Appendix A
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is entered into this
23rd day of February, 1990, by and among The Minnesota Mutual Life Insurance
Company ("Minnesota Mutual Life"), a mutual life insurance company organized and
existing under the laws of the State of Minnesota, Minnesota Mutual Variable
Fund D ("Fund D"), organized under the insurance laws of the State of Minnesota
and MIMLIC Series Fund, Inc. (the "Series Fund"), a corporation organized and
existing under the laws of the State of Minnesota, with the intent that the
transactions described herein shall qualify as a tax-free reorganization under
Section [368(a)(1)(c)] of the Internal Revenue Code [of 1986].
WHEREAS, the Series Fund is a series type mutual fund currently consisting of a
Money Market Portfolio, a Stock Portfolio, a Bond Portfolio, a Managed
Portfolio, a Mortgage Securities Portfolio, an Index Portfolio, and an
Aggressive Growth Portfolio and is registered with the Securities and Exchange
Commission (the "Commission") as an open-end, diversified, management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Series Fund, to the extent permitted by the 1940 Act, serves as an
investment vehicle for variable annuities and variable life insurance products
issued by Minnesota Mutual Life; and
WHEREAS, Fund D is registered with the Commission as an open-end, diversified
management investment company under the 1940 Act, with no separate sub-account
subdivisions, and with its own investment objective relating to its diversified
portfolio which consists primarily of equity securities, mainly common stocks;
and
WHEREAS, Fund D will be reorganized into a unit investment trust that is
subdivided into six sub-accounts (the "Sub-Accounts"), which shall be registered
with the Commission under the 1940 Act as a unit investment trust ("UIT") with
one Sub-Account of the UIT to be created to invest exclusively in shares of each
Portfolio of the Series Fund other than the Aggressive Growth Portfolio; and
WHEREAS, the Variable Fund Committee of Fund D (the "Committee"), including
those members who are not "interested persons" within the meaning of Section
2(a)(19) of the 1940 Act, has considered and approved the participation of Fund
D in the reorganization contemplated by this Agreement ("Reorganization"), based
on its finding that such participation would be in the best interests of Fund D
and would not result in the dilution of the interests of any Contract Owner or
Participant whose variable annuity contract is funded through investment in Fund
D; and
WHEREAS, the Committee has further determined that the registration statement of
Fund D shall be amended to reflect the Reorganization; and
WHEREAS, the Board of Directors of the Series Fund, including those directors
who are not interested persons" within the meaning of Section 2(a)(19) of the
1940 Act, has considered and approved the participation of the Series Fund in
the Reorganization, based on its finding that such participation would be in the
best interests of the Series Fund and would not result in the dilution of the
interests of any Contract Owner or Participant whose variable annuity or
variable life insurance contract is funded through investment in the Series
Fund; and
WHEREAS, this Agreement is conditioned upon approval of the Reorganization by
majority vote, as defined in the 1940 Act and rules thereunder, of the Contract
Owners and Participants of Fund D at a meeting called for that purpose, or any
adjournments thereof.
NOW, THEREFORE, in consideration of the mutual promises made herein, the parties
hereto agree as follows:
ARTICLE I
Closing Date
Section 1.01 The Reorganization shall be effective on July 16, 1990, or at such
other date as may be mutually agreed upon by all parties to this Agreement (the
"Closing Date"). The time on the Closing Date as of which the Reorganization is
consummated is referred to hereinafter as the "Effective Time."
Section 1.02 The Parties agree to use their best efforts to obtain all
regulatory and Contract Owners' and Participants' approvals and perform all
other acts necessary or desirable to complete the Reorganization as of the
Closing Date.
ARTICLE II
Reorganization Transactions
Section 2.01 As of the Effective Time, Minnesota Mutual Life, on behalf of Fund
D, will sell, assign and transfer all cash, securities and other investments
held or in transit, receivables for sold investments and dividend and interest
receivables ("portfolio assets") of Fund D to the Series Fund, the portfolio
assets to be held as the property of the Series Fund's Stock Portfolio. All
portfolio assets of Fund D are ones that are suitable to be purchased and held
by the Stock Portfolio of the Series Fund.
Section 2.02 In exchange for the portfolio assets of Fund D, the Series Fund
will issue shares of its Stock Portfolio and its Stock Portfolio will assume any
unsatisfied liabilities incurred by Fund D before the Effective Time to pay for
securities or other investments purchased and to pay accrued investment
management fees. The number of full and fractional shares of the Series Fund's
Stock Portfolio to be issued in the exchange shall be equal to the net assets of
Fund D (computed in accordance with the valuation procedures disclosed in
prospectuses and statements of additional information for Fund D, which are
identical to the valuation procedures employed by
2
the Stock Portfolio of the Series Fund) divided by the share value of the Series
Fund's Stock Portfolio as of the Effective Time.
Section 2.03 As of the Effective Time, Minnesota Mutual Life shall cause the
shares it receives from the Series Fund, pursuant to Section 2.02 above, to be
duly and validly recorded and held on its records as assets of Fund D.
Section 2.04 The Series Fund shares to be issued hereunder shall be issued in
open account form by book entry without the issuance of certificates. Each
Series Fund Stock Portfolio capital share that is issued pursuant to Section
2.02 above will be deemed to have been issued for a consideration equal to that
described.
Section 2.05 If, at any time after the Closing Date, Fund D, the Series Fund or
Minnesota Mutual Life shall determine that any further conveyance, assignment,
documentation or action is necessary or desirable to complete the Reorganization
contemplated by this Agreement or confirm full title to the assets transferred,
the appropriate party or parties shall execute and deliver all such instruments
and take all such actions.
Section 2.06 Following the Closing Date, Minnesota Mutual Life shall make
available to the Fund D Contract Owners and Participants a contract endorsement
which shall provide Sub-Accounts for Fund D. This endorsement shall be made
available to Contract Owners and Participants as regulatory authority is
obtained. The Series Fund shall thereafter make available capital shares of its
Money Market Portfolio, Bond Portfolio, Managed Portfolio, Mortgage Securities
Portfolio and Index Portfolio to Contract Owners and Participants holding
endorsed contracts.
Section 2.07 Following the Closing Date, Minnesota Mutual Life shall cease to
charge Fund D for investment management services, and, with respect to contracts
issued prior to the Effective Time ("Contracts"), will reimburse owners of such
Contracts to the extent that they are charged indirectly investment management
fees (plus other expenses with respect to interests in the Stock Portfolio of
the Series Fund) at a rate that exceeds the rate (.265% on an annual basis)
which they would have paid on an investment of that amount in Fund D had there
been no Reorganization. Such reimbursement shall not apply to any federal
income tax if the Series Fund fails to qualify as a "regulated investment
company" under the applicable provisions of the Internal Revenue Code, as
amended from time to time, or to any charge for Minnesota Mutual Life federal
income taxes attributable to the Contracts, for which Minnesota Mutual Life had
reserved in the Contracts the right to charge Fund D.
ARTICLE 111
Warranties and Conditions
Section 3.01 Fund D, Minnesota Mutual Life and the Series Fund as appropriate,
make the following representations and warranties, which shall survive the
Closing Date:
(a) There are no suits, actions or proceedings pending or threatened against
any party to this Agreement which, to its knowledge, if adversely determined,
would materially and adversely
3
affect its financial condition, the conduct of its business or its ability to
carry out its obligations hereunder;
(b) There are no investigations or administrative proceedings by the Commission
or by any insurance or securities regulatory body of any state, territory or the
District of Columbia pending against any party to this Agreement which, to its
knowledge, would lead to any suit, action or proceeding that would materially
and adversely affect its financial condition, the conduct of its business or its
ability to carry out its obligations hereunder;
(c) Should any party to this Agreement become aware, prior to the Effective
Time, of any suit, action, or proceeding, of the types described in paragraph
(a) or (b) above, instituted or commenced against it, it shall immediately
notify and advise all other parties to this Agreement;
(d) Immediately prior to the Effective Time, Minnesota Mutual Life shall have
valid and unencumbered title to the portfolio assets of Fund D, except with
respect to those assets for which payment has not yet been made; and
(e) Each party shall make available all information concerning itself which may
be required in any application, registration statement or other filing with a
governmental body to be made by the Series Fund, by Minnesota Mutual Life or by
Fund D, or any or all of them, in connection with any of the transactions
contemplated by this Agreement and shall join in all such applications or
filings, subject to reasonable approval of their counsel. Each party represents
and warrants that all of such information so furnished shall be correct in all
material respects and that it shall not omit any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading.
Section 3.02 The obligations of the parties hereunder shall be subject to
satisfaction of each of the following conditions:
(a) The representations contained herein shall be true as of and at the
Effective Time with the same effect as though made at such time, and such
parties shall have performed all obligations required by this Agreement to be
performed by each of them prior to such time;
(b) The Commission shall not have issued an unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin
consummation of the Reorganization contemplated hereby;
(c) The appropriate parties shall have received orders from the Commission
providing such exemptions and approvals as they and their counsel reasonably
deem necessary, including orders pursuant to Sections 17(b) and Section 6(c) of
the 1940 Act and Rule 17d-1 thereunder, and shall have made all necessary
filings, if any, with, and received all necessary approvals from, state
securities or insurance authorities;
(d) Fund D shall have filed with the Commission (1) one or more post-effective
amendments to its registration statement under the Securities Act of 1933 (the
"1933 Act") as are necessary or desirable in connection with the Reorganization
contemplated by this Agreement and (2) a
4
registration statement on Form N-14 under the 1933 Act for the contracts to be
issued in connection with the Reorganization and such pre-effective amendments
thereto as may be necessary or desirable to effect the purposes of the
Reorganization.
(e) At a Contract Owners' and Participants' meeting called for such purposes (or
any adjournments thereof), a majority of the outstanding voting securities (as
defined in the 1940 Act and the rules thereunder) of Fund D shall have voted in
favor of approving this Agreement and the Reorganization;
(f) The Board of Directors of the Series Fund shall have taken the following
actions:
(1) approve this Agreement and Plan of Reorganization; and
(2) authorize the issuance by the Series Fund of its Stock Portfolio shares at
their per share value on the Closing Date in exchange for the portfolio assets
of Fund D, as contemplated by this Agreement;
(g) Minnesota Mutual Life and Fund D shall have received an opinion of counsel
to the Series Fund in form and substance reasonably satisfactory to them to the
effect that, as of the Closing Date:
(1) the Series Fund is validly organized and in good standing under the laws of
the State of Minnesota and is authorized to issue shares of the Stock Portfolio
for the purposes contemplated by this Agreement and is duly registered as an
investment company under the 1940 Act;
(2) the shares of the Stock Portfolio of the Series Fund to be issued have been
duly authorized and, when issued as provided herein, will be validly issued,
fully paid and non-assessable;
(3) all corporate and other proceedings necessary and required to be taken by
or on the part of the Series Fund to authorize and carry out this Agreement and
to effect the Reorganization have been duly and properly taken; and
(4) this Agreement is a valid obligation of the Series Fund and legally binding
upon it in accordance with its terms;
(h) The Series Fund and Fund D shall have received an opinion from counsel to
Minnesota Mutual Life (who may be the same as counsel to the Series Fund) in
form and substance reasonably satisfactory to them to the effect that, as of the
Closing Date:
(1) Minnesota Mutual Life and Fund D are validly organized and in good standing
under the laws of the State of Minnesota.
(2) all corporate and other proceedings necessary and required to be taken by
or on the part of Fund D and Minnesota Mutual Life to authorize and carry out
this Agreement and to effect the Reorganization have been duly and properly
taken; and
5
(3) this Agreement is a valid obligation of Minnesota Mutual Life and legally
binding upon it in accordance with its terms; and
(I) Minnesota Mutual Life shall have received an opinion of counsel that the
Reorganization will have no adverse tax consequences on any of the parties or on
Contract Owners and Participants.
(j) Each party shall have furnished as reasonably requested by any other party,
other legal opinions, officers certificates, incumbency certificates, certified
copies of Board and Committee resolutions, good standing certificates, and other
closing documentation as may be appropriate for a transaction of this type.
ARTICLE IV
Costs
Section 4.01 Minnesota Mutual Life shall bear all expenses in connection with
effecting the Reorganization contemplated by this Agreement, including, without
limitation, any expenses in connection with preparation and filing of
registration statements and applications and amendments on behalf of any and all
parties hereto, and all legal, accounting and data processing services necessary
to effect the Reorganization.
ARTICLE V
Termination
Section 5.01 This Agreement may be terminated and the Reorganization abandoned
at any time prior to the Effective Time, notwithstanding approval by Contract
Owners and Participants,
(a) By mutual consent of the parties hereto;
(b) By any of the parties if any condition set forth in Section 3.02 has not
been fulfilled by the other parties; and
(c) By any of the parties if the Reorganization does not occur as of December
31, 1990, and so subsequent date can be mutually agreed upon.
Section 5.02 At any time prior to the Effective Time, any of the terms or
conditions of this Agreement may be waived by the party or parties entitled to
the benefit thereof if such waiver will not have a material adverse effect on
the interests of the Contract Owners and Participants.
IN WITNESS WHEREOF, as of the day and year first above written, each of the
parties has caused this Agreement to be executed on its behalf by its President
or Chairman and attested by its Secretary, all thereunto duly authorized.
ATTEST: THE MINNESOTA MUTUAL LIFE INSURANCE
COMPANY
By /s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxxxx X. Xxxxx
---------------------------- ----------------------------
6
Xxxxxx X. Xxxxxxx Xxxxxxx X. Xxxxx
Secretary President
ATTEST: MINNESOTA MUTUAL VARIABLE FUND D
By /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxx
---------------------------- ----------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxx
Secretary President
ATTEST: MIMLIC SERIES FUND, INC.
By /s/ Xxxxxx X. Xxxxxx By /s/ Xxxxxx X. Xxxx
---------------------------- ----------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxx
Secretary Chairman
7
