<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION
14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X] Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
BB&T Funds
3435 Stelzer Road
Columbus, OH 43219
--------------------------------------
(Name of Registrant as Specified in its Charter)
Alan G. Priest, Esq.
Ropes & Gray
1301 K Street, N.W., Suite 800 East
Washington, D.C. 20005
--------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing is calculated and state how it was determined): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid: N/A.
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Notes:
<PAGE> 2
IMPORTANT SHAREHOLDER INFORMATION
BB&T Funds
The document you hold in your hands contains your proxy statement and proxy
card. A proxy card is, in essence, a ballot. When you vote your proxy, it tells
us how to vote on your behalf on important issues relating to your Fund. The
proxy card may be completed by checking the appropriate box voting for or
against the specific proposals relating to your Fund. If you simply sign the
proxy without specifying a vote, your shares will be voted in accordance with
the recommendations of the Board of Trustees.
We urge you to take the time to read the proxy statement, fill out the proxy
card, and return it to us. Voting your proxy, and doing so promptly, ensures
that the Funds will not need to conduct additional mailings. When shareholders
do not return their proxies in sufficient numbers, we will incur the expense of
follow-up solicitations.
Please take a few moments to exercise your right to vote. Thank you.
<PAGE> 3
BB&T FUNDS
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS OF
BB&T FUNDS
TO BE HELD JANUARY 14, 2000
A Special Meeting of the shareholders of the BB&T Funds (the "Trust"), will
be held at 10:00 a.m., Eastern time, at the offices of BB&T Funds, at 3435
Stelzer Road, Columbus, OH 43219 on January 14, 2000 for the following purposes:
The Board of Trustees has fixed November 8, 1999 as the record date for
determination of shareholders entitled to vote at this Special Meeting.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------
VOTES FUNDS VOTING
- ----------------------------------------------------------------------
<S> <C>
1. To elect the Board of Trustees All Funds
of BB&T Funds.
- ----------------------------------------------------------------------
2. To ratify the selection of All Funds
independent accountants.
- ----------------------------------------------------------------------
3. To consider eliminating the Small Company Growth Fund
Fund's fundamental investment
policy regarding investment in
companies with market
capitalization under $1
billion.
- ----------------------------------------------------------------------
4. To transact such other All Funds
business as may properly come
before the meeting or any
adjournment thereof.
- ----------------------------------------------------------------------
</TABLE>
By Order of the Trustees,
Preston Loftin
Secretary
BB&T Funds
NOVEMBER 22, 1999
PROMPT EXECUTION AND RETURN OF THE ENCLOSED PROXY CARD IS REQUESTED. A
SELF-ADDRESSED, POSTAGE-PAID ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
<PAGE> 4
To BB&T Funds Shareholders:
The purpose of this proxy is to announce that a Special Meeting of
Shareholders (the "Meeting") for BB&T Funds (the "Trust") has been scheduled for
January 14, 2000. The purpose of this Meeting is to submit to the Shareholders
for a vote important matters regarding the management of the Trust.
While you are, of course, welcome to join us at the Meeting, most
Shareholders cast their votes by filling out and signing the enclosed proxy
card. In order to conduct the Meeting, a majority of shares must be represented
either in person or by proxy. Whether or not you plan to attend the Meeting, we
need your vote. Please mark, sign and date the enclosed proxy card and return it
promptly in the enclosed, postage-paid envelope so that the maximum number of
shares may be voted.
We encourage you to read the enclosed proxy statement thoroughly. In
addition, we have included on the next page a list of some commonly asked
questions and answers. If you have any additional questions, please call your
account administrator, investment representative, or BB&T Funds directly at
1-800-228-1872.
Your vote is very important to us. As always, we thank you for your
confidence and support.
Sincerely,
Walter B. Grimm
Chairman
BB&T Funds
PLEASE SIGN AND RETURN THE ENCLOSED PROXY BALLOT CARD
YOUR VOTE IS VERY IMPORTANT
<PAGE> 5
BB&T FUNDS
Q. WHY ARE WE ELECTING MEMBERS OF THE BOARD OF TRUSTEES NOW?
A. Under the Investment Company Act of 1940 (the "1940 Act"), the Board of
Trustees may fill vacancies on the Board of Trustees or appoint new trustees
only if, immediately thereafter, at least two-thirds of the trustees will
have been elected by shareholders. Currently, two of the BB&T Fund's six
trustees have not been elected by shareholders.
Under the 1940 Act, the Trust is also required to call a meeting of
shareholders promptly to elect trustees if at any time less than a majority
of the trustees have been elected by shareholders. By holding a meeting to
elect trustees at this time, BB&T Funds may be able to delay the time at
which another shareholder meeting is required for the election of trustees,
which will result in a savings of the costs associated with holding such a
meeting.
Q. WHY IS THE BOARD OF TRUSTEES PROPOSING TO ELIMINATE THE FUNDAMENTAL
INVESTMENT POLICY OF THE BB&T SMALL COMPANY GROWTH FUND?
A. After reviewing this restriction in light of the recent growth of the stock
market, the Board of Trustees has determined that this restriction should be
eliminated and replaced with a more flexible non-fundamental policy. Since
the inception of the Fund, the stock market has appreciated greatly.
Consequently, companies that are characterized as small have also grown. The
threshold amount contained in the fundamental investment policy of the Fund
no longer accurately reflects the market perception of what constitutes a
small company.
The Board therefore is proposing to make the market capitalization
threshold used to define small companies non-fundamental, thereby
permitting the board of Trustees, without shareholder approval, to adjust
the threshold from time to time in the future as necessary to reflect
market trends. At the same time, the Board of Trustees is proposing to
increase the market capitalization threshold presently used to define small
companies. The Board believes future flexibility associated with this
proposed change will enhance the ability of the Fund to achieve its
objective in varying market environments.
Q. WHAT IF I DO NOT RETURN MY PROXY VOTING BALLOT?
A. In order to conduct the Shareholder Meeting, a quorum must be present, in
person or by proxy. A quorum is defined as representation of over 50% of the
shares outstanding for the Fund as of November 8, 1999. In the event that
not enough shareholders return the enclosed proxy ballot card to achieve
quorum, we will be forced to incur additional expenses associated with
additional solicitations. In order to avoid additional costs, please return
the completed proxy ballot as soon as possible.
2
<PAGE> 6
Q. HOW DOES THE BOARD SUGGEST THAT I VOTE?
A. After careful consideration, the Board of Trustees of BB&T Funds, including
the independent members, recommends that you vote "FOR" all of the items on
the enclosed proxy ballot. The Board also wishes to urge you to vote and
return all the proxy ballot cards you receive.
Q. WHO SHOULD I CALL WITH QUESTIONS ABOUT THIS PROXY?
A. If you have any questions regarding this proxy, please contact your account
administrator, investment representative, or BB&T Funds directly at
1-800-228-1872.
THE INFORMATION PROVIDED IN THIS "Q&A" IS SUPPORTED
BY DISCLOSURES CONTAINED IN THE ACCOMPANYING
PROXY STATEMENT
3
<PAGE> 7
PROXY STATEMENT
The enclosed proxy is solicited on behalf of the Board of Trustees (the
"Trustees") of the BB&T Funds with respect to the BB&T Prime Money Market Fund,
BB&T U.S. Treasury Money Market Fund, BB&T Growth and Income Stock Fund, BB&T
Balanced Fund, BB&T Large Company Growth Fund, BB&T Small Company Growth Fund,
BB&T International Equity Fund, BB&T Short-Intermediate U.S. Government Income
Fund, BB&T Intermediate U.S. Government Bond Fund, BB&T North Carolina
Intermediate Tax-Free Bond Fund, BB&T South Carolina Intermediate Tax-Free Bond
Fund, BB&T Virginia Intermediate Tax-Free Bond Fund, BB&T Capital Manager
Conservative Growth Fund, BB&T Capital Manager Moderate Growth Fund, and BB&T
Capital Manager Growth Fund (the "Funds"). The Funds are all the currently
operational portfolios of BB&T Funds. The proxy is revocable at any time before
it is voted by sending written notice of the revocation to the trustees or by
appearing personally at the January 14, 2000 special meeting of shareholders of
the trust (the "Special Meeting").
Only shareholders of record at the close of business on November 8, 1999
will be entitled to vote at the Special Meeting. The table below shows the
number of shares outstanding at that date. Each Share being entitled to one
vote, and each fractional Share being entitled to a proportionate fractional
vote. Shareholders will vote on the proposal to amend the Fund objective and on
any other business as may properly come before the Special Meeting.
1
<PAGE> 8
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
SHARES
BB&T GROUP FUND OUTSTANDING
- ------------------------------------------------------------------------
<S> <C> <C>
BB&T Prime Money Market Fund 68,917,535.19
- ------------------------------------------------------------------------
BB&T U.S. Treasury Money Market Fund 352,805,656.68
- ------------------------------------------------------------------------
BB&T Growth and Income Stock Fund 23,197,454.86
- ------------------------------------------------------------------------
BB&T Balanced Fund 11,883,730.67
- ------------------------------------------------------------------------
BB&T Large Company Growth Fund 9,266,644.77
- ------------------------------------------------------------------------
BB&T Small Company Growth Fund 5,131,348.94
- ------------------------------------------------------------------------
BB&T International Equity Fund 8,125,125.79
- ------------------------------------------------------------------------
BB&T Short-Intermediate U.S. Government Income Fund 17,731,420.36
- ------------------------------------------------------------------------
BB&T Intermediate U.S. Government Bond Fund 22,764,509.95
- ------------------------------------------------------------------------
BB&T North Carolina Intermediate Tax-Free Bond Fund 8,645,067.18
- ------------------------------------------------------------------------
BB&T South Carolina Intermediate Tax-Free Bond Fund 1,784,119.28
- ------------------------------------------------------------------------
BB&T Virginia Intermediate Tax-Free Bond Fund 7,378,017.09
- ------------------------------------------------------------------------
BB&T Capital Manager Conservative Growth Fund 3,323,833.09
- ------------------------------------------------------------------------
BB&T Capital Manager Moderate Growth Fund 2,710,602.47
- ------------------------------------------------------------------------
BB&T Capital Manager Growth Fund 2,365,574.12
- ------------------------------------------------------------------------
</TABLE>
For purposes of determining the presence of a quorum and counting votes on
the matters presented, Shares represented by abstentions and "broker non-votes"
will be counted as present, but not as votes cast, at the Special Meeting. Under
the Investment Company Act of 1940 (the "1940 Act"), the affirmative vote
necessary to approve the matter under consideration may be determined with
reference to a percentage of votes present at the Special Meeting, which would
have the effect of treating abstentions and non-votes as if they were votes
against the proposal.
BB&T Funds' Declaration of Trust and By-laws do not provide for annual
shareholder meetings, and no such meetings are planned for 2000. Proposals that
shareholders would like to have included in a proxy statement for any future
meeting must be received by BB&T Funds within a reasonable period of time prior
to printing and mailing proxy materials for such meeting.
2
<PAGE> 9
The Funds' executive offices are located at 3435 Stelzer Road, Columbus,
Ohio, 43219. This proxy statement and the enclosed notice of meeting and proxy
card are first being mailed on or about November 22, 1999.
A copy of the Funds' Annual Report dated September 30, 1999, and Semi-
Annual Report dated March 31, 1999, is available upon request and may be
obtained by calling 1-800-228-1872.
3
<PAGE> 10
PROPOSAL 1
ELECTION OF THE TRUSTEES
Proposal 1 concerns the election of the BB&T Funds' Board of Trustees. All
six of the presently serving members of the Board of Trustees are standing for
election as Trustees at the Special Meeting. It is the intention of the persons
named in the enclosed proxy to vote the shares represented by the proxy for the
election of these six individuals unless otherwise specified by a shareholder on
the proxy. Should any of them become unable or unwilling to accept nomination or
election, the persons named in the proxy will exercise their voting power in
favor of such other person or persons as the Board of Trustees may recommend.
The Board of Trustees oversees the management and administration of the
Funds. The Trustees are responsible for making major decisions about each Fund's
investment objectives and policies, but delegate the day-to-day administration
of the Fund to the officers of the trust. The Trustees, in turn, elect the
officers of the Funds. The nominees for Trustees of BB&T Funds, their current
addresses, and principal occupations during the past five years are as follows:
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE BB&T FUNDS DURING THE PAST 5 YEARS
- ---------------- ------------------- -----------------------
<S> <C> <C>
*Walter B. Grimm Chairman of the Board, From June 1992 to
3435 Stelzer Road Trustee and President present, employee of
Columbus, OH 43219 BISYS Fund Services.
Age: 54
William E. Graham, Jr. Trustee From January 1994 to
1 Hannover Square present, Counsel,
Fayetteville Street Mall Hunton & Williams; from
P.O. Box 109 1985 to December, 1993,
Raleigh, NC 27602 Vice Chairman, Carolina
Age: 70 Power & Light Company.
Thomas W. Lambeth Trustee From 1978 to present,
101 Reynolda Village Executive Director, Z.
Winston-Salem, NC 27106 Smith Reynolds
Age: 65 Foundation.
*W. Ray Long Trustee Retired; Executive Vice
605 Blenheim Drive President, Branch
Raleigh, NC 27612 Banking and Trust
Age: 65 Company prior to August
1998.
</TABLE>
4
<PAGE> 11
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE BB&T FUNDS DURING THE PAST 5 YEARS
- ---------------- ------------------- -----------------------
<S> <C> <C>
Robert W. Stewart Trustee Retired; Chairman and
201 Huntington Road Chief Executive Officer
Greenville, SC 29615 of Engineered Custom
Age: 67 Plastics Corporation
from 1969 to 1990.
*Raymond K. McCulloch Trustee Executive Vice
434 Fayetteville Street Mall President, Branch
29th Floor Banking and Trust
Raleigh, NC 27601 Company since August
Age: 43 1998; employee of
Branch Banking and
Trust Company since
1989.
</TABLE>
- ---------------
* Indicates an "interested person" of BB&T Funds as defined in the 1940 Act.
The Trustees meet at least four times a year. During the most recent fiscal
year, the Trustees hold four regular meetings and no special meetings. The
Trustees attended all of the Board meetings. The Trustees receive fees and
expenses for each meeting of the Board of Trustees attended. The Compensation
Table below sets forth the total compensation to the Trustees from BB&T Funds
for the fiscal year ended September 30, 1999.
<TABLE>
<CAPTION>
TOTAL
COMPENSATION
AGGREGATE PENSION OR ESTIMATED FROM THE
COMPENSATION RETIREMENT BENEFITS ANNUAL BB&T FUNDS
NAME OF PERSON, FROM THE ACCRUED AS PART BENEFITS UPON PAID TO
POSITION BB&T FUNDS OF FUND EXPENSES RETIREMENT TRUSTEE
- --------------- ------------ ------------------- ------------- ------------
<S> <C> <C> <C> <C>
Walter B. Grimm None None None None
Chairman of the Board
W. Ray Long None None None None
Trustee
William E. Graham $9,000 None None $9,000
Trustee
Thomas W. Lambeth $9,000 None None $9,000
Trustee
Robert W. Stewart $9,000 None None $9,000
Trustee
Raymond McCulloch None None None None
Trustee
</TABLE>
The principle executive officers of BB&T Funds are all officers or
employees of BISYS Fund Services, Inc. ("BISYS"). BISYS is BB&T Funds'
administrator. The officers of the BB&T Funds receive no compensation directly
from BB&T Funds for performing the duties of their offices. BISYS Fund Services,
Inc. receives fees from BB&T Funds for acting as Administrator and BISYS Fund
Services Ohio, Inc. receives fees from BB&T Funds for acting as Transfer Agent
and for providing fund accounting services to BB&T Funds. The officers of each
Fund of BB&T Funds, their
5
<PAGE> 12
current addresses, and principal occupations during the past five years are as
follows (if no address is listed, the address is 3435 Stelzer Road, Columbus,
Ohio 43219):
<TABLE>
<CAPTION>
POSITION(S) HELD PRINCIPAL OCCUPATION
NAME AND ADDRESS WITH THE BB&T FUNDS DURING THE PAST 5 YEARS
- ---------------- ------------------- -----------------------
<S> <C> <C>
Walter B. Grimm Chairman of the Board, From June 1992 to present,
Age: 54 Trustee and President employee of BISYS Fund Services.
Preston Loftin Secretary From April 1995 to present,
Age: 53 employee of BISYS Fund Services;
from May 1992 to April 1995,
employee of Concorde Financial.
Gary Tenkman Treasurer From April 1998 to present,
Age: 29 Director, Financial Services,
BISYS Fund Services; from 1990
to March 1998, Audit Manager,
Ernst & Young LLP.
Bob Tuch Age: 48 Assistant Secretary From June 1991 to present,
employee of BISYS Fund Services.
Alaina V. Metz Assistant Secretary From June 1995 to present,
Age: 32 employee, BISYS Fund Services;
from May 1989-June 1995,
Supervisor, Mutual Fund Legal
Department, Alliance Capital
Management.
</TABLE>
The Trustees and Officers of BB&T Funds own less than 1% of the outstanding
shares of BB&T Funds.
REQUIRED VOTE AND BOARD OF TRUSTEES' RECOMMENDATION
BB&T Funds as a whole must approve Proposal 1. This means that approval of
Proposal 1 requires the affirmative vote of: (a) 67% or more of the Shares of
BB&T Funds as a whole present at the Special Meeting, if the holders of more
than 50% of the outstanding Shares are present or represented by proxy; or (b)
more than 50% of the outstanding Shares of BB&T Funds as a whole, whichever is
less.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ELECTION OF ALL NOMINEES FOR ELECTION TO THE BOARD OF TRUSTEES OF BB&T FUNDS.
PROPOSAL 2
SELECTION OF INDEPENDENT ACCOUNTANTS
At a meeting held on November 5, 1999, the Trustees, including the Trustees
who are not "interested persons" as defined in the 1940 Act, unanimously
approved the selection of KPMG LLP as the independent accountants for the fiscal
year ending September 30, 2000.
6
<PAGE> 13
The firm of KPMG LLP has extensive experience in investment company
accounting and auditing and has served as independent accountants to BB&T Funds
since its inception. The financial statements included in BB&T Funds' Annual
Report have been examined by KPMG LLP. It is not expected that a representative
of KPMG LLP will be present at the meeting.
KPMG LLP and its members do not have any direct or indirect material
financial interest in or connection with BB&T Funds in any capacity other than
as independent accountants.
REQUIRED VOTE AND BOARD OF TRUSTEES' RECOMMENDATION
BB&T Funds as a whole must approve Proposal 2. This means that approval of
Proposal 2 requires the affirmative vote of : (a) 67% or more of the Shares of
BB&T Funds as a whole present at the Special Meeting, if the holders of more
than 50% of the outstanding Shares are present or represented by proxy; or (b)
more than 50% of the outstanding Shares of BB&T Funds as a whole, whichever is
less.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
SELECTION OF KPMG LLP.
PROPOSAL 3
PROPOSED ELIMINATION OF THE FUNDAMENTAL INVESTMENT
POLICY REGARDING INVESTMENT IN COMPANIES WITH A
MARKET CAPITALIZATION UNDER $1 BILLION.
CURRENT FUNDAMENTAL INVESTMENT POLICY
"[A]s a matter of fundamental policy, at least 65% of the Fund's total
assets will be invested in small companies with a market capitalization under $1
billion at the time of purchase."
ANALYSIS OF PROPOSED CHANGE
In recent years, stock prices have appreciated significantly and,
consequently, the size of smaller companies has increased as well. However,
because the market capitalization threshold used by the Small Company Growth
Fund to define small companies is fundamental, the Fund has been unable to
increase the average size of the companies in which it invests. As a result, the
average size of the companies in which the Fund invests has declined relative to
the overall market, and has exposed the Fund to increased price volatility as
compared to the market generally. This development has affected the Fund's
performance relative to its peers, which have increased the level of market
capitalizations of companies in which they invest to correspond to the market
appreciation of stocks generally.
7
<PAGE> 14
In order to provide more flexibility for the Small Company Growth Fund to
respond to such market changes in the future, the Board of Trustees is proposing
to eliminate the market capitalization threshold as a fundamental investment
policy of the Fund. At the same time, the Board of Trustees proposes to
establish a non-fundamental investment policy for the Fund which will define
small companies to mean those with market capitalizations of less than $2
billion, as compared to the current threshold of $1 billion. Because the policy
would be non-fundamental, the Board of Trustees could adjust this threshold in
the future as it deems necessary in response to market trends, without
shareholder approval. The Board of Trustees believes the flexibility associated
with this proposed change will enhance the ability of the investment manager to
achieve the Fund's investment objective.
REQUIRED VOTE AND BOARD OF TRUSTEES' RECOMMENDATION
After due deliberation, on November 5, 1999, the Trustees unanimously
approved the elimination of the Small Company Growth Fund's fundamental
investment policy and resolved that the proper time had come to present the
issue to the shareholders. The Board of Trustees has considered the relevant
factors and believes that Proposal 3 will increase investment management
flexibility and is in the best interests of the Fund and its shareholders. With
respect to the Small Company Growth Fund, approval of Proposal 3 requires the
affirmative vote of: (a) 67% or more of the Shares of the Fund present at the
Special Meeting, if the holders of more than 50% of the outstanding Shares are
present or represented by proxy; or (b) more than 50% of the outstanding Shares
of the Fund, whichever is less. If Proposal 3 is disapproved, the current
investment policy will remain fundamental.
THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE
ELIMINATION OF THE FUND'S FUNDAMENTAL INVESTMENT POLICY.
PROPOSAL 4
OTHER MATTERS AND DISCRETION
OF PERSONS NAMED IN THE PROXY
While the Special Meeting is called to act upon any other business that may
properly come before it, at the date of this proxy statement the only business
which management intends to present or knows that others will present is the
business stated in the Notice of Meeting. If any other matters lawfully come
before the Special Meeting, and in all procedural matters at the Special
Meeting, it is the intention that the enclosed proxy shall be voted in
accordance with the best judgment of the persons named as proxies therein, or
their substitutes, present and acting at the Special Meeting.
8
<PAGE> 15
If at the time any session of the Special Meeting is called to order, a
quorum is not present, in person or by proxy, the persons named as proxies may
vote those proxies that have been received to adjourn the Special Meeting to a
later date. In the event that a quorum is present but sufficient votes in favor
of one or more of the proposals have not been received, the persons named as
proxies may propose one or more adjournments of the Special Meeting to permit
further solicitation of proxies with respect to any such proposal. All such
adjournments will require the affirmative vote of a majority of the Shares
present in person or by proxy at the session of the Special Meeting to be
adjourned. The persons named as proxies will vote those proxies that they are
entitled to vote in favor of the proposal, in favor of such an adjournment, and
will vote those proxies required to be voted against the proposal, against any
such adjournment.
In the event that a shareholder signs and returns the proxy card, but does
not indicate a choice on the proxy card, the proxy attorneys will vote those
shares in favor of the proposal to amend the investment objective.
Proxy solicitations will be made primarily by mail, but may also be made by
telephone, internet, telegraph, fax or personal interview conducted by certain
officers or employees of BB&T Funds or BB&T Funds' service providers or, if
necessary, a commercial firm retained for this purpose. The cost of preparing
and mailing the notice of meeting, the proxy card, this proxy statement and any
additional proxy material will be borne by the Fund. Brokerage firms and others
will be reimbursed for their expenses in forwarding solicitation materials to
the beneficial owners of Shares of the Funds.
The Investment Adviser for each of the Funds is Branch Bank and Trust
Company, Raleigh, North Carolina.
The Investment Sub-Advisor for the Small Company Growth Fund is BlackRock
Financial Management, Inc., Philadelphia, Pennsylvania. The Investment
Sub-Adviser for the International Equity Fund is BlackRock International Ltd.,
Edinburgh, Scotland. The Investment Sub-Advisor for the Prime Money Market Fund
and the Tax-Free Money Market Funds is BlackRock Institutional Management
Corporation, Philadelphia, Pennsylvania.
The Funds' principal distributor is BISYS Fund Services, LP, an Ohio
Limited Partnership and subsidiary of The BISYS Group, Inc.
The Funds' principal administrator is BISYS Fund Services, LP, 3435 Stelzer
Road, Columbus, Ohio.
As of November 8, 1999, BB&T Funds believe that BB&T and its bank
affiliates had investment authority with respect to 79.54% of the Prime Money
Market Fund, 77.67% of the U.S. Treasury Money Market Fund, 72.56% of the Growth
and Income
9
<PAGE> 16
Stock Fund, 64.22% of the Balanced Fund, 82.26% of the Large Company Growth
Fund, 70.01% of the Small Company Growth Fund, 93.81% of the International
Equity Fund, 97.28% of the Short-Intermediate U.S. Government Income Fund,
97.74% of the Intermediate U.S. Government Bond Fund, 84.32% of the North
Carolina Intermediate Tax-Free Bond Fund, 93.29% of the South Carolina
Intermediate Tax-Free Bond Fund, 99.91% of the Virginia Intermediate Tax-Free
Bond Fund, 96.94% of the Capital Manager Conservative Growth Fund, 93.91% of the
Capital Manager Moderate Growth Fund, and 93.94% of the Capital Manager Growth
Fund. As a consequence, BB&T may be deemed to be a controlling person of these
Fund under the 1940 Act.
10
<PAGE> 17
The following list indicates the beneficial ownership of the shareholders
who, to the best knowledge of BB&T Funds, were the owners of 5% or more of the
outstanding Shares of the Funds as of November 8, 1999:
PRIME MONEY MARKET FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
John P. Parker 308,557.350 6.2523%
1220 Graydon Ave.
Norfolk, VA 23507
R. Donahue Peebles 771,754.330 15.6382%
100 S.E. 2nd Street, Apt. 4650
Miami, FL 33131
</TABLE>
INTERNATIONAL EQUITY FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Jerald Taft Howell 9,005.272 5.8915%
628 Walnut Creek Dr.
Goldsboro, NC 27534
</TABLE>
SHORT-INTERMEDIATE U.S. GOVERNMENT
INCOME FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Henry Fibers, Inc. 84,584.556 17.8475%
P.O. Box 1675
Gastonia, NC 28053
</TABLE>
INTERMEDIATE U.S. GOVERNMENT BOND FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Raymond H. Parks 19,973.188 5.8854%
Merrill Parks
4818 Vickery Chapel Rd.
Greensboro, NC 27407
</TABLE>
11
<PAGE> 18
NORTH CAROLINA INTERMEDIATE TAX-FREE
BOND FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Helen N. Hendricks 73,787.340 5.4442%
277 Beechwood Dr.
Mocksville, NC 27028
R.L. Honbarrier Co. 207,403.112 15.3027%
1507 Crestlin Road
High Point, NC 27260
Marshall Lyle Gurley, Sr. 101,379.338 7.4800%
P.O. Box 30878
Raleigh, NC 27622
</TABLE>
SOUTH CAROLINA INTERMEDIATE TAX-FREE
BOND FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Cheryl K. Boone 15,054.549 12.5737%
Wilt C. Boone
1901 Martin Road
Chapin, SC 29036
Cheryl K. Boone 17,041.788 14.2335%
George O. Boone
1901 Martin Road
Chapin, SC 29036
George S. Morgan 14,126.517 11.7986%
Joyce Morgan Dekesis
4477 Mandi Drive
Little River, SC 29566
Nancy Jenkins Stewart 10,082.289 8.4208%
Nancy Jenkins Stewart Trust
201 Huntington Road
Greenville, SC 29615
Charles R. Nolan 10,069.595 8.4102%
Nelda W. Nolan
1644 Farmsteam Road
Rook Hill, SC 29732
</TABLE>
12
<PAGE> 19
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Knowltone Bouknight 6,330.067 5.2869%
Thelamae Bouknight
1835 1/2 Sunset Boulevard
W. Columbia, SC 29169
Betty R. Roof 6,385.289 5.3331%
Terry C. Roof
1566 Pisgah Church Road
Lexington, SC 29072
</TABLE>
VIRGINIA INTERMEDIATE TAX-FREE
BOND FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Gail F. Pruden 4,558.340 66.1643%
309 Western Avenue
Suffolk, VA 23434
Ann P. Watson 2,240.395 32.5193%
7511 Glebe Road
Richmond, VA 23229
</TABLE>
CAPITAL MANAGER CONSERVATIVE
GROWTH FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Carol C. Watts 2,764.641 5.3507%
401 McAuthor Street
Tabor City, NC 28463
Lorraine K. Cauthen 6,118.495 11.8418%
108 Strawberry Lane
Clemson, SC 29631
Cheryl B. Cobb 6,623.614 12.8194%
Linda Z. Greer
214 Park Road
Lexington, SC 29072
Melton Ellerby 2,681.459 5.1897%
Route 1 Box 34
Wadesboro, NC 28170
</TABLE>
13
<PAGE> 20
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Walter Cooper 23,773.302 46.0110%
2232 Windburn Street
Conway, SC 29527
Willetta Huffman 4,485.615 8.6815%
1112 Woodland Street
Whiteville, NC 28472
</TABLE>
CAPITAL MANAGER CONSERVATIVE
GROWTH FUND -- CLASS B SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Betty F. Fincher 6,574.145 54.5504%
55 Chambler Road
Walterboro, SC 29488
Sandra A. Headley 2,733.712 22.6836%
3050 Cottageville
Walterboro, SC 29488
Margo A. Stevenson 759.712 6.3039%
764 Zion Church Road
Bladenboro, NC 28320
Dale Gierszewski 1,431.298 11.8765%
102 Crowaton
Castle Hayne, NC 28429
</TABLE>
CAPITAL MANAGER MODERATE
GROWTH FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
William H. Peeler 35,529.528 33.2539%
Betty P. Peeler
3802 Old Sptg. Highway
Moore, SC 29369
David A. Jarvis 7,237.830 6.7743%
P.O. Box 2292
Walterboro, SC 29488
</TABLE>
14
<PAGE> 21
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Leslie L. Keeter 18,132.228 16.9709%
1704 Hodges Ferry Road
Portsmouth, VA 23701
B. Lloyd Brown 7,148.359 6.6905%
2000 Damon Drive
Florence, SC 29505
</TABLE>
CAPITAL MANAGER MODERATE GROWTH FUND -- CLASS B SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Belinda Jo Gray 3,719.313 18.9156%
217 Porter Road
Portsmouth, VA 23707
Doris H. Howell 3,482.791 17.7127%
191 Old Spartanburg Highway
Pacolet, SC 29372
William A. Smith 4,570.054 23.2423%
403 Sierra Road
Spartanburg, SC 29301
Dennis B. Raney 3,468.146 17.6382%
Melissa D. Raney
RR 3 Box 9
Old Fort, NC 28762
Francisco U. Lopez 1,259.550 6.4058%
129 Hearth Stone Lane
Boiling Springs, SC 29316
Robert P. Baker 1,848.815 9.4027%
5392 Highway 701 N.
Elizabethtown, NC 28337
</TABLE>
CAPITAL MANAGER GROWTH FUND -- CLASS A SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Elham B. Makram 9,841.214 9.4236%
Adly A. Girgis
110 Sedgefield Drive
Clemson, SC 29631
Susan M. Bowman 16,690.627 15.9824%
301 Compton Road
Raleigh, NC 27609
</TABLE>
15
<PAGE> 22
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Gordon Chee Ming Wong 6,159.134 5.8978%
214 E. Wyche Street
Whiteville, NC 28472
Sharlene McRae 9,030.880 8.6477%
4492 Daniel McLeod Road
Red Springs, NC 28377
James B. Cranford 7,269.744 6.9613%
Chadwick Kyle Cranford
Memorial Scholarship Fund
9413 Cove Drive
Myrtle Beach, SC 29572
Ronald D. Hodge 5,528.685 5.2941%
RR 4 Box 75H
Rutherfordton, NC 28139
</TABLE>
CAPITAL MANAGER GROWTH FUND -- CLASS B SHARES
<TABLE>
<CAPTION>
NAME AND ADDRESS SHARE BALANCE PERCENTAGE
- ---------------- ------------- ----------
<S> <C> <C>
Betty Butler 1,181.669 5.4845%
415 E. 1st Avenue
Chadbourn, NC 28431
Lamar J. Schlegel 6,741.415 31.2889%
11 Algonquin Street
Portsmouth, VA 23707
James G. Ferneyhough 3,101.538 14.3951%
1285 Cedar Gate Road
Monroe, VA 24574
Helen A. Ferneyhough 1,867.523 8.6677%
1285 Cedar Gate Road
Monroe, VA 24574
</TABLE>
As of November 8, 1999, the Officers and Trustees of the Fund owned less
than 1% of the Fund's outstanding Shares.
If you do not expect to attend the Special Meeting, please sign your proxy
card promptly and return it in the enclosed envelope to avoid unnecessary
expense and delay. No postage is necessary.
NOVEMBER 22, 1999
16
<PAGE> 23
BB&T FUNDS
PROXY FOR A SPECIAL MEETING OF
SHAREHOLDERS, JANUARY 14, 2000
THIS PROXY IS SOLICITED ON BEHALF OF THE TRUSTEES OF BB&T FUNDS.
The undersigned hereby appoints Preston Loftin and Alaina V. Metz and each of
them with full power of substitution as proxy of the undersigned, and hereby
authorizes them to represent and to vote, as designated below, at the Special
Meeting of Shareholders of BB&T Funds on Friday, January 14, 1999 at 10:00 a.m.,
Eastern time, and at any adjournments thereof, all of the shares of the Fund
which the undersigned would be entitled to vote if personally present.
To vote by Telephone
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Call 1-800-690-6903.
3) Enter the 12 digit control number set on the Proxy Card and follow the
simple instructions.
To vote by Internet
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to website www.proxyvote.com.
3) Enter the 12 digit control number set forth on the Proxy Card and follow
the simple instructions.
1. Election of the Board of Trustees of BB&T Funds as set forth below. If you
wish to withhold authority to vote for all the nominees as group, or any
individual nominee, please mark the box labeled "Abstain" opposite the
nominees name. IF YOU MARK YOUR BALLOT IN SUCH A WAY THAT YOU DO NOT
WITHHOLD AUTHORITY TO VOTE FOR A NOMINEE, YOU WILL BE DEEMED TO HAVE VOTED
IN FAVOR OF THE NOMINEE.
All of the nominees FOR AGAINST ABSTAIN
as a group ( ) ( ) ( )
Walter B. Grimm FOR AGAINST ABSTAIN
( ) ( ) ( )
William E. Graham, Jr. FOR AGAINST ABSTAIN
( ) ( ) ( )
Thomas W. Lambeth FOR AGAINST ABSTAIN
( ) ( ) ( )
W. Ray Long FOR AGAINST ABSTAIN
( ) ( ) ( )
Robert W. Stewart FOR AGAINST ABSTAIN
( ) ( ) ( )
Raymond K. McCulloch FOR AGAINST ABSTAIN
( ) ( ) ( )
2. Ratification of the selection of KPMG LLP is the independent accountants
for BB&T Funds.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of the elimination of the Small Company Growth Fund's fundamental
investment policy regarding investment in companies with market
capitalization under $1 billion. (Small Company Growth Fund only)
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
4. To transact any other business as may properly come before the meeting or
any adjournment thereof.
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
FOR PROPOSALS (1), (2) AND (3) AND TO AUTHORIZE THE PROXIES, IN THEIR
DISCRETION, TO VOTE UPON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE
MEETING. THE TRUSTEES RECOMMEND A VOTE FOR ITEMS (1), (2), (3) AND (4).
<PAGE> 24
NOTE: Please sign exactly as the name appears on this card. EACH joint owner
should sign. When signing as executor, administrator, attorney, trustee or
guardian, or as custodian for a minor, please give the full title as such. If a
corporation, please sign in full corporate name and indicate the signer's
office. If a partner, please sign in the partnership name.
Please be sure to sign and date this Proxy.
________________________________________
Signature of Shareholder(s)
________________________________________
Signature of Shareholder(s)
Dated:______________, 1999
PLEASE EXECUTE, SIGN, DATE AND RETURN THIS PROXY PROMPTLY USING THE ENCLOSED
ENVELOPE.
-2-
<PAGE> 25
<TABLE>
<S> <C>
Two Quick and Easy Ways [BB&T MUTUAL FUNDS LOGO]
To Vote Your Proxy Instantly
</TABLE>
As a valued BB&T Funds shareholder, your proxy vote is important to us.
That's why we've made it faster and easier to vote your proxy at your
convenience, 24 hours a day. After reviewing the enclosed Proxy Statement, which
outlines important issues affecting your fund, select one of the following quick
and easy methods to register your vote -- accurately and immediately.
Vote On-Line
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Go to Web site WWW.PROXYVOTE.COM.
3. Enter the 12-digit Control Number found on your Proxy Card
4. Cast your vote using the easy-to-follow instructions.
Vote By Toll-Free Phone Call
1. Read the enclosed Proxy Statement and have your Proxy Card* at hand.
2. Call the toll-free Number found on your Proxy Card.
3. Enter the 12-digit Control Number found on your Proxy Card.
4. Cast your vote using the easy-to-follow instructions.
*DO NOT MAIL THE PROXY CARD IF VOTING BY INTERNET OR TELEPHONE.
