SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)
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Check the appropriate box:
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Rule 14c-6(e)(2)
________________________________________________________________________________
Blue Ridge Funds Trust
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
(X) No fee required.
( ) Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
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<PAGE>
Blue Ridge Funds Trust
Blue Ridge Total Return Fund
105 North Washington Street
Post Office 69
Rocky Mount, North Carolina 27801-0069
February 19, 1999
Dear Shareholder:
As was recently announced, Blue Ridge Funds Trust's investment manager, Blue
Ridge Advisors, Inc. recently entered into an Asset Purchase Agreement with
Colonial Asset Management, Inc. ("CAM"), pursuant to which CAM would become the
investment manager of the Blue Ridge Total Return Fund ("Fund").
Under the Investment Company Act of 1940 as amended, the asset sale would
constitute an "assignment" of the investment management agreement with Blue
Ridge Advisors, Inc. and, therefore, would result in an automatic termination of
that agreement. As a result, it is necessary for you to approve a new investment
management agreement. In addition, you are also being asked to approve an
amended and restated distribution agreement and to elect a new Board of
Trustees. As you review the attached materials, please keep in mind that Blue
Ridge Advisors, Inc., not the Fund, plans to sell its assets to CAM. Also, it is
important to remember that CAM has agreed to manage the Fund without an increase
in the fees payable by the Fund and its shareholders. Moreover, CAM has agreed
to limit the Fund's ordinary operating expenses to 1.45% of the Fund's issue
average daily net assets pursuant to an Expense Limitation Agreement.
THE BOARD OF TRUSTEES, INCLUDING THE TRUST'S SOLE INDEPENDENT TRUSTEE, HAS
APPROVED EACH PROPOSAL AND RECOMMENDS THEM FOR YOUR APPROVAL.
If you have any questions about any of the proposals, please feel free to call
me directly at (864) 268-8967.
Sincerely,
/s/ Jeff Doyon
Jeff Doyon
President
Blue Ridge Advisors, Inc.
<PAGE>
BLUE RIDGE FUNDS TRUST
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To the shareholders of Blue Ridge Total Return Fund:
A special meeting of the shareholders of Blue Ridge Total Return Fund, a series
of Blue Ridge Funds Trust (the "Trust"), will be held at the office of NC
Shareholder Services (the Trust's Dividend Disbursing and Transfer Agent), 107
North Washington Street, Rocky Mount, North Carolina, on March 30, 1999, at
10:00 a.m. for the purposes of:
1. Approving a new investment management agreement with Colonial Asset
Management, Inc.;
2. Approving an amended and restated distribution agreement with Capital
Investment Group, Inc.;
3. Electing new Trustees; and
4. Transacting such other business as may properly come before the
meeting.
Shareholders of record at the close of business on February 18, 1999 are
entitled to vote at the meeting.
For the Board of Trustees,
/s/ C. Frank Watson, III
C. Frank Watson, III
Secretary
March 12, 1999
<PAGE>
* * * YOUR VOTE IS IMPORTANT * * *
PLEASE SIGN AND MAIL THE ENCLOSED PROXY CARD
PROXY STATEMENT
The Board of Trustees of Blue Ridge Funds Trust (the "Trust") is soliciting
proxies from the shareholders of the Blue Ridge Total Return Fund ("Fund") for
use at a special meeting of shareholders to be held March 30, 1999, and at any
adjournment of that meeting. A proxy may be revoked at any time before it is
voted, either in person or by written notice to the Trust or by delivery of a
later-dated proxy.
Shareholders of record of the Trust at the close of business on February 18,
1999 are entitled to participate in the meeting and to cast one vote for each
share held. The Trust had 154,003.034 shares of beneficial interest outstanding
on the record date, all of which were shares of Fund, which is the only existing
series of the Trust. This proxy statement is first being mailed to shareholders
on or about March 15, 1999. Any shareholder who desires a copy of the
previously-mailed annual report may obtain it upon request, without charge, by
calling or writing the Trust as indicated below:
Blue Ridge Total Return Fund
c/o NC Shareholder Services, LLC
107 North Washington Street
Post Office Box 4365
Rocky Mount, North Carolina 27803-0365
Toll Free Telephone: (800) 525-3863
<PAGE>
INTRODUCTION
Blue Ridge Advisors, Inc. ("Blue Ridge Advisors" or "Manager"), 84 Villa Road,
B37, Greenville, S.C. 29615, is the investment manager for the Fund. Capital
Investment Group, Inc. (the "Distributor"), Post Office Box 32249, Raleigh,
North Carolina, 27622, is the Fund's distributor. The Nottingham Company, 105
North Washington Street, Post Office Drawer 69, Rocky Mount, North Carolina
27801-0069, is the Fund's administrator.
On February 18, 1999, Blue Ridge Advisors and Colonial Asset Management, Inc.
("CAM") entered into an Asset Purchase Agreement pursuant to which CAM will buy
specified assets of Blue Ridge Advisors ("Asset Sale"). The specified assets
("Assets") include: (a) the right in and use of the "Blue Ridge" name; (b) Blue
Ridge Advisors' interests in and claims under any and all agreements to which it
is a party, including the management agreement dated December 1, 1997, by and
among Blue Ridge Advisors; (c) all of Blue Ridge Advisors' files, books, records
and data files relating to the Fund and its investment history; (d) all records
relating to the Fund required to be maintained and retained under the Investment
Company Act of 1940 Act, as amended ("1940 Act") or the Investment Advisers Act
of 1940, as amended; and (e) Blue Ridge Advisors' interest in and claims under
certain permits, licenses, exemptions, order or approval of any governmental or
regulatory authority and the trade marks, trade names, copyrights and
applications therefor, and other intangible property ancillary thereto. Upon
closing of the Asset Sale (scheduled for March 30, 1999 or as soon thereafter as
practicable), CAM would assume the investment management of the Fund under a new
investment management agreement as described more fully below. Under the 1940
Act, the Asset Sale would constitute an "assignment" of the Fund's investment
management agreement and, therefore, would result in an automatic termination of
that agreement. As a result, as discussed further below, a new investment
management agreement for the Fund with CAM is being proposed.
Under the Asset Purchase Agreement between Blue Ridge Advisors and "CAM," the
closing of the Asset Sale is subject to several conditions, including: (1) the
Board take action (a) to approve an investment management agreement between CAM
and the Fund and (b) to call, with a recommendation of a favorable vote, a
shareholder meeting of the Fund to approve the Fund's investment management
agreement with CAM; and (2) approval of the new investment management agreement
by the Fund's shareholders.
1. APPROVAL OF NEW INVESTMENT MANAGEMENT AGREEMENT
INTRODUCTION. As discussed above, consummation of the Asset Sale would
constitute an "assignment" of the Fund's current investment management agreement
and, therefore, would result in an automatic termination of that agreement. As a
result, on February 18, 1999, the Board of Trustees, including the Trust's sole
disinterested Trustee, approved a new investment management agreement with CAM,
subject to approval by the shareholders of the Fund and the consummation of the
Asset Sale. The following discussion is qualified in its entirety by reference
to the form of new investment management agreement attached hereto as Exhibit A.
CURRENT INVESTMENT MANAGEMENT AGREEMENT. Blue Ridge Advisors has served as
investment manager to the Fund since its inception on December 1, 1997 pursuant
to an investment management agreement dated December 1, 1997 ("Current
Management Agreement").
The Current Management Agreement obligates the Manager to: (1) provide overall
advice and guidance with respect to the Fund, and to provide advice and guidance
to the Trust's Trustees, in accordance with the Fund's investment objective,
program, policies and restrictions; (2) provide investment advice to the Fund,
and manage the investment of the Fund and the composition of the Fund's
portfolio securities and investments; (3) periodically monitor and evaluate the
performance of the Fund with respect to the Fund's investment objective,
program, policies and restrictions; (4) monitor the compliance of the Manager,
and the Manager's employees acting on behalf of the Manager with the investment
objective, program, policies and restrictions of the Fund, the 1940 Act, and
Subchapter M of the Internal Revenue Code of 1986, as amended; (5) provide all
supervisory and management services reasonably necessary for the operation of
the Fund; (6) provide or procure on behalf of the Trust and the Fund, and at the
expense of the Manager, administrative and fund accounting services, transfer
agency services, dividend disbursing services, custodial services, distribution
services and other services necessary for the ordinary operation of the Fund;
(7) render to the Board of Trustees of the Trust such periodic and special
reports as the Board may reasonably request; and (8) make available its officers
and employees to the Board of Trustees as officers of the Trust for consultation
and discussions regarding the management of the Fund and services provided to
the Trust under the Current Management Agreement.
For its management and management services, Blue Ridge Advisors is paid by the
Fund a fee, accrued daily and paid monthly, at the annual rate of 1.65% of the
first $20 million of the Fund's average daily net assets and 1.20% of average
daily net assets in excess of $20 million.
During the fiscal period ended November 30, 1998, the Fund incurred total
management fees of $19,968 of which Blue Ridge Advisors waived $820.
PROPOSED INVESTMENT MANAGEMENT AGREEMENT. As noted above, consummation of the
Asset Sale would constitute an "assignment," as that term is defined in the 1940
Act, of the Fund's Current Management Agreement with Blue Ridge Advisors. As
required by the 1940 Act, the Current Management Agreement provides for its
automatic termination in the event of its assignment. In anticipation of the
Asset Sale, a new investment management agreement between the Trust and CAM is
being proposed for approval by the shareholders of the Fund ("New Management
Agreement"). The New Management Agreement, if approved by shareholders, will be
dated as of March 31, 1999. The New Management Agreement will be in effect for
an initial two year term ending March 31, 2001. Thereafter, the New Management
Agreement may continue, in effect, so long as its continuance is approved at
least annually by (a) the Board of Trustees of the Trust or a vote of a
"majority of the outstanding voting securities" of the Fund, as defined in the
1940 Act, and, in either event, (b) the vote of a majority of the Trustees who
are not parties to the agreement or "interested persons" of Blue Ridge Advisors
or CAM, as that term is defined in the 1940 Act, cast in person at a meeting
called for such purpose.
Under the Current Management Agreement, Blue Ridge Advisors receives a "bundled
fee" (at the annual rate of 1.65% of the first $20 million of the Fund's average
daily net assets and 1.20% of average daily net assets in excess of $20 million
which requires Blue Ridge Advisors to provide or arrange for the provision of
all services to the Fund, including custodial, transfer agency, or
administrative services.
The New Management Agreement will differ from that agreement in that CAM will
receive a management fee solely for its services and CAM will not provide or
arrange for the provision of the Fund's other services, such as custodial,
transfer agency, and administration. For its management services under the New
Management Agreement, CAM would be paid a fee that would be accrued daily and
paid monthly at the annual rate of 0.750% of the Fund's average daily net assets
up to and including $20 million, 0.625% of the Fund's average daily net assets
on the next $30 million, and 0.500% of the Fund's average daily net assets over
$50 million. Under the New Management Agreement, the Trust will be required to
enter new agreements with each of its service provides in order to obtain these
same services. The overall fees payable by the Fund and the Fund's shareholders,
however, will not exceed 1.45% of the net assets of the Fund.
In the interest of limiting expenses of the Fund, CAM also will enter into an
expense limitation agreement with the Trust, with respect to the Fund ("Expense
Limitation Agreement"), pursuant to which CAM will waive or limit its fees and
assume other expenses so that the total annual operating expenses of the Fund
(other than interest, taxes, brokerage commissions, other expenditures which are
capitalized in accordance with generally accepted accounting principles, other
extraordinary expenses not incurred in the ordinary course of the Fund's
business, and amounts, if any, payable pursuant to a Rule 12b-1 Plan) are
limited to 1.45% of the average daily assets of the Fund. The Fund may at a
later date reimburse CAM the fees waived or limited and other expenses assumed
and paid by CAM pursuant to the Expense Limitation Agreement during any of the
previous five (5) fiscal years, provided the Fund has reached a sufficient asset
size to permit such reimbursement to be made without causing the total annual
expense ratio of the Fund to exceed the percentage limits stated above.
Consequently, no reimbursement by the Fund will be made unless: (i) the Fund's
assets exceed $10 million; (ii) the Fund's total annual expense ratio is less
than the percentage stated above; and (iii) the payment of such reimbursement
has been approved by the Trust's Board of Trustees on a quarterly basis.
PRO FORMA COMPARISON OF MANAGEMENT FEES
- --------------------------------------------------------------------------------
Annual Rate as a Percentage
of Average Daily Net Assets
- --------------------------------------------------------------------------------
Current Management Agreement 1.65%
New Management Agreement and all other 1.45%
agreements (after waiver and/or
reimbursement of expenses by CAM)
A copy of the proposed New Management Agreement is included as Exhibit A to this
Proxy Statement.
INFORMATION ABOUT COLONIAL ASSET MANAGEMENT. Colonial Asset Management, Inc.,
531 East Main Street, Spartanburg, South Carolina, 29302, is registered as an
investment adviser with the Securities and Exchange Commission under the
Investment Advisers Act of 1940, as amended. CAM, which was formed in 1996 as a
result of a restructuring of its affiliate, Colonial Trust Company, is organized
under the laws of South Carolina as a corporation. CAM is a wholly owned
subsidiary of Colonial Group, Inc. which is also a South Carolina corporation.
CAM's clients include trusts, corporations, foundations, charitable
organizations, retirement plans, and individuals. The two main principals of CAM
are H. Walter Barre and Barry D. Wynn. As of December 31, 1998, CAM had
approximately $ 351 million in assets under management.
The Fund will be primarily managed by an investment team consisting of H. Walter
Barre and Barry D. Wynn, Chairman and President, respectively, of CAM. Messrs.
Barre and Wynn have been with the CAM since its inception. Prior to 1996,
Messrs. Barre and Wynn served as Chairman and President, respectively, for
Colonial Trust Company.
BOARD OF TRUSTEES EVALUATION. The Board of Trustees met on February 18, 1999 to
consider the Asset Sale and its anticipated effects on the Fund. On that date,
the Board, including the sole disinterested Trustee, voted to approve the New
Management Agreement and to recommend it to shareholders for their approval.
Before considering the New Management Agreement, the Board obtained from Blue
Ridge Advisors and CAM various information regarding CAM and the plans of the
parties. At the February 18, 1999, Board meeting, the Board reviewed various
matters including the history and organizational structure of CAM, its
investment performance record, the proposed team of CAM partners and associates
that would manage the Fund, its investments strategy, its financial condition
and its general plans for the Fund.
In connection with its deliberations, the Board obtained certain assurances from
the parties, including the following:
* CAM had no current intention to change the Fund's investment objectives
or policies.
* CAM intends to devote to the Fund and its affairs all attention and
resources that are necessary to provide the Fund with top quality
investment management services.
* CAM and Blue Ridge Advisors intend to comply with Section 15(f) of the
1940 Act and are not aware of any express or implied term, condition,
arrangement or understanding that would impose an "unfair burden" on
the Fund as a result of the Asset Sale, as that term is defined in
Section 15(f) of the 1940 Act.
* CAM will take no action that would have the effect of imposing an
"unfair burden" on the Fund as a result of the Asset Sale for a period
of two years and will ensure that at least 75% of the Board of the
Trust will be composed of members who are not interested persons of
Blue Ridge Advisors or CAM.
* CAM will pay the cost of preparing and distributing proxy materials to
and of holding the meeting of the Fund's shareholders as well as other
fees and expenses in connection with the Asset Sale, including the fees
and expenses of legal counsel to the Fund.
In considering the New Management Agreement, the Board took into account that
the terms relating to the services provided and the fees and expenses payable by
the Fund, as well as the Expense Limitation Agreement between the Trust and CAM.
The Board also considered a number of other factors including the investment
management fees and expense ratios of the Fund and competitive investment
companies.
As a result of its review and consideration of these matters, and the assurances
of CAM as described above, the Board voted to approve the New Management
Agreement and to recommend it to shareholders of the Fund for their approval.
2. APPROVAL OF AMENDED AND RESTATED DISTRIBUTION AGREEMENT
To facilitate the creation and addition of new series and classes to the Trust,
the Board has reviewed and recommends for shareholder approval a proposal to
amend and restate the Distribution Agreement with the Distributor. The current
distribution agreement provides for Capital Investment Group, Inc. to act as the
Distributor only with respect to the No Load class of shares ("NL Class") of the
Blue Ridge Total Return Fund. In the event new series or classes of shares are
added to the Trust, the Trust would be required to enter into a new or amended
distribution agreement.
The Amended and Restated Distribution Agreement would contain the following
additional clause.
"WHEREAS, the Trust is authorized to issue interests in separate classes of
Shares for each of its series now or in the future; and"
The Amended and Restated Distribution Agreement will provide that the Capital
Investment Group, Inc. will act as Distributor to the existing Fund and NL Class
of the Trust and any other series or classes of shares created hereafter. In
addition, the Distribution Agreement was revised in order to modify the standard
of care and indemnification provisions in order to conform those provisions to
industry norms. Among other things, Section 6 and 7 of the Distribution
Agreement were revised in order: to require the distributor to exercise
reasonable care in the performance of its duties and obligations under the
Agreement; and to require indemnification by the Distributor for losses
resulting from its malfeasance, bad faith, negligence, and willful disregard of
its duties and obligations under the Agreement.
The Amended and Restated Distribution Agreement would contain the following
additional clause.
"The distributor shall exercise reasonable care in connection with its
responsibilities under this Agreement."
There are no other material revisions to the Distribution Agreement.
A copy of the proposed Amended and Restated Distribution Agreement is included
as Exhibit B to this proxy statement.
3. ELECTION OF TRUSTEES
A condition to the consummation of the Asset Sale is that a restructuring of the
Board be approved such that the composition of the Board complies with Section
15(f) of the 1940 Act. Section 15(f) provides, in pertinent part, that for a
period of three years after the Asset Sale, at least 75% of the Trustees of the
Board may not be "interested persons" (as defined in the 1940 Act) of CAM or
Blue Ridge Advisors.
In order to meet the requirements of Section 15(f), three disinterested persons
have been nominated to the Board by the current disinterested Trustee. These
nominees include William Brewer Bradshaw, Geoffrey M. Salkow, and Bob Inglis. In
addition one nominee who is affiliated with CAM, Johnnie M. Walters has been
nominated by the current sole disinterested trustee.
The nominees, if elected, will take office upon the consummation of the Asset
Sale and their election and qualification is contingent upon consummation of the
Asset Sale (i.e., March 31, 1999). The term of each person elected as Trustee
will be from the date of the consummation of the Asset Sale until the next
meeting held for the purpose of electing Trustees and until his or her successor
is elected and qualified. If the Asset Sale is not consummated, the current
Trustees of the Trust will continue to serve as the Trust's Board.
All of the nominees have consented to serve as Trustees. However, if any nominee
is not available for election at the time of the meeting, the proxies may be
voted for such other person(s) as shall be determined by the persons acting
under the proxies in their discretion.
The following tables show each nominee and non-continuing Trustee and such
person's age as of February 18, 1999, principal occupation or employment during
the past five years and other board memberships. The tables also show, to the
extent applicable, the year in which the person was first elected or appointed
to the Board of Trustees of the Trust.
NOMINEES
<TABLE>
<S> <C> <C>
- ------------------------------- -------------------------------------------------------------- -----------------------
Name and Age Experience Length of Service
- ------------------------------- -------------------------------------------------------------- -----------------------
- ------------------------------- -------------------------------------------------------------- -----------------------
William Brewer Bradshaw (37) Chairman, Capital Consulting Group, Inc., Insurance and Nominee
Investment Management Consulting Service, and Trustee,
Baptist Foundation of South Carolina during the
past five years.
- ------------------------------- -------------------------------------------------------------- -----------------------
- ------------------------------- -------------------------------------------------------------- -----------------------
Johnnie M. Walters^1 (79) Exec. V.P./Gen. Counsel, Colonial Trust Company since 1996. Nominee
Previously, Partner with Leatherwood, Walker,
Todd & Mann (law firm).
- ------------------------------- -------------------------------------------------------------- -----------------------
- ------------------------------- -------------------------------------------------------------- -----------------------
Geoffrey M. Salkow (34) President, Colonial Capital Management, LLC, (a registered Nominee
investment advisor) during the last five years.^2
- ------------------------------- -------------------------------------------------------------- -----------------------
- ------------------------------- -------------------------------------------------------------- -----------------------
Bob Inglis (40) Attorney-Partner, Leatherwood, Walker, Todd & Mann (law Nominee
firm); previously, Member, U.S. House of Representatives,
from 1993-1998.
- ------------------------------- -------------------------------------------------------------- -----------------------
1. Mr. Walters is an "interested person" of the Trust as defined in the 1940 Act.
2. Colonial Capital Management, LLC is not an "affiliate" of CAM, as defined in the 1940 Act.
</TABLE>
<TABLE>
<S> <C> <C>
NON-CONTINUING TRUSTEES^3
- ------------------------ ----------------------------------------------------------------- ---------------------------
Name and Age Experience Length of Service
- ------------------------ ----------------------------------------------------------------- ---------------------------
- ------------------------ ----------------------------------------------------------------- ---------------------------
Maria Stamoulas Attorney, Facer & Stamoulas, PC, since June 1996; previously, Since December 1997
Attorney, Zuckerman, Spaeder, Goldstein, Taylor & Kolker, from
1992 to 1996
- ------------------------ ----------------------------------------------------------------- ---------------------------
- ------------------------ ----------------------------------------------------------------- ---------------------------
Jeff Doyon President, Blue Ridge Advisers since 1997; CFO and GM, Janed Since December 1997
Enterprises, Inc since 1996; Reg. Rep, Royal Alliance Assoc.
from Feb. 1996 to Sept. 1996; and Reg. Rep., Smith Barney from
1994 to 1996
- ------------------------ ----------------------------------------------------------------- ---------------------------
- ------------------------ ----------------------------------------------------------------- ---------------------------
Allen Gillespie V.P., Blue Ridge Advisers, since 1997 and Reg. Rep. with Smith Since December 1997
Barney/Robinson Humphrey from 1995 to 1997
- ------------------------ ----------------------------------------------------------------- ---------------------------
</TABLE>
3. Bruce H. Herrick, Ph.D., who served as a Trustee beginning in December 1997,
resigned on February 18, 1999.
The following table shows shares of the Fund as to which each nominee or
non-continuing Trustee, and all current Trustees and officers of the Trust as a
group, had or shared power over voting or disposition of as of February 18,
1999.
AMOUNT OF BENEFICIAL OWNERSHIP^4
<TABLE>
<S> <C> <C>
- ----------------------------------------- ---------------------------------- ----------------------------------
Name of Trustee Amount and Nature of Beneficial Percentage Ownership
Ownership
- ----------------------------------------- ---------------------------------- ----------------------------------
Allen R. Gillespie 23,070.246 shares 14.980%
- ----------------------------------------- ---------------------------------- ----------------------------------
Jeffrey M. Doyon 1,971.888 shares 1.280%
- ----------------------------------------- ---------------------------------- ----------------------------------
</TABLE>
4. All of the shares of the Fund over which the nominees, Trustees and
officers of the Trust, directly or indirectly, had or shared voting or
investment power, have been deemed beneficially owned in accordance
with Rule 13d-3 of the Securities Exchange Act of 1934.
The Board met two times during the Trust's fiscal period ended November 30,
1998. Each then current Trustee attended 75% or more of the meetings of the
Board. The Board's audit committee did not meet during the last fiscal period
ended November 30, 1998. The Board does not have a standing nominating
committee.
Disinterested Trustees received $500 per fiscal quarter as compensation for
their services to the Trust. Trustees or officers who are "interested persons"
received no compensation for their services as such.
The table below shows, for each disinterested trustee, the aggregate
compensation paid or accrued by the independent Trustees for the fiscal period
ended November 30, 1998.
<TABLE>
<S> <C> <C> <C> <C>
- ---------------------------- ----------------------- -------------------- ------------------- -----------------------
Name of Person, Position Aggregate Compensation Pension or Estimatd Total Compensation
from the Fund Retirement Benefits Annual Benefits from the Trust Paid
Accrued as Part Upon to Trustees
of Trust Expenses Retirement
- ---------------------------- ----------------------- -------------------- ------------------- -----------------------
- ---------------------------- ----------------------- -------------------- ------------------- -----------------------
Maria A. Stamoulas $2,000 None None $2,000
- ---------------------------- ----------------------- -------------------- ------------------- -----------------------
- ---------------------------- ----------------------- -------------------- ------------------- -----------------------
Bruce H. Herrick^5 $2,000 None None $2,000
- ---------------------------- ----------------------- -------------------- ------------------- -----------------------
</TABLE>
5. Resigned from the Board of Trustees on February 18, 1999.
THE BOARD OF TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES, OF THE TRUST HAS
UNANIMOUSLY APPROVED EACH PROPOSAL AND RECOMMENDS THEM FOR YOUR APPROVAL.
4. OTHER MATTERS
Management is not aware of any other matters that will come before the meeting.
If any other business should come before the meeting, however, your proxy, if
signed and returned, will give discretionary authority to the persons designated
in it to vote according to their best judgment.
5. OTHER INFORMATION
EXECUTIVE OFFICERS OF THE TRUST. The officers of the Trust, their principal
occupations during the past five years, other business affiliations and ages as
of March 30, 1999, are set forth below:
<TABLE>
<S> <C> <C>
- ---------------------------------- ------------------- ---------------------------------------------------------------
Name (Age) Position(s) with Principal Occupations(s)
Trust
- ---------------------------------- ------------------- ---------------------------------------------------------------
- ---------------------------------- ------------------- ---------------------------------------------------------------
H. WALTER BARRE^6 (51) President Chairman, Colonial Trust Company and CEO of Colonial Asset
Management during the past five years.
- ---------------------------------- ------------------- ---------------------------------------------------------------
- ---------------------------------- ------------------- ---------------------------------------------------------------
BARRY D. WYNN^6 (54) Vice-President President, Colonial Trust Company during the past five years.
- ---------------------------------- ------------------- ---------------------------------------------------------------
- ---------------------------------- ------------------- ---------------------------------------------------------------
C. FRANK WATSON (28) Secretary Chief Operating Officer, The Nottingham Company, Inc., Rocky
Mount, North Carolina, since 1992.
- ---------------------------------- ------------------- ---------------------------------------------------------------
- ---------------------------------- ------------------- ---------------------------------------------------------------
JULIAN G. WINTERS (30) Treasurer Legal and Compliance Director, The Nottingham Company, Inc.,
Rocky Mount, North Carolina, since 1996. Prior thereto,
Operations Manager, Tar Heel Medical, Inc. (pharmaceutical
supplier), Nashville, North Carolina (1992-1996).
- ---------------------------------- ------------------- ---------------------------------------------------------------
</TABLE>
6. Mr. Wynn and Mr. Barre will assume their positions after consummation of
the Asset Sale. They are both persons affiliated with CAM, as described
above.
Capital Asset Management, Inc. The names and principal occupations of the
General Managers of CAM are as follows:
Name Principal Occupation
==== ====================
H. Walter Barre Chairman, Colonial Trust Company and CEO
Colonial Asset Management, Inc.
Barry D. Wynn President, Colonial Trust Company and President
Colonial Asset Management, Inc.
PORTFOLIO TRANSACTIONS. Portfolio transactions on behalf of the Fund effected on
stock exchanges involve the payment of negotiated brokerage commissions. There
is generally no stated commission in the case of securities traded in the
over-the-counter markets, but the price paid by the Fund usually includes an
undisclosed dealer commission or mark-up. In underwritten offerings, the price
paid by the Fund includes a disclosed, fixed commission or discount retained by
the underwriter or dealer.
In executing portfolio transactions, Blue Ridge Advisors does, and CAM would,
use its best efforts to obtain for the Fund the most favorable price and
execution available. In seeking the most favorable price and execution, Blue
Ridge Advisors does, and CAM would, consider all factors it deems relevant,
including price, the size of the transaction, the nature of the market for the
security, the amount of commission, the timing of the transaction taking into
account market prices and trends, the execution capability of the broker-dealer
and the quality of service rendered by the broker-dealer in the other
transactions.
Brokerage commissions incurred during the fiscal period ended November 30, 1998,
aggregated $9,050 for the Fund.
PRINCIPAL SHAREHOLDERS. As of February 18, 1999, the following persons were
known by the Trust to own beneficially five percent or more of the outstanding
shares of the Fund, as determined in accordance with Rule 13d-3 under the
Securities Exchange Act of 1934.
<TABLE>
<S> <C> <C>
- -------------------------------------------------- ----------------------------------------------------- -------------
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership Percent
- -------------------------------------------------- ----------------------------------------------------- -------------
First Union National Bank, NC 73,749.287 shares 47.888%
FBO Marion R. Gillespie IRA R/O
108 Carter Oaks Drive
Anderson, SC 29621
- -------------------------------------------------- ----------------------------------------------------- -------------
Janed Enerprises PSPT 30,688.005 shares 19.927%
DTD 12-31-94
P.O. Box 220
Taylors, SC 29687
- -------------------------------------------------- ----------------------------------------------------- -------------
Allen R. Gillespie 23,070.246 shares 14.980%
119 Oregon Street
Greenville, SC 29605
- -------------------------------------------------- ----------------------------------------------------- -------------
Blue Ridge Advisors, Inc. 8,015.069 shares 5.204%
P.O. Box 220
Taylors, SC 29687
- -------------------------------------------------- ----------------------------------------------------- -------------
</TABLE>
SOLICITATION OF PROXIES. Proxies will be solicited by the Board of Trustees, and
the cost of solicitation will be paid by CAM. Additional solicitation may be
made by mail, personal interview, telephone and telegraph by Blue Ridge
Advisors, CAM, or Capital Investment Group, Inc. personnel who will not be
additionally compensated for such activities.
SHAREHOLDER PROPOSALS. The Trust does not hold regular or annual meetings of its
shareholders. Proposals of shareholders which are intended to be presented at a
future shareholders' meeting must be received by the Trust by a reasonable time
prior to the Trust's solicitation of proxies relating to such future meeting.
Shareholder proposals must meet certain requirements and there is no guarantee
that any proposal will be presented at a shareholder's meeting.
ANNUAL REPORT. The Trust's annual report to shareholders for the fiscal period
ended November 30, 1998 was mailed to shareholders on January 20, 1999. Any
shareholder who desires an additional copy of the annual report may obtain it
upon request (without charge) by contacting NC Shareholder Services, 107 North
Washington Street, Post Office Drawer 4365, Rocky Mount, North Carolina,
27803-0365 or by calling (800) 773-3863.
QUORUM, VOTING. A Quorum of the shares entitled to vote for the purpose of
transacting of business at the meeting shall be 33 1/3% as required by
Declaration of Trust. If, by the time of the meeting, a quorum of shareholders
of the Trust is not present or if a quorum is present but sufficient votes in
favor of any of the items are not received, the persons named as proxies may
propose one or more adjournments of the meeting to permit further soliciting of
proxies from the shareholders. Any such adjournment would require an affirmative
vote of the majority of the shares of the Trust represented at the meeting,
either in person or by proxy. The persons named as proxies will vote in favor of
any such adjournment if they determine that such adjournment and additional
solicitation are reasonable and in the interest of the shareholders of the
Trust.
Each valid proxy will be voted in accordance with the instructions on the proxy
and as the persons named in the proxy determine on such other business as may
come before the meeting. If no instructions are given, the proxy will be voted
FOR items 1 and 2 and, with respect to item 3, FOR the election of all nominees
for Trustees. Voting instructions given by telephone or electronically
transmitted instruments may be counted if obtained pursuant to procedures
designed to verify that such instructions have been authorized. Any shareholder
may revoke his or her proxy at any time prior to exercise thereof by giving
written notice to the Secretary of the Trust at the offices of The Nottingham
Company, Inc. at 105 North Washington Street, Post Office Drawer 69, Rocky
Mount, North Carolina, 27801-0069, or by signing another proxy of a later date
and submitting that later proxy before the Shareholders Special Meeting, or by
personally casting his or her vote at the Shareholders Special Meeting.
Item 1 (approval of the New Management Agreement) requires the affirmative vote
of a "majority of the outstanding voting securities" as defined in the 1940 Act,
meaning: the affirmative vote of the lesser of (1) 67% of the voting securities
of the Fund present at the meeting if more than 50% of the outstanding shares of
the Fund are present in person or by proxy or (2) more than 50% of the
outstanding shares of the fund.
Item 2 (approval of the Amended and Restated Distribution Agreement) requires a
majority of the shares voted.
Item 3 (election of Trustees) requires a plurality of the shares voted. This
means that the four nominees receiving the largest number of votes will be
elected.
In tallying shareholder votes, abstentions and "broker non-votes" (i.e. shares
held by brokers or nominees as to which (i) instructions have not been received
from the beneficial owners or person entitled to vote and (ii) the broker or
nominee does not have discretionary voting power on a particular matter) will be
counted for purposes of determining whether a quorum is present for purposes of
convening the meeting. On Item 1 abstentions and broker non-votes will be
considered to be both present at the meeting and issued and outstanding and, as
a result, will have the effect of being counted as voted against the Item. On
Items 2 and 3, abstentions and broker non-votes will have no effect. With
respect to Item 2, a majority of the shares voted will constitute an approval.
With respect to Item 3, the four nominees receiving the largest number of votes
will be elected.
PLEASE COMPLETE, SIGN AND RETURN THE ENCLOSED PROXY PROMPTLY.
BY ORDER OF THE BOARD OF TRUSTEES:
C. Frank Watson, III
Secretary
<PAGE>
EXHIBIT A
---------
INVESTMENT MANAGEMENT AGREEMENT
THIS AGREEMENT, entered into as of the 1st day of April, 1999, by and between
BLUE RIDGE FUNDS TRUST (the "Trust"), a Delaware Business Trust, and COLONIAL
ASSET MANAGEMENT, INC. a South Carolina Corporation (the "Advisor"), registered
as an investment advisor under the Investment Advisors Act of 1940, as amended
(the "Advisors Act").
WHEREAS, the Trust is registered as an open-end management investment company of
the series type under the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Trust desires to retain the Advisor to furnish investment advisory
and administrative services to the series of the Trust identified in Appendix A
(each a "Fund"), and the Advisor is willing to so furnish such services;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Advisor to act as Investment
Advisor to the Blue Ridge Total Return Fund (the "Fund"), a series of
the Trust for the period and on the terms set forth in this Agreement.
The Advisor accepts such appointment and agrees to furnish the services
set forth herein, for the compensation as indicated in Appendix A.
2. Delivery of Documents. The Trust has furnished the Investment Advisor
with copies properly certified or authenticated of each of the
following:
(a) The Trust's Declaration of Trust, as filed with the State of
Delaware (the "Declaration");
(b) The Trust's By-Laws (the "By-Laws"");
(c) Resolutions of the Trust's Board of Trustees and the resolution
approved by a majority of the outstanding shares of the Fund
authorizing the appointment of the Advisor and approving this
Agreement;
(d) The Trust's Registration Statement on Form N-1A under the 1940
Act and under the Securities Act of 1933 as amended, (the "1933
Act"), relating to shares of beneficial interest of the Fund
(the "Shares") as filed with the Securities and Exchange
Commission ("SEC") and all amendments thereto;
(e) The Fund's Prospectus (the "Prospectus").
The Trust will furnish the Advisor from time to time with copies,
properly certified or authenticated, of all amendments of or
supplements to the foregoing at the same time as such documents are
required to be filed with the SEC.
3. Management. Subject to the supervision of the Trust's Board of
Trustees, the Advisor will provide a continuous investment program for
the Fund, including investment research and management with respect to
all securities, investments, cash and cash equivalents in the Fund. The
Advisor will determine from time to time what securities and other
investments will be purchased, retained or sold by the Fund. The
Advisor will provide the services under this Agreement in accordance
with the Fund's investment objectives, policies and restrictions as
stated in its Prospectus. The Advisor further agrees that it:
<PAGE>
(a) Will conform its activities to all applicable Rules and
Regulations of the Securities and Exchange Commission and will,
in addition, conduct its activities under this Agreement in
accordance with regulations of any other Federal and State
agencies which may now or in the future have jurisdiction over
its activities under this Agreement;
(b) Will place orders pursuant to its investment determinations for
the Fund either directly with the issuer or with any broker or
dealer. In placing orders with brokers or dealers, the Advisor
will attempt to obtain the best net price and the most favorable
execution of its orders. Consistent with this obligation, when
the Advisor believes two or more brokers or dealers are
comparable in price and execution, the Advisor may prefer: (i)
brokers and dealers who provide the Fund with research advice
and other services, or who recommend or sell Trust shares, and
(ii) brokers who are affiliated with the Fund or its Advisor;
provided, however, that in no instance will portfolio securities
be purchased from or sold to the Advisor or any affiliated
person of the Advisor in principal transactions;
(c) Will provide certain executive personnel for the Fund as may be
mutually agreed upon from time to time with the Board of
Trustees, the salaries and expenses of such personnel to be
borne by the Advisor unless otherwise mutually agreed upon; and
(d) Will provide, at its own cost, all office space, facilities and
equipment necessary for the conduct of its advisory activities
on behalf of the Fund.
4. Services Not Exclusive. The advisory services furnished by the Advisor
hereunder are not to be deemed exclusive, and the Advisor shall be free
to furnish similar services to others so long as its services under
this Agreement are not impaired thereby; provided, however, that
without the written consent of the Trustees, the Advisor will not serve
as investment advisor to any other investment company having a similar
investment objective to that of the Fund.
5. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Advisor hereby agrees that all records which it
maintains for the benefit of the Fund are the property of the Fund and
further agrees to surrender promptly to the Fund any of such records
upon the Fund's request. The Advisor further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records
required to be maintained by it pursuant to Rule 31a-1 under the 1940
Act that are not maintained by others on behalf of the Fund.
6. Expenses. During the term of this Agreement, the Advisor will pay all
expenses incurred by it in connection with its investment advisory
services pertaining to the Fund. The Advisor will pay, out of the
Advisor's resources, the entire cost of the promotion and sale of Trust
shares, including the preparation of the prospectus and other
documents. The Advisor will provide other information and services,
other than services of outside counsel or independent accountants or
investment advisory services to be provided by any Adviser under a
Management Agreement, required in connection with the preparation of
all registration statements and Prospectuses, Prospectus supplements,
SAIs, all annual, semiannual, and periodic reports to shareholders of
the Trust, regulatory authorities, or others, and all notices and proxy
solicitation materials, furnished to shareholders of the Trust or
regulatory authorities, and all tax returns.
Notwithstanding the foregoing, the Fund shall pay the expenses and
costs of the following:
<PAGE>
(a) Taxes, interest charges and extraordinary expenses;
(b) Brokerage fees and commissions with regard to portfolio
transactions of the Fund;
(c) Fees and expenses of the custodian of the Fund's portfolio
securities;
(d) Fees and expenses of the Fund's administrator, transfer and
dividend disbursing agent and the Fund's fund accounting agent
or, if the Fund performs any such services without an agent, the
costs of the same;
(e) Auditing and legal expenses;
(f) Cost of maintenance of the Fund's existence as a legal entity;
(g) Compensation of trustees who are not interested persons of the
Advisor as law defines that term;
(h) Costs of Trust meetings;
(i) Federal and State registration or qualification fees and
expenses;
(j) Costs of setting in type, printing and mailing Prospectuses,
reports and notices to existing shareholders;
(k) The investment management fee payable to the Advisor, as
provided in paragraph 7 herein; and
(l) Plan of Distribution expenses, but only in accordance with the
Plan of Distribution as approved by the shareholders of the
Fund.
7. Compensation. The Trust will pay the Advisor and the Advisor will
accept as full compensation an investment advisory fee, based upon the
daily average net assets of each Fund, computed at the end of each
month and payable within five (5) business days thereafter, based upon
the schedule attached hereto as Appendix A.
8.(a) Limitation of Liability. The Advisor shall not be liable for any error
of judgment, mistake of law or for any other loss whatsoever suffered
by the Fund in connection with the performance of this 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 misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement.
<PAGE>
8.(b) Indemnification of Advisor. Subject to the limitations set forth in
this Subsection 8(b), the Fund shall indemnify, defend and hold
harmless (from the assets of the Trust or Trusts to which the conduct
in question relates) the Advisor against all loss, damage and
liability, including but not limited to amounts paid in satisfaction of
judgments, in compromise or as fines and penalties, and expenses,
including reasonable accountants' and counsel fees, incurred by the
Advisor in connection with the defense or disposition of any action,
suit or other proceeding, whether civil or criminal, before any court
or administrative or legislative body, related to or resulting from
this Agreement or the performance of services hereunder, except with
respect to any matter as to which it has been determined that the loss,
damage or liability is a direct result of (i) a breach of fiduciary
duty with respect to the receipt of compensation for services; or (ii)
willful misfeasance, bad faith or gross negligence on the part of the
Advisor in the performance of its duties or from reckless disregard by
it of its duties under this Agreement (either and both of the conduct
described in clauses (i) and (ii) above being referred to hereinafter
as "Disabling Conduct"). A determination that the Advisor is entitled
to indemnification may be made by (i) a final decision on the merits by
a court or other body before whom the proceeding was brought that the
Advisor was not liable by reason of Disabling Conduct, (ii) dismissal
of a court action or an administrative proceeding against the Advisor
for insufficiency of evidence of Disabling Conduct, or (iii) a
reasonable determination, based upon a review of the facts, that the
Advisor was not liable by reason of Disabling Conduct by, (a) vote of a
majority of a quorum of Trustees who are neither "interested persons"
of the Fund as the quoted phrase is defined in Section 2(a)(19) of the
1940 Act nor parties to the action, suit or other proceeding on the
same or similar grounds that is then or has been pending or threatened
(such quorum of such Trustees being referred to hereinafter as the
"Independent Trustees"), or (b) an independent legal counsel in a
written opinion. Expenses, including accountants' and counsel fees so
incurred by the Advisor (but excluding amounts paid in satisfaction of
judgments, in compromise or as fines or penalties), may be paid from
time to time by the Fund or Trust to which the conduct in question
related in advance of the final disposition of any such action, suit or
proceeding; provided, that the Advisor shall have undertaken to repay
the amounts so paid if it is ultimately determined that indemnification
of such expenses is not authorized under this Subsection 8(b) and if
(i) the Advisor shall have provided security for such undertaking, (ii)
the Fund shall be insured against losses arising by reason of any
lawful advances, or (iii) a majority of the Independent Trustees, or an
independent legal counsel in a written opinion, shall have determined,
based on a review of readily available facts (as opposed to a full
trial-type inquiry), that there is reason to believe that the Advisor
ultimately will be entitled to indemnification hereunder.
As to any matter disposed of by a compromise payment by the Advisor
referred to in this Subsection 8(b), pursuant to a consent decree or
otherwise, no such indemnification either for said payment or for any
other expenses shall be provided unless such indemnification shall be
approved (i) by a majority of the Independent Trustees or (ii) by an
independent legal counsel in a written opinion. Approval by the
Independent Trustees pursuant to clause (i) shall not prevent the
recovery from the Advisor of any amount paid to the Advisor in
accordance with either of such clauses as indemnification of the
Advisor is subsequently adjudicated by a court of competent
jurisdiction not to have acted in good faith in the reasonable belief
that the Advisor's action was in or not opposed to the best interest of
the Fund or to have been liable to the Fund or its Shareholders by
reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in its conduct under the Agreement.
<PAGE>
The right of indemnification provided by this Subsection 8(b) shall not
be exclusive of or affect any of the rights to which the Advisor may be
entitled. Nothing contained in this Subsection 8(b) shall affect any
rights to indemnification to which Trustees, officers or other
personnel of the Fund, and other persons may be entitled by contract or
otherwise under law, nor the power of the Fund to purchase and maintain
liability insurance on behalf of any such person.
The Board of Trustees of the Trust shall take all such action as may be
necessary and appropriate to authorize the Fund hereunder to pay the
indemnification required by this Subsection 8(b) including, without
limitation, to the extent needed, to determine whether the Advisor is
entitled to indemnification hereunder and the reasonable amount of any
indemnity due it hereunder, or employ independent legal counsel for
that purpose.
8.(c) The provisions contained in Section 8 shall survive the expiration or
other termination of this Agreement, shall be deemed to include and
protect the Advisor and its directors, officers, employees and agents
and shall inure to the benefit of its/their respective successors,
assigns and personal representatives.
9. Duration and Termination. This Agreement shall become effective upon
the date the registration statement of the Trust containing the Fund's
Prospectus is declared effective by the Securities and Exchange
Commission and, unless sooner terminated as provided herein, shall
continue in effect for two years. Thereafter, this Agreement shall be
renewable for successive periods of one year each, provided such
continuance is specifically approved annually:
(a) By the vote of a majority of those members of the Board of
Trustees who are not parties to this Agreement or interested
persons of any such party (as that term is defined in the 1940
Act), cast in person at a meeting called for the purpose of
voting on such approval; and
(b) By vote of either the Board of Trustees or a majority (as that
term is defined in the 1940 Act) of the outstanding voting
securities of the Fund.
Notwithstanding the foregoing, this Agreement may be terminated by the
Fund or by the Advisor at any time on sixty (60) days' written notice,
without the payment of any penalty, provided that termination by the
Fund must be authorized either by vote of the Board of Trustees or by
vote of a majority of the outstanding voting securities of the Fund.
This Agreement will automatically terminate in the event of its
assignment (as that term is defined in the 1940 Act).
10. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by a written
instrument signed by the party against which enforcement of the change,
waiver, discharge or termination is sought. No material amendment of
this Agreement shall be effective until approved by vote of the holders
of a majority of the Fund's outstanding voting securities (as defined
in the 1940 Act).
11. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect. If
any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of the
Agreement shall not be affected thereby. This Agreement shall be
binding and shall inure to the benefit of the parties hereto and their
respective successors.
12. Applicable Law. This Agreement shall be construed in accordance with,
and governed by, the laws of the Commonwealth of North Carolina.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ATTEST: BLUE RIDGE FUNDS TRUST
By: __________________________ By: __________________________
Title: _______________________ Title: _______________________
ATTEST: COLONIAL ASSET MANAGEMENT, INC.
By: __________________________ By: __________________________
Title: _______________________ Title: _______________________
<PAGE>
APPENDIX A
SERIES OF THE TRUST TO WHICH THE ADVISOR PROVIDES SERVICES AND
INVESTMENT ADVISOR'S COMPENSATION SCHEDULE
For the services delineated in the INVESTMENT MANAGEMENT AGREEMENT, the
Investment Advisor shall be compensated monthly by the Blue Ridge Total Return
Fund, as of the last day of each month, within five business days of the month
end, a fee based upon the daily average net assets of the Fund according to the
following schedule.
Annual
Net Assets Fee
---------- ------
$20 Million and Less 0.750%
Next $30 Million 0.625%
Greater than $50 Million 0.500%
<PAGE>
EXHIBIT B
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
AGREEMENT made effective as of the 1st day of April, 1999, by and between BLUE
RIDGE FUNDS TRUST, an business trust organized under the laws of the State of
Delaware (the "Trust"), and CAPITAL INVESTMENT GROUP, INC., a North Carolina
corporation ("Distributor").
WITNESSETH:
WHEREAS, the Trust is engaged in business as an open-end management investment
company and is so registered under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to issue an unlimited number of shares of
beneficial interest (the "Shares"), in separate series representing the
interests in separate funds of securities and other assets; and
WHEREAS, the Trust is authorized to issue interests in separate classes of
Shares for each of its series now or in the future existing; and
WHEREAS, the Trust offers a series of such Shares representing interests in the
BLUE RIDGE TOTAL RETURN FUND (the "Fund") of the Trust, and has registered the
Shares under the Securities Act of 1933, as amended (the "1933 Act"), pursuant
to a registration statement on Form N-1A (the "Registration Statement"),
including a prospectus (the "Prospectus") and a statement of additional
information (the "Statement of Additional Information"); and
WHEREAS, the Trust may in the future adopt a Plan of Distribution Pursuant to
Rule 12b-1 under the 1940 Act (the "Distribution Plan") with respect to the
Shares of the Fund or any other series designated in Schedule A to this
Agreement (each a "Designated Fund"), and may enter into related agreements
providing for the distribution of Shares of any Designated Fund; and
WHEREAS, Distributor has agreed to act as distributor of the Shares of each
Designated Fund for the period of this Agreement;
NOW, THEREFORE, it is hereby agreed between the parties hereto as follows:
1. Appointment of Distributor.
(a) The Trust hereby appoints Distributor its exclusive agent for the
distribution of the Shares of each Designated Fund in jurisdictions
wherein such Shares may be legally offered for sale; provided, however,
that the Trust in its absolute discretion may issue Shares of each
Designated Fund in connection with (i) the payment or reinvestment of
dividends or distributions; (ii) any merger or consolidation of the
Trust or of each Designated Fund with any other investment company or
trust or any personal holding company, or the acquisition of the assets
of any such entity or another fund of the Trust; or (iii) any offer of
exchange permitted by Section 11 of the 1940 Act.
<PAGE>
(b) Distributor hereby accepts such appointment as exclusive agent for
the distribution of the Shares of each Designated Fund and agrees that
it will sell the Shares as agent for the Trust at prices determined as
hereinafter provided and on the terms hereinafter set forth, all
according to applicable federal and state laws and regulations and to
the Agreement and Declaration of Trust of the Trust.
(c) Distributor may sell Shares of each Designated Fund to or through
qualified securities dealers or others. Distributor will require each
dealer or other such party to conform to the provisions hereof, the
Registration Statement and the Prospectus and Statement of Additional
Information, and applicable law; and neither Distributor nor any such
dealers or others shall withhold the placing of purchase orders for
Shares so as to make a profit thereby.
(d) Distributor shall order Shares of each Designated Fund from the
Trust only to the extent that it shall have received purchase orders
therefor. Distributor will not make, or authorize any dealers or others
to make: (i) any short sales of Shares; or (ii) any sales of Shares to
any Trustee or officer of the Trust or to any officer or director of
Distributor or of any corporation or association furnishing investment
advisory, managerial or supervisory services to the Trust, or to any
such corporation or association, unless such sales are made in
accordance with the then current Prospectus and Statement of Additional
Information.
(e) Distributor is not authorized by the Trust to give any information
or make any representations regarding the Shares of each Designated
Fund, except such information or representations as are contained in
the Registration Statement or in the current Prospectus or Statement of
Additional Information of each Designated Fund, or in advertisements
and sales literature prepared by or on behalf of the Trust for
Distributor's use.
(f) Notwithstanding any provision hereof, the Trust may terminate,
suspend or withdraw the offering of Shares of each Designated Fund
whenever, in its sole discretion, it deems such action to be desirable.
2. Offering Price of Shares. All Fund Shares sold under this
Agreement shall be sold at the public offering price per Share in
effect at the time of the sale, as described in the then current
Prospectus for the Designated Fund. The excess, if any, of the public
offering price over the net asset value of the Shares sold by
Distributor as agent shall be retained by Distributor as a commission
for its services hereunder. Out of such commission Distributor may
allow commissions or concessions to dealers and may allow them to
others in its discretion in such amounts as Distributor shall determine
from time to time. Except as may be otherwise determined by Distributor
from time to time, such commissions or concessions shall be uniform to
all dealers. At no time shall the Trust receive less than the full net
asset value of the Shares, determined in the manner set forth in the
then current Prospectus and Statement of Additional Information.
Distributor shall also be entitled to such commissions and other fees
and payments as may be authorized by the Trustees of the Trust from
time to time under any Distribution Plan adopted by the Trust.
<PAGE>
3. Furnishing of Information. The Trust shall furnish to
Distributor copies of any information, financial statements and other
documents that Distributor may reasonably request for use in connection
with the sale of Shares of each Designated Fund under this Agreement.
The Trust shall also make available a sufficient number of copies of
each Designated Fund's current Prospectus and Statement of Additional
Information for use by the Distributor.
4. Expenses.
(a) The Trust will pay or cause to be paid the following expenses: (i)
preparation, printing and distribution to shareholders of the
Prospectus and Statement of Additional Information; (ii) preparation,
printing and distribution of reports and other communications to
shareholders; (iii) registration of the Shares under the federal
securities laws; (iv) qualification of the Shares for sale in certain
states; (v) qualification of the Trust as a dealer or broker under
state law as well as qualification of the Trust as an entity authorized
to do business in certain states; (vi) maintaining facilities for the
issue and transfer of Shares; (vii) supplying information, prices and
other data to be furnished by the Trust under this Agreement; and
(viii) certain taxes applicable to the sale or delivery of the Shares
or certificates therefor.
(b) Except to the extent such expenses are borne by the Trust pursuant
to any Distribution Plan adopted by the Trust with respect to any class
of Shares issued by any Designated Fund, Distributor will pay or cause
to be paid the following expenses: (i) payments to sales
representatives of the Distributor and to securities dealers and others
in respect of the sale of Shares of each Designated Fund; (ii) payment
of compensation to and expenses of employees of the Distributor and any
of its affiliates to the extent they engage in or support distribution
of Fund Shares or render shareholder support services not otherwise
provided by the Trust's transfer agent, administrator, or custodian,
including, but not limited to, answering routine inquiries regarding
each Designated Fund, processing shareholder transactions, and
providing such other shareholder services as the Trust may reasonably
request; (iii) formulation and implementation of marketing and
promotional activities, including, but not limited to, direct mail
promotions and television, radio, newspaper, magazine and other mass
media advertising; (iv) preparation, printing and distribution of sales
literature and of Prospectuses and Statements of Additional Information
and reports of the Trust for recipients other than existing
shareholders of each Designated Fund; and (v) obtaining such
information, analyses and reports with respect to marketing and
promotional activities as the Trust may, from time to time, reasonably
request.
(c) Distributor in connection with any Distribution Plan adopted by
the Trust shall prepare and deliver reports to the Trustees of the
Trust on a regular basis, at least quarterly, showing the expenditures
with respect to each Designated Fund pursuant to the Distribution Plan
and the purposes therefor, as well as any supplemental reports as the
Trustees of the Trust, from time to time, may reasonably request.
5. Redemption of Shares. Distributor as agent and for the account
of the Trust may redeem Shares at their net asset value plus any
applicable sales load or redemption fee as specified in the Trust's
current Prospectus and Statement of Additional Information.
<PAGE>
6. Indemnification by the Trust. The distributor shall exercise
reasonable care in connection with its responsibilities under this
Agreement. In absence of misfeasance, bad faith, negligence or reckless
disregard of obligations or duties hereunder on the part of
Distributor, the Trust agrees to indemnify Distributor and its officers
and partners and to hold them harmless against any and all claims,
demands, liabilities and expenses that Distributor may incur under the
1933 Act, the 1940 Act, common law or otherwise arising out of or based
upon any alleged untrue statement of a material fact contained in the
Registration Statement or any Prospectus or Statement of Additional
Information of each Designated Fund, or in any advertisements or sales
literature prepared by or on behalf of the Trust for Distributor's use,
or any omission to state a material fact therein, the omission of which
makes any statement contained therein misleading, unless such statement
or omission was made in reliance upon and in conformity with
information furnished to the Trust in connection therewith by or on
behalf of Distributor. Nothing herein contained shall require the Trust
to take any action contrary to any provision of its Agreement and
Declaration of Trust or any applicable statute or regulation.
7. Indemnification by Distributor. Distributor agrees to
indemnify the Trust and its officers and Trustees and to hold them
harmless against any and all claims, demands, liabilities and expenses
which the Trust may incur under the 1933 Act, the 1940 Act, common law
or otherwise arising out of or based upon (i) any untrue statement of a
material fact or alleged untrue statement of a material fact contained
in the Registration Statement or any Prospectus or Statement of
Additional Information of each Designated Fund, or in any
advertisements or sales literature prepared by or on behalf of the
Trust for Distributor's use, or any omission to state a material fact
therein, the omission of which makes any statement contained therein
misleading, if such statement or omission to state a material fact was
made in reliance upon and in conformity with information furnished to
the Trust in connection therewith by or on behalf of Distributor; (ii)
any act or deed of Distributor or its sales representatives, or
securities dealers and others authorized to sell Shares hereunder or
their sales representatives that has not been specifically authorized
in advance by the Trust in any Prospectus or Statement of Additional
Information of each Designated Fund or by this Agreement or other
written instrument; or (iii) any misfeasance, bad faith or negligence
by the Distributor or reckless disregard by the Distributor of its
obligations or duties hereunder.
8. Term and Termination.
(a) This Agreement shall become effective on the date hereof. Unless
terminated as herein provided, this Agreement shall continue in effect
for one year from the date hereof and shall continue in full force and
effect for successive periods of one year thereafter, but only so long
as each such continuance is approved (i) by either the Trustees of the
Trust or by vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of each Designated Fund and, in either event,
(ii) by vote of a majority of the Trustees of the Trust who are not
parties to this Agreement or interested persons (as defined in the 1940
Act) of any such party and who have no direct or indirect financial
interest in this Agreement or in the operation of the Distribution Plan
or in any agreement related thereto ("Independent Trustees"), cast at a
meeting called for the purpose of voting on such approval.
(b) This Agreement may be terminated at any time without the payment of
any penalty by vote of the Trustees of the Trust or a majority of the
Independent Trustees or by vote of a majority of the outstanding voting
securities (as defined in the 1940 Act) of each Designated Fund or by
Distributor, on sixty days' written notice to the other party.
(c) This Agreement shall automatically terminate in the event of its
assignment (as defined in the 1940 Act).
<PAGE>
9. Limitation of Liability. The obligations of the Trust hereunder
shall not be binding upon any of the Trustees, officers or shareholders
of the Trust personally, but shall bind only the assets and property of
the Trust. The term "Blue Ridge Funds Trust" means and refers to the
Trustees from time to time serving under the Agreement and Declaration
of Trust of the Trust. The execution and delivery of this Agreement has
been authorized by the Trustees, and this Agreement has been signed on
behalf of the Trust by an authorized officer of the Trust, acting as
such and not individually, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall 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 assets and
property of the Trust as provided in the Agreement and Declaration of
Trust and by the Delaware Business Trust or other applicable law.
IN WITNESS THEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
BLUE RIDGE FUNDS TRUST
Attest: __________________________
By: _______________________
CAPITAL INVESTMENT GROUP, INC.
Attest: __________________________
By: _______________________
<PAGE>
Schedule A
The Amended and Restated Distribution Agreement between Blue Ridge Funds Trust
and Capital Investment Group, Inc. applies to the following series of the Trust:
Series
- ------
The Blue Ridge Total Return Fund
<PAGE>
INSTRUCTIONS FOR SIGNING PROXY CARDS
The following general rules for signing proxy cards may be of
assistance to you and may help avoid the time and expense involved in validating
your vote if you fail to sign your proxy card properly.
1. INDIVIDUAL ACCOUNTS: sign your name exactly as it appears in
the registration on the proxy card.
2. JOINT ACCOUNTS: either party may sign, but the name of the
party signing should conform exactly to a name shown in the
registration on the proxy card.
3. ALL OTHER ACCOUNTS: the capacity of the individual signing the
proxy card should be indicated unless it is reflected in the
form of registration. For example:
<TABLE>
<S> <C> <C>
Registration Valid Signature
------------ ---------------
CORPORATE ACCOUNTS
(1) ABC Corp............................................ ABC Corp. John Doe, Treasurer
(2) ABC Corp............................................ John Doe, Treasurer
(3) ABC Corp. c/o John Doe.............................. John Doe, Treasurer
(4) ABC Corp. Profit Sharing Plan....................... John Doe, Trustee
PARTNERSHIP ACCOUNTS
(1) The XYZ Partnership................................. Jane B. Smith, Partner
(2) Smith and Jones, Limited Partnership................ Jane B. Smith, General Partner
TRUST ACCOUNTS
(1) ABC Trust........................................... Jane B. Doe, Trustee
(2) Jane B. Doe, Trustee u/t/d 12/28/78................. Jane B. Doe, Trustee
CUSTODIAL OR ESTATE ACCOUNTS
(1) John B. Smith, Cust. f/b/o John B. Smith, Jr.
UGMA/UTMA........................................ John B. Smith
(2) Estate of John B. Smith............................. John B. Smith, Jr., Executor
</TABLE>
<PAGE>
BLUE RIDGE TOTAL RETURN FUND
SPECIAL MEETING OF SHAREHOLDERS OF MARCH 30, 1999
PROXY SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES
In order to vote your shares, please sign and date this card and return it in
the envelope provided. By returning this card, you authorize the proxies to vote
on each proposal as marked, or, if not marked, as indicated.
The Board of Trustees recommends voting "FOR" proposals 1 and 2 and "FOR" the
election of all nominees for Trustees.
1. FOR AGAINST ABSTAIN Approval of the New Management
Agreement with Colonial Asset Management, Inc.
( ) ( ) ( )
2. FOR AGAINST ABSTAIN Approval of the Amended and Restated
Distribution Agreement with Capital Investment
Group, Inc
( ) ( ) ( )
3. For election as Trustees, the nominees are:
(A) William Brewer Bradshaw
(B) Johnnie M. Walters
(C) Geoffrey M. Salkow
(D) Bob Inglis
To vote for all nominees, mark an "X" in the "For All" box. To withhold
authority on all nominees, mark an "X" in the "withhold all" box. To withhold
authority for any individual nominee, mark an "X" in the box marked "for all
except," and mark another "X" in the appropriate nominee's box.
FOR ALL WITHHOLD ALL FOR ALL EXCEPT: (A) (B) (C) (D)
( ) ( ) ( ) ( ) ( ) ( ) ( )
(Continued on Reverse Side -- Sign on Reverse Side)
<PAGE>
(Continued from other side)
By signing and dating this card, you authorize C. Frank Watson, III, with the
power of substitution to vote your shares of the fund at the scheduled meeting
of shareholders of the fund and at any adjournment of the meeting. MR. WATSON
SHALL VOTE AS RECOMMENDED BY THE BOARD, UNLESS OTHERWISE INDICATED, AND IN HIS
DISCRETION UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING.
x___________________________________
x___________________________________
Dated__________________, 1999
Please sign name or names as they appear to authorize the voting of your shares
as indicated. Where shares are registered with joint owners, all joint owners
should sign. Persons signing as executors, administrators, trustees, etc.,
should so indicate.
