<PAGE> 1
As filed with the Securities and Exchange Commission
on May 1, 2000
Registration No.
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PRE-EFFECTIVE AMENDMENT NO. __ [ ]
POST-EFFECTIVE AMENDMENT NO. __ [ ]
(Check appropriate box or boxes)
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PACIFIC CAPITAL FUNDS
(Exact Name of Registrant as Specified in Charter)
(800) 258-9232
(Area code and Telephone Number)
3435 Stelzer Road
Columbus, Ohio 43219
(Address of Principal Executive Offices, including Zip Code)
Irimga McKay
3435 Stelzer Road
Columbus, Ohio 43219
(Name and Address of Agent for Service)
Copy to: Michael Glazer
Paul, Hastings, Janofsky & Walker LLP
555 S. Flower Street
Los Angeles, California 90071
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Approximate Date of Proposed Public Offering:
As soon as practicable following effective date.
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It is proposed that this filing will become effective on May 31, 2000
pursuant to Rule 488.
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Title of Securities Being Registered: Shares of Beneficial Interest.
No filing fee is required because of Registrant's reliance on Rule 24f-2.
<PAGE> 2
PACIFIC CAPITAL
U.S. TREASURY SECURITIES FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JULY 5, 2000
3:00 P.M.
A Special Meeting of shareholders of the Pacific Capital U.S.
Treasury Securities Fund series (the "Treasury Fund") of Pacific Capital Funds
will be held on July 5, 2000 at 3:00 p.m., local time, at 3435 Stelzer Road,
Columbus, Ohio. At the meeting, we will ask the shareholders to vote on:
1. A proposal to reorganize the Treasury Fund into the Pacific Capital
Diversified Fixed Income Fund.
2. Any other matters that properly come before the Meeting.
The Board of Trustees has unanimously approved the
reorganization proposal and recommends you vote FOR it. Please read the enclosed
proxy statement for a full discussion of the proposal.
By order of the Board of Trustees
Gregory T. Maddox, Secretary
June 1, 2000
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WHO CAN VOTE?
Anyone owning share on April 28, 2000.
WHY SHOULD I BOTHER TO VOTE?
Your vote is important. If the Fund doesn't receive enough votes, it
will have added expenses to mail proxies again or solicit voters by telephone so
the meeting can take place.
HOW CAN I VOTE?
- By mail - vote, sign and mail the enclosed ballot in the enclosed
envelope
- By fax - vote, sign and fax both sides to 1-631-254-7564
- By phone - call 1-800-690-6903
- In person at the meeting
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<PAGE> 3
PACIFIC CAPITAL FUNDS
U.S. TREASURY SECURITIES FUND
COMBINED PROXY STATEMENT AND PROSPECTUS
SPECIAL MEETING OF SHAREHOLDERS
JULY 5, 2000
The Board of Trustees of Pacific Capital Funds (referred to in
this Proxy Statement as the "Trust") is soliciting the enclosed Proxy in
connection with the Special Meeting of shareholders of the Trust's U.S. Treasury
Securities Fund series (referred to below as the "Treasury Fund"). The Meeting
will be held on July 5, 2000 at 3:00 p.m. local time at 3435 Stelzer Road,
Columbus, Ohio.
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This Combined Proxy Statement and Prospects (referred to below as the
"Proxy Statement") is organized as follows:
1. Summary of the Proxy Statement - the summary begins on page 2.
2. Reorganization of the Treasury Fund - information begins on page 4.
3. Proxy Voting and Meeting Procedures - information begins on page 9.
4. General Information - information begins on page 11.
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This Proxy Statement is being mailed to shareholders of the
Treasury Fund on or about June 1, 2000. The Trust's Annual Report for the year
ended July 31, 1999 and Semi-Annual Report for the six months ended January 1,
2000 were previously mailed to shareholders. To get a copy of the Reports free
of charge, write Pacific Capital Funds at 3435 Stelzer Road, Columbus, Ohio
43219 or telephone us at 1-800-258-9232.
THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR
DISAPPROVED THESE SECURITIES OR PASSED ON THE ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Dated: June 1, 2000
<PAGE> 4
SUMMARY OF THE PROXY STATEMENT
The Board of Trustees has approved a plan to reorganize the
Treasury Fund into the Pacific Capital Diversified Fixed Income Fund (referred
to in this Proxy Statement as the "Diversified Fund").
At its current asset size ($15.9 million as of March 31,
2000), the Treasury Fund is too small to operate efficiently, and the Fund's
service providers are not willing to continue subsidizing the Fund's operations
by reducing their fees and paying other Fund expenses. The purpose of the
reorganization is to lower the investment expenses paid by shareholders of the
Treasury Fund by combining their assets with those of the larger Diversified
Fund, which can spread expenses over a larger asset and income base.
The proposed reorganization will not change the Trust's
distribution and purchase procedures, exchange rights, or redemption procedures.
INVESTMENT OBJECTIVES, POLICIES, AND RISKS
The investment objectives and policies of the Diversified Fund
are substantially similar to the Treasury Fund. Each Fund's primary objective is
high current income. The Treasury Fund invests primarily in U.S. Treasury bonds,
notes, and bills and related repurchase agreements. The Diversified Fund invests
in those securities as well as debt securities issued or guaranteed by U.S.
Government agencies and instrumentalities, investment grade corporate debt
securities, and (up to 25% of total assets) investment grade, dollar-denominated
debt securities of foreign companies and governments.
Both Funds are subject to similar risks. The values of each
Fund's investments fluctuate in response to movements in interest rates. If
rates rise, the values of its debt securities generally fall. The longer the
average maturity of a Fund's investment portfolio, the greater the fluctuation
in value. The value of any of the Diversified Fund's investments may also
decline in response to events affecting the issuer or its credit rating. In
addition, the performance of foreign securities held by the Diversified Fund
depends on different political and economic environments and other overall
economic conditions in countries where the Fund invests.
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EXPENSE COMPARISON
The following table shows the comparative fees and expenses
you would pay if you buy and hold Class A or Class Y shares of the Treasury Fund
and the Diversified Fund, based on the actual operating expenses of that Class
for the fiscal year ended July 31, 1999.
<TABLE>
<CAPTION>
A Share Y Shares
------------------------------- ---------------------------------
Treasury Fund Diversified Fund Treasury Fund Diversified Fund
------------- ---------------- ------------- ----------------
Shareholder Transaction Expenses (paid by
you directly)
<S> <C> <C> <C> <C>
Maximum sales charge (load) on 4.00%(1,2) 4.00%(1,2) None None
purchase (as a % of offering price)
Maximum deferred sales charge (load) None(3) None(3) None None
(as a % of offering price)
Annual Fund Operating Expense (paid from
Fund assets)
Management fee 0.60%(4) 0.60%(4) 0.60%(5) 0.60%5
Distribution (12b-1) fee 0.75%(4) 0.75%(4) None None
Other expenses 0.45%(4) 0.32%(4) 0.45%(5) 0.32%5
Total Fund Operating Expenses 1.80%(4) 1.67%(4) 1.05%(5) 0.92%5
</TABLE>
1. Lower sales charges are available depending upon the amount invested.
2. Long-term shareholders may pay indirectly more than the equivalent of the
maximum permitted front-end sales charge due to the recurring nature of
12b-1 fees.
3. For investments of $1 million or more, a contingent deferred sales charge
is applicable to redemptions within one year of purchase.
4. For Class A shares, the Adviser is limiting the Management fee to 0.35% for
the Treasury Fund and 0.45% for the Diversified Fund, the Distributor is
limiting the Distribution (12b-1) fee to 0.25% for both Funds, and the
Administrator is waiving a portion of its fee, so that Other expenses were
0.41% for the Treasury Fund and 0.28%% for the Diversified Fund. TOTAL FUND
OPERATING EXPENSES FOR CLASS A SHARES AFTER THESE FEE WAIVERS WERE 1.01%
FOR THE TREASURY FUND AND 0.98% FOR THE DIVERSIFIED FUND. Theses expense
limitations may be revised or cancelled at any time.
5. For Class Y shares, the Adviser is limiting the Management fee to 0.35% for
the Treasury Fund and 0.45% for the Diversified Fund, and the Administrator
is waiving a portion of its fee, so that Other expenses were 0.41% for the
Treasury Fund and 0.28% for the Diversified Fund. TOTAL FUND OPERATING
EXPENSES FOR CLASS Y SHARES AFTER THESE FEE WAIVERS WERE 0.76% FOR THE
TREASURY FUND AND 0.73% FOR THE DIVERSIFIED FUND. These expense limitations
may be revised or cancelled at any time.
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EXPENSE EXAMPLE. Use the following table to compare fees and
expenses of the Funds with those of other funds. It illustrates the amount of
fees and expenses you would pay assuming a $10,000 investment, a 5% annual
return, redemption at the end of each period, and no changes in the Funds'
operating expenses. Because the example is hypothetical and for comparison only,
your actual costs will be different.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
A Shares
Treasury Fund $ 576 $ 944 $1,336 $2,431
Diversified Fund $ 563 $ 905 $1,271 $2,297
Y Shares
Treasury Fund $ 107 $ 334 $ 579 $1,283
Diversified Fund $ 94 $ 293 $ 509 $1,131
PROPOSED REORGANIZATION OF THE TREASURY FUND
The Board of Trustees has approved a plan to reorganize the
Treasury Fund into the Diversified Fund. The purpose of the reorganization is to
lower the investment expenses paid by the shareholders of the Treasury Fund. To
proceed, we need the approval of the shareholders of the Treasury Fund. The next
several pages outline the important details of the reorganization plan:
- Why we want to reorganize the Treasury Fund
- How we plan to accomplish the reorganization
- How the reorganization will affect the Treasury Fund
- Financial and legal information
WHY WE WANT TO REORGANIZE THE TREASURY FUND
The Board of Trustees believes that the proposed
reorganization will benefit the shareholders of the Treasury Fund. The Fund has
substantial overhead costs for accounting, legal, printing, insurance, custody,
transfer agency, advisory and administrative services. At its current asset size
($15.9 million as of March 31, 2000), the Fund is too small to operate
efficiently, and its investment adviser (The Asset Management Group of Bank of
Hawaii) and administrator (BISYS Fund Services Ohio, Inc.) have been voluntarily
subsidizing the Fund's operations by reducing its management fees and paying
other Fund expenses, so that the Fund can provide a competitive yield to its
shareholders. Pacific Century does not foresee any significant increases in the
Fund's asset size in the near future, and has informed that Board that it is not
willing to continue subsidizing the Fund's future operations.
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<PAGE> 7
Although the Diversified Fund has similar expenses, as a fund
with more assets ($258.1 million as of March 31, 2000) it can spread those
expenses over a substantially larger asset and income base. Because the
investment objectives, current portfolios, and policies of the Treasury Fund and
the Diversified Fund are similar, the Board of Trustees believes shareholders of
the Treasury Fund should be able to continue to meet their primary investment
goals of high current income as shareholders of the Diversified Fund.
The Board of Trustees believes that the only other alternative
to the proposed reorganization would be the taxable liquidation of the Treasury
Fund, which would not be as advantageous. The Board specifically determined, as
required by the Investment Company Act of 1940, that the proposed reorganization
is in the best interests of the shareholders of both Funds, and that the
interests of the Funds' shareholders will not be diluted as a result of the
reorganization.
HOW WE PLAN TO ACCOMPLISH THE REORGANIZATION
The Board of Trustees has approved a written reorganization
agreement between the Treasury Fund and the Diversified Fund. It spells out the
terms and conditions that will apply to the Treasury Fund's reorganization into
the Diversified Fund.
In essence, the reorganization will have two steps:
- First, if the shareholders approve the
reorganization, the Treasury Fund will transfer all
of its assets and liabilities to the Diversified
Fund. In exchange, the Treasury Fund will receive
shares of the Diversified Fund with a total value
equal to the value of the assets it is transferring
(net of the Treasury Fund's liabilities).
- Second, the Treasury Fund will dissolve. The
Diversified Fund will open an account for each
shareholder of the Treasury Fund, and will credit
each shareholder with shares of the Diversified Fund
of the same Class and with the same total value as
the Treasury Fund shares that he or she owned on the
date of the reorganization. New share certificates
will not be issued.
Reorganization expenses will be paid by The Asset Management Group of Bank of
Hawaii.
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The following table shows the capitalization of the Funds as
of March 31, 2000, and their pro forma combined capitalization as of that date
after giving effect to the proposed reorganization.
<TABLE>
<CAPTION>
Treasury Fund Diversified Fund Pro Forma Combined
------------------------ ----------------------------------------- ------------------------------------------
Class A Class Y Class A Class B Class Y Class A Class B Class Y
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Aggregate net $ 1,516,826 $14,358,087 2,023,994 $253,550,140 $ 2,327,332 $ 3,540,820 $253,550,140 $ 16,685,419
assets
Shares 165,190.252 1,562,645.167 197,323.111 24,570,303.626 227,306.812 345,109.162 24,570,303.626 1,629,435.449
outstanding
Net asset $ 9.18 $9.19 $10.26 $10.32 $10.24 $10.26 $10.32 $10.24
value per
share
</TABLE>
If the reorganization is approved by the Treasury Fund
shareholders, it will take place as soon as feasible. We believe this should be
accomplished by July 3, 2000. However, at any time before the reorganization the
Board of Trustees may decide that it is not in the best interest of the Treasury
Fund, the Diversified Fund, or their respective shareholders to go forward.
HOW THE REORGANIZATION WILL AFFECT TREASURY FUND SHAREHOLDERS
After the reorganization, you will own Class A or Y shares of
the Diversified Fund (the same Class as your shares of the Treasury Fund).
THE DIVERSIFIED FUND'S INVESTMENT OBJECTIVE, POLICIES AND
RESTRICTIONS ARE SIMILAR TO THE TREASURY FUND. The Treasury Fund's investment
objectives are high current income consistent with prudent capital risk, and
secondarily capital appreciation. The Diversified Fund's investment objective is
high current income. Both Funds focus on maximizing income consistent with
prudent investment risk, and vary the average of their investment portfolios
from time to time in response to actual and expected changes in interest rates
(and, in the case of the Diversified Fund, other market and economic changes).
The Treasury Fund invests primarily in bonds, notes and bills
issued by the U.S. Treasury, and in repurchase agreements for which those
securities are held as collateral. The Diversified Fund invests in those
securities as well as debt securities issued or guaranteed by agencies and
instrumentalities of the U.S. Government, and investment grade corporate debt
securities rated A or better by Standard & Poor's. In addition, it may invest up
to 20% of its total assets in investment grade debt securities rated BBB issued
by U.S. companies and state and local government issuers, and up to 25% of its
total assets in investment grade, dollar-denominated debt securities of foreign
companies and government issuers.
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<PAGE> 9
For further information about the Funds' investment
objectives, policies and restrictions, see the "Risk/Return Summary and Fund
Expenses" and "Investment Objectives, Policies and Risks" sections of the
Prospectus accompanying this Proxy Statement.
YOUR INVESTMENT ADVISER AND SERVICE PROVIDERS WILL STAY THE
SAME. THE ASSET MANAGEMENT GROUP OF BANK OF HAWAII is the investment adviser to
both Funds and will continue to manage the Diversified Fund after the
reorganization. The day-to-day portfolio manager of the Diversified Fund is Jane
E. Katakura, Vice President, Team Leader and Manager of the Taxable Fixed Income
Investment Team for The Asset Management Group of Bank of Hawaii. She has been a
portfolio manager for The Asset Management Group of Bank of Hawaii since 1983,
and has managed the Diversified Fund since it began operation in 1994. BISYS
Fund Services Ohio, Inc. is the administrator of both Funds and will continue
after the reorganization. See the "Fund Management" section of the Prospectus
for further information.
YOUR FEES AND EXPENSES WILL DECREASE. The advisory fees for
both Funds are the same (0.60% of average daily net assets per year). However,
because of the Diversified Fund's larger size, its total operating expenses for
the fiscal year ended July 31, 1999 were less. For information about these
expenses, see the "Expenses Comparison" section of this Proxy Statement.
THE TOTAL VALUE OF YOUR SHARES WILL NOT BE AFFECTED. On or
before the reorganization date, the Treasury Fund will distribute all of its
then-remaining net investment income and realized capital gains. On the day of
the reorganization, you will receive shares of the Diversified Fund, of the same
Class as your shares of the Treasury Fund and with the same total value as your
shares of the Treasury Fund. However, the number of shares you receive, and the
price per share, will be different, depending on the net asset values per share
of the Funds on the reorganization date.
THE REORGANIZATION WILL HAVE NO MATERIAL FEDERAL INCOME TAX
CONSEQUENCES. We expect the reorganization will have no material federal income
tax consequences to you or to either Fund. We will not proceed with the
reorganization unless this point is confirmed by an opinion of counsel.
Following the reorganization, the adjusted federal tax basis of your shares will
be the same as before. We do not expect shareholders to incur any personal state
or local taxes as a result of the reorganization, but you should consult your
own tax adviser to make sure.
The Treasury Fund had a capital loss carry-forward available
to offset future capital gains of approximately $3,200,000 as of December 31,
1999. The carry-forward period for capital losses is limited to eight years, and
various portions will expire through 2006 unless used to offset realized capital
gains. Under the Internal Revenue Code, the Diversified Fund will succeed to
only a portion of this capital loss carry-forward, limited generally to an
amount equal to the fair market value of the Treasury Fund on the closing date
of the reorganization multiplied by the long-term tax-exempt rate in effect at
that time (currently 5.84%).
The Diversified Fund also has a capital loss carry-forward of
approximately $1,900,000 as of December 31, 1999, expiring in various increments
through 2007. The reorganization agreement does not provide for any adjustment
to the
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<PAGE> 10
number of shares you will receive to reflect any potential income tax effect
that might occur from the differences in the proportionate amounts of the
capital loss carry-forwards of the Treasury Fund and the Diversified Fund,
because of the difficulty of predicting the potential use by the Diversified
Fund of the capital loss carry-forwards.
YOU WILL CONTINUE TO RECEIVE MONTHLY DIVIDENDS. Both Funds
currently declare dividends daily and pay them monthly. As was the case for the
Treasury Fund, all dividends paid by the Diversified Fund will continue to be
reinvested in shares of the same Class of the Fund unless you request otherwise
in writing to the Fund's transfer agent at least 15 days prior to the
distribution. If you have such a request on file for the Treasury Fund, it will
be applied to your Diversified Fund shares. The Fund's distributor does not
charge any fees or sales charges on reinvestments.
THE TRUST'S PURCHASE AND REDEMPTION PROCEDURES WILL NOT BE
AFFECTED. The Diversified Fund will have the same purchase, redemption and
exchange procedures as the Treasury Fund. In addition, as a shareholder of the
Diversified Fund you will have the option of purchasing Class B shares, which
are not available for the Treasury Fund. See the "Shareholder Information"
section of the Prospectus.
THE TRUST'S TRUSTEES AND ACCOUNTANTS WILL CONTINUE. The
current Board of Trustees will continue to oversee the operations of the Trust
after the reorganization. Ernst & Young LLP will continue as the Trust's
independent public accountants.
FINANCIAL AND LEGAL INFORMATION
See the "Financial Highlights" section of the Prospectus for
financial highlights tables for the Treasury Fund and the Diversified Fund for
the fiscal year ended July 31, 1999.
The audited financial statements of the Trust for the year
ended July 31, 1999 (which are included in the Trust's 1999 Annual Report to
Shareholders), and the unaudited financial statements of the Trust for the six
months ended January 31, 2000 (which are included in the Trust's 2000
Semi-Annual Report to Shareholders) are incorporated by reference in this Proxy
Statement. The financial statements included in the Trust's 1999 Annual Report
to Shareholders have been audited by Ernst & Young LLP, independent auditors, as
stated in their report included in the Annual Report, and are incorporated in
this Proxy Statement by reference in reliance upon that report given upon their
authority as experts in auditing and accounting.
Certain legal matters in connection with the issuance of the
Diversified Fund shares will be passed upon for the Trust by Paul, Hastings,
Janofsky & Walker LLP.
The Trust is subject to the informational requirements of the
Investment Company Act of 1940, and files reports, proxy statements and other
information with the Securities and Exchange Commission. These documents and
other information filed with respect to the Trust, the Treasury Fund and the
Diversified Fund can be reviewed and copied:
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<PAGE> 11
- At the Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549
- On the Commission's EDGAR data base on the Commission's Internet Web
site at http://www.sec.gov.
- By e-mail request to [email protected] (for a duplicating fee)
- By writing the Commission's Public Reference Section, Washington, D.C.
20549-0102 (for a duplicating fee)
PROXY VOTING AND MEETING PROCEDURES
WHO CAN VOTE
Anyone who is shown on the records of the Treasury Fund as
holding shares as of the close of business (Eastern Standard Time) on April 28,
2000, is entitled to vote at the Meeting. On that date, the Treasury Fund had
736,077.275 outstanding shares.
HOW TO VOTE
You can vote by mail, phone, internet or in person at the
meeting.
- To vote by mail, sign and send us the enclosed Proxy voting card in
the envelope provided.
- To vote by internet, go to the Website www.proxyvote.com.
- To vote by phone, call our proxy tabulator, Automatic Data Processing,
at 1-800-690-6903. They have procedures designed to confirm your
identity and voting instructions.
Even if you plan to attend the Meeting and vote in person,
please return the enclosed Proxy card. This will help us ensure that an adequate
number of shares are present at the Meeting.
QUORUM REQUIREMENTS
In order for the Meeting to go forward, a quorum of
shareholders must be present. This means that a majority of the Treasury Fund's
shares must be represented at the Meeting - either in person or by proxy. All
returned proxies count toward a quorum, regardless of how they are voted.
"Broker non-votes" will also be treated as shares which are present but have not
been voted. (Broker non-votes are shares held by a broker for the owner, which
the owner has not voted on a proposal and the broker does not have the authority
to vote on the proposal.) Broker non-votes and abstentions will have the same
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<PAGE> 12
effect as a "No" vote for purposes of determining whether the reorganization has
been approved.
If sufficient votes in favor of the reorganization are not
received by the date of the Meeting, the persons named in the Proxy may propose
and vote for one or more adjournments of the Meeting to permit further
solicitations of proxies. Any such adjournment will require approval by the
holders of a majority of the shares who are present in person or by proxy.
WHAT VOTE IS REQUIRED?
The reorganization must be approved by a majority of the
shares of the Treasury Fund.
WHAT IF THE REORGANIZATION IS NOT APPROVED?
If the shareholders do not approve the reorganization, the
Board will decide whether to re-propose approval to the shareholders, to
terminate the Treasury Fund (which does not require shareholder approval), or to
take some other action.
PROXY SOLICITATION METHODS AND COSTS
Proxies will be solicited by mail, but trustees and officers
of the Trust and employees of The Asset Management Group of Bank of Hawaii or
BISYS Fund Services, the Company's administrator, may also solicit proxies by
personal meetings, telephone and facsimile. Banks, brokerage houses and other
custodians, nominees and fiduciaries may forward soliciting material to
beneficial owners of shares entitled to vote at the Meeting. Pacific Century
Trust will pay or reimburse all solicitation costs.
PRINCIPAL SHAREHOLDERS
As of April 28, 2000, the following shareholders were known by
the Company to own of record 5% or more of the outstanding shares of the
Treasury Fund:
Name and Address Shares/Class % Ownership
- ---------------- ------------ -----------
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<PAGE> 13
As of April 28, 2000, the trustees and officers of the Trust
as a group beneficially owned less than 1% of the outstanding shares of the
Treasury Fund. However, Mr. Laskey, as Executive Vice President of Bank of
Hawaii, may be deemed the beneficial owner of any shares held by The Asset
Management Group of Bank of Hawaii which it may vote.
GENERAL INFORMATION
NAMES AND ADDRESSES
The Fund's investment adviser is The Asset Management Group of
Bank of Hawaii, 111 S. King Street, Honolulu, Hawaii 96813. The Fund's principal
underwriter is BISYS Fund Services, and the Fund's administrator is BISYS Fund
Services Ohio, Inc. Their address is 3435 Stelzer Road, Columbus, Ohio 43219.
DEADLINE FOR SUBMITTING SHAREHOLDER REPORTS
The Trust does not intend to hold annual meetings of
shareholders of the Treasury Fund. If the reorganization is not approved, the
Trust will call meetings of shareholders of the Fund as may be required under
the Investment Company Act (such as to approve a new investment advisory
agreement for the Fund) or as the Board of Trustees may determine in its
discretion.
If a shareholder wishes to present a proposal to be included
in the proxy statement for the next meeting of shareholders of the Treasury Fund
or the Trust, the Secretary of the Trust must receive the proposal at the
Trust's principal office a reasonable time before the meeting is to be held. Any
such proposal must satisfy all applicable federal and state requirements.
OTHER MATTERS
Management knows of no other business to be presented at the
Meeting, but if other matters properly do come before the Meeting, the persons
named in the Proxy will vote on them in accordance with their best judgment.
Very truly yours,
WALTER J. LASKEY
Trustee and Chairperson
on behalf of the Board of Trustees of
Pacific Capital Funds
June 1, 2000
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<PAGE> 14
STATEMENT OF ADDITIONAL INFORMATION
Relating to the Reorganization of
PACIFIC CAPITAL U.S. TREASURY SECURITIES FUND
3435 Stelzer Road
Columbus, Ohio 43219
Telephone: (800) 258-9232
This Statement of Additional Information, relating
specifically to the proposed reorganization of the U.S. Treasury Securities Fund
series of Pacific Capital Funds, consists of this cover page and the following
described documents, each of which is incorporated by reference herein:
(1) The Statement of Additional Information of Pacific Capital Funds filed
with the Securities and Exchange Commission as part of Post-Effective
Amendment No. 13 to Registrant's Form N-1A Registration Statement on
December 1, 1999;
(2) The Annual Report of Pacific Capital Funds for the year ended July 31,
1999, filed with the Securities and Exchange Commission; and
(3) The Semi-Annual Report of Pacific Capital Funds for the six months
ended January 31, 2000, filed with the Securities Exchange Commission.
This Statement of Additional Information is not a prospectus.
A Combined Proxy Statement and Prospectus dated May 31, 2000 relating to the
proposed reorganization may be obtained from Pacific Capital Funds at the
telephone number and address above. This Statement of Additional Information
relates to, and should be read in conjunction with, that Combined Proxy
Statement and Prospectus.
The date of this Statement of Additional Information is
May 31, 2000.
B-1
<PAGE> 15
PART C
OTHER INFORMATION
Item 25. Indemnification.
Section 5.2 of the Registrant's Declaration of Trust, filed
herewith as Exhibit 1.1, provides for indemnification of the Registrant's
trustees, officers, employees and agents against liabilities incurred by them in
connection with the defense or disposition of any action or proceeding in which
they may be involved or with which they may be threatened, while in office or
thereafter, by reason of being or having been in such office, except with
respect to matters as to which it has been determined that they acted with
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of their office ("Disabling Conduct").
Section 7 of the Registrant's Fund Accounting Agreement, filed
herewith as Exhibit 13.2, provides for the indemnification of the Registrant's
Fund Accounting Agent, and its directors, officers, employees and agents against
all liabilities incurred by it in performing its obligations under the
Agreement, except with respect to matters involving Disabling Conduct. Section
1.11 of the Registrant's Distribution Agreement, filed herewith as Exhibit 7.1,
provides for the indemnification of the Registrant's Distributor against certain
liabilities incurred by it in performing its obligations under the Agreement,
except with respect to matters involving its Disabling Conduct; and Section 1.12
of such Agreement provides for indemnification by the Distributor of the
Registrant's trustees and officers against certain liabilities incurred by them
in connection with the Distributor's activities.
The Registrant has obtained a trustees' and officers'
liability policy covering certain types of errors and omissions.
Insofar as indemnification for liability arising under the
Securities Act of 1933 may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the provisions set forth above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in such Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
Item 16. EXHIBITS
(1.1)* Declaration of Trust.
(1.2)* Amendment No. 1 to Declaration of Trust.
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(1.3)* Amendment No. 2 to Declaration of Trust.
(1.4)*** Amendment No. 3 to Declaration of Trust.
(1.5)*** Amendment No. 4 to Declaration of Trust.
(2)* By-Laws.
(3) Not applicable.
(4) Form of Agreement and Plan of Reorganization.
(5)** Rule 18f-3 Plan.
(6.1)* Investment Advisory Agreement between Hawaiian Trust
Company, Limited and the Registrant, dated as of
October 29, 1993 ("Investment Advisory Agreement").
(6.2)* Addendum to Investment Advisory Agreement.
(6.3)** Form of Amended Schedule A and Amended Addendum to
Investment Advisory Agreement.
(6.4)**** Sub-Advisory Agreement among the Registrant, Pacific
Century Trust and CMG First State (Hong Kong) LLC
[New Asia Growth Fund].
(6.5)** Form of Sub-Advisory Agreement among the Registrant,
Pacific Century Trust and Nicholas-Applegate Capital
Management [International Stock Fund].
(6.6)**** Sub-Advisory Agreement among the Registrant, Pacific
Century Trust and Nicholas-Applegate Capital
Management [Small Cap Fund].
(7.1)* Distribution Agreement between BISYS Fund Services
(formerly, The Winsbury Company Limited Partnership)
and the Registrant, dated as of October 29, 1993, as
amended ("Distribution Agreement").
(7.2)** Amended Schedules A and B to Distribution Agreement.
(7.3)* Form of Selling Agreement.
(8) None.
(9.1)* Form of Custodian Agreement between Bank One Trust
Company, N.A. and the Registrant, on behalf of
Balanced Fund, Diversified Fixed Income Fund, Growth
and Income Fund, Growth Stock Fund, Short
Intermediate U.S. Treasury Fund, Tax-Free Securities
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<PAGE> 17
Fund, Tax-Free Short Intermediate Securities Fund and
U.S. Treasury Securities Fund.
(9.2)* Custodian Agreement between Union Bank of California
and the Registrant.
(9.3) Form of Addendum to Custodian Agreement between Union
Bank of California and the Registrant.
(10.1)* Class A Distribution and Shareholder Service Plan
between the Registrant and BISYS Fund Services
(formerly, The Winsbury Company), dated as of October
29, 1993.
(10.2)* Amended Appendix A to the Distribution and
Shareholder Service Plan.
(10.3)* Class B Distribution and Shareholder Service Plan
between the Registrant and BISYS Fund Services
(formerly, The Winsbury Company), dated as of
September 26, 1997.
(11) Opinion and consent of counsel as to legality of the
securities being offered.
(12) Form of opinion and consent of counsel as to tax
consequences.
(13.1)*** Form of Administration Agreement between BISYS Fund
Services Ohio, Inc. and the Registrant
(13.2)*** Form of Fund Accounting Agreement between BISYS Fund
Services Ohio, Inc. and the Registrant
(13.3)*** Transfer Agency Agreement between BISYS Fund
Services, Inc. and the Registrant, dated as of
February 1, 1998 ("BISYS Transfer Agency Agreement")
(13.4)*** Amended Schedule A to the BISYS Transfer Agency
Agreement
(14) None.
(15) None.
(16.1)+ Powers of Attorney for Irimga McKay, Douglas
Philpotts, Richard W. Gushman, II, Stanley W. Hong,
Russell G. Okata, Oswald K. Stender, and Craig Warren
(16.2)** Power of Attorney for Walter J. Laskey
(17) Form of proxy card.
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<PAGE> 18
+ Filed as an exhibit to Post-Effective Amendment No. 8 to Registrant's
Registration Statement on Form N-1A on November 22, 1996 and
incorporated herein by reference.
* Filed as an exhibit to Post-Effective Amendment No. 10 to Registrant's
Registration Statement on Form N-1A on September 30, 1997 and
incorporated herein by reference.
** Filed as an exhibit to Post-Effective Amendment No. 11 to Registrant's
Registration Statement on Form N-1A on September 16, 1998 and
incorporated herein by reference.
*** Filed as an exhibit to Post-Effective Amendment No. 12 to Registrant's
Registration Statement on Form N-1A on December 1, 1998 and
incorporated herein by reference.
**** Filed as an exhibit to Post-Effective Amendment No. 13 to Registrant's
Registration Statement on Form N-1A on November 30, 1999 and
incorporated herein by reference.
Item 17. UNDERTAKINGS
(1) The undersigned registrant agrees that prior to any public offering of
the securities registered through the use of a prospectus which is part of
this registration statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the Securities Act of
1933, as amended, the reoffering prospectus will contain the information
called for by the applicable registration form for reofferings by persons
who may be deemed underwriters, in addition to the information called for
by the other items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as part of an amendment to the
registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the Securities Act
of 1933, as amended, each post-effective amendment shall be deemed to be a
new registration statement for the securities offered therein, and the
offering of the securities at that time shall be deemed to be the initial
bona fide offering of them.
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<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed on behalf of the Registrant in the
City of San Diego, State of California, on the 1st day of May, 2000.
PACIFIC CAPITAL FUNDS
By: /s/Irimga McKay
---------------------------------
Irimga McKay
President
As required by the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
Signature Title Date
/s/ IRIMGA MCKAY President May 1, 2000
___________________________ (Principal Executive
(Irimga McKay) Officer)
* Treasurer (Principal
___________________________ Financial and Accounting
(Craig Warren) Officer)
* Trustee and Chairperson
- ---------------------------
(Walter J. Laskey)
* Trustee
- ---------------------------
(Douglas Philpotts)
* Trustee
- ---------------------------
(Richard W. Gushman, II)
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* Trustee
- ---------------------------
(Stanley W. Hong)
* Trustee
- ---------------------------
(Russell K. Okata)
* Trustee
- ---------------------------
(Oswald K. Stender)
*/s/ IRIMGA MCKAY Trustee May 1, 2000
- ---------------------------
(Irimga McKay, Attorney-in-Fact)
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<PAGE> 21
EXHIBIT INDEX
PACIFIC CAPITAL FUNDS
Form N-14 Registration Statement
(4) Form of Agreement and Plan of Reorganization
(9.3) Form of Addendum to Custodian Agreement between Union Bank of
California and the Registrant.
(11) Opinion and consent of counsel as to legality of the securities being
offered
(12) Form of opinion and consent of counsel as to tax consequences
(17) Form of proxy card
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<PAGE> 1
Exhibit 4
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
This Agreement and Plan of Reorganization (this "Agreement")
is made as of this 25th day of April, 2000, by and between Pacific Capital
Funds, a Massachusetts business trust (the "Trust"), on behalf of its U.S.
Treasury Securities Fund ("Treasury Fund"), and the Trust on behalf of its
Diversified Fixed Income Fund ("Diversified Fund").
WHEREAS, the parties wish to enter into a plan of
reorganization (the "Plan") which will consist, among other things, of the
transfer of assets of Treasury Fund to Diversified Fund in exchange for shares
of Diversified Fund (the "Shares"), and the distribution of the Shares by
Treasury Fund to its shareholders in connection with the dissolution of Treasury
Fund.
WHEREAS, the Board of Trustees of the Trust, including a
majority of the Trustees who are not "interested persons" of the Trust, as
defined in the Investment Company Act of 1940, as amended (the "1940 Act"), has
determined that the Plan is in the best interests of the shareholders of
Treasury Fund and Diversified Fund, respectively, and that their interests would
not be diluted as a result of the transactions contemplated thereby.
NOW THEREFORE, in consideration of the agreements contained in
this Agreement, the parties agree as follows:
ARTICLE 1
TRANSFER OF ASSETS AND LIABILITIES
1.1 Transfer of Assets and Liabilities. Subject to the terms and conditions
set forth herein, on the Closing Date (as hereafter defined) Treasury Fund shall
transfer all of its assets to Diversified Fund. In exchange therefor,
Diversified Fund shall assume all of the liabilities of Treasury Fund and
deliver to Treasury Fund a number of Class A and Class Y Shares which is equal
to (i) the aggregate net asset value attributable to each such Class of shares
of Treasury Fund at the close of business on the day preceding the Closing Date,
divided by (ii) the net asset value per share of such Class of shares of
Diversified Fund outstanding at the close of business on the day preceding the
Closing Date.
1.2 LIQUIDATION OF TREASURY FUND. Subject to the terms and conditions set
forth herein, on the Closing Date Treasury Fund shall liquidate and shall
distribute pro rata to each Class of its shareholders of record, determined as
of the close of business on the day preceding the Closing Date, the same Class
of Shares received by Treasury Fund pursuant to Section 1.1.
1.3 NO ISSUANCE OF SHARE CERTIFICATES. Treasury Fund shall accomplish the
liquidation and distribution provided for herein by opening accounts on the
books of Diversified Fund in the names of its shareholders and transferring to
its shareholders the Shares credited to the account of Treasury Fund on the
books of Diversified Fund. No certificates evidencing Shares shall be issued.
1
<PAGE> 2
1.4 TIME AND DATE OF VALUATION. The number of Shares to be issued by
Diversified Fund to Treasury Fund shall be computed as of 4:30 p.m. (Eastern
time) on the date preceding the Closing Date in accordance with the regular
practices of Treasury Fund and the Trust.
1.5 CLOSING TIME AND PLACE. The Closing Date shall be July 7, 2000, or such
later date on which all of the conditions set forth in Article 2 have been
fulfilled or otherwise waived by the parties hereto, but in any event not later
than July 31, 2000, or such later date as the parties may mutually agree. All
acts taking place on the Closing Date shall be deemed to be taking place
simultaneously as of the commencement of business on the Closing Date, unless
otherwise provided. The closing of the reorganization contemplated by the Plan
(the "Closing") shall be held at 10:00 a.m. (Eastern time) at the offices of the
Trust, 3435 Stelzer Road, Columbus, Ohio 43219, or such other time and/or place
as the parties may mutually agree.
1.6 DELAY OF VALUATION. If on the day preceding the Closing Date (a) the
primary trading market for portfolio securities of either party is closed to
trading or trading thereon is restricted, or (b) trading or the reporting of
trading is disrupted so that an accurate appraisal of the value of the net
assets of either party and an accurate calculation of the number of shares held
by each shareholder is impracticable, the Closing Date shall be postponed until
the first business day after the day when trading shall have been fully resumed
and reporting shall have been restored.
1.7 TERMINATION OF TREASURY FUND. As promptly as practicable after the
Closing, Treasury Fund shall dissolve.
ARTICLE 2
CONDITIONS PRECEDENT TO THE EFFECTIVENESS OF THE REORGANIZATION
The respective obligation of each party to effect the
reorganization contemplated by this Agreement is subject to the satisfaction or
waiver on or prior to the Closing Date of the following conditions:
2.1 SHAREHOLDER APPROVAL. On or prior to the Closing Date, the shareholders
of Treasury Fund shall have approved the transactions contemplated by this
Agreement in accordance with the provisions of Massachusetts law and the 1940
Act.
2.2 NO INJUNCTIONS OR RESTRAINTS. On the Closing Date, no action, suit or
other proceeding shall be pending before any court or government agency which
seeks to restrain or prohibit or obtain damages or other relief in connection
with this Agreement or the transactions contemplated hereby.
2.3 CONSENTS. All consents of the other party and all other consents,
orders and permits of Federal, state and local regulatory authorities deemed
necessary by the Trust to permit consummation, in all material respects, of the
transactions contemplated herein shall have been obtained, except where failure
to obtain any such consent, order or permit would not involve a risk of a
material adverse effect on the assets or properties of either party or the
Trust.
2
<PAGE> 3
2.4 EFFECTIVE REGISTRATION STATEMENT. The Form N-1A Registration Statement
of the Trust and the Form N-14 Registration Statement of the Trust with respect
to the Shares shall continue to be effective 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.
2.5 TAX OPINION. The parties shall have received an opinion of Paul,
Hastings, Janofsky & Walker LLP substantially to the effect that for Federal
income tax purposes:
(a) The transfer of Treasury Fund's assets to Diversified Fund in exchange
for Shares, and the distribution of the Shares to Treasury Fund's
shareholders in liquidation of Treasury Fund, will constitute a
"reorganization" (the "Reorganization") within the meaning of Section
368 of the Internal Revenue Code of 1986, as amended;
(b) No gain or loss will be recognized by Treasury Fund upon the receipt
of the assets of Diversified Fund solely in exchange for Shares;
(c) No gain or loss will be recognized by Treasury Fund upon the transfer
of its assets to Diversified Fund in exchange for Shares;
(d) No gain or loss will be recognized by any shareholders of Treasury
Fund upon exchange of their Treasury Fund shares for Shares;
(e) The tax basis of the assets of Treasury Fund acquired by Diversified
Fund will be the same as the tax basis of such assets to Treasury Fund
immediately prior to the Reorganization;
(f) The tax basis of the Shares received by each shareholder of Treasury
Fund pursuant to the Reorganization will be the same as the tax basis
of Treasury Fund shares held by such shareholder immediately prior to
the Reorganization;
(g) The holding period of the assets of Treasury Fund by Diversified Fund
will include the period during which those assets were held by
Treasury Fund; and
(h) The holding period of the Shares to be received by each shareholder of
Treasury Fund will include the period during which Treasury Fund
shares exchanged therefor were held by such shareholder.
2.6 COVENANTS, REPRESENTATIONS AND WARRANTIES. Each party shall have
performed all of its covenants set forth in Article 4, and its representations
and warranties set forth in Article 3 shall be true and correct in all material
respects on and as of the Closing Date as if made on such date, and the
President of the Trust shall have executed a certificate to such effect.
3
<PAGE> 4
2.7 STATEMENT OF ASSETS AND LIABILITIES. Treasury Fund shall have delivered
to the Trust on the Closing Date a statement of its assets and liabilities,
prepared in accordance with generally accepted accounting principles
consistently applied, together with a certificate of its Treasurer or Assistant
Treasurer as to its portfolio securities and the federal income tax basis and
holding period as of the Closing Date.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The parties represent and warrant as follows:
3.1 STRUCTURE AND STANDING. Each party represents and warrants that it is
duly organized as a series of a business trust, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts, and has the power
to own all of its properties and assets and conduct its business.
3.2 POWER. Each party represents and warrants that it has full power and
authority to enter into and perform its obligations under this Agreement; the
execution, delivery and performance of this Agreement has been duly authorized
by all necessary action of the Board of Trustees of the Trust; this Agreement
does not violate, and its performance will not result in violation of, any
provision of the Declaration of Trust of the Trust, or any agreement, instrument
or other undertaking to which it is a party or by which it is bound; and this
Agreement constitutes its valid and binding contract enforceable in accordance
with its terms, subject to the effects of bankruptcy, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto.
3.3 LITIGATION. Each party represents and warrants that no litigation or
administrative proceeding or investigation of or before any court or
governmental body is currently pending against it and, to the best of its
knowledge, none is threatened against it or any of its properties or assets,
which, if adversely determined, would materially and adversely affect its
financial condition or the conduct of its business; it knows of no facts which
might form the basis for the institution of such proceedings; and it is not a
party to or subject to the provisions of any order, decree or judgment of any
court or governmental body which materially and adversely affects its business
or its ability to consummate the transactions herein contemplated.
3.4 FUND ASSETS. Treasury Fund represents and warrants that on the Closing
Date the assets received by Diversified Fund from Treasury Fund will be
delivered to Diversified Fund as provided in Section 1.1 free and clear of all
liens, pledges, security interests, charges or other encumbrances of any nature
whatsoever created by Treasury Fund and without any restriction upon the
transfer thereof, except for such liabilities assumed as provided in Section
1.1.
3.5 THE SHARES. Diversified Fund represents and warrants that on the
Closing Date (a) the Shares to be delivered to Treasury Fund as contemplated in
this Agreement will be duly authorized, validly issued, fully paid and
nonassessable (recognizing that, under Massachusetts law, Diversified Fund
shareholders could, under certain circumstances, be held personally liable for
obligations of Diversified Fund); (b) no
4
<PAGE> 5
shareholder of Diversified Fund or any other series of the Trust has any
preemptive right to subscription or purchase in respect thereof; (c) Treasury
Fund will acquire the Shares free and clear of all liens pledges, security
interests, charges or other encumbrances of any nature whatsoever created by the
Trust and without any restriction on the transfer thereof; and (d) the Shares
will be duly qualified for offering to the public in all of the states of the
United States in which such qualification is required or an exemption from such
requirement shall have been obtained.
3.6 TAX STATUS AND FILINGS. Each party represents and warrants that it has
satisfied the requirements of Subchapter M of the Code for treatment as a
regulated investment company and has elected to be treated as such; it has filed
or furnished all federal, state, and other tax returns and reports required by
law to have been filed or furnished, and it has paid or made provision for
payment of, so far as due, all federal, state and other taxes, interest and
penalties; that no such return is currently being audited; and that no
assessment has been asserted with respect to any such returns or reports.
3.7 ACCURACY OF INFORMATION. Each party represents and warrants that all
information furnished by it to the other party for use in any documents which
may be necessary in connection with the transactions contemplated by this
Agreement will be accurate and complete and will comply in all material respects
with federal securities and other laws and regulations applicable thereto.
3.8 ACQUISITION OF THE SHARES. Treasury Fund represents and warrants that
the Shares it acquires pursuant to this Agreement are not being acquired for the
purpose of making any distribution thereof, except in accordance with the terms
of this Agreement.
3.9 FINANCIAL STATEMENTS. Each party represents and warrants that its
Statement of Assets and Liabilities of January 31, 2000 provided to the other
party has been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly reflects the financial condition of
such party as of such date, and there are no known contingent liabilities of
such party as of such date not disclosed therein.
3.10 NO ADVERSE CHANGES. Each party represents and warrants that since
January 31, 2000, there has not been any material adverse change in its
financial condition, assets, liabilities or business other than changes
occurring in the ordinary course of business except as otherwise disclosed in
writing to and accepted by the other party (for the purposes of this paragraph,
a decline in net asset value per share of a party shall not constitute a
material adverse change).
3.11 PROXY STATEMENT. Each party represents and warrants that the Combined
Proxy Statement and Prospectus contained in the Registration Statement on Form
N-14 to be used in connection with the transaction contemplated hereby (only
insofar as it relates to such party) will, on its effective date and on the
Closing Date, not contain any untrue statement of material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not materially misleading.
5
<PAGE> 6
3.12 LITIGATION. Each party represents and warrants that there is no
material litigation or administrative proceeding or investigation of or before
any court or governmental body either pending or threatened against such party
or any of its properties or assets which, if adversely determined, would
materially affect its financial condition or the conduct of its business.
ARTICLE 4
COVENANTS
4.1 CONDUCT OF BUSINESS. During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the
Closing Date, each party shall operate its business in the ordinary course
except as contemplated by this Agreement.
4.2 SHAREHOLDERS MEETING. Treasury Fund shall call a special meeting of its
shareholders as soon as possible for the purpose of considering the
reorganization contemplated by this Agreement.
4.3 PREPARATION OF COMBINED PROSPECTUS AND PROXY STATEMENT. As soon as
reasonably practicable after the execution of this Agreement, Diversified Fund
shall prepare and file a combined prospectus and proxy statement with respect to
the reorganization with the United States Securities and Exchange Commission in
form and substance satisfactory to both parties, and shall use its best efforts
to provide that the combined prospectus and proxy statement can be distributed
to the shareholders of Treasury Fund as promptly as thereafter as practicable.
As soon a reasonably practicable, the parties shall also prepare and file any
other related filings required under applicable state securities laws.
4.4 FEES AND EXPENSES. Whether or not this Agreement is consummated, each
party shall bear its respective costs and expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
4.5 PROVISION OF DOCUMENTS. Each party agrees that it will, from time to
time as and when reasonably requested by the other party, provide or cause to be
provided to the other party such information, execute and deliver or cause to be
executed and delivered to the other party such documents, and take or cause to
be taken such further action, as the other party may deem necessary in order to
carry out the intent of this Agreement.
4.6 TREASURY FUND LIABILITIES. Treasury Fund will use its best efforts to
discharge all of its financial liabilities and obligations prior to the Closing
Date.
ARTICLE 5
TERMINATION, AMENDMENT AND WAIVER
5.1 TERMINATION. This Agreement may be terminated by resolution of the
Board of Trustees of the Trust at any time prior to the Closing Date, if
(a) either party shall have breached any material provision of this
Agreement; or
6
<PAGE> 7
(b) circumstances develop that, in the opinion of such Board, make
proceeding with the Plan inadvisable; or
(c) any governmental body shall have issued an order, decree or ruling
having the effect of permanently enjoining, restraining or otherwise
prohibiting the consummation of this Agreement.
5.2 EFFECT OF TERMINATION. In the event of any termination pursuant to
Section 5.1, there shall be no liability for damage on the part of either party
to the other party.
5.3 AMENDMENT. This Agreement contains the entire agreement of the parties
with respect to the reorganization contemplated by the Plan and may be amended
prior to the Closing Date by the parties in writing at any time; provided,
however, that there shall not be any amendment that by law requires approval by
the shareholders of a party without obtaining such approval.
5.4 WAIVER. At any time prior to the Closing Date, any of the terms or
conditions of this Agreement may be waived by the Board of Trustees of the Trust
if, in its judgment after consultation with legal counsel, such action or waiver
will not have a material adverse effect on the benefits intended under this
Agreement to the shareholders of Treasury Fund or Diversified Fund,
respectively.
ARTICLE 6
GENERAL PROVISIONS
6.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of Massachusetts.
6.2 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, but
no assignment or transfer hereof or of any rights or obligations hereunder shall
be made by either party without the written consent of the other party. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person other than the parties hereto and their respective successors
and assigns any rights or remedies under or by reason of this Agreement.
6.3 RECOURSE. All persons dealing with Diversified Fund or Treasury Fund
must look solely to the property of Diversified Fund or Treasury Fund for the
enforcement of any claims against Diversified Fund or Treasury Fund,
respectively, as neither the trustees, directors, officers, agents nor
shareholders of Diversified Fund or Treasury Fund assume any personal liability
for obligations entered into on behalf of Diversified Fund or Treasury Fund,
respectively.
6.4 NOTICES. Any notice, report, statement or demand required or permitted
by any provisions of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy or certified mail addressed to either party at 3435
Stelzer Road, Columbus, Ohio 43219, Attention: President.
7
<PAGE> 8
IN WITNESS WHEREOF, each party has caused this Agreement to be
executed and attested on its behalf by its duly authorized representatives as of
the date first above written.
PACIFIC CAPITAL FUNDS, on behalf of
its U.S. Treasury Securities Fund Series
Attest: By: _______________________________
Irimga McKay
President
- ---------------------------
Gregory Maddox
Secretary
PACIFIC CAPITAL FUNDS, on behalf of
its Diversified Fixed Income Fund Series
Attest: By: ________________________________
Irimga McKay
President
- --------------------------
Gregory Maddox
Secretary
8
<PAGE> 1
ADDENDUM
CUSTODIAN AGREEMENT
(FOREIGN AND DOMESTIC SECURITIES)
This Addendum is in reference to the Custodian Agreement by
and between Pacific Capital Funds (Principal) and Union Bank of California,
formerly The Bank of California, (Custodian), dated June 29, 1996, and the Annex
to the Custodian Agreement of October 13, 1997.
The Principal wishes to acknowledge that the Custodian
Agreement between the two parties applies to all individual Funds within the
Pacific Capital Fund Group, where Union Bank of California has been appointed
the Custodian. The current appointment is for the New Asia Growth Fund and the
International Stock Fund.
Date:___________________
- ------------------------------- ----------------------------------
Authorized Signer Authorized Signer
Pacific Capital Funds Union Bank of California
1
<PAGE> 1
Exhibit 11
PAUL, HASTINGS, JANOFSKY & WALKER LLP
555 South Flower Street
Los Angeles, California 90071
(213) 683-6000
May 1, 2000
Pacific Capital Funds
3435 Stelzer Road
Columbus, Ohio 43219
Ladies and Gentlemen:
We have acted as counsel to Pacific Capital Funds (the
"Trust") in connection with the proposed reorganization of the U.S. Treasury
Securities Fund series of the Trust (the "Treasury Fund"), pursuant to which the
Treasury Fund will transfer all of its assets, subject to all of its
liabilities, to the Diversified Fixed Income Fund series of the Trust (the
"Diversified Fund") in exchange for shares of beneficial interest of the
Diversified Fund issued in connection with the reorganization (the "Shares").
The Shares will be registered on a Form N-14 Registration Statement of the Trust
to be filed by the Trust with the Securities and Exchange Commission (the
"Registration Statement").
In our capacity as counsel for the Trust, we have examined the
Declaration of Trust of the Trust dated October 30, 1992 as amended (the
"Declaration of Trust"), the bylaws of the Trust, as amended, and originals or
copies of actions of the Board of Trustees of the Trust, as furnished to us by
the Trust, certificates of public officials, and such other documents, records
and certificates as we have deemed necessary for the purposes of this opinion.
Our opinion below is limited to the federal law of the United
States of America and the business trust law of the Commonwealth of
Massachusetts. We are not licensed to practice law in the Commonwealth of
Massachusetts, and we have based our opinion solely on our review of Chapter 182
of the Massachusetts General Laws and the case law interpreting such Chapter as
reported in the Annotated Laws of Massachusetts (Aspen Law & Business, supp.
1999). We have not undertaken a review of other Massachusetts law or of any
administrative or court decisions in connection with rendering this opinion. We
disclaim any opinion as to any law other than as described above, and we
disclaim any opinion as to any statute, rule, regulation, ordinance, order or
other promulgation of any regional or local governmental authority.
We note that, pursuant to certain decisions of the Supreme
Judicial Court of the Commonwealth of Massachusetts, shareholders of a
Massachusetts business trust may, in certain circumstances, be assessed or held
personally liable as partners for the obligations or liabilities of the Trust.
However, we also note that Article V, Section 5.1 of the Declaration of Trust
provides that no shareholder of the Trust as such shall be subject to any
personal liability whatsoever to any person in connection with the affairs
1
<PAGE> 2
of the Diversified Fund, and that all persons shall look solely to the property
of the Diversified Fund for satisfaction of claims of any nature arising
directly or indirectly in connection with the affairs of the Diversified Fund.
Further, the Diversified Fund is required to indemnify and hold each shareholder
of the Diversified Fund harmless from and against all claims and liabilities to
which the shareholder may become subject by reason of the shareholder's being or
having been a shareholder. This indemnification provision requires the
Diversified Fund to reimburse the shareholder for all legal and other expenses
reasonably incurred in connection with any such claim or liability. In addition,
Article V, Section 5.5 of the Declaration of Trust provides that every written
obligation, contract, instrument, or other undertaking of the Diversified Fund
shall recite that the obligations of the Diversified Fund thereunder are not
binding upon any shareholder individually, but bind only the Diversified Fund.
Based on the foregoing and our examination of such questions
of law as we have deemed necessary and appropriate for the purpose of this
opinion, we are of the opinion that the Shares are duly authorized and, when
purchased and paid for as described in the Registration Statement, will be
validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion of counsel as
an exhibit to the Registration Statement.
Very truly yours,
PAUL, HASTINGS, JANOFSKY & WALKER LLP
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Exhibit 12
Paul, Hastings, Janofsky & Walker LLP
555 South Flower Street
Los Angeles, California 90071-2371
May 1, 2000
Pacific Capital Funds
3435 Stelzer Road
Columbus, Ohio 43218
Re: Reorganization of U.S. Treasury Securities Fund
and Diversified Fixed Income Fund
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Ladies and Gentlemen:
You have requested our opinion as counsel for The Pacific
Capital Funds, a Massachusetts business trust (the "Trust"), with respect to
certain federal income tax matters in connection with the reorganization by and
between the Diversified Fixed Income Fund (the "Acquiring Fund"), a series of
the Trust, and the U.S. Treasury Securities Fund (the "Acquired Fund"), also a
series of the Trust. This opinion is rendered in connection with the transaction
(the "Transaction") described in the Agreement and Plan of Reorganization dated
as of April 25, 2000 (the "Reorganization Agreement"), by the Trust for itself
and on behalf of the Acquiring Fund and the Acquired Fund, and adopts the
applicable defined terms therein.
This letter and the opinion expressed herein are for delivery
to the Trust and may be relied upon only by the Trust, the Acquiring Fund and
the Acquired Fund, and their shareholders. This opinion also may be disclosed by
the Trust, the Acquiring Fund and the Acquired Fund, or any of their
shareholders in connection with an audit or other administrative proceeding
before the Internal Revenue Service (the "Service") affecting the Trust, the
Acquiring Fund and the Acquired Fund, or any of their shareholders or in
connection with any judicial proceeding relating to the federal, state or local
tax liability of the Trust, the Acquiring Fund and the Acquired Fund or any of
their shareholders.
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For purposes of this opinion we have assumed the truth and
accuracy of the following facts:
The Trust was duly created pursuant to its Agreement and
Declaration of Trust by the Trustees for the purpose of acting as a management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), and is validly existing under the laws of the Commonwealth of
Massachusetts. The Trust is registered as an investment company classified as a
diversified, open-end management company, under the 1940 Act.
The Acquiring Fund is a series of the Trust duly established
under the laws of the Commonwealth of Massachusetts, and is validly existing
under the laws of that Commonwealth. The shares of the Acquiring Fund are widely
held. The Acquiring Fund has an authorized capital of an unlimited number of
shares and each outstanding share of the Acquired Fund is fully transferable and
has full voting rights.
The Acquired Fund is a series of the Trust duly established
under the laws of the Commonwealth of Massachusetts, and is validly existing
under the laws of that Commonwealth. The shares of the Acquired Fund are widely
held. The Acquired Fund has an authorized capital of an unlimited number of
shares and each outstanding share of the Acquired Fund is fully transferable and
has full voting rights.
For valid business purposes, the following transaction will
take place in accordance with the laws of the Commonwealth of Massachusetts and
pursuant to the Reorganization Agreement:
(a) On the date of the closing (the "Closing Date"), the Trust
will cause the Acquired Fund to transfer substantially all of its assets to the
Acquiring Fund. Solely in exchange therefor, the Trust will cause the Acquiring
Fund to deliver to the Acquired Fund a number of Class A and Class Y shares (the
"Acquiring Fund Shares") of voting shares of beneficial interest of the
Acquiring Fund and to assume the liabilities of the Acquired Fund as stated in
the Reorganization Agreement.
(b) The Trust will then cause the Acquired Fund to liquidate
and distribute all of the Acquiring Fund Shares to the shareholders of the
Acquired Fund in proportion to their respective interests in the Acquired Fund
in exchange for their shares in the Acquired Fund.
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(c) The Trust will then cause the Acquired Fund to wind up and
dissolve as soon as practicable thereafter.
In rendering the opinions stated below, we have examined and
relied upon the following, assuming the truth and accuracy of any statements
contained therein:
(1) The Reorganization Agreement; and
(2) Such other documents, records and instruments as we
have deemed necessary in order to enable us to render
the opinions referred to in this letter.
For purposes of rendering the opinions stated below, we have
in addition relied upon the following representations by the Trust on behalf of
both the Acquired Fund and the Acquiring Fund, as applicable:
(A) The fair market value of the Acquiring Fund Shares
received by each shareholder of the Acquired Fund will be approximately equal to
the fair market value of the shares of the Acquired Fund surrendered in the
exchange. The shareholders of the Acquired Fund received no consideration other
than Acquiring Fund Shares in exchange for their shares in the Acquired Fund.
(B) On the Closing Date and at all times prior to the Closing,
there was not and there has not been any plan or intention by the Acquiring Fund
or any person related (as defined in section 1.368-1(e)(3) of the Treasury
Regulations which generally provides that two corporations are related persons
if either (i) the corporations are members of the same affiliated group or (ii)
one corporation is a subsidiary of the other corporation) to the Acquiring Fund
to acquire or redeem any of the shares of the Acquiring Fund issued in the
transaction either directly or through any transaction, agreement, or
arrangement with any other person, other than redemptions in the ordinary course
of the Acquiring Fund's business as an open-end investment company as required
by section 22(e) of the 1940 Act.
(C) During the five-year period ending on the Closing Date,
neither the Acquired Fund nor any person related to the Acquired Fund (as
defined in section 1.368-1(e)(3) of the Treasury Regulations) will have directly
or through any transaction, agreement, or arrangement with any other person, (i)
acquired shares of the Acquired Fund with consideration other than shares of the
Acquiring Fund or the Acquired Fund, except for shares redeemed in the ordinary
course of the Acquired Fund's business as an
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open-end investment company as required by section 22(e) of the 1940 Act or (ii)
made distributions with respect to the Acquired Fund shares, except for (a)
regular, normal dividend distributions made to the Acquired Fund's shareholders
in an amount equal to 100% of its investment company taxable income and its net
capital gains, and (b) additional distributions, to the extent such
distributions do not exceed 50% of the value (without giving effect to such
distributions) of the proprietary interest in the Acquired Fund on the effective
date of the proposed transaction.
(D) Prior to or in the Transaction, neither the Acquiring Fund
nor any person related to the Acquiring Fund (as defined in section
1.368-1(e)(3) of the Treasury Regulations) will have acquired directly or
through any transaction, agreement or arrangement with any other person, shares
of the Acquired Fund with consideration other than shares of the Acquiring Fund.
(E) The Acquiring Fund will acquire at least 90 percent of the
fair market value of the net assets and at least 70 percent of the fair market
value of the gross assets held by the Acquired Fund immediately prior to the
Transaction. For purposes of this representation, amounts used by the Acquired
Fund to pay its reorganization expenses, amounts paid by the Acquired Fund to
shareholders who receive cash or other property, and all redemptions and
distributions (except for distributions and redemptions occurring in the
ordinary course of the Acquired Fund's business as a series of an investment
company) made by the Acquired Fund immediately preceding the transfer have been
included as assets of the Acquired Fund held immediately prior to the
transaction.
(F) On the Closing Date and at all times prior to the Closing
Date, the Acquiring Fund did not have and has not had any plan or intention to
sell or otherwise dispose of any of the assets of the Acquired Fund acquired in
the Transaction, except for dispositions made in the ordinary course of its
business as a series of an open-end investment company.
(G) The Acquired Fund will distribute the Acquiring Fund
Shares it receives in the Transaction to its shareholders as provided in the
Reorganization Agreement.
(H) The liabilities of the Acquired Fund assumed by the
Acquiring Fund and the liabilities to which the transferred assets will be
subject were incurred by the Acquired Fund in the ordinary course of business
and were associated with the assets transferred to the Acquiring Fund.
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(I) At all times following the Transaction, the Acquiring Fund
has continued and intends to continue the historic business of the Acquired Fund
or use a significant portion of the Acquired Fund's historic business assets in
a business.
(J) Pacific Capital Trust, the investment adviser to both the
Acquiring Fund and the Acquired Fund will pay or assume only those expenses of
the Acquired Fund and the Acquired Fund's shareholders that are solely and
directly related to the transaction in accordance with the guidelines
established in Rev. Rul. 73-54, 1973-1 C.B. 187 (such as legal and accounting
expenses, appraisal fees, administrative costs, security underwriting and
registration fees and expenses, and transfer agents' fees and expenses).
Otherwise, the Acquiring Fund, the Acquired Fund, and the shareholders of the
Acquired Fund will pay their respective expenses, if any, incurred in connection
with the transaction.
(K) There is no intercorporate indebtedness existing between
the Acquired Fund and the Acquiring Fund that was issued, acquired, or will be
settled at a discount.
(L) The Acquired Fund and the Acquiring Fund each meet the
requirements of a regulated investment company as defined in Sections
368(a)(2)(F)(ii) and (iii) of the Internal Revenue Code of 1986, as amended (the
"Code").
(M) On the Closing Date, the Acquiring Fund will not own,
directly or indirectly, nor did it own during the five years preceding the
Closing Date, directly or indirectly, any shares of the Acquired Fund.
(N) The fair market value of the assets of the Acquired Fund
transferred to the Acquiring Fund will equal or exceed the sum of the
liabilities assumed by the Acquiring Fund, plus the amount of liabilities, if
any, to which the transferred assets are subject.
(O) Each of the Acquired Fund and the Acquiring Fund has
elected to be taxed as a "regulated investment company" under Section 851 of the
Code and, for all of its taxable periods (including the last short taxable
period ending on the date of the transaction for the Acquired Fund), has
qualified for the special tax treatment afforded regulated investment companies
under the Code, and after the transaction, the Acquiring Fund intends to
continue to so qualify.
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(P) The Acquired Fund is not under the jurisdiction of a court
in a case under Title 11 of the United States Code or a receivership,
foreclosure, or similar proceeding in a Federal or state court within the
meaning of Code Section 368(a)(3)(A).
(Q) Neither the Acquired Fund nor one or more of its
shareholders, or any combination thereof, will control (within the meaning of
Section 368(c) of the Code) the Acquiring Fund immediately after the transfer.
Our opinions set forth in this letter are based upon the Code,
regulations of the Treasury Department, published administrative announcements
and rulings of the Service and court decisions, all as of the date of this
letter. Based on the foregoing facts and representations, and provided that the
transaction will take place in accordance with the terms of the Reorganization
Agreement, and further provided that the Acquired Fund distributes the shares of
the Acquiring Fund received in the transaction as soon as practicable, we are of
the opinion that:
(1) The transfer by the Acquired Fund of substantially all of
its assets to the Acquiring Fund solely in exchange for shares of the Acquiring
Fund and the assumption by the Acquiring Fund of the Acquired Fund's
liabilities, followed by the distribution by the Acquired Fund of the Acquiring
Fund Shares to its shareholders in complete liquidation of the Acquired Fund
will be a reorganization within the meaning of Section 368(a) of the Code. The
Acquiring Fund and the Acquired Fund each are a "party to a reorganization"
within the meaning of Section 368(b) of the Code.
(2) The Acquired Fund will recognize no gain or loss on its
transfer of substantially all of its assets to the Acquiring Fund in exchange
solely for the Acquiring Fund Shares and the assumption by the Acquiring Fund of
the Acquired Fund's liabilities, or on distribution of such Acquiring Fund
Shares to its shareholders.
(3) The Acquiring Fund will recognize no gain or loss on its
receipt of substantially all of the assets of the Acquired Fund and the
assumption by the Acquiring Fund of the Acquired Fund's liabilities in exchange
solely for the Acquiring Fund Shares.
(4) The Acquiring Fund's basis in the assets received from the
Acquired Fund in the transaction will equal the basis of such assets in the
hands of the Acquired Fund immediately prior to the transaction.
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<PAGE> 7
(5) The Acquiring Fund's holding period for the assets
received in the Transaction will include the period during which the Acquired
Fund held such assets.
(6) The shareholders of the Acquired Fund will recognize no
gain or loss on the receipt of the Acquiring Fund Shares (including any
fractional share interests to which they may be entitled) solely in exchange for
their Acquired Fund shares.
(7) The basis of the Acquiring Fund Shares received by each of
the Acquired Fund's shareholders in the transaction (including fractional shares
to which they may be entitled) will equal the basis of the Acquired Fund shares
surrendered in exchange therefor.
(8) The holding period of the Acquiring Fund Shares received
by each of the Acquired Fund's shareholders in exchange for their Acquired Fund
shares (including fractional shares to which they may be entitled) will include
the period that the shareholder held the Acquired Fund shares exchanged
therefor, provided that the shareholder held such shares as a capital asset on
the date of the exchange.
The opinions set forth above represent our conclusions as to
the application of federal income tax law existing as of the date of this letter
to the transactions described above, and we can give no assurance that
legislative enactments, administrative changes or court decisions may not be
forthcoming which would require modifications or revocations of our opinions
expressed herein. Moreover, there can be no assurance that positions contrary to
our opinions will not be taken by the Service, or that a court considering the
issues would not hold contrary to such opinions. Further, all the opinions set
forth above represent our conclusions based upon the documents and facts
referred to above. Any material amendments to such documents or changes in any
significant facts would affect the opinions referred to herein. Although we have
made such inquiries and performed such investigation as we have deemed necessary
to fulfill our professional responsibilities, we have not undertaken an
independent investigation of the facts referred to in this letter.
We express no opinion as to any federal income tax issue or
other matter except those set forth above.
We hereby consent to the filing of this opinion as an exhibit
to the Trust's Registration Statement on Form N-14 (and our being named therein)
filed by the Trust in connection with the Transaction.
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Very truly yours,
/s/ Paul, Hastings, Janofsky & Walker LLP
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<PAGE> 1
Exhibit 17
PROXY
PACIFIC CAPITAL U.S. TREASURY SECURITIES FUND
SPECIAL MEETING OF SHAREHOLDERS
JULY 5, 2000
The undersigned hereby appoints Greg Maddox and Jeff Laroche
his/her attorney and proxy with full power of substitution to vote and act with
respect to all shares of the Pacific Capital U.S. Treasury Securities (the
"Fund") held by the undersigned at the Special Meeting of Shareholders of the
Fund to be held at 3:00 p.m., Eastern Time, on July 5, 2000, at the offices of
BISYS Fund Services, 3435 Stelzer Road, Columbus, Ohio and at any adjournment
thereof (the "Meeting"), and instructs them to vote as indicated on the matter
referred to in the Proxy Statement for the Meeting, receipt of which is hereby
acknowledged, with discretionary power to vote upon such other business as may
properly come before the Meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE FUND.
THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR THE FOLLOWING PROPOSAL:
Approval of the reorganization of the Fund into the Pacific
Capital Diversified Fixed Income Fund.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
THIS PROXY WILL BE VOTED AS SPECIFIED. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED FOR THE PROPOSAL.
Receipt of the Notice of Special Meeting and Proxy Statement is hereby
acknowledged.
Dated __________, 2000
-------------------------------------------
Name of Shareholder(s) - Please print or type
-------------------------------------------
Signature(s) of Shareholder(s)
-------------------------------------------
Signature(s) of Shareholder(s)
This proxy must be signed by the beneficial owner of Fund shares. If signing as
attorney, executor, guardian or in some representative capacity or as an officer
of a corporation, please add title as such.
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
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