EXHIBIT (4)
BB&T FUNDS
BB&T LARGE CAP GROWTH FUND AND
BB&T LARGE CAP FUND
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization, having been approved by the
Board of Trustees of BB&T Funds, is made as of [_______], 2006 between BB&T
Funds, on behalf of BB&T Large Cap Growth Fund and BB&T Large Cap Fund, and BB&T
Asset Management, Inc (the "Plan"). The capitalized terms used herein shall have
the meaning ascribed to them in this Plan.
1. OVERVIEW OF PLAN OF REORGANIZATION
(a) The BB&T Large Cap Growth Fund ("Large Cap Growth Fund") will sell,
assign, convey, transfer and deliver to BB&T Large Cap Fund ("Large Cap Fund"),
and Large Cap Fund will acquire, on the Exchange Date, all of the properties and
assets existing at the Valuation Time in Large Cap Growth Fund, subject to
liabilities.
In consideration therefor, Large Cap Fund shall, on the Exchange Date,
assume all of the liabilities of Large Cap Growth Fund existing at the Valuation
Time and transfer to Large Cap Growth Fund a number of full and fractional units
of beneficial interest ("Shares") (such Shares being Institutional, Class A,
Class B or Class C Shares) of Large Cap Fund having an aggregate net asset value
equal to the value of the assets of Large Cap Growth Fund transferred to Large
Cap Fund on such date less the value of all of the liabilities of Large Cap
Growth Fund assumed by Large Cap Fund on that date. It is intended that the
reorganization described in this Plan shall be a tax-free reorganization under
Section 368 of the Internal Revenue Code of 1986, as amended (the "Code").
(b) Upon consummation of the transaction described in paragraph 1(a) of
this Plan, Large Cap Growth Fund in complete liquidation shall distribute to its
respective shareholders of record as of the Exchange Date the Large Cap Fund
Shares received by it, each shareholder being entitled to receive that number of
such Large Cap Fund Shares equal to the total of (i) the proportion which the
number of Shares of Large Cap Growth Fund held by such shareholder bears to the
number of such Shares of Large Cap Growth Fund outstanding on such date
multiplied by (ii) the total number of Large Cap Fund Shares received by the
Large Cap Growth Fund, as of the Exchange Date. Large Cap Growth Fund
shareholders of record holding Institutional, Class A, Class B or Class C Shares
will receive Institutional, Class A, Class B or Class C Shares, respectively, of
Large Cap Fund.
2. REPRESENTATIONS AND WARRANTIES OF BB&T FUNDS. Each of the BB&T Funds, Large
Cap Fund and Large Cap Growth Fund warrant to and agree that:
(a) BB&T Funds is a business trust duly established and validly existing
under the laws of The Commonwealth of Massachusetts and has power to carry on
its business as it is now being conducted and to carry out this Plan. Each of
BB&T Funds, Large Cap Growth Fund and Large Cap Fund is not required to qualify
as a foreign association in any jurisdiction. Each of BB&T Funds, Large Cap
Growth Fund and Large Cap Fund has all necessary federal, state and local
authorizations to own all of its
properties and assets and to carry on business as now being conducted and to
fulfill the terms of this Plan, except as set forth in Section 2(i).
(b) BB&T Funds is registered under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end management investment company, and such
registration has not been revoked or rescinded and is in full force and effect.
(c) The statements of assets and liabilities, statements of operations,
statements of changes in net assets and schedules of investments (indicating
their market values) for each of Large Cap Growth Fund and Large Cap Fund for
the year ended September 30, 2006, fairly present the financial position of each
of Large Cap Growth Fund and Large Cap Fund as of such date, and said statements
of operations and changes in net assets and financial highlights fairly reflect
the results of operations, changes in net assets and financial highlights for
the periods covered thereby in conformity with generally accepted accounting
principles.
(d) The prospectuses of each of Large Cap Growth Fund and Large Cap Fund
dated February 1, 2006, as amended, as filed with the Securities and Exchange
Commission (the "Commission") (the "Prospectuses") and the Statement of
Additional Information for BB&T Funds, dated February 1, 2006, as amended (the
"Statement of Additional Information"), as filed with the Commission, did not as
of such date, and will not as of the Exchange Date, 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 they were made, not misleading.
(e) There are no material legal, administrative or other proceedings
pending or, to the knowledge of BB&T Funds, Large Cap Growth Fund or Large Cap
Fund, overtly threatened against BB&T Funds, Large Cap Growth Fund or Large Cap
Fund, which assert liability on the part of BB&T Funds, Large Cap Growth Fund or
Large Cap Fund.
(f) There are no material contracts outstanding to which BB&T Funds, Large
Cap Growth Fund or Large Cap Fund is a party, other than as disclosed in BB&T's
Prospectuses and Statement of Additional Information or in the Registration
Statement.
(g) Large Cap Growth Fund has no known liabilities of a material nature,
contingent or otherwise, other than those shown on its statement of assets and
liabilities as of September 30, 2006, referred to above and those incurred in
the ordinary course of the business of BB&T Funds as an investment company or
Large Cap Growth Fund since such date. Prior to the Exchange Date, Large Cap
Growth Fund will advise Large Cap Fund of all known material liabilities,
contingent or otherwise, incurred by it subsequent to September 30, 2006,
whether or not incurred in the ordinary course of business.
(h) As of the Exchange Date, BB&T Funds and each of Large Cap Growth Fund
and Large Cap Fund will have filed all federal and other tax returns which, to
the knowledge of BB&T Funds' officers, have been required to be filed by Large
Cap Growth Fund or Large Cap Fund, respectively, and will have paid or will pay
all federal and other taxes shown to be due on such returns or on any
assessments received by Large Cap Growth Fund or Large Cap Fund, respectively.
As of the Exchange Date, to such officers' knowledge, each of Large Cap Growth
Fund and Large Cap Fund (i) will have adequately provided for all tax
liabilities on its books, (ii) will not have had any tax deficiency or liability
asserted against it, or question with respect thereto raised, and (iii) will not
be under audit by the Internal Revenue Service or by any state or local tax
authority for taxes in excess of those already paid.
(i) As used in this Plan, the term "Investments" shall mean the Large Cap
Growth Fund's investments shown on the schedule of its portfolio investments as
of September 30, 2006, referred to in Section 2(c) hereof, as supplemented with
such changes as BB&T Funds or the Large Cap Growth Fund shall make after
September 30, 2006, which changes shall be disclosed to BB&T Funds and the Large
Cap Fund, and changes resulting from stock dividends, stock split-ups, mergers
and similar corporate actions.
(j) Each of Large Cap Growth Fund and Large Cap Fund has elected to qualify
and has qualified as, and has met the requirements of subchapter M of the Code
for treatment as a "regulated investment company" within the meaning of Section
851 of the Code in respect of each taxable year since the commencement of
operations, and will continue to so qualify and meet such requirements at all
times through the Exchange Date. Neither Large Cap Growth Fund nor Large Cap
Fund has at any time since its inception been liable (nor is now liable) for any
material income or excise tax pursuant to Section 852 or 4982 of the Code. Each
of Large Cap Growth Fund and Large Cap Fund is in compliance in all material
respects with applicable regulations of the Internal Revenue Service pertaining
to the reporting of dividends and other distributions on and redemptions of its
capital stock and to withholding in respect of dividends and other distributions
to shareholders, and is not liable for any material penalties which could be
imposed thereunder.
(k) No consent, approval, authorization or order of any governmental
authority is required for the consummation by BB&T Funds, Large Cap Growth Fund
or Large Cap Fund of the transaction contemplated by this Plan, except such as
may be required under the 1933 Act, the 1934 Act, the 1940 Act, state securities
or Blue Sky laws or the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976.
(l) As of both the Valuation Time and the Exchange Date and otherwise as
described in Section 2(i), BB&T Funds on behalf of Large Cap Fund will have full
right, power and authority to purchase the Investments and any other assets and
assume the liabilities of Large Cap Growth Fund to be transferred to Large Cap
Fund pursuant to this Plan.
(m) The Registration Statement, the Prospectuses and the Proxy Statement,
on the effective date of the Registration Statement and insofar as they relate
to BB&T Funds, Large Cap Growth Fund and Large Cap Fund: (i) will comply 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 (ii) 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 in which they were made, not misleading; and at the time of the
shareholders' meeting referred to in Section 8(a) and at the Exchange Date, the
Prospectuses, as amended or supplemented by any amendments or supplements filed
with the Commission by BB&T Funds, Large Cap Growth Fund or Large Cap Fund, 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 in which they were made, not misleading; provided,
however, that none of the representations and warranties in this subsection
shall apply to statements in or omissions from the Registration Statement, the
Prospectuses or the Proxy Statement made in reliance upon and in conformity with
information furnished by Large Cap Growth Fund or Large Cap Fund for use in the
Registration Statement, the Prospectuses or the Proxy Statement.
(n) Large Cap Fund Shares to be issued to each of Large Cap Growth Fund
have been duly authorized and, when issued and delivered pursuant to this Plan
and the Prospectuses, will be legally and validly issued and will be fully paid
and nonassessable by BB&T Funds and no shareholder of BB&T Funds will have any
preemptive right of subscription or purchase in respect thereof.
(o) The issuance of Large Cap Fund Shares pursuant to this Plan will be in
compliance with all applicable federal and state securities laws.
3. REORGANIZATION. (a) Subject to the requisite approval of the
shareholders of Large Cap Growth Fund (in respect of the Large Cap Growth Fund
Reorganization, as hereafter defined) and to the other terms and conditions
contained herein (including Large Cap Growth Fund's obligation described in
Section 9(j) hereof to distribute to its respective shareholders all of its
undistributed investment company taxable income (as defined in Section 852 of
the Code), if any, and net capital gain (as defined in Section 1222 of the
Code)), Large Cap Growth Fund will agree to sell, assign, convey, transfer and
deliver to Large Cap Fund, and Large Cap Fund will agree to acquire from Large
Cap Growth Fund, on the Exchange Date all of the Investments and all of the cash
and other assets of Large Cap Growth Fund, subject to liabilities, in exchange
for that number of Shares of Large Cap Fund provided for in Section 4 and the
assumption by Large Cap Fund of all of the liabilities of Large Cap Growth Fund.
Pursuant to this Plan, Large Cap Growth Fund will, as soon as practicable after
the Exchange Date, distribute in liquidation all of the Large Cap Fund Shares
received by it to its shareholders in exchange for their respective Shares of
Large Cap Growth Fund.
(b) BB&T Funds, on behalf of Large Cap Growth Fund, will pay or cause to be
paid to Large Cap Fund any interest and cash dividends received by it on or
after the Exchange Date with respect to the Investments transferred to Large Cap
Fund hereunder. BB&T Funds, on behalf of Large Cap Growth Fund, will transfer to
Large Cap Fund any rights, stock dividends, or other securities received by
Large Cap Growth Fund after the Exchange Date as stock dividends or other
distributions on or with respect to the Investments transferred, which rights,
stock dividends, and other securities shall be deemed included in the assets
transferred to Large Cap Fund at the Exchange Date and shall not be separately
valued, in which case any such distribution that remains unpaid as of the
Exchange Date shall be included in the determination of the value of the assets
of Large Cap Growth Fund acquired by Large Cap Fund.
4. EXCHANGE DATE; VALUATION TIME. On the Exchange Date, Large Cap Fund will
deliver to Large Cap Growth Fund a number of Large Cap Fund Shares having an
aggregate net asset value equal to the value of the assets attributable to each
corresponding class of Shares of Large Cap Growth Fund acquired by Large Cap
Fund, less the value of the liabilities of Large Cap Growth Fund assumed,
determined as hereafter provided in this Section 4.
(a) Subject to Section 4(d) hereof, the value of Large Cap Growth Fund's
net assets will be computed as of the Valuation Time using the valuation
procedures for Large Cap Fund set forth in the BB&T Prospectuses and BB&T
Statement of Additional Information. In no event shall the same security held by
the Large Cap Growth Fund and BB&T Funds be valued at different prices.
(b) Subject to Section 4(d) hereof, the net asset value of a Share of Large
Cap Fund will be determined to the nearest full cent as of the Valuation Time,
using the valuation procedures set forth in the BB&T Prospectuses for Large Cap
Fund.
(c) Subject to Section 4(d), the Valuation Time shall be 4:00 p.m. Eastern
Standard time on January 26, 2007, or such earlier or later days as may be
established by the proper officers of BB&T Funds (the "Valuation Time").
(d) No formula will be used to adjust the net asset value of Large Cap
Growth Fund or Large Cap Fund to take into account differences in realized and
unrealized gains and losses.
(e) Large Cap Fund shall issue its Shares to Large Cap Growth Fund on one
share deposit receipt registered in the name of Large Cap Growth Fund. Large Cap
Growth Fund shall distribute in liquidation the Large Cap Fund Shares received
by it hereunder pro rata to its shareholders by redelivering such share deposit
receipt to BB&T Funds' transfer agent which will as soon as practicable set up
open accounts for each Large Cap Growth Fund shareholder, in accordance with
written instructions furnished by Large Cap Growth Fund.
(f) Large Cap Fund shall assume all liabilities of Large Cap Growth Fund,
whether accrued or contingent, in connection with the acquisition of assets and
subsequent dissolution of Large Cap Growth Fund or otherwise, except that
recourse for assumed liabilities relating to Large Cap Growth Fund will be
limited to Large Cap Fund.
5. EXPENSES, FEES, ETC. (a) All fees and expenses incurred by Large Cap
Growth Fund, Large Cap Fund and/or BB&T Asset Management, Inc. (the investment
adviser of both Large Cap Growth Fund and Large Cap Fund) directly in connection
with the consummation the transaction contemplated by this Plan will be borne by
BB&T Asset Management, Inc., including the costs of proxy materials, proxy
solicitations and legal expenses. All such fees and expenses incurred and so
borne by BB&T Asset Management, Inc. will be solely and directly related to the
transaction contemplated by this Plan and will be paid directly by BB&T Asset
Management, Inc. to the relevant providers of services or other payees, in
accordance with the principles set forth in Revenue Ruling 73-54, 1973-1 C.B.
187. Fees and expenses not incurred directly in connection with the consummation
of the transaction contemplated by this Plan will be paid by the party directly
incurring such expenses. Notwithstanding any of the foregoing, fees and expenses
shall in any event be paid by the party directly incurring such fees and
expenses if and to the extent that the payment by BB&T Asset Management, Inc. of
such fees and expenses would result in the disqualification of such party as a
regulated investment company within the meaning of Section 851 of the Code.
Large Cap Growth Fund shareholders will pay their respective expenses, if any,
incurred in connection with the transaction contemplated by this Plan. Neither
BB&T Asset Management, Inc. nor Large Cap Growth Fund nor Large Cap Fund will
pay Large Cap Growth Fund shareholders' expenses.
(b) Notwithstanding any other provisions of this Plan, if for any reason
the transaction contemplated by this Plan is not consummated, no party shall be
liable to the other party for any damages resulting therefrom, including without
limitation consequential damages.
6. PERMITTED ASSETS. BB&T Funds and Large Cap Growth Fund will agree to
review the assets of Large Cap Growth Fund to ensure that at any time prior to
the Exchange Date the assets of Large Cap Growth Fund do not include any assets
that Large Cap Fund is not permitted, or reasonably believes to be unsuitable
for it, to acquire, including without limitation any security that, prior to its
acquisition by Large Cap Growth Fund, is unsuitable for Large Cap Fund to
acquire.
7. EXCHANGE DATE. Delivery of the assets of Large Cap Growth Fund to be
transferred, assumption of the liabilities of Large Cap Growth Fund to be
assumed, and the delivery of Large Cap Fund Shares to be issued shall be made at
the offices of BB&T Funds, 0000 Xxxxxxx Xxxx, Xxxxxxxx, XX 00000, at 9:00 a.m.
Eastern standard time on January 29, 2007, or at such other times and dates
established by the proper officers of BB&T Funds, the date and time upon which
such delivery is to take place being referred to herein as the "Exchange Date."
8. SPECIAL MEETING OF SHAREHOLDERS; DISSOLUTION. (a) Large Cap Growth Fund
will agree to call a special meeting of the shareholders as soon as is
practicable after the effective date of the Registration Statement for the
purpose of considering the sale of all of the assets of Large Cap Growth
Fund to and the assumption of all of the liabilities of Large Cap Growth Fund by
Large Cap Fund as herein provided, and approving this Plan, and it shall be a
condition to the obligations of each of the parties hereto that the holders of
the Shares of Large Cap Growth Fund shall have approved this Plan and the
transaction contemplated herein in the manner required by law and BB&T Funds'
Declaration of Trust and Bylaws at such a meeting on or before the Valuation
Time.
9. CONDITIONS TO BE MET REGARDING THE TRANSACTION. The consummation by the
Large Cap Growth Fund and Large Cap Fund of the reorganization of the Large Cap
Growth Fund with and into the Large Cap Fund ("Large Cap Growth Fund
Reorganization") shall be subject to the following conditions:
(a) This Plan shall have been adopted and the transaction contemplated
hereby, shall have been approved by the shareholders of Large Cap Growth Fund in
the manner required by law.
(b) Large Cap Growth Fund shall have furnished to Large Cap Fund a
statement of each of Large Cap Growth Fund's assets and liabilities, with values
determined as provided in Section 3 of this Plan, together with a list of
Investments with their respective tax costs, all as of the Valuation Time,
certified on Large Cap Growth Fund's behalf by its President (or any Vice
President) and Treasurer, and a certificate of both such officers, dated the
Exchange Date, to the effect that as of the Valuation Time and as of the
Exchange Date there has been no material adverse change in the financial
position of Large Cap Growth Fund since September 30, 2006, other than changes
in the Investments since that date or changes in the market value of the
Investments, or changes due to net redemptions of Shares of Large Cap Growth
Fund, dividends paid or losses from operations.
(c) As of the Valuation Time and as of the Exchange Date, all
representations and warranties of BB&T Funds, Large Cap Fund and Large Cap
Growth Fund made in Section 2 of this Plan are true and correct in all material
respects as if made at and as of such dates, Large Cap Growth Fund has complied
with all requirements of this Plan to be performed or satisfied at or prior to
each of such dates, and Large Cap Growth Fund shall have furnished to Large Cap
Fund a statement, dated the Exchange Date, signed by BB&T Funds' President (or
any Vice President) and Treasurer certifying those facts as of such dates.
(d) There shall not be any material litigation pending with respect to the
matters contemplated by this Plan.
(e) BB&T Funds shall have received an opinion of Ropes & Xxxx LLP dated the
Exchange Date to the effect that: (i) BB&T Funds is a business trust duly
established and validly existing under the laws of the Commonwealth of
Massachusetts, and neither BB&T Funds, Large Cap Growth Fund nor Large Cap Fund
is, to the knowledge of such counsel, required to qualify to do business as a
foreign association in any jurisdiction; (ii) BB&T Funds and Large Cap Growth
Fund have power to sell, assign, convey, transfer and deliver the Investments
and other assets contemplated hereby and, upon consummation of the transaction
contemplated hereby in accordance with the terms of this Plan, BB&T Funds and
Large Cap Growth Fund will have duly sold, assigned, conveyed, transferred and
delivered such Investments and other assets to Large Cap Fund; (iii) the
adoption of this Plan did not, and the consummation of the transaction
contemplated hereby will not, violate BB&T Funds' Declaration of Trust or
Bylaws, as amended, or any provision of any agreement known to such counsel to
which BB&T Funds is a party or by which it is bound; (iv) no consent, approval,
authorization or order of any court or governmental authority is required for
the consummation by BB&T Funds of the transaction contemplated hereby, except
such as have been obtained under the Securities Act of 1933 (the "1933 Act"),
the Securities Exchange Act of 1934 ("the 1934 Act") and the 1940 Act; (v) this
Plan has been duly authorized by BB&T Funds and is a valid and binding
obligation of BB&T Funds; and (vi) the Shares of Large Cap
Fund to be delivered to Large Cap Growth Fund as provided for by this Plan are
duly authorized and upon such delivery will be validly issued and will be fully
paid and nonassessable by BB&T Funds and no shareholder of BB&T Funds has any
preemptive right to subscription or purchase in respect thereof.
(f) With respect to the Large Cap Growth Fund Reorganization, BB&T Funds,
on behalf of Large Cap Growth Fund and Large Cap Fund shall have received an
opinion of Ropes & Xxxx LLP addressed to Large Cap Growth Fund and Large Cap
Fund and dated the Exchange Date (which opinion will be based upon certain
factual representations and subject to certain qualifications) to the effect
that, on the basis of the existing provisions of the Code, Treasury Regulations,
current administrative rules and court decisions, generally for federal income
tax purposes, except as noted below: (i) the transaction contemplated by this
Plan will constitute a reorganization within the meaning of Section 368(a) of
the Code, and Large Cap Fund and Large Cap Growth Fund will each be a "party to
a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain
or loss will be recognized by Large Cap Fund upon the receipt of the assets of
Large Cap Growth Fund in exchange for Large Cap Fund Shares and the assumption
by Large Cap Fund of the liabilities of Large Cap Growth Fund; (iii) the basis
in the hands of Large Cap Fund of the assets of Large Cap Growth Fund
transferred to Large Cap Fund in the transaction contemplated by this Plan will
be the same as the basis of such assets in the hands of Large Cap Growth Fund
immediately prior to the transfer; (iv) the holding periods of the assets of
Large Cap Growth Fund in the hands of Large Cap Fund will include the periods
during which such assets were held by Large Cap Growth Fund; (v) no gain or loss
will be recognized by Large Cap Growth Fund upon the transfer of Large Cap
Growth Fund's assets to Large Cap Fund in exchange for Large Cap Fund Shares and
the assumption by Large Cap Fund of the liabilities of Large Cap Growth Fund, or
upon the distribution of Large Cap Fund Shares by Large Cap Growth Fund to its
shareholders in liquidation; (vi) no gain or loss will be recognized by Large
Cap Growth Fund shareholders upon the exchange of their Large Cap Growth Fund
Shares for Large Cap Fund Shares; (vii) the aggregate basis of Large Cap Fund
Shares a Large Cap Growth Fund shareholder receives in connection with the
transaction contemplated by this Plan will be the same as the aggregate basis of
his or her Large Cap Growth Fund exchanged therefor; (viii) a Large Cap Growth
Fund shareholder's holding period for his or her Large Cap Fund Shares will be
determined by including the period for which he or she held the Large Cap Growth
Fund Shares exchanged therefor, provided that he or she held such Large Cap
Growth Fund Shares as capital assets; and (ix) Large Cap Fund will succeed to,
and take into account the items of Large Cap Growth Fund described in Section
381(c) of the Code, subject to the conditions and limitations specified in
Sections 381, 382, 383 and 384 of the Code and the Treasury regulations
thereunder. The opinion will express no view with respect to the effect of the
reorganization on any transferred asset as to which any unrealized gain or loss
is required to be recognized at the end of a taxable year (or on the termination
or transfer thereof) under federal income tax principles.
(g) The assets of Large Cap Growth Fund to be acquired by Large Cap Fund
will include no assets which Large Cap Fund, by reason of limitations contained
in its Declaration of Trust or of investment restrictions disclosed in BB&T
Prospectuses and SAI in effect on the Exchange Date, may not properly acquire.
BB&T Funds shall not change BB&T Funds' Declaration of Trust and BB&T
Prospectuses so as to restrict permitted investments for Large Cap Fund except
as required by the Commission or any state regulatory authority.
(h) The Registration Statement shall have become effective under the 1933
Act and applicable Blue Sky provisions, and no stop order suspending such
effectiveness shall have been instituted or, to the knowledge of BB&T Funds,
contemplated by the Commission and or any state regulatory authority.
(i) BB&T Funds shall have received from the Commission such order or orders
as Ropes & Xxxx LLP deems reasonably necessary or desirable under the 1933 Act,
the 1934 Act, the 1940 Act in
connection with the transaction contemplated hereby, and that all such orders
shall be in full force and effect.
(j) Prior to the Exchange Date, the Large Cap Growth Fund shall have
declared a dividend or dividends which, together with all previous such
dividends, shall have the effect of distributing to its shareholders (a) all of
the excess of (x) its investment income excludable from gross income under
Section 103 of the Code over (y) its deductions disallowed under Section 265 and
171 of the Code, (b) all of its investment company taxable income (in each case
computed without regard to any deduction for dividends paid), and (c) all of its
net capital gain realized (after reduction for any capital loss carryover), in
each case for both the current taxable year (which will end on the Exchange
Date) and the immediately preceding taxable year.
(k) With respect to the Large Cap Growth Fund Reorganization, Large Cap
Growth Fund shall have furnished to Large Cap Fund a certificate, signed by the
President (or any Vice President) and the Treasurer of BB&T Funds, as to the tax
cost to Large Cap Growth Fund of the securities delivered to Large Cap Fund
pursuant to this Plan, together with any such other evidence as to such tax cost
as Large Cap Fund may reasonably request.
(l) BB&T Funds shall have received from the custodian of BB&T Funds a
certificate identifying all of the assets of Large Cap Growth Fund held by such
custodian as of the Valuation Time.
(m) The transfer agent of BB&T Funds shall have provided to BB&T Funds (i)
a record specifying the number of Shares of Large Cap Growth Fund outstanding as
of the Valuation Time and (iii) a record specifying the name and address of each
holder of record of any such Shares of Large Cap Growth Fund and the number of
Large Cap Growth Fund Shares held of record by each such shareholder as of the
Valuation Time. Large Cap Growth Fund's transfer agent shall also have provided
BB&T Funds with a certificate confirming that the acts specified in the
preceding sentence have been taken and that the information so supplied is
complete and accurate to the best knowledge of the transfer agent.
(n) BB&T Funds, on behalf of Large Cap Fund, shall have executed and
delivered an Assumption of Liabilities dated as of the Exchange Date pursuant to
which Large Cap Fund will assume all of the liabilities of Large Cap Growth Fund
existing at the Valuation Time in connection with the transaction contemplated
by this Plan, other than liabilities pursuant to this Plan.
(o) BB&T Funds, on behalf of Large Cap Growth Fund, shall have executed and
delivered an instrument of transfer ("Transfer Document") and any other
certificates or documents BB&T Funds may deem necessary or desirable to transfer
Large Cap Growth Fund's entire right, title and interest in and to the
Investments and all other assets of Large Cap Growth Fund.
10. NO BROKER, ETC. There is no person who has dealt with BB&T Funds, Large
Cap Growth Fund or Large Cap Fund who by reason of such dealings is entitled to
any broker's or finder's or other similar fee or commission arising out of the
transaction contemplated by this Plan.
11. TERMINATION. BB&T Funds may, by consent of its Trustees, terminate this
Plan, and BB&T Funds, after consultation with counsel, may modify this Plan in
any manner deemed necessary or desirable.
12. COVENANTS, ETC. DEEMED MATERIAL. All covenants, agreements,
representations and warranties made under this Plan and any certificates
delivered pursuant to this Plan shall be deemed to
have been material and relied upon by each of the parties, notwithstanding any
investigation made by them or on their behalf.
13. SOLE PLAN; AMENDMENTS. This Plan supersedes all previous correspondence
and oral communications between the parties regarding the subject matter hereof,
constitutes the only understanding with respect to such subject matter, may be
changed only by duly adopted resolution of the Board of Trustees of BB&T Funds,
and shall be construed in accordance with and governed by the laws of The
Commonwealth of Massachusetts.
14. RULE 145. Pursuant to Rule 145 under the 1933 Act, BB&T Funds will, in
connection with the issuance of any Shares of the Large Cap Fund to any person
who at the time of the transaction contemplated hereby is deemed to be an
affiliate of a party to the transaction pursuant to Rule 145(c), cause to be
affixed upon the certificates issued to such person (if any) a legend as
follows:
THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED EXCEPT TO BB&T FUNDS OR
ITS PRINCIPAL UNDERWRITER UNLESS (i) A REGISTRATION STATEMENT WITH RESPECT
THERETO IS EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (ii) IN
THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO BB&T FUNDS SUCH REGISTRATION
IS NOT REQUIRED.
15. BB&T FUNDS' DECLARATION OF TRUST BB&T Funds is a business trust
organized under Massachusetts law and under a Declaration of Trust, to which
reference is hereby made and a copy of which is on file at the office of the
Secretary of The Commonwealth of Massachusetts and elsewhere as required by law,
and to any and all amendments thereto so filed or hereafter filed. The
obligations of "BB&T Funds" entered into in the name or on behalf thereof by any
of the Trustees, officers, employees or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of BB&T Funds personally, but bind only the
assets of BB&T Funds and all persons dealing with any series or funds of BB&T
Funds, such as Large Cap Fund, must look solely to the assets of BB&T Funds
belonging to such series or funds for the enforcement of any claims against BB&T
Funds.
BB&T FUNDS,
on behalf of BB&T Large Cap Fund and
BB&T Large Cap Growth Fund
By:
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Name:
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Title:
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BB&T ASSET MANAGEMENT, INC.,
with respect to Section 5 only
By:
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Name:
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Title:
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