BRANCH BANKING AND TRUST COMPANY
CODE OF ETHICS
GOVERNING THE CONDUCT OF ITS
INVESTMENT ADVISORY SERVICE
TO INVESTMENT COMPANIES
STATEMENT OF GENERAL PRINCIPLES
It is the policy of Branch Banking and Trust Company (BB&T) that Portfolio
Managers, Investment Personnel and Access Persons1 should (1) at all times place
the interests of the shareholder first; (2) conduct all personal securities
transactions in a manner that is consistent with the Code of Ethics and to avoid
any actual or potential conflict of interest or any abuse of the individual's
position of trust and responsibility; and (3) adhere to the fundamental standard
that BB&T personnel should not take inappropriate advantage of their positions.
It is the policy of BB&T that all officers and employees will abide by all
applicable laws, regulations, rulings, orders, and policy statements and other
similar provisions, which govern the operation of BB&T. BB&T will not tolerate
any violation or intent to violate either the letter or spirit of such
provisions.
GOVERNING STANDARDS
This Code of Ethics shall be governed by Rule 17j-1 under the Investment Company
Act of 1940.
Portfolio Managers, Investment Personnel, or Access Persons shall not in the
connection with the purchase or sale by such person of a security "held or to be
acquired" by any investment company portfolio (a "Fund") of the BB&T Funds or
the Arbor Funds (the "Trusts") commit the following:
1) Employ a device, scheme, or artifice to defraud the Fund;
2) Make to the Fund, or BB&T, any untrue statement of a material fact or omit
to state to the Fund, or BB&T, a material fact necessary in order to make
the statements made, in light of the circumstances under which they are
made, not misleading;
3) Engage in any act, practice, or course of business which operates or
would operate as a fraud or deceit upon the Fund; or
4) Engage in any manipulative practice with respect to the Fund.
A security is "held or to be acquired" if within the most recent 15 days it (1)
is or has been held by a Fund, or (2) is being or has been considered by a Fund,
or the investment adviser for a Fund (BB&T) for purchase by a Fund. A purchase
or sale includes the writing of an option to purchase or sell.
SUBSTANTIVE RESTRICTIONS ON PERSONAL INVESTMENT ACTIVITIES
1. Initial Public Offerings
Portfolio Managers and Investment Personnel are prohibited from acquiring
any securities in an initial public offering.
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2. Private Placement
Portfolio Managers and Investment Personnel shall, when purchasing
securities in a private placement:
A. Obtain the prior written approval of the Investment Management Group
Manager and Trust Counsel.
B. Disclose the Investment when they are involved in any subsequent
decision to invest in the issuer on behalf of a Fund, and refer the
decision to purchase securities of the issuer to the Investment
Management Group Manager.
3. Blackout Periods
A. Same Day
Portfolio Managers, Investment Personnel and Access Persons are
prohibited from executing a securities transaction on a day when a Fund
has a pending "buy" or "sell" order in the same security until that
order is executed or withdrawn. Any profits realized on trades within
the proscribed periods will be disgorged.
B. Seven Day
Portfolio Managers are prohibited from buying or selling a security
within at least seven (7) calendar days before and after the Fund he or
she manages trades in that security. Any profits realized on trades
within the proscribed periods will be disgorged.
4. Ban on Short-Term Trading Profits
Portfolio Managers and Investment Personnel are prohibited from profiting
in the purchase and sale, or the sale and purchase, of the same (or
equivalent) securities within 60 calendar days. Any profits realized on
trades within the proscribed periods will be disgorged.2
5. Gifts
Portfolio Managers and Investment Personnel are prohibited from receiving
any gift or other thing of more than $100 value from any person or entity
that does business with or on behalf of a Fund.
6. Service as a Director
Portfolio Mangers and Investment Personnel are prohibited from serving on
the board of directors of publicly traded companies, without prior
authorization from the Trust Committee of BB&T and the Funds' Board of
Directors.
DISCLOSURE AND REPORTING REQUIREMENTS
1. Preclearance
Portfolio Managers, Investment Personnel and Access Persons are required to
preclear all transactions in securities in which the person has, or by
reason of the transaction acquires, any direct or indirect beneficial
ownership3 ("Personal Securities") with the Director of Corporate
Compliance or Trust Counsel.
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The preclearance requirement shall not apply to purchases that are made
solely with the dividend proceeds received in a dividend reinvestment plan.
2. Records of Securities Transactions
Portfolio Managers, Investment Personnel, and Access Persons are required
to direct their brokers to provide the Director of Corporate Compliance, on
a timely basis, duplicate copies of confirmations of all Personal
Securities transactions and copies of periodic statements for all
securities accounts. Reportable transactions do not include (1) securities
issued or guaranteed by the United States Government, its agencies or
instrumentalities; (2) bankers acceptances; (3) bank certificates of
deposit; (4) commercial paper; (5) high-quality short-term debt
instruments, including repurchase agreements; and (6) shares of registered
open-end investment companies.
3. Disclosure of Personal Holdings
Portfolio Managers, Investment Personnel, and Access Persons are required
to disclose all Personal Securities holdings at commencement of employment
and thereafter on an annual basis.
4. Disclosure of Personal Brokerage Accounts
Portfolio Managers, Investment Personnel, and Access Persons are required
to disclose the name of any broker, dealer or bank maintaining an account
in which any security was held for the direct or indirect benefit of the
Portfolio Manager, Investment Personnel, or Access Person as of the date of
employment. Portfolio Managers, Investment Personnel, and Access Persons
are also required to report, on a quarterly basis, any new account
established with a broker, dealer or bank in which any security was
transacted or held for the direct or indirect benefit of such person.
4. Certification of Compliance with Code of Ethics
Portfolio Managers, Investment Personnel and Access Persons are required to
certify annually that they have read and understand the Code of Ethics.
They must further certify that they have complied with the requirements of
the Code of Ethics and that they have disclosed or reported all Personal
Securities transactions required to be disclosed or reported.
COMPLIANCE PROCEDURES
In order to provide Branch Banking and Trust Company with information to enable
it to determine with reasonable assurance whether the provisions of the Code of
Ethics are being observed by Portfolio Managers, Investment Personnel and Access
Persons:
1. The Director of Corporate Compliance shall notify each Portfolio Manager,
Investment Personnel, and Access Person of the reporting requirements of
the Code of Ethics and shall deliver a copy of the Code to each person.
2. Each Portfolio Manager, Investment Personnel, and Access Person shall
submit to the Director of Corporate Compliance on an annual basis, an
Annual Certification of Compliance with the Code of Ethics as prescribed in
Exhibit A. The annual certification shall be filed with the Director of
Corporate Compliance within ten (10) calendar days after year-end.
3. Each Portfolio Manager, Investment Personnel, and Access Person shall
submit to the Director of Corporate Compliance upon commencement of
employment and thereafter on an annual basis, reports in the form
prescribed in Exhibit B, Personal Securities Initial and Annual Holdings
Report. The annual report shall be filed with the Director of Corporate
Compliance with ten (10) calendar days after year-end,
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and shall be current as of a date no more than thirty (30) days before the
report is submitted. Both the initial and annual holdings shall report any
securities accounts (including exempt securities) maintained.
4. Each Portfolio Manager, Investment Personnel, and Access Person shall
submit to the Director of Corporate Compliance on a quarterly basis,
reports in the form prescribed in Exhibit C, Personal Securities
Transactions. This report shall also contain disclosure of any securities
account(s) established during the quarter. The quarterly reports shall be
filed with the Director of Corporate Compliance within ten (10) calendar
days after quarter-end.
5. Decisions regarding the preclearance of all securities transactions for
Portfolio Managers, Investment Personnel, and Access Persons shall be
documented in writing by the Director of Corporate Compliance or Trust
Counsel. Portfolio Managers, Investment Personnel, and Access Persons shall
make arrangements with their broker to provide the Director of Corporate
Compliance, on a timely basis, with copies of confirmations of all Personal
Securities transactions and copies of periodic statements for all
securities accounts.
6. Each report submitted under the Code shall be reviewed by the Director of
Corporate Compliance on a quarterly basis.
7. The Director of Corporate Compliance shall report to the Trust Committee
of the BB&T Board of Directors:
A. at the next meeting following the receipt of the annual report of
holdings, the results of the review.
B. any apparent violation of the Code at the first meeting subsequent to
the discovery of the violation.
8. The Trust Committee of the Board of Directors of BB&T shall consider
reports made to it and shall determine whether the policies established in
the Code of Ethics have been violated, and what sanctions, if any, should
be imposed. The Trust Committee of the Board of Directors of BB&T shall
review the operation of this policy at least annually or as dictated by
changes in applicable securities regulations.
9. Branch Banking and Trust Company shall annually prepare a written report to
be presented to the Board of each Fund for which it is Investment Adviser
detailing any violations of the Code of Ethics. A certification shall also
be provided that BB&T has adopted procedures reasonably necessary to
prevent its Portfolio Managers, Investment Personnel, and Access Persons
from violating its Code of Ethics.
10. This Code of Ethics, a copy of each Personal Securities Holding Report and
Personal Securities Transactions Report by the parties covered in the Code,
any written report prepared by the Director of Corporate Compliance, and
lists of all persons required to make reports shall be preserved with
Branch Banking and Trust Company for the period required by Rule 17j-1
under the Investment Company Act of 1940.
Adopted _________________, 2000
The Board of Directors
Branch Banking and Trust Company
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1 Portfolio Managers of a fund have the responsibility and authority either
individually, or as part of a team, to make decisions about fund investments,
while Investment Personnel include the analysts and traders who provide
information and advice to a portfolio manager or who help execute the portfolio
manager's decisions. Access persons are those, who in the course of their normal
workplace duties, obtain information about the funds' purchases and sales of
securities.
2 Note: This prohibition applies regardless of portfolio holdings or securities
transactions of a Fund.
3 Beneficial ownership of a security is determined in the same manner as it
would be for the purposes of Section 16 of the Securities Exchange Act of 1934,
except that such determination should apply to all securities. Generally, a
person should consider himself the beneficial owner of securities held by his
spouse, his minor children, a relative who shares his home, or other persons if
by reason of any contact, understanding, relationship agreement or other
arrangement, he obtains from such ownership. He should also consider himself the
beneficial owner of securities if he can invest or revest title in himself now
or in the future.
