SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
MAPLEWOOD INVESTMENT TRUST
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
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(1) Amount Previously Paid:
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THE CAROLINASFUND
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NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
June 12, 1998
To the Shareholders:
A Special Shareholders' Meeting of the CAROLINASFUND (the "CAROLINASFUND"), a
series of the Maplewood Investment Trust, will be held at the offices of North
Carolina Shareholder Services, LLC, 107 North Washington Street, Rocky Mount,
North Carolina, on Monday, June 29, 1998, at 10:00 a.m. for the following
purposes:
(1) To consider and act upon an Agreement and Plan of
Reorganization (the "Plan") providing for the transfer of all
of the assets and liabilities of the CAROLINASFUND to a series
of The Nottingham Investment Trust II, also called the
CAROLINASFUND (the "NEW CAROLINASFUND"), in exchange for
shares of the NEW CAROLINASFUND and the distribution of the
shares to the shareholders of the CAROLINASFUND and the
subsequent liquidation and termination of the CAROLINASFUND. A
vote for approval of the Plan will authorize the
CAROLINASFUND, as the sole shareholder of the NEW
CAROLINASFUND, to approve (a) the proposed Investment Advisory
Agreement for the NEW CAROLINASFUND with Morehead Capital
Advisors, LLC; (b) the proposed Sub-Advisory Agreement with
Capital Investment Counsel; and (c) the proposed plan of
distribution.
(2) To transact such other business as may properly come before
the meeting or any adjournment of the meeting.
The Board of Trustees has fixed the close of business on May 15, 1998 as the
record date for determining those shareholders who will be entitled to notice
of, and to vote at, the meeting and any adjournment or adjournments thereof.
WHETHER OR NOT YOU CAN ATTEND THE MEETING IN PERSON, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE POSTAGE PAID RETURN
ENVELOPE ENCLOSED FOR YOUR USE.
By order of the Board of Trustees
John F. Splain
Secretary
Rocky Mount, North Carolina
June 12, 1998
<PAGE>
PROXY STATEMENT DATED JUNE 10, 1998
ACQUISITION OF THE ASSETS OF
the CAROLINASFUND, A SERIES OF
the MAPLEWOOD INVESTMENT TRUST,
BY AND IN EXCHANGE FOR SHARES OF
the NEW CAROLINASFUND, A SERIES OF
the NOTTINGHAM INVESTMENT TRUST II
P. O. DRAWER 4365
ROCKY MOUNT, NORTH CAROLINA 27803-0365
(919-972-3165X264)
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This Proxy Statement relates to the proposed transfer of all the assets and
liabilities of the CAROLINASFUND (the "CAROLINASFUND"), a series of the
MAPLEWOOD INVESTMENT TRUST, to a new series of The NOTTINGHAM INVESTMENT TRUST
II, also called the CAROLINASFUND (the "NEW CAROLINASFUND"), in exchange for
shares of the NEW CAROLINASFUND. Following such transfer, shares of the NEW
CAROLINASFUND will be distributed to shareholders of the CAROLINASFUND in
liquidation of the CAROLINASFUND and the CAROLINASFUND will be terminated. As a
result of the proposed transaction, each shareholder of the CAROLINASFUND will
receive the same number of shares of the NEW CAROLINASFUND as he or she held of
the CAROLINASFUND having an aggregate net asset value equal to the aggregate net
asset value of such shareholder's existing shares of the CAROLINASFUND.
Both the CAROLINASFUND and the NEW CAROLINASFUND are mutual funds having the
same investment objective, which is to provide long-term capital growth by
investing primarily in the common stocks of publicly-held companies
headquartered in North and South Carolina. Current income is of secondary
importance.
This Proxy Statement will be first sent to shareholders on or about June 12,
1998.
<PAGE>
SUMMARY
This summary of certain information contained in this Proxy Statement is
qualified by reference to the more complete information contained elsewhere in
this Proxy Statement, the Agreement and Plan of Reorganization attached to this
Proxy Statement as Exhibit A, and the prospectus of the NEW CAROLINASFUND, a
copy of which is being delivered with this Proxy Statement.
Proposed Transaction. The Board of Trustees of the MAPLEWOOD INVESTMENT TRUST,
including a majority of the trustees who are not "interested persons" (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")), has
approved an Agreement and Plan of Reorganization (the "Plan") providing for the
transfer of all of the assets and liabilities of the CAROLINASFUND to the NEW
CAROLINASFUND in exchange for shares of the NEW CAROLINASFUND based upon the
factors set forth in "Reasons for the Reorganization" below. (The proposed
transaction is referred to in this Proxy Statement as the "Reorganization" and
the CAROLINASFUND and the NEW CAROLINASFUND are sometimes collectively referred
to as the "Funds".) In connection with the Reorganization, the NEW CAROLINASFUND
shares will be distributed to shareholders in liquidation of the CAROLINASFUND,
and the CAROLINASFUND will be terminated. As a result of the Reorganization,
each shareholder of the CAROLINASFUND will cease to be a shareholder of the
CAROLINASFUND and will become the owner of the same number of full and
fractional NEW CAROLINASFUND shares having an aggregate net asset value equal to
the aggregate net asset value of the shareholder's shares of the CAROLINASFUND
as of the close of business on the business day preceding the closing date of
the Reorganization. For the reasons set forth below under "Reasons for the
Reorganization," the Board of Trustees of the MAPLEWOOD INVESTMENT TRUST,
including a majority of the non-interested trustees, has concluded that the
Reorganization would be in the best interests of the shareholders of the
CAROLINASFUND and will not dilute their interests, and, therefore, recommends
approval of the Plan. Approval of the Plan will require the affirmative vote of
the holders of at least a majority of the outstanding shares of the
CAROLINASFUND entitled to vote on the matter.
Tax Consequences. The Reorganization is conditioned upon receipt of an opinion
of Poyner & Spruill, L.L.P., counsel to the NEW CAROLINASFUND, that no gain or
loss will be recognized by the CAROLINASFUND or the CAROLINASFUND's shareholders
for Federal income tax purposes as a result of the Reorganization; that the
holding period and aggregate tax basis of the NEW CAROLINASFUND shares received
by a shareholder of the CAROLINASFUND will be the same as the holding period and
aggregate tax basis of the shareholder's CAROLINASFUND shares; and that the
holding period and tax basis of the CAROLINASFUND assets in the hands of the NEW
CAROLINASFUND as a result of the Reorganization will be the holding period and
tax basis of those assets in the CAROLINASFUND's hands immediately prior to the
Reorganization. For further information about the tax consequences of the
Reorganization, see "Information About the Reorganization - Tax Considerations."
Investment Objectives, Policies and Restrictions. The investment objective of
both the CAROLINASFUND and the NEW CAROLINASFUND is to provide long-term capital
growth by investing primarily in common stocks and other equity securities of
publicly traded companies headquartered in North and South Carolina. Current
income is of secondary importance. In seeking to achieve these investment
objectives, both Funds are guided by the same investment policies and
restrictions.
Management of the NEW CAROLINASFUND. The management of the NEW CAROLINASFUND's
business and affairs will be the responsibility of the Board of Trustees of The
Nottingham Investment Trust II. The non-interested members of the Board of
Trustees of the Maplewood Investment Trust are not the same individuals serving
as the non-interested Trustees of The Nottingham Investment Trust II. The
portfolio of the NEW CAROLINASFUND will be managed by Morehead Capital Advisors,
LLC, 1712 East Boulevard, Charlotte, North Carolina ("Morehead"), the same
entity serving as investment advisor to the CAROLINASFUND since its inception on
January 3, 1995. Morehead is a North Carolina limited liability company
established in 1994 for the purpose of managing the CAROLINASFUND.
Capital Investment Counsel ("CIC") will become Sub-Advisor to the NEW
CAROLINASFUND. Richard K. Bryant, a Trustee of The Nottingham Investment Trust
II and control person of the proposed Distributor to the NEW CAROLINASFUND,
controls CIC. Morehead will compensate CIC directly out of its compensation,
based upon an agreement between the firms.
The terms of the investment advisory agreement for the NEW CAROLINASFUND are
identical to the terms of the investment advisory agreement for the
CAROLINASFUND except for the commencement date. The existing agreement allows
for Morehead to utilize a Sub-Advisor, although prior to the formation date of
the NEW CAROLINASFUND a Sub-Advisor has not been formally utilized.
Advisory Fees and Operating Expenses. The CAROLINASFUND pays compensation to
Morehead at the annual rate of 1.0% of the daily average net assets of the Fund.
The same advisory fee will apply to the NEW CAROLINASFUND. For the fiscal year
ended February 28, 1998, Morehead voluntarily waived its fee and reimbursed a
portion of the CAROLINASFUND's operating expenses in order to limit total Fund
operating expenses to 1.75% of the Fund's Institutional Shares' and 2.25% of the
Fund's Investor Shares' average daily net assets, respectively. Absent such fee
waiver and expense reimbursements by the Advisor, the Advisor's fee would have
been 1% and total operating expenses would have been 3.61% of the Institutional
Shares and 4.12% of the Investor Shares for the fiscal year ended February 28,
1998. Morehead currently intends to waive its fee and reimburse the NEW
CAROLINASFUND to the extent necessary to limit total operating expenses
(exclusive of interest, taxes, brokerage commissions, sales charges and
extraordinary expenses) to 1.75% of the Fund's Institutional Shares' and 2.25%
of the Fund's Investor Shares' average daily net assets, respectively. There is
no assurance that any voluntary fee waivers or expense reimbursements will
continue in the current or future fiscal years, and expenses of the NEW
CAROLINASFUND may exceed the existing voluntary limitations.
Administrator. Countrywide Fund Services, Inc., PO Box 5354, Cincinnati, Ohio
45201 ("Countrywide") provides administrative, transfer agent, accounting and
recordkeeping services to the CAROLINASFUND. The CAROLINASFUND pays Countrywide
a fee for administrative services at the annual rate of 0.15% of average daily
net assets, subject to a minimum fee of $1,000 per month. Countrywide receives a
monthly fee of $2,000 for calculating daily the net asset value per share and
maintaining the Fund's books and records. For transfer agent services, the
CAROLINASFUND pays Countrywide a fee payable monthly at an annual rate of $17
per account, with a minimum fee of $1,000 per month for each class of shares.
The Nottingham Company, PO Drawer 69, Rocky Mount, North Carolina 27802 ("TNC")
will provide administrative and accounting services to the NEW CAROLINASFUND.
North Carolina Shareholder Services, LLC, PO Box 4365, Rocky Mount, North
Carolina 27803 ("NCSS") will provide transfer agent, shareholder recordkeeping
and shareholder servicing services to the NEW CAROLINASFUND under a sub-contract
relationship with TNC on behalf of the NEW CAROLINASFUND.
The NEW CAROLINASFUND will pay TNC a fee for administrative services at the
annual rate of 0.15% of average daily net assets, not subject to a minimum
monthly fee. TNC will receive a base monthly fee of $1,750 plus $750 per
separate class of shares for calculating daily the net asset value per share and
maintaining the Fund's books and records. For transfer agent services, the NEW
CAROLINASFUND will pay TNC, and TNC will in turn sub-contract to NCSS, a fee
payable monthly at an annual rate of $15 per account, with a minimum fee of $750
per month for each class of shares.
Total fees paid to Countrywide for fiscal year 1998 were approximately $60,000.
Assuming average net assets in the NEW CAROLINASFUND of $5 million, the total
fees paid to TNC for fiscal year 1999 will be approximately $55,000.
In 1995 TNC and its controlling shareholder, Frank P. Meadows III, agreed to
settle administrative proceedings instituted by the SEC, without admitting or
denying the SEC's claims, relating to alleged violation of federal securities
laws relating to fund accounting and procedure in the administration of other
investment companies administered by TNC between 1991 and 1993. The SEC released
the settlement in 1997. Pursuant to the settlement, Mr. Meadows and TNC were
prohibited from future violations of federal securities laws, were assessed
civil monetary penalties, and Mr. Meadows was directed to not be associated with
any investment company, investment advisor, broker, dealer or transfer agent,
with the right to reapply after a period of 18 months. This settlement did not
restrict TNC from continuing to provide administrative services to investment
companies or preclude Mr. Meadows from being associated with TNC. The Board of
Trustees of The Nottingham Investment Trust II has reviewed these issues on a
number of occasions and has taken all measures deemed appropriate, including
renewal of existing contracts with TNC.
Distributor. Capital Investment Group, Inc., PO Box 32249, Raleigh, North
Carolina 27622 will serve as Distributor of the NEW CAROLINASFUND. Richard K.
Bryant, a Trustee of The Nottingham Investment Trust II, controls the
Distributor, and Capital Investment Counsel, proposed Sub-Advisor to the NEW
CAROLINASFUND.
Purchase Price, Redemption Price, Dividends and Distributions. Shares of the
CAROLINASFUND are sold continuously at net asset value, plus a maximum 3.5%
sales charge for the Investor Shares, and without a sales charge for the
Institutional Shares, as will shares of the NEW CAROLINASFUND. The minimum
initial investment in the CAROLINASFUND is $2,500, $1,000 for IRAs. The same
minimums will apply to the NEW CAROLINASFUND.
Shares of both the CAROLINASFUND and the NEW CAROLINASFUND may be redeemed at
their respective net asset values per share.
It is the practice of the CAROLINASFUND and will be the practice of the NEW
CAROLINASFUND generally to pay dividends from net investment income, if any,
quarterly and to make distributions from any net realized capital gains,
annually. Dividends and capital gains distributions are automatically reinvested
in additional shares of the same class of the CAROLINASFUND, unless and until
the shareholder elects to receive them in cash, and the same practice will apply
to the NEW CAROLINASFUND.
The Investor Shares of the CAROLINASFUND are subject to 12b-1 distribution fees
of up to 0.50% of the average daily net assets. The Investor Shares of the NEW
CAROLINASFUND will be subject to the same level of distribution fees. The
Institutional Shares are not subject to 12b-1 fees in either the existing
CAROLINASFUND or the NEW CAROLINASFUND.
Risk Factors. Because the investment objectives, policies and restrictions of
the CAROLINASFUND and the NEW CarolinasFund are identical, an investment in the
NEW CAROLINASFUND involves the same investment risks that apply to the
CAROLINASFUND. These investment risks, in general, are those typically
associated with concentrating in North and South Carolina equity securities. See
"Information About the Funds" below.
REASONS FOR THE REORGANIZATION
The CAROLINASFUND has been a series of the Maplewood Investment Trust since its
organization in 1994. The Maplewood Investment Trust consisted, at that time, of
five series. As such, the Trust was able to operate efficiently, through the
ability to share certain costs of operation and registration. Over the past two
years, three of the series in the Trust have either dissolved and liquidated due
to lack of assets, or elected to reorganize outside of the Maplewood Investment
Trust. In late 1997, Morehead began to search for an acceptable solution, to
keep the expenses for the CAROLINASFUND at an acceptable level for the benefit
of all CAROLINASFUND shareholders.
In 1996, the Maplewood Investment Trust voted to change its Administrator and
Transfer Agent, largely due to promised fee and expense savings. In part because
of the reduction in number of series in the Trust, these savings have not
materialized. Given the reduction in number of series in the Maplewood
Investment Trust to share these expenses, the potential harm to shareholders of
CAROLINASFUND has become potentially detrimental to the best interests of
CAROLINASFUND shareholders.
Capital Investment Counsel, which will serve as Sub-Advisor to the NEW
CAROLINASFUND, is also the investment advisor to the Capital Value Fund. The
Capital Value Fund was organized as the initial series in The NOTTINGHAM
INVESTMENT TRUST II in 1990. TNC and NCSS provide administrative and transfer
agent services to this Fund, as applicable. For efficiency of administration and
operations, Morehead and CIC recommended to the Board of Trustees of both Trusts
that a reorganization would be appropriate, economical, and desirable.
The Reorganization has been considered by the Board of Trustees of The
NOTTINGHAM INVESTMENT TRUST II on behalf of the NEW CAROLINASFUND and the Board
of Trustees of the MAPLEWOOD INVESTMENT TRUST on behalf of the CAROLINASFUND. In
determining whether to recommend approval of the Reorganization to shareholders
of the CAROLINASFUND, the Board of Trustees (including a majority of the
non-interested trustees, with the advice and assistance of counsel) carefully
considered information they deemed necessary to determine that the
Reorganization would not result in the dilution of, and would be in the best
interests of the shareholders of the CAROLINASFUND. The Board of Trustees of
Maplewood gave substantial weight to the following representations of Advisors
and others: (1) Mr. Bryant's representations to the Trustees regarding the
operations of Nottingham Investment Trust II; (2) that the investment
objectives, policies and restrictions of both Funds are identical; (3) that the
investment advisor and the investment advisory agreements are identical; (4)
that the reorganization will be tax-free for federal income tax purposes; (5)
that Morehead has agreed to waive its advisory fee and reimburse expenses to
maintain the NEW CAROLINASFUND's expense ratio at the same level as the current
expense ratio; (6) that the Statement of Assets and Liabilities of the NEW
CAROLINASFUND will be reviewed by Deloitte & Touche, LLP to insure compliance
with all aspects of a tax free reorganization of the CAROLINASFUND and the NEW
CAROLINASFUND, and that the net assets and net asset value of the NEW
CAROLINASFUND will be identical to the CAROLINASFUND on the Closing Date; and
(7) that the anticipated expenses of the Reorganization will be borne by the
Morehead and/or TNC.
In reaching the decision to recommend that the shareholders of the CAROLINASFUND
vote to approve the Reorganization, the Board of Trustees of Maplewood
Investment Trust concluded that the participation of the CAROLINASFUND in the
Reorganization will not dilute its shareholders' interests.
INFORMATION ABOUT THE REORGANIZATION
The following summary of the Agreement and Plan of Reorganization does not
purport to be complete, and is subject in all respects to the provisions of, and
is qualified in its entirety by reference to, the Plan, a copy of which is
annexed hereto as Exhibit A.
Method of Carrying Out Reorganization. If the shareholders of the CAROLINASFUND
approve the Plan, the Reorganization will be consummated promptly after the
various conditions to the obligations of each of the parties are satisfied. (See
"Conditions Precedent to Closing.") The date of consummation of the
Reorganization (the "Closing Date") will be June 29, 1998 or such other date as
is agreed to by the CAROLINASFUND and the NEW CAROLINASFUND, subject to
termination by either party if the Closing Date does not occur on or before June
30, 1998.
On the Closing Date, the CAROLINASFUND will transfer substantially all of its
assets in exchange for the assumption of all of its liabilities by the NEW
CAROLINASFUND and for an identical number of shares of the NEW CAROLINASFUND
having an aggregate net asset value equal to the aggregate value of the
CAROLINASFUND's assets transferred to the NEW CAROLINASFUND as of the close of
business on the New York Stock Exchange on the business day next preceding the
Closing Date (the "Calculation Date"). The stock transfer books of the
CAROLINASFUND will be permanently closed as of the close of business on the
Calculation Date and only redemption requests received in proper form prior to
the close of trading on the New York Stock Exchange on the Calculation Date will
be accepted by the CAROLINASFUND.
Redemption requests thereafter received by the CAROLINASFUND shall be deemed to
be redemption requests for shares of the NEW CAROLINASFUND to be distributed to
the former shareholders of the CAROLINASFUND.
Simultaneously with the closing or as soon after the Closing Date as is
practicable, the CAROLINASFUND will distribute pro rata, based on each class of
shares, to the shareholders of the CAROLINASFUND of record, determined as of the
close of business on the Calculation Date, the NEW CAROLINASFUND shares received
by the CAROLINASFUND in complete liquidation of the CAROLINASFUND.
Conditions Precedent to Closing. The obligation of the CAROLINASFUND to transfer
its assets to the NEW CAROLINASFUND pursuant to the Plan is subject to the
satisfaction of certain conditions precedent, including performance by the NEW
CAROLINASFUND of all the acts and undertakings required to be performed under
the Plan, the receipt of certain documents from the NEW CAROLINASFUND, the
receipt of opinion of counsel to the NEW CAROLINASFUND, and the receipt of all
consents, orders and permits necessary to consummate the Reorganization. The NEW
CAROLINASFUND's obligation to consummate the Reorganization is subject to the
satisfaction of certain conditions precedent, including the performance by the
CAROLINASFUND of all acts and undertakings to be performed under the Plan, the
receipt of certain documents from the CAROLINASFUND, and the receipt of all
consents, orders and permits necessary to consummate the Reorganization. The
obligations of both parties are subject to the receipt of approval and
authorization of the Plan by vote of not less than a majority of the votes
represented by the CAROLINASFUND's shares outstanding and entitled to vote. If
the Plan is not approved by shareholders, the Reorganization will not be
consummated, and the Trustees will consider various courses of action, including
continuing to operate the CAROLINASFUND as it presently is operated.
Expenses of the Transaction. Morehead and/or TNC will bear all of the expenses
of the Reorganization.
Tax Considerations. The consummation of the Reorganization is subject to the
receipt of a favorable opinion from counsel to the NEW CAROLINASFUND in form,
scope and substance satisfactory to the CAROLINASFUND and the NEW CAROLINASFUND
to the effect that (i) the exchange contemplated by the Plan constitutes a
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended, and the regulations promulgated thereunder; (ii) no gain or
loss will be recognized by the CAROLINASFUND or the NEW CAROLINASFUND as a
result of the Reorganization; (iii) no gain or loss will be recognized by the
CAROLINASFUND shareholders upon their receipt, in the liquidation, of the NEW
CAROLINASFUND shares; (iv) the tax basis of the NEW CAROLINASFUND shares
received by the CAROLINASFUND shareholders will be the same as the tax basis of
the CAROLINASFUND shares exchanged therefor; (v) the holding period of the NEW
CAROLINASFUND shares received by CAROLINASFUND shareholders will include the
period during which they held the CAROLINASFUND shares exchanged therefor,
provided such CAROLINASFUND shares were held as a capital asset at the time of
the exchange; (vi) the tax basis of the assets of the CAROLINASFUND in the hands
of the NEW CAROLINASFUND will be the same as the basis of such assets in the
hands of the CAROLINASFUND immediately prior to the transfer; (vii) the holding
period of the assets of the CAROLINASFUND in the hands of the NEW CAROLINASFUND
will include the holding period of the assets in the hands of the CAROLINASFUND
immediately prior to the transaction. The opinion will be based upon certain
representations of the CAROLINASFUND and the NEW CAROLINASFUND. No ruling has
been sought from the Internal Revenue Service as to federal income tax
consequences of the Reorganization, and the opinion of counsel will not be
binding on the Internal Revenue Service or any court.
Shareholders of the CAROLINASFUND should consult their own tax advisors
regarding the effect, if any, of the proposed Reorganization in light of their
individual circumstances. Since the foregoing discussion only relates to the
Federal income tax consequences of the Reorganization, shareholders of the
CAROLINASFUND should also consult their own tax advisors as to the state and
local tax consequences, if any, of the Reorganization.
Description of the NEW CAROLINASFUND Shares. Shares of the NEW CAROLINASFUND
will be issued to the CAROLINASFUND's shareholders in accordance with the
procedures under the Plan as described above. Each share will be fully paid and
non-assessable when issued and transferable without restrictions and will have
no preemptive or conversion rights. As shareholders of the NEW CAROLINASFUND,
shareholders of the CAROLINASFUND will have the same privileges, voting rights
and rights upon dissolution with respect to the NEW CAROLINASFUND as they
currently have with respect to the CAROLINASFUND.
Capitalization. The capitalization of the NEW CAROLINASFUND will be the same as
that of the CAROLINASFUND as of the date of the Reorganization giving effect to
the proposed acquisition of assets at net asset value on that date, having an
aggregate net asset value equal to the aggregate net asset value of the
CAROLINASFUND'S shares.
Indemnification/Insurance. The Plan provides that Morehead and certain of its
members, jointly and severally (collectively "Indemnifying Party"), will
indemnify each trustee of Maplewood to the fullest extent permissible under law.
The Plan also provides that if the insurance policy currently providing
liability insurance for the Maplewood Trustees terminates for any reason within
one year of the Closing Date, the Indemnifying Party will procure an insurance
policy providing insurance at the current scope and amount of coverage for such
Trustees with respect to any indemnification by the Indemnifying Party pursuant
to the Plan for a term ending on the first anniversary of the Closing Date.
INFORMATION ABOUT THE FUNDS
Both Funds are diversified, open-end investment companies. The investment
objectives, policies and restrictions of the Funds, and the risk factors
relating thereto, are identical and are described in detail under the captions
"Investment Objectives and Policies" in their respective prospectuses. The
financial highlights of the CAROLINASFUND as of February 28, 1998 are also
included in the NEW CAROLINASFUND Prospectus.
The expense information relating to both Funds is described under "Fee Table"
and "Management of the Fund." The nature and attributes of the shares of both
Funds are described under "Dividends, Distributions and Taxation" and
"Description of Fund Shares and Other Matters" in the NEW CAROLINASFUND
Prospectus. The tax consequences of investments in the CAROLINASFUND and the NEW
CAROLINASFUND are identical and are those described under "Dividends,
Distributions and Taxation" in the CAROLINASFUND Prospectus.
ADDITIONAL INFORMATION ABOUT THE NEW CAROLINASFUND
Additional information about the NEW CAROLINASFUND is included in its Statement
of Additional Information, which can be obtained at no charge by calling
800-525-3863. The NEW CAROLINASFUND will be subject to the information
requirements for the Securities Exchange Act of 1934 and, in accordance with
such requirements, will file proxy materials, reports and other information with
the Securities and Exchange Commission (the "SEC"). These materials can be
inspected and copied at the Public Reference Facilities maintained by the SEC at
450 Fifth Street, NW, Washington, DC 20549. Copies of such material can also be
obtained from the Public Reference Branch, office of Consumer Affairs and
Information Services, SEC, Washington, DC 20549, at prescribed rates. The SEC
also maintains a website (http:\\www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the NEW CAROLINASFUND.
ADDITIONAL INFORMATION ABOUT THE CAROLINASFUND
Reports and other information filed by the CAROLINASFUND can be inspected and
copied at the Public Reference Facilities maintained by the SEC, located at 450
Fifth Street, NW, Washington, DC 20549, and copies of such material can be
obtained from the Public Reference Branch, Office of Consumer Affairs and
Information Services, SEC, Washington, DC 20549, at prescribed rates.
VOTING INFORMATION
Proxies from the shareholders of the CAROLINASFUND are being solicited by the
Board of Trustees of the MAPLEWOOD INVESTMENT TRUST for the Special Meeting of
Shareholders to be held on June 29, 1998, at the offices of NC Shareholder
Services, LLC 107 North Washington Street, Rocky Mount, North Carolina, at 10:00
a.m.
Proxies are to be solicited by mail. Additional solicitations may be made by
telephone, facsimile or personal contact by officers, employees or agents of the
CAROLINASFUND. The costs of solicitation will be borne by Morehead and/or TNC. A
proxy may be revoked at any time before the meeting by written notice to the
CAROLINASFUND, by submitting a proxy bearing a later date, or by attending and
voting at the meeting. Unless revoked, all valid proxies will be voted in
accordance with the specification thereon or, in the absence of specification,
for approval of the Plan.
Approval of the Plan will require the affirmative vote of the holders of a
majority of the outstanding shares of the CAROLINASFUND entitled to vote
thereon. While votes to abstain and broker non-votes will count toward
establishing a quorum, they will not represent votes cast with respect to a
proposal. The Plan will be approved only if a majority of the shares are voted
in favor of the Plan. Accordingly, votes to abstain, broker non-votes and votes
against will have the same effect in determining whether the proposal is
approved.
Broker non-votes are shares held by a broker or nominee for which an executed
proxy is received by the CAROLINASFUND, but are not voted because instructions
have not been received from the beneficial owners or persons entitled to vote,
and the broker or nominee does not have discretionary voting power.
Under the Declaration of Trust of the MAPLEWOOD INVESTMENT TRUST and
Massachusetts law, shareholders of the CAROLINASFUND are not entitled to
appraisal rights and will be bound by the terms of the Plan, if approved. Any
shareholder of the CAROLINASFUND may, however, redeem his or her shares at net
asset value prior to the Closing Date.
Shareholders of the CAROLINASFUND of record at the close of business on May 15,
1998 will be entitled to vote at the special meeting or any adjournment of the
meeting. The holders of a majority of the shares outstanding at the close of
business on that date present in person or represented by proxy will constitute
a quorum for the meeting; however, as noted above, the affirmative vote of a
majority of the outstanding shares entitled to vote therein is required to
approve the Reorganization. Shareholders are entitled to one vote for each share
held and fractional votes for fractional shares held. As of May 15, 1998, as
shown on the books of the CAROLINASFUND, there were issued and outstanding
67,765 Institutional Class shares and 246,716 Investor Class shares of the
CAROLINASFUND. There were no shares of the NEW CAROLINASFUND outstanding on that
date.
In the event that a quorum is present at the meeting but sufficient votes to
approve the Plan are not received, the persons named as proxies may propose one
or more adjournments of the meeting to permit further solicitations of proxies.
Any such adjournment will require the affirmative vote of a majority of those
shares present at the meeting in person or by proxy. If a quorum is present, the
persons named as proxies will vote those proxies which they are entitled to vote
FOR the Plan in favor of such adjournment and will vote those proxies required
to vote AGAINST the Plan against any such adjournment.
The following table sets forth the name, address, number of shares and
percentage of ownership of each person who owned of record or who is known by
the CAROLINASFUND to own beneficially (i.e., possessing voting and/or investment
power) 5% or more of the CAROLINASFUND's outstanding shares at May 15, 1998.
INSTITUTIONAL CLASS
Number of Percentage of
Name and Address Shares Ownership
The Niles Stevens Trust 3,909.727 5.77%
Post Office Box 357
Myrtle Beach, SC 29578
Bellamy, Rutenberg, Copeland, 3,974.994 5.87%
Epps, Cravely, & Bowers, PA Profit
Sharing Plan and Trust
Post Office Box 357
Myrtle Beach, SC 29578
Chapin Company 401(k) Plan 3,952.997 5.83%
Post Office Box 2568
740 E. Main Street
Myrtle Beach, SC 29578
C. Blucher Eringhaus III*
IRA Rollover 7,362.815 10.86%
1565 Roswell Ave.
Charlotte, NC 28209
Robert Stowe, Jr. Foundation 8,353.450 12.33%
Post Office Box 351
Belmont, NC 28012
John O. Fairey
Marie J. Fairey JTWROS 3,952.494 5.83%
5016 Hillside Rd.
Columbia, SC 29206
Robert W. Donaldson, Jr.
IRA Account 3,670.379 5.42%
2531 Forest Dr.
Charlotte, NC 28211
Donald G. Walser
IRA Rollover 11,109.909 16.39%
1318 S. Union Rd.
Suite 6600
Gastonia, NC 28056
Broyhill Family Foundation Inc. 6,226.650 9.19%
Post Office Box 500
Golfview Park
Lenoir, NC 23645
INVESTOR CLASS
Number of Percentage of
Name and Address Shares Ownership
Midsouth Data Systems, Inc.
Retirement Trust 14,918.174 6.05%
25 Westridge Market Place
Candler, NC 28715
* Trustees and officers of the CAROLINASFUND owned 10.86% of the CAROLINASFUND
shares at May 15, 1998.
THE BOARD OF TRUSTEES, INCLUDING ALL OF THE NON-INTERESTED TRUSTEES, UNANIMOUSLY
RECOMMENDS APPROVAL OF THE PLAN.
FINANCIAL STATEMENTS AND EXPERTS
The CAROLINASFUND's annual report for the fiscal year ended February 28, 1998 is
available at no charge by calling 800-934-1012. The annual report for the fiscal
year ended February 28, 1998 has been prepared in reliance on the report of KPMG
Peat Marwick, LLP, independent accountants, given on the authority of said firm
as experts in accounting and auditing.
LEGAL MATTERS
Poyner & Spruill, L.L.P., Raleigh, North Carolina will pass upon certain legal
matters concerning the issuance of shares of the NEW CAROLINASFUND.
TRANSFER AGENT AND CUSTODIAN
Countrywide Fund Services, Inc., Cincinnati, Ohio, serves as the transfer agent
and dividend disbursing agent for the CAROLINASFUND and NC Shareholder Services,
LLC, Rocky Mount, North Carolina, will serve as the transfer agent and dividend
disbursing agent for the NEW CAROLINASFUND. The custodian for the NEW
CAROLINASFUND will be First Union National Bank of North Carolina, Charlotte,
North Carolina.
<PAGE>
AGREEMENT
and
PLAN OF REORGANIZATION
THIS AGREEMENT is made this 15th day of May, 1998, by and between the
Maplewood Investment Trust, a Massachusetts business trust on behalf of the
CAROLINASFUND series (the "CAROLINASFUND") and The Nottingham Investment Trust
II, a Massachusetts business trust, on behalf of the CAROLINASFUND series (the
"NEW CAROLINASFUND").
W I T N E S S E T H
WHEREAS, the CAROLINASFUND and the NEW CAROLINASFUND are open-end,
management investment companies; and
WHEREAS, the parties hereto desire to provide for the reorganization of
the CAROLINASFUND through the acquisition by the NEW CAROLINASFUND of all the
assets and liabilities of the CAROLINASFUND, in exchange solely for shares of
the NEW CAROLINASFUND thereafter to be distributed to the shareholders of the
CAROLINASFUND in complete liquidation of the CAROLINASFUND; and
WHEREAS, this Agreement is intended to be and is adopted as a plan of
reorganization and liquidation within the meaning of section 368(a)(1)(C) of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, the Reorganization has been considered by the Board of Trustees of The
NOTTINGHAM INVESTMENT TRUST II on behalf of the NEW CAROLINASFUND and the Board
of Trustees of the MAPLEWOOD INVESTMENT TRUST on behalf of the CarolinasFund. In
determining whether to recommend approval of the Reorganization to shareholders
of the CAROLINASFUND, the Board of Trustees (including a majority of the
non-interested trustees, with the advice and assistance of counsel) carefully
considered information they deemed necessary to determine that the
Reorganization would not result in the dilution of, and would be in the best
interests of the shareholders of the CAROLINASFUND. The Board of Trustees of
Maplewood Investment Trust gave substantial weight to the following
representations of Morehead Capital Advisors, LLC ("Morehead") and others: (1)
Mr. Bryant's representations to the Trustees regarding the operations of
Nottingham Investment Trust II; (2) that the investment objectives, policies and
restrictions of both Funds are identical; (3) that the investment advisor and
the investment advisory agreements are identical; (4) that the Reorganization
will be tax-free for federal income tax purposes; (5) that Morehead has agreed
to waive its advisory fee and reimburse expenses to maintain the NEW
CarolinasFund's expense ratio at the same level as the current expense ratio;
(6) that the Statement of Assets and Liabilities of the NEW CAROLINASFUND will
be reviewed by Deloitte & Touche, LLP to insure compliance with all aspects of a
tax free reorganization of the CAROLINASFUND and the NEW CAROLINASFUND, and that
the net assets and net asset value of the NEW CAROLINASFUND will be identical to
the CAROLINASFUND on the Closing Date; and (7) that the anticipated expenses of
the Reorganization will be borne by the Morehead and/or THE NOTTINGHAM COMPANY;
and
WHEREAS, the Board of Trustees of the Maplewood Investment Trust has
determined to recommend approval of the reorganization to the shareholders of
the CAROLINASFUND; and
WHEREAS, the Board of Trustees of the Nottingham Investment Trust II
has determined that the transactions set forth herein are in the best interests
of the NEW CAROLINASFUND,
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows:
1. Assets to be Transferred
A. Reorganization. Prior to the close of business on the New York Stock
Exchange on the Closing Date, as herein referred to, all the assets of
the CAROLINASFUND shall be delivered to First Union National Bank of
North Carolina, Custodian of the NEW CAROLINASFUND (the "Custodian"), in
exchange for and against delivery by the New CAROLINASFUND to the
CAROLINASFUND on the Closing Date, as hereinafter defined, of the same
number of shares (including, if applicable, fractional shares), having
an aggregate net asset value equal to the aggregate net asset value of
the CAROLINASFUND's shares, of the NEW CAROLINASFUND, par value $.01 per
share, as are then outstanding of the CAROLINASFUND. The NEW
CAROLINASFUND shall assume all of the obligations and liabilities
attributable to the CAROLINASFUND, of whatever kind or nature, whether
absolute, accrued, contingent or otherwise, and whether or not
determinable as of the Closing Date. All such obligations and
liabilities of the CAROLINASFUND, to the extent that they exist at or
after the Closing Date, shall, after the Closing Date, be and become
debts, obligations and liabilities of the NEW CAROLINASFUND, and may be
enforced against the NEW CAROLINASFUND to the same extent as if the same
had been incurred by the NEW CAROLINASFUND.
2. Definitions
A. Closing Date. The closing shall be at the office of North Carolina
Shareholder Services LLC, 107 North Washington Street, Rocky Mount,
North Carolina, at 11:00 a.m. on June 29, 1998, or such other time and
date as the parties shall mutually determine in writing, not later than
June 30, 1998 (the "Closing Date"). At the closing, each party shall
deliver to the other such bills of sale, checks, assignments,
assumptions, receipts or other documents as such party or its counsel
may reasonably request.
B. Calculation Date. The assets of the CAROLINASFUND and the net asset
value per share of the NEW CAROLINASFUND shall be valued as of the close
of business on the New York Stock Exchange on the business day next
preceding the Closing Date (the "Calculation Date"). The stock transfer
books of the CAROLINASFUND will be permanently closed as of the close of
business on the Calculation Date and only redemption requests received
in proper form prior to the close of trading on the New York Stock
Exchange on the Calculation Date shall be accepted by the CAROLINASFUND;
redemption requests thereafter received by the CAROLINASFUND shall be
deemed to be redemption requests for the shares of the NEW CAROLINASFUND
(assuming that the transactions contemplated by this Agreement have been
consummated) to be distributed to the shareholders of the CAROLINASFUND
under this Agreement.
C. Delivery. Portfolio securities shall be delivered by the CAROLINASFUND
to the Custodian no later than five (5) business days preceding the
Calculation Date for the account of the NEW CAROLINASFUND (the "Delivery
Date"), duly endorsed in proper form for transfer in such condition as
to constitute a good delivery thereof, in accordance with the custom of
brokers, and shall be accompanied by all necessary state stock transfer
stamps or a check for the appropriate purchase price thereof.
Notwithstanding such delivery, the CAROLINASFUND shall retain title to
such portfolio and shall be permitted to continue to engage in portfolio
transactions in accordance with its investment objective, policies and
restrictions. The cash shall be delivered on the Closing Date and shall
be in the form of currency or wire transfer in Federal funds, payable to
the order of the Custodian. A confirmation for shares of the NEW
CAROLINASFUND, registered in the name of the CarolinasFund, shall be
delivered to the CAROLINASFUND on the Closing Date.
3. Failure to Deliver Securities. If, on the Delivery Date, the CAROLINASFUND
is unable to make delivery under paragraph 2.C. to the Custodian of any of
its portfolio securities for the reason that any of such securities
purchased by the CAROLINASFUND prior to the Delivery Date have not yet been
delivered to it by the CAROLINASFUND broker or brokers, then the NEW
CAROLINASFUND may, at its sole option, waive the delivery requirements of
paragraph 2.C. with respect to said undelivered securities, if (i) the
CAROLINASFUND has delivered the securities to the Custodian, or (ii) the
CAROLINASFUND has delivered to the Custodian by or on the Delivery Date and,
with respect to said undelivered securities, executed copies of an agreement
of assignment and escrow agreement and due bills executed on behalf of said
broker or brokers, together with such other documents as may be required by
the NEW CAROLINASFUND or Custodian, including brokers' confirmation slips.
4. The CAROLINASFUND Liquidation and Termination. As soon as practicable after
the Closing Date, the Maplewood Investment Trust shall take such further
actions as may be required to effect the complete liquidation and
termination of the CAROLINASFUND under Massachusetts law and the Internal
Revenue Code, terminate the CAROLINASFUND as a series of Maplewood
Investment Trust, file the final Form NSAR on behalf of the CAROLINASFUND,
and to take all such appropriate measures as may be necessary or desirable
to terminate the registration of the CAROLINASFUND. At, or as soon as may be
practicable following the Closing Date, the CAROLINASFUND shall instruct the
NEW CAROLINASFUND that the pro rata interest (in full and fractional shares
as certified by the Custodian) of each of the holders of record of the
CAROLINASFUND as of the close of business on the Calculation Date as
certified by the Custodian (the "CAROLINASFUND Record Holders") in the NEW
CAROLINASFUND shares be registered on the books of the NEW CAROLINASFUND in
the names of each of the CAROLINASFUND Record Holders, and the NEW
CAROLINASFUND agrees promptly to comply with said instruction. All issued
and outstanding shares of the CAROLINASFUND shall thereupon be canceled on
the books of the CAROLINASFUND. The NEW CAROLINASFUND shall have no
obligation to inquire as to the validity, propriety or correctness of any
such instruction, but shall, in each case, assume that such instruction is
valid, proper and correct.
5. The CAROLINASFUND Securities. On the Delivery Date, the CAROLINASFUND shall
deliver to the NEW CAROLINASFUND two (2) copies of a list setting forth the
securities then owned by the CAROLINASFUND and the respective Federal income
tax bases thereof (the "Securities List"). The CAROLINASFUND agrees to
provide the NEW CAROLINASFUND on or before the Closing Date, with detailed
tax basis accounting records for each security to be transferred. Such
records shall be prepared in accordance with the requirements for specific
identification tax lot accounting and clearly reflect the bases used for
determination of gain and loss realized on the partial sale of any security
transferred to the New CAROLINASFUND.
6. Expenses. Morehead Capital Advisors, LLC, the investment advisor to each
party, and/or The Nottingham Company, the proposed administrator to the NEW
CAROLINASFUND, shall pay all expense in connection with carrying out this
Agreement. Any expenses incurred by the Maplewood Investment Trust or by the
CAROLINASFUND in connection with the carrying out of this Agreement shall be
reimbursed by check by one of the parties on or before the Closing Date.
7. Legal Opinions. Each party shall have received an opinion of Poyner &
Spruill, L.L.P. that (i) the NEW CarolinasFund is duly formed and validly
existing under the laws of The Commonwealth of Massachusetts; (ii)
Nottingham Investment Trust II ("NOTTINGHAM INVESTMENT TRUST II") is an
open-end management investment company registered under the 1940 Act, and
the NEW CAROLINASFUND is a duly established series of NIT II; (iii) this
Agreement and the Reorganization provided for herein and the execution and
delivery of this Agreement have been duly authorized and approved by all
requisite action of the Board of Trustees of NIT II and this Agreement has
been duly executed and delivered by NIT II and is a valid and binding
obligation of NIT II and the NEW CAROLINASFUND; (iv) to the best of its
knowledge, this Agreement and the Reorganization are in compliance with the
1940 Act, the rules and regulations promulgated thereunder, and any other
applicable laws; and (v) that the shares of the NEW CAROLINASFUND to be
issued pursuant to the terms of this Agreement have been duly authorized
and, when issued and delivered as provided in this Agreement, will have been
legally issued, fully paid and non-assessable.
8. Representations and Warranties of the Nottingham Investment Trust II. The
Nottingham Investment Trust II, with respect to itself and the NEW
CAROLINASFUND Fund, represents and warrants to the Maplewood Investment
Trust as follows:
i. Nottingham Investment Trust II is a business trust duly organized,
validly existing and in good standing under the laws of The
Commonwealth of Massachusetts;
ii. Nottingham Investment Trust II is a registered open-end management
investment company, and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect;
iii. The NEW CAROLINASFUND is a duly established series of Nottingham
Investment Trust II;
iv. The Statement of Assets and Liabilities of the NEW CAROLINASFUND
immediately after the Closing Date, as defined herein, will be
identical to the Statement of Assets and Liabilities of the
CAROLINASFUND immediately prior to the Closing Date;
v. Nottingham Investment Trust II is not, and the execution, delivery
and performance of this Agreement will not result, in material
violation of Nottingham Investment Trust II's Restated Agreement and
Declaration of Trust or Bylaws or of any agreement, indenture,
instrument, contract, lease or other undertaking to which Nottingham
Investment Trust II is a party or is bound;
vi. There is no litigation or administrative proceeding or investigation
of or before any court or governmental body pending or to Nottingham
Investment Trust II's knowledge threatened against Nottingham
Investment Trust II with respect to the NEW CAROLINASFUND or its
properties or assets, and Nottingham Investment Trust II knows of no
fact which might form the basis for the institution of such
proceedings, and neither Nottingham Investment Trust II nor the NEW
CAROLINASFUND is a party or subject to the provisions of any order,
decree or judgment of any court or governmental body which
materially and adversely affects their respective businesses or
their respective abilities to consummate the transactions
contemplated herein;
vii. On the Closing Date all shares of beneficial interest in the NEW
CAROLINASFUND will be duly authorized, legally issued, fully paid
and non-assessable, and the NEW CAROLINASFUND does not have
outstanding any options, warrants or other rights to subscribe for
or purchase any shares of the NEW CAROLINASFUND (other than dividend
reinvestment plans of the NEW CAROLINASFUND or as set forth in this
Agreement), nor are there outstanding any securities convertible
into any shares of the NEW CAROLINASFUND (except pursuant to
exchange privileges described in the current Prospectus or
Registration Statement of the NEW CAROLINASFUND under the 1933 Act);
viii. Nottingham Investment Trust II has full power and authority to enter
into and perform its obligations under this Agreement; the
execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on the part of the Board of
Trustees of Nottingham Investment Trust II; and this Agreement
constitutes a valid and binding obligation of Nottingham Investment
Trust II and the NEW CAROLINASFUND, enforceable against Nottingham
Investment Trust II and the NEW CAROLINASFUND in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting creditors' rights and by equitable principles;
ix. Nottingham Investment Trust II will provide to the CAROLINASFUND the
Form N-1A Registration Statement under the 1933 Act concerning the
NEW CAROLINASFUND, which does not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make any statements therein, in light of the
circumstances under which such statements were made, not materially
misleading;
x. The information to be furnished by Nottingham Investment Trust II
for use in Registration Statements, proxy materials and other
documents, in connection with the transactions contemplated hereby,
will be accurate and complete in all material respects and will
comply in all material respects with federal securities laws and
other laws and regulations thereunder applicable thereto; and
xi. The Proxy Statement to be used in connection with the transactions
contemplated hereby (only insofar as it relates to the NEW
CAROLINASFUND or Nottingham Investment Trust II), on its effective
date and on the Closing Date, will conform in all material respects
with the provisions of the 1933 Act, the 1934 Act and the 1940 Act
and the rules and regulations thereunder, and will not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which such statements
were made, not materially misleading.
9. Covenants of Nottingham Investment Trust II, Advisor, and Designated
Individuals. Nottingham Investment Trust II and Morehead Capital Advisors,
LLC (and its individual principals identified below), respectively,
covenant to the Maplewood Investment Trust and the CAROLINASFUND as
follows:
i. Nottingham Investment Trust II will use its best efforts and take
all actions as may be necessary or advisable to effectuate the
Reorganization and to cause to be registered and continue the NEW
CAROLINASFUND in operation thereafter, including the obtaining of
any regulatory approvals required to be obtained by it.
ii. Morehead Capital Advisors, LLC, Lloyd Richter, Benjamin Richter,
Ronald Wrenn, Marshall Rauch, Blucher Ehringhaus and Richard Bryant,
jointly and severally (collectively, "Indemnifying Person"), agree
that every person who is or has been a Trustee, officer, employee or
agent of the Maplewood Investment Trust and every person who serves
at the Maplewood Trustees' request as director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise shall be indemnified by the Indemnifying Person to
the fullest extent permitted by law against all liabilities and
against all expenses reasonably incurred or paid to him in
connection with any debt, claim, action, demand, suit, proceeding,
judgment, decree, liability or obligation of any kind in which he
becomes involved as a party or otherwise or is threatened by virtue
of his being or having been a Trustee, officer, employee or agent of
the Maplewood Investment Trust or of another corporation,
partnership, joint venture, trust or other enterprise at the request
of the Maplewood Investment Trust and against amounts paid or
incurred by him in the compromise or settlement thereof.
(a) The words "claim", "action", "suit", or "proceeding" shall
apply to all claims, actions, suits or proceedings (civil,
criminal, administrative, legislative, investigation or other,
including appeals), actual or threatened, and the words
"liabilities" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement,
fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee
or officer:
i. against any liability to the Maplewood Investment Trust or
the shareholders of the CAROLINASFUND by reason of willful
misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his
officer ("disabling conduct");
ii. with respect to any matter as to which he shall, by the
court or other body by or before which the proceeding was
brought or engaged, have been finally adjudicated to be
liable by reason of disabling conduct;
iii. in the absence of a final adjudication on the merits that
such Trustee or officer did not engage in disabling
conduct, unless a reasonable determination, based upon a
review of the facts that the person to be indemnified is
not liable by reason of such conduct, is made by
independent legal counsel, in a written opinion.
(c) Expenses in connection with the preparation and presentation of
a defense to any claim, action, suit or proceeding of the
character described in this section shall be paid by the
Indemnifying Person prior to final disposition thereof upon
receipt of a written undertaking by or on behalf of the
Maplewood Investment Trust Trustee, officer, employee or agent
to reimburse the Indemnifying Person if it is ultimately
determined under this section that he is not entitled to
indemnification. Such undertaking shall be secured by a surety
bond or other suitable insurance or such security as the
Indemnifying Person shall require.
iii. The Indemnifying Person agrees that in the event the liability
insurance policy currently in place providing insurance for the
Maplewood Trustees terminates for any reason within one year of the
Closing Date, the Indemnifying Person shall procure an insurance
policy at the current scope and amount of coverage, providing
insurance for such Trustees with respect to any indemnification by
the Indemnifying Person pursuant to this Agreement for a term ending
on the first anniversary of the Closing Date.
10. Representations and Warranties of the Maplewood Investment Trust. The
Maplewood Investment Trust, with respect to itself and the CAROLINASFUND,
represents and warrants to the Nottingham Investment Trust II that Maplewood
Investment Trust has full power and authority to enter into and perform its
obligations under this Agreement; the execution, delivery and performance of
this Agreement have been duly authorized by all necessary action on the part
of the Board of Trustees of Maplewood Investment Trust; and this Agreement
constitutes a valid and binding obligation of Maplewood Investment Trust and
the CAROLINASFUND, enforceable against Maplewood Investment Trust and the
CAROLINASFUND in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other laws
relating to or affecting creditors' rights and by equitable principles.
11. Representations and Warranties. All representations and warranties of
Nottingham Investment Trust II and the NEW CAROLINASFUND 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. All representations and warranties of Maplewood Investment Trust and
the CAROLINASFUND 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.
12. Certain Conditions.
A. Section 368 of the Internal Revenue Code. The obligations of the
CAROLINASFUND under this Agreement shall be subject to the receipt by
the CAROLINASFUND, on or before the Closing Date, of an opinion of
Poyner & Spruill, L.L.P., in form, scope and substance satisfactory to
the CAROLINASFUND and the NEW CAROLINASFUND to the effect that the
exchange contemplated by this Agreement constitutes a reorganization
within the meaning of section 368(a)(1)(C) of the Code and the
regulations promulgated thereunder and that such transactions will give
rise to the recognition of neither gain nor loss to the CAROLINASFUND
or the NEW CAROLINASFUND or the NEW CAROLINASFUND shareholders. Gain,
if any, will be realized by the CAROLINASFUND shareholders only to the
extent that they receive in the exchange cash or other property in
addition to the NEW CAROLINASFUND shares, and will be recognized, but
not in excess of the amount of cash or such other property received. If
the exchange has the effect of the distribution of a dividend, then the
amount of gain recognized that it is not in excess of the ratable share
of undistributed earnings and profits of the CAROLINASFUND will be
treated as a dividend. No loss will be recognized by the CAROLINASFUND
in the transaction. Such opinion shall include a statement that the
earnings and profits of the CAROLINASFUND for Federal income tax
purposes will be carried over to the NEW CAROLINASFUND pursuant to
section 381 of the Code, no gain or loss will be recognized by the NEW
CAROLINASFUND pursuant to section 1032(a) of the Code, the basis of the
assets of the CAROLINASFUND acquired by the NEW CAROLINASFUND will be
the same as the basis of those assets in the hands of the CAROLINASFUND
immediately prior to the transaction pursuant to section 362(b) of the
Code, and the holding period of the assets of the CAROLINASFUND in the
hands of the NEW CAROLINASFUND will include the holding period of those
assets in the hands of the CAROLINASFUND immediately prior to the
transaction pursuant to section 1223(2) of the Code. Such opinion shall
also state that the basis of the NEW CAROLINASFUND shares, including
any fractional shares, received by the CAROLINASFUND shareholders will
be, in each instance, the same as the basis of the CAROLINASFUND shares
surrendered in exchange therefor, and the holding period of the NEW
CAROLINASFUND shares, including any fractional shares, received by the
CAROLINASFUND shareholders will include the holding period of the
CAROLINASFUND shares surrendered in exchange therefor, provided such
shares were held as capital assets on the date of such exchange.
B. Shareholder Vote. The obligations of the CAROLINASFUND under this
Agreement shall be subject to its shareholders duly approving the
execution and delivery of this Agreement and the transactions
contemplated herein. The Maplewood Investment Trust will call a meeting
of the shareholders of the CAROLINASFUND to consider and act upon this
Agreement, and to take all other actions reasonably necessary to obtain
approval of the transactions contemplated herein. The CAROLINASFUND
will provide the NEW CAROLINASFUND with information necessary for the
preparation of the Proxy Statement in compliance with applicable
securities laws in connection with the meeting of shareholders to
consider approval of this Agreement and the transactions contemplated
herein.
C. Pending or Threatened Proceedings. On the Closing Date, no action, suit
or other proceeding shall be threatened or pending before any court or
government 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.
D. Registration Statement. The Registration Statement filed with respect
to the NEW CAROLINASFUND shall have become effective under the 1933 Act
and no stop orders suspending the effectiveness thereof shall have been
issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted
or be pending, threatened or contemplated under the 1933 Act.
E. Declaration of Dividend. The CAROLINASFUND shall have declared a
dividend or dividends which, together with all previous such dividends,
shall have the effect of distributing to shareholders all of the fund's
investment company taxable income for its final taxable period and all
of its net capital gain realized in its final taxable period (after
reduction for any capital loss carry-forward).
13. Addresses. All notices required or permitted to be given under this
Agreement shall be given in writing to the CAROLINASFUND, O.J. Peterson, II,
Ten Bellona Arsenal, Midlothian, VA 23113, with copies to John F. Splain,
Countrywide Fund Services, Inc., PO Box 5354, Cincinnati, OH 45201, and
Tracy S. Byrd, Esq., Cors & Bassett, 1200 Carew Tower, 441 Vine Street,
Cincinnati, OH 45202; and to NEW CAROLINASFUND, c/o Morehead Capital
Advisors, LLC, 1712 East Boulevard, Charlotte, North Carolina, Attention:
J.C.B. Ehringhaus, III, with a copy to M. Guy Brooks III, Esq., Poyner &
Spruill, L.L.P., 3600 Glenwood Avenue, Raleigh, North Carolina 27612, or at
such other place as shall be specified in a written notice given by either
party to the other party to this Agreement and shall be validly given if
mailed by first-class mail, postage prepaid.
14. Termination.
A. The CAROLINASFUND or the NEW CAROLINASFUND upon the giving of written
notice to the other may also terminate this Agreement, if (a) the
conditions specified in paragraph 13 have not been performed on or
before June 30, 1998; or (b) there occurs a material breach by the
other of any representation, warranty or agreement contained herein to
be performed at or prior to the Closing Date or (c) at any time prior
to the Closing Date if circumstances should develop that, in the
opinion of the respective Boards, make proceeding with the
Reorganization inadvisable.
B. In the event of termination of this Agreement pursuant to this
Agreement, neither party (nor its officers or trustees) shall have any
liability to the other.
15. Miscellaneous. This Agreement shall bind and inure to the benefit of the
parties and their respective successors and assigns. It shall be governed
by, construed and enforced in accordance with the laws of the Commonwealth
of Massachusetts. The CAROLINASFUND and the NEW CAROLINASFUND agree that
neither party has made any representation, warranty or covenant not set
forth herein and that this Agreement constitutes the entire agreement
between the parties as to the subject matter hereof. The representations and
warranties 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. The 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. This Agreement shall be
executed in any number of counterparts, each of which shall be deemed an
original. 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. Whenever used herein, the
use of any gender shall include all genders. Subject to the provisions of
this Agreement, each party will take or cause to be taken all action, and do
or cause to be done, all things reasonably necessary, proper, or advisable
to consummate the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and their seals affixed hereto by their officers
thereunto duly authorized, as of the day and year first above written.
ATTEST: MAPLEWOOD INVESTMENT TRUST, on behalf
of CAROLINASFUND
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ATTEST: NOTTINGHAM INVESTMENT TRUST II, on
behalf of NEW CAROLINASFUND
- ------------------------- -------------------------------------
MOREHEAD CAPITAL ADVISORS, LLC
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<PAGE>
THE CAROLINASFUND
PROXY
The undersigned shareholder of The CarolinasFund (the "Fund"), an investment
series of the Maplewood Investment Trust, an unincorporated business trust
organized under the laws of The Commonwealth of Massachusetts (the "Trust"),
hereby constitutes and appoints John D. Marriott, Jr. and J.C.B. Ehringhaus III,
and each of them singly, to serve as proxy and attorney for the undersigned,
with full power of substitution, for and in the name of the undersigned to vote
and act upon all matters (unless and except as expressly limited below) at the
Special Meeting of Shareholders to be held on June 29, 1998 at the offices of
North Carolina Shareholder Services, LLC, 107 North Washington Street, Rocky
Mount, North Carolina, at 10:00 a.m., local time, and at any and all
adjournments thereof, in respect of all shares of the Fund held by the
undersigned or in respect of which the undersigned would be entitled to vote or
act, with all the powers the undersigned would possess if personally present.
All proxies heretofore given by the undersigned in respect of said meeting are
hereby revoked.
ITEM 1. To approve or disapprove the Agreement and Plan of Reorganization
providing for the transfer of all of the assets and liabilities of the
CarolinasFund to a new series of The Nottingham Investment Trust II, also called
the CarolinasFund (the "New CarolinasFund"), in exchange for shares of the New
CarolinasFund and the distribution of the shares to the shareholders of the
CarolinasFund and the subsequent liquidation and termination of the
CarolinasFund.
/ / FOR / / AGAINST / / ABSTAIN
Specify desired action by check marks in the appropriate spaces. This Proxy will
be voted as specified. If no specification is made, the Proxy will be voted FOR
the item referred to above. The persons named proxies have discretionary
authority, which they intend to exercise in favor of the proposal referred to
and according to their best judgment as to any other matters which properly come
before the meeting.
PLEASE COMPLETE, SIGN, DATE, AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE AS
SOON AS POSSIBLE.
Date _____________ Signature(s) of Shareholder(s):
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The signature(s) on this Proxy should
correspond exactly with the shareholder's
name as printed hereon.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES
