UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, For Use by the
[ ] Definitive Proxy Statement Commission Only (as permitted
[ ] Definitive Additional Materials by Rule 14a-6(e)(2))
[ ] Soliciting Material Under Rule 14a-12
Nations LifeGoal Funds, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
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(2) Aggregate number of securities to which transaction applies: N/A
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined): N/A
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(4) Proposed maximum aggregate value of transaction: N/A
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[ ] 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: N/A
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Notes:
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NATIONS LIFEGOAL FUNDS, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
Telephone: 800-653-9427
January 20, 2001
DEAR SHAREHOLDER:
On behalf of the Board of Directors of Nations LifeGoal Funds, Inc. (the
"Company"), we are pleased to invite you to special meetings of shareholders of
Nations LifeGoal Growth Portfolio, Nations LifeGoal Balanced Growth Portfolio
and Nations LifeGoal Income and Growth Portfolio (each a "Fund" and
collectively, the "Funds") to be held jointly at 10:00 a.m., Eastern time, on
April 12, 2001, at One Bank of America Plaza, 101 South Tryon Street, 33rd
Floor, Charlotte, North Carolina (the "Meetings"). At the Meetings, you will be
asked to approve the proposed reorganization (the "Reorganization") of your Fund
into a successor mutual fund in Nations Funds Trust, another registered
investment company within the Nations Funds family.
Your new mutual fund (each a "Successor Fund" and collectively, the
"Successor Funds") will have the same name, investment objective, investment
adviser, investment sub-adviser, principal investment strategies and investment
risks as those of your current Fund. In addition, the Reorganization will not
result in any change to the total operating expense ratios (before and after
voluntary waivers and/or reimbursements) of the various classes of shares.
Similarly, the features and services that are available to you today will
continue to be available to you as a Successor Fund shareholder after the
Reorganization.
The Reorganization offers several benefits. First, the Reorganization is
one part of a broader initiative to reduce the number of registered investment
companies in the Nations Funds family. If shareholders of all of the Funds
approve the Reorganization, the Company would be dissolved and deregistered.
Reducing the number of registered investment companies in the Nations Funds
family may allow it and the Successor Funds to achieve cost savings by reducing
certain accounting, legal and securities registration costs. Also, the Successor
Funds will be part of a Delaware business trust, which generally offers greater
advantages than a Maryland corporation like the Company. Finally, the Successor
Funds also will have more flexibility in their investment policies, including
policies that permit them to adopt a "master-feeder" structure. A master-feeder
structure, if adopted in the future, would allow a Successor Fund to combine its
assets with those of other similar funds, thereby potentially achieving
economies of scale and other benefits that come from greater asset size.
If shareholder approval is obtained and the other conditions to the
Reorganization are satisfied, it is anticipated that your Fund would be
reorganized into its corresponding Successor Fund on or about June 8, 2001, when
your Fund shares would be exchanged for shares of the same class of shares of
the corresponding Successor Fund of equal dollar value. Each Fund will then be
terminated and liquidated, and, if shareholders of all Funds approve the
Reorganization, the Company will be dissolved and deregistered. The exchange in
shares in the Reorganization is expected to be tax-free under federal law.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO
APPROVE THE PROPOSED REORGANIZATION.
<PAGE>
The formal Notice of Special Meetings, Proxy Statement and Proxy Ballot(s)
are enclosed. The proposed Reorganization and the reasons for the unanimous
recommendation of the Company's Board are discussed in more detail in the
enclosed materials, which you should read carefully. If you have any questions
about the Reorganization, please do not hesitate to contact us at the toll-free
number set forth above.
We look forward to your attendance at the Meetings or to receiving your
Proxy Ballot(s) so that your shares may be voted at the Meetings.
Sincerely,
A. MAX WALKER
President and Chairman of the Board
of Directors of Nations LifeGoal
Funds, Inc.
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU
OWN. PLEASE VOTE BY SUBMITTING YOUR PROXY BALLOT(S) TODAY, EITHER IN THE
ENCLOSED POSTAGE-PAID ENVELOPE OR BY FAX AT (704) 388-2641. YOU MAY ALSO
SUBMIT YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED
BELOW.
Two Quick And Easy Ways To Submit Your Proxy
As a valued Fund shareholder, your proxy vote is important to us. That's why
we've made it faster and easier to submit your proxy at your convenience, 24
hours a day. After reviewing the enclosed Proxy Statement select one of the
following quick and easy methods to submit your proxy -- accurately and
quickly.
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Vote On-Line Vote By Toll-Free Phone Call
1. Read the enclosed Proxy Statement and have 1. Read the enclosed Proxy Statement and have
your Proxy Ballot(s)* at hand. your Proxy Ballot(s)* at hand.
2. Go to Web site www.proxyvote.com 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found on 3. Enter the 12-digit Control Number found on
your Proxy Ballot(s). your Proxy Ballot(s).
4. Submit your proxy using the easy-to-follow 4. Submit your proxy using the easy-to-follow
instructions. instructions.
</TABLE>
* Do not mail the Proxy Ballot(s) if submitting your Proxy by Internet, fax or
telephone.
<PAGE>
NATIONS LIFEGOAL FUNDS, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-653-9427
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NOTICE OF SPECIAL MEETINGS OF SHAREHOLDERS
To Be Held on April 12, 2001
---------------------------------------------
TO NATIONS LIFEGOAL GROWTH PORTFOLIO, NATIONS LIFEGOAL BALANCED GROWTH PORTFOLIO
AND NATIONS LIFEGOAL INCOME AND GROWTH PORTFOLIO SHAREHOLDERS:
PLEASE TAKE NOTE THAT special meetings ("Meetings") of shareholders of
Nations LifeGoal Growth Portfolio, Nations LifeGoal Balanced Growth Portfolio
and Nations LifeGoal Income and Growth Portfolio (each a "Fund" and
collectively, the "Funds") of Nations LifeGoal Funds, Inc. (the "Company") will
be held jointly at 10:00 a.m., Eastern time, on April 12, 2001, at One Bank of
America Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina,
for the purpose of considering and voting upon:
ITEM 1. A proposed agreement and plan of reorganization dated as of January
20, 2001 (the "Reorganization Agreement"), by and between the Company, on
behalf of the Funds, and Nations Funds Trust, on behalf of corresponding
mutual funds (each a "Successor Fund" and collectively, the "Successor
Funds"). The Reorganization Agreement provides for the transfer of the
assets and liabilities of each Fund to a corresponding Successor Fund, in
exchange for shares of equal value of designated classes of the
corresponding Successor Fund, and the dissolution and deregistration of the
Company.
ITEM 2. Such other business as may properly come before the Meetings or any
adjournment(s).
YOUR DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
Shareholders of record as of the close of business on January 15, 2001 are
entitled to notice of, and to vote at, the Meetings or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE THE ACCOMPANYING PROXY BALLOT(S), WHICH IS BEING SOLICITED BY
THE BOARD OF DIRECTORS OF NATIONS LIFEGOAL FUNDS, INC. THIS IS IMPORTANT TO
ENSURE A QUORUM AT THE MEETINGS. SHAREHOLDERS ALSO MAY SUBMIT THEIR PROXIES: 1)
BY FAX AT (704) 388-2641; 2) BY TELEPHONE AT (800) 690-6903; OR 3) ON-LINE AT
WEBSITE WWW.PROXYVOTE.COM. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE
EXERCISED BY SUBMITTING TO THE COMPANY A WRITTEN NOTICE OF REVOCATION OR A
SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE MEETINGS AND VOTING IN PERSON.
By Order of the Board of Directors,
RICHARD H. BLANK, JR.
Secretary of Nations LifeGoal Funds, Inc.
January 20, 2001
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PROXY STATEMENT
Dated January 20, 2001
NATIONS LIFEGOAL FUNDS, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-653-9427
This Proxy Statement ("Proxy") is furnished in connection with the
solicitation of proxies by the Board of Directors of Nations LifeGoal Funds,
Inc. (the "Company") at special meetings of shareholders of Nations LifeGoal
Growth Portfolio, Nations LifeGoal Balanced Growth Portfolio and Nations
LifeGoal Income and Growth Portfolio (each, a "Fund" and collectively, the
"Funds"). The Board of Directors of the Company is sometimes referred to as the
"Board." The special meetings and any adjournment(s) are referred to as the
"Meetings." The Meetings have been called to consider the following proposal:
ITEM 1. A proposed agreement and plan of reorganization dated as of January
20, 2001 (the "Reorganization Agreement"), by and between the Company, on
behalf of the Funds, and Nations Funds Trust, on behalf of corresponding
mutual funds (each a "Successor Fund" and collectively, the "Successor
Funds"). The Reorganization Agreement provides for the transfer of the assets
and liabilities of each Fund to a corresponding Successor Fund, in exchange
for shares of equal value of designated classes of the corresponding
Successor Fund and, if all shareholders of all Funds approve the
Reorganization, the dissolution and deregistration of the Company.
ITEM 2. Such other business as may properly come before the Meetings or any
adjournment(s).
Each Successor Fund is referred to as a "successor" because each was
created to receive the assets and liabilities and to continue the operations of
its corresponding Fund. While there are some differences between the Funds and
their corresponding Successor Funds, which are discussed below, an investment in
a Successor Fund will be considered substantially the same as an investment in
its corresponding Fund.
Additional information about the Funds is available in their:
o Prospectuses;
o Statement of Additional Information, or SAI; and
o Annual and Semi-Annual Reports to shareholders.
All of this information is in documents filed with the Securities and
Exchange Commission (the "SEC"). The annual reports to shareholders for the
fiscal year ended March 31, 2000 and semi-annual reports to shareholders for the
fiscal period ended September 30, 2000 previously have been mailed to
shareholders.
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Additional copies are available without charge by writing the address given
above or by calling 1-800-321-7854. Documents also are available on the website
of the SEC at www.sec.gov.
Copies of the effective prospectuses of the Successor Funds will be
provided to shareholders at the time the Reorganization is consummated.
Shareholders may, after the Reorganization, obtain copies of the Statement of
Additional Information relating to the Successor Funds without charge by
calling 1-800-321-7854 or by writing the Company at: Nations LifeGoal Funds,
Inc., c/o Stephens Inc., One Bank of America Plaza, 33rd Floor, Charlotte,
North Carolina 28255.
It is expected that this Proxy will be mailed to shareholders on or about
January 20, 2001.
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THE REORGANIZATION
The Company's Board of Directors has called the Meetings to ask
shareholders to consider and vote on one proposal -- approval of the
Reorganization Agreement. Please be sure to read the entire Proxy to determine
how the Reorganization will affect your investment before casting your vote.
Description of the Proposal
At the Meetings, the shareholders of each of the Funds will be asked to
approve the Reorganization. If shareholder approval is obtained, and the other
conditions to the closing of the Reorganization (the "Closing") are met,
shareholders will receive shares of the same class of the corresponding
Successor Fund equal in value to their holdings of Fund shares immediately
before the Reorganization. Each Fund will then be terminated and liquidated,
and, if shareholders of all Funds approve the Reorganization, the Company will
be dissolved under Maryland law and deregistered under the Investment Company
Act of 1940, as amended (the "1940 Act").
Each Successor Fund will have the same name, investment objective,
investment adviser, investment sub-adviser, principal investment strategies and
investment risks as its corresponding Fund. In addition, the Reorganization will
not result in any change to the total operating expense ratios (before and after
voluntary waivers and/or reimbursements) of the various classes of shares.
Similarly, the features and services that are available to Fund shareholders
today will continue to be available to Successor Fund shareholders after the
Reorganization. However, the Successor Funds differ in some respects from the
Funds, and these differences are described in more detail below.
It is possible that a majority of a Fund's shareholders entitled to vote do
not approve the Reorganization. In such a case, shareholders will retain their
shares in their Fund and the Board of Directors will contemplate what further
action is appropriate. If one Fund does not approve the Reorganization, the
Nations Funds family will not be able to dissolve and deregister the Company.
The Meetings are scheduled for April 12, 2001, and the Reorganization, if
approved, is expected to occur on or about June 8, 2001.
Description of the Reorganization Agreement
The Reorganization Agreement is the governing document of the
Reorganization. Among other things, it provides for (i) the transfer of all of
the assets and liabilities of each Fund to its corresponding Successor Fund in
exchange for shares of equal value of the same classes of the Successor Fund;
and (ii) the distribution of such Successor Fund shares to shareholders of the
respective Fund in liquidation of that Fund. The completion of the
Reorganization is conditioned upon the Company and Nations Funds Trust ("Funds
Trust") receiving an opinion from Morrison & Foerster LLP that the exchange of
shares contemplated under the Reorganization will be tax-free under federal
income tax law. The Reorganization Agreement includes a
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number of other conditions for completion of the Reorganization, sets forth
representations and warranties of the parties and describes the mechanics of the
transaction.
The Reorganization also provides that the Reorganization may be abandoned
at any time before the Closing upon the mutual consent of the Company and Funds
Trust. At any time before or (to the extent permitted by law) after approval of
the Reorganization Agreement by Fund shareholders: (i) the parties may, by
written agreement authorized by the Company's Board of Directors and Funds
Trust's Board of Trustees and with or without the approval of their
shareholders, amend any of the provisions of the Reorganization Agreement and
(ii) either party may waive any default by the other party or the failure to
satisfy any of the conditions to its obligations (the waiver to be in writing
and authorized by the Company's Board of Directors or Funds Trust's Board of
Trustees with or without the approval of the parties' shareholders).
Upon completion of the Reorganization, all outstanding shares of each Fund
will be canceled. Exchange or redemption requests received thereafter will be
deemed to be exchange or redemption requests for shares of the corresponding
Successor Fund. At Closing, the assets of each Fund will be transferred to the
corresponding Successor Fund as described above.
The Reorganization Agreement provides that Banc of America Advisors, Inc.
("BAAI"), the investment adviser to each of the Funds, and/or its affiliates,
will bear all customary expenses associated with the Reorganization. Neither the
Funds nor their shareholders will bear any of these costs.
A copy of the Reorganization Agreement is available at no charge by calling
or writing the Company at the toll-free number or address listed on the first
page of the Proxy. Copies of the Reorganization Agreement are also available at
the SEC's website (www.sec.gov).
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT FUND
SHAREHOLDERS VOTE FOR THE REORGANIZATION AGREEMENT.
Reasons for the Reorganization
The Reorganization offers several benefits to Fund shareholders:
o The Reorganization is part of a broader initiative to streamline the
operations of the Nations Funds family, which currently consists of several
registered investment companies. Over time, management expects to reduce
the number of registered investment companies in the Nations Funds family
without necessarily impacting investment alternatives. Management believes
that if it were permitted to operate the same number of mutual funds with
fewer registered investment companies, certain efficiencies and benefits to
shareholders in the Nations Funds family should accrue over the long term.
These benefits may include, among other things, cost savings relating to
the reduction of certain accounting, legal and securities registration
costs. The Reorganization is designed, in effect, to convert the Funds from
the only three series of a separate corporation to three of many series
within a registered investment company -- Funds Trust. As the Funds are the
Company's only operating series, the Reorganization would allow management
to de-register and dissolve the Company. If the Reorganization is not
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approved and management is unable to dissolve and de-register the Company,
Fund shareholders would not enjoy the expected efficiencies and benefits of
operating the Funds as part of a registered investment company with many
discreet mutual funds.
o The Successor Funds will be part of a Delaware business trust, which
generally has more flexibility in its operations than a Maryland
corporation like the Company. As part of Funds Trust, the Successor Funds
would have greater flexibility in their investment policies, including
policies that permit them to adopt a "master-feeder" structure. A
master-feeder structure, if adopted in the future, would allow the
Successor Funds to combine their assets with those of other similar funds,
thereby potentially achieving economies of scale and other benefits that
come from greater asset size. Also, as part of Funds Trust, the Successor
Funds would be governed under a more flexible charter document which could
be amended by Funds Trust's Board without the necessity of soliciting
shareholders, thereby otherwise saving costs relating to proxy
solicitations on certain routine matters.
o Neither Fund nor Successor Fund shareholders will bear any of the customary
costs associated with the Reorganization, including solicitation costs.
In addition, the Reorganization will not result in any change to the total
operating expense ratios (before and after voluntary waivers and/or
reimbursements) of the various classes of each Fund. Similarly, the features and
services that are available to Fund shareholders today will also be available to
Successor Fund shareholders after the Reorganization. The exchange of shares in
the Reorganization is expected to be tax-free under federal law.
Board Consideration
The Company's Board of Directors unanimously voted to approve the
Reorganization Agreement at a meeting held on August 23, 2000. During
deliberations, the Board (with the advice and assistance of independent counsel)
reviewed and considered, among other things: (1) the various aspects of the
Reorganization and the Reorganization Agreement; (2) the Reorganization as part
of a broader initiative to streamline the operations of the Nations Funds
family; (3) the fact that the Successor Funds, as part of Funds Trust, would
have greater flexibility in their investment policies and would be governed
under a more flexible charter document which could be amended by the Board
without the necessity of soliciting shareholders, thereby otherwise saving costs
relating to proxy solicitations on certain routine matters; (4) the investment
objective, principal investment strategies and investment risks of the Funds and
their corresponding Successor Funds are identical; (5) the anticipated tax-free
nature of the exchange of shares in the Reorganization; (6) the fact that total
operating expense ratios (before and after voluntary waivers and/or
reimbursements) charged to each Successor Fund class after the Reorganization
would be no higher than that of the corresponding Fund class prior to the
Reorganization; (7) the fact that the expenses associated with the
Reorganization would not be borne by Fund or Successor Fund shareholders; (8)
that shareholders would remain invested in a Fund, and the Company would not
dissolve and deregister, if a Fund's shareholders did not approve the
Reorganization; and (8) potential benefits of the Reorganization, if any, to
other persons, including BAAI and its affiliates (e.g., the benefit of
consolidating resources within BAAI and its affiliates).
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Based upon its evaluation of the information presented to it, and in light
of their fiduciary duties under federal and state law, the Company's Board of
Directors, including all of the non-interested directors, determined that
participation in the Reorganization, as contemplated by the Reorganization
Agreement, was in the best interests of each Fund, and that the shares of each
Fund will not be diluted as a result of the Reorganization.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT FUND
SHAREHOLDERS VOTE TO APPROVE THE REORGANIZATION AGREEMENT.
Comparison of the Funds and Successor Funds
As noted above, there are some differences between the Funds and their
corresponding Successor Funds, which are summarized below:
o After the Reorganization, Fund shareholders will hold shares in series of
Funds Trust, a registered investment company in the Nations Funds family.
Unlike the Company, which is a Maryland corporation, Funds Trust is a
Delaware business trust.
o The Funds and the Successor Funds will have somewhat different fundamental
and non-fundamental investment policies. As part of Funds Trust, the
Successor Funds will have greater flexibility in their investment policies.
Comparison of Forms of Business Organization
Federal securities laws largely govern the way that mutual funds operate,
but they do not cover every aspect of a fund's existence and operation. State
law and a fund's governing documents fill in most of the gaps and typically
create additional operational rules and restrictions that funds must follow. As
noted, the Company is a Maryland corporation. The proposed Reorganization would
reorganize each Fund into a series of Funds Trust, which is a Delaware business
trust. There are few differences between these forms of organization although
one advantage to a Delaware business trust is its potentially greater
flexibility. Generally, under Delaware business trust law, a mutual fund's
governing instrument, called a declaration of trust, may establish the way it
will operate with few state law requirements or prohibitions. Thus, mutual funds
organized in Delaware generally have more flexibility in their operations and
certainty about any operational restrictions because the restrictions are
written in the fund's declaration of trust.
The following discussion outlines some of the differences between the state
law and documents currently governing the Company's Funds and that which apply
to the Successor Funds as series of Funds Trust.
o The Board of Trustees. Maryland corporations are governed by a Board of
Directors. The Successor Funds, as part of a business trust, instead will
be governed by a Board of Trustees. The Board of Funds Trust will have
eleven Trustees, all eleven of whom currently serve as Directors of the
Company.
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o Governing Documents. Maryland corporations are governed by organizational
documents called articles of incorporation (or sometimes called a charter)
and by-laws. Delaware business trusts are governed by a similar set of
documents, called a declaration of trust and by-laws. These governing
documents are generally similar, although there are some differences. For
example, in order for the Company to dissolve under Maryland law, its
Articles of Incorporation and By-Laws provide (and Maryland law requires)
that a majority of all outstanding shares of the Company must approve such
a dissolution. The Declaration of Trust of Funds Trust provides that Funds
Trust, or any series of Funds Trust, may be dissolved at any time by the
Board of Funds Trust with written notice to shareholders. In addition,
Funds Trust's Declaration of Trust, as permitted by Delaware law, provides
that shareholders of series of Funds Trust would be entitled to vote on
mergers, acquisitions and consolidations involving such series, only to the
extent required by federal securities law. By limiting mandatory
shareholder votes to those matters expressly required under the federal
securities laws, the Funds will save costs by not having to schedule
special shareholder meetings and solicit shareholder proxies. Although,
shareholders of series of Funds Trust will no longer have certain rights
outlined above, it is anticipated that the Successor Funds will benefit
from a reduction in expenses associated with potential proxy solicitations
on these matters.
In general, however, the attributes of a share of common stock are
comparable to those of a share of beneficial interest, i.e., shares of both
are entitled to one vote per share held and fractional votes for fractional
shares held, and will vote in the aggregate and not by portfolio or class
except as otherwise required by law or when class voting is permitted by
its Board.
o Shareholder Liability. Under Maryland law, Fund shareholders are not
personally liable for the Fund's debts. The charter of Funds Trust, which
governs the Successor Funds, provides the same protection.
Comparison of Investment Policies and Restrictions
Each Fund's investment objective, principal investment strategies and
investment risks will not change as a result of the Reorganization. However, as
noted, the Successor Funds will have a more streamlined set of fundamental and
non-fundamental investment policies and restrictions. Some of each Fund's
current investment policies and restrictions may limit its portfolio manager
from investing in a security that is both consistent with the investment
objective of such Fund and that may be a good investment. One reason for
changing some of these investment policies is to remove restrictions that
unnecessarily hamper the portfolio manager's investment discretion. Many of
these restrictions were put in place by the Funds as a result of the directives
of various state securities commissions. Changes to federal securities laws have
superseded these directives. Another reason is the desire to migrate towards
uniform investment policies for all funds in the Nations Funds family.
One of the differences between the Successor Funds' fundamental policies
and those of the Funds is that the Successor Funds will have the ability under
its fundamental policies to invest all of its assets in a master portfolio
rather than in individual securities.
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For a detailed comparison of the fundamental investment policies and
limitations of the Funds and Successor Funds see Appendix I to this Proxy.
OTHER INFORMATION ABOUT THE REORGANIZATION
Investment Adviser and Other Service Providers
The Funds and Successor Funds have the same service providers. Upon
completion of the Reorganization, these service providers will continue to serve
the Successor Funds in the capacities indicated below.
Service Providers for the Fund and the Successor Fund
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Investment Adviser BAAI
Investment Sub-Adviser Banc of America Capital Management, Inc.
Distributor Stephens Inc.
Co-Administrator BAAI
Co-Administrator Stephens Inc.
Sub-Administrator The Bank of New York
Custodian Bank of America, N.A. ("Bank of America")
Transfer Agent PFPC Inc.
Sub-Transfer Agent Bank of America (for Primary A and B shares
only)
Independent Auditors PricewaterhouseCoopers LLP
</TABLE>
BAAI and the Funds are currently seeking an exemptive order from the SEC
that would permit BAAI to engage a different or additional sub-adviser for a
Fund or to continue the engagement of a sub-adviser who has experienced a change
in its ownership or corporate structure or under an agreement that has
materially changed, with the approval of the respective Fund's Board, but
without submitting the sub-advisory change to a vote of the Fund's shareholders,
under certain circumstances. If this exemptive order is granted and the proposed
Reorganization is approved, the Funds or BAAI will inform shareholders of any
such sub-advisory change, which may include: (i) engaging new or additional
sub-advisers, (ii) terminating or replacing one or more sub-advisers, or (iii)
materially amending an existing sub-advisory agreement. Until this exemptive
order is granted and the proposed Reorganization is approved, consistent with
applicable law, the Funds will continue to submit any such sub-advisory changes
to the Funds' shareholders for approval.
Comparison of Fees and Expenses
The Reorganization will not result in any change to the total operating
expense ratios (before and after voluntary waivers and/or reimbursements) of the
various classes.
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Comparison of Purchase, Redemption, Distribution and Exchange Policies and
Other Shareholder Transactions and Services
As a result of the Reorganization Fund shareholders will hold shares of the
same class of the corresponding Successor Fund as they held in each Fund. For
example, a Fund shareholder who owns Investor A shares will, immediately after
the Reorganization, hold Investor A shares in the corresponding Successor Fund.
Accordingly, all of the purchase, redemption, distribution, exchange policies
and other shareholder transactions and services applicable to a shareholder's
share class will remain unaffected and unchanged by the Reorganization. As
noted, no sales charge or sales load will be imposed in connection with the
exchange of shares in the Reorganization.
Accounting Treatment of the Reorganization
The Successor Funds will become the accounting successor of their
corresponding Fund as of the Closing, which means that the financial statements
and performance history of each Fund and its classes will become those of the
corresponding Successor Fund and its corresponding classes as though such
financial statements and performance history were that Successor Fund's own.
Federal Income Tax Consequences
As noted, the exchange of shares in the Reorganization is expected to be
tax free under federal income tax law.
The following discussion summarizes the material federal income tax
consequences of the Reorganization that are applicable to Fund shareholders. It
is based on the Internal Revenue Code of 1986, as amended (the "Code"),
applicable Treasury Regulations, judicial authority, and administrative rulings
and practice, all as of the date of this Proxy and all of which are subject to
change, including changes with retroactive effect. The discussion below does not
address any state, local or foreign tax consequences of the Reorganization. A
Fund shareholder's tax treatment may vary depending upon his or her particular
situation.
The obligation of the Funds and the Successor Funds to consummate the
Reorganization is conditioned upon the receipt by the Company and Funds Trust of
an opinion of Morrison & Foerster LLP reasonably acceptable to the Company and
Funds Trust substantially to the effect that, on the basis of the
representations set forth or referred to in the opinion, the Reorganization,
with respect to each Fund and its corresponding Successor Fund, will be treated
for federal income tax purposes as a tax-free reorganization under Section
368(a) of the Code and that the Fund and its corresponding Successor Fund will
each be a party to a reorganization within the meaning of Section 368(b) of the
Code. Provided that the Reorganization so qualifies and each Fund and its
corresponding Successor Fund are so treated:
o Neither the Funds nor the Successor Funds will recognize any gain or loss
as a result of the Reorganization.
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o A Fund shareholder will not recognize any gain or loss as a result of the
receipt of Successor Fund shares in exchange for such shareholder's Fund
shares pursuant to the Reorganization.
o A Fund shareholder's aggregate tax basis for the Successor Fund shares
received pursuant to the Reorganization will equal such shareholder's
aggregate tax basis in Fund shares held immediately before the
Reorganization.
o A Fund shareholder's holding period for the Successor Fund shares received
pursuant to the Reorganization will include the period during which the
Fund shares are held.
The tax opinion of Morrison & Foerster LLP described above is based upon
facts, representations and assumptions to be set forth or referred to in the
opinion and the continued accuracy and completeness of representations made by
the Company, on behalf of the Funds, and Funds Trust, on behalf of the Successor
Funds, including representations in certificates to be delivered to Morrison &
Foerster LLP by the management of each of the Company and Funds Trust, which if
incorrect in any material respect would jeopardize the conclusions reached by
Morrison & Foerster LLP in the opinion. In addition, in the event that the
Company and Funds Trust are unable to obtain the tax opinion, they are permitted
under the Reorganization Agreement to waive the receipt of such tax opinion as a
condition to their obligation to consummate the Reorganization.
A Fund shareholder may also be subject to special rules not discussed below
if you are a certain kind of shareholder, including: an insurance company; a
tax-exempt organization; a financial institution or broker-dealer; a person who
is neither a citizen nor resident of the United States or entity that is not
organized under the laws of the United States or political subdivision thereof;
a holder of Fund shares as part of a hedge, straddle or conversion transaction;
or a person that does not hold Fund shares as a capital asset at the time of the
Reorganization.
Neither the Company nor Funds Trust has requested or will request an
advance ruling from the Internal Revenue Service as to the federal income tax
consequences of the Reorganization or any related transaction. The Internal
Revenue Service may adopt positions contrary to that discussed below and such
positions could be sustained. A Fund shareholder is urged to consult with its
own tax advisors and financial planners as to the particular tax consequences of
the Reorganization to the Fund shareholder, including the applicability and
effect of any state, local or foreign laws, and the effect of possible changes
in applicable tax laws.
Regardless of whether the acquisition of the assets and liabilities of each
Fund by the corresponding Successor Fund qualifies as a tax-free reorganization
as described above, the sale of securities by the Fund prior to the
Reorganization, whether in the ordinary course of business or in anticipation of
the Reorganization, could result in a taxable distribution to Fund shareholders.
Since its formation, each Fund and Successor Fund believes it has qualified
as a separate "regulated investment company" under the Code. Accordingly, each
Fund and Successor Fund believes it has been, and expects to continue to be,
relieved of federal income tax liability on its taxable income distributions to
its shareholders.
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VOTING MATTERS
General Information
This Proxy is being furnished in connection with the solicitation of
proxies for the Meetings by the Board. It is expected that the solicitation of
proxies will be primarily by mail. Officers and service contractors of the
Company also may solicit proxies by telephone or otherwise. In this connection,
the Company has retained ADP Proxy Services to assist in the solicitation of
proxies. Shareholders may submit their proxy: (1) by mail, by marking, signing,
dating and returning the enclosed proxy ballot(s) in the enclosed postage-paid
envelope; (2) by fax, by marking, signing, dating and faxing the enclosed proxy
ballot(s) to ADP Proxy Services at (704) 388-2641; (3) by phone at (800)
690-6903; or 4) by on-line voting at www.proxyvote.com. Any shareholder
submitting a proxy may revoke it at any time before it is exercised at the
Meetings by submitting to the Company a written notice of revocation addressed
to the Company at the address shown on the cover page of this Proxy, or a
subsequently executed proxy or by attending the Meetings and voting in person.
Any expenses incurred as a result of hiring ADP Proxy Services or any other
proxy solicitation agent will be borne by BAAI and/or its affiliates.
Only shareholders of record at the close of business on January 15, 2001
will be entitled to vote at the Meetings. On that date, xxx,xxx,xxx shares of
Nations LifeGoal Growth Portfolio, xxx,xxx,xxx shares of Nations LifeGoal
Balanced Growth Portfolio and xxx,xxx,xxx shares of Nations LifeGoal Income and
Growth Portfolio were outstanding and entitled to be voted. Each whole and
fractional share of a Fund is entitled to a whole or fractional vote.
If the accompanying proxy ballot(s) is executed and returned in time for
the Meetings, the shares covered thereby will be voted in accordance with the
proxy on all matters that may properly come before the Meetings.
Quorum
A quorum is constituted with respect to each Fund by the presence in person
or by proxy of the holders of one-third of the outstanding shares of each Fund
entitled to vote at its Meeting.
For purposes of determining the presence of a quorum for transacting
business at the Meetings, abstentions will be treated as shares that are present
at the Meetings but which have not been voted. Accordingly, abstentions will
have the effect of a "no" vote for purposes of obtaining the requisite approvals
of the Reorganization Agreement. Broker "non-votes" (that is, proxies from
brokers or nominees indicating that such persons have not received instructions
from the beneficial owners or other persons entitled to vote shares on a
particular matter with respect to which the brokers or nominees do not have
discretionary power) will be treated the same as abstentions.
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In the event that a quorum is not present for any of the Meetings, or in
the event that a quorum is present at such Meetings but sufficient votes to
approve the Reorganization Agreement are not received by a Fund, one or more
adjournment(s) may be proposed to permit further solicitation of proxies. Any
such adjournment(s) will require the affirmative vote of a majority of those
shares affected by the adjournment(s) that are represented at the Meetings in
person or by proxy. If a quorum is present, the persons named as proxies will
vote those proxies which they are entitled to vote FOR the particular proposal
for which a quorum exists in favor of such adjournment(s), and will vote those
proxies required to be voted AGAINST such proposal against any adjournment(s).
Any adjournment(s) may be held, after the date set for the original Meetings
without notice except announcement at the Meetings, but, under Maryland law, no
more than 120 days after the record date.
Shareholder Approval
The Reorganization Agreement is being submitted for approval at the
Meetings by each Fund's shareholders pursuant to the charter documents of the
Company. The Reorganization Agreement, which contemplates not only the
Reorganization but also the dissolution and deregistration of the Company, must
be approved both by a majority of the shares of a Fund voting and present in
person or by proxy and also a majority of the Funds' outstanding shares voting
in the aggregate. In the event that less than a majority of the outstanding
shares of the Funds, in the aggregate, approve the Reorganization Agreement
preventing the dissolution and deregistration of the Company, but a majority of
the votes cast approves the Reorganization Agreement allowing any Fund(s) to be
reorganized into the respective Successor Fund(s), the Reorganization(s) will
occur with respect to such Fund(s) pursuant to the terms of the Reorganization
Agreement. In such case, the Board of Directors will contemplate what further
action is appropriate.
Principal Shareholders
The table below shows the name, address and share ownership of each person
known to the Company to have ownership with respect to 5% or more of a class of
a Fund as of January 15, 2001. Each shareholder is known to own as of record the
shares indicated below. Any shareholder known to the Company to own such shares
beneficially is designated by an asterisk.
<TABLE>
<CAPTION>
Percentage of
Class; Amount of Percentage Percentage Fund Post
Fund Name and Address Shares Owned of Class of Fund Closing
------ ------------------ ----------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C>
[TBD]
</TABLE>
For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company. Accordingly, to the extent that a
shareholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a class, or is identified as the holder of record of
more than 25% of a class and has voting and/or investment power, it may be
presumed to control such class. As of January 15, 2001, Bank of America had
voting control of [ ]% of Nations LifeGoal Growth Portfolio's outstanding
shares, [ ]% of Nations LifeGoal Balanced Growth Portfolio's outstanding
shares and [ ]% of
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Nations LifeGoal Income and Growth Portfolio's outstanding shares. Accordingly,
Bank of America may be considered to "control" such Funds. The address of Bank
of America is: 1401 Elm Street, 11th Floor, Dallas, TX 75202-2911. Bank of
America's control is likely to increase the chance that the Funds' shareholders
will approve the proposed items.
As of January 15, 2001, the officers and Directors of the Company, as a
group, owned less than 1% of any class of a Fund.
Annual Meetings and Shareholder Meetings
The Company does not presently hold annual meetings of shareholders for the
election of Directors and other business unless otherwise required by the 1940
Act.
OTHER BUSINESS
The Board knows of no other business to be brought before the Meetings.
However, if any other matters properly come before the Meetings, it is the
intention that proxies which 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.
SHAREHOLDER INQUIRIES
Shareholder inquiries may be addressed to the Company in writing at the
address, or by phone at the phone number, on the cover page of this Proxy.
* * *
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETINGS ARE REQUESTED
TO MARK, SIGN AND DATE THE ENCLOSED PROXY BALLOT(S) AND RETURN IT IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
SHAREHOLDERS ALSO MAY SUBMIT PROXIES BY FAX, TELEPHONE OR ON-LINE.
THE COMPANY WILL FURNISH, WITHOUT CHARGE, COPIES OF THE MARCH 31, 2000
ANNUAL REPORT AND SEPTEMBER 30, 2000 SEMI-ANNUAL REPORT FOR EACH FUND TO ANY
SHAREHOLDER UPON REQUEST ADDRESSED TO: NATIONS LIFEGOAL FUNDS, INC., ONE BANK
OF AMERICA PLAZA, 101 SOUTH TRYON STREET, CHARLOTTE, N.C. 28255 OR BY TELEPHONE
AT 1-800-321-7854.
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APPENDIX I
COMPARISON OF FUNDAMENTAL POLICIES AND LIMITATIONS OF THE FUNDS AND
THE SUCCESSOR FUNDS
Fundamental Investment Policies and Limitations
<TABLE>
<S> <C>
The Funds may not: The Successor Funds may not:
1. Underwrite securities issued by any other 1. Underwrite any issue of securities within the
person, except to the extent that the purchase of meaning of the 1933 Act except when it might
securities and the later disposition of such technically be deemed to be an underwriter
securities in accordance with the Fund's either (a) in connection with the disposition of
investment program may be deemed an a portfolio security, or (b) in connection with
underwriting. This restriction shall not limit a the purchase of securities directly from the
Fund's ability to invest in securities issued by issuer thereof in accordance with its investment
other registered investment companies. objective. This restriction shall not limit the
Fund's ability to invest in securities issued by
other registered investment companies.
2. Invest in real estate or real estate limited 2. Purchase or sell real estate, except a Fund may
partnership interests. (Each Fund may, however, purchase securities of issuers which deal or
purchase and sell securities secured by real invest in real estate and may purchase securities
estate or interests therein or issued by issuers which are secured by real estate or interests in
which invest in real estate or interests therein.) real estate.
This restriction does not apply to real estate
limited partnerships listed on a national stock
exchange (e.g., the New York Stock Exchange).
3. Purchase or sell commodity contracts except 3. Purchase or sell commodities, except that a
that each Fund may, to the extent appropriate Fund may to the extent consistent with its
under its investment policies, purchase publicly investment objective, invest in securities of
traded securities of companies engaging in companies that purchase or sell commodities or
whole or in part in such activities, may enter which invest in such programs, and purchase
into futures contracts and related options, may and sell options, forward contracts, futures
engage in transactions on a when-issued or contracts, and options on futures contracts. This
forward commitment basis, and may enter into limitation does not apply to foreign currency
forward currency contracts in accordance with transactions including without limitation
its investment policies. forward currency contracts.
4. Make loans, except that a Fund may purchase 4. Make loans, except to the extent permitted by
and hold debt instruments (whether such the 1940 Act, the rules and regulations
instruments are part of a public offering or thereunder and any exemptive relief obtained
privately placed), may enter into repurchase by the Funds.
agreements and may lend portfolio securities in
accordance with its investment policies.
</TABLE>
I-1
<PAGE>
<TABLE>
<S> <C>
5. Borrow money or issue senior securities as 5. Borrow money or issue senior securities except
defined in the 1940 Act except that (a) a Fund to the extent permitted by the 1940 Act, the
may borrow money from banks for temporary rules and regulations thereunder and any
or emergency purposes in amounts up to exemptive relief obtained by the Funds.
one-third of the value of such Fund's total
assets at the time of borrowing, provided that
borrowings in excess of 5% of the value of
such Fund's total assets will be repaid prior to
the purchase of additional portfolio securities
by such Fund, (b) a Fund may enter into
commitments to purchase securities in
accordance with the Fund's investment
program, including delayed delivery and
when-issued securities, which commitments
may be considered the issuance of senior
securities, and (c) a Fund may issue multiple
classes of shares in accordance with SEC
regulations or exemptions under the 1940 Act.
The purchase or sale of futures contracts and
related options shall not be considered to
involve the borrowing of money or issuance of
senior securities.
6. The Funds will be diversified and each Fund 6. Purchase securities (except securities issued or
may not purchase securities of any one issuer guaranteed by the U.S. Government, its
(other than securities issued or guaranteed by agencies or instrumentalities) of any one issuer
the U.S. Government, its agencies or instrumen- if, as a result, more than 5% of its total assets
talities or securities of other investment will be invested in the securities of such issuer
companies) if, immediately after such purchase, or it would own more than 10% of the voting
more than 5% of the value of such Fund's total securities of such issuer, except that (a) up to
assets would be invested in the securities of 25% of its total assets may be invested without
such issuer, except that up to 25% of the value regard to these limitations and (b) a Fund's
of the Fund's total assets may be invested assets may be invested in the securities of one
without regard to these limitations and with or more management investment companies to
respect to 75% of such Fund's assets, such the extent permitted by the 1940 Act, the rules
Fund will not hold more than 10% of the and regulations thereunder and any exemptive
voting securities of any issuer. relief obtained by the Funds.
</TABLE>
I-2
<PAGE>
<TABLE>
<S> <C>
7. Each Fund will concentrate its investments in 7. Purchase any securities which would cause 25%
the securities of other investment companies. or more of the value of its total assets at the
time of purchase to be invested in the securities
of one or more issuers conducting their
principal business activities in the same
industry, provided that: (a) there is no limitation
with respect to obligations issued or guaranteed
by the U.S. Government, any state or territory
of the United States, or any of their agencies,
instrumentalities or political subdivisions, and
(b) notwithstanding this limitation or any other
fundamental investment limitation, assets may
be invested in the securities of one or more
management investment companies to the
extent permitted by the 1940 Act, the rules and
regulations thereunder and any exemptive relief
obtained by the Funds.
8. Purchase any securities on margin (except for
such short-term credits as are necessary for the
clearance of purchases and sales of portfolio
securities) or sell any securities short (except
against the box.) For purposes of this
restriction, the deposit or payment by the Fund
of initial or maintenance margin connection
with futures contracts and related options and
options on securities is not considered to be the
purchase of a security on margin.
</TABLE>
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Nations LifeGoal Funds, Inc.
Exhibit Index
Exhibit No. Description
----------- -----------
EX-1 Form of Proxy Ballots
EX-2 Form of Agreement and Plan of Reorganization
