SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec. 240.14a-1 I(c) or sec. 240.14a-12
BB&T VARIABLE INSURANCE FUND
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] Fee not required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies
BB&T Large Cap Value Fund, BB&T Capital Manager Equity Fund,
BB&T Large Company Growth Fund, BB&T Mid Cap Growth Fund, BB&T
Special Opportunities Equity Fund and BB&T Total Return Bond Fund:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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VARIABLE INSURANCE FUNDS
100 SUMMER STREET, SUITE 1500
BOSTON, MA 02110
(617) 824-1200
March 14, 2005
Dear Contract Owner:
I am writing to inform you of the upcoming special meeting of the
shareholders of BB&T Large Cap Value Fund, BB&T Capital Manager Equity Fund,
BB&T Large Company Growth Fund, BB&T Mid Cap Growth Fund, BB&T Special
Opportunities Equity Fund and BB&T Total Return Bond Fund (collectively, the
"Funds," and individually, a "Fund").
The meeting is scheduled to be held at 10 a.m. Eastern time on April 14,
2005, at the office of BISYS Fund Services, 100 Summer Street, Suite 1500,
Boston, MA 02110. Please read the enclosed proxy statement and cast your vote.
The purpose of the meeting is to seek your approval of the proposed
reorganization of each Fund. Each Fund is currently a series of Variable
Insurance Funds, an investment company organized as a Massachusetts business
trust and registered under the Investment Company Act of 1940, as amended. After
the completion of the proposed reorganization, which is expected to be tax-free
to the Funds and their shareholders, each Fund would be a series of BB&T
Variable Insurance Funds, a new Massachusetts business trust to be advised by
BB&T Asset Management, Inc.
We believe that the proposed reorganization offers the opportunity for
operational efficiencies that will benefit all shareholders, and the Board of
Trustees of the Variable Insurance Funds has unanimously recommended that
shareholders of each Fund vote FOR the proposal. Should you have any questions,
please feel free to call us at (800) 228-1872. We will be happy to answer any
questions you may have.
PLEASE TAKE A FEW MINUTES TO REVIEW THE ENCLOSED PROXY STATEMENT AND SIGN
AND RETURN THE PROXY CARD TODAY.
Sincerely,
Walter B. Grimm
President and Chairman of the Board
Variable Insurance Funds
VARIABLE INSURANCE FUNDS
100 SUMMER STREET, SUITE 1500
BOSTON, MA 02110
(617) 824-1200
BB&T LARGE CAP VALUE FUND
BB&T CAPITAL MANAGER EQUITY FUND
BB&T LARGE COMPANY GROWTH FUND
BB&T MID CAP GROWTH FUND
BB&T SPECIAL OPPORTUNITIES EQUITY FUND
BB&T TOTAL RETURN BOND FUND
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 14, 2005
To the Shareholders:
Notice is hereby given that Variable Insurance Funds (the "Trust"), a
Massachusetts business trust, will hold a special meeting of the shareholders of
BB&T Large Cap Value Fund, BB&T Capital Manager Equity Fund, BB&T Large Company
Growth Fund, BB&T Mid Cap Growth Fund, BB&T Special Opportunities Equity Fund
and BB&T Total Return Bond Fund (each a series of the Trust) (each, a "Fund" and
collectively, the "Funds") at the offices of BISYS Fund Services, 100 Summer
Street, Suite 1500, Boston, MA 02110 on April 14, 2005 at 10 a.m., Eastern time
and at any adjournment(s) or postponement(s) thereof (the "Meeting"), for the
following purposes:
(1) To approve a proposed Agreement and Plan of Reorganization pursuant to
which the Funds would be reorganized as separate series of BB&T Variable
Insurance Funds, a new Massachusetts business trust (the "New Trust"); as
described in the Proxy Statement; and
(2) To consider and act upon any other business as may properly come
before the Meeting and any adjournment(s) or postponement(s) thereof.
You are entitled to vote at the Meeting if you owned shares of any Fund
listed above at the close of business on February 25, 2005 (the "Record Date").
Whether or not you plan to attend the Meeting in person, please vote your
shares. As a convenience to our shareholders, you may now vote in any one of the
following ways:
- By telephone, with a toll-free call to the number listed on
the enclosed proxy card and following recorded instructions;
- By mail, with the enclosed proxy card and postage-paid
envelope; or
- In person at the Meeting.
We encourage you to vote by telephone, using the control number that
appears on your enclosed proxy card. Use of telephone voting will reduce the
time and costs associated with this proxy solicitation. Whichever method you
choose, please read the enclosed Proxy Statement and proxy card carefully before
you vote.
PLEASE RESPOND - WE ASK THAT YOU VOTE PROMPTLY IN ORDER TO AVOID THE ADDITIONAL
EXPENSE OF FURTHER SOLICITATION.
By Order of the Board of Trustees
Alaina Metz
Secretary
March 14, 2005
VARIABLE INSURANCE FUNDS
100 SUMMER STREET, SUITE 1500
BOSTON, MA 02110
(617) 824-1200
BB&T LARGE CAP VALUE FUND
BB&T CAPITAL MANAGER EQUITY FUND
BB&T LARGE COMPANY GROWTH FUND
BB&T MID CAP GROWTH FUND
BB&T SPECIAL OPPORTUNITIES EQUITY FUND
BB&T TOTAL RETURN BOND FUND
PROXY STATEMENT
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 14 2005
This Proxy Statement and the enclosed proxy cards are being furnished in
connection with the solicitation of proxies by the Board of Trustees (the
"Board") of Variable Insurance Funds (the "Trust") to be used at a special
meeting of the shareholders of BB&T Large Cap Value Fund, BB&T Capital Manager
Equity Fund, BB&T Large Company Growth Fund, BB&T Mid Cap Growth Fund, BB&T
Special Opportunities Equity Fund and BB&T Total Return Bond Fund (each, an
"Existing Fund" and collectively, the "Existing Funds") to be held at 10 a.m.
Eastern time on April 14, 2005 at the offices of BISYS Fund Services, located at
100 Summer Street, Suite 1500, Boston, MA 02110, and at any adjournment(s) or
postponement(s) thereof (the "Meeting"), for the purposes set forth in the
accompanying Notice of Special Meeting of Shareholders.
The Board has fixed the close of business on February 25, 2005, as the
record date for the determination of shareholders entitled to notice of and to
vote at the Meeting (the "Record Date"). You are entitled to vote at the Meeting
if you owned shares of any of the Funds at the close of business on the Record
Date.
The mailing of this Proxy Statement and the proxy cards is expected to
begin on or about March 14, 2005.
SUMMARY OF PROPOSAL
While you should read the full text of the Proxy Statement, the following
is a brief summary of the proposal and how it will affect the Existing Funds.
PROPOSAL:
You are being asked to approve a proposed Agreement and Plan of
Reorganization (the "Plan") for each Existing Fund, (a) whereby all assets of
each Existing Fund would be transferred to a substantially similar series of the
New Trust (each, a "New Fund," and collectively, the "New Funds"), in exchange
for shares of the corresponding New Fund which will have an aggregate value
equal to the assets and liabilities of such Existing Fund, and the assumption by
each corresponding New Fund of liabilities of its corresponding Existing Fund,
and (b) the distribution to shareholders of each Existing Fund of its
corresponding New Fund's shares (the "Reorganization"). A form of the Agreement
and Plan of Reorganization is attached as EXHIBIT A.
The Reorganization will not change the investment objective or principal
investment strategy, investment adviser, investment sub-adviser, portfolio
managers, independent auditors, or fiscal year of any of the Existing Funds.
Each shareholder will own the same number of shares of the New Fund immediately
after the Reorganization as the number of Existing Fund shares owned by the
shareholder immediately prior to the closing of the Reorganization. Each New
Fund will offer the same shareholder services as its corresponding Existing
Fund.
SHAREHOLDER REPORTS
The most recent annual report of the Existing Funds, including financial
statements, for the year ended December 31, 2003, and the most recent
semi-annual report for the semi-annual period ended June 30, 2004, have been
mailed previously to shareholders. If you have not received these reports or
would like to receive additional copies free of charge, please contact the
Existing Funds at the address set forth on the first page of this Proxy
Statement or by calling 1-800-228-1872 and they will be sent within three
business days by first class mail.
PROPOSAL
APPROVAL OF AN AGREEMENT AND PLAN OF REORGANIZATION
At a meeting of the Board of the Trust held on November 23, 2004, the
Board approved, on behalf of the Existing Funds, the Plan substantially in the
form attached to this Proxy Statement as EXHIBIT A. BB&T Asset Management, Inc.
("BB&T") requested that the Plan be submitted to shareholders of the Existing
Funds. For the reasons set forth below under "Reasons for the Reorganization,"
the Trustees of the Trust, including the Trustees who are not "interested
persons" of the Trust, as that term is defined in the Investment Company Act of
1940, as amended (the "1940 Act") (such Trustees are referred to herein as
"Independent Trustees"), have unanimously determined that the Reorganization is
in the best interests of the shareholders of
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each of the Existing Funds and that the interests of those shareholders will not
be diluted as a result of the Reorganization.
We now submit to shareholders of each Existing Fund a proposal to approve
the Plan. If shareholders approve the proposal, the Trustees and officers of the
Trust will execute and implement the Plan. If approved, we expect the Plan to
take effect on or about April 29, 2005, although that date may be adjusted in
accordance with the Reorganization Plan.
SUMMARY OF THE REORGANIZATION PLAN AND AGREEMENT
We summarize below the important terms of the Plan. This summary is
subject in all respects to the provisions of, and is qualified in its entirety
by reference to the Reorganization Plan itself, which is set forth as EXHIBIT A
to this Proxy Statement. All information regarding the New Trust, its operations
and the various agreements between the New Trust and its several service
providers have been supplied by BB&T, and neither the Trust nor any of its
Trustees or officers has independently verified the accuracy of such
information.
GENERAL PLAN OF REORGANIZATION. The Reorganization Plan consists of
several steps that will occur on the closing date of the Reorganization (the
"Closing Date") following shareholder approval. First, each Existing Fund of the
Trust will transfer all of its assets to a corresponding New Fund of the New
Trust in exchange solely for all of the shares of the corresponding New Fund.
The Existing Funds, as sole shareholders of the New Funds, will make elections,
approvals and ratifications as set forth below. Each New Fund will also assume
all of the liabilities of its corresponding Existing Fund. Immediately
thereafter, each Existing Fund will liquidate and distribute shares of its
corresponding New Fund to its shareholders in exchange for their shares of that
Existing Fund. This will be accomplished by opening an account on the books of
the corresponding New Fund in the name of each shareholder of record of the
Existing Fund and by crediting to each account the number of shares due in the
Reorganization. Each shareholder will own the same number of shares of the
corresponding New Fund as the number of Existing Fund shares held by the
shareholder in the Existing Fund immediately before the Reorganization. For
example, if you held 100 shares of an Existing Fund immediately prior to the
close of the New York Stock Exchange (generally 4:00 p.m., Eastern time) on the
Closing Date, those shares would be canceled and you would receive 100 shares of
the corresponding New Fund of a similar name. All of these transactions would
occur as of the Closing Date. The value of your investment immediately after the
Reorganization will be the same as it was immediately prior to the
Reorganization.
ELECTIONS, APPROVALS AND RATIFICATIONS. The 1940 Act generally requires
that shareholders of a mutual fund elect the fund's trustees, approve the fund's
investment advisory agreements and ratify the trustees' selection of the
independent auditors for the fund. Those requirements apply to the New Funds
equally as to the Existing Funds. If shareholders approve the Reorganization
contemplated by the Plan, such approval shall be deemed to constitute approval
of the following matters with respect to which the New Trust and the New Funds
are expected to be acted upon:
- the trustees of the New Trust;
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- an investment advisory agreement between the New Trust, on behalf
of each New Fund, and BB&T Asset Management, Inc.;
- with respect to the BB&T Special Opportunities Equity Fund, an
investment sub-advisory agreement between BB&T Asset Management, Inc. and
Scott & Stringfellow, Inc. (the "Sub-Adviser");
- the selection of KPMG LLP as the independent auditors for the New
Funds.
Technically, these approvals will be accomplished by a vote of the
Existing Funds, as sole shareholders of their corresponding New Funds, prior to
the effective date of the Reorganization. In general, there will be no
substantive changes in those areas noted above from the Existing Funds to the
New Funds except that the Trustees of the Trust will not serve as trustees for
the New Trust. The slate of proposed trustees for the New Trust is listed below.
CLOSING DATE. The Closing Date will be the next Monday that is a full
business day following satisfaction (or waiver), as provided in the
Reorganization Plan, of all of the conditions set forth in the Reorganization
Plan. BB&T currently anticipates that the Closing Date will be on or about April
29, 2005.
OTHER PROVISIONS. The Reorganization is subject to a number of conditions
set forth in the Reorganization Plan. Certain of these conditions may be waived
by the Board of Trustees of the Trust. The significant conditions which may not
be waived include: (a) the receipt by the Trust and the New Trust of opinions of
counsel as to certain federal income tax aspects of the Reorganization, and (b)
the approval of the Reorganization Plan by the shareholders of all of the
Existing Funds. The Reorganization Plan may be terminated and the Reorganization
abandoned at any time, before or after approval by the shareholders of the
Existing Funds, prior to the Closing Date by the Board of Trustees of the Trust.
In addition, the Reorganization Plan may be amended by the Board of Trustees of
the Trust. However, the Reorganization Plan may not be amended without
shareholder approval subsequent to the special shareholders' Meeting in a manner
that would change the method for determining the number of shares to be issued
to shareholders of the Existing Funds.
MANAGEMENT AND OTHER SERVICE PROVIDERS
ADVISER AND SUB-ADVISER
The Reorganization Plan authorizes each Existing Fund, while it is the
sole shareholder of its corresponding New Fund, to approve a new investment
advisory agreement between the New Trust, on behalf of each New Fund, and BB&T
Asset Management, Inc. (the "New Advisory Agreement") and, with respect to the
BB&T Special Opportunities Equity Fund, a new investment sub-advisory agreement
between BB&T and the Sub-Adviser (the "New Sub-Advisory Agreement"), which
agreements are substantially identical to the current agreements detailed below.
The rate of advisory fees payable to BB&T and the Sub-Adviser under the New
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Advisory Agreement and New Sub-Advisory Agreement with respect to each New Fund
will be the same as under the current agreements. Each of the New Advisory
Agreement and New Sub-Advisory Agreement will continue in effect, unless sooner
terminated, for two years from its effective date, and will continue for
additional one (1) year periods if such continuance is approved at least
annually by the New Trust's Board of Trustees, including a majority of the New
Trust's Independent Trustees, by votes cast in person at a meeting called for
such purpose, or by vote of a majority of the outstanding shares of the
applicable New Fund.
BB&T, 434 Fayetteville Street, Raleigh, North Carolina 27601, acts as
investment adviser to each Existing Fund pursuant to an investment advisory
agreement between BB&T and the New Trust, on behalf of each Existing Fund (the
"Current Advisory Agreement"). Under the Current Advisory Agreement, BB&T is
entitled to receive fees from the Existing Funds for its services, which are
computed daily and paid monthly at the following annual rates, calculated as a
percentage of the particular Existing Fund's average daily net assets: BB&T
Large Cap Value Fund, 0.74%; BB&T Capital Manager Equity Fund, 0.25%; BB&T Large
Company Growth Fund, 0.74%; BB&T Mid Cap Growth Fund, 0.74%; BB&T Special
Opportunities Equity Fund, 0.80%; and BB&T Total Return Bond Fund, 0.60%. BB&T
may periodically waive all or a portion of its advisory fees or reimburse
expenses to increase the net income of an Existing Fund available for
distribution as dividends or to limit an Existing Fund's total operating
expenses.
BB&T has retained the Sub-Adviser, an affiliate of BB&T, to provide
portfolio management services to the BB&T Special Opportunities Equity Fund
pursuant to an investment sub-advisory agreement between BB&T and the
Sub-Adviser (the "Current Sub-Advisory Agreement"). The Sub-Adviser's offices
are located at 909 E. Main Street, Richmond, Virginia 23219. BB&T pays the fees
of the Sub-Adviser at no additional cost to the BB&T Special Opportunities
Equity Fund. The Sub-Adviser is entitled to fees computed daily and paid monthly
at an annual rate of 0.80% of the BB&T Special Opportunities Equity Fund's
average daily net assets, or such lower fees as may be agreed to in writing by
BB&T and the Sub-Adviser. If BB&T waives all or a portion of its investment
advisory fees for the BB&T Special Opportunities Equity Fund, the Sub-Adviser
will waive its fees so that it receives no more than 75% of the net investment
advisory fee paid to BB&T.
The Current Advisory Agreement and Current Sub-Advisory Agreement include
provisions for continuation and termination similar to those of the New Advisory
Agreement and New Sub-Advisory Agreement. The Current Sub-Advisory Agreement and
the New Sub-Advisory Agreement also may be terminated by BB&T or the
Sub-Adviser. The Current Advisory Agreement and Current Sub-Advisory Agreement
were last approved for continuation by the Board of Trustees, including the
Independent Trustees, of the New Trust at a meeting on February 28, 2005.
Each of the Current Advisory Agreement, Current Sub-Advisory Agreement,
New Advisory Agreement and New Sub-Advisory Agreement provides that BB&T (or the
Sub-Adviser, as the case may be) shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the applicable Existing Fund or
New Fund in connection with its performance under the applicable agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services or a loss resulting from willful
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misfeasance, bad faith, or gross negligence on the part of BB&T (or the
Sub-Adviser, as the case may be) in the performance of its duties, or from
reckless disregard by BB&T (or the Sub-Adviser, as the case may be) of its
duties and obligations thereunder.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP, 191 W. Nationwide Blvd., Suite 500, Columbus, Ohio 43215,
currently serves as each Existing Fund's independent registered public
accounting firm and is also expected to serve as independent auditors for the
New Funds. KPMG LLP will perform an annual audit of each New Fund's financial
statements and provide other services related to filings with respect to
securities regulations.
DISTRIBUTOR, ADMINISTRATOR, FUND ACCOUNTANT, TRANSFER AGENT, AND DIVIDEND
DISBURSING AGENT
The New Trust is expected to retain for the New Funds the same fund
accountant, and transfer agent and dividend disbursing agent as currently serve
in such capacities for the Existing Funds. BB&T Fund Distributors Inc., an
affiliate of BISYS Fund Services Limited Partnership will serve as the New
Funds' Distributor following the Reorganization. BB&T Asset Management will
serve as the New Funds' Administrator. BISYS Fund Services Ohio, Inc. ("Bisys
Ohio") will serve as the New Funds' Sub-Administrator, Fund Accountant, and
Transfer Agent and Dividend Disbursing Agent following the Reorganization. The
address of each entity is 3435 Stelzer Road, Columbus, Ohio 43219.
CUSTODIAN
The New Trust, on behalf of the New Funds, is expected to retain US Bank
NA, US Bank Center, 425 Walnut Street, Cincinnati, Ohio 45202, to serve as the
New Funds' custodian. US Bank NA currently serves as custodian for the Existing
Funds.
FISCAL YEAR
Each of the Existing Funds currently operates on a fiscal year ending
December 31. Following the Reorganization, the New Funds will also operate on a
fiscal year ending December 31.
INVESTMENT OBJECTIVES, PRINCIPAL INVESTMENT STRATEGIES AND FUNDAMENTAL
INVESTMENT RESTRICTIONS
The investment objectives, principal investment strategies and fundamental
investment restrictions of each of the New Funds will be identical to the
investment objectives, principal investment strategies, and fundamental
investment restrictions of the corresponding Existing Fund.
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CERTAIN INFORMATION REGARDING THE NEW FUNDS' TRUSTEES
In relation to the Reorganization, BB&T has proposed new trustees to
oversee the operations of the New Trust. The 1940 Act requires that at least
one-half of the Trustees of the Trust and, following the Reorganization,
trustees of the New Trust, be elected by shareholders. Rather than call another
shareholder meeting to vote on trustees for the New Trust after the
Reorganization, the Reorganization Plan authorizes each Existing Fund, while it
is the sole shareholder of the corresponding New Fund, to elect the trustees of
the New Trust.
Information on the individuals that are expected to serve as the trustees
and officers of the New Trust and their business affiliations for at least the
past five years is set forth below. The business address of each executive
officer and trustee of the New Trust is 3435 Stelzer Road, Columbus, Ohio
43219-3035.
NAME, ADDRESS AND DATE PRINCIPAL OCCUPATIONS
OF BIRTH PROPOSED POSITION DURING THE PAST 5 YEARS
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PROPOSED INDEPENDENT TRUSTEES
Thomas W. Lambeth Trustee From January 2004 to present, Senior
700 Yorkshire Road Fellow, Z. Smith Reynolds Foundation;
Winston-Salem, NC 27106 from 1978 to January 2001, Executive
Birth date: 01/08/35 Director, Z. Smith Reynolds Foundation.
Robert W. Stewart Trustee Retired; From 1969 to 1990, Chairman and
201 Huntington Road Chief Executive Officer, Engineered
Greenville, SC 29615 Custom Plastics Corporation.
Birth date: 05/22/32
Drew T. Kagan Trustee From December 2003 to present, President
Montecito Advisors, Inc. and Director, Montecito Advisors, Inc.;
810 N. Jefferson St., Suite 101 from March 1996 to December 2003,
Lewisburg, WV 24901 President, Investment Affiliate, Inc.
Birth date: 02/21/48
Laura C. Bingham Trustee From July 1998 to present, President,
Peace College Peace College.
Office of the President
15 East Peace Street
Raleigh, NC 27604-1194
Birth date: 11/09/56
Douglas Van Scoy Trustee Retired; From November 1974 to July
841 Middle St. 2001, Deputy Director of Private Client
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Sullivans Island, SC 26481 Group and Executive Vice President,
Birth date: 11/09/43 Smith Barney (investment banking).
James L. Roberts Trustee Retired; From January 1999 to December
7 Kittansett Court 2003, President, CEO and Director,
Skillman, NJ 08558 Covest Bancshares, Inc.
Birth date: 11/23/42
NAME, ADDRESS AND DATE PRINCIPAL OCCUPATIONS
OF BIRTH PROPOSED POSITION DURING THE PAST 5 YEARS
- ------------------------------- ----------------- -----------------------------------------
PROPOSED INTERESTED TRUSTEE
*Kenneth L. Miller Trustee From August 1997 to present, Executive
Birthdate: 09/19/46 Vice President, Branch Banking and Trust
Company; employee of Branch Banking and
Trust Company since 1982.
* Mr. Miller would be considered an "interested person" of the New Trust because
he owns shares of BB&T Corporation and is an Executive Vice President of BB&T
Corporation, the publicly traded parent of BB&T.
NAME, ADDRESS AND DATE PRINCIPAL OCCUPATIONS
OF BIRTH PROPOSED POSITION DURING THE PAST 5 YEARS
- ------------------------------- ---------------------- -----------------------------------------
PROPOSED OFFICERS
Keith F. Karlawish President From May 2002 to present, President,
Birth date: 08/22/64 BB&T Asset Management, Inc.; from 1996
to 2002, Senior Vice President and
Director of Fixed Income, BB&T Asset
Management, Inc.
Troy A. Sheets Treasurer From April 2002 to present, employee of
Birth date: 05/29/71 BISYS Fund Services; from September 1993
to April 2002, employee of KPMG LLP.
From May 2004 to September 2004, Senior
Frank Pavlak Vice President, Chief Vice President, BISYS Fund Services
Birth date: 03/23/47 Compliance Officer and
AML Compliance Officer From January 1999 to April 2004,
Vice President, OppenheimerFunds, Inc.
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Alaina V. Metz Assistant Secretary From June 1995 to present, employee,
Birth date: 04/07/67 BISYS Fund Services.
The Trust pays each Trustee who is not an employee of BISYS Ohio or its
affiliates a retainer fee at the rate of $1,250 per calendar quarter, reasonable
out-of-pocket expenses and $500 for each regular meeting of the Board of
Trustees attended in person. The Trust also pays each Trustee $1,000 for each
special meeting of the Board of Trustees attended in person, and $1,000 for
each special meeting of the Board of Trustees attended by telephone. The Trust
pays each Trustee who is a member of the Audit Committee of the Board $750 for
each meeting of the Audit Committee that is not held in conjunction with a
regular meeting of the Board. The Trust pays the Chair of the Audit Committee
$3,000 for such meetings. The Trust also pays the Chair of the Nominating
Committee of the Board $1,000 for each meeting of the Nominating Committee. The
officers of the Trust receive no compensation directly from the Trust for
performing the duties of their offices.
EXPENSES OF THE REORGANIZATION
BB&T will bear all expenses associated with the transactions contemplated
by the Reorganization Plan, including expenses associated with the solicitation
of proxies.
FEDERAL INCOME TAX CONSEQUENCES
As a condition to each Existing Fund's obligation to consummate the
Reorganization, the Trust and New Trust will receive an opinion from counsel to
the Trust and Board of Trustees, Dechert LLP, to the effect that, on the basis
of the existing provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), current administrative rules and court decisions, the transactions
contemplated by the Reorganization Plan constitute a tax-free reorganization for
federal income tax purposes.
SHARES OWNED BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of February 25, 2004 with
respect to each person who owns of record or is known by the Trust to own of
record or beneficially 5% or more of any class of any of the Existing Funds:
NAME OF SHAREHOLDER FUND PERCENTAGE OF THE FUND NUMBER OF SHARES
- ------------------- ---- ---------------------- ----------------
On February 25, 2005, the Trustees and officers of the Trust as a group owned
beneficially less than one percent of the outstanding shares of the Trust or any
Fund.
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CONTINUATION OF SHAREHOLDER ACCOUNTS AND PLANS
BISYS Ohio, as the Trust's and New Trust's transfer agent, will establish
accounts for all current Existing Fund shareholders containing the appropriate
number of New Fund shares to be received by the Existing Fund shareholders in
accordance with the terms and provisions of the Reorganization Plan. These
accounts will be identical in all material respects to the accounts currently
maintained by each Existing Fund on behalf of its shareholders.
COMPARATIVE INFORMATION ON PURCHASES AND REDEMPTIONS OF SHARES
Following is a summary of certain purchase and redemption policies and
procedures, which will be the same for the New Funds as they are for the
Existing Funds. Shares are available for purchase by insurance company separate
accounts to serve as an investment medium for variable insurance contracts, and
by qualified pension and retirement plans, certain insurance companies, and
BB&T. Shares are purchased at the net asset value per share next determined
after receipt and acceptance by the Distributor (or other agent) of a purchase
order or receipt of a redemption request. Payment for redeemed shares normally
will be made within seven days. Redeemed proceeds will normally be paid in cash,
but under abnormal conditions which make payment in cash unwise, payment may be
made wholly or partly in portfolio securities at their then market value equal
to the redemption price.
The Existing Funds reserve, and the New Funds will reserve, the right to
reject any order to purchase shares reasonably determined to be in connection
with market timing or excessive trading by an investor or by accounts of
investors under common control (for example, related contract owners, or a
financial advisor with discretionary authority over multiple accounts).
The Existing Funds have adopted, and the New Funds will adopt, a plan
under which up to 0.25% of an Existing Fund's or New Fund's average daily net
assets may be expended for support services to investors, such as establishing
and maintaining accounts and records, providing account information, arranging
bank wires, responding to routine inquiries, forwarding investor communications,
assisting in the processing of purchase and redemptions requests, and assisting
investors in changing account designations and addresses.
DIVIDENDS AND DISTRIBUTIONS
Each New Fund will have the same dividend and distribution policy as its
corresponding Existing Fund. After the closing of the Reorganization, Existing
Fund shareholders who currently have dividends reinvested will continue to have
dividends reinvested in the New Funds. Shareholders who currently have capital
gains reinvested will continue to have capital gains reinvested in the New
Funds.
CERTAIN INFORMATION ABOUT THE TRUST AND THE NEW TRUST
As mentioned above, the Trust and the New Trust are both Massachusetts
business trusts. Therefore, the Declaration of Trust and By-Laws of the New
Trust will be substantially similar to the Declaration of Trust and By-Laws of
the New Trust. The New Trust's operations will be
-10-
governed by the same federal and Massachusetts laws as the Trust and the New
Trust will have the same fiduciary obligations to act with due care and in the
interests of shareholders. In addition, shareholders of the New Trust will be
entitled to the same rights and privileges as those under the Trust.
REASONS FOR THE PROPOSED REORGANIZATION
The Board of Trustees of the Trust, including the Independent Trustees,
unanimously approved the Reorganization Plan at a meeting held on November 23,
2004. In approving the Reorganization Plan, the Board of Trustees determined
that the proposed Plan was in the best interests of the Existing Funds and
Existing Fund shareholders. We summarize below the key factors considered by the
Trustees.
In approving the Reorganization Plan, the Trustees of the Trust determined
that the proposed Reorganization would be in the best interests of the Existing
Funds, and that the interests of each Existing Fund's shareholders would not be
diluted as a result of effecting the Reorganization. The Board of Trustees
determined, on the basis of information provided by BB&T and the terms of the
draft Plan, that the New Funds represented a viable continuation of Fund
shareholders' current investments. In this regard, the Board of Trustees
determined that the New Funds would be substantially similar to the Funds in
terms of investment objectives, policies and restrictions. The Board of Trustees
also considered that BB&T had made a substantial commitment to the success of
the New Funds, had committed to maintain existing fee arrangements and fee
limitations, and possessed the necessary qualifications to manage the New Funds.
The Board of Trustees also considered that the Existing Fund shareholders
were expected to have the same economic interest in the New Funds immediately
after the Reorganization as they had immediately before the Reorganization, and
that their voting rights and interests were not expected to be affected by the
Reorganizations.
The Board of Trustees also considered that the New Funds were, in effect,
intended to be continuations of the Existing Funds subject to comparable
management arrangements. The Board of Trustees then considered the tax-free
nature of the proposed Reorganizations, BB&T's undertaking to pay all costs
associated with the Reorganization transactions, and the continuation of
operating expense limitations. In light of these considerations, on the basis of
information provided by BB&T and the terms of the draft Plan, the Board of
Trustees determined that the Reorganizations would not dilute Fund shareholders'
interests.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE FOR THE APPROVAL OF THE REORGANIZATION
PLAN.
* * *
-11-
OTHER BUSINESS
The Board of Trustees of the Trust knows of no business to be brought
before the Meeting other than the matters set forth in this Proxy Statement.
Should any other matter requiring a vote of the shareholders of the Existing
Funds arise, however, the proxies will vote thereon according to their best
judgment in the interests of the Existing Funds and the shareholders of the
Existing Funds.
VOTING INFORMATION
Shareholders of record of the Existing Funds at the close of business on
February 25, 2005 (the "Record Date"), will be entitled to vote at the Meeting.
As of the Record Date, there were issued and outstanding the following number of
shares for each Existing Fund:
- - BB&T Large Cap Value Fund [______________________]
- - BB&T Capital Manager Equity Fund [______________________]
- - BB&T Large Company Growth Fund [______________________]
- - BB&T Mid Cap Growth Fund [______________________]
- - BB&T Special Opportunities Equity Fund [______________________]
- - BB&T Total Return Bond Fund [______________________]
Shareholders are entitled to one vote for each dollar value invested and a
proportionate vote for each fractional dollar value of shares held. Shareholders
of each Existing Fund will vote separately on the proposed Reorganization. The
holders of a majority of the outstanding shares of an Existing Fund entitled to
vote shall constitute a quorum for the meeting for that Existing Fund. A quorum
being present, the proposed Reorganization will be approved with respect to an
Existing Fund if a majority of the shares of such Existing Fund vote to approve
the proposal. The Board of Trustees unanimously recommends that the shareholders
vote FOR the proposal set forth above.
Insurance companies that use shares of the Existing Funds as funding media
for their variable insurance contracts will vote shares of each Existing Fund
held by their registered separate accounts in accordance with instructions
received from owners of the variable insurance contracts. An insurance company
also will vote shares of each Existing Fund held in registered separate accounts
for which it has not received timely instructions in the same proportion as it
votes shares held by that separate account for which it has received
instructions.
-12-
For purposes of determining the presence of a quorum for transacting
business at the Meeting and for determining whether sufficient votes have been
received for approval of the proposal to be acted upon at the Meeting,
abstentions and broker "non-votes" (that is, proxies from brokers or nominees
indicating that such persons have not received instructions from the beneficial
owner or other persons entitled to vote shares on a particular matter with
respect to which the brokers or nominees do not have discretionary power) will
be treated as shares that are present at the meeting, but which have not been
voted. For this reason, abstentions and broker non-votes will assist the
Existing Fund in obtaining a quorum, but both have the practical effect of a
"no" vote for purposes of obtaining the requisite vote for approval of the
proposal.
If either (a) a quorum is not present at the Meeting or (b) a quorum is
present but sufficient votes in favor of the proposal have not been obtained,
then the persons named as proxies may propose one or more adjournments of the
Meeting without further notice to shareholders to permit further solicitation of
proxies provided such persons determine, after consideration of all relevant
factors, including the nature of the proposal, the percentage of votes then
cast, the percentage of negative votes then cast, the nature of the proposed
solicitation activities and the nature of the reasons for such further
solicitation, that an adjournment and additional solicitation is reasonable and
in the interests of shareholders. The persons named as proxies will vote those
proxies that such persons are required to vote FOR the Reorganization proposal
in favor of such an adjournment and will vote those proxies required to be voted
AGAINST the Reorganization proposal against such adjournment.
The Meeting may be adjourned from time to time by the vote of a majority
of the shares represented at the Meeting, whether or not a quorum is present. If
the Meeting is adjourned to another time or place, notice need not be given of
the adjourned Meeting at which the adjournment is taken, unless a new record
date for the adjourned Meeting is fixed. At any adjourned Meeting, the Trust may
transact any business that otherwise may have been transacted at the original
Meeting.
The individuals named as proxies on the enclosed proxy card will vote in
accordance with the shareholder's direction, as indicated thereon, if the proxy
card is received and is properly executed. If the shareholder properly executes
a proxy and gives no voting instructions with respect to the Reorganization
proposal, the shares will be voted in favor of the Reorganization proposal. The
proxies, in their discretion, may vote upon such other matters as may properly
come before the Meeting. The Board of Trustees of the Trust is not aware of any
other matters to come before the Meeting.
REVOCATION OF PROXIES
If you return a properly executed proxy card, but later wish to revoke it,
you may do so at any time before it is voted by doing any of the following:
- delivering written notice of the proxy's revocation to the
Secretary of the Trust at the above address prior to the Meeting;
-13-
- submitting a properly-executed proxy bearing a later date, but
prior to the Meeting;
- submitting a subsequent telephone vote; or
- attending and voting in person at the Meeting and giving oral
notice of revocation to the Chairman of the Meeting. Attendance at the Meeting,
by itself, will not revoke a previously submitted proxy.
SOLICITATION OF PROXIES
We are soliciting these proxies by U.S. mail, and may also solicit them in
person, by telephone, by facsimile, or by any other electronic means. BB&T Asset
Management, Inc. ("BB&T"), the investment adviser for the Existing Funds and
proposed investment adviser for the New Funds, is paying for the costs of this
proposed Reorganization, and is paying for the expense of the preparation,
printing, and mailing of the enclosed proxy card, this Proxy Statement, and
other expenses relating to the Meeting. BB&T has engaged MIS an ADP Company to
assist in proxy solicitation at a cost to BB&T of approximately $________.
Employees of BB&T or BISYS Fund Services Ohio, Inc. ("BISYS Ohio"), the transfer
agent for the Existing Funds, may make additional solicitations to obtain the
necessary representation at the Meeting, but will receive no additional
compensation for doing so. We may count proxies authorized by telephone or
electronically-transmitted instruments if we follow procedures designed to
verify that you have authorized us to accept your proxy in that manner.
If a shareholder wishes to participate in the Meeting, but does not wish
to authorize the execution of a proxy by telephone, the shareholder may still
submit the proxy form included with this Proxy Statement or attend the Meeting
in person.
SHAREHOLDER PROPOSALS
The Trust does not hold regular shareholders' meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a subsequent
shareholders' meeting should send their written proposals to the Secretary of
the Trust (or, with respect to a New Fund following the Reorganization, to the
New Trust) at the address set forth on the cover of this proxy statement.
Proposals must be received a reasonable time prior to the date of a
meeting of shareholders to be considered for inclusion in the proxy materials
for a meeting. Timely submission of a proposal does not, however, necessarily
mean that the proposal will be included. Persons named as proxies for any
subsequent shareholders' meeting will vote in their discretion with respect to
proposals submitted on an untimely basis.
-14-
PROMPT EXECUTION AND RETURN OF THE APPROPRIATE ENCLOSED PROXY CARD IS
REQUESTED. A SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE.
By order of the Board of Trustees,
________________________
Alaina Metz
Secretary
Date:________________
-15-
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 29th day of April 2005, by and between Variable Insurance Funds, a
Massachusetts business trust (the "Predecessor Trust"), on behalf of the BB&T
Large Cap Value Fund, BB&T Capital Manager Equity Fund, BB&T Large Company
Growth Fund, BB&T Mid Cap Growth Fund, BB&T Special Opportunities Equity Fund
and BB&T Total Return Bond Fund (collectively, the "Predecessor Funds" and
individually, a "Predecessor Fund"), and BB&T Variable Insurance Funds, a
Massachusetts business trust (the "Successor Trust"), on behalf of the BB&T VIF
Large Cap Value Fund, BB&T VIF Capital Manager Equity Fund, BB&T VIF Large
Company Growth Fund, BB&T VIF Mid Cap Growth Fund, BB&T VIF Special
Opportunities Equity Fund and BB&T VIF Total Return Bond Fund (collectively, the
"Successor Funds" and individually, a "Successor Fund").
All references in this Agreement to action taken by the Predecessor Funds
or the Successor Funds shall be deemed to refer to action taken by the
Predecessor Trust or the Successor Trust, respectively, on behalf of the
respective portfolio series.
This Agreement is intended to be and is adopted as plans of reorganization
within the meaning of Section 368(a) of the United States Internal Revenue Code
of 1986, as amended (the "Code"). The reorganization (the "Reorganization") will
consist of the transfer by each Predecessor Fund of all of its assets to the
corresponding Successor Fund, in exchange for shares of beneficial interest in
such Successor Fund ("New Shares") having a net asset value equal to the net
asset value of the corresponding Predecessor Fund, the assumption by each
Successor Fund of all the liabilities of the corresponding Predecessor Fund, and
the distribution of the New Shares to the shareholders of each Predecessor Fund
in complete liquidation of such Predecessor Fund as provided herein, all upon
the terms and conditions hereinafter set forth in this Agreement.
WHEREAS, the Predecessor Trust and the Successor Trust are each open-end,
registered investment companies of the management type; and
WHEREAS, the Board of Trustees of the Predecessor Trust and the Board of
Trustees of the Successor Trust have determined that it is in the best interest
of each Predecessor Fund and each Successor Fund, respectively, that the assets
of the Predecessor Fund be acquired by the respective Successor Fund pursuant to
this Agreement and in accordance with the applicable statutes of the
Commonwealth of Massachusetts and that the interests of existing shareholders
will not be diluted as a result of this transaction;
NOW, THEREFORE, in consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto covenant and agree as
follows:
-16-
1. PLAN OF REORGANIZATION
1.1 Subject to the terms and conditions herein set forth and on the basis
of the representations and warranties contained herein, the Predecessor Trust
agrees to transfer all of the assets of each Predecessor Fund, as set forth in
paragraph 1.2, to the corresponding Successor Fund and the Successor Trust
agrees in exchange therefor: (i) to deliver to the Predecessor Trust a number of
full and fractional New Shares of each class of each Successor Fund equal to the
number of shares of the corresponding class of the corresponding Predecessor
Fund as of the time and date set forth in Article 2, and (ii) to assume all the
liabilities of each Predecessor Fund, as set forth in paragraph 1.2. Such
transactions shall take place at the closing provided for in paragraph 2.1 (the
"Closing").
1.2 The assets of the Predecessor Funds to be acquired by the
corresponding Successor Funds shall consist of all property, including, without
limitation, all cash, securities, commodities and futures interests, and
dividends or interest receivable which are owned by the Predecessor Funds and
any deferred or prepaid expenses shown as an asset on the books of the
Predecessor Funds on the closing date provided in paragraph 2.1 (the "Closing
Date"). All liabilities, expenses, costs, charges and reserves of the
Predecessor Funds, to the extent that they exist at or after the Closing, shall
after the Closing attach to the corresponding Successor Funds and may be
enforced against the Successor Funds to the same extent as if the same had been
incurred by the Successor Funds.
1.3 Immediately upon delivery to the Predecessor Funds of the New Shares,
the Predecessor Funds, as the then sole shareholders of the Successor Funds,
shall: (i) elect as trustees of the Successor Trust the following persons:
Thomas W. Lambeth, Robert W. Stewart, Drew T. Kagan, Laura C. Bingham, Douglas
Van Scoy, James L. Roberts and Kenneth L. Miller; (ii) approve an Investment
Advisory Agreement between the Successor Trust, on behalf of the Successor
Funds, and BB&T Asset Management, Inc. (the "Investment Manager"); (iii) in the
case of the BB&T Special Opportunities Equity Fund, approve an Investment
Sub-Advisory Agreement by and between the Investment Manager, on behalf of such
fund, and Scott & Stringfellow, Inc. (the "Sub-Adviser"); and (iv) ratify the
selection of KPMG LLP as the independent auditors of the Successor Funds.
1.4 Immediately following the action contemplated by paragraph 1.3, the
Predecessor Funds will distribute pro rata to their respective shareholders of
record, determined as of immediately after the close of business on the Closing
Date (the "Current Shareholders"), the corresponding New Shares received by the
Predecessor Trust pursuant to paragraph 1.1. Such distribution and liquidation
will be accomplished by the transfer of the New Shares then credited to the
accounts of the Predecessor Funds on the books of the Successor Funds to open
accounts on the share records of the Successor Funds in the names of the Current
Shareholders and representing the respective pro rata number of the New Shares
of the corresponding class due such shareholders. All issued and outstanding
shares of the Predecessor Funds will simultaneously be canceled on the books of
the Predecessor Trust, although share certificates representing interests in the
Predecessor Trust will represent a number of New Shares after the Closing Date
as determined in accordance with paragraph 2.2. The Successor Funds shall not
issue certificates representing the New Shares in connection with such exchange.
Ownership of
- 17 -
New Shares will be shown on the books of the Successor Trust's transfer agent.
As soon as practicable after the Closing, the Predecessor Trust shall take all
steps necessary to effect a complete liquidation of the Predecessor Funds and
shall file such instruments, if any, as are necessary to effect the dissolution
of the Predecessor Funds and shall take all other steps necessary to effect such
dissolution.
2. CLOSING AND CLOSING DATE
2.1 The Closing Date shall be the next Monday that is a full business day
following satisfaction (or waiver as provided herein) of all of the conditions
set forth in Article 4 of this Agreement (other than those conditions which may
by their terms be satisfied only at the Closing), or such later date as the
parties may agree to in writing. All acts taking place at the Closing shall be
deemed to take place simultaneously as of immediately after the close of
business on the Closing Date unless otherwise agreed to by the parties. The
close of business on the Closing Date shall be as of 4:00 p.m. Eastern time. The
Closing shall be held at the offices of the Successor Trust, 3435 Stelzer Road,
Columbus, Ohio 43219, or at such other time and/or place as the parties may
agree.
2.2 The Predecessor Trust shall cause BISYS Fund Services Ohio, Inc. (the
"Transfer Agent"), transfer agent of the Predecessor Funds, to deliver at the
Closing a certificate of an authorized officer stating that its records contain
the names and addresses of the Current Shareholders and the number and
percentage ownership of outstanding shares of the Predecessor Funds and the
class of each Predecessor Fund owned by each such shareholder immediately prior
to the Closing. The Successor Funds shall issue and deliver a confirmation
evidencing the New Shares to be credited on the Closing Date to the Secretary of
the Predecessor Trust or provide evidence satisfactory to the Predecessor Trust
that such New Shares have been credited to the accounts of the Predecessor Funds
on the books of the Successor Funds. At the Closing, each party shall deliver to
the other such bills of sales, checks, assignments, share certificates, if any,
receipts or other documents as such other party or its counsel may reasonably
request.
3. REPRESENTATIONS AND WARRANTIES
3.1 The Predecessor Trust, on behalf of each Predecessor Fund, hereby
represents and warrants to the Successor Funds as follows:
(i) the Predecessor Trust is duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has full power
and authority to conduct its business as presently conducted;
(ii) the Predecessor Trust has full power and authority to execute,
deliver and carry out the terms of this Agreement on behalf of each Predecessor
Fund;
(iii) the execution and delivery of this Agreement on behalf of each
Predecessor Fund and the consummation of the transactions contemplated hereby
are duly authorized and no other proceedings on the part of the Predecessor
Trust or the shareholders of the Predecessor Fund
- 18 -
(other than as contemplated in paragraph 4.1(vii)) are necessary to authorize
this Agreement and the transactions contemplated hereby;
(iv) the Predecessor Trust is registered under the Investment Company Act
of 1940, as amended (the "1940 Act"), as an open-end management investment
company; such registration has not been revoked or rescinded and is in full
force and effect; and each Predecessor Fund is a separate series of the
Predecessor Trust;
(v) there are no material liabilities of the Predecessor Funds whether or
not determined or determinable, other than liabilities disclosed or provided for
in the Predecessor Funds' financial statements and liabilities incurred in the
ordinary course of business after the date of such financial statements;
(vi) there are no claims, actions, suits or proceedings pending or, to the
knowledge of the Predecessor Trust, threatened which would adversely affect the
Predecessor Funds or their assets or business or which would prevent or hinder
consummation of the transactions contemplated hereby or which upon such
consummation would adversely affect the Successor Funds;
(vii) this Agreement has been duly executed by the Predecessor Trust on
behalf of the Predecessor Funds and constitutes its valid and binding
obligation, enforceable in accordance with its terms, subject to applicable
bankruptcy, reorganization, insolvency, moratorium and other rights affecting
creditors' rights generally, and general equitable principles;
(viii) neither the execution and delivery of this Agreement by the
Predecessor Trust on behalf of the Predecessor Funds, nor the consummation by
the Predecessor Trust on behalf of the Predecessor Funds of the transactions
contemplated hereby, will conflict with, result in a breach or violation of or
constitute (or with notice, lapse of time or both) a breach of or default under,
the Declaration of Trust or By-Laws of the Predecessor Trust, as each may be
amended, or any statute, regulation, order, judgment or decree, or any
instrument, contract or other agreement to which the Predecessor Trust is a
party or by which the Predecessor Trust or any of its assets is subject or
bound;
(ix) as of the Closing, all federal and other tax returns and reports of
the Predecessor Funds required by law to have been filed shall have been filed,
and all taxes of the Predecessor Funds shall have been paid so far as due, or
provision shall have been made for the payment thereof, and to the best of the
Predecessor Trust's knowledge, no such return is currently under audit and no
assessment has been asserted with respect to any of such returns. The
Predecessor Funds have qualified and elected, and continue to qualify, to be
treated as regulated investment companies under the provisions of Subchapter M
of the Code; and
(x) no authorization, consent or approval of any governmental or other
public body or authority or any other party is necessary for the execution and
delivery of this Agreement by the Predecessor Trust on behalf of the Predecessor
Funds or the consummation of any transactions contemplated hereby by the
Predecessor Trust, other than as shall be obtained at or prior to the Closing.
- 19 -
3.2 The Successor Trust, on behalf of each of the Successor Funds, hereby
represents and warrants to the Predecessor Funds as follows:
(i) the Successor Trust is duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts and has full power
and authority to conduct its business as presently conducted;
(ii) the Successor Trust has full power and authority to execute, deliver
and carry out the terms of this Agreement on behalf of the Successor Funds;
(iii) the execution and delivery of this Agreement on behalf of the
Successor Funds and the consummation of the transactions contemplated hereby are
duly authorized and no other proceedings on the part of the Successor Trust or
the shareholders of the Successor Funds are necessary to authorize this
Agreement and the transactions contemplated hereby;
(iv) the Successor Trust is (or will be before the Closing) registered
under 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;
(v) the New Shares to be issued in connection with the Reorganization have
been duly authorized and upon consummation of the Reorganization will be validly
issued, fully paid and nonassessable. Except for the shares issued pursuant to
Article 1 above, there shall be no issued and outstanding New Shares or any
other securities issued by the Successor Trust before the Closing;
(vi) there are no liabilities of the Successor Trust, whether or not
determined or determinable, other than liabilities incurred in the ordinary
course of business or otherwise previously disclosed to the Predecessor Funds in
writing. There are no liabilities of the Successor Trust of any kind for which
the holders of shares of the Predecessor Funds shall become responsible as the
result of this Agreement or the consummation of the transactions contemplated
hereby or otherwise;
(vii) there are no claims, actions, suits or proceedings pending or, to
the knowledge of the Successor Trust, threatened which would adversely affect
the Successor Trust or its assets or business or which would prevent or hinder
consummation of the transactions contemplated hereby or which upon such
consummation would adversely affect the Successor Funds;
(viii) this Agreement has been duly executed by the Successor Trust on
behalf of the Successor Funds and constitutes its valid and binding obligation,
enforceable in accordance with its terms, subject to applicable bankruptcy,
reorganization, insolvency, moratorium and other rights affecting creditors'
rights generally, and general equitable principles;
(ix) neither the execution and delivery of this Agreement by the Successor
Trust on behalf of the Successor Funds, nor the consummation by the Successor
Trust on behalf of the Successor Funds of the transactions contemplated hereby,
will conflict with, result in a breach or
- 20 -
violation of or constitute (or with notice, lapse of time or both constitute) a
breach of or default under, the Declaration of Trust or By-Laws of the Successor
Trust, as each may be amended, or any statute, regulation, order, judgment or
decree, or any instrument, contract or other agreement to which the Successor
Trust is a party or by which the Successor Trust or any of its assets is subject
or bound;
(x) as of the Closing, all federal and other tax returns and reports of
the Successor Trust required by law to have been filed shall have been filed,
and all taxes shall have been paid so far as due, or provision shall have been
made for the payment thereof, and to the best of the Successor Trust's
knowledge, no such return is currently under audit and no assessment has been
asserted with respect to any of such returns;
(xi) no authorization, consent or approval of any governmental or other
public body or authority or any other party is necessary for the execution and
delivery of this Agreement by the Successor Trust on behalf of the Successor
Funds or the consummation of any transactions contemplated hereby by the
Successor Trust, other than as shall be obtained at or prior to the Closing.
(xii) before the Closing, the Successor Trust will take all steps
necessary to cause the formation of the six (6) Successor Funds. The Successor
Funds will have substantially the same investment objectives, policies,
identical fundamental investment objectives and the same investment adviser as
the Predecessor Funds.
(xiii) All information contained in the proxy statement to be supplied to
shareholders of the Predecessor Funds in connection with the Reorganization that
relates to the Predecessor Trust, the Successor Funds, the Investment Manager,
the agreement between the Investment Manager and the Sub-Adviser, the agreements
between the Successor Trust and other service providers, the effects, tax and
otherwise, of the Reorganization on Predecessor Fund shareholders and other
matters known primarily to the Successor Trust or the Investment Manager (i) is
true and correct in all material respects and (ii) does not contain (and will
not contain at the time the proxy statement is mailed to Predecessor Fund
shareholders) 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 not misleading.
4. CONDITIONS PRECEDENT
4.1 The obligations of the Predecessor Trust on behalf of the Predecessor
Funds and the Successor Trust on behalf of the Successor Funds to effectuate the
Reorganization shall be subject to the satisfaction of the following conditions:
(i) Such authority from the Securities and Exchange Commission (the "SEC")
and state securities commissions as may be necessary to permit the parties to
carry out the transactions contemplated by this Agreement shall have been
received;
(ii) The Registration Statement of the Successor Trust with respect to the
Successor Funds shall have been filed with the SEC and shall have become
effective, and no stop-order
- 21 -
suspending the effectiveness of the Registration Statement or amendment thereto
shall have been issued, and no proceeding for that purpose shall have been
initiated or threatened by the SEC (and not withdrawn or terminated);
(iii) The applicable New Shares shall have been duly qualified for
offering to the public in all states in which such qualification is required for
consummation of the transactions contemplated hereunder;
(iv) All representations and warranties of the Predecessor Trust on behalf
of the Predecessor Funds contained in this Agreement shall be true and correct
in all material respects as of the date hereof and as of the Closing, with the
same force and effect as if then made, and the Successor Trust on behalf of the
Successor Funds shall have received a certificate of an officer of the
Predecessor Trust acting on behalf of the Predecessor Funds to that effect in
form and substance reasonably satisfactory to the Successor Trust on behalf of
the Successor Funds;
(v) All representations and warranties of the Successor Trust on behalf of
the Successor Funds contained in this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing, with the same
force and effect as if then made, and the Predecessor Trust on behalf of the
Predecessor Funds shall have received a certificate of an officer of the
Successor Trust acting on behalf of the Successor Funds to that effect in form
and substance reasonably satisfactory to the Predecessor Trust on behalf of the
Predecessor Funds;
(vi) Dechert LLP shall deliver an opinion addressed to the Predecessor
Trust and to the Successor Trust substantially to the effect that, based upon
certain facts, assumptions, and representations, the transactions contemplated
by this Agreement shall constitute tax-free reorganizations for federal income
tax purposes, unless, based on the circumstances existing at the time of the
Closing, Dechert LLP determines that a transaction contemplated by this
Agreement does not qualify as such. The delivery of such opinion is conditioned
upon receipt by Dechert LLP of representations it shall request of the
Predecessor Trust and the Successor Trust.
(vii) A vote approving this Agreement shall have been adopted by at least
a majority of the outstanding shares of each Predecessor Fund entitled to vote
at a special meeting of shareholders of each such Predecessor Fund duly called
for such purpose (the "Special Meeting").
5. BROKERAGE FEES AND EXPENSES
5.1 The Successor Trust and the Predecessor Trust each represents and
warrants to the other that there are no brokers or finders entitled to receive
any payments in connection with the transactions provided for herein.
5.2 All of the expenses and costs of the Reorganization and the
transactions contemplated thereby shall be borne by BB&T Asset Management, Inc.
- 22 -
6. ENTIRE AGREEMENT
The Successor Trust and the Predecessor Trust agree that neither party has
made any representation, warranty or covenant not set forth herein and that this
Agreement constitutes the entire agreement between the parties.
7. TERMINATION
This Agreement and the transactions contemplated hereby may be terminated
and abandoned by either party by resolution of the party's Board of Trustees, at
any time prior to the Closing Date, if circumstances should develop that, in the
opinion of such Board of Trustees, make proceeding with the Agreement
inadvisable. In the event of any such termination, there shall be no liability
for damages on the part of either the Successor Trust or the Predecessor Trust,
or their respective Trustees or officers, to the other party.
8. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as
may be mutually agreed upon in writing by the authorized officers of the
Predecessor Trust and the Successor Trust; provided, however, that following the
meeting of the Current Shareholders called by the Predecessor Trust pursuant to
paragraph 4.1(vii) of this Agreement, no such amendment may have the effect of
changing the provisions for determining the number of New Shares to be issued to
the Current Shareholders under this Agreement to the detriment of such
shareholders without their further approval.
9. 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 the parties hereto at their
principal place of business.
10. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
10.1 The Article and paragraph headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
10.2 This Agreement may be executed in any number of counterparts each of
which shall be deemed an original.
10.3 This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts.
10.4 This Agreement shall bind 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
- 23 -
obligations hereunder shall be made by any 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, firm or corporation, other than the
parties hereto and their respective successors and assigns, any rights or
remedies under or by reason of this Agreement.
10.5 It is expressly agreed that the obligations of the Predecessor Trust
hereunder shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents, or employees of the Predecessor Trust personally, but shall
bind only the trust property of the Predecessor Trust, as provided in the
Declaration of Trust of the Predecessor Trust. The execution and delivery by
such officers of the Predecessor Trust shall not be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
but shall bind only the trust property of the Predecessor Trust as provided in
the Declaration of Trust of the Predecessor Trust. The Predecessor Trust is a
series company with multiple series including, without limitation, BB&T Large
Cap Value Fund, BB&T Capital Manager Equity Fund, BB&T Large Company Growth
Fund, BB&T Mid Cap Growth Fund, BB&T Special Opportunities Equity Fund and BB&T
Total Return Bond Fund, and has entered into this Agreement on behalf of the
Predecessor Funds. With respect to any obligation of the Predecessor Trust
arising hereunder, the Successor Trust and the Successor Funds shall look for
payment or satisfaction of such obligations solely to the assets and property of
the corresponding Predecessor Funds.
10.6 It is expressly agreed that the obligations of the Successor Trust
hereunder shall not be binding upon any of the trustees, shareholders, nominees,
officers, agents or employees of the Successor Trust personally, but shall bind
only the trust property of the Successor Trust, as provided in the Declaration
of Trust of the Successor Trust. The execution and delivery by such officers of
the Successor Trust shall not be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the trust property of the Successor Trust as provided in the
Declaration of Trust of the Successor Trust. The Successor Trust is a series
company with multiple series, BB&T VIF Large Cap Value Fund, BB&T VIF Capital
Manager Equity Fund, BB&T VIF Large Company Growth Fund, BB&T VIF Mid Cap Growth
Fund, BB&T VIF Special Opportunities Equity Fund and BB&T VIF Total Return Bond
Fund, and has entered into this Agreement on behalf of the Successor Funds. With
respect to any obligation of the Successor Trust arising hereunder, the
Predecessor Funds and the Predecessor Trust shall look for payment or
satisfaction of such obligations solely to the assets and property of the
corresponding Successor Funds.
10.7 The sole remedy of a party hereto for a breach of any representation
or warranty made in this Agreement by the other party shall be an election by
the non-breaching party not to complete the transactions contemplated herein.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by its President or Vice President.
- 24 -
ATTEST VARIABLE INSURANCE FUNDS,
a Massachusetts business trust
By: ______________________________ By: _______________________________
Name: Name:
Title: Title:
ATTEST BB&T VARIABLE INSURANCE FUNDS
a Massachusetts business trust
By: ______________________________ By: ________________________________
Name: Name:
Title: Title:
ATTEST BB&T ASSET MANAGEMENT, INC,
a North Carolina corporation
solely for purposes of Section 5.2
By: ______________________________ By: ________________________________
Name: Name:
Title: Title:
- 25 -
VARIABLE INSURANCE FUNDS
100 Summer Street, Suite 1500
Boston, MA 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
April 14, 2005
BB&T LARGE CAP VALUE FUND
PROXY CARD
The undersigned shareholder of BB&T Large Cap Value Fund (the "Fund"), a
series of Variable Insurance Funds (the "Trust"), revoking any and all previous
proxies heretofore given for shares of the Fund held by the undersigned, hereby
constitutes Timothy J. Bresnahan and Alysha Danko, and each of them, proxies and
attorneys of the undersigned, with power of substitution to each, for and in the
name of the undersigned to vote and act upon all matters (unless and except as
expressly limited below) at the Special Meeting of Shareholders of the Fund to
be held on April 15, 2005 at the offices of BISYS Fund Services, 100 Summer
Street, Suite 1500, Boston, MA 02110, and at any and all adjournment(s) or
postponement(s) thereof (the "Meeting"), with respect to all shares of the Fund
for which the undersigned is entitled to provide instructions or with respect to
which the undersigned would be entitled to provide instructions or act with all
the powers the undersigned would possess if personally present and to vote with
respect to specific matters as set forth below. Any proxies heretofore given by
the undersigned with respect to said Meeting are hereby revoked.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy card in the enclosed self-addressed, postage-paid
envelope. In the alternative, you may vote by telephone by calling toll-free
(800) 228-1872 and following the recorded instructions. Prompt voting by
shareholders will avoid the costs associated with further solicitation.
This proxy card, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast FOR the Proposal. If
no direction is made for the Proposal, this proxy card will be voted FOR the
Proposal. The proxy will be voted in the designated proxy holder's discretion as
to other matters that come before the Meeting.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSAL
VOTE ON PROPOSAL
1. To approve a proposed Agreement and Plan of Reorganization pursuant to which
the Funds would be reorganized as separate series of BB&T Variable Insurance
Funds, a new Massachusetts business trust (the "New Trust"); as described in the
Proxy Statement; and
FOR [ ] AGAINST [ ] ABSTAIN [ ]
- 26 -
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
_________________________________
Signature
_________________________________
Title (If applicable)
_________________________________
Signature (if held jointly)
_________________________________
Title (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
- 27 -
VARIABLE INSURANCE FUNDS
100 Summer Street, Suite 1500
Boston, MA 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
April 14, 2005
BB&T CAPITAL MANAGER EQUITY FUND
PROXY CARD
The undersigned shareholder of BB&T Capital Manager Equity Fund (the
"Fund"), a series of Variable Insurance Funds (the "Trust"), revoking any and
all previous proxies heretofore given for shares of the Fund held by the
undersigned, hereby constitutes Timothy J. Bresnahan and Alysha Danko, and each
of them, proxies and attorneys of the undersigned, with power of substitution to
each, for and in the name of the undersigned to vote and act upon all matters
(unless and except as expressly limited below) at the Special Meeting of
Shareholders of the Fund to be held on April 14, 2005 at the offices of BISYS
Fund Services, 100 Summer Street, Suite 1500, Boston, MA 02110, and at any and
all adjournment(s) or postponement(s) thereof (the "Meeting"), with respect to
all shares of the Fund for which the undersigned is entitled to provide
instructions or with respect to which the undersigned would be entitled to
provide instructions or act with all the powers the undersigned would possess if
personally present and to vote with respect to specific matters as set forth
below. Any proxies heretofore given by the undersigned with respect to said
Meeting are hereby revoked.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy card in the enclosed self-addressed, postage-paid
envelope. In the alternative, you may vote by telephone by calling toll-free
(800) 228-1872 and following the recorded instructions. Prompt voting by
shareholders will avoid the costs associated with further solicitation.
This proxy card, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast FOR the Proposal. If
no direction is made for the Proposal, this proxy will be voted FOR the
Proposal. The proxy will be voted in the designated proxy holder's discretion as
to other matters that come before the Meeting.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSAL
VOTE ON PROPOSAL
1. (1) To approve a proposed Agreement and Plan of Reorganization pursuant to
which the Funds would be reorganized as separate series of BB&T Variable
Insurance Funds, a new Massachusetts business trust (the "New Trust"); as
described in the Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
-28-
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
_________________________________
Signature
_________________________________
Title (If applicable)
_________________________________
Signature (if held jointly)
_________________________________
Title (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
-29-
VARIABLE INSURANCE FUNDS
100 Summer Street, Suite 1500
Boston, MA 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
April 14, 2005
BB&T LARGE COMPANY GROWTH FUND
PROXY CARD
The undersigned shareholder of BB&T Large Company Growth Fund (the
"Fund"), a series of Variable Insurance Funds (the "Trust"), revoking any and
all previous proxies heretofore given for shares of the Fund held by the
undersigned, hereby constitutes Timothy J. Bresnahan and Alysha Danko, and each
of them, proxies and attorneys of the undersigned, with power of substitution to
each, for and in the name of the undersigned to vote and act upon all matters
(unless and except as expressly limited below) at the Special Meeting of
Shareholders of the Fund to be held on April 14, 2005 at the offices of BISYS
Fund Services, 100 Summer Street, Suite 1500, Boston, MA 02110, and at any and
all adjournment(s) or postponement(s) thereof (the "Meeting"), with respect to
all shares of the Fund for which the undersigned is entitled to provide
instructions or with respect to which the undersigned would be entitled to
provide instructions or act with all the powers the undersigned would possess if
personally present and to vote with respect to specific matters as set forth
below. Any proxies heretofore given by the undersigned with respect to said
Meeting are hereby revoked.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy card in the enclosed self-addressed, postage-paid
envelope. In the alternative, you may vote by telephone by calling toll-free
(800) 228-1872 and following the recorded instructions. Prompt voting by
shareholders will avoid the costs associated with further solicitation.
This proxy card, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast FOR the Proposal. If
no direction is made for the Proposal, this proxy will be voted FOR the
Proposal. The proxy will be voted in the designated proxy holder's discretion as
to other matters that come before the Meeting.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSAL
VOTE ON PROPOSAL
1. (1) To approve a proposed Agreement and Plan of Reorganization pursuant to
which the Funds would be reorganized as separate series of BB&T Variable
Insurance Funds, a new Massachusetts business trust (the "New Trust"); as
described in the Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
_________________________________
Signature
_________________________________
Title (If applicable)
_________________________________
Signature (if held jointly)
_________________________________
Title (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
-2-
VARIABLE INSURANCE FUNDS
100 Summer Street, Suite 1500
Boston, MA 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
April 14, 2005
BB&T MID CAP GROWTH FUND
PROXY CARD
The undersigned shareholder of BB&T Mid Cap Growth Fund (the "Fund"), a
series of Variable Insurance Funds (the "Trust"), revoking any and all previous
proxies heretofore given for shares of the Trust held by the undersigned, hereby
constitutes Timothy J. Bresnahan and Alysha Danko, and each of them, proxies and
attorneys of the undersigned, with power of substitution to each, for and in the
name of the undersigned to vote and act upon all matters (unless and except as
expressly limited below) at the Special Meeting of Shareholders of the Fund to
be held on April 14, 2005 at the offices of BISYS Fund Services, 100 Summer
Street, Suite 1500, Boston, MA 02110, and at any and all adjournment(s) or
postponement(s) thereof (the "Meeting"), with respect to all shares of the Fund
for which the undersigned is entitled to provide instructions or with respect to
which the undersigned would be entitled to provide instructions or act with all
the powers the undersigned would possess if personally present and to vote with
respect to specific matters as set forth below. Any proxies heretofore given by
the undersigned with respect to said Meeting are hereby revoked.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy card in the enclosed self-addressed, postage-paid
envelope. In the alternative, you may vote by telephone by calling toll-free
(800) 228-1872 and following the recorded instructions. Prompt voting by
shareholders will avoid the costs associated with further solicitation.
This proxy card, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast FOR the Proposal. If
no direction is made for the Proposal, this proxy will be voted FOR the
Proposal. The proxy will be voted in the designated proxy holder's discretion as
to other matters that come before the Meeting.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSAL
VOTE ON PROPOSAL
1. (1) To approve a proposed Agreement and Plan of Reorganization pursuant to
which the Funds would be reorganized as separate series of BB&T Variable
Insurance Funds, a new Massachusetts business trust (the "New Trust"); as
described in the Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
_________________________________
Signature
_________________________________
Title (If applicable)
_________________________________
Signature (if held jointly)
_________________________________
Title (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
-2-
VARIABLE INSURANCE FUNDS
100 Summer Street, Suite 1500
Boston, MA 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
April 14, 2005
BB&T SPECIAL OPPORTUNITIES EQUITY FUND
PROXY CARD
The undersigned shareholder of BB&T Special Opportunities Equity Fund (the
"Fund"), a series of Variable Insurance Funds (the "Trust"), revoking any and
all previous proxies heretofore given for shares of the Fund held by the
undersigned, hereby constitutes Timothy J. Bresnahan and Alysha Danko, and each
of them, proxies and attorneys of the undersigned, with power of substitution to
each, for and in the name of the undersigned to vote and act upon all matters
(unless and except as expressly limited below) at the Special Meeting of
Shareholders of the Fund to be held on April 14, 2005 at the offices of BISYS
Fund Services, 100 Summer Street, Suite 1500, Boston, MA 02110, and at any and
all adjournment(s) or postponement(s) thereof (the "Meeting"), with respect to
all shares of the Fund for which the undersigned is entitled to provide
instructions or with respect to which the undersigned would be entitled to
provide instructions or act with all the powers the undersigned would possess if
personally present and to vote with respect to specific matters as set forth
below. Any proxies heretofore given by the undersigned with respect to said
Meeting are hereby revoked.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy card in the enclosed self-addressed, postage-paid
envelope. In the alternative, you may vote by telephone by calling toll-free
(800) 228-1872 and following the recorded instructions. Prompt voting by
shareholders will avoid the costs associated with further solicitation.
This proxy card, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast FOR the Proposal. If
no direction is made for the Proposal, this proxy will be voted FOR the
Proposal. The proxy will be voted in the designated proxy holder's discretion as
to other matters that come before the Meeting.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSAL
VOTE ON PROPOSAL
1. (1) To approve a proposed Agreement and Plan of Reorganization pursuant to
which the Funds would be reorganized as separate series of BB&T Variable
Insurance Funds, a new Massachusetts business trust (the "New Trust"); as
described in the Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
_________________________________
Signature
_________________________________
Title (If applicable)
_________________________________
Signature (if held jointly)
_________________________________
Title (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
-2-
VARIABLE INSURANCE FUNDS
100 Summer Street, Suite 1500
Boston, MA 02110
PROXY FOR THE SPECIAL MEETING OF SHAREHOLDERS
April 14, 2005
BB&T TOTAL RETURN BOND FUND
PROXY CARD
The undersigned shareholder of BB&T Total Return Bond Fund (the "Fund"), a
series of Variable Insurance Funds (the "Trust"), revoking any and all previous
proxies heretofore given for shares of the Fund held by the undersigned, hereby
constitutes Timothy J. Bresnahan and Alysha Danko, and each of them, proxies and
attorneys of the undersigned, with power of substitution to each, for and in the
name of the undersigned to vote and act upon all matters (unless and except as
expressly limited below) at the Special Meeting of Shareholders of the Fund to
be held on April 14, 2005 at the offices of BISYS Fund Services, 100 Summer
Street, Suite 1500, Boston, MA 02110, and at any and all adjournment(s) or
postponement(s) thereof (the "Meeting"), with respect to all shares of the Fund
for which the undersigned is entitled to provide instructions or with respect to
which the undersigned would be entitled to provide instructions or act with all
the powers the undersigned would possess if personally present and to vote with
respect to specific matters as set forth below. Any proxies heretofore given by
the undersigned with respect to said Meeting are hereby revoked.
To avoid the expense of adjourning the Meeting to a subsequent date,
please return this proxy in the enclosed self-addressed, postage-paid envelope.
In the alternative, you may vote by telephone by calling toll-free (800)
228-1872 and following the recorded instructions. Prompt voting by shareholders
will avoid the costs associated with further solicitation.
This proxy card, if properly executed, will be voted in the manner as
directed herein by the undersigned shareholder. Unless otherwise specified in
the squares provided, the undersigned's vote will be cast FOR the Proposal. If
no direction is made for the Proposal, this proxy will be voted FOR the
Proposal. The proxy will be voted in the designated proxy holder's discretion as
to other matters that come before the Meeting.
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
OF THE TRUST, THE BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE
"FOR" THE PROPOSAL
VOTE ON PROPOSAL
1. (1) To approve a proposed Agreement and Plan of Reorganization pursuant to
which the Funds would be reorganized as separate series of BB&T Variable
Insurance Funds, a new Massachusetts business trust (the "New Trust"); as
described in the Proxy Statement.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
Please date and sign exactly as the name or names appear on your shareholder
account statement. When signing as attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. If shares are
held jointly, each shareholder must sign.
_________________________________
Signature
_________________________________
Title (If applicable)
_________________________________
Signature (if held jointly)
_________________________________
Title (if applicable)
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE.
-2-