeing the Surviving
Fund's sub-adviser(s) and recommending to the Board the hiring, termination or
replacement of a sub-adviser. In instances where the Adviser hires a
sub-adviser, the Adviser performs the following oversight and evaluation
services to a sub-advised Fund:
o initial due diligence on prospective Surviving Fund sub-advisers;
o monitoring sub-adviser performance, including ongoing analysis and
periodic consultations;
o communicating performance expectations and evaluations to the
sub-advisers; and
o making recommendations to the Board regarding renewal, modification
or termination of a sub-adviser's contract.
The Adviser does not expect to frequently recommend sub-adviser
changes. Where the Adviser does recommend sub-adviser changes, the Adviser
periodically provides written reports to the Board regarding its evaluation and
monitoring of the sub-adviser. Although the Adviser monitors the sub-adviser's
performance, there is no certainty that any sub-adviser or Surviving Fund will
obtain favorable results at any given time.
26
OTHER SERVICE PROVIDERS
The other services providers for the Acquired Fund and the Surviving
Fund are listed below.
---------------------------- ---------------------------------------------------- ------------------------------------------
ACQUIRED FUND SURVIVING FUND
---------------------------- ---------------------------------------------------- ------------------------------------------
TRANSFER AGENT: DST Systems, Inc. Citi Fund Services Ohio, Inc.
333 W. 11th Street 3435 Stelzer Road
Kansas City, Missouri 64105 Columbus, Ohio 43219
---------------------------- ---------------------------------------------------- ------------------------------------------
CUSTODIAN: The Northern Trust Company JPMorgan Chase Bank
50 South La Salle Street 270 Park Avenue
Chicago, Illinois 60675 New York, NY 10017
---------------------------- ---------------------------------------------------- ------------------------------------------
ADMINISTRATOR: SEI Investments Global Funds Services Aberdeen Asset Management Inc.
(FUND ACCOUNTANT FOR THE One Freedom Valley Drive 1735 Market Street
ACQUIRED FUND) Oaks, Pennsylvania 19456 32nd Floor
Philadelphia, PA 19103
---------------------------- ---------------------------------------------------- ------------------------------------------
SUB-ADMINISTRATOR AND FUND N/A Citi Fund Services Ohio, Inc.
ACCOUNTANT: 3435 Stelzer Road
Columbus, Ohio 43219
---------------------------- ---------------------------------------------------- ------------------------------------------
DISTRIBUTOR: SEI Investments Distribution Co. Aberdeen Fund Distributors LLC
One Freedom Valley Drive 1735 Market Street
Oaks, Pennsylvania 19456 32nd Floor
Philadelphia, PA 19103
---------------------------- ---------------------------------------------------- ------------------------------------------
AUDITOR: PricewaterhouseCoopers LLP KPMG LLP
Two Commerce Square 1601 Market Street
2001 Market Street Philadelphia, Pennsylvania 19103
Suite 1700
Philadelphia, Pennsylvania 19103
---------------------------- ---------------------------------------------------- ------------------------------------------
PERFORMANCE HISTORY OF THE ACQUIRED FUND
The Surviving Fund is a new fund that has not yet commenced operations
and has been created for the purpose of acquiring the Acquired Fund's assets and
assuming its liabilities. As such, Surviving Fund does not have any operating
history or performance information. Because the same portfolio managers that
manage the Acquired Fund will also manage the Surviving Fund using substantially
similar investment strategies as the Acquired Fund, shown below are the average
annual total returns for the periods indicated for the Acquired Fund. The bar
chart and table below illustrate the risks and volatility of investing in
Institutional Class Shares of the Acquired Fund (and if the Reorganization is
effected, the Surviving Fund). The Surviving Fund will carry forward the
investment performance and financial history of the Acquired Fund.
The bar chart shows the performance of the Acquired Fund's
Institutional Class for the most recent calendar year. The table illustrates how
the performance of the Acquired Fund's Institutional Class Shares, before taxes
and for specified time periods, compares to that of a broad measure of market
performance. Of course, the Acquired Fund's past performance (before and after
taxes) is not necessarily an indication of how it or the Surviving Fund will
perform in the future.
27
YEARLY PERFORMANCE OF THE ACQUIRED FUND
YEARLY PERFORMANCE
(BAR CHART)
----------------- ---------------
2008 (40.36)%
----------------- ---------------
---------------------------- -------------------------
BEST QUARTER WORST QUARTER
---------------------------- -------------------------
0.19% (22.69)%
---------------------------- -------------------------
(06/30/2008) (12/31/2008)
---------------------------- -------------------------
PERFORMANCE TABLE OF THE ACQUIRED FUND
This table compares the Acquired Fund's Institutional Class Shares'
average annual total returns for the periods ended December 31, 2008 to those of
the MSCI EMF (Emerging Markets Free) Index.
------------------------------------------------------------------------ --------------- -------------------
INSTITUTIONAL CLASS SHARES 1 YEAR SINCE INCEPTION*
------------------------------------------------------------------------ --------------- -------------------
FUND RETURNS BEFORE TAXES (40.36)% (18.98)%
------------------------------------------------------------------------ --------------- -------------------
FUND RETURNS AFTER TAXES ON DISTRIBUTIONS** (40.77)% (19.72)%
------------------------------------------------------------------------ --------------- -------------------
FUND RETURNS AFTER TAXES ON DISTRIBUTIONS AND SALE OF FUND SHARES**+ (26.01)% (16.16)%
------------------------------------------------------------------------ --------------- -------------------
MSCI EMF INDEX (REFLECTS NO DEDUCTION FOR FEES, EXPENSES OR TAXES) (53.17)% (25.58)%
------------------------------------------------------------------------ --------------- -------------------
* The Acquired Fund's inception date was May 11, 2007. Index comparisons
begin on April 30, 2007.
** After-tax returns are calculated using the historical
highest individual federal marginal income tax rates and do
not reflect the impact of state and local taxes. Your actual after-tax
returns will depend on your tax situation and may differ from those
shown. After-tax returns shown are not relevant to investors who hold
their Fund shares through tax-deferred arrangements, such as 401(k)
plans or individual retirement accounts.
+ Returns after taxes on distributions and sale of Fund shares may be
higher than before-tax returns when a net capital loss occurs upon the
redemption of Fund shares.
FINANCIAL HIGHLIGHTS OF THE ACQUIRED FUND
The financial highlights table that follows presents performance
information about Institutional Class Shares of the Acquired Fund. The
information is intended to help you understand the Acquired Fund's financial
performance the period of the Acquired Fund's operations. Some of this
information reflects financial information for a single Acquired Fund share. The
total returns in the table represent the rate that you would have earned (or
lost) on an investment in the Acquired Fund, assuming you reinvested all of your
dividends and distributions. The information provided below has been derived
from the Acquired Fund's financial statements, which have been audited by
PricewaterhouseCoopers LLP, independent registered public accounting firm whose
report, along with the Acquired Fund's financial statements, are included in the
Acquired Fund's Annual Report. The report of PricewaterhouseCoopers LLP, along
with the Acquired Fund's financial statements and related notes, appears in the
Annual Report that is incorporated by reference into the Statement of Additional
Information. The information for the six-month period ended April 30, 2009 is
unaudited and included in the Acquired Fund's Semi-Annual Report. You can obtain
the Annual Report or Semi-Annual Report at no charge by calling 1-866-392-2626.
28
SELECTED PER SHARE DATA & RATIOS
FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD
-------------- ----------- ----------- ------------- ----------- ---------- -------------- -------------- --------- --------
NET ASSET INCOME INCOME FROM TOTAL DIVIDENDS DISTRIBUTIONS TOTAL NET TOTAL
VALUE, FROM INVESTMENT FROM FROM NET FROM NET DIVIDENDS ASSET RETURN+
BEGINNING INVESTMENT OPERATIONS: INVESTMENT INVESTMENT REALIZED AND VALUE,
OF PERIOD OPERATIONS: OPERATIONS INCOME GAINS DISTRIBUTIONS END OF
TO PERIOD
NET SHAREHOLDERS
NET REALIZED
INVESTMENT AND
INCOME UNREALIZED
(1) GAIN (LOSS)
-----------------------------------------------------------------------------------------------------------------------------
ABERDEEN EMERGING MARKETS FUND
-----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS $6.80 $0.06 $0.87 $0.93 ($0.05) ($0.15) ($0.20) $7.53 14.18%
ENDED
APRIL 30,
2009
(UNAUDITED)
-------------- ----------- ----------- ------------- ----------- ----------- ------------- -------------- --------- --------
YEAR ENDED $12.67 $0.19 ($5.73) ($5.54) ($0.21) ($0.12) ($0.33) $6.80 (44.80)%
OCTOBER 31,
2008
-------------- ----------- ----------- ------------- ----------- ----------- ------------- -------------- --------- --------
YEAR ENDED $10.00 $0.07 $2.60 $2.67 - - - $12.67 26.70%
OCTOBER 31,
2007*
-------------- ----------- ----------- ------------- ----------- ----------- ------------- -------------- --------- --------
------------- ----------- ----------- ----------- ----------
NET ASSETS, RATIO OF RATIO OF RATIO OF PORTFOLIO
END OF EXPENSES EXPENSES NET TURNOVER
PERIOD TO TO INVESTMENT RATE
(THOUSANDS) AVERAGE AVERAGE INCOME
NET NET TO
ASSETS (2) ASSETS AVERAGE
(EXCLUDING NET ASSETS
WAIVERS)
------------- ----------- ----------- ----------- ----------
$410,978 0.95** 1.17%** 1.71%** 5%***
------------- ----------- ----------- ----------- ----------
$189,074 0.95% 1.19% 1.80% 13%
------------- ----------- ----------- ----------- ----------
$227,686 0.95%** 1.26%** 1.29%** 4%***
------------- ----------- ----------- ----------- ----------
+ TOTAL RETURN IS FOR THE PERIOD INDICATED AND HAS NOT BEEN ANNUALIZED.
TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN WAIVED
BY THE ADVISER DURING THE PERIOD. THE RETURN SHOWN DOES NOT REFLECT THE
DEDUCTION OF TAXES THAT A SHAREHOLDER WOULD PAY ON FUND DISTRIBUTIONS
OR THE REDEMPTION OF FUND SHARES.
* THE FUND COMMENCED OPERATIONS ON MAY 11, 2007.
** ANNUALIZED.
*** NOT ANNUALIZED. EXCLUDES EFFECT OF IN-KIND TRANSFER, WHERE APPLICABLE.
(1) PER SHARE CALCULATIONS WERE PERFORMED USING AVERAGE SHARES FOR THE
PERIOD.
(2) THE RATIO OF EXPENSES TO AVERAGE NET ASSETS EXCLUDES THE EFFECTS OF FEES
PAID INDIRECTLY. IF THESE EXPENSE OFFSETS WERE INCLUDED, THE RATIO WOULD BE
EQUAL TO THE RATIO PRESENTED
AMOUNTS DESIGNATED AS "--" ARE $0.
29
VOTING INFORMATION
This section provides information on a number of topics relating to
proxy voting and the Meeting.
Shareholders of record at the close of business on [Insert Record
Date], 2009 (the "Record Date") are entitled to notice of, and to vote at, the
Meeting. Each whole share outstanding is entitled to one vote and each
fractional share outstanding is entitled to a proportionate fractional vote.
SHARES OUTSTANDING. The number of shares of the Acquired Fund outstanding as
of the Record Date is listed below:
SHARES OUTSTANDING
Acquired Fund - Institutional Class Shares XX
PROXY SOLICITATION METHODS. The solicitation of proxies will be largely by mail,
but may include telephonic, Internet or oral communication. In addition to
solicitations by mail, officers and employees of the Adviser, without extra pay,
may conduct additional solicitations by telephone, telecopy, and personal
interviews. The AIC II Trust has also retained an outside firm the Altman Group,
Inc. ("Altman Group"), who specializes in proxy solicitation to assist with the
proxy solicitation process (tabulation, printing and mailing), the collection of
proxies, and with any necessary follow-up.
PROXY SOLICITATION COSTS. All costs of solicitation, including (a) printing and
mailing of this Prospectus/Proxy Statement and accompanying material, (b) the
maintenance of the Internet web site relating to this proxy solicitation, (c)
the reimbursement of brokerage firms and others for their expenses in forwarding
solicitation material to the beneficial owners of the Acquired Fund's shares,
(d) payment to Altman Group for tabulation, printing and mailing services(which
is anticipated to amount to approximately $_____), including solicitations to
submit proxies by telephone, and (e) the costs of holding the Meeting will be
borne by Aberdeen and its affiliates.
QUORUM. The presence, in person or by proxy, of a majority of the holders of
shares entitled to vote on the Proposal on the Record Date constitutes a quorum
for the transaction of business at the Meeting.
VOTE REQUIRED. Approval of the Proposal will require, if a quorum is present at
the Meeting, the affirmative vote of a majority of the shares voted. A "majority
shareholder vote," under the AIC II Declaration of Trust, means the lesser of
(a) 67% or more of the voting securities present at the Meeting, if the holders
of more than 50% of the outstanding voting securities of the Acquired Fund are
present or represented by proxy, or (b) more than 50% of the outstanding voting
securities of the Acquired Fund.
ADJOURNMENT. If a quorum is not present at the Meeting, or if a quorum is
present at the Meeting but sufficient votes to approve the Proposal are not
received, or if other matters arise requiring shareholder attention, the persons
named as proxy agents may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. Any such adjournment will require the
affirmative vote of a majority of those shares present at the Meeting or
represented by proxy. Abstentions and "broker non-votes" will not be counted for
or against such proposal to adjourn. The persons named as proxy agents will vote
those proxies that they are entitled to vote FOR such Proposal in favor of such
an adjournment, and will vote those proxies required to be voted AGAINST such
Proposal, against such an adjournment. Aberdeen will bear the costs of any
additional solicitation or any adjourned sessions.
30
VOTING BY BROKER-DEALERS AND METHOD OF TABULATION. If shares are held of record
by a broker-dealer and a person wishes to vote in person at the Meeting, that
person should obtain a legal proxy from the broker of record and present it to
the Inspector of Elections at the Meeting. For purposes of determining the
presence of a quorum, abstentions or "broker non-votes" will be counted as
present; however, they will have the effect of a vote against the Proposal.
As used above, "broker non-votes" relate to shares that are held of
record by a broker-dealer for a beneficial owner who has not given instructions
to such broker-dealer. Pursuant to certain rules promulgated by the NYSE that
govern the voting by such broker-dealers, a broker-dealer holding shares of
record for a beneficial owner may not exercise discretionary voting power with
respect to certain non-routine matters, which may include the matter
contemplated by this Proposal.
REVOCATION OF PROXY. At any time before the Meeting, a person may change their
vote, even though a proxy has already been returned, by written notice to the
AIC II Trust, or by submitting a subsequent proxy, by mail, by Internet, by
telephone or by voting in person at the Meeting. Should shareholders require
additional information regarding the proxy or replacement proxy cards, they may
contact the AIC II Trust at 1-XXX-XXX-XXXX.
SHAREHOLDER PROPOSALS. The AIC II Trust is organized as a voluntary association
under the laws of the Commonwealth of Massachusetts. As such, the AIC II Trust
is not required to, and does not, hold annual meetings. Nonetheless, the AIC II
Board may call a special meeting of shareholders for action by shareholder vote
as may be required by the 1940 Act or as required or permitted by the AIC II
Declaration of Trust and by-laws. Shareholders of the Acquired Fund who wish to
present a proposal for action at a future meeting should submit a written
proposal to the AIC II Trust for inclusion in a future proxy statement.
Shareholders retain the right to request that a meeting of the shareholders be
held for the purpose of considering matters requiring shareholder approval.
If a shareholder wishes to send a communication to the AIC II Trustees,
such correspondence should be in writing and addressed to the Trustees of the
AIC II Trust c/o the Secretary of the AIC II Trust, at One Freedom Valley Drive,
Oaks, Pennsylvania 19456. The correspondence will be given to the AIC II
Trustees for review and consideration.
OTHER MATTERS. No business other than the matter described above is expected to
come before the Meeting, but should any matter incident to the conduct of the
Meeting or any question as to an adjournment of the Meeting arise, the persons
named in the enclosed proxy will vote thereon according to their best judgment
in the interest of the AIC II Trust.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE
THEIR SHARES VOTED ARE REQUESTED TO VOTE BY MAIL, TELEPHONE OR INTERNET AS
EXPLAINED IN THE INSTRUCTIONS INCLUDED ON YOUR PROXY CARD.
ADDITIONAL INFORMATION ABOUT THE ACQUIRED FUND AND THE SURVIVING FUND
More information about the Acquired Fund and the Surviving Fund is
included in: (i) the Acquired Fund's Prospectus dated March 1, 2009 which is
incorporated by reference herein and considered a part of this Prospectus/Proxy
Statement; (ii) the Statement of Additional Information dated March 1, 2009,
relating to the Acquired Fund's Prospectus (iii) the Surviving Fund's Prospectus
dated August 15, 2009, which accompanies this Prospectus/Proxy Statement, is
incorporated by reference and considered a part of this Prospectus/Proxy
Statement; (iv) the Statement of Additional Information dated August 15, 2009,
relating to the Surviving Fund's Prospectus; and (v) the Statement of Additional
Information dated [_____, 2009] (relating to this Prospectus/Proxy Statement),
which is incorporated by reference herein. You may request free copies of the
Acquired Fund's Prospectus or Statement of Additional Information (including any
supplement) by calling (866) 392-2626 or by writing the Aberdeen Emerging
Markets Fund (The Advisors' Inner Circle Fund II), P.O. Box 219009, Kansas City,
MO 64121. You may request free copies of the Surviving Fund's Prospectus or
Statement of Additional Information (including any supplements), by calling
(866) 667-9231 or by writing to Aberdeen Funds, P.O. Box 183148, Columbus, Ohio,
43218-3148.
31
This Prospectus/Proxy Statement, which constitutes part of a
Registration Statement filed by the Aberdeen Trust with the SEC under the
Securities Act of 1933, as amended, omits certain information contained in such
Registration Statement. Reference is hereby made to the Registration Statement
and to the exhibits and amendments thereto for further information with respect
to the Surviving Fund and the shares offered. Statements contained herein
concerning the provisions of documents are necessarily summaries of such
documents, and each such statement is qualified in its entirety by reference to
the copy of the applicable document filed with the SEC.
Each Fund also files proxy materials, reports, and other information
with the SEC in accordance with the informational requirements of the Securities
Exchange Act of 1934, as amended, and the 1940 Act. These materials can be
inspected and copied at the public reference facilities maintained by the SEC,
100 F Street, N.E., Room 1580, Washington, D.C. 20549 and at the following
regional offices of the SEC: New York Regional Office, 3 World Financial Center,
Suite 400, New York, New York 10281; Miami Regional Office, 801 Brickell Avenue,
Suite 1800, Miami, Florida 33131; Chicago Regional Office, 175 West Jackson
Boulevard, Suite 900, Chicago, Illinois 60604; Denver Regional Office, 1801
California Street, Suite 1500, Denver, Colorado 80202; Los Angeles Regional
Office, 5670 Wilshire Boulevard, Suite 1100, Los Angeles, California 90036;
Atlanta Regional Office, 3475 Lenox Road, NE., Suite 1000, Atlanta, Georgia
30326; Boston Regional Office, 33 Arch Street, 23rd Floor, Boston, Massachusetts
02110; Fort Worth Regional Office, Burnett Plaza, Suite 1900, 801 Cherry Street,
Unit #18, Fort Worth, Texas 76102; Philadelphia Regional Office, 701 Market
Street, Suite 2000, Philadelphia, Pennsylvania 19106; Salt Lake City Regional
Office, 15 W. South Temple Street, Suite 1800, Salt Lake City, Utah 84101; and
San Francisco Regional Office, 44 Montgomery Street, Suite 2600, San Francisco,
California 94104. Also, copies of such material can be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services, SEC,
Washington, D.C. 20549, at prescribed rates or from the SEC's Web site at
www.sec.gov. To request information regarding the Funds, you may also send an
e-mail to the SEC at publicinfo@sec.gov.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The audited financial statements for the Acquired Fund, which appear in
the Acquired Fund's Annual Report dated October 31, 2008 have been audited by
PricewaterhouseCoopers LLP, independent registered public accounting firm as set
forth in their reports therein and are incorporated by reference into the
Statement of Additional Information relating to this Prospectus/Proxy Statement.
Such financial statements are incorporated therein by reference in reliance upon
such reports given on the authority of such firm.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
As of the Record Date, the AIC II Trustees and officers as a group
owned less than 1% of the outstanding shares of the Acquired Fund, and less than
1% of the outstanding shares of all funds of the AIC II Trust in the aggregate.
32
To the best knowledge of AIC II Trust, as of the Record Date, no person
except as set forth in the following table owned of record 5% or more of the
outstanding shares of the Acquired Fund. The following table sets forth the
name, address and share ownership of each person known to AIC II Trust to have
ownership with respect to 5% or more of the Institutional Class Shares of the
Acquired Fund as of [ ]. The type of ownership of each entry listed on the table
is record ownership. The percentage of the Surviving Fund that would be owned by
the below named shareholders upon consummation of the Reorganization is not
expected to change.
As of the Record Date, the Surviving Fund has not yet commenced
operations and has no outstanding shares.
NAME AND ADDRESS AMOUNT OF SHARES OWNED PERCENTAGE OF CLASS OWNED PERCENTAGE OF FUND OWNED
---------------- ---------------------- ------------------------- ------------------------
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the AIC II Trust or to the
Aberdeen Trust in writing at the address(es), or by phone at the phone
number(s), on the cover page of this Prospectus/Proxy Statement.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO
WISH TO HAVE THEIR SHARES VOTED ARE REQUIRED TO VOTE BY MAIL, TELEPHONE OR
INTERNET AS EXPLAINED IN THE INSTRUCTIONS INCLUDED ON YOUR PROXY CARD.
33
APPENDIX A
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is made as of this ___
day of ____________, 2009, by and between The Advisors' Inner Circle Fund II, a
Massachusetts business trust (the "Trust"), with respect to the Aberdeen
Emerging Markets Fund, a series of the Trust (the "Reorganizing Fund"), and
Aberdeen Funds, a Delaware statutory trust (the "Company"), with respect to the
Aberdeen Emerging Markets Institutional Fund, a series of the Company (the
"Surviving Fund"). The Reorganizing Fund and the Surviving Fund may also be
referred to in this Agreement collectively as "Funds" and individually as a
"Fund." Except for the Funds, no other series of either the Trust or the Company
are parties to this Agreement. Aberdeen Asset Management Inc., a Delaware
corporation, ("AAMI") joins this Agreement solely for purposes of paragraphs
1.3, 1.10, 6.2, 6.6, 7.8, 15.6 and Article IX.
RECITALS
This Agreement is intended to be, and is adopted as, a plan of reorganization
within the meaning of Section 368 of the United States Internal Revenue Code of
1986, as amended (the "Code") and the Treasury Regulations promulgated under
Section 368 of the Code. The reorganization will consist of: (i) the transfer of
all of the assets of the Reorganizing Fund as set forth in paragraph 1.2 of this
Agreement ("Assets") in exchange for Institutional Class shares of the Surviving
Fund ("Surviving Fund Shares"); (ii) the assumption by the Surviving Fund of all
of the Liabilities (as defined in paragraph 1.3) of the Reorganizing Fund; and
(iii) the distribution of Surviving Fund Shares to the holders of Institutional
Class shares of the Reorganizing Fund and the liquidation of the Reorganizing
Fund as provided herein, all upon the terms and conditions set forth in this
Agreement (the "Reorganization").
WHEREAS, the Reorganizing Fund is a separate series of the Trust, the Surviving
Fund is a separate series of the Company and the Trust and the Company are
registered open-end management investment companies;
WHEREAS, each of the Surviving Fund and the Reorganizing Fund is authorized to
issue its respective shares of beneficial interest;
WHEREAS, the Surviving Fund has been newly organized to hold the Assets of the
Reorganizing Fund and has had no assets and has carried on no business
activities prior to the consummation of the Reorganization described herein;
WHEREAS, the Trustees of the Trust have determined that the Reorganization is in
the best interests of the Trust and the Reorganizing Fund and that the interests
of the existing shareholders of the Reorganizing Fund will not be diluted as a
result of the Reorganization; and
WHEREAS, the Trustees of the Company have determined that the Reorganization is
in the best interests of the Company and the Surviving Fund and that the
interests of the existing shareholders of the Surviving Fund will not be diluted
as a result of the Reorganization.
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AGREEMENT
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
ARTICLE I
TRANSFER OF ALL REORGANIZING FUND ASSETS IN EXCHANGE FOR SURVIVING FUND
SHARES, THE ASSUMPTION OF ALL REORGANIZING FUND LIABILITIES
AND LIQUIDATION OF THE REORGANIZING FUND
1.1 THE EXCHANGE. Subject to the terms and conditions contained herein and on
the basis of the representations and warranties contained herein, the
Reorganizing Fund agrees to transfer all of its Assets, as set forth in
paragraph 1.2, to the Surviving Fund. In exchange, the Surviving Fund agrees:
(i) to issue and deliver to the Reorganizing Fund the number of full and
fractional (to the third decimal place) Surviving Fund Shares, determined in the
manner and as of the time and date set forth in Article II and (ii) to assume
all of the Liabilities of the Reorganizing Fund as set forth in paragraph 1.3.
Holders of Institutional Class shares of the Reorganizing Fund will receive the
Institutional Class of shares of the Surviving Fund. Such transactions shall
take place at the closing of the Reorganization on the Closing Date provided for
in paragraph 3.1.
1.2 ASSETS TO BE ACQUIRED. (a) The Assets of the Reorganizing Fund to be
acquired by the Surviving Fund shall consist of all assets and property of the
Reorganizing Fund, including, without limitation, cash, securities, commodities,
interests in futures, claims (whether absolute or contingent, known or unknown,
accrued or unaccrued) and dividends or interest receivable, owned by the
Reorganizing Fund and any deferred or prepaid expenses shown as an asset on the
books of the Reorganizing Fund at the Valuation Time as provided for in
paragraph 2.1. At and after the Effective Time provided for in paragraph 3.1,
all of the Assets of the Reorganizing Fund shall become, and be included in, the
assets of the Surviving Fund.
(b) The Trust has provided the Company with a list of the Reorganizing Fund's
portfolio securities as of the date of execution of this Agreement. The
Reorganizing Fund reserves the right to sell any of these securities prior to
the Closing Date. The Trust will, within a reasonable time prior to the Closing
Date, furnish the Surviving Fund with an updated list of the portfolio
securities.
1.3 LIABILITIES TO BE DISCHARGED AND LIABILITIES TO BE ASSUMED. The Reorganizing
Fund will use commercially reasonable efforts to identify and discharge all of
its known liabilities and obligations (including accrued fees and expenses and
payables for securities transactions or for share redemptions) prior to the
Closing Date. The Surviving Fund will assume all of the Reorganizing Fund's
liabilities and obligations of any kind whatsoever, whether absolute, accrued,
contingent or otherwise, in existence on the Closing Date other than those
listed in the next sentence (the "Liabilities"). The Surviving Fund will not
assume: (i) any debts, liabilities and obligations of the Trust that are not
related to the Reorganizing Fund; and (ii) any debts, liabilities and
obligations of the Trust's other series. If prior to the Closing Date, the
Company identifies a liability that the Trust and the Company mutually agree
should not be assumed by the Company, such liability shall be excluded from the
definition of Liabilities hereunder and shall be listed on a Schedule of
Excluded Liabilities to be signed by the Trust and the Company at the closing
(the "Excluded Liabilities"). Certain liabilities that would otherwise be listed
as Excluded Liabilities may be assumed by the Company on behalf of the Surviving
Fund, subject to such conditions as may be mutually agreed upon between the
Trust and the Company.
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1.4 LIQUIDATION AND DISTRIBUTION. On or as soon after the Closing Date as is
conveniently practicable: (a) the Reorganizing Fund will distribute in complete
liquidation of the Reorganizing Fund, PRO RATA to its shareholders of record,
determined as of the close of business on the business day immediately preceding
the Closing Date ("Reorganizing Fund Shareholders"), all of the Surviving Fund
Shares received by the Reorganizing Fund pursuant to paragraph 1.1; and (b) the
Reorganizing Fund will thereupon proceed to terminate as set forth in paragraph
1.8 below. Such distribution will be accomplished by the transfer of Surviving
Fund Shares credited to the account of the Reorganizing Fund on the books of the
Surviving Fund to open accounts on the share records of the Surviving Fund in
the name of the Reorganizing Fund Shareholders, with each such account being
credited a number of Surviving Fund Shares representing the respective PRO RATA
number of Surviving Fund Shares due the related shareholders. All issued and
outstanding shares of the Reorganizing Fund ("Reorganizing Fund Shares") will
simultaneously be canceled on the books of the Reorganizing Fund. The Surviving
Fund shall not issue certificates representing Surviving Fund Shares in
connection with such transfer. After the Closing Date, the Reorganizing Fund
shall not conduct any business except in connection with its termination or as
otherwise required by law or the terms of this Agreement.
1.5 OWNERSHIP OF SHARES. Ownership of Surviving Fund Shares will be shown on the
books of the Surviving Fund's transfer agent. Surviving Fund Shares equal in
value to the aggregate net asset value of the Reorganizing Fund Shares will be
issued simultaneously to the Reorganizing Fund and will be distributed to the
Reorganizing Fund Shareholders.
1.6 TRANSFER TAXES. Any transfer taxes payable upon the issuance of Surviving
Fund Shares in a name other than the registered holder of the Reorganizing Fund
Shares on the books of the Reorganizing Fund as of that time shall, as a
condition of such issuance and transfer, be paid by the person to whom such
Surviving Fund Shares are to be issued and transferred.
1.7 REPORTING RESPONSIBILITY. Any reporting responsibility of the Reorganizing
Fund including, without limitation, the responsibility for filing of regulatory
reports, tax returns, or other documents with the Securities and Exchange
Commission (the "Commission"), any state securities commissions, and any federal
state, or local tax authorities or any other relevant regulatory authority, is
and shall remain the responsibility of the Reorganizing Fund.
1.8 TERMINATION. The Reorganizing Fund shall be terminated under Massachusetts
law promptly following the Closing Date and the making of all distributions
pursuant to paragraph 1.4.
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1.9 BOOKS AND RECORDS. All books and records of the Reorganizing Fund, including
all books and records required to be maintained under the Investment Company Act
of 1940 (the "1940 Act"), and the related rules and regulations, shall be
available to the Surviving Fund from and after the Closing Date and shall be
turned over to the Surviving Fund as soon as practicable following the Closing
Date.
1.10 INSURANCE AND INDEMNIFICATION. From the Closing Date to the third
anniversary of the Closing Date, the Trust's insurance policy will provide
liability insurance coverage to the Trustees and officers of the Trust. For the
period beginning on the third anniversary of the Closing Date and ending on the
sixth anniversary of the Closing Date, AAMI, its successors or assigns shall
provide or cause to be provided liability insurance coverage (the "AAMI
Insurance Policy") to the Trustees and officers of the Trust that covers their
actions relating to the Reorganizing Fund. In addition, at the Closing Date and
for the period beginning at the Effective Time and ending six years thereafter
(the "Run-off Period"), the Company, on behalf of the Surviving Fund, will
indemnify to the fullest extent provided by law and the Trust's Declaration of
Trust and By-laws the Trust's Trustees and officers, acting in their capacities
as such, under the Trust's Declaration of Trust and Bylaws as in effect as of
the date of this Agreement, with respect to any action or omission or alleged
action or omission relating to the Reorganizing Fund that are not covered by the
Trust's insurance policy or the AAMI Insurance Policy to be secured by AAMI
pursuant to this paragraph (the "Insurance Policies"). The AAMI Insurance Policy
will be in a form and substance acceptable to the Trust. As a condition
precedent to the Company's obligation to provide such indemnification, the
Trustees and officers of the Trust: (a) shall have timely provided notice of
claim and/or circumstances ("Insurance Claims") under the Insurance Policies;
(b) shall provide to the Company, on behalf of the Surviving Fund, evidence to
show that such claims have been made; (c) shall cooperate fully with the Company
in perfecting and prosecuting any and all such Insurance Claims; (d) shall
undertake all reasonable efforts to obtain the benefits of the Insurance
Policies before seeking to rely on the indemnities provided herein; provided the
Trustees and officers of the Trust have fulfilled their obligations under (a),
(b), (c) and (d) above, the obligations of the Company, on behalf of the
Surviving Fund, with respect to the liabilities hereby assumed shall not be
subject to any suspension or delay by reason of the pendency of such Insurance
Claim or any delay or dispute by the insurer with respect to such Insurance
Claim; it being further understood and agreed that, should the Company, on
behalf of the Surviving Fund, be called upon hereunder to provide
indemnification by reason of the failure or refusal of any issuer(s) of the
Insurance Policies timely to undertake its insuring obligations (including the
advancement of legal expenses), the Company on behalf of the Surviving Fund
shall do so. Nonetheless, the performance of its obligations hereunder by the
Company on behalf of the Surviving Fund (a) shall not affect rights under the
Insurance Policies, (b) shall be treated as an advance of performance by the
Company, on behalf of the Surviving Fund, rather than an assumption of
liability, (c) shall subrogate the Company, on behalf of the Surviving Fund, in
its name or in the name of the Trustees and officers of the Trust to exercise
all rights of such Trustees and officers pursuant to the Insurance Policies, and
(d) shall permit the Company, on behalf of the Surviving Fund, to receive all
proceeds of the Insurance Policies to extent funds have been advanced hereunder
by the Company, on behalf of the Surviving Fund. The advancement of expenses on
behalf of the Trustees and officers shall be subject to the same terms and
conditions as provided for by the Trust's Declaration of Trust. The obligations
of the Trustees and officers of the Trust pursuant to these provisions shall be
continuing, including beyond the Run-Off Period in the event of a continuing
delay or dispute by any issuer(s) of the Insurance Policies. It is further
understood that, at and after the Effective Time, recourse for the Liabilities
of the Reorganizing Fund and the obligation of the Company, on behalf of the
Surviving Fund, to indemnify the Trustees and officers of the Trust as provided
in this paragraph 1.10 shall be limited to the assets of the Surviving Fund.
A-4
ARTICLE II
VALUATION
2.1 VALUATION OF ASSETS. The value of the Assets to be acquired by the Surviving
Fund shall be the value of such Assets at the close of regular trading on the
New York Stock Exchange (the "NYSE") on the business day immediately preceding
the Closing Date provided in paragraph 3.1 or such earlier or later date and
time as may be mutually agreed upon in writing by an officer of the Trust and
Company (the "Valuation Time") using the valuation procedures set forth in the
Surviving Fund's then-current prospectus and statement of additional information
or such other valuation procedures as shall be mutually agreed upon by the
parties.
2.2 VALUATION OF SHARES. The net asset value per share of Surviving Fund Shares
shall be the net asset value per share computed at the Valuation Time, using the
valuation procedures set forth in the Surviving Fund's then-current prospectus
and statement of additional information, or such other valuation procedures as
shall be mutually agreed upon by the parties.
2.3 SHARES TO BE ISSUED. The number of Surviving Fund Shares to be issued
(including fractional shares, if any) in exchange for the Reorganizing Fund's
Assets shall be determined by (a) multiplying the shares outstanding of the
Institutional Class of the Reorganizing Fund by (b) the ratio computed by (x)
dividing the net asset value per share of the Institutional Class of the
Reorganizing Fund by (y) the net asset value per share of the Institutional
Class of the Surviving Fund Shares determined in accordance with paragraph 2.2.
2.4 DETERMINATION OF VALUE. All computations of value hereunder shall by made by
or under the direction of each Fund's respective accounting agent in accordance
with its regular practice and the requirements of the 1940 Act and shall be
subject to confirmation by each Fund's respective independent registered public
accounting firm upon reasonable request of the other Fund. The Trust and the
Company agree to use all commercially reasonable efforts to resolve prior to the
Valuation Time any material pricing differences between the prices of portfolio
securities of the Reorganizing Fund and the Surviving Fund.
ARTICLE III
CLOSING AND CLOSING DATE
3.1 CLOSING DATE. The closing shall occur on ______________, 2009, or such other
date(s) as an officer of each party may agree to in writing ("Closing Date").
All acts taking place at the closing shall be deemed to take place immediately
prior to the opening of business on the Closing Date unless otherwise provided
herein (the "Effective Time"). The closing shall be held at the offices of SEI
Investments Company, One Freedom Valley Drive, Oaks, PA 19456, or at such other
time and/or place as an officer of each party may agree (the "Closing").
A-5
3.2 CUSTODIAN'S CERTIFICATE. The Trust, on behalf of the Reorganizing Fund,
shall direct The Northern Trust Company, as custodian for the Reorganizing Fund
("Custodian"), to deliver at the Closing a certificate of an authorized officer
of The Northern Trust Company stating that: (a) the Reorganizing Fund's Assets
have been delivered in proper form to the Surviving Fund on the Closing Date;
and (b) all necessary taxes including all applicable federal and state stock
transfer stamps, if any, have been paid, or provision for payment has been made,
in conjunction with the delivery of portfolio securities by the Reorganizing
Fund. The Reorganizing Fund's portfolio securities represented by a certificate
or other written instrument shall be presented by the Custodian to the Company's
custodian. Such presentation shall be made for examination no later than five
business days preceding the Closing Date, and such certificates and other
written instruments shall be transferred and delivered by each Reorganizing Fund
as of the Closing Date for the account of the Surviving Fund duly endorsed in
proper form for transfer in such condition as to constitute good delivery
thereof. The Custodian shall deliver to the Company's custodian the Assets of
the Reorganizing Fund as of the Closing Date by book entry, in accordance with
the customary practices of the Custodian and of each securities depository, in
accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7, as the case may be, under
the 1940 Act. The cash to be transferred by the Reorganizing Fund shall be
delivered by wire transfer of federal funds on the Closing Date.
3.3 EFFECT OF SUSPENSION IN TRADING. In the event that on the scheduled
Valuation Time, either: (a) the NYSE or another primary exchange on which the
portfolio securities of the Surviving Fund or the Reorganizing Fund are
purchased or sold shall be closed to trading or trading on such exchange shall
be restricted; or (b) trading or the reporting of trading on the NYSE or
elsewhere shall be disrupted so that accurate appraisal of the value of the net
assets of the Surviving Fund or the Reorganizing Fund is impracticable, the
Valuation Time shall be postponed until the next Friday (which is a business day
and which is not the last Friday of the month) after the day when trading is
fully resumed and reporting is restored or such date as may be mutually agreed
upon in writing by an officer of each party.
3.4 CERTIFICATES. DST Systems, Inc., as transfer agent for the Reorganizing Fund
as of the Closing Date, shall deliver at the closing a certificate of an
authorized officer of DST Systems, Inc. stating that its records contain the
names and addresses of Reorganizing Fund Shareholders, and the number and
percentage ownership of outstanding shares owned by each such shareholder as of
the Valuation Time. The Surviving Fund shall issue and deliver or cause Citi
Fund Services Ohio, Inc., its transfer agent, to issue and deliver a
confirmation evidencing Surviving Fund Shares to be credited on the Closing Date
or provide evidence satisfactory to the Reorganizing Fund that the Surviving
Fund Shares have been credited as of the Effective Time to the Reorganizing
Fund's account on the books of the Surviving Fund. At the Closing, each party
shall deliver to the other such bills of sale, checks, assignments, share
certificates, receipts, officer's certificates, transfer agent certificates,
custodian certificates, opinions, and other certificates and documents, if any,
as such other party or its counsel may reasonably request.
A-6
3.5 FAILURE TO DELIVER ASSETS. If the Reorganizing Fund is unable to make
delivery pursuant to paragraph 3.2 to the custodian for the Surviving Fund of
any of the Assets of the Reorganizing Fund for the reason that any of such
Assets have not yet been delivered to it by the Reorganizing Fund's broker,
dealer or other counterparty, then, in lieu of such delivery, the Reorganizing
Fund shall deliver, with respect to said Assets, executed copies of an agreement
of assignment and due bills executed on behalf of said broker, dealer or other
counterparty, together with such other documents as may be required by the
Surviving Fund or its custodian, including brokers' confirmation slips.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS OF THE REORGANIZING FUND. The Trust, on behalf of the
Reorganizing Fund, represents and warrants to the Company and the Surviving Fund
as follows:
a) The Reorganizing Fund is a legally designated, separate series of the Trust.
The Trust is duly organized and validly existing under the laws of the
Commonwealth of Massachusetts.
b) The Reorganizing Fund has the power to own all of its assets and, subject to
shareholder approval, to carry out and consummate the transactions contemplated
herein and has all necessary federal, state and local authorizations to carry on
its business as such business is now being conducted.
c) The Trust is registered as an open-end management investment company under
the 1940 Act, and the Trust's registration with the Commission as an investment
company under the 1940 Act is in full force and effect. The Reorganizing Fund is
in compliance, in all material respects, with the 1940 Act and the rules and
regulations thereunder.
d) The current prospectus and statement of additional information of the
Reorganizing Fund and current shareholder reports (true and correct copies of
which have been delivered to the Company) and each prospectus, statement of
additional information and shareholder report of the Reorganizing Fund used
since the Reorganizing Fund commenced operations conform or conformed at the
time of its use in all material respects to the applicable requirements of the
Securities Act of 1933 ("1933 Act") and the 1940 Act, and the related rules and
regulations, and do not include any untrue statement of material fact or omit to
state any material fact required to be stated or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
e) The Trust and the Reorganizing Fund are not in violation, and the execution,
delivery, and performance of this Agreement (subject to shareholder approval)
will neither result in a violation, of any provision of the Trust's Declaration
of Trust or By-Laws or of any material agreement, indenture, instrument,
contract, lease, or other undertaking to which the Trust or the Reorganizing
Fund is a party or by which it is bound nor result in the acceleration of any
obligation, or the imposition of any penalty, under any agreement, indenture,
instrument, contract, lease, judgment or decree to which the Trust, on behalf of
the Reorganizing Fund, is a party or by which it is bound.
A-7
f) The Trust, with respect to the Reorganizing Fund, has no material contracts
or other commitments that will be terminated with liability to it before the
Closing Date, except for liabilities, if any, to be discharged as provided in
paragraph 1.3 hereof.
g) Except as otherwise disclosed in writing to and accepted by the Surviving
Fund, no litigation, administrative proceeding, or investigation by or before
any court or governmental body is presently pending or to its knowledge
threatened against the Trust or the Reorganizing Fund or any of its properties
or assets, which, if adversely determined, would materially and adversely affect
its financial condition, the conduct of its business, or the ability of the
Reorganizing Fund to carry out the transactions contemplated by this Agreement.
Neither the Trust nor the Reorganizing Fund know of any facts that might form
the basis for the institution of such proceedings and neither is a party to or
subject to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects its business or its
ability to consummate the transactions contemplated herein.
h) The financial statements of the Reorganizing Fund as of October 31, 2008, and
for the fiscal year then ended have been prepared in accordance with generally
accepted accounting principles, and audited by PricewaterhouseCoopers, LLP,
independent registered public accountants, and the unaudited financial
statements as of April 30, 2009 (copies of which have been furnished to the
Surviving Fund) have been prepared in accordance with generally accepted
accounting principles, and each set of financial statements fairly reflect the
financial condition of the Reorganizing Fund as of such date and fairly reflect
the results of its operations for the periods covered thereby, and there are no
known contingent liabilities of the Reorganizing Fund as of such date that are
not disclosed in such statements.
i) Since the date of the financial statements referred to in paragraph (h)
above, there have been no material adverse changes in the Reorganizing Fund's
financial condition, assets, liabilities or business (other than changes
occurring in the ordinary course of business), or any incurrence by the
Reorganizing Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed to and accepted by the
Surviving Fund. For purposes of this paragraph (i), a decline in the net asset
value of the Reorganizing Fund shall not constitute a material adverse change.
j) All federal and other Tax (as defined below) returns and reports of the
Reorganizing Fund required by law to be filed prior to the date hereof have been
duly and timely filed (and all federal and other Tax returns and reports of the
Reorganizing Fund required by law to be filed from and after the date hereof to
the Closing Date will be duly and timely filed), and all such returns and
reports accurately state, in all material respects, the amount of Tax owed for
the periods covered by the returns, or, in the case of information returns, the
amount and character of income required to be reported by the Reorganizing Fund.
The Reorganizing Fund has paid or made provision and properly accounted for all
Taxes (as defined below) due or properly shown to be due on such returns and
reports. The amounts set up as provisions for Taxes in the books and records of
the Reorganizing Fund as of the Valuation Time will, to the extent required by
GAAP, be sufficient for the payment of all Taxes of any kind, whether accrued,
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due, absolute, contingent or otherwise, which were or which may be payable by
the Reorganizing Fund for any periods or fiscal years prior to and including the
Valuation Time, including all Taxes imposed before or after the Valuation Time
that are attributable to any such period or fiscal year. To the best of the
Reorganizing Fund's knowledge, no such return is currently under audit by the
Internal Revenue Service or by any state or local taxing authority; no
assessment has been asserted or proposed with respect to such returns; and there
are no levies, liens or other encumbrances related to Taxes existing, threatened
or pending with respect to the Assets of the Reorganizing Fund. As used in this
Agreement, "Tax" or "Taxes" means all federal, state, local and foreign (whether
imposed by a country or political subdivision or authority thereunder) income,
gross receipts, excise, sales, use, value added, employment, franchise, profits,
property, ad valorem or other taxes, stamp taxes and duties, fees, assessments
or charges, whether payable directly or by withholding, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (foreign or domestic) with respect thereto.
k) All issued and outstanding shares of the Reorganizing Fund are duly and
validly issued and outstanding, fully paid and non-assessable by the
Reorganizing Fund and were offered for sale and sold in conformity with
applicable federal and state securities laws, rules and regulations. All of the
issued and outstanding shares of the Reorganizing Fund will, at the time of the
Closing Date, be held by the persons and in the amounts set forth in the records
of the Reorganizing Fund's transfer agent as provided in paragraph 3.4. The
Reorganizing Fund has no outstanding options, warrants, or other rights to
subscribe for or purchase any of the Reorganizing Fund Shares, and has no
outstanding securities convertible into any of the Reorganizing Fund Shares.
l) At the Closing Date, the Reorganizing Fund will have good and marketable
title to the Reorganizing Fund's Assets to be transferred to the Surviving Fund
pursuant to paragraph 1.2, and full right, power, and authority to sell, assign,
transfer, and deliver such Assets hereunder, free of any lien or other
encumbrance, except those liens or encumbrances of which the Surviving Fund has
received notice, and, upon delivery and payment for such Assets, and the filing
of any articles, certificates or other documents under the laws of
Massachusetts, the Surviving Fund will acquire good and marketable title,
subject to no restrictions on the full transfer of such Assets, other than such
restrictions as might arise under the 1933 Act, and other than as disclosed to
and accepted by the Surviving Fund.
m) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Trust and the Reorganizing
Fund. Subject to approval by the Reorganizing Fund Shareholders, this Agreement
constitutes a valid and binding obligation of the Trust and the Reorganizing
Fund, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium, and other laws relating to or affecting
creditors' rights and to general equity principles.
n) The information to be furnished by the Reorganizing Fund for use in the
combined proxy statement/prospectus and related statement of additional
information on Form N-14 relating to the Reorganization ("N-14 Registration
Statement") and other documents related to the Reorganization that may be
necessary in connection with the transactions contemplated herein shall comply
in all material respects with federal securities laws and regulations and will
not contain any untrue statement of material fact or omit to state a material
fact required to be stated or necessary to make the statements, in light of the
circumstances under which such statements were made, not misleading.
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o) The Reorganizing Fund has elected to be taxed as and for each taxable year of
its operation has qualified as a "regulated investment company" under the Code
(a "RIC"); has been a RIC under the Code at all times since it commenced
operations; and qualifies and will continue to qualify as a RIC under the Code
through the period ending upon its liquidation; and has computed and will
compute its federal income tax under Section 852 of the Code for all such
taxable years. The Reorganizing Fund has not at any time since its inception
been liable for nor is it now liable for any material income or excise tax
pursuant to Section 852 or 4982 of the Code. The Reorganizing Fund has no
earnings and profits accumulated with respect to any taxable year in which the
provisions of Subchapter M of the Code did not apply.
p) No governmental consents, approvals, authorizations or filings are required
under the 1933 Act, the Securities Exchange Act of 1934 ("1934 Act"), the 1940
Act or Massachusetts law for the execution of this Agreement by the Trust, for
itself and on behalf of the Reorganizing Fund, or the performance of the
Agreement by the Trust and the Reorganizing Fund, except for the effectiveness
of the N-14 Registration Statement, and the filing of any articles, certificates
or other documents that may be required under Massachusetts law, and except for
such other consents, approvals, authorizations and filings as have been made or
received, and except for such consents, approvals, authorizations and filings as
may be required subsequent to the Closing Date, it being understood, however,
that this Agreement and the transactions contemplated herein must be approved by
the shareholders of the Reorganizing Fund as described in paragraph 5.2.
q) As of the date hereof, except as previously disclosed to the Surviving Fund
in writing, and except as have been corrected as required by applicable law, and
to the best of the Reorganizing Fund's knowledge, there have been no material
miscalculations of the net asset value of the Reorganizing Fund or the net asset
value per share during the twelve-month period preceding the date hereof and
preceding the Closing Date, and all such calculations have been made in
accordance with the applicable provisions of the 1940 Act.
r) The Trust, on behalf of the Reorganizing Fund has maintained, or caused to be
maintained on its behalf, all books and records required of a registered
investment company in compliance with the requirements of Section 31 of the 1940
Act and rules thereunder, and such books and records are true and correct in all
material respects.
s) The Trust has adopted and implemented written policies and procedures in
accordance with Rule 38a-1 under the 1940 Act.
t) The books and records of Reorganizing Fund, including, without limitation,
FIN 48 work papers and supporting statements (the "FIN 48 Work Papers"), made
available to Surviving Fund and/or its counsel and authorized agents are true
and correct in all material respects and contain no material omissions with
respect to the business and operations of Reorganizing Fund.
u) The Trust satisfies the fund governance standards defined in Rule 0-1(a)(7)
under the 1940 Act.
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4.2 REPRESENTATIONS OF THE SURVIVING FUND. The Company, on behalf of the
Surviving Fund, represents and warrants to the Trust and the Reorganizing Fund
as follows:
a) The Surviving Fund is a legally designated, separate series of the Company.
The Company is duly organized, validly existing, and in good standing under the
laws of the State of Delaware.
b) The Surviving Fund has the power to own all of its assets and to carry out
and consummate the transactions contemplated herein and has all necessary
federal, state and local authorizations to carry on its business as such
business is now being conducted.
c) The Company is registered as an open-end management investment company under
the 1940 Act, and the Company's registration with the Commission as an
investment company under the 1940 Act is in full force and effect. The Surviving
Fund is in compliance, in all material respects, the 1940 Act and the rules and
regulations thereunder.
d) The preliminary prospectus and statement of additional information of the
Surviving Fund filed with the Commission on June 1, 2009 pursuant to Rule
485(a)(2) under the 1933 Act as part of the Company's registration statement on
Form N-1A, which will become effective prior to the Closing Date, conforms and,
as of its effective date, will conform in all material respects to the
applicable requirements of the 1933 Act and the 1940 Act and the related rules
and regulations, and does not and, as of its effective date, will not include
any untrue statement of material fact or omit to state any material fact
required to be stated or necessary to make such statements therein, in light of
the circumstances under which they were made, not misleading.
e) The N-14 Registration Statement, other than as it relates to the Reorganizing
Fund and the Trust and their service providers, will, on the effective date of
the N-14 Registration Statement, through the time of the special meeting of the
Reorganizing Fund Shareholders to consider and act upon this Agreement, and on
the Closing Date, (a) comply in all materials respects with the applicable
provisions and regulations of the 1933 Act, 1934 Act and 1940 Act, and (b) not
contain any untrue statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements in the N-14
Registration Statement, in light of the circumstances under which such
statements are made, not materially misleading; provided, however, that the
representations and warranties in this paragraph shall not apply to statements
in or omissions from the N-14 Registration Statement made in reliance upon and
in conformity with information that was furnished by the Trust or the
Reorganizing Fund or their agents.
f) The Company and the Surviving Fund are not in violation, and the execution,
delivery, and performance of this Agreement will neither result in a violation,
of any provision of the Company's Agreement and Declaration of Trust or By-Laws
or of any material agreement, indenture, instrument, contract, lease, or other
undertaking to which the Company or the Surviving Fund is a party or by which it
is bound nor result in the acceleration of any obligation, or the imposition of
any penalty, under any agreement, indenture, instrument, contract, lease,
judgment or decree to which the Company, on behalf of the Surviving Fund, is a
party or by which it is bound.
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g) Except as otherwise disclosed in writing to and accepted by the Reorganizing
Fund, no litigation, administrative proceeding, or investigation by or before
any court or governmental body is presently pending or to its knowledge
threatened against the Company or the Surviving Fund or any of its properties or
assets, which, if adversely determined, would materially and adversely affect
its financial condition, the conduct of its business, or the ability of the
Surviving Fund to carry out the transactions contemplated by this Agreement.
Neither the Company nor the Surviving Fund know of any facts that might form the
basis for the institution of such proceedings and neither is a party to or
subject to the provisions of any order, decree, or judgment of any court or
governmental body that materially and adversely affects its business or its
ability to consummate the transactions contemplated herein.
h) The Surviving Fund was formed for the purpose of effecting the Reorganization
and, prior to the closing, will have not commenced operations or carried on any
business activity, will have had no assets or liabilities and will have no
issued or outstanding shares other than as described in paragraph 6.2 of this
Agreement.
i) The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Company and the Surviving
Fund, and this Agreement constitutes a valid and binding obligation of the
Company and the Surviving Fund, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium, and other laws
relating to or affecting creditors' rights and to general equity principles.
j) Surviving Fund Shares to be issued and delivered to the Reorganizing Fund for
the account of the Reorganizing Fund Shareholders pursuant to the terms of this
Agreement will, at the Closing Date, have been duly authorized. When so issued
and delivered, such shares will be duly and validly issued Surviving Fund
Shares, and will be fully paid and non-assessable and no shareholder of the
Company has any preemptive right to subscription or purchase in respect thereof.
k) The information to be furnished by the Surviving Fund for use in the N-14
Registration Statement, and other documents related to the Reorganization that
may be necessary in connection with the transactions contemplated herein shall
comply in all material respects with federal securities laws and regulations and
will not contain any untrue statement of material fact or omit to state a
material fact required to be stated or necessary to make the statements, in
light of the circumstances under which such statements were made, not
misleading.
l) The Surviving Fund intends to meet the requirements of Subchapter M of the
Code for qualification and treatment of such Surviving Fund as a RIC in the
future and, from the date of this Agreement until the Closing Date, shall not
take any action inconsistent with such efforts to qualify and be treated as a
RIC under the Code in the future.
m) No governmental consents, approvals, authorizations or filings are required
under the 1933 Act, the 1934 Act, the 1940 Act or Delaware law for the execution
of this Agreement by the Company, for itself and on behalf of the Surviving
Fund, or the performance of the Agreement by the Company and the Surviving Fund,
except for the effectiveness of the N-14 Registration Statement, and the filing
of any articles, certificates or other documents that may be required under
Delaware law, and except for such other consents, approvals, authorizations and
filings as have been made or received, and except for such consents, approvals,
authorizations and filings as may be required subsequent to the Closing Date.
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n) The Company and the Surviving Fund agree to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act,
and any state Blue Sky or securities laws as it may deem appropriate in order to
continue its operations after the Closing Date.
o) The Company, on behalf of the Surviving Fund, has maintained, or caused to be
maintained on its behalf, all books and records required of a registered
investment company in compliance with the requirements of Section 31 of the 1940
Act and rules thereunder, and such books and records are true and correct in all
material respects; and
p) The Company has adopted and implemented written policies and procedures in
accordance with Rule 38a-1 under the 1940 Act.
q) The Company satisfies the fund governance standards defined in Rule 0-1(a)(7)
under the 1940 Act.
ARTICLE V
COVENANTS OF THE FUNDS
5.1 OPERATION IN ORDINARY COURSE. The Surviving Fund and the Reorganizing Fund
will each operate its respective business in the ordinary course between the
date of this Agreement and the Closing Date, it being understood that such
ordinary course of business will include customary dividends, shareholder
purchases and redemptions and such selling and purchasing of securities and
other changes as are contemplated by the Reorganizing Fund's normal operations.
No party shall take any action that would, or reasonably would be expected to,
result in any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect.
5.2 APPROVAL OF SHAREHOLDERS. The Trust will call a special meeting of the
Reorganizing Fund Shareholders to consider and act upon this Agreement and to
take all other appropriate action necessary to obtain approval of the
transactions contemplated herein. In the event that insufficient votes are
received from Reorganizing Fund shareholders, the meeting may be adjourned as
permitted under the Trust's Declaration of Trust and By-laws and applicable law
in order to permit further solicitation of proxies.
5.3 INVESTMENT REPRESENTATION. The Reorganizing Fund covenants that the
Surviving Fund Shares to be issued pursuant to this Agreement are not being
acquired for the purpose of making any distribution, other than in connection
with the Reorganization and in accordance with the terms of this Agreement.
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5.4 ADDITIONAL INFORMATION. The Trust and the Reorganizing Fund will assist the
Surviving Fund in obtaining such information as the Surviving Fund reasonably
requests concerning the beneficial ownership of the Reorganizing Fund Shares.
5.5 FURTHER ACTION. Subject to the provisions of this Agreement, the Surviving
Fund and the Reorganizing Fund 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, including any actions required to be taken after the Closing Date.
Without limiting the foregoing, the Trust and the Reorganizing Fund will assist
the Surviving Fund and AAMI in obtaining any books and records of the
Reorganizing Funds from their service providers. In addition, the Trust and the
Reorganizing Fund and the Company and the Surviving Fund will provide each other
and their respective representatives with such cooperation, assistance and
information as either of them reasonably may request of the other in filing any
tax returns, amended return or claim for refund, determining a liability for
taxes or a right to a refund of taxes or participating in or conducting any
audit or other proceeding in respect of taxes, or in determining the financial
reporting of any tax position.
5.6 STATEMENT OF EARNINGS AND PROFITS. As promptly as practicable, but in any
case within sixty days after the Closing Date, the Trust and the Reorganizing
Fund shall furnish the Surviving Fund, in such form as is reasonably
satisfactory to the Surviving Fund, a statement of the earnings and profits and
of any capital loss carryovers and other items of the Reorganizing Fund for
federal income tax purposes that will be carried over by the Surviving Fund as a
result of Sections 381 through 384 of the Code. Such statement will be certified
by the Trust's Treasurer.
5.7 PREPARATION OF FORM N-14 REGISTRATION STATEMENT. The Reorganizing Fund will
draft and the Surviving Fund will file with the Commission, the N-14
Registration Statement in compliance with the 1933 Act, the 1934 Act and the
1940 Act, as applicable. Each party will provide the other party with the
materials and information necessary to prepare the N-14 Registration Statement
and related materials. Upon effectiveness of the N-14 Registration Statement,
the Reorganizing Fund will cause the combined proxy statement and prospectus to
be delivered to the Reorganizing Fund's shareholders entitled to vote on this
Agreement and transactions contemplated herein in accordance with the
Reorganizing Fund's Declaration of Trust and By-laws.
5.8 FINAL DIVIDEND. On or before the Closing Date, unless the Reorganizing Fund
provides an opinion of counsel that the Reorganization qualifies as a
"reorganization" under Section 368(a)(1)(F) of the Code, the Reorganizing Fund
shall have declared and paid a dividend or dividends which, together with all
previous such dividends, shall have the effect of distributing to its
shareholders all of the Reorganizing Fund's investment company taxable income
(computed without regard to any deduction for dividends paid), if any, plus the
excess, if any, of its interest income excludible from gross income under
Section 103(a) of the Code over its deductions disallowed under Sections 265 and
171(a)(2) of the Code, in each case for all taxable periods or years ending on
or before the Closing Date, and all of its net capital gains realized (after
reduction for any capital loss carry forward), if any, in all taxable periods or
years ending on or before the Closing Date.
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5.9 TAX-FREE REORGANIZATION. It is the intention of the parties that the
transaction will qualify as a reorganization within the meaning of Section
368(a) of the Code. Neither the Trust, the Company, the Reorganizing Fund nor
the Surviving Fund shall take any action or cause any action to be taken
(including, without limitation the filing of any tax return) that is
inconsistent with such treatment or results in the failure of the transaction to
qualify as a reorganization within the meaning of Section 368(a) of the Code. At
or prior to the Closing Date, the parties to this Agreement will take such
reasonable action, or cause such action to be taken, as is reasonably necessary
to enable Morgan, Lewis & Bockius LLP to render the tax opinion contemplated in
the Agreement.
5.10 ACCESS TO BOOKS AND RECORDS. Upon reasonable notice, each of the Trust and
the Reorganizing Fund shall make available to the Company's officers and agents
all books and records of the Trust relating to the Reorganizing Fund.
5.11 REASONABLE BEST EFFORTS. Each of the Company, the Trust, the Surviving Fund
and the Reorganizing Fund shall use its reasonable best efforts to fulfill or
obtain the fulfillment of the conditions precedent to effect the transactions
contemplated by this Agreement.
5.12 AUTHORIZATIONS. The Surviving Fund agrees to use all reasonable efforts to
obtain the approvals and authorizations required by the 1933 Act, the 1940 Act
and any state Blue Sky or securities laws as it may deem appropriate in order to
operate in the normal course of business after the Closing Date.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE REORGANIZING FUND
6.1 PERFORMANCE OF OBLIGATIONS. The obligations of the Reorganizing Fund to
consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Surviving Fund of all the obligations to be
performed by the Surviving Fund pursuant to this Agreement on or before the
Closing Date.
6.2 INITIAL SHAREHOLDER. Prior to the Closing Date, (a) the Trustees of the
Company, on behalf of the Surviving Fund, shall have authorized the issuance of
and the Surviving Fund shall have issued one share to AAMI in consideration of
the payment of $10.00, (b) AAMI shall have, among other things, approved as the
sole initial shareholder (i) the Investment Advisory Agreement between the
Company, on behalf of the Surviving Fund, and AAMI and (ii) the Investment
Sub-Advisory Agreements among the Company, AAMI and Aberdeen Asset Management
Investment Services Limited and Aberdeen Asset Management Asia Limited, and (c)
immediately prior to or contemporaneously with the consummation of the
transactions described in this Agreement, the share of Surviving Fund acquired
by AAMI has been or is redeemed for $10.00.
6.3 TRUE REPRESENTATIONS AND WARRANTIES. All representations, covenants, and
warranties of the Surviving Fund contained in this Agreement shall be true and
correct in all material respects as of the date hereof and as of the Closing
Date, with the same force and effect as if made on and as of the Closing Date.
The Company shall have delivered to the Trust on the Closing Date a certificate
executed in the Company's name by its President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Trust and dated as of the Closing Date, to such effect and as to such other
matters as the Trust shall reasonably request.
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6.4 CORPORATE DOCUMENTS. The Surviving Fund also shall have delivered (or caused
to be delivered) to the Reorganizing Fund, as required by the Reorganizing Fund
or its counsel, the following documents in the name of the Surviving Fund by the
Trust or by its officers, counsel or service providers (as applicable): an
assumption of liabilities, secretary's or assistant secretary's certificate,
copies of custodian and transfer agent instructions, custodian and transfer
agent acknowledgements of transfer or certificates, tax representation
certificates, and any opinion, certificate or document mutually agreed as
necessary or appropriate to consummate the Reorganization under this Agreement.
A facsimile signature of an officer of the Surviving Fund on any of the
foregoing corporate documents listed in this paragraph shall have the same
effect as if executed in the original by such officer.
6.5 CORPORATE OPINION. The Reorganizing Fund shall have received on the Closing
Date an opinion of Stradley Ronon Stevens & Young, LLP, counsel to the Surviving
Fund, in a form reasonably satisfactory to the Reorganizing Fund, and dated as
of the Closing Date, to the effect that:
a) The Company is a Delaware statutory trust, existing and in good standing
under Delaware law. The Company has the power to own its properties and conduct
its business as a registered investment company. The Surviving Fund is a
separate series of the Company that has been duly classified and designated in
accordance with the applicable provisions of the Company's Agreement and
Declaration of Trust;
b) The Surviving Fund Shares to be delivered to the Trust as provided for by
this Agreement are duly authorized and upon such delivery will be validly issued
and will be fully paid and nonassessable by the Company and no shareholder of
the Company has any preemptive right to subscription or purchase in respect
thereof;
c) The Company is registered with the Commission as an open-end management
investment company under the 1940 Act; such registration has not been revoked or
rescinded and is in full force and effect;
d) To such counsel's knowledge, no consent, approval, authorization, or order of
any court or governmental authority is required for the consummation by the
Surviving Fund of the transactions contemplated in this Agreement, 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;
e) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary action on the part of the Board of Trustees of the
Company and, assuming due authorization, execution and delivery of this
Agreement by the Trust, this Agreement constitutes a valid and binding
obligation of the Company, on behalf of the Surviving Fund, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other laws
relating to or affecting creditors' rights and to general equity principles;
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f) To the knowledge of such counsel, except as has been disclosed in writing to
the Trust, no litigation or administrative proceedings or investigation of or
before any court or governmental body is presently pending as to the Surviving
Fund or any of its properties or assets or any person whom the Surviving Fund
may be obligated to indemnify in connection with such litigation, proceeding or
investigation, and the Surviving Fund 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 contemplated hereby;
g) The execution and delivery of this Agreement did not, and the consummation of
the transactions contemplated hereby will not, result in a violation of the
Company's Agreement and Declaration of Trust or By-Laws or in a material
violation of any provision of any agreement (known to such counsel) to which the
Company is a party or by which it is bound or, to the knowledge of such counsel,
result in the acceleration of any obligation or the imposition of any penalty
under any agreement, judgment or decree to which the Company is a party or by
which it is bound; and
h) To such counsel's actual knowledge, the N-14 Registration Statement as of the
date it was declared effective, other than as it relates to the Reorganizing
Fund, complies as to form in all material respects with the provisions and
regulations of the 1933 Act, 1934 Act and 1940 Act;
Such opinion (i) shall state that while such counsel have not verified, and are
not passing upon and do not assume responsibility for, the accuracy,
completeness or fairness of any portion of the N-14 Registration Statement or
any amendment thereof or supplement thereto, they have generally reviewed and
discussed certain information furnished therein with respect to the Surviving
Fund with certain officers of the Company and that in the course of such review
and discussion no facts came to the attention of such counsel which caused them
to believe that on the effective date of the N-14 Registration Statement and any
amendment thereof or supplement thereto and only insofar as they relate to the
information furnished with respect to the Company or the Surviving Fund, the
N-14 Registration Statement or any amendment thereof or supplement thereto
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; (ii) shall state that counsel do not express any opinion or
belief with regard to the financial statements and other financial and
statistical data or information contained in or incorporated by reference in the
N-14 Registration Statement; (iii) may rely on the opinion of other counsel to
the extent set forth in such opinion, PROVIDED such other counsel is reasonably
acceptable to the Trust; (iv) shall state that with regard to the opinion in
section 6.5(e) counsel may assume that the laws of the Commonwealth of
Massachusetts are identical in all respects with the laws of the Commonwealth of
Pennsylvania; (v) shall state that such opinion is solely for the benefit of the
Trust and the Reorganizing Fund and its Trustees and officers; and (vi) may rely
upon officers' certificates and certificates of public officials in rendering
their opinion.
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6.6 FEES AND EXPENSES. All fees and expenses associated with the Reorganization
contemplated by this Agreement, whether or not consummated, shall have been or,
when due, will be paid in full by AAMI and/or its affiliates.
6.7 DUE DILIGENCE. The Reorganizing Fund shall have completed to its
satisfaction its review of the Surviving Fund's books and records.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
SURVIVING FUND
7.1 PERFORMANCE OF OBLIGATIONS. The obligations of the Surviving Fund to
consummate the transactions provided for herein shall be subject, at its
election, to the performance by the Reorganizing Fund of all the obligations to
be performed by the Reorganizing Fund pursuant to this Agreement on or before
the Closing Date.
7.2 TRUE REPRESENTATIONS AND WARRANTIES. All representations, covenants, and
warranties of the Reorganizing Fund contained in this Agreement shall be true
and correct in all material respects as of the date hereof and as of the Closing
Date, with the same force and effect as if made on and as of the Closing Date.
The Trust shall have delivered to the Company on the Closing Date a certificate
executed in the Trust's name by its President or Vice President and its
Treasurer or Assistant Treasurer, in form and substance satisfactory to the
Company and dated as of the Closing Date, to such effect and as to such other
matters as the Company shall reasonably request.
7.3 STATEMENT OF ASSETS AND LIABILITIES. The Reorganizing Fund shall have
delivered to the Surviving Fund a statement of the Reorganizing Fund's assets
and known liabilities, together with a list of the Reorganizing Fund's portfolio
securities showing the tax costs of such securities by lot and the holding
periods of such securities, as of the Valuation Time, certified by the Treasurer
of the Trust.
7.4 CORPORATE DOCUMENTS. The Reorganizing Fund also shall have delivered (or
caused to be delivered) to the Surviving Fund, as required by the Surviving Fund
or its counsel, the following documents in the name of the Surviving Fund by the
Surviving Fund or by its officers, counsel or service providers (as applicable):
A bill of sale and assignment, treasurer's certificate, chief financial officer
certificate, secretary's or assistant secretary's certificate, copies of
custodian and transfer agent instructions, custodian and transfer agent
acknowledgements of transfer or certificates, tax representation certificates,
and any opinion, certificate or document mutually agreed as necessary or
appropriate to consummate the Reorganization under this Agreement. A facsimile
signature of an officer of the Surviving Fund on any of the foregoing corporate
documents listed in this paragraph shall have the same effect as if executed in
the original by such officer.
7.5 CORPORATE OPINION. The Surviving Fund shall have received on the Closing
Date an opinion of Morgan, Lewis & Bockius LLP, counsel to the Reorganizing
Fund, in a form reasonably satisfactory to the Surviving Fund, and dated as of
the Closing Date, to the effect that:
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a) The Trust is a trust existing under Massachusetts law. The Trust has the
power to own its properties and conduct its business as a registered investment
company. The Reorganizing Fund is a separate series of the Trust that has been
duly classified and designated in accordance with the applicable provisions of
the Trust's Declaration of Trust;
b) The Trust is registered with the Commission as an open-end management
investment company under the 1940 Act; such registration has not been revoked or
rescinded and is in full force and effect;
c) To such counsel's knowledge, no consent, approval, authorization, or order of
any court or governmental authority is required for the consummation by the
Reorganizing Fund of the transactions contemplated in this Agreement, 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;
d) The execution, delivery and performance of this Agreement has been duly
authorized by all necessary action on the part of the Board of Trustees of the
Trust and, assuming due authorization, execution and delivery of this Agreement
by the Company, this Agreement constitutes a valid and binding obligation of the
Trust, on behalf of the Reorganizing Fund, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other laws relating to or affecting
creditors' rights and to general equity principles;
e) To the knowledge of such counsel, except as has been disclosed in writing to
the Company, no litigation or administrative proceedings or investigation of or
before any court or governmental body is presently pending as to the
Reorganizing Fund or any of its properties or assets or any person whom the
Reorganizing Fund may be obligated to indemnify in connection with such
litigation, proceeding or investigation, and the Reorganizing Fund 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 contemplated hereby;
f) The execution and delivery of this Agreement did not, and the consummation of
the transactions contemplated hereby will not, result in a violation of the
Trust's Declaration of Trust or By-Laws or in a material violation of any
provision of any agreement (known to such counsel) to which the Trust is a party
or by which it is bound or, to the knowledge of such counsel, result in the
acceleration of any obligation or the imposition of any penalty under any
agreement, judgment or decree to which the Trust is a party or by which it is
bound; and
g) To such counsel's actual knowledge, the N-14 Registration Statement as of the
date it was declared effective, other than as it relates to the Surviving Fund,
complies as to form in all material respects with the provisions and regulations
of the 1933 Act, 1934 Act and 1940 Act.
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Such opinion (i) shall state that while such counsel have not verified, and are
not passing upon and do not assume responsibility for, the accuracy,
completeness or fairness of any portion of the N-14 Registration Statement or
any amendment thereof or supplement thereto, they have generally reviewed and
discussed certain information furnished therein with respect to the Reorganizing
Fund with certain officers of the Trust and that in the course of such review
and discussion no facts came to the attention of such counsel which caused them
to believe that on the effective date of the N-14 Registration Statement and any
amendment thereof or supplement thereto and only insofar as they relate to the
information furnished with respect to the Trust or the Reorganizing Fund, the
N-14 Registration Statement or any amendment thereof or supplement thereto
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; (ii) shall state that counsel do not express any opinion or
belief with regard to the financial statements and other financial and
statistical data or information contained in or incorporated by reference in the
N-14 Registration Statement; (iii) may rely on the opinion of other counsel to
the extent set forth in such opinion, PROVIDED such other counsel is reasonably
acceptable to the Company; (iv) shall state that such opinion is solely for the
benefit of the Company and the Surviving Fund and its Trustees and officers; and
(v) may rely upon officers' certificates and certificates of public officials in
rendering their opinion.
7.6 DUE DILIGENCE. The Company shall have completed to its satisfaction its
review of the Reorganizing Fund's books and records.
7.7 The Company shall have received at the Closing: (i) a certificate of an
authorized signatory of The Northern Trust Company, as custodian for a
Reorganizing Fund, stating that the Assets of the Reorganizing Fund have been
delivered to the Company; (ii) a certificate of an authorized signatory from JP
Morgan Chase Bank, N.A. as custodian for the Company, stating that the Assets of
the Reorganizing Fund have been received; (iii) a statement of the respective
tax basis of all investments to be transferred by the Reorganizing Fund to the
Surviving Fund; (iv) a copy (which may be in electronic form) of the shareholder
ledger accounts including, without limitation, the name, address and taxpayer
identification number of each shareholder of record, the number and percentage
(to three decimal places) of shares of beneficial interest held by each
shareholder, the dividend reinvestment elections applicable to each shareholder,
and the backup withholding and nonresident alien withholding certifications,
notices or records on file with the Reorganizing Fund with respect to each
shareholder, for all of the shareholders of record of the Reorganizing Fund as
of the Valuation Time, who are to become holders of the Surviving Fund as a
result of the transfer of assets that is the subject of this Agreement,
certified by its transfer agent or its President or its Vice-President to the
best of their knowledge and belief; and (v) all FIN 48 Work Papers; and (vi) the
tax books and records of the Reorganizing Fund for purposes of preparing any tax
returns required by law to be filed after the Closing Date.
7.8 The Reorganizing Fund's agreements with each of its service providers shall
have terminated on or prior to the Closing Date with respect to the Reorganizing
Fund in compliance with their termination provisions, and the Trust and the
Company have received reasonable assurance that no claim for damages (liquidated
or otherwise) will arise as a result of such termination. The Company and AAMI
agree that any fees, costs or other amounts that become due or payable under any
such agreement in accordance with its terms (or as otherwise may be mutually
agreed upon by the Trust, the Company and AAMI) as a result of its termination:
(i) shall not constitute a "claim for damages" for purposes of this paragraph
7.8; (ii) shall not constitute the "acceleration of any obligation" or the
"imposition of any penalty" for purposes of paragraph 4.1(e) of this Agreement;
and (iii) shall constitute expenses that are "solely and directly related to the
Reorganization" and, as such, shall be paid by AAMI and/or its affiliates in
accordance with Article IX.
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ARTICLE VIII
FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
REORGANIZING FUND AND SURVIVING FUND
If any of the conditions set forth below do not exist on or before the Closing
Date, each party to this Agreement shall, at its option, not be required to
consummate the transactions contemplated by this Agreement:
8.1 BOARD APPROVAL. The Agreement and the transactions contemplated herein shall
have been approved by the Board of Trustees of the Company, on behalf of the
Surviving Fund and by the Board of Trustees of the Trust on behalf of the
Reorganizing Fund, and each party shall have delivered to the other a copy of
the resolutions approving this Agreement adopted by the other party's Board,
certified by the Secretary or an equivalent officer.
8.2 SHAREHOLDER VOTE. This Agreement and the transactions contemplated herein
shall have been approved by the requisite vote of the holders of the outstanding
shares of the Reorganizing Fund in accordance with applicable law and the
provisions of the Trust's Declaration of Trust and By-Laws. Certificates
evidencing such approval shall have been delivered to the Surviving Fund.
Notwithstanding anything herein to the contrary, neither the Surviving Fund nor
the Reorganizing Fund may waive the conditions set forth in this paragraph 8.2
with respect to the Reorganization.
8.3 ORDERS AND PROCEEDINGS. On the Closing Date, the Commission shall not have
issued an unfavorable report under Section 25(b) of the 1940 Act, or instituted
any proceeding seeking to enjoin the consummation of the transactions
contemplated by this Agreement under Section 25(c) of the 1940 Act. Furthermore,
no action, suit or other proceeding shall be threatened or 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.
8.4 CONSENTS. All required 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 securities authorities,
including any necessary "no-action" positions and exemptive orders from such
federal and state authorities) to permit consummation of the transactions
contemplated herein shall have been obtained, except where failure to obtain any
such consent, order, or permit would not involve a risk of a material adverse
effect on the assets or properties of the Surviving Fund or Reorganizing Fund,
provided that either party hereto may waive any such conditions for itself.
8.5 EFFECTIVE N-14 REGISTRATION STATEMENT. The N-14 Registration Statement shall
have become effective under the 1933 Act, and no stop orders suspending the
effectiveness thereof shall have been issued. To the best knowledge of the
parties to this Agreement, no investigation or proceeding for that purpose shall
have been instituted or be pending, threatened or contemplated under the 1933
Act.
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8.6 EFFECTIVE SURVIVING FUND REGISTRATION STATEMENT. The registration statement
of the Company with respect to the Surviving Fund referred to in paragraph
4.2(d) of this Agreement shall have become effective under the 1933 Act and no
stop orders suspending the effectiveness thereof shall have been issued. To the
best knowledge of the Company, no investigation or proceeding for that purpose
shall have been instituted or be pending, threatened or contemplated under the
1933 Act.
8.7 TAX OPINION. The parties shall have received an opinion of Morgan, Lewis &
Bockius LLP substantially to the effect that for federal income tax purposes:
a) The transfer of all of the Assets of the Reorganizing Fund to, and the
assumption of all the Liabilities of the Reorganizing Fund by, the Surviving
Fund solely in exchange for Surviving Fund Shares (followed by the distribution
of Surviving Fund Shares to the Reorganizing Fund Shareholders in termination
and liquidation of the Reorganizing Fund) will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and the Surviving Fund and the
Reorganizing Fund 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 the Surviving Fund upon the receipt of
the Assets of the Reorganizing Fund, and the assumption by the Surviving Fund of
all of the Liabilities of the Reorganizing Fund, solely in exchange for
Surviving Fund Shares.
c) No gain or loss will be recognized by the Reorganizing Fund upon the transfer
of the Reorganizing Fund's Assets to the Surviving Fund, and the assumption by
the Surviving Fund of all of the Liabilities of the Reorganizing Fund, solely in
exchange for Surviving Fund Shares or upon the distribution (whether actual or
constructive) of Surviving Fund Shares to Reorganizing Fund Shareholders in
exchange for their Reorganizing Fund Shares.
d) No gain or loss will be recognized by any Reorganizing Fund Shareholder upon
the exchange of its Reorganizing Fund Shares for Surviving Fund Shares.
e) The aggregate tax basis of the Surviving Fund Shares received by the
Reorganizing Fund Shareholder pursuant to the Reorganization will be the same as
the aggregate tax basis of the Reorganizing Fund Shares held by it immediately
prior to the Reorganization. The holding period of Surviving Fund Shares
received by each Reorganizing Fund Shareholder will include the period during
which the Reorganizing Fund Shares exchanged therefor were held by such
shareholder, provided the Reorganizing Fund Shares are held as capital assets at
the time of the Reorganization.
f) The tax basis of the Reorganizing Fund's Assets acquired by the Surviving
Fund will be the same as the tax basis of such Assets to the Reorganizing Fund
immediately prior to the Reorganization. The holding period of the Assets of the
Reorganizing Fund in the hands of the Surviving Fund will include the period
during which those Assets were held by the Reorganizing Fund.
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g) The Surviving Fund will succeed to and take into account, as of the date of
the transfer (as defined in Section 1.381(b)-1(b) of the Treasury Regulations)
the items of the Reorganizing Fund described in Section 381(c) of the Code
subject to the conditions and limitations specified in Sections 381(b) and (c)
of the Code and the regulations thereunder.
Such opinion shall be based on customary assumptions and such representations as
Morgan, Lewis & Bockius LLP may reasonably request, and the Reorganizing Fund
and Surviving Fund will cooperate to make and certify the accuracy of such
representations. Notwithstanding anything herein to the contrary, neither the
Trust nor the Company may waive the conditions set forth in this paragraph 8.7.
ARTICLE IX
EXPENSES
Except as otherwise provided for herein, all expenses that are solely and
directly related to the Reorganization contemplated by this Agreement will be
borne and paid by AAMI and/or its affiliates, whether or not such Reorganization
is consummated. Such expenses include, without limitation, to the extent solely
and directly related to the Reorganization contemplated by this Agreement: (i)
expenses incurred in connection with the entering into and the carrying out of
the provisions of this Agreement; (ii) expenses associated with the preparation
and filing of the N-14 Registration Statement; (iii) registration or
qualification fees and expenses of preparing and filing such forms as are
necessary under applicable state securities laws to qualify the Surviving Fund
Shares to be issued in connection herewith in each state in which the
Reorganizing Fund Shareholders are resident as of the date of the mailing of the
Proxy Statement/Prospectus to such shareholders; (iv) postage; (v) printing;
(vi) accounting fees; and (vii) legal fees. AAMI agrees that all such fees and
expenses so borne and paid, shall be paid directly by AAMI and/or its affiliates
to the relevant providers of services or other payees in accordance with the
principles set forth in the Internal Revenue Service Rev. Ruling 73-54, 1973-1
C.B. 187.
Fees and expenses not incurred directly in connection with the consummation of
the transactions contemplated by this Agreement will be borne by the party
incurring such fees and expenses. Notwithstanding 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 the other party of such expenses would result in the
disqualification of the Reorganizing Fund or the Surviving Fund, as the case may
be, as a "regulated investment company" within the meaning of Section 851 of the
Code. Reorganizing Fund Shareholders will pay their respective expenses, if any,
incurred in connection with the transactions contemplated by this Agreement.
Neither the Reorganizing Fund nor the Surviving Fund will pay the Surviving Fund
shareholders' expenses, if any.
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ARTICLE X
ENTIRE AGREEMENT; TERMINATION OF WARRANTIES
10.1 The parties agree that neither party has made to the other party any
representation, warranty and/or covenant not set forth herein, and that 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 not
survive the consummation of the transactions contemplated hereunder.
Notwithstanding the foregoing sentence, the covenants to be performed after the
Closing Date shall survive the Closing Date.
ARTICLE XI
TERMINATION
This Agreement may be terminated by the mutual agreement of the Trust and the
Company. In addition, either the Trust or the Company may at its option
terminate this Agreement at or before the Closing Date due to:
a) a breach by the other of any representation, warranty, or agreement contained
herein to be performed at or before the Closing Date, if not cured within 30
days;
b) a condition herein expressed to be precedent to the obligations of the
terminating party that has not been met and it reasonably appears that it will
not or cannot be met; or
c) a determination by a party's Board of Trustees, that the consummation of the
transactions contemplated herein is not in the best interest of the Company or
the Trust, respectively, and notice given to the other party hereto.
In the event of any such termination, in the absence of willful default, there
shall be no liability for damages on the part of any of the Company, Surviving
Fund, Trust, Reorganizing Fund or their respective Trustees or officers, to the
other party or its Trustees or officers.
In the event of a termination under (a) in connection with a willful default,
all remedies at law or in equity of the party adversely affected shall survive.
At any time prior to the Closing Date, any of the terms or conditions of this
Agreement (except for paragraphs 8.2 and 8.7) may be waived by either the Trust
or the Company (whichever is entitled to the benefit thereof). Such waiver shall
be in writing and authorized by an officer of the waiving party. The failure of
either party hereto to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part hereof or the
right of either party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement shall be held to be a waiver of any other
or subsequent breach.
A-24
The obligation of the Company, on behalf of the Surviving Fund, to indemnify the
Trustees and officers of the Trust as provided by paragraph 1.10 is terminable
as set forth below, in the sole discretion of the Company, in the event that any
material representation made in this Agreement by the Trust, on behalf of the
Reorganizing Fund, proves to be materially inaccurate at any time, including
during the Run-Off Period; notwithstanding the foregoing, said termination can
only be applied to any Trustee(s) or officer(s) who knew (or should have known)
of the inaccuracy when made and then only as to a claim for indemnity arising
out of said inaccuracy. Further, should the Company, on behalf of the Surviving
Fund, defend or indemnify any Trustee(s) or officer(s) of the Trust, such
undertaking to indemnify shall not preclude the Company, on behalf of the
Surviving Fund, from seeking recovery for the attendant costs of such
indemnification from any Trustee(s) or officer(s) should any material
representation made in this Agreement by the Trust, on behalf of the
Reorganizing Fund, later be determined to be materially inaccurate and either to
have been known or should have been known by the subject Trustee(s) or
officer(s) when made.
ARTICLE XII
AMENDMENTS
This Agreement may be amended, modified, or supplemented in such manner as may
be mutually agreed upon in writing by the officers of the Company and the Trust;
provided, however, that following the meeting of the Reorganizing Fund
Shareholders called by the Reorganizing Fund pursuant to paragraph 5.2 of this
Agreement, no such amendment may have the effect of changing the provisions for
determining the number of Surviving Fund Shares to be issued to the Reorganizing
Fund Shareholders under this Agreement to the detriment of such shareholders
without their further approval and further provided, that the officers of the
Trust and the Company may change the Valuation Time, Effective Time and Closing
Date through an agreement in writing without additional specific authorization
by their respective Board of Trustees.
ARTICLE XIII
NOTICES
13.1 All notices and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed given if delivered personally,
transmitted by facsimile (and telephonically confirmed), mailed by registered or
certified mail with postage prepaid and return receipt requested, or sent by
commercial overnight courier, courier fees prepaid (if available; otherwise, by
the next best class of service available), to the parties at the following
address:
A-25
a) if to the Trust or the Reorganizing Fund, to it at:
The Advisors' Inner Circle Fund II
One Freedom Valley Drive
Oaks, Pennsylvania 19456
Attn: Joseph Gallo, Esq.
with a copy (which shall not constitute notice) to:
Morgan, Lewis & Bockius LLP
1111 Pennsylvania Ave., NW
Washington, D.C. 20004
Attn: Christopher D. Menconi, Esq.
b) if to the Company, to it at:
Aberdeen Funds
1735 Market Street
32nd Floor
Philadelphia, Pennsylvania 19103
Attn: Legal
with a copy (which shall not constitute notice) to:
Stradley, Ronon, Stevens & Young LLP
2600 One Commerce Square
Philadelphia, Pennsylvania 19103
Attn: Kenneth L. Greenberg, Esq.
or to such other person or address as any party shall specify by notice in
writing to the other parties in accordance with this paragraph. All such notices
or other communications shall be deemed to have been received on the date of the
personal delivery or on the third business day after the mailing or dispatch
thereof; provided that notice of change of address shall be effective only upon
receipt.
ARTICLE XIV
PUBLICITY; CONFIDENTIALITY
14.1 PUBLICITY. Any public announcements or similar publicity with respect to
this Agreement or the transactions contemplated herein will be made at such time
and in such manner as the parties mutually shall agree in writing, provided that
nothing herein shall prevent either party from making such public announcements
as may be required by law, in which case the party issuing such statement or
communication shall advise the other party prior to such issuance.
A-26
14.2 CONFIDENTIALITY. The parties, (for purposes of this paragraph 14.2, the
"Protected Persons") will hold, and will cause their officers, employees,
representatives, agents and affiliates to hold, in strict confidence, and not
disclose to any other person, and not use in any way except in connection with
the transactions herein contemplated, without the prior written consent of the
other Protected Persons, all non-public, confidential or proprietary information
obtained from the other Protected Persons in connection with the transactions
contemplated by this Agreement, except such information may be disclosed: (i) to
governmental or regulatory bodies, and, where necessary, to any other person in
connection with the obtaining of consents or waivers as contemplated by this
Agreement; (ii) if required by court order or decree or applicable law; (iii) if
it is publicly available through no act or failure to act of such party; (iv) if
it was already known to such party on a non-confidential basis on the date of
receipt; (v) during the course of or in connection with any litigation,
government investigation, arbitration, or other proceedings based upon or in
connection with the subject matter of this Agreement, including, without
limitation, the failure of the transactions contemplated hereby to be
consummated; or (vi) if it is otherwise expressly provided for herein.
In the event of a termination of this Agreement, the parties agree that they
along with their employees, representative agents and affiliates shall, and
shall cause their affiliates to, except with the prior written consent of the
other Protected Persons, keep secret and retain in strict confidence, and not
use for the benefit of itself or themselves, nor disclose to any other persons,
any and all non-public, confidential or proprietary information relating to the
other Protected Persons and their related parties and Affiliates, whether
obtained through their due diligence investigation, this Agreement or otherwise,
except such information may be disclosed: (i) if required by court order or
decree or applicable law; (ii) if it is publicly available through no act or
failure to act of such party; (iii) if it was already known to such party on a
non-confidential basis on the date of receipt; (iv) during the course of or in
connection with any litigation, government investigation, arbitration, or other
proceedings based upon or in connection with the subject matter of this
Agreement, including, without limitation, the failure of the transactions
contemplated hereby to be consummated; or (v) if it is otherwise expressly
provided for herein.
ARTICLE XV
HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT;
LIMITATION OF LIABILITY
15.1 HEADINGS. 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.
15.2 COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
15.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts, without regard to
the conflict of laws rules of that or any other jurisdiction.
15.4 SUCCESSORS AND ASSIGNMENTS. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns, but,
except as provided in this paragraph, 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 except that the Trust's
Trustees and officers are intended third-party beneficiaries of the provisions
of paragraph 1.10 herein.
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15.5 MASSACHUSETTS BUSINESS TRUST. The Trust is a business trust organized under
Massachusetts law and under a Declaration of Trust, to which reference is hereby
made and a copy of which is on file at the office of the Secretary of The
Commonwealth of Massachusetts and elsewhere as required by law, and to any and
all amendments thereto so filed or hereafter filed. The obligations of the Trust
or the Reorganizing Fund entered into in the name or on behalf thereof by any of
the Trustees, officers, employees or agents are not made individually, but in
such capacities; and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of the Trust personally, but only the assets
of the Trust and all persons dealing with any series or funds of the Trust, such
as the Reorganizing Fund, with respect to all obligations contained in this
Agreement, must look solely to the assets of the Trust belonging to such series
or fund for the enforcement of any claims against the Trust.
15.6 DELAWARE STATUTORY TRUST. The name "Aberdeen Funds" is the designation of
the Trustees for the time being under an Amended and Restated Agreement and
Declaration of Trust dated December 12, 2007, as amended from time to time, and
all persons dealing with the Company or the Surviving Fund must look solely to
the property of the Company or the Surviving Fund for the enforcement of any
claims as none of its Trustees, officers, agents or shareholders assume any
personal liability for obligations entered into on behalf of the Company. No
portfolio of the Company shall be liable for any claims against any other
portfolio of the Company. The Reorganizing Fund, the Trust and AAMI specifically
acknowledge and agree that any liability of the Company under this Agreement
with respect to the Surviving Fund of the Company, or in connection with the
transactions contemplated herein with respect to the Surviving Fund, shall be
discharged only out of the assets of the Surviving Fund and that no other
portfolio of the Company shall be liable with respect thereto.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement, all as of the
date first written above.
THE ADVISORS' INNER CIRCLE FUND II, on behalf
of the Aberdeen Emerging Markets Fund
------------------------------------------
Philip T. Masterson
President
ABERDEEN FUNDS, on behalf of the Aberdeen
Emerging Markets Institutional Fund
------------------------------------------
Gary Marshall
President
ABERDEEN ASSET MANAGEMENT INC.
(solely with respect to paragraphs 1.3, 1.10,
6.2, 6.6, 7.8, 15.6 and Article IX)
-------------------------------------------
[Name]
[Title]
A-29
[PROXY TABULATOR]
[INSERT ADDRESS]
To vote by Internet
1) Read the Combined Prospectus/Proxy Statement and have the proxy card below at
hand. 2) Go to website www. .com 3) Follow the instructions provided on the
website.
To vote by Telephone
1) Read the Combined Prospectus/Proxy Statement and have the proxy card below at
hand. 2) Call 1-XXX-XXX-XXXX 3) Follow the instructions.
To vote by Mail
1) Read the Combined Prospectus/Proxy Statement. 2) Check the appropriate boxes
on the proxy card below. 3) Sign and date the proxy card.
4) Return the proxy card in the envelope provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
ABERDEEN EMERGING MARKETS FUND
PROPOSAL
To vote on an Agreement and Plan of Reorganization between The Advisors' For Against Abstain
Inner Circle Fund II (the "Trust"), on behalf of the Aberdeen Emerging
Markets Fund (the "Acquired Fund"), and the Aberdeen Funds, on behalf of
the Aberdeen Emerging Markets Institutional Fund (the "Surviving Fund"), 0 0 0
that provides for: (i) the acquisition of all of the assets, subject to
the liabilities, of the Acquired Fund in exchange for Institutional Class
Shares of the Surviving Fund; (ii) the pro rata distribution of
Institutional Class Shares of the Surviving Fund to the shareholders of
the Acquired Fund; and (iii) the liquidation and termination of the
Acquired Fund.
This proxy will, when properly executed, be voted as directed herein by
the signing shareholder(s). If no contrary direction is given when the
duly executed proxy is returned, this proxy will be voted FOR the
foregoing Proposal and will be voted in the appointed proxies' discretion
upon such other business as may properly come before the Meeting.
Your signature(s) acknowledge(s) receipt with this proxy of a copy of the
Notice of Special Meeting and the Combined Prospectus/Proxy Statement.
Your signature(s) on this proxy should be exactly as your name(s) appear
on this proxy. If the shares are held jointly, either holder may sign this
proxy but the name of the person signing should conform exactly to the
name appearing on this proxy. Attorneys-in-fact, executors,
administrators, trustees or guardians should indicate the full title and
capacity in which they are signing.
PLEASE DATE, SIGN AND RETURN PROMPTLY USING THE ENCLOSED POSTAGE-PAID
ENVELOPE WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING. YOU MAY VOTE IN
PERSON IF YOU ATTEND.
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
Important Notice Regarding the Availability of Proxy Materials for the
Shareholder Meeting to beheld on _____, 2009: The Combined Prospectus/Proxy
Statement is available at www. .com.
--------------------------------------------------------------------------------
ABERDEEN EMERGING MARKETS FUND
a series of
THE ADVISORS' INNER CIRCLE FUND II
FORM OF PROXY SOLICITED BY THE BOARD OF TRUSTEES FOR THE SPECIAL MEETING OF
SHAREHOLDERS, TO BE HELD ON
SEPTEMBER 25, 2009
The undersigned, revoking previous proxies with respect to the units of
beneficial interest in the name of undersigned (the "Shares"), hereby appoints
Amanda Albano and Joseph Gallo as proxies, each with full power of
substitution, to vote all of the Shares at the Special Meeting of Shareholders
of the Aberdeen Emerging Markets Fund (the "Fund"), a series of The Advisors'
Inner Circle Fund II (the "Trust"), to be held at the offices of the Fund's
administrator, SEI Investments Global Funds Services, One Freedom Valley
Drive, Oaks, Pennsylvania 19456, a [insert time], Eastern Time, on September
25, 2009, and any adjournments or postponements thereof (the "Meeting"); and
on the reverse the undersigned hereby instructs said proxies to vote.
PART B
ABERDEEN FUNDS
Aberdeen Emerging Markets Institutional Fund
--------------------------------------------------------------------------------
STATEMENT OF ADDITIONAL INFORMATION
AUGUST [__], 2009
--------------------------------------------------------------------------------
Acquisition of all of the assets and liabilities of: By and in exchange for shares of:
ABERDEEN EMERGING MARKETS FUND, A SERIES OF THE ADVISORS' INNER ABERDEEN EMERGING MARKETS INSTITUTIONAL FUND, A
CIRCLE FUND II (THE "ACQUIRED FUND") SERIES OF THE ABERDEEN FUNDS (THE "SURVIVING FUND")
Institutional Class Institutional Class
This Statement of Additional Information ("SAI"), which is not a
prospectus, supplements and should be read in conjunction with the combined
prospectus/proxy statement dated August [__], 2009 (the "Prospectus/ Proxy
Statement") relating specifically to the Special Meeting of Shareholders of the
Acquired Fund that will be held on September 25, 2009. A copy of the Prospectus/
Proxy Statement may be obtained upon request and without charge by calling
Aberdeen Funds toll free at 1-866-667-9231.
Unless otherwise indicated, capitalized terms used herein and not
otherwise defined have the same meanings as are given to them in the
Prospectus/Proxy Statement. The Reorganization will occur in accordance with the
terms of the Plan.
TABLE OF CONTENTS
PAGE
General Information ..................................................... 3
Incorporation by Reference .............................................. 3
Pro Forma Financial Statements .......................................... 3
2
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GENERAL INFORMATION
This SAI and the Prospectus/ Proxy Statement are related to the
acquisition of all of the assets of the Acquired Fund by the Surviving Fund and
the assumption by the Surviving Fund of substantially all of the liabilities of
the Acquired Fund. Such assets and liabilities are proposed to be exchanged for
Institutional Class shares of the Surviving Fund. On the Closing Date, the
Surviving Fund will distribute its Institutional Class Shares to each holder of
the Acquired Fund's Institutional Class Shares in an amount equal in value to
the shareholder's Acquired Fund shares as of the last business day prior to the
Closing Date in complete liquidation of the Acquired Fund (collectively, the
"Reorganization").
INCORPORATION OF DOCUMENTS BY REFERENCE INTO THE STATEMENT OF ADDITIONAL
INFORMATION
This Statement of Additional Information incorporates by reference the following
documents:
1. Statement of Additional Information dated March 1, 2009, with respect
to the Acquired Fund (previously filed on EDGAR, Accession No.
0001135428-09-000090).
2. The audited financial statements and related report of the independent
public accounting firm included in The Advisors' Inner Circle Fund II
Annual Report to Shareholders for the fiscal year ended October 31, 2008,
with respect to the Acquired Fund (previously filed on EDGAR, Accession No.
0000935069-09-000031). No other parts of the Annual Report are incorporated
herein by reference.
3. The unaudited financial statements included in The Advisors' Inner Circle
Fund II Semi-Annual Report to Shareholders for the semi-annual period ended
April 30, 2009, with respect to the Acquired Fund (previously filed on
EDGAR, Accession No. 0000950123-09-020695). No other parts of the
Semi-Annual Report are incorporated herein by reference.
4. The Statement of Additional Information dated August [15], 2009, with
respect to the Surviving Fund (previously filed on EDGAR, Accession No.
0001386893-09-000104).
PRO FORMA FINANCIAL STATEMENTS
PRO FORMA FINANCIAL INFORMATION HAS NOT BEEN PREPARED FOR THE
REORGANIZATION OF THE ACQUIRED FUND INTO THE SURVIVING FUND BECAUSE THE ACQUIRED
FUND WILL BE REORGANIZED INTO A NEWLY ORGANIZED SURVIVING FUND WITH NO ASSETS
AND LIABILITIES THAT WILL COMMENCE INVESTMENT OPERATIONS UPON COMPLETION OF THE
REORGANIZATION AND CONTINUE THE OPERATIONS OF THE ACQUIRED FUND.
3
PART C: OTHER INFORMATION
ITEM 15. INDEMNIFICATION
(a) Article VII, Section 2 of the Registrant's Agreement and
Declaration of Trust ("Trust Declaration") provides that the Registrant
(the "Trust"), out of the Trust Property, shall indemnify and hold
harmless each and every officer and trustee from and against any and
all claims and demands whatsoever arising out of or related to such
officer's or trustee's performance of his or her duties as an officer
or trustee of the Trust. This limitation on liability applies to events
occurring at the time a person serves as a trustee or officer of the
Trust whether or not such person is a trustee or officer at the time of
any proceeding in which liability is asserted. Nothing in the Trust
Declaration shall indemnify, hold harmless or protect any officer or
trustee from or against any liability to the Trust or any shareholder
to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such person's office (such conduct
referred to herein as "Disqualifying Conduct").
For the purpose of this indemnification and limitation of liability,
"Agent" means any person who is or was a trustee, officer, employee or
other agent of the Trust or is or was serving at the request of the
Trust as a trustee, director, officer, employee or other agent of
another foreign or domestic corporation, partnership, joint venture,
trust or other enterprise; "Proceeding" means any threatened, pending
or completed action or proceeding, whether civil, criminal,
administrative or investigative. To the fullest extent that limitations
on the liability of Agents are permitted by the Delaware Statutory
Trust Act, as amended, and other applicable law, the Agents shall not
be responsible or liable in any event for any act or omission of any
other Agent of the Trust or any investment adviser or principal
underwriter of the Trust. No amendment or repeal of Article VII of the
Trust Declaration regarding indemnification shall adversely affect any
right or protection of an Agent that exists at the time of such
amendment or repeal.
(b) The Registrant's Trust Declaration provides that to the fullest
extent permitted by applicable law, the officers and Trustees shall be
entitled and have the authority to purchase with Trust Property,
insurance for liability and for all expenses reasonably incurred or
paid or expected to be paid by a Trustee or officer in connection with
any claim, action, suit or proceeding in which such Person becomes
involved by virtue of such Person's capacity or former capacity with
the Trust, whether or not the Trust would have the power to indemnify
such Person against such liability under the provisions of Article VII
of the Trust Declaration.
(c) In addition, indemnification against certain liabilities of the
Registrant's trustees and officers and the Registrant's sub-advisers,
administrator, principal underwriter and custodian are provided in: (1)
Section 7(b) of the Investment Advisory Agreement between the
Registrant and Aberdeen Asset Management Inc. ("AAMI") (2) Section
10(b) of the Sub-Advisory Agreements among the Registrant, AAMI and
each of the following sub-advisers; (a) Credit Suisse Asset Management,
LLC; (b) Aberdeen Asset Management Asia Limited and (c) Aberdeen Asset
Management Investment Services Limited; (3) Section 9(a) and (b) of the
Underwriting Agreement between the Registrant and Aberdeen Fund
Distributors LLC; (4) Section 10(a), (b), (c), (d) and (e) of the
Services Agreement between the Registrant and Citi Fund Services Ohio,
Inc. and (g) Section 7.1(c) of the Global Custody Agreement between the
Registrant and JP Morgan Chase Bank, N.A. Generally, such
indemnification does not apply to any liabilities by reason of willful
misfeasance, bad faith or gross negligence and reckless disregard of
duties. These Agreements are incorporated herein by reference to Item
16.
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ITEM 16. EXHIBITS
1. (a) Amended and Restated Agreement and Declaration of Trust of
Registrant is incorporated by reference to Exhibit EX-99.a.1.
of Post-Effective Amendment No. 3 to the Registrant's
Registration Statement on Form N-1A filed on August 25, 2008
(Accession Number 0001386893-08-000050).
(i) Amendment No. 1 to the Amended and Restated
Agreement and Declaration of Trust of Registrant
is incorporated by reference to Exhibit
EX-99.a.1.a. of Post-Effective Amendment No. 2 to
the Registrant's Registration Statement on Form
N-1A filed on June 23, 2008 ( Accession Number
0001193125-08-138324) ("Post-Effective Amendment
No. 2").
(ii) Certificate of Establishment and Designation of
Additional Series and Share Classes of Aberdeen
Funds establishing the Aberdeen Core Plus Income
Fund is incorporated by reference to Exhibit
EX-99.a.1.b. of Post-Effective Amendment No. 5 to
the Registrant's Registration Statement on Form
N-1A filed on November 6, 2008 (Accession Number
0001421877-08-000264) ("Post-Effective Amendment
No. 5").
(iii) Certificate of Establishment and Designation of
Additional Series and Share Classes of Aberdeen
Funds establishing the Aberdeen Global Fixed
Income Fund, Aberdeen Global Small Cap Fund,
Aberdeen International Focus Fund, Aberdeen
International Focus Portfolio and Aberdeen Asia
Bond Fund is incorporated by reference to Exhibit
EX-99.a.1.c. of Post-Effective Amendment No. 11
to the Registrant's Registration Statement on
Form N-1A filed on April 22, 2009 (Accession
Number 0001104659-09-025445).
(iv) Certificate of Establishment and Designation of
Additional Series and Share Class of Aberdeen
Funds establishing the Aberdeen Emerging Markets
Institutional Fund is incorporated by reference
to Exhibit EX-99.1.a.d. of Post-Effective
Amendment No. 14 to the Registrant's Registration
Statement on Form N-1A filed on July 20, 2009
(Accession Number 0001104659-09-043743).
2
(b) Certificate of Trust of Registrant, as filed with the
Office of the Secretary of State of the State of Delaware on
September 27, 2007, is incorporated by reference to the
Registrant's initial Registration Statement on Form N-1A filed
on October 12, 2007 (Accession Number 0001137439-07-000471).
2. Amended and Restated By-Laws of Registrant are incorporated by
reference to Pre-effective Amendment No. 1 to the Registrant's
initial Registration Statement on Form N-1A filed on January
18, 2008 (Accession Number 0001386893-08-000026).
3. Not Applicable.
4. Form of Agreement and Plan of Reorganization attached as
Exhibit A to the Proxy Statement/Prospectus and incorporated
herein by reference.
5. a) See Article III, "Shares," and Article V, "Shareholders'
Voting Powers and Meetings," of Registrant's Amended and
Restated Agreement and Declaration of Trust.
(b) See Article II, "Meetings of Shareholders," of
Registrant's Amended and Restated By-Laws.
6. (a) Investment Advisory Agreement between Registrant and AAMI
is incorporated by reference to Exhibit EX-99.d.1. of
Post-Effective Amendment No. 2 filed on June 23, 2008.
(i) Form of Schedule A to the Investment Advisory
Agreement between Registrant and AAMI is
incorporated by reference to Exhibit EX-99.d.1.a.
of Post-Effective Amendment No. 13 to the
Registrant's Registration Statement on Form N-1A
filed on June 1, 2009 (Accession Number
0001386893-09-000104) ("Post-Effective Amendment
No. 13").
(b) Subadvisory Agreement between AAMI and Credit Suisse Asset
Management, LLC is incorporated by reference to Exhibit
EX-99.d.4. of Post-Effective Amendment No. 2 filed on June 23,
2008.
(c) Subadvisory Agreement between AAMI and Aberdeen Asset
Management Asia Limited is incorporated by reference to
Exhibit EX-99.d.6. of Post-Effective Amendment No. 2 filed on
June 23, 2008.
(i) Form of Exhibit A to the Subadvisory Agreement
between AAMI and Aberdeen Asset Management Asia
Limited is incorporated by reference to Exhibit
EX-99.d.3.a. of Post-Effective Amendment No. 13
filed on June 1, 2009.
(d) Subadvisory Agreement between AAMI and Aberdeen Asset
Management Investment Services Limited is incorporated by
reference to Exhibit EX-99.d.7. of Post-Effective Amendment
No. 2 filed on June 23, 2008.
3
(i) Form of Exhibit A to the Subadvisory Agreement
between AAMI and Aberdeen Asset Management
Investment Services Limited is incorporated by
reference to Exhibit EX-99.d.4.a. of
Post-Effective Amendment No. 13 filed on June 1,
2009.
7. (a) Underwriting Agreement between Registrant and Aberdeen
Fund Distributors, LLC is incorporated by reference to Exhibit
EX-99.e.1. of Post-Effective Amendment No. 2 filed on June 23,
2008.
(i) Form of Schedule A to the Underwriting Agreement
between Registrant and Aberdeen Fund Distributors
is incorporated by reference to Exhibit
EX-99.e.1.a. of Post-Effective Amendment No. 13
filed on June 1, 2009.
(b) Form of Dealer Agreement is incorporated by reference to
Exhibit EX-99.e.2. of Post-Effective Amendment No. 2 filed on
June 23, 2008.
8. Not Applicable.
9. (a) Global Custody Agreement between Registrant and JPMorgan
Chase Bank, National Association is incorporated by reference
to Exhibit EX-99.g.1. of Post-Effective Amendment No. 2 filed
on June 23, 2008.
(i) Form of Schedule 6 to the Global Custody
Agreement between Registrant and JPMorgan Chase
Bank, National Association is incorporated by
reference to Exhibit EX-99.g.1.a. of
Post-Effective Amendment No. 13 filed on June 1,
2009.
(b) Mutual Fund Rider to the Global Custody Agreement between
Registrant and JPMorgan Chase Bank, National Association
is incorporated by reference to Exhibit EX-99.g.2. of
Post-Effective Amendment No. 2 filed on June 23, 2008.
10. (a) Distribution Plan is incorporated by reference to Exhibit
EX-99.m. of Post-Effective Amendment No. 2 filed on June 23,
2008.
(b) Form of Distribution Plan is incorporated by reference to
Exhibit EX-99.10.b. of Registrant's Registration Statement on
Form N-14 filed on March 24, 2009 (Accession Number
0001386893-09-000055) ("Registrant's N-14").
(c) Rule 18f-3 Plan is incorporated by reference to Exhibit
EX-99.n. of Post-Effective Amendment No. 5 filed on November
6, 2008.
(i) Form of Rule 18f-3 Plan is incorporated by
reference to Exhibit EX-99.n.1. of Post-Effective
Amendment No. 13 filed on June 1, 2009.
4
11. Opinion and Consent of Counsel that shares will be validly
issued, fully paid and non-assessable (Stradley Ronon Stevens
& Young, LLP) is attached hereto as Exhibit EX-99.11.
12. Form of Opinion and Consent of Counsel with respect to certain
tax consequences (Morgan, Lewis & Bockius LLP) is attached
hereto as Exhibit EX-99.12. A final signed opinion will be
filed by post-effective amendment pursuant to an undertaking.
13. (a) Fund Administration Agreement between Registrant and AAMI
is incorporated by reference to Exhibit EX-99.h.1. of
Post-Effective Amendment No. 2 filed on June 23, 2008.
(i) Form of Exhibit B to the Fund Administration
Agreement between Registrant and AAMI is
incorporated by reference to Exhibit EX-99.h.1.a.
of Post-Effective Amendment No. 13 filed on June
1, 2009.
(b) Services Agreement between Registrant and Citi Fund
Services Ohio, Inc. is incorporated by reference to Exhibit
EX-99.h.2. of Post-Effective Amendment No. 2 filed on June 23,
2008.
(i) Amendment to Services Agreement is incorporated
by reference to Exhibit EX-99.h.2.a. of
Post-Effective Amendment No. 2 filed on June 23,
2008.
(ii) Compliance Services Amendment to Services
Agreement and Sub-Administration Agreement is
incorporated by reference to Exhibit EX-99.h.2.b.
of Post-Effective Amendment No. 2 filed on June
23, 2008.
(iii) Form of Schedule A to Services Agreement
between Registrant and Citi Fund Services Ohio,
Inc. is incorporated by reference to Exhibit
EX-99.h.2.c. of Post-Effective Amendment No. 13
filed on June 1, 2009.
(iv) Portal Services Amendment to Services Agreement
is incorporated by reference to Exhibit
EX-99.h.2.d. of Post-Effective Amendment No. 3
filed on August 25, 2008 (Accession Number
0001386893-08-000050).
(c) Sub-Administration Agreement between AAMI and Citi Fund
Services Ohio Inc. is incorporated by reference to Exhibit
EX-99.h.3. of Post-Effective Amendment No. 2 filed on June 23,
2008.
5
(i) Amendment to Sub-Administration Agreement is
incorporated by reference to Exhibit EX-99.h.3.a.
of Post-Effective Amendment No. 2 to filed on
June 23, 2008.
(ii) Compliance Services Amendment to Services
Agreement and Sub-Administration Agreement is
incorporated by reference to Exhibit EX-99.h.2.b.
of Post-Effective Amendment No. 2 filed on
June 23, 2008.
(iii) Form of Schedule A to the Sub-Administration
Agreement between AAMI and Citi Fund Services
Ohio, Inc. is incorporated by reference to
Exhibit EX-99.h.3.c. of Post-Effective Amendment
No. 13 filed on June 1, 2009.
(d) Administrative Services Plan is incorporated by reference
to Exhibit EX-99.h.4. of Post-Effective Amendment No. 8 to the
Registrant's Registration Statement on Form N-1A filed on
February 6, 2009 (Accession Number 0001386893-09-000028).
(i) Form of Exhibit A to the Administrative Services
Plan is incorporated by reference to Exhibit
EX-99.13.d.i. of Registrant's N-14 filed on March
24, 2009.
(e) Form of Servicing Agreement is incorporated by reference
to Exhibit EX-99.h.5. of Post-Effective Amendment No. 2 filed
on June 23, 2008.
(i) Form of Appendix A to the Servicing Agreement is
incorporated by reference to Exhibit
EX-99.13.e.i. of Registrant's N-14 filed on March
24, 2009.
(f) Expense Limitation Agreement is incorporated by reference
to Exhibit EX-99.h.6. of Post-Effective Amendment No. 2 filed
on June 23, 2008.
(i) Form of Exhibit A to the Expense Limitation is
incorporated by reference to Exhibit EX-99.h.6.a.
of Post-Effective Amendment No. 13 filed on June
1, 2009.
(g) Website Services Agreement between Registrant, AAMI and
Citi Fund Services Ohio, Inc. is incorporated by reference to
Exhibit EX-99.h.7. of Post-Effective Amendment No. 2 filed on
June 23, 2008.
(i) Form of Schedule D to the Website Services
Agreement is incorporated by reference to Exhibit
EX-99.h.7.a. of Post-Effective Amendment No. 13
filed on June 1, 2009.
14. Consent of PricewaterhouseCoopers LLP is filed herewith as
Exhibit EX-99.14.
15. Not Applicable.
16. (a) Powers of Attorney are attached hereto as Exhibit
EX-99.16.a.
(b) Certificate of Assistant Secretary is attached hereto as
Exhibit EX-99.16.b.
17. (a) Aberdeen Emerging Markets Fund Prospectus, a series of The
Advisors' Inner Circle Fund II, dated March 1, 2009, is
incorporated herein by reference to the Prospectus previously
filed on EDGAR, Accession Number 0001135428-09-000090.
6
(b) Statement of Additional Information dated March 1, 2009,
with respect to the Aberdeen Emerging Markets Fund, a series
of The Advisors' Inner Circle Fund II, is incorporated by
reference to the Statement of Additional Information
previously filed on EDGAR, Accession Number
0001135428-09-000090.
(c) The audited financial statements and related report of the
independent public accounting firm included in The Advisors'
Inner Circle Fund II Report to Shareholders for the fiscal
year ended October 31, 2008, with respect to the Aberdeen
Emerging Markets Fund, are incorporated by reference to the
Annual Report previously filed on EDGAR, Accession Number
0000935069-09-000031.
(d) The unaudited financial statements included in The
Advisors' Inner Circle Fund II Report to Shareholders for the
semi-annual period ended April 30, 2009, with respect to the
Aberdeen Emerging Markets Fund is incorporated by reference to
the Semi-Annual Report previously filed on EDGAR, Accession
Number 0000950123-09-020695.
(e) Aberdeen Funds Prospectus dated August [15], 2009, with
respect to the Aberdeen Emerging Markets Institutional Fund is
incorporated by reference to the Prospectus previously filed
on EDGAR, Accession Number 0001386893-09-000104.
(f) Aberdeen Funds Statement of Additional Information dated
August [15], 2009, with respect to the Aberdeen Emerging
Markets Institutional Fund is incorporated by reference to the
Statement of Additional Information previously filed on EDGAR,
Accession Number 0001386893-09-000104.
ITEM 17. UNDERTAKINGS
1. The undersigned Registrant agrees that prior to any public reoffering of
the securities registered through the use of a prospectus which is a part
of this registration statement by any person or party who is deemed to be
an underwriter within the meaning of Rule 145(c) of the Securities Act [17
CFR 230.145c], the reoffering prospectus will contain the information
called for by the applicable registration form for the reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
2. The undersigned Registrant agrees that every prospectus that is filed under
paragraph 1 above will be filed as a part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act, 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.
7
3. The undersigned Registrant agrees to file by post-effective amendment the
opinion of counsel regarding tax consequences of the proposed
reorganization required by Item 16(12) of Form N-14 within a reasonable
time after receipt of such opinion.
8
SIGNATURES
As required by the Securities Act of 1933, as amended, this registration
statement has been signed on behalf of the Registrant, in the City of
Philadelphia, and the Commonwealth of Pennsylvania on the 31st day of July,
2009.
ABERDEEN FUNDS
Registrant
By: Gary Marshall
---------------------------
Gary Marshall
President of Aberdeen Funds
As required by the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the date indicated.
Name Title Date
---- ----- ----
Gary Marshall(1) President and Chief Executive Officer July 31, 2009
-------------
Gary Marshall
Megan Kennedy(1) Treasurer, Chief Financial Officer July 31, 2009
-------------
Megan Kennedy and Principal Accounting Officer
P. Gerald Malone(1) Chairman of the Board July 31, 2009
----------------
P. Gerald Malone
Richard H. McCoy(1) Trustee July 31, 2009
----------------
Richard H. McCoy
Peter D. Sacks (1) Trustee July 31, 2009
--------------
Peter D. Sacks
John T. Sheehy(1) Trustee July 31, 2009
--------------
John T. Sheehy
Warren C. Smith(1) Trustee July 31, 2009
---------------
Warren C. Smith
Jack Solan(1) Trustee July 31, 2009
----------
Jack Solan
Martin Gilbert(1) Trustee July 31, 2009
--------------
Martin Gilbert
By: /s/ Lucia Sitar
---------------------------------
Lucia Sitar
Attorney In Fact
(1) Pursuant to a power of attorney incorporated herein by reference.
EXHIBIT LIST
EXHIBITS EXHIBIT NO.
Opinion and Consent of Counsel that shares will be validly issued, fully paid EX-99.11.
and non-assessable (Stradley Ronon Stevens & Young, LLP)
Form of Opinion and Consent of Counsel with respect to certain tax EX-99.12.
consequences (Morgan, Lewis & Bockius LLP)
Consent of PricewaterhouseCoopers LLP EX-99.14.
Powers of Attorney EX-99.16.a.
Certificate of Assistant Secretary EX-99.16.b.