As filed with the Securities and Exchange Commission
on October 9, 1998
Registration No. 333-46717
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 1 [X]
(Check appropriate box or boxes)
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THE CAPITOL MUTUAL FUNDS
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)
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Registrant's Telephone Number, including Area Code: (800) 321-7854
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With copies to:
Robert M. Kurucza, Esq. Carl Frischling, Esq.
Marco E. Adelfio, Esq. Kramer, Levin, Naftalis
Morrison & Foerster LLP & Frankel
2000 Pennsylvania Ave., N.W. 919 3rd Avenue
Suite 5500 New York, New York 10022
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
[X] Immediately upon filing pursuant [ ] on (date), pursuant
to Rule 485(b), or to Rule 485(b), or
[ ] 60 days after filing pursuant [ ] on (date) pursuant
to Rule 485(a), or to Rule 485(a).
[ ] 75 days after filing pursuant [ ] on (date) pursuant to
paragraph (a)(2) paragraph (a)(2) of
rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration
Statement of The Capitol Mutual Funds (d/b/a Nations Institutional
Reserves)(the "Trust") filed on February 23, 1998 on Form N-14 under the
Securities Act of 1933 (the "Registration Statement") hereby incorporates
by reference all the information set forth in Parts A, B and C of the
Registration Statement. This Amendment is being filed to amend the
Registration Statement to include opinions of counsel supporting the tax
consequences of the reorganization of certain of the portfolios of The
Emerald Funds into corresponding funds of the Trust. The opinions of
counsel are filed herewith pursuant to an undertaking made by the Trust in
its Registration Statement.
<PAGE>
Nations Institutional Reserves
(formerly The Capitol Mutual Funds)
File No. 333-46717
Exhibit Index
The follwing exhibits are filed herewith as part of this Amendment No. 1 to
the Registration Statement.
Exhibit
Number Description
12(a) Opinion and Consent of Morrison & Foerster LLP
supporting the matters and consequences to shareholders
as to the Acqusition of The Emerald Funds' Treasury
Advantage Institutional Fund.
12(b) Opinion and Consent of Morrison & Foerster LLP
supporting the tax matters and consequences to
shareholders as to the Acqusition of The Emerald Funds'
Prime Advantage Institutional Fund.
<PAGE>
[MORRISON & FOERSTER LLP LETTERHEAD]
May 15, 1998
Nations Institutional Reserves
Corporate Secretary
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Emerald Funds
3435 Stelzer Road
Columbus, Ohio 43219
Re: Reorganization of the Nations Treasury Reserves Fund and the
Emerald Treasury Advantage Institutional Fund
Ladies and Gentlemen:
We have acted as special counsel to Nations Institutional Reserves, a
Massachusetts business trust ("Nations Fund"), in connection with that certain
Agreement and Plan of Reorganization, dated March 25, 1998 (the "Agreement"), by
and between Nations Fund and Emerald Funds, a Massachusetts business trust
("Emerald Funds"). Pursuant to the Agreement, the Nations Treasury Reserve Fund
(the "Acquiring Fund"), a separate portfolio of Nations Fund, shall acquire all
of the Fund Assets and assume the Liabilities of the Emerald Treasury Advantage
Institutional Fund (the "Acquired Fund"), a separate portfolio of Emerald Funds
(the "Reorganization").
The Reorganization is described in the Combined Proxy
Statement/Prospectus (the "Proxy/Prospectus") of Nations Fund and Emerald Funds,
and the appendices thereto, as filed on Registration Statement Form N-14 with
the SEC on February 23, 1998 (File no. 333-46717), as amended from time to time
through the date hereof. Unless otherwise indicated, capitalized terms not
defined herein shall have the meanings ascribed to them (or defined by
reference) in the certificates delivered to us by Nations Fund, for itself and
on behalf of the Acquiring Fund, and by Emerald Funds, for itself and on behalf
of the Acquired Fund (together, the "Certificates of Representations").
You have requested our opinion as to certain federal income tax
consequences regarding the Reorganization. This opinion is solely for the
benefit of the Acquiring Fund, the Acquired Fund and their respective
shareholders, and may not be relied upon by, nor may copies be delivered to,
other person without our prior written consent.
<PAGE>
Nations Institutional Reserves
The Emerald Funds
Page Two
May 15, 1998
In our capacity as special counsel to Nations Fund and for purposes of
rendering this opinion, we have examined and relied upon, with your consent: (i)
the Agreement, (ii) the Certificates of Representations, (iii) the
Proxy/Prospectus, and (iv) such other documents we considered relevant to our
analysis. We have assumed that all parties to the Agreement and to any other
documents examined by us have acted, and will act, in accordance with the terms
of the Agreement and such other documents without waiver of material terms or
conditions set forth therein. In our examination of documents, we have assumed
the authenticity of original documents, the accuracy of copies, the genuineness
of signatures, and the legal capacity of signatories.
Furthermore, we have assumed that all of the representations in the
Agreement and the Certificates of Representations are true and complete in all
material respects, and that the Acquiring Fund and the Acquired Fund have been
and will be operated and maintained consistently with such representations. We
have not independently verified such representations. While we have reviewed
such representations to ensure that they appear reasonable, we have no assurance
that these expectations will ultimately prove to be accurate. We also note that
the tax consequences addressed herein may depend upon the actual occurrence of
events in the future, which events may or may not be consistent with such
representations. To the extent the facts differ from those relied on and assumed
herein, our opinion should not be relied upon.
Our opinion below is based on existing law as contained in the Code and
the Treasury Regulations, administrative pronouncements of the Internal Revenue
Service ("IRS"), and court decisions as of the date hereof. The provisions of
the Code and the Treasury Regulations, IRS administrative pronouncements and
caselaw upon which this opinion is based could be changed at any time, perhaps
with retroactive effect. We undertake no obligation to update this opinion, or
to ascertain after the date hereof whether circumstances occurring after such
date may affect the conclusions set forth herein. Furthermore, our opinion
represents only our best judgment of how a court would conclude if presented
with the issues addressed herein and is not binding upon either the IRS or any
court. Hence, there can be no assurance that the IRS will not challenge or that
the courts will agree with our conclusions.
Our opinion relates solely to the tax consequences of the
Reorganization under the federal income tax laws of the United States, and we
express no opinion (and no opinion should be inferred) regarding the tax
consequences of the Reorganization under the laws of any other jurisdiction.
This opinion addresses only the specific issues set forth below, and does not
address any other tax consequences that may result from the Reorganization or
any other transaction (including any transaction undertaken in connection with
the Reorganization).
This opinion may not be applicable to certain classes of Acquired Fund
shareholders, including securities dealers, foreign persons and persons who
acquired their stock pursuant to the exercise of employee stock options or
rights or otherwise as compensation.
On the basis of, and subject to the foregoing, and in reliance upon the
representations described above, we are of the opinion that:
(1) The Reorganization will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and the Acquiring Fund and the Acquired
Fund will each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, in respect of the Reorganization.
<PAGE>
Nations Institutional Reserves
The Emerald Funds
Page Three
May 15, 1998
(2) No gain or loss will be recognized by the Acquired Fund upon the
transfer of its assets and liabilities to the Acquiring Fund solely in exchange
for the Acquiring Fund Shares.
(3) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets and assumption of the stated liabilities of the Acquired
Fund solely in exchange for the Acquiring Fund Shares.
(4) The basis of the Acquired Fund's assets received by the Acquiring
Fund pursuant to the Reorganization will be the same as the basis of those
assets in the hands of the Acquired Fund immediately prior to the
Reorganization.
(5) The holding period of the Acquired Fund's assets in the hands of
the Acquiring Fund will include the period for which such assets have been held
by the Acquired Fund.
(6) No gain or loss will be recognized by the Acquired Fund on the
distribution to its shareholders of the Acquiring Fund Shares to be received by
the Acquired Fund in the Reorganization.
(7) No gain or loss will be recognized by the shareholders of the
Acquired Fund upon their receipt of the Acquiring Fund Shares in exchange for
such shareholders' Acquired Fund Shares.
(8) The basis of the Acquiring Fund Shares received by the shareholders
of the Acquired Fund will be the same as the basis of the Acquired Fund Shares
surrendered by such shareholders pursuant to the Reorganization.
(9) The holding period for the Acquiring Fund Shares received by the
Acquired Fund shareholders will include the period during which such
shareholders held the Acquired Fund Shares surrendered therefor, provided that
such Acquired Fund Shares are held as a capital asset in the hands of the
Acquired Fund shareholders on the date of the exchange.
(10) The Acquiring Fund will succeed to and take into account the tax
attributes described in Section 381(c) of the Code of the Acquired Fund as of
the Closing Date, subject to the conditions and limitations specified in the
Code.
Very truly yours,
/s/ Morrison & Foerster LLP
Morrison & Foerster LLP
<PAGE>
[MORRISON & FOERSTER LLP LETTERHEAD]
May 22, 1998
Nations Institutional Reserves
Corporate Secretary
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Emerald Funds
3435 Stelzer Road
Columbus, Ohio 43219
Re: Reorganization of the Nations Money Market Reserves Fund and
the Emerald Prime Advantage Institutional Fund
Ladies and Gentlemen:
We have acted as special counsel to Nations Institutional Reserves, a
Massachusetts business trust ("Nations Fund"), in connection with that certain
Agreement and Plan of Reorganization, dated March 25, 1998 (the "Agreement"), by
and between Nations Fund and Emerald Funds, a Massachusetts business trust
("Emerald Funds"). Pursuant to the Agreement, the Nations Money Market Reserves
Fund (the "Acquiring Fund"), a separate portfolio of Nations Fund, shall acquire
all of the Fund Assets and assume the Liabilities of the Emerald Prime Advantage
Institutional Fund (the "Acquired Fund"), a separate portfolio of Emerald Funds
(the "Reorganization").
The Reorganization is described in the Combined Proxy
Statement/Prospectus (the "Proxy/Prospectus") of Nations Fund and Emerald Funds,
and the appendices thereto, as filed on Registration Statement Form N-14 with
the SEC on February 23, 1998 (File no. 333-46717), as amended from time to time
through the date hereof. Unless otherwise indicated, capitalized terms not
defined herein shall have the meanings ascribed to them (or defined by
reference) in the certificates delivered to us by Nations Fund, for itself and
on behalf of the Acquiring Fund, and by Emerald Funds, for itself and on behalf
of the Acquired Fund (together, the "Certificates of Representations").
You have requested our opinion as to certain federal income tax
consequences regarding the Reorganization. This opinion is solely for the
benefit of the Acquiring Fund, the Acquired Fund and their respective
shareholders, and may not be relied upon by, nor may copies be delivered to, any
other person without our prior written consent.
<PAGE>
Nations Institutional Reserves
The Emerald Funds
May 22, 1998
Page Two
In our capacity as special counsel to Nations Fund and for purposes of
rendering this opinion, we have examined and relied upon, with your consent: (i)
the Agreement, (ii) the Certificates of Representations, (iii) the
Proxy/Prospectus, and (iv) such other documents we considered relevant to our
analysis. We have assumed that all parties to the Agreement and to any other
documents examined by us have acted, and will act, in accordance with the terms
of the Agreement and such other documents without waiver of material terms or
conditions set forth therein. In our examination of documents, we have assumed
the authenticity of original documents, the accuracy of copies, the genuineness
of signatures, and the legal capacity of signatories.
Furthermore, we have assumed that all of the representations in the
Agreement and the Certificates of Representations are true and complete in all
material respects, and that the Acquiring Fund and the Acquired Fund have been
and will be operated and maintained consistently with such representations. We
have not independently verified such representations. While we have reviewed
such representations to ensure that they appear reasonable, we have no assurance
that these expectations will ultimately prove to be accurate. We also note that
the tax consequences addressed herein may depend upon the actual occurrence of
events in the future, which events may or may not be consistent with such
representations. To the extent the facts differ from those relied on and assumed
herein, our opinion should not be relied upon.
Our opinion below is based on existing law as contained in the Code and
the Treasury Regulations, administrative pronouncements of the Internal Revenue
Service ("IRS"), and court decisions as of the date hereof. The provisions of
the Code and the Treasury Regulations, IRS administrative pronouncements and
caselaw upon which this opinion is based could be changed at any time, perhaps
with retroactive effect. We undertake no obligation to update this opinion, or
to ascertain after the date hereof whether circumstances occurring after such
date may affect the conclusions set forth herein. Furthermore, our opinion
represents only our best judgment of how a court would conclude if presented
with the issues addressed herein and is not binding upon either the IRS or any
court. Hence, there can be no assurance that the IRS will not challenge or that
the courts will agree with our conclusions.
Our opinion relates solely to the tax consequences of the
Reorganization under the federal income tax laws of the United States, and we
express no opinion (and no opinion should be inferred) regarding the tax
consequences of the Reorganization under the laws of any other jurisdiction.
This opinion addresses only the specific issues set forth below, and does not
address any other tax consequences that may result from the Reorganization or
any other transaction (including any transaction undertaken in connection with
the Reorganization).
<PAGE>
Nations Institutional Reserves
The Emerald Funds
May 22, 1998
Page Three
This opinion may not be applicable to certain classes of Acquired Fund
shareholders, including securities dealers, foreign persons and persons who
acquired their stock pursuant to the exercise of employee stock options or
rights or otherwise as compensation.
No opinion is expressed as to any transactions other than the
Reorganization as described in the Agreement or as to any transactions
whatsoever, including the Reorganization, if all the transactions described in
the Agreement are not consummated in accordance with the terms of such Agreement
and without waiver or breach of any material provision thereof, or if all of the
representations, warranties, statements and assumptions upon which we relied are
not true and accurate at all relevant times. In the event any one of the
statements, representations, warranties or assumptions upon which he have relied
to issue this opinion is incorrect, our opinion might be adversely affected and
may not be relied upon.
On the basis of, and subject to the foregoing, and in reliance upon the
representations described above, we are of the opinion that:
(1) The Reorganization will constitute a "reorganization" within the
meaning of Section 368(a) of the Code, and the Acquiring Fund and the Acquired
Fund will each be a "party to a reorganization," within the meaning of Section
368(b) of the Code, in respect of the Reorganization.
(2) No gain or loss will be recognized by the Acquired Fund upon the
transfer of its assets and liabilities to the Acquiring Fund solely in exchange
for the Acquiring Fund Shares.
(3) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets and assumption of the stated liabilities of the Acquired
Fund solely in exchange for the Acquiring Fund Shares.
(4) The basis of the Acquired Fund's assets received by the Acquiring
Fund pursuant to the Reorganization will be the same as the basis of those
assets in the hands of the Acquired Fund immediately prior to the
Reorganization.
(5) The holding period of the Acquired Fund's assets in the hands of
the Acquiring Fund will include the period for which such assets have been held
by the Acquired Fund.
<PAGE>
Nations Institutional Reserves
The Emerald Funds
May 22, 1998
Page Four
(6) No gain or loss will be recognized by the Acquired Fund on the
distribution to its shareholders of the Acquiring Fund Shares to be received by
the Acquired Fund in the Reorganization.
(7) No gain or loss will be recognized by the shareholders of the
Acquired Fund upon their receipt of the Acquiring Fund Shares in exchange for
such shareholders' Acquired Fund Shares.
(8) The basis of the Acquiring Fund Shares received by the
shareholders of the Acquired Fund will be the same as the basis of the Acquired
Fund Shares surrendered by such shareholders pursuant to the Reorganization.
(9) The holding period for the Acquiring Fund Shares received by the
Acquired Fund shareholders will include the period during which such
shareholders held the Acquired Fund Shares surrendered therefor, provided that
such Acquired Fund Shares are held as a capital asset in the hands of the
Acquired Fund shareholders on the date of the exchange.
(10) The Acquiring Fund will succeed to and take into account the tax
attributes described in Section 381(c) of the Code of the Acquired Fund as of
the Closing Date, subject to the conditions and limitations specified in the
Code.
Very truly yours,
/s/ Morrison & Foerster LLP
Morrison & Foerster LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
this Registrant certifies that it meets all of the requirements for
effectiveness of this Post-Effective Amendment No. 1 to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Amendment to its Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Little Rock, State
of Arkansas on the 8th day of October, 1998.
THE CAPITOL MUTUAL FUNDS
By: *
A. Max Walker
President and Chairman of the Board
of Trustees
By: /s/ Richard H. Blank, Jr.
Richard H. Blank, Jr.
*Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933,
this Post-Effective Amendment to the Registration Statement on Form N-14 has
been signed below by the following persons in the capacities and on the date
indicated:
<TABLE>
<S> <C> <C>
SIGNATURES TITLE DATE
* President and Chairman of the Board October 8, 1998
----------------------------------
(A. Max Walker) of Trustees (Principal Executive
Officer)
* Treasurer and Vice President October 8, 1998
----------------------------------
(Richard H. Rose) (Principal Financial and Accounting
Officer)
* Trustee October 8, 1998
----------------------------------
(Edmund L. Benson, III)
* Trustee October 8, 1998
(James Ermer)
* Trustee October 8, 1998
----------------------------------
(William H. Grigg)
* Trustee October 8, 1998
----------------------------------
(Thomas F. Keller)
* Trustee October 8, 1998
(Carl E. Mundy, Jr.)
* Trustee October 8, 1998
---------------------------------
(Charles B. Walker)
* Trustee October 8, 1998
----------------------------------
(Thomas S. Word, Jr.)
* Trustee
(James B. Sommers) October 8, 1998
/s/ Richard H. Blnak, Jr.
Richard H. Blank, Jr.
*Attorney-In-Fact
</TABLE>
