SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.35)
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 240.14a-11(c) or 240.14a-12
The Arbor Fund
(Name of Registrant as Specified In Its Charter)
same
(Name of Person(s) Filing Proxy Statement, if other than 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)(1)
and 0-11(1).
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on
which the filing fee is calculated and state how it was
determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] 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:
<PAGE>
THE ARBOR FUND
OVB EQUITY INCOME PORTFOLIO
OVB CAPITAL APPRECIATION PORTFOLIO
OVB GOVERNMENT SECURITIES PORTFOLIO
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
OVB PRIME OBLIGATIONS PORTFOLIO
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IMPORTANT SHAREHOLDER INFORMATION
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THIS DOCUMENT 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 THE OVB FUNDS. EACH PROXY CARD MAY BE COMPLETED BY
CHECKING THE APPROPRIATE BOX AND VOTING FOR OR AGAINST THE
SPECIFIC PROPOSALS RELATING TO THE FUNDS. 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.
PLEASE SPEND A FEW MINUTES WITH THE PROXY STATEMENT, FILL OUT
YOUR 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. IF SHAREHOLDERS DO NOT RETURN
THEIR PROXIES IN SUFFICIENT NUMBERS, THE FUNDS MAY HAVE TO
INCUR THE EXPENSE OF FOLLOW-UP SOLICITATIONS, WHICH COULD COST
YOUR FUNDS MONEY.
PLEASE TAKE A FEW MOMENTS TO EXERCISE YOUR RIGHT TO VOTE.
THANK YOU.
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i
<PAGE>
THE ARBOR FUND
OVB EQUITY INCOME PORTFOLIO
OVB CAPITAL APPRECIATION PORTFOLIO
OVB GOVERNMENT SECURITIES PORTFOLIO
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
OVB PRIME OBLIGATIONS PORTFOLIO
Dear Shareholder,
A shareholder meeting of the OVB Equity Income Portfolio, OVB Capital
Appreciation Portfolio, OVB Government Securities Portfolio, OVB West Virginia
Tax-Exempt Income Portfolio, and OVB Prime Obligations Portfolio (each a "Fund"
and together, the "Funds"), each a portfolio of The Arbor Fund (the "Trust"),
has been scheduled for Thursday, November 30, 2000. If you were a shareholder of
record as of the close of business on Thursday, October 5, 2000, you are
entitled to vote at the meeting and any adjournment of the meeting.
The Fund's Trustees have called the special shareholder meeting to
permit the Fund's shareholders to consider a new investment advisory agreement
with Branch Banking and Trust Company ("BB&T") and a new sub-advisory agreement
with Wellington Management Company, LLP ("Wellington Management"), with respect
to the OVB Prime Obligations Portfolio (together, the "New Agreements"). On July
6, 2000, BB&T Corporation, the parent corporation of BB&T, completed the
acquisition of all of the outstanding shares of One Valley Bank, N.A. ("OVB"),
the Funds' former investment adviser. The Funds' previous investment advisory
agreement with OVB and sub-advisory agreement with Wellington Management
(together, the "Old Agreements") contained provisions which terminated the
agreements upon their assignment from OVB to BB&T. In anticipation of the
acquisition, the Trust's Board of Trustees met on June 27, 2000 to consider and
approve an interim investment advisory agreement between BB&T and the Trust and
an interim sub-advisory agreement between and among BB&T, Wellington Management
and the Trust, on behalf of the OVB Prime Obligations Portfolio (together, the
"Interim Agreements"). On August 14, 2000, the Trust's Board of Trustees met to
consider and approve the New Agreements. BB&T has served as investment adviser
to the Portfolios and Wellington Management has served as sub-adviser to the OVB
Prime Obligations Portfolio under the Interim Agreements since the acquisition
of OVB on July 6, 2000. The Interim Agreements are scheduled to expire on
December 3, 2000.
Following the acquisition, all but one of the investment professionals
previously employed by OVB have agreed, as part of the transaction, to enter
into employment contracts with BB&T and have continued to perform investment
advisory services to the Portfolios. During the last quarter of 2000, BB&T
intends to reorganize its investment advisory division as a separate,
wholly-owned subsidiary of BB&T to be called BB&T Asset management, LLC ("BB&T
Asset Management"). Following the reorganization, BB&T Asset Management will
replace BB&T as the investment adviser to the Funds. The management and
investment advisory personnel of BB&T that are currently providing investment
management services to the Funds will continue to do as the personnel of BB&T
Asset Management. There has been no change to Wellington Management's personnel
or investment advisory services to the Prime Obligations Portfolio as a result
of the acquisition.
The terms of the New Agreements are substantially identical to the
terms of the Old Agreements, except for the dates of execution, effectiveness
and termination. The enclosed proxy statement describes the transaction in
greater detail, and explains the basis for the Board of Trustees' decision to
approve the New Agreements and recommend them to the Fund's shareholders.
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. Whether or not you plan to attend the meeting, we need your vote. PLEASE
MARK, SIGN, AND DATE THE ENCLOSED PROXY CARD(S) AND RETURN IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE SO THE MAXIMUM NUMBER OF SHARES MAY BE VOTED. YOU MAY ALSO
VOTE EASILY AND QUICKLY THROUGH THE INTERNET AS DESCRIBED IN THE ENCLOSED PROXY
CARD. TO DO SO, PLEASE FOLLOW THE INSTRUCTIONS INCLUDED ON YOUR ENCLOSED PROXY
CARD. THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE. YOUR VOTE IS
IMPORTANT TO US. Please do not hesitate to call Trip Purcell of BB&T at (919)
716-9085 or call the Funds at 1-800-545-6331 if you have any questions about the
Proposals. Thank you for taking the time to consider this important proposal and
for your investment in the Funds.
Sincerely,
/S/ MARK NAGLE
--------------
MARK NAGLE
PRESIDENT, THE ARBOR FUND
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<PAGE>
IMPORTANT NOTICE
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the proposals.
QUESTIONS & ANSWERS
Q: WHY AM I RECEIVING THIS PROXY STATEMENT?
A: Federal securities laws require a vote by a fund's shareholders whenever a
fund's investment adviser or sub-adviser experiences certain changes in its
ownership structure. Such a change occurred when BB&T Corporation, the parent of
BB&T, acquired OVB, the Funds' former investment adviser, on July 6, 2000. BB&T
has been providing investment advisory services to the Funds since then under an
interim agreement approved by the Board of Trustees. Your Fund(s) are seeking
shareholder approval of the following proposals:
o Approval of a new investment advisory agreement between the Trust, on
behalf of the Funds, and BB&T.
o Approval of a new sub-advisory agreement between and among BB&T,
Wellington Management and the Trust, on behalf of the OVB Prime
Obligations Portfolio.
Please refer to the proxy statement for a detailed explanation of the proposals.
Q: HOW WILL THIS AFFECT MY ACCOUNT?
A: You can expect the same services from BB&T to which you've grown accustomed.
The terms of the proposed new investment advisory agreement between the Trust
and BB&T are substantially identical to the terms of the current investment
advisory agreement on behalf of the Fund, except for the dates of execution,
effectiveness and termination. NEITHER PROPOSAL REQUESTS AN INCREASE IN THE RATE
OF THE FUNDS' INVESTMENT ADVISORY FEES.
Q: WILL MY VOTE MAKE A DIFFERENCE?
A: Your vote is needed to ensure that the proposals can be acted upon.
Additionally, your immediate response on the enclosed proxy card will help save
the costs of any further solicitations for a shareholder vote. We encourage all
shareholders to participate in the governance of their Fund(s).
Q: HOW DO THE TRUSTEES OF MY FUND SUGGEST THAT I VOTE?
A: After careful consideration, the Trustees of your Funds, including
the independent Trustees who comprise a majority of the Fund's Board of
Trustees, unanimously recommend that you vote "FOR" the proposal.
Q: WHOM DO I CALL IF I HAVE QUESTIONS?
A: Please call Trip Purcell of BB&T at (919) 716-9085 or call the Funds at
1-800-545-6331 between 9:00 a.m. and 5:00 p.m. New York time, Monday
through Friday.
Q: HOW DO I SEND MY VOTE?
A: You may mail your proxy card using the enclosed postage-paid envelope. YOU
MAY ALSO VOTE EASILY AND QUICKLY THROUGH THE INTERNET AS DESCRIBED IN THE
ENCLOSED PROXY CARD. TO DO SO, PLEASE FOLLOW THE INSTRUCTIONS INCLUDED ON YOUR
ENCLOSED PROXY CARD.
iii
<PAGE>
THE ARBOR FUND
OVB EQUITY INCOME PORTFOLIO
OVB CAPITAL APPRECIATION PORTFOLIO
OVB GOVERNMENT SECURITIES PORTFOLIO
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
OVB PRIME OBLIGATIONS PORTFOLIO
C/O SEI INVESTMENTS, INC.
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
NOVEMBER 30, 2000
To the Shareholders:
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the OVB Equity Income Portfolio, OVB Capital Appreciation
Portfolio, OVB Government Securities Portfolio, OVB West Virginia Tax-Exempt
Income Portfolio, and OVB Prime Obligations Portfolio (each a "Fund" and
together, the "Funds"), each a portfolio of The Arbor Fund (the "Trust"), will
be held at the offices of the Administrator, One Freedom Valley Drive, Oaks,
Pennsylvania 19456, on November 30, 2000 at 3:30 p.m., local time, to act on the
following Proposals and to transact other business that may properly come before
the Meeting or any adjournment thereof:
<TABLE>
<CAPTION>
<S> <C>
DESCRIPTION OF PROPOSAL: FUNDS SOLICITED:
1. TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE A NEW OVB EQUITY INCOME PORTFOLIO
ADVISORY AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE FUNDS, OVB CAPITAL APPRECIATION PORTFOLIO
AND BRANCH BANKING AND TRUST COMPANY ("BB&T"). OVB GOVERNMENT SECURITIES PORTFOLIO
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
OVB PRIME OBLIGATIONS PORTFOLIO
2. TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE A NEW OVB PRIME OBLIGATIONS PORTFOLIO
PORTFOLIO SUB-ADVISORY AGREEMENT BETWEEN AND AMONG BB&T,
WELLINGTON MANAGEMENT COMPANY, LLP ("WELLINGTON MANAGEMENT")
AND THE TRUST, ON BEHALF OF THE OVB PRIME OBLIGATIONS
PORTFOLIO.
</TABLE>
The advisory agreement between the Trust and One Valley Bank, N.A.
("OVB") on behalf of the Funds terminated when OVB was acquired on July 6, 2000
by BB&T Corporation, a large banking and financial services company and the
parent corporation of BB&T. The acquisition of OVB also caused the sub-advisory
agreement between the Trust, OVB and Wellington Management to terminate. BB&T
has served as investment adviser to the Funds, and Wellington Management has
served as sub-adviser to the OVB Prime Obligations Portfolio, under interim
agreements since the acquisition. It is proposed that BB&T continue to serve as
adviser, and Wellington Management continue to serve as sub-adviser, under new
agreements described in the attached proxy statement. THE BOARD OF TRUSTEES HAS
APPROVED, AND IS RECOMMENDING THAT SHAREHOLDERS OF THE FUNDS VOTE TO APPROVE, A
NEW ADVISORY AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE FUNDS, AND BB&T AND A
NEW SUB-ADVISORY AGREEMENT BETWEEN AND AMONG BB&T, WELLINGTON MANAGEMENT AND THE
TRUST, ON BEHALF OF THE OVB PRIME OBLIGATIONS PORTFOLIO.
All Shareholders are cordially invited to attend the meeting. WHETHER
OR NOT YOU EXPECT TO BE PRESENT AT THE SPECIAL MEETING, PLEASE COMPLETE AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD. A POSTAGE PAID ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE SO THAT YOU MAY RETURN YOUR PROXY CARD AS SOON AS POSSIBLE. YOU
MAY ALSO VOTE EASILY AND QUICKLY THROUGH THE INTERNET AS DESCRIBED IN THE
ENCLOSED PROXY CARD. TO DO SO, PLEASE FOLLOW THE INSTRUCTIONS INCLUDED ON YOUR
ENCLOSED
iv
<PAGE>
PROXY CARD. IT IS MOST IMPORTANT AND IN YOUR INTEREST FOR YOU TO VOTE
SO THAT A QUORUM WILL BE PRESENT AND A MAXIMUM NUMBER OF SHARES MAY BE VOTED.
THE PROXY IS REVOCABLE AT ANY TIME PRIOR TO ITS USE.
Shareholders of record at the close of business on October 5, 2000 are
entitled to receive notice of and to vote at that meeting or any adjournment
thereof.
By Order of the Board of Trustees
/S/ MARK NAGLE
--------------------
Mark Nagle
President
November 3, 2000
v
<PAGE>
THE ARBOR FUND
OVB EQUITY INCOME PORTFOLIO
OVB CAPITAL APPRECIATION PORTFOLIO
OVB GOVERNMENT SECURITIES PORTFOLIO
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
OVB PRIME OBLIGATIONS PORTFOLIO
C/O SEI INVESTMENTS, INC.
ONE FREEDOM VALLEY DRIVE
OAKS, PA 19456
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation
of proxies by the Board of Trustees of The Arbor Fund (the "Trust"), on behalf
of the OVB Equity Income Portfolio, OVB Capital Appreciation Portfolio, OVB
Government Securities Portfolio, OVB West Virginia Tax-Exempt Income Portfolio,
and OVB Prime Obligations Portfolio (each a "Fund" and together, the "Funds"),
each a portfolio of The Arbor Fund (the "Trust"), will be held at the offices of
the Administrator, One Freedom Valley Drive, Oaks, Pennsylvania 19456, on
Thursday, November 30, 2000, at 3:30 p.m., local time, and at any adjourned
session thereof (this meeting and any adjournment thereof are hereinafter
referred to as the "Meeting"). Shareholders of record at the close of business
on October 5, 2000 ("Shareholders") are entitled to vote at the Meeting.
As of October 5, 2000, the Funds had the following number of shares
outstanding:
OVB Equity Income Portfolio 4,792,368.778
OVB Capital Appreciation Portfolio 8,331,450.593
OVB Government Securities Portfolio 4,448,778.773
OVB West Virginia Tax-Exempt Income Portfolio 8,917,092.718
OVB Prime Obligations Portfolio 77,029,416.090
The Meeting is being called to act on the following Proposals and to
transact other business that may properly come before the meeting or any
adjournment thereof:
<TABLE>
<CAPTION>
<S> <C>
DESCRIPTION OF PROPOSAL: FUNDS SOLICITED:
1. TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE A NEW OVB EQUITY INCOME PORTFOLIO
ADVISORY AGREEMENT BETWEEN THE TRUST, ON BEHALF OF THE FUNDS, OVB CAPITAL APPRECIATION PORTFOLIO
AND BRANCH BANKING AND TRUST COMPANY ("BB&T"). OVB GOVERNMENT SECURITIES PORTFOLIO
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
OVB PRIME OBLIGATIONS PORTFOLIO
2. TO CONSIDER AND VOTE UPON A PROPOSAL TO APPROVE A OVB PRIME OBLIGATIONS PORTFOLIO
NEW PORTFOLIO SUB-ADVISORY AGREEMENT BETWEEN
AND AMONG BB&T, WELLINGTON MANAGEMENT COMPANY,
LLP ("WELLINGTON MANAGEMENT") AND THE TRUST, ON
BEHALF OF THE OVB PRIME OBLIGATIONS PORTFOLIO.
</TABLE>
Each share is entitled to one vote and each fractional share is
entitled to a proportionate fractional vote on each matter at the Meeting. In
addition to the solicitation of proxies by mail, directors and officers of the
Trust, officers and employees of BB&T and SEI Investments Mutual Funds Services,
the Administrator for the Funds, may solicit proxies in person. In addition,
third parties hired for the purpose may solicit proxies in person or by fax.
Persons holding shares as nominees will, upon request, be reimbursed for their
reasonable expenses incurred in sending soliciting materials to their
principals. The cost of solicitation will be borne by BB&T and its affiliates.
The Proxy Card and this Proxy Statement are being mailed to the Shareholders on
or about October 31, 2000.
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<PAGE>
Shares represented by duly executed proxies will be voted in accordance
with the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, by properly executing a
later-dated proxy, or by attending the Meeting and voting in person.
INTRODUCTION
The Trust is organized as a Massachusetts business trust and is not
required to hold annual meetings of Shareholders. The Board of Trustees has
called this Meeting to permit Shareholders of the Fund to vote on a new advisory
agreement, which is to take effect upon the termination of the interim advisory
agreements. The interim agreements will terminate on December 3, 2000. This
Proxy Statement solicits votes on the proposal to approve a new advisory
agreement between the Trust, on behalf of the Funds, and Branch Banking and
Trust Company ("BB&T") and a new sub-advisory agreement between and among BB&T,
Wellington Management and the Trust, on behalf of the OVB Prime Obligations
Portfolio. AS DESCRIBED BELOW, NEITHER PROPOSAL REQUESTS AN INCREASE IN THE RATE
OF THE FUNDS' INVESTMENT ADVISORY FEES.
PROPOSAL 1. APPROVE A NEW ADVISORY AGREEMENT BETWEEN THE TRUST, ON BEHALF OF
THE FUNDS, BB&T.
BACKGROUND
On August 14, 2000, the Trust's Board, including a majority of the
non-interested Trustees, approved a new advisory agreement by and between the
Trust, on behalf of the Funds, and BB&T (the "New Agreement with BB&T")
embodying substantially identical terms and fees as the Funds' previous
investment advisory agreement with One Valley Bank, N.A. ("OVB") (the "Old
Agreement"), except for the dates of execution, effectiveness and termination.
Shareholders are being asked to approve the New Agreement with BB&T. A copy of
the form of New Agreement with BB&T is attached as ANNEX A to this Proxy
Statement.
BB&T has agreed to pay all expenses relating to the procurement of a
Shareholder vote. If Shareholder approval is not forthcoming, the Fund's Board
will meet to discuss its options, which may include recommending the hiring,
subject to Board and Shareholder approval, of one or more new advisers.
THE ACQUISITION AND APPROVAL OF INTERIM AGREEMENT WITH BB&T
BB&T Corporation, the parent company of BB&T, completed its acquisition
of OVB (the "Acquisition") on July 6, 2000. The Acquisition created an
"assignment," which caused the Old Agreement to terminate immediately as
required by the Investment Company Act of 1940 (the "1940 Act"). In anticipation
of the Acquisition and termination of the Old Agreement, the Trust's Board of
Trustees met in person on June 27, 2000 to consider and approve an interim
investment advisory agreement between BB&T and the Trust (the "Interim Agreement
with BB&T") for the 150-day period following the Acquisition. The Trustees of
the Trust, including the Trust's "independent Trustees," unanimously approved
the Interim Agreement with BB&T. The purpose of the Interim Agreement with BB&T
is to allow BB&T to continue to provide investment advisory services to the
Funds while the required Shareholder approval of New Agreement with BB&T is
pending.
The Interim Agreement with BB&T provides that any advisory fees earned
by BB&T under the agreement shall be held in an interest-bearing escrow account
and be paid upon approval of the New Agreement with BB&T by Shareholders. If
Shareholders do not vote to approve the New Agreement, BB&T shall be paid, out
of the escrow account, the lesser of (a) any costs incurred in performing its
duties under the Interim Agreement (plus interest earned on that amount while in
escrow), or (b) the total amount in the escrow account (plus interest earned).
If the New Agreement is not approved, BB&T may serve as the Funds' investment
adviser on a temporary basis while the Trustees consider further action.
In evaluating the Interim Agreement with BB&T, the Trustees reviewed
materials furnished by BB&T, including information regarding its personnel,
operations and financial condition. The Trustees also reviewed the terms of the
Acquisition and its possible effects on the Funds and their shareholders.
Representatives of BB&T discussed with the Trustees the anticipated effects of
the Acquisition, and indicated their belief that as a consequence of the
proposed transaction,
2
<PAGE>
the operations and advisory and other services to the Funds would not be
materially adversely affected and may be enhanced by the resources of BB&T,
though there could be no assurance as to any particular benefits that may
result. Representatives of BB&T indicated that all but one of the investment
professionals previously employed by OVB had agreed, as part of the transaction,
to enter into employment contracts with BB&T and would continue to perform
investment advisory services to the Portfolios. In addition, BB&T agreed to take
all appropriate steps to ensure that the scope and quality of its advisory and
other services provided to the Funds under its Interim Agreement will be at
least equivalent to the scope and quality of services provided under the Old
Agreements, and that, in the event of any material change in the personnel
providing advisory services pursuant to the Interim Agreements, the Trustees
will be apprised and consulted to assure that they are satisfied that the
services provided will not be diminished in scope or quality.
APPROVAL OF THE NEW AGREEMENT WITH BB&T AND THE RECOMMENDATION OF THE BOARD
The Board of Trustees met in person on August 14, 2000 to consider the
approval of the New Agreement with BB&T, to take effect upon the expiration of
the Interim Agreement and the approval of the New Agreement by Shareholders. The
Trustees reviewed additional materials furnished by BB&T, and representatives of
BB&T discussed with the Trustees the operations and advisory and other services
to the Funds following the Acquisition. The representatives of BB&T informed the
Trustees that the OVB employee responsible for the day to day management of the
OVB Government Securities Portfolio and the OVB West Virginia Tax-Exempt Income
Portfolio had resigned following the Acquisition and his duties had been assumed
by investment professionals from BB&T. The Trustees, including the Independent
Trustees, unanimously approved the New Agreement with BB&T and recommended that
the Shareholders of the Fund vote to approve the New Advisory Agreement at the
Meeting. In making their recommendation, the Trustees considered the experience
of BB&T in investment company management, the continued service of the key
personnel in Fund management, and that the proposed compensation under the New
Agreement is identical to the rate of compensation under the Old Agreement.
Specifically, the Trustees considered the following in making their
recommendation: (1) that the fee and expense ratios of the Fund are reasonable
given the quality of services expected to be provided and the fee and expense
ratios of comparable mutual funds; (2) the relative performance of the Fund
since commencement of operations to comparable mutual funds and unmanaged
indices; (3) that the terms of the New Agreement are substantially identical to
those of the Old Agreement, except for different execution dates and effective
dates and termination dates; (4) the favorable history, reputation,
qualification and background of BB&T, as well as the qualifications of its
personnel and its financial condition; (5) the commitment of BB&T to maintain
the current respective expense ratio of each of the Funds and maintain those fee
waivers currently in place; (6) the commitment of BB&T to pay the expenses of
the Fund in connection with the Acquisition so that shareholders of the Fund
would not have to bear such expenses; (7) the possibility of benefits that may
be realized by the Fund as a result of BB&T's resources; and (8) other factors
deemed relevant by the Trustees.
Based upon a review of the above factors, the Board concluded that the
terms of the New Agreement are fair to, and in the best interests, of the Funds
and the Shareholders. THE TRUSTEES, INCLUDING THE INDEPENDENT TRUSTEES,
UNANIMOUSLY VOTED TO APPROVE THE NEW AGREEMENT FOR THE FUND AND TO RECOMMEND
THAT THE SHAREHOLDERS OF THE FUNDS VOTE FOR THE APPROVAL OF THE NEW AGREEMENT
WITH BB&T.
CONCLUSION
If the Shareholders of the Funds do not approve the New Agreement, the
Trustees would consider what further action to take consistent with their
fiduciary duties to the Funds. Such actions may include obtaining for the Funds
interim investment advisory services at cost or at the current fee rate either
from BB&T or from another advisory organization. Thereafter, the Trustees would
either negotiate a new investment advisory agreement with an advisory
organization selected by the Trustees or make other appropriate arrangements.
INFORMATION REGARDING BB&T
BB&T is the oldest bank in North Carolina and is the principal bank
affiliate of BB&T Corporation, a bank holding company that is a North Carolina
corporation, headquartered in Winston-Salem, North Carolina. As of September 30,
2000, BB&T Corporation had assets of approximately $55.2 billion. Through its
subsidiaries, BB&T
3
<PAGE>
Corporation operates over 800 banking offices in Maryland, North Carolina, South
Carolina, Virginia and Washington, D.C., providing a broad range of financial
services to individuals and businesses.
In addition to general commercial, mortgage and retail banking
services, BB&T also provides trust, investment,insurance and travel services.
BB&T has provided investment management services through its Trust and
Investment Services Division since 1912. BB&T provides investment advisory
services to the BB&T Funds, a registered investment company, and has experience
in managing collective investment funds with investment portfolios and
objectives comparable to those of the BB&T Funds. BB&T employs an experienced
staff of professional portfolio managers and traders who use a disciplined
investment process that focuses on maximization of risk-adjusted investment
returns. BB&T has managed common and collective investment funds for its
fiduciary accounts for more than 17 years and currently manages assets of more
than $8 billion.
During the last quarter of 2000, BB&T intends to reorganize its
investment advisory division as a separate, wholly-owned subsidiary of BB&T to
be called BB&T Asset Management, LLC ("BB&T Asset Management"). Following the
reorganization, BB&T Asset Management will replace BB&T as the investment
adviser to the Funds. The management and investment advisory personnel of BB&T
that are currently providing investment management services to the Funds will
continue to do so as the personnel of BB&T Asset Management. Additionally, BB&T
Asset Management will be wholly-owned and otherwise fully controlled by BB&T. As
a result, this transaction will not result in "assignment" of the investment
advisory contract (and sub- advisory contract) and, therefore, another
shareholder vote will not be required.
BB&T serves as investment adviser to the following portfolios of BB&T
Funds which have investment objectives similar to those of the Funds. All
figures are as of the BB&T Funds' most recent available audited financial
statements for the fiscal year ended 9/30/1999:
<TABLE>
<CAPTION>
NET ASSETS (000) CONTRACTUAL FEE FEE PAID AFTER
WAIVERS
----------------------------------------------------------
<S> <C> <C> <C>
OVB EQUITY INCOME PORTFOLIO
---------------------------
BB&T Growth and Income Fund $379,321 .74% .60%
OVB CAPITAL APPRECIATION PORTFOLIO
----------------------------------
BB&T Large Company Growth Fund $90,635 .74% .60%
OVB GOVERNMENT SECURITIES PORTFOLIO
-----------------------------------
BB&T Short-Intermediate U.S. Government Income Fund $167,285 .60% .50%
BB&T Intermediate U.S. Government Bond Fund $213,417 .60% .50%
OVB WEST VIRGINIA TAX-EXEMPT INCOME PORTFOLIO
---------------------------------------------
BB&T North Carolina Intermediate Tax-Free Fund $70,430 .60% .50%
BB&T South Carolina Intermediate Tax-Free Fund $16,295 .60% .30%
BB&T Virginia Intermediate Tax-Free Fund $79,353 .60% .50%
OVB PRIME OBLIGATIONS PORTFOLIO
-------------------------------
BB&T Prime Money Market Fund $56,492 .40% .30%
</TABLE>
The name and principal occupation of the principal executive officers
and each of the directors of BB&T Corporation are as follows:
BOARD OF DIRECTORS
John A. Allison
Chairman and CEO
BB&T Corporation and Branch Banking and Trust Company
Winston-Salem, NC
Paul Barringer
Chairman and CEO
Coastal Lumber Company
Weldon, NC
Alfred E. Cleveland, Esq.
McCoy, Weaver, Wiggins, Cleveland & Raper
Fayetteville, NC
W.R. Cuthbertson, Jr.
Retired - Former Sen. VP
Branch Banking and Trust Company
Charlotte, NC
Ronald E. Deal
Investor, Chairman
Wesley Hall
Hickory, NC
A.J. Dooley, Sr., Esq.
Retired Partner
Dooley, Dooley, Spence, Parker & Hipp, P.A.
Lexington, SC
Tom D. Efird
President
Standard Distributors, Inc.
Gastonia, NC
Paul S. Goldsmith
Chairman and President
William Goldsmith Company, Inc.
Greenville, SC
Dr. L. Vincent Hackley
Chairman
Character Counts! Coalition
Fayetteville, NC
Jane P. Helm
Vice Chancellor for Business Affairs
Appalachian State University
Boone, NC
Dr. Richard Janeway, M.D.
Exec. VP for Health Affairs
Emeritus
Professor, Medicine & Management
Wake Forest University School of Medicine
Winston-Salem, NC
Dr. J. Ernest Lathem, M.D.
Personal Investments
Retired Medical Director
Prostate Diagnostic Center
Greenville, SC
James H. Maynard
Chairman and CEO
Investors Management Corporation
Raleigh, NC
Joseph A. McAleer, Jr.
Manager and Member MACKK, LLC
Krispy Kreme Doughnut Franchise
Winston-Salem, NC
Albert O. McCauley
President and CEO
McCauley Moving & Storage of Fayetteville, Inc.
Fayetteville, NC
Richard L. Player, Jr.
Chairman
Player, Inc.
Fayetteville, NC
E. Edward Pleasants, Jr.
Chairman Emeritus and Director PHC Holdings
Winston-Salem, NC
Nido R. Qubein
CEO
Creative Services, Inc.
High Point, NC
E. Rhone Sasser
Former Chairman
United Carolina Bancshares Corporation
Whiteville, NC
Jack E. Shaw
CEO
Shaw Resources, Inc.
Greenville, SC
Harold B. Wells
President
Wells Chevrolet, Buick, Pontiac, Oldsmobile, GMC, Inc.
Wells Chrysler, Dodge, Jeep, Inc.
Whiteville, NC
EXECUTIVE MANAGEMENT
John A. Allison
Chairman and Chief Executive Officer
Henry G. Williamson, Jr.
Chief Operating Officer
Kelly S. King
President
Robert E. Greene
Senior Executive Vice President
W. Kendall Chalk
Senior Executive Vice President
Scott E. Reed
Senior Executive Vice President and Chief Financial Officer
Sherry A. Kellett
Senior Executive Vice President and Controller
C. Leon Wilson, III
Senior Executive Vice President
<PAGE>
FUTURE PLANS FOR THE FUNDS
As stated above, BB&T also serves as the investment adviser to BB&T
Funds, an open-end, investment company. BB&T Funds consists of 18 funds with a
variety of investment objectives. Several of the BB&T Funds are substantially
similar to the OVB Portfolios. BB&T Funds in the future may propose that the
Trustees of the Trust consider a plan to consolidate some or all of the OVB
Portfolios with a similar existing or newly created BB&T Fund. The proposal to
consolidate the Funds would require Trustee and shareholder approval. This
discussion is for your information only. You are not now being asked to consider
or vote on this issue.
4
<PAGE>
DESCRIPTION OF THE NEW AGREEMENT WITH BB&T
GENERAL
OVB served as the investment adviser to the Funds pursuant to the Old
Agreement, which was approved by the Fund's shareholders on November 22, 1993.
The Old Agreement terminated upon consummation of the Acquisition and BB&T has
served as interim investment adviser to the Funds pursuant to the Interim
Agreement. The Board of Trustees recommends that Shareholders of the Funds
approve the New Agreement with BB&T, a copy of which is attached as ANNEX A to
this Proxy Statement. The description of the New Agreement set forth in this
Proxy Statement is qualified in its entirety by reference to the form of New
Agreement attached to this Proxy Statement as ANNEX A. The terms of the New
Agreement are identical to the terms of the Old Agreement except for dates of
execution, effectiveness and termination.
DUTIES UNDER THE NEW AGREEMENT
Under its New Agreement, BB&T will make the daily investment decisions
for the Fund and will continuously review, supervise, and administer the Fund's
investment program. BB&T will discharge its responsibilities subject to the
supervision of the Trustees of the Trust in a manner consistent with the Fund's
investment objectives, policies and limitations. The New Advisory Agreement also
provides that BB&T will not be protected against any liability to the Fund or
its shareholders by reason of willful misfeasance, bad faith, or negligence on
its part in the performance of its duties or from reckless disregard by BB&T of
its obligations or duties thereunder.
DURATION AND TERMINATION
If approved by shareholders at the Meeting, the New Agreement with BB&T
would take effect upon the later to occur of (i) the obtaining of shareholder
approval or (ii) the expiration of the Interim Agreement.
Unless terminated earlier, the New Agreement with BB&T will continue in
effect for a period of two years from the date of effectiveness, and thereafter,
for periods of one year for so long as such continuance is specifically approved
at least annually (i) by the vote of the holders of a majority of the
outstanding voting securities of the Funds or by the Board of Trustees, and (ii)
by the vote of a majority of the independent Trustees, cast in person at a
meeting called for the purpose of voting on such approval.
The New Agreement with BB&T will terminate automatically in the event
of its assignment. The New Agreement is also terminable by BB&T at any time
without penalty, on not more than 60 days' written notice by the Board of
Trustees or by vote of a majority of each Fund's outstanding voting securities.
COMPENSATION
Under the New Agreement with BB&T, the Trust will pay BB&T a fee, which
is calculated and paid monthly, at the annual rate (stated as a percentage of
each Fund's assets) as follows:
FUND CONTRACTUAL FEE
---- ---------------
OVB Equity Income Portfolio .74%
OVB Capital Appreciation Portfolio .95%
OVB Government Securities Portfolio .75%
OVB West Virginia Tax-Exempt Income Portfolio .45%
OVB Prime Obligations Portfolio .25%
5
<PAGE>
Under the Old Agreement, the Trust paid OVB the following fees for its
services to the Funds (stated as a percentage of each Fund's assets and in
dollars) and OVB made the following waivers in order to maintain the Funds'
total operating expense ratios for the Funds' most recently ended fiscal year
(1/31/2000):
<TABLE>
<CAPTION>
FUND FEES PAID (%) FEES WAIVED (%) FEES PAID ($) FEES WAIVED ($)
---- ------------- --------------- ------------- ---------------
<S> <C> <C> <C> <C>
OVB Equity Income Portfolio .63% .11% $437,613 $73,000
OVB Capital Appreciation Portfolio .67% .28% $1,030,000 $426,757
OVB Government Securities Portfolio .46% .29% $226,256 $140,141
OVB West Virginia Tax-Exempt Income Portfolio .40% .05% $366,788 $18,000
OVB Prime Obligations Portfolio .10% .15% $78,063 $118,638
</TABLE>
BB&T has voluntarily agreed to continue to waive a sufficient portion
of its fees to maintain the Funds' total operating expense ratios under the New
Agreement at a level equal to that under the Old Agreement.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF
THE NEW AGREEMENT WITH BB&T.
PROPOSAL 2. APPROVE A NEW SUB-ADVISORY AGREEMENT BETWEEN AND
AMONG BB&T, WELLINGTON MANAGEMENT AND THE TRUST, ON
BEHALF OF THE OVB PRIME OBLIGATIONS PORTFOLIO.
BACKGROUND
As similarly discussed in Proposal 1 above, on August 14, 2000, the
Trust's Board, including a majority of the non-interested Trustees, approved a
new sub-advisory agreement between BB&T and Wellington Management, with respect
to the OVB Prime Obligations Portfolio (the "New Agreement with Wellington
Management") embodying substantially identical terms and fees as the Funds'
previous sub-advisory agreement between OVB and Wellington Management (the "Old
Agreement"), except for the dates of execution, effectiveness and termination.
Shareholders are being asked to approve the New Agreement with Wellington
Management. A copy of the New Agreement with Wellington Management is attached
as ANNEX B to this Proxy Statement.
BB&T has agreed to pay all expenses relating to the procurement of a
Shareholder vote. If Shareholder approval is not forthcoming, the Fund's Board
will meet to discuss its options, which may include recommending the hiring,
subject to Board and Shareholder approval, of one or more new sub-advisers for
the OVB Prime Obligations Portfolio.
THE ASSIGNMENT AND APPROVAL OF THE INTERIM AGREEMENT WITH WELLINGTON MANAGEMENT
As similarly discussed in Proposal 1 above, the Acquisition created an
"assignment," which caused the Old Agreement to terminate immediately as
required by the Investment Company Act of 1940 (the "1940 Act"). In anticipation
of the Acquisition and termination of the Old Agreement, the Trust's Board of
Trustees met in person on June 27, 2000 to consider and approve an interim
sub-advisory agreement between and among BB&T, Wellington Management and the
Trust, on behalf of the OVB Prime Obligations Portfolio (the "Interim
Agreement") for the 150-day period following the Acquisition. The Trustees of
the Trust, including the Trust's "independent Trustees," unanimously approved
the Interim Agreements. The purpose of the Interim Agreements is to allow
Wellington Management to continue to provide investment advisory services to the
OVB Prime Obligations Portfolio while the required Shareholder approval of new
agreements is pending. THE ACQUISITION DID NOT IMPACT WELLINGTON MANAGEMENT OR
EFFECT THE SERVICES WELLINGTON MANAGEMENT PROVIDES TO THE OVB PRIME OBLIGATIONS
PORTFOLIO.
The Interim Agreements provide that any advisory fees earned Wellington
Management under the Interim Agreement shall be held in an interest-bearing
escrow account and be paid only upon approval of the New Agreement with
Wellington Management by Shareholders of the OVB Prime Obligations Portfolio. If
Shareholders do not vote to approve the New Agreement with Wellington
Management, Wellington Management shall be paid, out of the escrow account, the
lesser of (a) any costs incurred in performing its duties under the Interim
Agreement (plus interest earned on that amount while in escrow),
6
<PAGE>
or (b) the total amount in the escrow account (plus interest earned). If the New
Agreement is not approved, Wellington Management may serve as the OVB Prime
Obligations Portfolio's sub-adviser on a temporary basis while the Trustees
consider further action.
In evaluating the Interim Agreement with Wellington Management, the
Trustees relied on Wellington Management's past experience in sub-advising the
OVB Prime Obligations Portfolio. The Trustees also strongly relied on the fact
that the Old Agreement with Wellington Management terminated solely because of
BB&T Corporation's acquisition of OVB, and not because of any reorganization of
Wellington Management. Representatives of Wellington Management indicated that
they would continue to act as sub-adviser to the OVB Prime Obligations Portfolio
under the same terms as the Old Agreement and the Acquisition did not impact the
scope and quality of its sub-advisory and other services provided to the OVB
Prime Obligations Portfolio.
APPROVAL OF THE NEW AGREEMENT WITH WELLINGTON MANAGEMENT AND THE RECOMMENDATION
OF THE BOARD
The Board of Trustees met in person on August 14, 2000 to consider the
approval of the New Agreement with Wellington Management. The Trustees,
including the Independent Trustees, unanimously recommend that the Shareholders
of the OVB Prime Obligations Portfolio vote to approve the New Agreement with
Wellington Management at the Meeting.
In making their recommendation, the Trustees considered Wellington
Management's past experience in sub-advising the OVB Prime Obligations
Portfolio, the fact that the Old Agreement with Wellington Management terminated
solely because of BB&T Corporation's acquisition of OVB, and not because of any
reorganization of Wellington Management, and that the proposed compensation
under the New Agreement is identical to the rate of compensation under the Old
Agreement. Specifically, the Trustees considered the following in making their
recommendation: (1) that the fee and expense ratios of the OVB Prime Obligations
Portfolio are reasonable given the quality of services expected to be provided
and the fee and expense ratios of comparable mutual funds; (2) the relative
performance of the OVB Prime Obligations Portfolio since commencement of
operations to comparable mutual funds and unmanaged indices; (3) that the terms
of the New Agreement are substantially identical to those of the Old Agreement,
except for different execution dates and effective dates and termination dates;
(4) the favorable history, reputation, qualification and background of
Wellington Management, as well as the qualifications of its personnel and its
financial condition; and (5) other factors deemed relevant by the Trustees.
Based upon a review of the above factors, the Board concluded that the
terms of the New Agreement are fair to, and in the best interests, of the OVB
Prime Obligations Portfolio and its Shareholders. THE TRUSTEES, INCLUDING THE
INDEPENDENT TRUSTEES, UNANIMOUSLY VOTED TO APPROVE THE NEW AGREEMENT FOR THE OVB
PRIME OBLIGATIONS PORTFOLIO AND TO RECOMMEND THAT THE SHAREHOLDERS OF THE FUNDS
VOTE FOR THE APPROVAL OF THE NEW AGREEMENT WITH WELLINGTON MANAGEMENT.
CONCLUSION
If the Shareholders of the Funds do not approve the New Agreement, the
Trustees would consider what further action to take consistent with their
fiduciary duties to the OVB Prime Obligations Portfolio. Such actions may
include obtaining for the Funds interim investment advisory services at cost or
at the current fee rate either from Wellington Management or from another
advisory organization. Thereafter, the Trustees would either negotiate a new
investment sub-advisory agreement with an advisory organization selected by the
Trustees or make other appropriate arrangements.
INFORMATION REGARDING WELLINGTON MANAGEMENT
Wellington Management is a professional investment counseling firm that
provides investment services to investment companies, employee benefit plans,
endowments, foundations, and other institutions. As of September 30, 2000,
Wellington Management had discretionary management authority with respect to
approximately $266 billion of assets. Wellington Management and its predecessor
organizations have provided investment advisory services to investment companies
since 1928 and to investment counseling clients since 1960. Wellington
Management, 75 State Street, Boston, MA 02109, is a
7
<PAGE>
Massachusetts limited liability partnership, of which the following
persons are managing partners: Laurie A Gabriel, Duncan M. McFarland and John R.
Ryan. The partner with primary management responsibility relating to the OVB
Prime Obligations Portfolio is John C. Keogh. Timothy E. Smith, a Vice
President of Wellington Management also has significant management
responsibility for the OVB Prime Obligations Portfolio.
Wellington Management serves as investment adviser or sub-adviser to
the following investment companies that have investment objectives similar to
those of the OVB Prime Obligations Portfolio. All figures are as of September
30, 2000:
<TABLE>
<CAPTION>
NET ASSETS
($ MIL) AS OF SUB-ADVISORY FEE SCHEDULE FEE PAID
9/30/00 AFTER
NET ASSETS ANNUAL RATE WAIVERS
----------------- ------------------------- -------------------- --------------
<S> <C> <C> <C> <C>
$ 64 First $500 Million 0.075% No waiver
OVB PRIME OBLIGATIONS PORTFOLIO* Over $500 Million 0.020%
GOLDEN OAK PRIME OBLIGATION $ 127 First $500 Million 0.075% No waiver
MONEY MARKET PORTFOLIO* Over $500 Million 0.020%
SEI DAILY INCOME TRUST First $500 Million 0.075% 0.0125%
PRIME OBLIGATION FUND* $4,547 Over $500 Million 0.020%
SEI DAILY INCOME TRUST First $500 Million 0.075% 0.01255
MONEY MARKET FUND* $1,160 Over $500 Million 0.020%
SEI LIQUID ASSET TRUST First $500 Million 0.075% 0.0125%
PRIME OBLIGATION FUND* $1,471 Over $500 Million 0.020%
SEI INSURANCE PRODUCTS TRUST First $500 Million 0.075% No waiver
VP PRIME OBLIGATION FUND $ 5 Over $500 Million 0.020%
BISHOP STREET First $500 Million 0.075% No waiver
MONEY MARKET FUND* $ 313 Over $500 Million 0.020%
PBHG CASH RESERVES FUND First $500 Million 0.075% No waiver
$ 246 Over $500 Million 0.020%
ANCHOR SERIES TRUST First $500 Million 0.075% No waiver
MONEY MARKET PORTFOLIO $ 61 Over $500 Million 0.020%
</TABLE>
*Fee schedules are applied to aggregate 2a-7 assets within the trust.
DESCRIPTION OF THE NEW AGREEMENT WITH WELLINGTON MANAGEMENT
GENERAL
Wellington Management served as the sub-adviser to the OVB Prime
Obligations Portfolio pursuant to the Old Agreement, which was approved by the
OVB Prime Obligations Portfolio's shareholders on November 22, 1993. The Old
Agreement terminated upon consummation of the Acquisition and Wellington
Management has served as interim investment sub-adviser to the Fund pursuant to
the Interim Agreement. The Board of Trustees recommends that Shareholders of the
OVB Prime Obligations Portfolio approve the New Agreement between and among
BB&T, Wellington Management and the Trust, on behalf of the OVB Prime
Obligations Portfolio, a copy of which is attached as ANNEX B to this Proxy
Statement. The description of the New Agreement set forth in this Proxy
Statement is qualified in its entirety by reference to the form of New Agreement
attached to this Proxy Statement as ANNEX B. The terms of the New Agreement are
identical to the terms of the Old Agreement except for dates of execution,
effectiveness and termination.
8
<PAGE>
DUTIES UNDER THE NEW AGREEMENT
Under the New Agreement with Wellington Management, Wellington
Management will make the daily investment decisions for the OVB Prime
Obligations Portfolio and will continuously review, supervise, and administer
the OVB Prime Obligations Portfolio's investment program. Wellington Management
will discharge its responsibilities subject to the supervision of the Trustees
of the Trust in a manner consistent with the Fund's investment objectives,
policies and limitations. The New Agreement with Wellington Management also
provides that Wellington Management will not be protected against any liability
to the OVB Prime Obligations Portfolio or its shareholders by reason of willful
misfeasance, bad faith, or gross negligence on its part in the performance of
its duties or from reckless disregard by Wellington Management of its
obligations or duties thereunder.
DURATION AND TERMINATION
If approved by shareholders at the Meeting, the New Agreement with
Wellington Management would take effect immediately.
Unless terminated earlier, the New Agreement with Wellington Management
will continue in effect for a period of two years from the date of
effectiveness, and thereafter, for periods of one-year for so long as such
continuance is specifically approved at least annually (i) by the vote of the
holders of a majority of the outstanding voting securities of the OVB Prime
Obligations Portfolio or by the Board of Trustees, and (ii) by the vote of a
majority of the independent Trustees, cast in person at a meeting called for the
purpose of voting on such approval.
The New Agreement will terminate automatically in the event of its
assignment. The New Agreement is also terminable by Wellington Management at any
time without penalty, on not more than 60 days' written notice by the Board of
Trustees or by vote of a majority of the OVB Prime Obligations Portfolio's
outstanding voting securities.
COMPENSATION
Under the New Agreement, the Trust will pay Wellington Management a
monthly sub-advisory fee equal, on an annual basis, to .075% on the first $500
million and .02% on the excess of $500 million of the aggregate average daily
net assets of the Trust's money market portfolios to which the Sub-Adviser
serves as sub-adviser. THESE TERMS OF COMPENSATION ARE UNCHANGED FROM THOSE OF
THE OLD AGREEMENT.
Under the Old Agreement, the Trust paid Wellington Management the
following fees for its services to the OVB Prime Obligations Portfolio (stated
as a percentage of assets and in dollars) for the most recently ended fiscal
year (1/31/2000):
<TABLE>
<CAPTION>
FUND FEES PAID (%) FEES WAIVED (%) FEES PAID ($) FEES WAIVED ($)
---- ------------- --------------- ------------- ---------------
<S> <C> <C>
OVB Prime Obligations Portfolio .075% none $59,000 none
</TABLE>
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS OF THE FUND VOTE FOR APPROVAL OF
THE NEW AGREEMENT WITH WELLINGTON MANAGEMENT.
GENERAL INFORMATION
ADMINISTRATOR
SEI Mutual Funds Services (the "Administrator") serves as Administrator
of the Fund pursuant to an administration agreement. The principal offices of
SEI are located at One Freedom Valley Drive, Oaks, Pennsylvania 19456.
9
<PAGE>
DISTRIBUTOR
SEI Investments Distribution Co. (the "Distributor"), an affiliate of
the Administrator, serves as Distributor of the Fund's shares pursuant to a
distribution agreement. The principal offices at the Distributor are located at
One Freedom Valley Drive, Oaks, Pennsylvania 19456.
FUND TRANSACTIONS
For the fiscal year ended January 31, 2000, the Funds paid the
following brokerage commissions to SEI Distribution Company, Inc., the Funds'
principal underwriter:
<TABLE>
<CAPTION>
FUND TOTAL $ AMOUNT OF BROKERAGE PAID TO SEI % OF TOTAL BROKERAGE THROUGH SEI
---- --------------------------------------- --------------------------------
<S> <C> <C>
OVB Equity Income Portfolio $10,298 5.7%
OVB Capital Appreciation Portfolio $88,403 21.87%
OVB Government Securities Portfolio $666 1.42%
</TABLE>
TRUSTEES AND OFFICERS OF THE TRUST
None of the trustees or officers of the Trust hold positions with BB&T
or Wellington Management, or have an interest in BB&T, Wellington Management or
in a person controlling, controlled by or under common control with BB&T or
Wellington Management.
SECTION 15(F) OF THE 1940 ACT
Section 15(f) of the 1940 Act provides legal protection to an adviser,
in the context of a change in control of an investment adviser to a registered
investment company, the receipt by such investment adviser (or any of its
affiliated persons) of any amount or benefit in connection with such sale, as
long as two conditions are satisfied. First, an "unfair burden" may not be
imposed on the investment company as a result of the sale of such interest, or
any express or implied terms, conditions or understandings applicable thereto.
The term "unfair burden" as defined in the 1940 Act, includes any arrangement
during the two-year period after the transaction whereby the investment adviser
(or predecessor or successor adviser), or any interested person of any such
adviser, receives or is entitled to receive any compensation, directly or
indirectly, from the investment company or its security holders (other than fees
for bona fide investment advisory and other services), or from any person in
connection with the purchase or sale of securities or other property to, from or
on behalf of the investment company (other than ordinary fees for bona fide
principal underwriting services).
The Board has not been advised by BB&T of any circumstances arising
from the Acquisition that will result in the imposition of an "unfair burden" on
the Funds. Moreover, BB&T has advised the Trustees that it will take no action
which would have the effect, directly or indirectly, of violating any of the
provisions of Section 15(f) of the 1940 Act in respect of the Acquisition. BB&T
has also advised the Trustees that during the two year period following the
Acquisition, BB&T does not intend to change its policies with respect to the
circumstances under which voluntary fee waivers may be permitted to expire. The
second condition of Section 15(f) is that during the three-year period
immediately following a transaction to which Section 15(f) is applicable, at
least 75% of the subject investment company's board of trustees must not be
"interested persons" (as defined in the 1940 Act) of the investment company's
investment adviser or predecessor adviser. The current composition of the
Trust's Board complies with this condition.
10
<PAGE>
5% Shareholders
As of October 5, 2000, the following persons were the only persons who
were, to the knowledge of the Trust, beneficial owners of 5% or more of shares
of the Funds voting at this Meeting:
<TABLE>
<CAPTION>
Shareholder Number of Shares %
----------- ---------------- --
<S> <C> <C> <C>
OVB Equity Income Portfolio (Class A Shares)
Kaw & Co. 4,399,586.862 99.91%
Attn: Securities Cage
P.O. Box 1793
Charlestown, WV 25326-1793
OVB Equity Income Portfolio (Class B Shares)
Donaldson, Lufkin & Jenrette 114,718.914 29.49%
Mutual Fund
One Pershing Plaza
Jersey City, NJ 07399-0001
OVB Capital Appreciation Portfolio (Class A Shares)
Kaw & Co. 7,138,754.580 99.03%
Attn: Securities Cage
P.O. Box 1793
Charlestown, WV 25326-1793
OVB Capital Appreciation Portfolio (Class B Shares)
Donaldson, Lufkin & Jenrette 158,950.811 22.54%
Mutual Fund
One Pershing Plaza
Jersey City, NJ 07399-0001
OVB Government Securities Portfolio (Class A Shares)
Kaw & Co. 4,285,060.943 99.98%
Attn: Securities Cage
P.O. Box 1793
Charlestown, WV 25326-1793
OVB Government Securities Portfolio (Class B Shares)
Donaldson, Lufkin & Jenrette 25,289.982 15.56%
Mutual Fund
One Pershing Plaza
Jersey City, NJ 07399-0001
Charles Edwin Gerwig & Jeanice Alma Gerwig Jtwros 10,118.037 6.23%
304 Elk Street
Webster Springs, WV 26288-1216
OVB West Virginia Tax-Exempt Income Portfolio (Class A Shares)
Kaw & Co. 7,952,215.611 100%
Attn: Securities Cage
P.O. Box 1793
Charlestown, WV 25326-1793
OVB West Virginia Tax-Exempt Income Portfolio (Class B Shares)
Donaldson, Lufkin & Jenrette 524,740.817 54.38%
Mutual Fund
One Pershing Plaza
Jersey City, NJ 07399-0001
OVB Prime Obligations Portfolio (Class A Shares)
Kaw & Co. 72,882,567.820 100%
Attn: Securities Cage
P.O. Box 1793
Charlestown, WV 25326-1793
OVB Prime Obligations Portfolio (Class B Shares)
Agawam Fund Corporation 9,118,679.140 68.74%
Windermere House
P.O. Box 556639
Nassau, Bahamas
Sanwa Bank California as Custodian 2,474,603.200 18.65%
For Wilshire Associates
444 Market Street, Fl. 23
San Francisco, CA 94111-5331
The Trustees and officers of the Trust own less than 1% of the outstanding
shares of the Trust.
</TABLE>
ADJOURNMENT
In the event that sufficient votes in favor of the Proposal set forth
in the Notice of the Special Meeting are not received by the time scheduled for
the Meeting, the persons named as proxies may propose one or more adjournments
of the Meeting for a period or periods of not more than 60 days in the aggregate
to permit further solicitation of proxies with respect to any of such Proposal.
Any such adjournment will require the affirmative vote of a majority of the
votes cast on the question in person or by proxy at the session of the Meeting
to be adjourned. The persons named as proxies will vote in favor of such
adjournment those proxies that they are entitled to vote in favor of the
Proposal. They will vote against any such adjournment those proxies required to
be voted against the Proposal. The costs of any such additional solicitation and
of any adjourned session will be borne by BB&T and its affiliates.
REQUIRED VOTE
Approval of the either Proposal requires the affirmative vote of a
majority of the outstanding voting securities of each Fund. The 1940 Act defines
"majority of the outstanding voting securities" as the vote of (i) 67% or more
of a fund's outstanding shares present at a meeting, if the holders of more than
50% of the outstanding shares of a fund are present or represented by proxy, or
(ii) more than 50% of the fund's outstanding shares, whichever is less.
Abstentions and "broker non-votes" will not be counted for or against
any Proposal to which it relates, but will be counted for purposes of
determining whether a quorum is present. Abstentions and "broker non-votes" will
be counted as votes present for purposes of determining a "majority of the
outstanding voting securities" present at the Meeting, and will therefore have
the effect of counting against the Proposal.
11
<PAGE>
SHAREHOLDER PROPOSALS
The Trust does not hold annual Shareholder Meetings. Shareholders
wishing to submit proposals for inclusion in a proxy statement for a subsequent
meeting should send their written proposals to the Secretary of the Trust c/o
SEI Investments Company, Legal Department, One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
REPORTS TO SHAREHOLDERS
The Trust will furnish, without charge, a copy of the most recent
Annual Report to Shareholders of the Trust and the most recent Semi-Annual
Report succeeding such Annual Report, if any, on request. Shareholders should
make requests by writing to the Trust c/o SEI Mutual Funds Services, at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, or by calling the Funds at
1-800-545-6331.
OTHER MATTERS
The Trustees know of no other business to be brought before the
Meeting. However, if any other matters properly come before the Meeting, proxies
that do not contain specific restrictions to the contrary will be voted on such
matters in accordance with the judgment of the persons named in the enclosed
form of proxy.
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY
AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID ENVELOPE.
12
<PAGE>
ANNEX A
INVESTMENT ADVISORY AGREEMENT
ANNEX A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 30th day of November, 2000 by and between The Arbor
Fund, a Massachusetts business trust (the "Trust"), and Branch Banking and Trust
Company (the "Adviser").
WHEREAS, the Trust is an open-end, non-diversified management
investment company registered under the Investment Company Act of 1940, as
amended, (the "Investment Company Act") consisting of several series of shares,
each having its own investment policies; and
WHEREAS, the Trust has retained SEI Financial Management Corporation
(the "Administrator") to provide administration of the Trust's operations,
subject to the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its OVB Equity Income, OVB Capital
Appreciation, OVB West Virginia Tax-Exempt Income, OVB Government Securities and
OVB Prime Obligations Portfolios and such other portfolios as the Trust and the
Adviser may agree upon (the "Portfolios"), and the Adviser is willing to render
such services:
NOW, THEREFORE, in consideration of mutual covenants herein contained,
the parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to
manage the investment and reinvestment of the assets, and to
continuously review, supervise, and administer the investment
program of the Portfolios, to determine in its discretion the
securities to be purchased or sold, to provide the
Administrator and the Trust with records concerning the
Adviser's activities which the Trust is required to maintain
and to render regular reports (except for those special
reports that the Board of Trustees may require more
frequently) to the Administrator and to the Trust's Officers
and Trustees concerning the Adviser's discharge of the
foregoing responsibilities.
The Adviser shall discharge the foregoing responsibilities
subject to the control of the Board of Trustees of the Trust
and in compliance with such policies as the Trustees may from
time to time establish, and in compliance with the objectives,
policies, and limitations for each such Portfolio set forth in
the Portfolios' prospectus and statement of additional
information as amended from time to time, and applicable laws
and regulations.
The Adviser accepts such employment and agrees, at its own
expense, to render the services and to provide the office
space, furnishings and equipment and the personnel required by
it to perform the services on the terms and for the
compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select
the brokers or dealers that will execute the purchases and
sales of portfolio securities for the Portfolios and is
directed to use its best efforts to obtain the best net
results as described in the Portfolios' prospectuses and
statement of additional information from time to time. The
Adviser will promptly communicate to the Administrator and to
the officers and the Trustees of the Trust such information
relating to portfolio transactions as they may reasonably
request.
It is understood that the Adviser will not be deemed to have
acted unlawfully, or to have breached a fiduciary duty to the
Trust or be in breach of any obligation owing to the Trust
under this Agreement, or otherwise, solely by reason of its
having directed a securities transaction on behalf of the
Trust to a broker-dealer in compliance with the provisions of
Section 28(e) of the Securities Exchange Act of 1934.
3. COMPENSATION OF THE ADVISER. For the services to be rendered
by the Adviser as provided in Sections 1 and 2 of this
Agreement, the Trust shall pay to the Adviser compensation at
the rate specified in the Schedule(s) which are attached
hereto and made a part of this Agreement. Such compensation
shall be paid to the Adviser at the end of each month, and
calculated by applying a daily rate, based on the annual
percentage rates as specified in the attached Schedule(s), to
the assets. The fee shall be based on the average daily net
assets for the month involved.
All rights of compensation under this Agreement for services
performed as of the termination date shall survive the
termination of this Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of
preparing (including typesetting), printing and mailing
reports, prospectuses, statements of additional information,
and sales literature to prospective clients to the extent
these expenses are not borne by the Trust under a distribution
plan adopted pursuant to Rule 12b-1 of the Investment Company
Act.
5. EXCESS EXPENSES. If the expenses for any Portfolio for any
fiscal year (including fees and other amounts payable to the
Adviser, but excluding interest, taxes, brokerage costs,
litigation, and other extraordinary costs) as calculated every
business day would exceed the expense limitations imposed on
investment companies by any applicable statute or regulatory
authority of any jurisdiction in which Shares are qualified
for offer and sale, the Adviser shall waive its fees, or
reimburse to the Trust out of fees previously paid to the
Adviser for such year in the amount necessary to comply with
the expense limitation.
However, no waiver or reimbursement under the foregoing
paragraph shall be made which would result in the Trust's
inability to qualify as a regulated investment company under
provisions of the Internal Revenue Code of 1986, as amended.
Waivers or reimbursements pursuant to this Section 5 shall be
settled on a monthly basis (subject to fiscal year end
reconciliation) by a reduction in the fee payable to the
Adviser for such month pursuant to Section 3 and, if such
reduction shall be insufficient to offset such expenses, by
reimbursing the Trust.
6. REPORTS. The Trust and the Adviser agree to furnish to each
other, if applicable, current prospectuses, proxy statements,
reports to shareholders, certified copies of their financial
statements, and such other information with regard to their
affairs as each may reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the
Trust are not to be deemed exclusive, and the Adviser shall be
free to render similar services to others so long as its
services to the Trust are not impaired thereby. The Adviser
shall be deemed to be an independent contractor and shall,
unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
8. CERTAIN RECORDS. Any records required to be maintained and
preserved pursuant to the provisions of Rule 31a-1 and Rule
31a-2 promulgated under the Investment Company Act which are
prepared or maintained by the Adviser on behalf of the Trust
are the property of the Trust and will be surrendered promptly
to the Trust on request.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the
Adviser shall be confined to those expressly set forth herein,
and no implied duties are assumed by or may be asserted
against the Adviser hereunder. The Adviser shall not be liable
for any error of judgment or mistake of law or for any loss
arising out of any investment or for any act or omission in
carrying out its duties hereunder, except a loss resulting
from willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of reckless disregard
of its obligations and duties hereunder, except as may
otherwise be provided under provisions of applicable state and
federal law which cannot be waived or modified hereby. (As
used in this Paragraph 9, the term "Adviser" shall include
directors, officers, employees and other corporate agents of
the Adviser as well as that corporation itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders
of the Trust are or may be interested in the Adviser (or any
successor thereof) as directors, partners, officers, or
shareholders, or otherwise; directors, partners, officers,
agents, and shareholders of the Adviser are or may be
interested in the Trust as Trustees, shareholders or
otherwise; and the Adviser (or any successor) is or may be
interested in the Trust as a shareholder or otherwise. In
addition, brokerage transactions for the Trust may be effected
through affiliates of the Adviser if approved by the Board of
Trustees, subject to the rules and regulations of the
Securities and Exchange Commission.
11. DURATION AND TERMINATION. This Agreement, unless sooner
terminated as provided herein, shall remain in effect until
two years from date of execution, and thereafter, for periods
of one year so long as such continuance thereafter is
specifically approved at least annually (a) by the vote of a
majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast
in person at a meeting called for the purpose of voting on
such approval, and (b) by the Trustees of the Trust or by vote
of a majority of the outstanding voting securities of each
Portfolio; provided, however, that if the shareholders of any
Portfolio fail to approve the Agreement as provided herein,
the Adviser may continue to serve hereunder in the manner and
to the extent permitted by the Investment Company Act and
rules and regulations thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved
at least annually" shall be construed in a manner consistent
with the Investment Company Act and the rules and regulations
thereunder.
This Agreement may be terminated as to any Portfolio at any
time, without the payment of any penalty by vote of a majority
of the Trustees of the Trust or by vote of a majority of the
outstanding voting securities of the Portfolio on not less
than 30 days nor more than 60 days written notice to the
Adviser, or by the Adviser at any time without the payment of
any penalty, on 90 days written notice to the Trust. This
Agreement will automatically and immediately terminate in the
event of its assignment. Any notice under this Agreement shall
be given in writing, addressed and delivered, or mailed
postpaid, to the other party at any office of such party.
As used in this Section 11, the terms "assignment",
"interested persons", and a "vote of a majority of the
outstanding voting securities" shall have the respective
meanings set forth in the Investment Company Act and the rules
and regulations thereunder; subject to such exemptions as may
be granted by the Securities and Exchange Commission under
said Act.
12. NOTICE. Any notice required or permitted to be given by
either party to the other shall be deemed sufficient if sent
by registered or certified mail, postage prepaid, addressed by
the party giving notice to the other party at the last address
furnished by the other party to the party giving notice: if to
the Trust, at 680 East Swedesford Road, Wayne, PA 19087 and if
to the Adviser at: 434 Fayetteville Street Mall, Raliegh NC
27601.
13. SEVERABILITY. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be
affected thereby.
A copy of the Agreement and Declaration of Trust of the Trust is on file with
the Secretary of The Commonwealth of Massachusetts, and notice is hereby given
that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and are not binding upon any of the Trustees, officers, or
shareholders of the Trust individually but binding only upon the assets and
property of the Trust.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
THE ARBOR FUND BRANCH BANKING AND TRUST COMPANY
By: _________________________ By: ________________________________
Attest: _________________________ Attest ________________________________
<PAGE>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ARBOR FUND
AND
BRANCH BANKING AND TRUST COMPANY
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
PORTFOLIO FEE (IN BASIS POINTS)
OVB Capital Appreciation .95%
OVB West Virginia Tax Exempt Income .45%
OVB Government Securities .75%
OVB Prime Obligations .25%
OVB Equity Income .74%
<PAGE>
ANNEX B
THE ARBOR FUND
OVB PRIME OBLIGATIONS PORTFOLIO
INVESTMENT SUB ADVISORY AGREEMENT
AGREEMENT made this 30th day of November, 2000, by and among Branch
Banking and Trust Company, a regional North Carolina banking association (the
"Adviser"), Wellington Management Company, LLP a Massachusetts limited
liability partnership (the "Sub-Adviser") and The Arbor Fund, a Massachusetts
business trust (the "Trust").
WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement
dated November 30, 2000 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser will act as investment adviser to the OVB Prime Obligations
Portfolio (the "Portfolio"); and
WHEREAS, the Adviser and the Trust each desire to retain the
Sub-Adviser to provide investment advisory services to the Trust in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services
NOW, THEREFORE, the parties hereto agree as follows:
1. (a) Subject to supervision by the Adviser and the Trust's
Board of Trustees, the Sub-Adviser shall manage the investment
operations of the Portfolio and the composition of the
Portfolio's portfolio, including the purchase, retention and
disposition thereof, in accordance with the Portfolio's
investment objectives, policies and restrictions as stated in
the Portfolio's Prospectus (such Prospectus and the Statement
of Additional Information, as currently in effect and as
amended or supplemented from time to time, being herein called
the "Prospectus"), and subject to the following:
(1) The Sub-Adviser shall provide supervision of the
Portfolio's investments and determine from time to
time what investments and securities will be
purchased, retained or sold by the Portfolio, and
what portion of the costs will be invested or held
uninvested in cash.
(2) In the performance of its duties and obligations
under this Agreement, the Sub-Adviser shall act in
conformity with the Trust's Declaration of Trust and
the Prospectus and with the instructions and
directions of the Adviser and of the Board of
Trustees of the Trust and will conform to and comply
with the requirements of the 1940 Act, the Internal
Revenue Code of 1986, and all other applicable
federal and state laws and regulations, as each is
amended from time to time.
(3) The Sub-Adviser shall determine the securities to be
purchased or sold by the Portfolio and will place
orders with or through such persons, brokers or
dealers to carry out the
<PAGE>
policy with respect to brokerage set forth in the
Portfolio's Registration Statement (as defined
herein) and Prospectus or as the Board of Trustee or
the Adviser may direct from time to time, in
conformity with federal securities laws. In providing
the Portfolio with investment supervision, the
Sub-Adviser will give primary consideration to
securing the most favorable price and efficient
execution. Within the framework of this policy, the
Sub-Adviser may consider the financial
responsibility, research and investment information
and other services provided by brokers or dealers who
may effect or be a party to any such transaction or
other transactions to which the Sub-Adviser's other
clients may be a party. It is understood that it is
desirable for the Portfolio that the Sub-Adviser have
access to supplemental investment and market research
and security and economic analysis provided by
brokers who may execute brokerage transactions at
higher cost to the Portfolio than may result when
allocating brokerage to other brokers on the basis of
seeking the most favorable price and efficient
execution. Therefore, the Sub-Adviser is authorized
to place orders for the purchase and sale of
securities for the Portfolio with such brokers,
subject to review by the Trust's Board of Trustees
from time to time with respect to the extent and
continuation of this practice. It is understood that
the services provided by such brokers may be useful
to the Sub-Adviser in connection with the
Sub-Adviser's services to other clients.
On occasions when the Sub-Adviser deems the purchase
or sale of a security to be in the best interest of
the Portfolio as well as other clients of the
Sub-Adviser, the Sub-Adviser, to the extent permitted
by applicable laws and regulations, may, but shall be
under no obligation to, aggregate the securities to
be so purchased or sold in order to obtain the most
favorable price or lower brokerage commissions and
efficient execution. In such event, allocation of the
securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by
the Sub-Adviser in the manner it considers to be the
most equitable and consistent with its fiduciary
obligation to the Portfolio and to such other
clients.
(4) The Sub-Adviser shall maintain all books and records
with respect to the Portfolio's portfolio
transactions required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule
31a-1 under the 1940 Act and shall render to the
Trust's Board of Trustees such periodic and special
reports as the Trust's Board of Trustees may
reasonably request.
(5) The Sub-Adviser shall provide the Portfolio's
Custodian on each business day with information
relating to all transactions concerning the
Portfolio's assets and shall provide the Adviser with
such information upon request of the Adviser.
(6) The investment management services provided by the
Sub-Adviser under this Agreement are not to be deemed
exclusive and the Sub-Adviser shall be free to render
similar services to others, as long as such services
do not impair the services rendered to the Adviser or
the Trust.
(b) Services to be furnished by the Sub-Adviser under this
Agreement may be furnished through the medium of any of the
Sub-Adviser's partners, officers or employees.
<PAGE>
(c) The Sub-Adviser shall keep the Portfolio's books and
records required to be maintained by the Sub-Adviser pursuant
to paragraph 1(a) of this Agreement and shall timely furnish
to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep
the other books and records of the Portfolio required by Rule
31a-1 under the 1940 Act. The Sub-Adviser agrees that all
records that it maintains on behalf of the Portfolio are
property of the Portfolio and the Sub-Adviser will surrender
promptly to the Portfolio any of such records upon the
Portfolio's request; provided, however, that the Sub-Adviser
may retain a copy of such records. The Sub-Adviser further
agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act any such records as are required to be
maintained by it pursuant to paragraph 1(a) of this Agreement.
2. The Adviser shall continue to have responsibility for all services to
be provided to the Portfolio pursuant to the Advisory Agreement and
shall oversee and review the Sub-Adviser's performance of its duties
under this Agreement
3. The Adviser has delivered to the Sub-Adviser copies of each of the
following documents and will deliver to it all future amendments and
supplements, if any:
(a) The Trust's Declaration of Trust, as filed with the Secretary
of State of Massachusetts (such Declaration of Trust, as in
effect on the date of this Agreement and as amended from time
to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the
date of this Agreement and as amended from time to time, are
herein called the "By-Laws");
(c) Certified resolutions of the Trust's Board of Trustees
authorizing the appointment of the Adviser and the Sub-Adviser
with respect to the Portfolio, and approving the form of this
Agreement;
(d) Registration Statement under the 1940 Act and the Securities
Act of 1933, as amended, on Form N-1A (the "Registration
Statement"), as filed with the Securities and Exchange
Commission (the "Commission") relating to the Portfolio and
shares of the Portfolio's beneficial shares, and all
amendments thereto;
(e) Notification of Registration of the Trust under the 1940
Act on Form N-8A as filed with the Commission, and all
amendments thereto; and
(f) Prospectus and Statement of Additional Information of the
Portfolio.
4. For the services to be provided by the Sub-Adviser pursuant to this
Agreement, the Portfolio will pay to the Sub-Adviser as full
compensation therefor a fee at an annual rate of 0.075% on the first
$500 million and 0.020% on the excess of $500 million of the aggregate
average daily net assets of the Trust's money market portfolios to
which the Sub-Adviser serves as sub-adviser, pro rated based on the
Portfolio's average daily net assets. This fee will be computed daily
and paid to the Sub-Adviser monthly.
<PAGE>
5. The Sub-Adviser shall not be liable for any error of judgment or for
any loss suffered by the Portfolio or the Adviser in connection with
performance of its obligations under this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt
of compensation for services (in which case any award of damages shall
be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad
faith or gross negligence on the Sub-Adviser's part in the performance
of its duties or from reckless disregard of its obligations and duties
under this Agreement, except as may otherwise be provided under
provisions of applicable state law which cannot be waived or modified
hereby.
6. This Agreement shall continue in effect for a period of more than
two years from the date hereof only so long as continuance is
specifically approved at least annually in conformance with the 1940
Act; provided, however, that this Agreement may be terminated (a) by
the Portfolio at any time, without the payment of any penalty, by the
vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of such Portfolio, (b) by
the Adviser at any time, without the payment of any penalty, on not
more than 60 days' nor less than 30 days' written notice to the other
parties, or (c) by the Sub-Adviser at any time, without the payment of
any penalty, on 90 days' written notice to the other parties. This
Agreement shall terminate automatically and immediately in the event of
its assignment. As used in this Section 6, the terms "assignment" and
"vote of a majority of the outstanding voting securities" shall have
the respective meanings set forth in the 1940 Act and the rules and
regulations thereunder, subject to such exceptions as may be granted by
the Commission under the 1940 Act.
7. Nothing in this Agreement shall limit or restrict the right of any of
the Sub-Adviser's partners, officers, or employees to engage in any
other business or to devote his or her time and attention in part to
the management or other aspects of any business, whether of a similar
or dissimilar nature, nor limit or restrict the Sub-Adviser's right to
engage in any other business or to render services of any kind to any
other corporation, firm, individual or association.
8. During the term of this Agreement, the Adviser agrees to furnish the
Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to shareholders, sales literature or other materials prepared
for distribution to shareholders of the Portfolio, the Trust or the
public that refer to the Sub-Adviser or its clients in any way prior to
use thereof and not to use material if the Sub-Adviser reasonably
objects in writing within five business days (or such other period as
may be mutually agreed) after receipt thereof. The Sub-Adviser's right
to object to such materials is limited to the portions of such
materials that expressly relate to the Sub-Adviser, its services and
its clients. The Adviser agrees to use its reasonable best efforts to
ensure that materials prepared by its employees or agents or its
affiliates that refer to the Sub-Adviser or its clients in any way are
consistent with those materials previously approved by the Sub-Adviser
as referenced in the first sentence of this paragraph. Sales literature
may be furnished to the Sub-Adviser by first class or overnight mail,
facsimile transmission equipment or hand delivery.
9. No provisions of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the
party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Agreement shall be
effective until approved by the vote of the majority of the outstanding
voting securities of the Portfolio.
10. This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts; provided,
<PAGE>
however, that nothing herein shall be construed as being
inconsistent with the 1940 Act.
11. This Agreement embodies the entire agreement and understanding among
the parties hereto, and supersedes all prior agreements and
understandings relating to this Agreement's subject matter. This
Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall,
together, constitute only one instrument.
12. Should any part of this Agreement be held invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement shall not
be affected thereby. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors.
13. Any notice, advice or report to be given pursuant to this Agreement
shall be delivered or mailed:
To the Adviser at:
Branch Banking and Trust Company
434 Fayetteville Street Mall
Raleigh, NC 27601
To the Sub-Adviser at:
Wellington Management Company, LLP
Attn: Regulatory Affairs Department
75 State Street
Boston, MA 02109
To the Trust or the Portfolio at:
The Arbor Fund
101 Federal Street
Boston, MA 02110
<PAGE>
14. Where the effect of a requirement of the 1940 Act reflected in any
provision of this Agreement is altered by a rule, regulation or order
of the Commission, whether of special or general application, such
provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
BRANCH BANKING AND TRUST COMPANY
By:__________________________________
Title:_______________________________
WELLINGTON MANAGEMENT COMPANY, LLP
By:__________________________________
Title:_______________________________
THE ARBOR FUND
By:__________________________________
Title:_______________________________
<PAGE>
THE ARBOR FUND
C/O SEI INVESTMENTS, INC.
One Freedom Valley Drive
Oaks, PA 19456
OVB Equity Income Portfolio
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
November 30, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE ARBOR FUND
The undersigned Shareholder(s) of The Arbor Fund (the "Trust") hereby
appoint(s) Laurie Brooks, Timothy Barto and Kristen Keefer, each of them (with
full power of substitution), the proxy or proxies of the undersigned to attend
the Special Meeting of Shareholders (the "Meeting") of the Trust to be held on
Thursday, November 30, 2000, and any adjournments thereof, to vote all of the
shares of the Trust that the signer would be entitled to vote if personally
present at the Meeting and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
All properly executed proxies will be voted as directed herein by the signing
Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal.
Please date, sign and return promptly.
To Vote by Internet
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to Web site www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
To Vote by Mail
1) Read the Proxy Statement and Proxy Card below at hand.
2) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
3) Return the Proxy Card to the address provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
OVB EQUITY INCOME PORTFOLIO
The undersigned acknowledges receipt with this proxy of a copy of the Notice
of Special Meeting of Shareholders and the Proxy Statement of the Board of
Trustees.
Vote On Proposal
1. To consider and vote upon a proposal to approve a new advisory
agreement between the Trust, on behalf of the Funds, and Branch
Banking and Trust Company.
For Against Abstain
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________2000 Dated: _____________2000
---------------------------------- --------------------------------------
Signature Signature
<PAGE>
THE ARBOR FUND
C/O SEI INVESTMENTS, INC.
One Freedom Valley Drive
Oaks, PA 19456
OVB Capital Appreciation Portfolio
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
November 30, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE ARBOR FUND
The undersigned Shareholder(s) of The Arbor Fund (the "Trust") hereby
appoint(s) Laurie Brooks, Timothy Barto and Kristen Keefer, each of them (with
full power of substitution), the proxy or proxies of the undersigned to attend
the Special Meeting of Shareholders (the "Meeting") of the Trust to be held on
Thursday, November 30, 2000, and any adjournments thereof, to vote all of the
shares of the Trust that the signer would be entitled to vote if personally
present at the Meeting and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
All properly executed proxies will be voted as directed herein by the signing
Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal.
Please date, sign and return promptly.
To Vote by Internet
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to Web site www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
To Vote by Mail
1) Read the Proxy Statement and Proxy Card below at hand.
2) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
3) Return the Proxy Card to the address provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
OVB Capital Appreciation Portfolio
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement of the Board
of Trustees.
Vote On Proposal
1. To consider and vote upon a proposal to approve a new advisory
agreement between the Trust, on behalf of the Funds, and Branch
Banking and Trust Company.
For Against Abstain
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________2000 Dated: _____________2000
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Signature Signature
<PAGE>
THE ARBOR FUND
C/O SEI INVESTMENTS, INC.
One Freedom Valley Drive
Oaks, PA 19456
OVB Government Securities Portfolio
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
November 30, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE ARBOR FUND
The undersigned Shareholder(s) of The Arbor Fund (the "Trust") hereby
appoint(s) Laurie Brooks, Timothy Barto and Kristen Keefer, each of them (with
full power of substitution), the proxy or proxies of the undersigned to attend
the Special Meeting of Shareholders (the "Meeting") of the Trust to be held on
Thursday, November 30, 2000, and any adjournments thereof, to vote all of the
shares of the Trust that the signer would be entitled to vote if personally
present at the Meeting and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
All properly executed proxies will be voted as directed herein by the signing
Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal.
Please date, sign and return promptly.
To Vote by Internet
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to Web site www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
To Vote by Mail
1) Read the Proxy Statement and Proxy Card below at hand.
2) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
3) Return the Proxy Card to the address provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
OVB Government Securities Portfolio
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement.
Vote On Proposal
1. To consider and vote upon a proposal to approve a new advisory
agreement between the Trust, on behalf of the Funds, and Branch
Banking and Trust Company.
For Against Abstain
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________2000 Dated: _____________2000
---------------------------------- --------------------------------------
Signature Signature
<PAGE>
THE ARBOR FUND
C/O SEI INVESTMENTS, INC.
One Freedom Valley Drive
Oaks, PA 19456
OVB West Virginia Tax-Exempt Income Portfolio
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
November 30, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE ARBOR FUND
The undersigned Shareholder(s) of The Arbor Fund (the "Trust") hereby
appoint(s) Laurie Brooks, Timothy Barto and Kristen Keefer, each of them (with
full power of substitution), the proxy or proxies of the undersigned to attend
the Special Meeting of Shareholders (the "Meeting") of the Trust to be held on
Thursday, November 30, 2000, and any adjournments thereof, to vote all of the
shares of the Trust that the signer would be entitled to vote if personally
present at the Meeting and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
All properly executed proxies will be voted as directed herein by the signing
Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal.
Please date, sign and return promptly.
To Vote by Internet
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to Web site www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
To Vote by Mail
1) Read the Proxy Statement and Proxy Card below at hand.
2) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
3) Return the Proxy Card to the address provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
OVB West Virginia Tax-Exempt Income Portfolio
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement.
Vote On Proposal
1. To consider and vote upon a proposal to approve a new advisory
agreement between the Trust, on behalf of the Funds, and Branch
Banking and Trust Company.
For Against Abstain
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________2000 Dated: _____________2000
---------------------------------- --------------------------------------
Signature Signature
<PAGE>
THE ARBOR FUND
C/O SEI INVESTMENTS, INC.
One Freedom Valley Drive
Oaks, PA 19456
OVB Prime Obligations Portfolio
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
November 30, 2000
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES OF THE ARBOR FUND
The undersigned Shareholder(s) of The Arbor Fund (the "Trust") hereby
appoint(s) Laurie Brooks, Timothy Barto and Kristen Keefer, each of them (with
full power of substitution), the proxy or proxies of the undersigned to attend
the Special Meeting of Shareholders (the "Meeting") of the Trust to be held on
Thursday, November 30, 2000, and any adjournments thereof, to vote all of the
shares of the Trust that the signer would be entitled to vote if personally
present at the Meeting and on any other matters brought before the Meeting, all
as set forth in the Notice of Special Meeting of Shareholders. Said proxies are
directed to vote or refrain from voting pursuant to the Proxy Statement as
checked below.
All properly executed proxies will be voted as directed herein by the signing
Shareholder(s). If no direction is given when the duly executed proxy is
returned, such shares will be voted FOR the Proposal.
Please date, sign and return promptly.
To Vote by Internet
1) Read the Proxy Statement and have the Proxy Card below at hand.
2) Go to Web site www.proxyvote.com.
3) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
To Vote by Mail
1) Read the Proxy Statement and Proxy Card below at hand.
2) Enter the 12-digit control number set forth on the Proxy Card and
follow the simple instructions.
3) Return the Proxy Card to the address provided.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
KEEP THIS PORTION FOR YOUR RECORDS.
--------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
OVB Prime Obligations Portfolio
The undersigned acknowledges receipt with this proxy of a copy of the
Notice of Special Meeting of Shareholders and the Proxy Statement of the Board
of Trustees.
Vote On Proposal
1. To consider and vote upon a proposal to approve a new advisory
agreement between the Trust, on behalf of the Funds, and Branch
Banking and Trust Company.
For Against Abstain
2. To consider and vote upon a proposal to approve a new sub-advisory
agreement between and among Branch Banking and Trust Company,
Wellington Management Company and the Trust, on behalf of the OVB
Prime Obligations Portfolio.
For Against Abstain
Your signature(s) on this proxy should be exactly as your name or names appear
on this proxy. If the shares are held jointly, each holder should sign. If
signing is by attorney, executor, administrator, trustee or guardian, please
print your full title below your signature.
Dated: _____________2000 Dated: _____________2000
---------------------------------- --------------------------------------
Signature Signature