EXHIBIT (4)
BB&T VARIABLE INSURANCE FUNDS
BB&T LARGE CAP GROWTH VIF AND
BB&T LARGE CAP VIF
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization, having been approved by the
Board of Trustees of BB&T Variable Insurance Funds, is made as of [________],
2006 between BB&T Variable Insurance Funds, on behalf of BB&T Large Cap Growth
VIF and BB&T Large Cap VIF, 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 VIF ("Large Cap Growth VIF") will sell, assign,
convey, transfer and deliver to BB&T Large Cap VIF ("Large Cap VIF"), and Large
Cap VIF will acquire, on the Exchange Date, all of the properties and assets
existing at the Valuation Time in Large Cap Growth VIF, subject to liabilities.
In consideration therefor, Large Cap VIF shall, on the Exchange Date, assume all
of the liabilities of Large Cap Growth VIF existing at the Valuation Time and
transfer to Large Cap Growth VIF a number of full and fractional units of
beneficial interest ("Shares" ) of Large Cap VIF having an aggregate net asset
value equal to the value of the assets of Large Cap Growth VIF transferred to
Large Cap VIF on such date less the value of all of the liabilities of Large Cap
Growth VIF assumed by Large Cap VIF 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 VIF in complete liquidation shall distribute to its
respective shareholders of record as of the Exchange Date the Large Ca p VIF
Shares received by it, each shareholder being entitled to receive that number of
such Large Cap VIF Shares equal to the total of (i) the proportion which the
number of Shares of Large Cap Growth VIF held by such shareholder bears to the
number of such Shares of Large Cap Growth VIF outstanding on such date
multiplied by (ii) the total number of Large Cap VIF Shares received by the
Large Cap Growth VIF, as of the Exchange Date. Large Cap Growth VIF shareholders
of record will receive Shares of Large Cap VIF.
2. REPRESENTATIONS AND WARRANTIES OF BB&T VARIABLE INSURANCE FUNDS. Each of BB&T
Variable Insurance Funds, Large Cap VIF and Large Cap Growth VIF warrant to and
agree that:
(a) BB&T Variable Insurance 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 Variable Insurance Funds, Large Cap Growth VIF and Large
Cap VIF is not required to qualify as a foreign association in any jurisdiction.
Each of BB&T Variable Insurance Funds, Large Cap Growth VIF and Large Cap VIF
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 Variable Insurance 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 VIF and Large Cap VIF for the
year ended December 31, 2005 and six-month period ended June 30, 2006, fairly
present the financial position of each of Large Cap Growth VIF and Large Cap VIF
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 VIF and Large Cap VIF dated May
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 Variable Insurance Funds, dated May 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 Variable Insurance Funds, Large Cap Growth VIF or Large
Cap VIF, overtly threatened against BB&T Variable Insurance Funds, Large Cap
Growth VIF or Large Cap VIF, which assert liability on the part of BB&T Variable
Insurance Funds, Large Cap Growth VIF or Large Cap VIF.
(f) There are no material contracts outstanding to which BB&T Variable Insurance
Funds, Large Cap Growth VIF or Large Cap VIF 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 VIF has no known liabilities of a material nature,
contingent or otherwise, other than those shown on its statement of assets and
liabilities as of June 30, 2006, referred to above and those incurred in the
ordinary course of the business of BB&T Variable Insurance Funds as an
investment company or Large Cap Growth VIF since such date. Prior to the
Exchange Date, Large Cap Growth VIF will advise Large Cap VIF of all known
material liabilities, contingent or otherwise, incurred by it subsequent to June
30, 2006, whether or not incurred in the ordinary course of business.
(h) As of the Exchange Date, BB&T Variable Insurance Funds and each of Large Cap
Growth VIF and Large Cap VIF will have filed all federal and other tax returns
which, to the knowledge of BB&T Variable Insurance Funds' officers, have been
required to be filed by Large Cap Growth VIF or Large Cap VIF, 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 VIF or Large Cap VIF,
respectively. As of the Exchange Date, to such officers' knowledge, each of
Large Cap Growth VIF and Large Cap VIF (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
VIF's investments shown on the schedule of its portfolio investments as of June
30, 2006, referred to in Section 2(c) hereof,
as supplemented with such changes as BB&T Variable Insurance Funds or the Large
Cap Growth VIF shall make after June 30, 2006, which changes shall be disclosed
to BB&T Variable Insurance Funds and the Large Cap VIF, and changes resulting
from stock dividends, stock split-ups, mergers and similar corporate actions.
(j) Each of Large Cap Growth VIF and Large Cap VIF 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 meet such requirements at all times through the
Exchange Date. Neither Large Cap Growth VIF nor Large Cap VIF 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
VIF and Large Cap VIF 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) For all taxable years and all applicable quarters of Large Cap Growth VIF
from the date of its inception, the assets of Large Cap Growth VIF have been
sufficiently diversified that each segregated asset account investing all its
assets in Large Cap Growth VIF was adequately diversified within the meaning of
Section 817(h) of the Code and applicable regulations thereunder. For all
taxable years and all applicable quarters of Large Cap VIF from the date of its
inception, the assets of Large Cap VIF have been sufficiently diversified that
each segregated asset account investing all its assets in Large Cap VIF was
adequately diversified within the meaning of Section 817(h) of the Code and
applicable regulations thereunder.
(l) No consent, approval, authorization or order of any governmental authority
is required for the consummation by BB&T Variable Insurance Funds, Large Cap
Growth VIF or Large Cap VIF 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 Hart-Scott-Rodino Antitrust Improvements Act
of 1976.
(m) As of both the Valuation Time and the Exchange Date and otherwise as
described in Section 2(i), BB&T Variable Insurance Funds on behalf of Large Cap
VIF will have full right, power and authority to purchase the Investments and
any other assets and assume the liabilities of Large Cap Growth VIF to be
transferred to Large Cap VIF pursuant to this Plan.
(n) 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
Variable Insurance Funds, Large Cap Growth VIF and Large Cap VIF: (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 Variable Insurance Funds, Large
Cap Growth VIF or Large Cap VIF, 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 VIF or Large Cap VIF for use in the Registration Statement, the
Prospectuses or the Proxy Statement.
(o) Large Cap VIF Shares to be issued to each of Large Cap Growth VIF 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 Variable Insurance Funds and no shareholder of BB&T
Variable Insurance Funds will have any preemptive right of subscription or
purchase in respect thereof.
(p) The issuance of Large Cap VIF Shares pursuant to this Plan will be in
compliance with all app licable federal and state securities laws.
3. REORGANIZATION. (a) Subject to the requisite approval of the shareholders of
Large Cap Growth VIF (in respect of the Large Cap Growth VIF Reorganization, as
hereafter defined) and to the other terms and conditions contained herein
(including Large Cap Growth VIF '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 Section 1222 of the Code)), Large Cap Growth VIF will
agree to sell, assign, convey, transfer and deliver to Large Cap VIF, and Large
Cap VIF will agree to acquire from Large Cap Growth VIF, on the Exchange Date
all of the Investments and all of the cash and other assets of Large Cap Growth
VIF, subject to liabilities, in exchange for that number of Shares of Large Cap
VIF provided for in Section 4 and the assumption by Large Cap VIF of all of the
liabilities of Large Cap Growth VIF. Pursuant to this Plan, Large Cap Growth VIF
will, as soon as practicable after the Exchange Date, distribute in liquidation
all of the Large Cap VIF Shares received by it to its shareholders in exchange
for their respective Shares of Large Cap Growth VIF.
(b) BB&T Variable Insurance Funds, on behalf of Large Cap Growth VIF, will pay
or cause to be paid to Large Cap VIF any interest and cash dividends received by
it on or after the Exchange Date with respect to the Investments transferred to
Large Cap VIF hereunder. BB&T Variable Insurance Funds, on behalf of Large Cap
Growth VIF, will transfer to Large Cap VIF any rights, stock dividends, or other
securities received by Large Cap Growth VIF 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 VIF 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 VIF acquired by Large Cap VIF.
4. EXCHANGE DATE; VALUATION TIME. On the Exchange Date, Large Cap VIF will
deliver to Large Cap Growth VIF a number of Large Cap VIF 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 VIF acquired by Large Cap VIF,
less the value of the liabilities of Large Cap Growth VIF assumed, determined as
hereafter provided in this Section 4.
(a) Subject to Section 4(d) hereof, the value of Large Cap Growth VIF's net
assets will be computed as of the Valuation Time using the valuation procedures
for Large Cap VIF 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 VIF and BB&T Variable Insurance Funds be valued at different prices.
(b) Subject to Section 4(d) hereof, the net asset value of a Share of Large Cap
VIF 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 VIF.
(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 Variable Insurance Funds (the
"Valuation Time").
(d) No formula will be used to adjust the net asset value of Large Cap Growth
VIF or Large Cap VIF to take into account differences in realized and unrealized
gains and losses.
(e) Large Cap VIF shall issue its Shares to Large Cap Growth VIF on one share
deposit receipt registered in the name of Large Cap Growth VIF. Large Cap Growth
VIF shall distribute in liquidation the Large Cap VIF Shares received by it
hereunder pro rata to its shareholders by redelivering such share deposit
receipt to BB&T Variable Insurance Funds' transfer agent which will as soon as
practicable set up open accounts for each Large Cap Growth VIF shareholder, in
accordance with written instructions furnished by Large Cap Growth VIF.
(f) Large Cap VIF shall assume all liabilities of Large Cap Growth VIF, whether
accrued or contingent, in connection with the acquisition of assets and
subsequent dissolution of Large Cap Growth VIF or otherwise, except that
recourse for assumed liabilities relating to Large Cap Growth VIF will be
limited to Large Cap VIF.
5. EXPENSES, FEES, ETC. (a) All fees and expenses incurred by Large Cap Growth
VIF, Large Cap VIF and/or BB&T Asset Management, Inc. (the investment adviser of
both Large Cap Growth VIF and Large Cap VIF) directly in connection with the
consummation of 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 VIF shareholders will pay their respective expenses, if any,
incurred in connection with the transaction contemplated by this Plan. BB&T
Asset Management, Inc. nor Large Cap Growth VIF nor Large Cap VIF will pay Large
Cap Growth VIF 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 Variable Insurance Funds and Large Cap Growth VIF will
agree to review the assets of Large Cap Growth VIF to ensure that at any time
prior to the Exchange Date the assets of Large Cap Growth VIF do not include any
assets that Large Cap VIF 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 VIF, is unsuitable for Large Cap
VIF to acquire.
7. EXCHANGE DATE. Delivery of the assets of Large Cap Growth VIF to be
transferred, assumption of the liabilities of Large Cap Growth VIF to be
assumed, and the delivery of Large Cap VIF Shares to be issued shall be made at
the offices of BB&T Variable Insurance Funds, 3435 Stelzer Road, Columbus, OH
43219, 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 Variable Insurance
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 VIF 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 VIF to and the
assumption of all of the liabilities of Large Cap Growth VIF by Large Cap VIF 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 VIF shall have approved this Plan and the transaction
contemplated herein in the manner required by law and BB&T Variable Insurance
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 VIF and Large Cap VIF of the reorganization of the Large Cap Growth
VIF with and into the Large Cap VIF ("Large Cap Growth VIF 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 VIF in the
manner required by law.
(b) Large Cap Growth VIF shall have furnished to Large Cap VIF a statement of
each of Large Cap Growth VIF'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 VIF'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 VIF since June 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 VIF, 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 Variable Insurance Funds, Large Cap VIF and Large Cap
Growth VIF 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 VIF 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 VIF shall have furnished to Large Cap
VIF a statement, dated the Exchange Date, signed by BB&T Variable Insurance
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 Variable Insurance Funds shall have received an opinion of Ropes & Gray
LLP dated the Exchange Date to the effect that: (i) BB&T Variable Insurance
Funds is a business trust duly established and validly existing under the laws
of the Commonwealth of Massachusetts, and neither BB&T Variable Insurance Funds,
Large Cap Growth VIF nor Large Cap VIF is, to the knowledge of such counsel,
required to qualify to do business as a foreign association in any jurisdiction;
(ii) BB&T Variable Insurance Funds and Large Cap Growth VIF 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
Variable Insurance Funds and Large Cap Growth VIF will have duly sold, assigned,
conveyed, transferred and delivered such Investments and other assets to Large
Cap VIF; (iii) the adoption of this Plan did not, and the consummation of the
transaction contemplated hereby will not, violate BB&T Variable Insurance Funds'
Declaration of Trust or Bylaws, as amended, or any provision of any agreement
known to such counsel to which BB&T Variable Insurance 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
Variable Insurance 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 Variable Insurance Funds and is a valid and
binding obligation of BB&T Variable Insurance Funds; and (vi) the Shares of
Large Cap VIF to be delivered to Large Cap Growth VIF 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 Variable Insurance Funds and no
shareholder of BB&T Variable Insurance Funds has any preemptive right to
subscription or purchase in respect thereof.
(f) With respect to the Large Cap Growth VIF Reorganization, BB&T Variable
Insurance Funds, on behalf of Large Cap Growth VIF and Large Cap VIF shall have
received an opinion of Ropes & Gray LLP addressed to Large Cap Growth VIF and
Large Cap VIF 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 VIF and Large Cap Growth VIF 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 VIF upon the receipt
of the assets of Large Cap Growth VIF in exchange for Large Cap VIF Shares and
the assumption by Large Cap VIF of the liabilities of Large Cap Growth VIF;
(iii) the basis in the hands of Large Cap VIF of the assets of Large Cap Growth
VIF transferred to Large Cap VIF in the transaction contemplated by this Plan
will be the same as the basis of such assets in the hands of Large Cap Growth
VIF immediately prior to the transfer; (iv) the holding periods of the assets of
Large Cap Growth VIF in the hands of Large Cap VIF will include the periods
during which such assets were held by Large Cap Growth VIF; (v) no gain or loss
will be recognized by Large Cap Growth VIF upon the transfer of Large Cap Growth
VIF's assets to Large Cap VIF in exchange for Large Cap VIF Shares and the
assumption by Large Cap VIF of the liabilities of Large Cap Growth VIF, or upon
the distribution of Large Cap VIF Shares by Large Cap Growth VIF to its
shareholders in liquidation; (vi) no gain or loss will be recognized by Large
Cap Growth VIF shareholders upon the exchange of their Large Cap Growth VIF
Shares for Large Cap VIF Shares; (vii) the aggregate basis of Large Cap VIF
Shares a Large Cap Growth VIF 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 VIF exchanged therefor; (viii) a Large Cap Growth
VIF shareholder's holding period for his or her Large Cap VIF Shares will be
determined by including the period for which he or she held the Large Cap Growth
VIF Shares exchanged therefor, provided that he or she held such Large Cap
Growth VIF Shares as capital assets; and (ix) Large Cap VIF will succeed to, and
take into account the items of Large Cap Growth VIF described in Section 318(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 VIF to be acquired by Large Cap VIF will
include no assets which Large Cap VIF, 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 Variable Insurance Funds shall not change BB&T Variable Insurance Funds'
Declaration of Trust and BB&T Prospectuses so as to restrict permitted
investments for Large Cap VIF 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 Variable
Insurance Funds, contemplated by the Commission and or any state regulatory
authority.
(i) BB&T Variable Insurance Funds shall have received from the Commission such
order or orders as Ropes & Gray 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 VIF 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 VIF Reorganization, Large Cap Growth
VIF shall have furnished to Large Cap VIF a certificate, signed by the President
(or any Vice President) and the Treasurer of BB&T Variable Insurance Funds, as
to the tax cost to Large Cap Growth VIF of the securities delivered to Large Cap
VIF pursuant to this Plan, together with any such other evidence as to such tax
cost as Large Cap VIF may reasonably request.
(l) BB&T Variable Insurance Funds shall have received from the custodian of BB&T
Variable Insurance Funds a certificate identifying all of the assets of Large
Cap Growth VIF held by such custodian as of the Valuation Time.
(m) The transfer agent of BB&T Variable Insurance Funds shall have provided to
BB&T Variable Insurance Funds (i) a record specifying the number of Shares of
Large Cap Growth VIF 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 VIF and the number of Large Cap Growth VIF Shares held of
record by each such shareholder as of the Valuation Time. Large Cap Growth VIF's
transfer agent shall also have provided BB&T Variable Insurance 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 Variable Insurance Funds, on behalf of Large Cap VIF, shall have
executed and delivered an Assumption of Liabilities dated as of the Exchange
Date pursuant to which Large Cap VIF will assume all of the liabilities of Large
Cap Growth VIF existing at the Valuation Time in connection with the transaction
contemplated by this Plan, other than liabilities pursuant to this Plan.
(o) BB&T Variable Insurance Funds, on behalf of Large Cap Growth VIF, shall have
executed and delivered an instrument of transfer ("Transfer Document") and any
other certificates or documents BB&T Variable Insurance Funds may deem necessary
or desirable to transfer Large Cap Growth VIF's entire right, title and interest
in and to the Investments and all other assets of Large Cap Growth VIF.
10. NO BROKER, ETC. There is no person who has dealt with BB&T Variable
Insurance Funds, Large Cap Growth VIF or Large Cap VIF 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 Variable Insurance Funds may, by consent of its Trustees,
terminate this Plan, and BB&T Variable Insurance 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
Variable Insurance 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 Variable Insurance
Funds will, in connection with the issuance of any Shares of the Large Cap VIF
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 VARIABLE
INSURANCE 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 VARIABLE INSURANCE FUNDS' DECLARATION OF TRUST BB&T Variable Insurance
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 Variable Insurance 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
Variable Insurance Funds personally, but bind only the assets of BB&T Variable
Insurance Funds and all persons dealing with any series or funds of BB&T
Variable Insurance Funds, such as Large Cap VIF, must look solely to the assets
of BB&T Variable Insurance Funds belonging to such series or funds for the
enforcement of any claims against BB&T Variable Insurance Funds.
BB&T VARIABLE INSURANCE FUNDS,
on behalf of BB&T Large Cap VIF and
BB&T Large Cap Growth VIF
By:
---------------------------------
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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