As filed with the Securities and Exchange Commission
on March 7, 2000
Registration No. 333-40265; 811-08481
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Post-Effective Amendment No. 4 [X]
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 5 [X]
(Check appropriate box or boxes)
-----------------------
NATIONS ANNUITY TRUST
(Exact Name of Registrant as specified in Charter)
111 Center Street
Little Rock, Arkansas 72201
(Address of Principal Executive Offices, including Zip Code)
--------------------------
Registrant's Telephone Number, including Area Code: (800) 321-7854
Richard H. Blank, Jr.
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
(Name and Address of Agent for Service)
With copies to:
Robert M. Kurucza, Esq. Carl Frischling, Esq.
Marco E. Adelfio, Esq. Kramer, Levin, Naftalis & Frankel
Morrison & Foerster LLP 919 3rd Avenue
2000 Pennsylvania Ave., N.W. New York, New York 10022
Suite 5500
Washington, D.C. 20006
It is proposed that this filing will become effective (check appropriate box):
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[X] Immediately upon filing pursuant to Rule 485(b); or |_| on (date) pursuant to Rule 485(b), or
|_| 60 days after filing pursuant to Rule 485(a), or |_| on (date) pursuant to Rule 485(a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2) |_| on (date) pursuant to paragraph (a)(2) of
Rule 485
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<PAGE>
EXPLANATORY NOTE
This Post-Effective Amendment No. 4 to the Registration Statement of
Nations Annuity Trust (the "Trust") is being filed for the purpose of filing all
of the Trust's corporate documents and agreements. The prospectuses and
Statement of Additional Information for the Trust is hereby incorporated by
reference Post-Effective Amendment No. 3, filed on February 15, 2000.
<PAGE>
NATIONS ANNUITY TRUST
CROSS REFERENCE SHEET
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Part A
Item No. Prospectus
- -------- -----------
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1. Front and Back Cover Pages................................ Front and Back Cover Pages
2. Risk/Return Summary: Investments, Risks,
and Performance ........................................... About this Prospectus
3. Risk/Return Summary: Fee Table............................ Not Applicable
4. Investment Objectives, Principal Investment
Strategies, and Related Risks.............................. About the Equity Portfolios; About
the Managed Index Portfolios; About
the Balanced Portfolio; Other
Important Information
5. Management's Discussion of Fund Performance................ Not Applicable
6. Management, Organization, and
Capital Structure........................................... How the Portfolios are Managed;
About Your Investment: Information
for Investors
7. Shareholder Information .................................... About Your Investment: Information
for Investors
8. Distribution Arrangements .................................. About Your Investment: Information
for Investors
9. Financial Highlights Information ........................... About Your Investment: Financial
Highlights
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Part B
Item No.
- ---------
10. Cover Page and Table of Contents............................ Cover Page and Table of Contents
11. Fund History................................................ Introduction
12. Description of the Fund and
Its Investments and Risks................................... Additional Information on Portfolio
Investments
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13. Management of the Fund...................................... Trustees And Officers; Investment
Advisory, Administration, Custody Transfer
Agency, Shareholder Servicing and
Distribution Agreements
14. Control Persons and Principal
Holders of Securities....................................... Not Applicable
15. Investment Advisory and Other Services...................... Investment Advisory,
Administration, Custody, Transfer Agency,
Shareholder Servicing And Distribution
Agreements
16. Brokerage Allocation and Other Practices.................... Portfolio Transactions and
Brokerage--General Brokerage Policy
17. Capital Stock and Other
Securities ................................................. Description Of Shares;
Investment Advisory, Administration,
Custody, Transfer Custody, Transfer
Agency, Shareholder Servicing And
Distribution Agreements
18. Purchase, Redemption and Pricing
of Shares.................................................. Net Asset Value -- Purchases
And Redemptions;
Distributor
19. Taxation of the Fund........................................ Additional Information Concerning
Taxes
20. Underwriters................................................ Investment Advisory,
Administration Custody, Transfer Agency
Shareholder Servicing And Distribution
Agreements; Distributor
21. Calculation of Performance Data............................. Additional Information on
Performance
22. Financial Statements........................................ Independent Accountant and
Reports
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<PAGE>
Part C
Item No. Other Information
- -------- -------------------
Information required to be included in
Part C is set forth under the
appropriate Item, so numbered, in Part C
of this Document
<PAGE>
NATIONS ANNUITY TRUST
ONE BANK OF AMERICA PLAZA
33rd Floor
Charlotte, NC 28255
1-800-626-2275
FORM N-1A
PART C
OTHER INFORMATION
ITEM 23. Exhibits
All references to the "Registration Statement" in the following
list of Exhibits refer to the Registrant's Registration Statement on Form N-1A
(File Nos. 33-40265; 811-08481)
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Exhibit Letter Description
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(a) Articles of Incorporation:
(a)(1) Amended and Restated Declaration of Trust dated February 5, 1998, filed herewith.
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(b) Bylaws:
(b)(1) Amended and Restated Bylaws dated February 5, 1998, last
amended November 17, 1999, filed herewith.
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(c) Instruments Defining Rights of Securities Holders:
Not Applicable
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(d) Investment Advisory Contracts:
(d)(1) Investment Advisory Agreement between Banc of America Advisors, Inc. (formerly
NationsBanc Advisors, Inc.) ("BAAI") and Nations Annuity Trust ("Registrant")
dated February 25, 1998, Schedule I dated May 21, 1999, filed herewith.
(d)(2) Sub-Advisory Agreement among BAAI, Banc of America Capital Management, Inc.
(formerly TradeStreet Investment Associates, Inc.) ("BACAP") and the Registrant
dated February 25, 1998, filed herewith.
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Exhibit Letter Description
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(d)(3) Sub-Advisory Agreement among BAAI, Marsico Capital Management, Inc. ("Marsico") and
the Registrant dated February 8, 1999, filed herewith.
(d)(4) Sub-Advisory Agreement among BAAI, Gartmore Global
Partners ("Gartmore") and the Registrant dated February
25, 1998, filed herewith.
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(e) Underwriting Contract:
(e)(1) Distribution Agreement between the Registrant and Stephens Inc. ("Stephens") dated
February 25, 1998, filed herewith.
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(f) Bonus or Profit Sharing Contracts:
Deferred Compensation Plan dated August 6, 1997, filed herewith.
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(g) Custodian Agreements:
(g)(1) Custody Agreement between the Registrant and The Bank of
New York ("BNY") dated October 19, 1998, filed herewith.
(g)(2) Amendment to the Custody Agreement dated September 1, 1999, filed herewith.
(g)(3) Amendment to the Custody Agreement dated February 14, 2000, filed herewith.
- ---------------------- -------------------------------------------------------------------------------------
(h) Other Material Contracts:
(h)(1) Co-Administration Agreement among the Registrant, Stephens and BAAI dated
December 1, 1998, filed herewith.
(h)(2) Sub-Administration Agreement among the Registrant, BNY
and BAAI dated December 1, 1998, filed herewith.
(h)(3) Transfer Agency and Services Agreement between PFPC Inc. (formerly First Data
Investor Services Group, Inc.) ("PFPC") and the Nations Funds family dated June 1,
1995, Schedule G dated February 14, 2000, filed herewith.
(h)(4) Adoption Agreement and Amendment to Transfer Agency and
Service Agreement dated February 25, 1998, filed
herewith.
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Exhibit Letter Description
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(h)(5) Amendment to Transfer Agency and Services Agreement dated December 1, 1999, filed
herewith.
(h)(6) Participation Agreement with Hartford Life Insurance
Company dated March 13, 1998, filed herewith.
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(i) Legal Opinion
Not Applicable
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(j) Other Opinions
Not Applicable
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(k) Omitted Financial Statements
Not Applicable
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(l) Initial Capital Agreements:
Investment Letter, incorporated by reference to Pre-Effective Amendment No. 1,
filed February 20, 1998.
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(m) Rule 12b-1 Plan:
(m)(1) Shareholder Servicing and Distribution Plan, filed herewith.
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(n) Financial Data Schedule:
Not Applicable
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(o) Rule 18f-3 Plan:
Not Applicable
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(p) Powers of Attorney for Edmund L. Benson, Charles B. Walker, A. Max Walker,
Thomas S. Word, Jr., William H. Grigg, James Ermer, Thomas F. Keller,
Carl E. Mundy, Jr., James B. Sommers, Cornelius J. Pings and William P. Carmichael,
filed herewith.
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ITEM 24. Persons Controlled by of Under Common Control with the Fund
No person is controlled by or under common control with the
Registrant.
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ITEM 25. Indemnification
Article V, Section 5.3 of the Registrant's Declaration of Trust
provides for the indemnification of the Registrant's trustees, officers,
employees and other agents. Indemnification of the Registrant's administrators,
distributor, custodian and transfer agent is provided for, respectively, in
the Registrant's:
1. Co-Administration Agreement with Stephens and BAAI.;
2. Sub-Administration Agreement with BNY and BAAI;
3. Distribution Agreement with Stephens;
4. Custody Agreement with BNY; and
5. Transfer Agency and Services Agreement with PFPC.
Promptly after receipt by an indemnified party above of notice of
the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission to so notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to notify the indemnifying
party of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel satisfactory to such indemnified party, and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in such case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation.
The Registrant has obtained from a major insurance carrier a
trustees' and officers' liability policy covering certain types of errors and
omissions. In no event will the Registrant indemnify any of its trustees,
officers, employees, or agents against any liability to which such person would
otherwise be subject by reason of his/her willful misfeasance, bad faith, gross
negligence in the performance of his/her duties, or by reason of his/her
reckless disregard of the duties involved in the conduct of his/her office or
arising under his agreement with the Registrant. The Registrant will comply with
Rule 484 under Securities Act of 1933, as amended (the "1933 Act") and Release
No. 11330 under the Investment Company Act of 1940, as amended (the "1940 Act"),
in connection with any indemnification.
Insofar as indemnification for liability arising under the 1933
Act may be permitted to trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
("SEC") such indemnification is against public policy as expressed in the 1933
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against
C-4
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such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
ITEM 26. Business and Other Connections of the Investment Adviser
To the knowledge of the Registrant, none of the directors or officers
of BAAI, the adviser to the Registrant's portfolios, or BACAP, Marsico or
Gartmore, the investment sub-advisers, except those set forth below, are or have
been, at any time during the past two calendar years, engaged in any other
business, profession, vocation or employment of a substantial nature, except
that certain directors and officers also hold various positions with, and engage
in business for, the company that owns all the outstanding stock (other than
directors' qualifying shares) of BAAI, BACAP, Marsico or Gartmore, respectively,
or other subsidiaries of Bank of America Corporation.
(a) BAAI performs investment advisory services for the Registrant and
certain other customers. BAAI is a wholly-owned subsidiary of Bank of America,
N.A. ("Bank of America"), which in turn is a wholly-owned banking subsidiary of
Bank of America Corporation. Information with respect to each director and
officer of the investment adviser is incorporated by reference to Form ADV filed
by BAAI with the SEC pursuant to the Investment Advisers Act of 1940, as amended
(the "Advisers Act") (file no. 801-49874).
(b) BACAP performs investment sub-advisory services for the Registrant
and certain other customers. BACAP is a wholly-owned subsidiary of Bank of
America Corporation. Information with respect to each director and officer of
the investment sub-adviser is incorporated by reference to Form ADV filed by
BACAP (formerly TradeStreet Investment Associates, Inc.) with the SEC pursuant
to the Advisers Act (file no. 801-50372).
(c) Marsico performs investment sub-advisory services for the
Registrant and certain other customers. Marsico Management Holdings, LLC, a
wholly-owned subsidiary of Bank of America, owns 50% of the equity of Marsico
Capital. Information with respect to each director and officer of the investment
sub-adviser is incorporated by reference to Form ADV filed by Marsico with the
SEC pursuant to the Advisers Act (file no. 801-54914).
(d) Gartmore performs investment sub-advisory services for the
Registrant and certain other customers. Gartmore is a joint venture structured
as a general partnership between NB Partner Corp., a wholly-owned subsidiary of
Bank of America, and Gartmore U.S. Limited, an indirect, wholly-owned subsidiary
of Gartmore Investment Management plc, a UK Company which is the holding company
for a leading
C-5
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UK based international fund management group of companies. Information with
respect to each director and officer of the investment sub-adviser is
incorporated by reference to Form ADV filed by Gartmore with the SEC pursuant to
the Advisers Act (file no. 801-48811).
ITEM 27. Principal Underwriters
(a) Stephens, distributor for the Registrant, does not presently
act as investment adviser for any other registered investment companies, but
does act as distributor for Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Funds Trust, Wells Fargo Trust,
Wells Fargo Variable Trust, and is the exclusive placement agent for Master
Investment Trust, Managed Series Investment Trust, Wells Fargo Core Trust,
Nations Master Investment Trust, and Master Investment Portfolio, all of which
are registered open-end management investment companies, and has acted as
principal underwriter for the Liberty Term Trust, Inc., Nations Government
Income Term Trust 2003, Inc., Nations Government Income Term Trust 2004, Inc.
and the Managed Balanced Target Maturity Fund, Inc., closed-end management
investment companies.
(b) Information with respect to each director and officer of the
principal underwriter is incorporated by reference to Form ADV filed by Stephens
with the SEC pursuant to the 1940 Act (file No. 501-15510).
(c) Not applicable.
ITEM 28. Location of Accounts and Records
(1) BAAI, One Bank of America Plaza, Charlotte, NC 28255 (records
relating to its function as investment adviser and
co-administrator).
(2) BACAP, One Bank of America Plaza, Charlotte, NC 28255 (records
relating to its function as investment sub-adviser).
(3) Gartmore, One Bank of America Plaza, Charlotte, NC 28255
(records relating to its function as investment sub-adviser).
(4) Marsico, 1200 17th Street, Suite 1300, Denver, CO 80202
(records relating to its function as investment sub-adviser).
(5) Stephens, 111 Center Street, Little Rock, AR 72201 (records
relating to its function as distributor and co-administrator).
(6) PFPC 400 Bellevue Parkway, Wilmington, DE 19809 (records
relating to its function as transfer agent).
(7) BNY, 100 Church Street, New York, NY 10286 (records relating
to its function as custodian and sub-administrator)
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<PAGE>
ITEM 29. Management Services
Not Applicable
ITEM 30. Undertakings
Not Applicable
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<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Post-Effective Amendment to the
Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933
and has duly caused this Amendment to its Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of Little
Rock, State of Arkansas on the 6th day of March, 2000.
NATIONS ANNUITY TRUST
By: *
-------------------------------------------
A. Max Walker
President and Chairman of the Board
of Directors
By: /s/ Richard H. Blank, Jr.
-------------------------------------------
Richard H. Blank, Jr.
*Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:
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SIGNATURES TITLE DATE
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* President and Chairman March 6 , 2000
- -------------------------------- of the Board of Trustees
(A. Max Walker) (Principal Executive Officer)
/s/ Richard H. Blank, Jr. Treasurer and Secretary March 6 , 2000
- --------------------------------- (Principal Financial and Accounting Officer)
(Richard H. Blank, Jr.)
* Trustee March 6 , 2000
- ---------------------------------
(Edmund L. Benson, III)
* Trustee March 6 , 2000
- ---------------------------------
(James Ermer)
* Trustee March 6 , 2000
- ---------------------------------
(William H. Grigg)
* Trustee March 6 , 2000
- ---------------------------------
(Thomas F. Keller)
* Trustee March 6 , 2000
- ---------------------------------
(Carl E. Mundy, Jr.)
* Trustee March 6 , 2000
- ---------------------------------
(Cornelius J. Pings)
* Trustee March 6 , 2000
- ---------------------------------
(Charles B. Walker)
* Trustee March 6 , 2000
- ---------------------------------
(Thomas S. Word)
* Trustee March 6 , 2000
- ---------------------------------
(James B. Sommers)
/s/ Richard H. Blank, Jr.
- ---------------------------------
Richard H. Blank, Jr.
*Attorney-in-Fact
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<PAGE>
Nations Annuity Trust
Exhibit Index
Exhibit No. Description
- ----------- -----------
EX-99.A1 Declaration of Trust
EX-99.B1 By-Laws
EX-99.D1 Investment Advisory Agreement
EX-99.D2 Sub-Advisory Agreement - TradeStreet
EX-99.D3 Sub-Advisory Agreement - Marsico Capital
EX-99.D4 Sub-Advisory Agreement - Gartmore Global Partners
EX-99.E1 Distribution Agreement
EX-99.F1 Form of Nations Funds Deferred Compensation Plan
EX-99.G1 Custody Agreement
EX-99.G2 Amendment to the Custody Agreement
EX-99.G3 Amendment No. 2 to the Custody Agreement
EX-99.H1 Co-Administration Agreement
EX-99.H2 Sub-Administration Agreement
EX-99.H3 Transfer Agency Agreement
EX-99.H4 Adoption Agreement
EX-99.H5 Amendment to Transfer Agency Agreement
EX-99.H6 Participation Agreement
EX-99.M1 Shareholder Servicing and Distribution Plan
EX-99.P Powers of Attorney
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NATIONS ANNUITY TRUST
a Delaware Business Trust
February 5, 1998
Principal Place of Business:
One NationsBank Plaza
33rd Floor
Charlotte, North Carolina 28255
<PAGE>
TABLE OF CONTENTS
ARTICLE I
The Trust
Section 1.1: Name................................................ 1
Section 1.2: Trust Purpose....................................... 2
Section 1.3: Definitions......................................... 2
ARTICLE II
Trustees
Section 2.1: Number and Qualification............................ 4
Section 2.2: Term and Election................................... 4
Section 2.3: Resignation and Removal............................. 4
Section 2.4: Vacancies........................................... 5
Section 2.5: Meetings............................................ 5
Section 2.6: Officers; Chairman of the Board..................... 6
Section 2.7: By-Laws............................................. 6
ARTICLE III
Powers of Trustees
Section 3.1: General............................................. 6
Section 3.2: Investments......................................... 6
Section 3.3: Legal Title......................................... 7
Section 3.4: Sale of Interests................................... 7
Section 3.5: Borrow Money........................................ 7
Section 3.6: Delegation; Committees.............................. 7
Section 3.7: Collection and Payment.............................. 7
Section 3.8: Expenses............................................ 8
Section 3.9: Miscellaneous Powers................................ 8
Section 3.10: Further Powers...................................... 8
ARTICLE IV
Investment Advisory, Administrative Services
and Distribution Arrangements
Section 4.1: Investment Advisory and Other Arrangements.......... 9
Section 4.2: Parties to Contract................................. 9
<PAGE>
ARTICLE V
Limitations of Liability
Section 5.1: No Personal Liability of Trustees, Officers or Employees;
Liability of Holders; Indemnification................ 9
Section 5.2: Non-liability of Trustees, etc....................... 10
Section 5.3: Mandatory Indemnification............................ 10
Section 5.4: No Bond Required of Trustees......................... 10
Section 5.5: No Duty of Investigation; Notice in Trust
Instruments.......................................... 10
Section 5.6: Reliance on Experts, etc............................. 11
ARTICLE VI
Interests in the Trust
Section 6.1: Interests........................................... 11
Section 6.2: Rights of Holders................................... 11
Section 6.3: Purchase of or Increase in Interests................ 12
Section 6.4: Register of Interests............................... 12
Section 6.5: Notices............................................. 12
ARTICLE VII
Distributions
Section 7.1: Distributions....................................... 12
Section 7.2: Determination of Net Income......................... 13
Section 7.3: Dividends and Distributions from Assets Only........ 13
ARTICLE VIII
Redemptions
Section 8.1: Redemptions......................................... 13
Section 8.2: Redemptions at the Option of the Trust.............. 15
Section 8.3: Redemptions and Repurchases from Assets Only........ 16
ARTICLE IX
Holders
Section 9.1: Meetings of Holders................................. 16
Section 9.2: Notice of Meetings.................................. 16
Section 9.3: Record Date for Meetings............................ 16
Section 9.4: Proxies, etc........................................ 17
Section 9.5: Reports............................................. 17
Section 9.6: Inspection of Records............................... 17
Section 9.7: Voting Powers....................................... 17
Section 9.8: Series of Interests................................. 18
Section 9.9: Holder Action by Written Consent.................... 19
<PAGE>
Section 9.10: No Pre-emptive Rights; Derivative Suits............. 20
ARTICLE X
Duration; Termination of Trust; Amendment; Mergers; etc.
Section 10.1: Duration............................................ 20
Section 10.2: Termination of Trust................................ 20
Section 10.3: Amendment Procedure................................. 21
Section 10.4: Merger, Consolidation, Conversion and Sale of
Assets.............................................. 21
ARTICLE XI
Miscellaneous
Section 11.1: Certificate of Designation; Agent for Service of
Process............................................. 22
Section 11.2: Governing Law....................................... 22
Section 11.3: Counterparts........................................ 22
Section 11.4: Reliance by Third Parties........................... 22
Section 11.5: Provision in Conflict With Law or Regulations....... 23
Section 11.6: Trust Only.......................................... 23
Section 11.7: Withholding......................................... 23
Section 11.8: Headings and Construction........................... 23
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
NATIONS ANNUITY TRUST
This DECLARATION OF TRUST of the NATIONS ANNUITY TRUST is made on
the 5th day of February, 1998, by the parties signatory hereto, as trustees
(such persons, so long as they shall continue in office in accordance with the
terms of this Declaration of Trust, and all other persons who at the time in
question have been duly elected or appointed as trustees in accordance with the
provisions of this Declaration of Trust and are then in office, in their
capacity as trustees hereunder, are hereinafter called the "Trustees").
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a business trust under the
law of Delaware for the investment and reinvestment of its assets; and
WHEREAS, it is proposed that the trust assets be composed of funds
contributed thereto by the holders of interests in the trust entitled to
ownership rights in the trust;
NOW, THEREFORE, the Trustees hereby declare that they will hold in
trust all cash, securities and other assets which they may from time to time
acquire in any manner as Trustees hereunder, and manage and dispose of the same
for the benefit of the holders of interests in the trust and subject to the
following terms and conditions.
ARTICLE I
The Trust
1.1 Name. The name of the trust created hereby (the "Trust") shall
be "Nations Annuity Trust," and so far as may be practicable the Trustees shall
conduct the Trust's activities, execute all documents and sue or be sued under
that name, which name (and the word "Trust" wherever hereinafter used) shall not
refer to the Trustees in their individual capacities or to the officers, agents,
employees or holders of interest in the Trust. However, should the Trustees
determine that the use of the name of the Trust is not advisable, they may
select such other name for the Trust as they deem proper and the Trust may hold
its property and conduct its activities under such other name. Any name change
shall become effective upon the execution by a majority of the then Trustees of
an instrument setting forth the new name. Any such instrument shall not require
the approval of the holders of interests in the Trust, but shall have the status
of an amendment to this Declaration.
1
<PAGE>
1.2 Trust Purpose. The purpose of the Trust is to conduct, operate
and carry on the business of an open-end management investment company
registered under the 1940 Act.
1.3 Definitions. As used in this Declaration, the following terms
shall have the following meanings:
The "1940 Act" refers to the Investment Company Act of 1940, as
amended from time to time, and the rules and regulations thereunder, as adopted
or amended from time to time.
The terms "Affiliated Person", "Assignment" and "Interested
Person" shall have the meanings given them in the 1940 Act.
"Administrator" shall mean any party furnishing services to the
Trust pursuant to any administrative services contract described in Section 4.1
hereof.
"By-Laws" shall mean the By-Laws of the Trust as amended from time
to time.
"Class" or "Class of Shares" refers to the division of Shares
representing any series into two or more classes.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the rules and regulations thereunder, as adopted or
amended from time to time.
"Commission" shall mean the Securities and Exchange Commission.
"Declaration" shall mean this Declaration of Trust as amended from
time to time. References in this Declaration to "Declaration", "hereof",
"herein" and "hereunder" shall be deemed to refer to the Declaration rather than
the article or section in which such words appear.
"DBTA" shall mean the Delaware Business Trust Act, Del. Code. Ann.
tit. 12,ss.ss. 3801-3822, as amended from time to time.
"Fiscal Year" shall mean an annual period as determined by the
Trustees unless otherwise provided by the Code or applicable regulations.
"Holders" shall mean as of any particular time any or all holders
of record of Interests in the Trust or in Trust Property, as the case may be, at
such time.
"Institutional Investor(s)" shall mean any registered
broker/dealer, regulated investment company, segregated asset account, foreign
investment company, common or commingled trust fund, group trust or similar
organization or entity that is an "accredited investor" within the meaning of
Regulation D under the Securities Act of 1933.
2
<PAGE>
"Interest(s)" shall mean the interest of a Holder in the Trust or
in Trust Property, as the case may be, including all rights, powers and
privileges accorded to Holders in this Declaration.
"Interested Person" shall have the same meaning as that described
in Section 2(a)(19) of the 1940 Act.
"Investment Adviser" shall mean any party furnishing services to
the Trust pursuant to any investment advisory contract described in Section 4.1
hereof.
"Majority Interests Vote" shall mean the vote, at a meeting of the
Holders of Interests in the Trust, or in any series thereof, of the lesser of
(a) 67% or more of the Interests present or represented at such meeting,
provided the Holders of more than 50% of the Interests in the Trust, or the
affected series, are present or represented by proxy or (b) more than 50% of the
Interests in the Trust, or the affected series.
"Person" shall mean and include individuals, corporations,
partnerships, limited liability companies, trusts, associations, joint ventures
and other entities, whether or not legal entities, and governments and agencies
and political subdivisions thereof.
"Registration Statement" shall mean the currently effective
Registration Statement of the Trust under the 1940 Act.
"Trust Property" shall mean as of any particular time any and all
property, real or personal, tangible or intangible, which at such time is owned
or held by or for the account of the Trust or the Trustees. The Trustees may
authorize the division of Trust Property into two or more series, in accordance
with the provisions of Section 9.8 hereof, in which case all references in this
Declaration to the Trust, Trust Property, Interests therein or Holders thereof
shall be deemed to refer to each such series, as the case may be, except as the
context otherwise requires. Any series of Trust Property shall be established
and designated, and the variations in the relative rights and preferences as
between the different series shall be fixed and determined, by the Trustees. The
voting rights of Interests in the Trust Property shall be governed by Section
18(f)(2) of the 1940 Act and Rule 18f-2 thereunder, as amended from time to
time, or upon repeal thereof, in such other manner as the Trustees shall
establish in the Trust's By-Laws.
"Series" or "Series of Interest" refers to the one or more
separate investment portfolios of the Trust into which the assets and
liabilities of the Trust may be divided and the Interests of the Trust
representing the beneficial interest of Holders in such respective portfolios.
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ARTICLE II
Trustees
2.1 Number and Qualification. The number of Trustees shall be fixed
from time to time by written instrument signed by a majority of the Trustees so
fixed then in office, provided, however, that the number of Trustees shall in no
event be less than three or more than fifteen. Any vacancy created by an
increase in Trustees may be filled by the appointment of an individual having
the qualifications described in this Article made by a written instrument signed
by a majority of the Trustees then in office. Any such appointment shall not
become effective, however, until the individual named in the written instrument
of appointment shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of this Declaration. No reduction in the number
of Trustees shall have the effect of removing any Trustee from office. Whenever
a vacancy in the number of Trustees shall occur, until such vacancy is filled as
provided in Section 2.4 hereof, the Trustees in office, regardless of their
number, shall have all the powers granted to the Trustees and shall discharge
all the duties imposed upon the Trustees by this Declaration. A Trustee shall be
an individual at least 21 years of age who is not under legal disability.
2.2 Term and Election. Each Trustee named herein, or elected or
appointed prior to the first meeting of the Holders, shall (except in the event
of resignations or removals or vacancies pursuant to Section 2.3 or 2.4 hereof)
hold office until his or her successor has been elected at such meeting and has
qualified to serve as Trustee, as required under the 1940 Act. Beginning with
the Trustees elected at the first meeting of Holders, each Trustee shall hold
office during the lifetime of this Trust and until its termination as
hereinafter provided unless such Trustee resigns or is removed as provided in
Section 2.3 below.
2.3 Resignation and Removal. Any Trustee may resign (without need
for prior or subsequent accounting) by an instrument in writing signed by him or
her and delivered or mailed to the Chairman, if any, the President or the
Secretary and such resignation shall be effective upon such delivery, or at a
later date according to the terms of the instrument. Any of the Trustees may be
removed by the affirmative vote of the Holders of two-thirds (2/3) of the
Interests or (provided the aggregate number of Trustees, after such removal and
after giving effect to any appointment made to fill the vacancy created by such
removal, shall not be less than the number required by Section 2.1 hereof) with
cause, by the action of two-thirds of the remaining Trustees. Removal with cause
includes, but is not limited to, the removal of a Trustee due to physical or
mental incapacity. Upon the resignation or removal of a Trustee, or his or her
otherwise ceasing to be a Trustee, he or she shall execute and deliver such
documents as the remaining Trustees shall require for the purpose of conveying
to the Trust or the remaining Trustees any Trust Property held in the name of
the resigning or removed Trustee. Upon the death of any Trustee or upon removal
or resignation due to any Trustee's incapacity to serve as trustee, his or her
legal representative shall execute and deliver on his or her behalf such
documents as the remaining Trustees shall require as provided in the preceding
sentence.
2.4 Vacancies. The term of office of a Trustee shall terminate and
a vacancy shall occur in the event of the death, resignation, adjudicated
incompetence or other incapacity to
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perform the duties of the office, or removal, of a Trustee. No such vacancy
shall operate to annul this Declaration or to revoke any existing agency created
pursuant to the terms of this Declaration. In the case of a vacancy, the Holders
of at least a majority of the Interests entitled to vote, acting at any meeting
of the Holders held in accordance with Section 9.1 hereof, or, to the extent
permitted by the 1940 Act, a majority vote of the Trustees continuing in office
acting by written instrument or instruments, may fill such vacancy, and any
Trustee so elected by the Trustees or the Holders shall hold office as provided
in this Declaration.
2.5 Meetings. Meetings of the Trustees shall be held from time to
time upon the call of the Chairman, if any, the President, the Chief Operating
Officer, if any, the Secretary, an Assistant Secretary or any two Trustees.
Regular meetings of the Trustees may be held without call or notice at a time
and place fixed by the By-Laws or by resolution of the Trustees. Notice of any
other meeting shall be mailed or otherwise given not less than 24 hours before
the meeting but may be waived in writing by any Trustee either before or after
such meeting. The attendance of a Trustee at a meeting shall constitute a waiver
of notice of such meeting except where a Trustee attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting has not been lawfully called or convened. The Trustees may act
with or without a meeting. A quorum for all meetings of the Trustees shall be
one-third (1/3) of the total number of Trustees, but no less than two Trustees.
Unless provided otherwise in this Declaration, any action of the Trustees may be
taken at a meeting by vote of a majority of the Trustees present (a quorum being
present) or without a meeting by written consent of all the Trustees. If there
be less than a quorum present at any meeting of the Trustees, a majority of
those present may adjourn the meeting until a quorum shall have been obtained.
Any committee of the Trustees, including an executive committee,
if any, may act with or without a meeting. A quorum for all meetings of any such
committee shall be two or more of the members thereof, unless the Board of
Trustees shall provide otherwise. Unless provided otherwise in this Declaration,
any action of any such committee may be taken at a meeting by vote of a majority
of the members present (a quorum being present) or without a meeting by written
consent of all of the members.
With respect to actions of the Trustees and any committee of the
Trustees, Trustees who are Interested Persons of the Trust or otherwise
interested in any action to be taken may be counted for quorum purposes under
this Section 2.5 and shall be entitled to vote to the extent permitted by the
1940 Act.
All or any one or more Trustees may participate in a meeting of
the Trustees or any committee thereof by means of a conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other and participating in a meeting pursuant to such
communications system shall constitute presence in person at such meeting,
unless the 1940 Act specifically requires the Trustees to act "in person," in
which case such term shall be construed consistent with Commission or staff
releases or interpretations.
2.6 Officers; Chairman of the Board. The Trustees shall, from time
to time, elect a President, a Secretary and a Treasurer. The Trustees shall
elect or appoint, from time to time, a Chairman of the Board who shall preside
at all meetings of the Trustees and carry out such other
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duties as the Trustees shall designate. The Trustees may elect or appoint or
authorize the President to appoint such other officers or agents with such
powers as the Trustees may deem to be advisable. The Chairman of the Board shall
be and the President, Secretary and Treasurer may, but need not, be a Trustee.
2.7 By-Laws. The Trustees may adopt and, from time to time, amend
or repeal the By-Laws for the conduct of the business of the Trust.
ARTICLE III
Powers of Trustees
3.1 General. The Trustees shall have exclusive and absolute control
over the Trust Property and over the business of the Trust to the same extent as
if the Trustees were the sole owners of the Trust Property and business in their
own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees may perform such acts as they deem, in their sole
discretion, to be proper, convenient or incidental for conducting the business
of the Trust. The enumeration of any specific power herein shall not be
construed as limiting the aforesaid power. Such powers of the Trustee may be
exercised without order of or recourse to any court.
3.2 Investments. The Trustees shall have power to:
(a) conduct, operate and carry on the business of an
investment company;
(b) subscribe for, invest in, reinvest in, purchase or
otherwise acquire, hold, pledge, sell, assign, transfer, exchange, distribute or
otherwise deal in or dispose of the United States and foreign currencies and
related instruments including forward contracts, and securities, including,
common and preferred stocks, warrants, bonds, debentures, time notes and all
other evidences of indebtedness, negotiable or non-negotiable instruments,
obligations, certificates of deposit or indebtedness, commercial paper,
repurchase agreements, reverse repurchase agreements, convertible securities,
options, futures contracts, and other securities, shares or interests,
including, without limitation, those issued, guaranteed or sponsored by any
state, territory or possession of the United States and the District of Columbia
and their political subdivisions, agencies and instrumentalities, or by the
United States Government, any foreign government, or any agency, instrumentality
or political subdivision of the United States Government or any foreign
government, or international instrumentalities, or by any bank, savings
institution, corporation or other business entity organized under the laws of
the United States or under foreign laws; and to exercise any and all rights,
powers and privileges of ownership or interest in respect of any and all such
investments of every kind and description, including, without limitation, the
right to consent and otherwise act with respect thereto, with power to designate
one or more persons, firms, associations, or corporations to exercise any of
said rights, powers and privileges in respect of any of said instruments; and
the Trustees shall be deemed to have the foregoing powers with respect to any
additional securities in which the Trustees may determine to invest.
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The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust, nor shall the Trustees be
limited by any law limiting the investments which may be made by fiduciaries.
3.3 Legal Title. Legal title to all the Trust Property shall be
vested in the Trustees as joint tenants except that the Trustees shall have the
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust, or in the name of any
other Person on behalf of the Trust on such terms as the Trustees may determine.
The right, title and interest of the Trustees in the Trust
Property shall vest automatically in each person who may hereafter become a
Trustee upon his or her due election and qualification. Upon the resignation,
removal or death of a Trustee he or she shall automatically cease to have any
right, title or interest in any of the Trust Property, and the right, title and
interest of such Trustee in the Trust Property shall vest automatically in the
remaining Trustees. Such vesting and cessation of title shall be effective
whether or not conveyancing documents have been executed and delivered.
3.4 Sale of Interests. Subject to the more detailed provisions set
forth in Articles VII and VIII, the Trustees shall have the power to issue,
sell, repurchase, redeem, retire, cancel, acquire, hold, resell, reissue,
dispose of, transfer, and otherwise deal in, Interests including Interests in
fractional denominations, and to apply to any such repurchase, redemption,
retirement, cancellation or acquisition of Interests any funds or other assets
of the appropriate series or class of Interests, whether capital or surplus or
otherwise.
3.5 Borrow Money. The Trustees shall have power to borrow money or
otherwise obtain credit and to secure the same by mortgaging, pledging or
otherwise subjecting as security the assets of the Trust, including the lending
of portfolio securities, and to endorse, guarantee, or undertake the performance
of any obligation, contract or engagement of any other person, firm, association
or corporation.
3.6 Delegation; Committees. The Trustees shall have the power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or the
names of the Trustees or otherwise as the Trustees may deem expedient.
3.7 Collection and Payment. The Trustees shall have power to
collect all property due to the Trust; and to pay all claims, including taxes,
against the Trust Property; to prosecute, defend, compromise or abandon any
claims relating to the Trust Property; to foreclose any security interest
securing any obligations, by virtue of which any property is owned to the Trust;
and to enter into releases, agreements and other instruments.
3.8 Expenses. The Trustees shall have the power to incur and pay
any expenses which in the opinion of the Trustees are necessary or incidental to
carry out any of the purposes
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of this Declaration, and to pay reasonable compensation from the funds of the
Trust to themselves as Trustees. The Trustees shall fix the compensation of all
officers, employees and Trustees. The Trustees may pay themselves such
compensation for special services, including legal and brokerage services, as
they in good faith may deem reasonable (and subject to any limitations in the
1940 Act), and reimbursement for expenses reasonably incurred by themselves on
behalf of the Trust.
3.9 Miscellaneous Powers. The Trustees shall have the power to: (a)
employ or contract with such Persons as the Trustees may deem desirable for the
transaction of the business of the Trust and terminate such employees or
contractual relationships as they consider appropriate; (b) to cause the Trust
or any series thereof to enter into joint ventures, partnerships, limited
liability companies and any other combinations or associations; (c) purchase,
and pay for out of Trust Property, insurance policies (including, but not
limited to, fidelity bonding and errors and omission) insuring the Investment
Adviser, Administrator, distributor, Holders, Trustees, officers, employees,
agents, or independent contractors of the Trust against all claims arising by
reason of holding any such position or by reason of any action taken or omitted
by any such Person in such capacity, whether or not the Trust would have the
power to indemnify such Person against liability; (d) establish pension,
profit-sharing and other retirement, incentive and benefit plans for any
Trustees, officers, employees and agents of the Trust; (e) to the extent
permitted by law, indemnify any Person with whom the Trust has dealings,
including the Investment Adviser, Administrator, distributor, Holders, Trustees,
officers, employees, agents or independent contractors of the Trust, to such
extent as the Trustees shall determine; (f) guarantee indebtedness or
contractual obligations of others; (g) determine and change the Fiscal Year of
the Trust, or any series thereof, and the method by which its accounts shall be
kept; and (h) adopt a seal for the Trust, but the absence of such seal shall not
impair the validity of any instrument executed on behalf of the Trust.
3.10 Further Powers. The Trustees shall have power to conduct the
business of the Trust and carry on its operations in any and all of its branches
and maintain offices, whether within or without the State of Delaware, in any
and all states of the United States of America, in the District of Columbia, and
in any and all commonwealths, territories, dependencies, colonies, possessions,
agencies or instrumentalities of the United States of America and of foreign
countries, and to do all such other things and execute all such instruments as
they deem necessary, proper, desirable, convenient or incidental in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Declaration, the presumption shall be in favor of a grant of
power to the Trustees. The Trustees will not be required to obtain any court
order to deal with Trust Property.
ARTICLE IV
Investment Advisory, Administrative Services
and Distribution Arrangements
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4.1 Investment Advisory and Other Arrangements. The Trustees may in
their discretion, from time to time, enter into investment advisory,
administrative services (including transfer and dividend disbursing agency
services), distribution, fiduciary (including custodian), placement agent,
shareholder servicing and/or other service contracts or agreements whereby the
other party to such contract or agreement shall undertake to furnish the
Trustees such investment advisory, administrative, distribution, fiduciary,
placement agent, shareholder servicing and/or other services as the Trustee
shall, from time to time, consider desirable or convenient and all upon such
terms and conditions as the Trustees may in their discretion determine.
Notwithstanding any provisions of this Declaration, the Trustees may authorize
any Investment Adviser (subject to such general or specific instructions as the
Trustees may, from time to time, adopt) to effect purchases, sales, loans or
exchanges of Trust Property on behalf of the Trustees or may authorize any
officer, employee or Trustee to effect such purchases, sales, loans or exchanges
pursuant to recommendations of any such Investment Adviser (and all without
further action by the Trustees). Any such purchases, sales, loans and exchanges
shall be deemed to have been authorized by all of the Trustees.
4.2 Parties to Contract. Any contract or agreement of the character
described in Section 4.1 of this Article IV or in the By-Laws of the Trust may
be entered into with any Person, although one or more of the Trustees or
officers of the Trust may be an employee, officer, director, trustee,
shareholder, or member of such other party to the contract or agreement, and no
such contract or agreement shall be invalidated or rendered voidable by reason
of the existence of any such relationship, nor shall any person holding such
relationship be liable merely by reason of such relationship for any loss or
expense to the Trust under or by reason of said contract or agreement or
accountable for any profit realized directly or indirectly therefrom, provided
that the contract or agreement when entered into was reasonable and fair and not
inconsistent with the provisions of this Article IV or the By-Laws.
ARTICLE V
Limitations of Liability
5.1 No Personal Liability of Trustees, Officers or Employees;
Liability of Holders; Indemnification. No Trustee, officer or employee of the
Trust, when acting in such capacity, shall be subject to any personal liability
whatsoever, in his or her official or individual capacity to any Person, other
than the Trust or its Holders, in connection with Trust Property or the affairs
of the Trust, save only that arising from his or her bad faith, willful
misfeasance, gross negligence or reckless disregard of his or her duty to such
Person; and all such Persons shall look solely to the Trust Property for
satisfaction of claims of any nature against a Trustee, officer or employee of
the Trust arising in connection with the affairs of the Trust.
5.2 Non-liability of Trustees, etc. No Trustee, officer or employee
of the Trust shall be liable to the Trust, Holders of Interests therein, or to
any Trustee, officer or employee thereof for any action or failure to act
(including, without limitation, the failure to compel in any way any former or
acting Trustee to redress any breach of trust) except for his or her own bad
faith, willful misfeasance, gross negligence or reckless disregard of his or her
duties.
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5.3 Mandatory Indemnification. The Trust shall indemnify each of
its Trustees, officers and employees (including Persons who serve at its request
as directors, officers or trustees of another organization in which it has any
interest, as a shareholder, creditor or otherwise) against all liabilities and
expenses (including amounts paid in satisfaction of judgments, in compromise, as
fines and penalties, and as counsel fees) reasonably incurred by him or her in
connection with the defense or disposition of any action, suit or other
proceeding, whether civil or criminal, in which he or she may be involved or
with which he or she may be threatened, while in office or thereafter, by reason
of his or her being or having been such a Trustee, officer or employee, except
with respect to any matter as to which he or she shall have been adjudicated to
have acted in bad faith, willful misfeasance, gross negligence or reckless
disregard of his or her duties; provided, however, that as to any matter
disposed of by a compromise payment by such Person, pursuant to a consent decree
or otherwise, no indemnification either for said payment or for any other
expenses shall be provided unless there has been a determination that such
Person did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office by
the court or other body approving the settlement or other disposition or by a
reasonable determination, based upon a review of readily available facts (as
opposed to a full trial type inquiry), that he or she did not engage in such
conduct by written opinion from independent legal counsel approved by the
Trustees. The rights accruing to any Person under these provisions shall not
exclude any other right to which he or she may be lawfully entitled; provided
that no Person may satisfy any right of indemnity or reimbursement granted
herein or in Section 5.1 or to which he or she may be otherwise entitled except
out of the Trust Property. The Trustees may make advance payments in connection
with indemnification under this Section 5.3, provided that the indemnified
Person shall have given a written undertaking to reimburse the Trust in the
event it is subsequently determined that he or she is not entitled to such
indemnification.
5.4 No Bond Required of Trustees. No Trustee shall, as such, be
obligated to give any bond or surety or other security for the performance of
any of his or her duties hereunder.
5.5 No Duty of Investigation; Notice in Trust Instruments. No
purchaser, lender, or other Person dealing with the Trustees or any officer or
employee of the Trust shall be bound to make any inquiry concerning the validity
of any transaction purporting to be made by the Trustees or by said officer or
employee or be liable for the application of money or property paid, loaned, or
delivered to or on the order of the Trustees or of said officer, employee or
agent. Every obligation, contract, instrument, certificate or other interest or
undertaking of the Trust, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively taken to have been executed or
done by the executors thereof only in their capacity as Trustees, officers,
employees or agents of the Trust. Every written obligation, contract,
instrument, certificate or other interest or undertaking of the Trust made or
sold by the Trustees or by any officer, employee or agent of the Trust, in his
or her capacity as such, shall contain an appropriate recital to the effect that
the Trustee, officer, employee and agent of the Trust shall not personally be
bound by or liable thereunder, nor shall resort be had to their private property
for the satisfaction of any obligation or claim thereunder, and appropriate
references shall be made therein to the Declaration, and may contain any further
recital which they may deem appropriate, but the omission of such recital shall
not operate to impose personal liability on any of the
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Trustees, officers, employees or agents of the Trust. The Trustees may maintain
insurance for the protection of the Trust Property, Holders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
5.6 Reliance on Experts, etc. Each Trustee and officer or employee
of the Trust shall, in the performance of his or her duties, be fully and
completely justified and protected with regard to any act or any failure to act
resulting from reliance in good faith upon the books of account or other records
of the Trust, upon an opinion of counsel, or upon reports made to the Trust by
any of its officers or employees or by any Investment Adviser, Administrator,
accountant, appraiser or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
ARTICLE VI
Interests in the Trust
6.1 Interests. The Interests of the Trust shall be issued in one or
more series as the Trustees may, without Holder approval, authorize. Each series
shall be preferred over all other series in respect of the assets allocated to
that series and shall represent a separate investment portfolio of the Trust.
The beneficial interest in each series at all times shall be divided into
Interests, with or without par value as the Trustees may from time to time
determine, each of which shall, except as provided in the following sentence,
represent an equal proportionate interest in the series with each other Interest
of the same series, none having priority or preference over another. The
Trustees may, without Holder approval, divide Interests of any series into two
or more classes, Interests of each such class having such preferences and
special or relative rights and privileges (including conversion right, if any)
as the Trustees may determine. The number of Interests authorized shall be
unlimited, and the Interests so authorized may be represented in part by
fractional Interests. From time to time, the Trustees may divide, without Holder
approval, or combine the Interests of any series or class into a greater or
lesser number without thereby changing the proportionate beneficial interests in
the series or class.
6.2 Rights of Holders. The ownership of the Trust Property of every
description and the right to conduct any business hereinbefore described are
vested exclusively in the Trustees, and the Holders shall have no right or title
therein other than the beneficial interest conferred by their Interests and they
shall have no right to call for any partition or division of any property,
profits or rights of the Trust. The Interests shall be personal property giving
only the rights in this Declaration specifically set forth.
6.3 Purchase of or Increase in Interests. The Trustees, in their
discretion, may, from time to time, without a vote of the Holders, permit the
purchase of Interests by such party or parties (or increase in the Interest of a
Holder) and for such type of consideration, including cash or property, at such
time or times (including, without limitation, each business day), and on such
terms as the Trustees may determine in their sole discretion, and may in such
manner acquire
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other assets (including the acquisition of assets subject to, and in connection
with the assumption of, liabilities) and businesses.
6.4 Register of Interests. A register shall be kept at the Trust
under the direction of the Trustees which shall contain the names and addresses
of the Holders. Each such register shall be conclusive as to who are the Holders
of each series of Interests in the Trust and who shall be entitled to payments
of distributions or otherwise to exercise or enjoy the rights of Holders. No
Holder shall be entitled to receive payment of any distribution, nor to have
notice given to it as herein provided, until it has given its address to such
officer or agent of the Trustees as shall keep the said register for entry
thereon.
6.5 Notices. Any and all notices to which any Holder hereunder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Holder of record at its last known
address as recorded on the register of the Trust.
ARTICLE VII
Distributions
7.1 Distributions. The Trustees shall distribute periodically to
the Holders of each series of Interests an amount approximately equal to the net
income of that series, determined by the Trustees or as they may authorize and
as herein provided. Distributions of income may be made in one or more payments,
which shall be in Interests, cash or otherwise, and on a date or dates and as of
a record date or dates determined by the Trustees. At any time and from time to
time in their discretion, the Trustees also may cause to be distributed to the
Holders of any one or more series as of a record date or dates determined by the
Trustees, in Interests, cash or otherwise, all or part of any gains realized on
the sale or disposition of the assets of the series or all or part of any other
property of the Trust attributable to the series. Each distribution pursuant to
this Section 7.1 shall be made ratably according to the number of Interests of
the series held by the several Holders on the record date for such distribution,
except to the extent otherwise required or permitted by the preferences and
special or relative rights and privileges of any classes of Interests of that
series, and any distribution to the Holders of a particular class of Interests
shall be made to such Holders pro rata in proportion to the number of Interests
of such class held by each of them. No distribution need be made on Interests
purchased pursuant to orders received, or for which payment is made, after such
time or times as the Trustees may determine.
7.2 Determination of Net Income. In determining the net income of
each series or class of Interests for any period, there shall be deducted from
income for that period (a) such portion of all charges, taxes, expenses and
liabilities due or accrued as the Trustees shall consider properly chargeable
and fairly applicable to income for that period or any earlier period and (b)
whatever reasonable reserves the Trustees shall consider advisable for possible
future charges, taxes, expenses and liabilities which the Trustees shall
consider properly chargeable and fairly applicable to income for that period or
any earlier period. The net income of each series or
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class for any period may be adjusted for amounts included on account of net
income in the net asset value of Interests issued or redeemed or repurchased
during that period. In determining the net income of a series or class for a
period ending on a date other than the end of its fiscal year, income may be
estimated as the Trustees shall deem fair. Gains on the sale or disposition of
assets shall not be treated as income, and losses shall not be charged against
income unless appropriate under applicable accounting principles, except in the
exercise of the discretionary powers of the Trustees. Any amount contributed to
the Trust which is received as income pursuant to a decree of any court of
competent jurisdiction shall be applied as required by the said decree.
7.3 Dividends and Distributions from Assets Only. No dividend or
distribution (including, without limitation, any distribution paid upon
termination of the Trust or of any series) with respect to the Interests of any
series shall be effected by the Trust other than from the assets of such series.
ARTICLE VIII
Redemptions
8.1 Redemptions. Any Holder shall be entitled to require the Trust
to redeem and the Trust shall be obligated to redeem at the option of such
Holder all or any part of the Interests owned by said Holder, at the redemption
price, pursuant to the method, upon the terms and subject to the conditions
hereinafter set forth:
(a) Certificates for Interests, if issued, shall be
presented for redemption in proper form to the Trust or the agent of the Trust
appointed for such purpose, and these shall be presented with a written request
that the Trust redeem all or any part of the Interests represented thereby.
(b) The redemption price per Interest shall be the net
asset value per Interest when next determined by the Trust at such time or times
as the Trustees shall designate, following the time of presentation of
certificates of Interests, if issued, and an appropriate request for redemption,
or such other time as the Trustees may designate in accordance with any
provision of the 1940 Act, or any rule or regulation made or adopted by any
securities association registered under the Securities Exchange Act of 1934, as
determined by the Trustees, less any applicable charge or fee imposed from time
to time as determined by the Trustees.
(c) Net asset value of each series or class of Interests
(for the purpose of issuance of Interests as well as redemptions thereof) shall
be determined by dividing:
(i) the total value of the assets of such series or
class determined as provided in paragraph (d) below less, to the extent
determined by or pursuant to the direction of the Trustees in
accordance with generally accepted accounting principles, all debts,
obligations and liabilities of such series or class (which debts,
obligations and liabilities shall include, without limitation of the
generality of the foregoing, any and all
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debts, obligations, liabilities, or claims, of any and every kind and
nature, fixed, accrued and otherwise, including the estimated accrued
expenses of management and supervision, administration and distribution
and any reserves or charges for any or all of the foregoing, whether
for taxes, expenses, or otherwise, and the price of Interests redeemed
but not paid for) but excluding the Trust's liability upon its
Interests and its surplus, by
(ii) the total number of Interests of such series
or class outstanding.
The Trustees are empowered, in their absolute discretion, to
establish other methods for determining such net asset value whenever such other
methods are deemed by them to be necessary to enable the Trust to comply with
applicable law, or are deemed by them to be desirable, provided they are not
inconsistent with any provision of the 1940 Act.
(d) In determining for the purposes of this Declaration of
Trust the total value of the assets of each series or class of Interests at any
time, investments and any other assets of such series or class shall be valued
in such manner as may be determined from time to time by or pursuant to a
resolution of the Trustees.
(e) Payment of the redemption price by the Trust may be
made either in cash or in securities or other assets at the time owned by the
Trust or partly in cash and partly in securities or other assets at the time
owned by the Trust. The value of any part of such payment to be made in
securities or other assets of the Trust shall be the value employed in
determining the redemption price. Payment of the redemption price shall be made
on or before the seventh day following the day on which the Interests are
properly presented for redemption hereunder, except that delivery of any
securities included in any such payment shall be made as promptly as any
necessary transfers on the books of the issuers whose securities are to be
delivered may be made and, except as postponement of the date of payment may be
permissible under the 1940 Act.
Pursuant to the resolution of the Trustees, the Trust may
deduct from the payment made for any Interests redeemed a liquidating charge not
in excess of an amount determined by the Trustees from time to time.
(f) The right of any Holder of Interests redeemed by the
Trust as provided in Article VII to receive dividends or distributions thereon
and all other rights of such Holder with respect to such Interests shall
terminate at the time as of which the redemption price of such Interests is
determined, except the right of such Holder to receive (i) the redemption price
of such Interests from the Trust in accordance with the provisions hereof, and
(ii) any dividend or distribution to which such Holder previously had become
entitled as the record holder of such Interests on the record date for such
dividend or distribution.
(g) Redemption of Interests by the Trust is conditional
upon the Trust having funds or other assets legally available therefor.
(h) The Trust, either directly or through an agent, may
repurchase its Interests, out of funds legally available therefor, upon such
terms and conditions and for such
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consideration as the Trustees shall deem advisable, by agreement with the owner
at a price not exceeding the net asset value per Interest as determined by or
pursuant to the order of the Trustees at such time or times as the Trustees
shall designate, less any applicable charge, if and as fixed by the Trustees
from time to time, and to take all other steps deemed necessary or advisable in
connection therewith.
(i) Interests purchased or redeemed by the Trust shall be
cancelled or held by the Trust for reissue, as the Trustees from time to time
may determine.
(j) The obligations set forth in this Article VIII may be
suspended or postponed: (i) for any period (1) during which the New York Stock
Exchange is closed other than for customary weekend and holiday closing, or (2)
during which trading on the New York Stock Exchange is restricted, (ii) for any
period during which an emergency exists as a result of which (1) the disposal by
the Trust of investments owned by it is not reasonably practicable, or (2) it is
not reasonably practicable for the Trust fairly to determine the value of its
net assets, or (iii) for such other periods as the Commission or any successor
governmental authority by order may permit.
Notwithstanding any other provision of this Article VIII,
if certificates representing such Interests have been issued, the redemption or
repurchase price need not be paid by the Trust until such certificates are
presented in proper form for transfer to the Trust or the agent of the Trust
appointed for such purpose; however, the redemption or repurchase shall be
effective, in accordance with the resolution of the Trustees, regardless of
whether or not such presentation has been made to time by the Trustees.
8.2 Redemptions at the Option of the Trust. The Trust shall have
the right at its option and at any time to redeem Interests of any Holder at the
net asset value thereof as determined in accordance with Article VIII of this
Declaration of Trust: (a) if at such time such Holder owns fewer Interests than,
or Interests having an aggregate net asset value of less than, an amount
determined from time to time by the Trustees; or (b) to the extent that such
Holder owns Interests of a particular series or class of Interests equal to or
in excess of a percentage of the outstanding Interests of that series or class
determined from time to time by the Trustees; or (c) to the extent that such
Holder owns Interests of the Trust representing a percentage equal to or in
excess of such percentage of the aggregate number of outstanding Interests of
the Trust or the aggregate net asset value of the Trust determined from time to
time by the Trustees.
8.3 Redemptions and Repurchases from Assets Only. No redemption or
repurchase of Interests of any series shall be effected by the Trust other than
from the assets of such series.
ARTICLE IX
Holders
9.1 Meetings of Holders. Meetings of the Holders may be called at
any time by a majority of the Trustees and shall be called by any Trustee upon
written request of Holders
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holding, in the aggregate, not less than 10% of the Interests in the Trust, or,
with respect to a Meeting of the Holders of one or more series, not less than
10% of the Interests of the affected series, such request specifying the purpose
or purposes for which such meeting is to be called. Any such meeting shall be
held within or without the State of Delaware on such day and at such time as the
Trustees shall designate. Holders of one-third of the Interests in the Trust, or
with respect to a Meeting of the Holders of one or more series, holders of
one-third of the Interests of that series, present in person or by proxy, shall
constitute a quorum for the transaction of any business, except as may otherwise
be required by the 1940 Act or other applicable law or by this Declaration or
the By-Laws of the Trust. If a quorum is present at a meeting, an affirmative
vote by the Holders present, in person or by proxy, holding more than 50% of the
total Interests of the Holders present, either in person or by proxy, at such
meeting constitutes the action of the Holders, unless the 1940 Act, other
applicable law, this Declaration or by the By-Laws of the Trust requires a
greater number of affirmative votes.
9.2 Notice of Meetings. Written or printed notice of all meetings
of the Holders, stating the time, place and purposes of the meeting, shall be
given by the Trustees either by presenting it personally to a Holder, leaving it
at his or her residence or usual place of business, or by mailing it to a
Holder, at his or her registered address, at least 20 business days and not more
than 90 business days before the meeting. If mailed, such notice shall be deemed
to be given when deposited in the United States mail addressed to the Holder at
his or her address as it is registered with the Trust, with postage thereon
prepaid. At any such meeting, any business properly before the meeting may be
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
9.3 Record Date for Meetings For the purpose of determining the
Holders who are entitled to notice of any to vote at any meeting, or to
participate in any distribution, or for the purpose of any other action, the
Trustees may from time to time fix a date, not more than 90 calendar days prior
to the date of any meeting of the Holders or payment of distributions or other
action, as the case may be, as a record date for the determination of the
persons to be treated as Holders of record for such purposes.
9.4 Proxies, etc. At any meeting of Holders, any Holder entitled to
vote thereat may vote by proxy, provided that no proxy shall be voted at any
meeting unless it shall have been placed on file with the Secretary, or with
such other officer or agent of the Trust as the Secretary may direct, for
verification prior to the time at which such vote shall be taken. Pursuant to a
resolution of a majority of the Trustees, proxies may be solicited in the name
of one or more Trustees or one or more of the officers of the Trust. Only
Holders of record shall be entitled to vote. Each Holder shall be entitled to a
vote proportionate to its Interest in the Trust. When Interests are held jointly
by several persons, any one of them may vote at any meeting in person or by
proxy in respect of such Interest, but if more than one of them shall be present
at such meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Interest. A proxy purporting to be executed by or on behalf of a
Holder shall be deemed valid unless challenged at or prior to its exercise, and
the burden of proving invalidity shall rest on the challenger. If the Holder is
a minor or a person of unsound mind, and subject to guardianship or to the legal
control of any other person regarding the charge or management of its Interest,
he or she may
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vote by his or her guardian or such other person appointed or having such
control, and such vote may be given in person or by proxy.
9.5 Reports. The Trustees shall cause to be prepared, at least
annually, a report of operations containing a balance sheet and statement of
income and undistributed income of the Trust prepared in conformity with
generally accepted accounting principles and an opinion of an independent public
accountant on such financial statements. The Trustees shall, in addition,
furnish to the Holders at least semi-annually, interim reports containing an
unaudited balance sheet as of the end of such period and an unaudited statement
of income and surplus for the period from the beginning of the current Fiscal
Year to the end of such period.
9.6 Inspection of Records. The records of the Trust shall be open
to inspection by Holders during normal business hours and for any purpose not
harmful to the Trust.
9.7 Voting Powers. The Holders shall have power to vote only (a)
for the election of Trustees as contemplated by Section 2.2 hereof, (b) with
respect to any investment advisory contract as contemplated by Section 4.1
hereof, (c) with respect to termination of the Trust as provided in Section 10.2
hereof, (d) with respect to any amendment of the Declaration to the extent and
as provided in Section 10.3 hereof, (e) with respect to any merger,
consolidation, conversion or sale of assets as provided in Section 10.4 hereof,
(f) with respect to incorporation of the Trust to the extent and as provided in
Section 10.5 hereof, and (g) with respect to such additional matters relating to
the Trust as may be required by the 1940 Act, DBTA, or any other law, the
Declaration, the By-Laws or any registration of the Trust with the Commission
(or any successor agency) or any state, or as and when the Trustees may consider
necessary or desirable. Each Holder shall be entitled to vote based on the ratio
its Interest bears to the Interests of all Holders entitled to vote. Until
Interests are issued, the Trustees may exercise all rights of Holders and may
take any action required by law, the Declaration or the By-Laws to be taken by
Holders. The By-Laws may include further provisions for Holders' votes and
meetings and related matters.
9.8 Series of Interests. If the Trustees shall divide the Trust
Property into two or more series the following provisions shall be applicable:
(a) All consideration received by the Trust for the issue
or sale of Interests of a particular series together with all Trust Property in
which such consideration is invested or reinvested, all income, earnings,
profits, and proceeds thereof, including any proceeds derived from the sale,
exchange or liquidation of such assets, and any funds or payments derived from
any reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that series for all purposes, subject only to the rights
of creditors of such series and except as may otherwise be required by
applicable tax laws, and shall be so recorded upon the books of account of the
Trust. In the event that there is any Trust Property, or any income, earnings,
profits, and proceeds thereof, funds, or payments which are not readily
identifiable as belonging to any particular series, the Trustees shall allocate
them among any one or more of the series established and designated from time to
time in such manner and on such basis as they, in their sole discretion, deem
fair and equitable. Each such allocation by the Trustees shall be conclusive and
binding upon the Holders of all Interests for all purposes.
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(b) The Trust Property belonging to each particular series
shall be charged with the debts, liabilities and obligations of the Trust in
respect of that series and all expenses, costs, charges and reserves
attributable to that series, and any general liabilities, expenses, costs,
charges or reserves of the Trust which are not readily identifiable as belonging
to any particular series shall be allocated and charged by the Trustees to and
among any one or more of the series established and designated from time to time
in such manner and on such basis as the Trustees in their sole discretion deem
fair and equitable. Each allocation of liabilities, expenses, costs, charges and
reserves by the Trustees shall be conclusive and binding upon the Holders of all
Interests for all purposes. The Trustees shall have full discretion, to the
extent not inconsistent with the 1940 Act, to determine which items shall be
treated as income and which items as capital; and each such determination and
allocation shall be conclusive and binding upon the Holders. The assets of a
particular series of the Trust shall, under no circumstances, be charged with
the debts, liabilities, obligations and expenses attributable to any other
series of the Trust. All persons extending credit to, or contracting with or
having any claim against a particular series of the Trust shall look only to the
assets of that particular series for payment of such credit, contract or claim.
(c) The power of the Trustees to pay dividends and make
distributions shall be governed by Article VII of this Declaration with respect
to the Interests in the Trust immediately prior to the establishment of two or
more series. With respect to any series, dividends and distributions on
Interests may be paid with such frequency as the Trustees may determine, which
may be daily or otherwise, pursuant to a standing resolution or resolution
adopted only once or with such frequency as the Trustees may determine, to the
Holders of Interests in that series, from such of the income and capital gains,
accrued or realized, from the Trust Property belonging to that series as the
Trustee may determine, after providing for actual and accrued liabilities
belonging to that series. All dividends and distributions on Interests in a
particular series shall be distributed pro rata to the Holders of Interests in
that series in proportion to the total outstanding Interests in that series held
by such Holders at the date and time of record establishment for the payment of
such dividends or distribution.
(d) The Interests in a series of the Trust shall represent
beneficial interests in the Trust Property belonging to such series. Each Holder
of Interests in a series shall be entitled to receive its pro rata share of
distributions of income and capital gains made with respect to such series. Upon
reduction or withdrawal of its Interests or indemnification for liabilities
incurred by reason of being or having been a Holder of Interests in a series,
such Holder shall be paid solely out of the funds and property of such series of
the Trust. Upon liquidation or termination of a series of the Trust, Holders of
Interests in such series shall be entitled to receive a pro rata share of the
Trust Property belonging to such series. A Holder of Interests in a particular
series of the Trust shall not be entitled to participate in a derivative or
class action lawsuit on behalf of any other series or the Holders of Interests
in any other series of the Trust.
(e) Notwithstanding any other provision hereof, if the
Trust Property has been divided into two or more series, then on any matter
submitted to a vote of Holders of Interests in the Trust, all Interests then
entitled to vote shall be voted by individual series, except that (i) when
required by the 1940 Act, Interests shall be voted in the aggregate and not by
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individual series, and (ii) when the Trustees have determined that the matter
affects only the interests of Holders of Interests in a limited number of
series, then only the Holders of Interests in such series shall be entitled to
vote thereon. Except as otherwise provided in this Article IX, the Trustees
shall have the power to determine the designations, preferences, privileges,
limitations and rights, including voting and dividend rights, of each series of
Interests.
(f) The establishment and designation of any series of
Interests shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and designation and
the relative rights and preferences of such series, or as otherwise provided in
such instrument. The Trustees may, in any such instrument, designate a separate
business purpose or investment objective for any such series. At any time that
there are no Interests outstanding of any particular series previously
established and designated, the Trustees may by an instrument executed by a
majority of their number terminate that series and the establishment and
designation thereof. Each instrument referred to in this paragraph shall have
the status of an amendment to this Declaration.
(g) There shall initially be eight series of Interests
designated as the "Nations Balanced Assets Portfolio Series," the "Nations
Disciplined Equity Portfolio Series," the "Nations International Growth
Portfolio Series," the "Nations Managed Index Portfolio Series," the "Nations
Managed SmallCap Index Portfolio Series," the "Nations Marsico Growth & Income
Portfolio Series," the "Nations Marsico Focused Equities Portfolio Series," and
the "Nations Value Portfolio Series." Each such series will consist of an
unlimited number of Interests, and shall have the rights and privileges as set
forth herein.
9.9 Holder Action by Written Consent. Any action which may be taken
by Holders may be taken without a meeting if Holders holding more than 50% of
the total Interests entitled to vote (or such larger proportion thereof as shall
be required by any express provision of this Declaration) shall consent to the
action in writing and the written consents are filed with the records of the
meetings of Holders. Such consents shall be treated for all purposes as a vote
taken at a meeting of Holders.
9.10 No Pre-emptive Rights; Derivative Suits. Holders shall have no
pre-emptive or other rights to subscribe for any additional Interests or other
securities issued by the Trust or any series thereof. No action may be brought
by a Holder on behalf of the Trust unless Holders owning no less than 20% of the
then outstanding Interests join in the bringing of such action.
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ARTICLE X
Duration; Termination of Trust;
Amendment; Mergers; Etc.
10.1 Duration. Subject to possible termination or dissolution in
accordance with the provision of Section 10.2, the Trust created hereby shall
continue perpetually pursuant to Section 3808 of the DBTA.
10.2 Termination of Trust.
(a) The Trust may be terminated (i) by the affirmative vote
of the Holders of not less than two-thirds of the Interests in the Trust at any
meeting of the Holders or by an instrument in writing, without a meeting, signed
by a majority of the Trustees and consented to by the Holders of not less than
two-thirds of such Interests, or (ii) by the Trustees by written notice to the
Holders. Upon any such termination:
(1) The Trust shall carry on no business except for
the purpose of winding up its affairs.
(2) The Trustees shall proceed to wind up the
affairs of the Trust and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust shall have
been wound up, including the power to fulfill or discharge the contracts
of the Trust, collect its assets, sell, convey, assign, exchange, or
otherwise dispose of all or any part of the remaining Trust Property to
one or more Persons at public or private sale for consideration which
may consist in whole or in part of cash, securities or other property of
any kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, or other disposition of all or
substantially all of the Trust Property shall require approval of the
principal terms of the transaction and the nature and amount of the
consideration by the vote of Holders holding more than 50% of the total
Interests entitled to vote.
(3) After paying or adequately providing for the
payment of all liabilities, and upon receipt of such releases,
indemnities and refunding agreements as they deem necessary for their
protection, the Trustees may distribute the remaining Trust Property, in
cash or in kind or partly each, among the Holders according to their
respective rights.
(b) Upon termination of the Trust and distribution to the
Holders as herein provided, a majority of the Trustees shall (i) execute and
lodge among the records of the Trust an instrument in writing setting forth the
fact of such termination, and (ii) execute and file with the Delaware Secretary
of State a certificate of cancellation in accordance with the DBTA. Upon
termination of the Trust, the Trustees shall thereon be discharged from all
further liabilities and duties hereunder, and the rights and interests of all
Holders shall thereupon cease.
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10.3 Amendment Procedure.
(a) This Declaration may be amended by the vote of Holders
holding more than 50% of the total Interests entitled to vote or by any
instrument in writing, without a meeting, signed by a majority of the Trustees
and consented to by the vote of Holders holding more than 50% of the total
Interests entitled to vote. The Trustees may also amend this Declaration without
the vote or consent of Holders to change the name of the Trust, to supply any
omission, to cure, correct or supplement any ambiguous, defective or
inconsistent provision hereof, or to conform this Declaration to the
requirements of the 1940 Act, the Code, DBTA, or any other applicable Federal
laws or regulations, but the Trustees shall not be liable for failing to do so.
(b) No amendment may be made, under Section 10.3(a) above,
which would change any rights with respect to any Interest in the Trust by
reducing the amount payable thereon upon liquidation of the Trust or by
diminishing or eliminating any voting rights pertaining thereto, except with a
Majority Interests Vote.
(c) A certification in recordable form signed by a majority
of the Trustees setting forth an amendment and reciting that it was duly adopted
by the Holders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when lodged among the records of the
Trust.
Notwithstanding any other provision hereof, until such time as
Interests are first sold, this Declaration may be terminated or amended in any
respect by the affirmative vote of a majority of the Trustees or by an
instrument signed by a majority of the Trustees.
10.4 Merger, Consolidation, Conversion and Sale of Assets. The
Trust, or any series thereof, may (a) merge or consolidate with or into one or
more business trusts or other business entities (as defined in the DBTA) or any
other organization formed or organized or existing under the laws of the State
of Delaware or any other state or the United States or any foreign country or
other foreign jurisdiction, (b) convert to a common-law trust, a general
partnership (including a registered limited liability partnership), a limited
partnership (including a registered limited liability limited partnership) or a
limited liability company organized, formed or created under the laws of the
State of Delaware, or (c) sell, lease or exchange all or substantially all of
its property, including its good will, in each such case, upon such terms and
conditions and for such consideration when and as authorized by no less than a
majority of the Trustees and, at any meeting of Holders called for the purpose,
by a Majority Interests Vote, or by an instrument or instruments in writing
without a meeting, consented to by a Majority Interests Vote. In accordance with
Section 3815(f) of the DBTA, an agreement of merger or consolidation may effect
any amendment to the Declaration or By-Laws or effect the adoption of a new
declaration of trust or by-laws of the Trust if the Trust is the surviving or
resulting business trust.
ARTICLE XI
Miscellaneous
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11.1 Certificate of Designation; Agent for Service of Process. The
Trust shall file, in accordance with Section 3812 of the DBTA, in the office of
the Secretary of State of the State of Delaware, a certificate of trust, in the
form and with such information required by Section 3810 by the DBTA and executed
in the manner specified in Section 3811 of the DBTA. In the event the Trust does
not have at least one Trustee qualified under Section 3807(a) of the DBTA, then
the Trust shall comply with Section 3807(b) of the DBTA by having and
maintaining a registered office in Delaware and by designating a registered
agent for service of process on the Trust, which agent shall have the same
business office as the Trust's registered office. The failure to file any such
certificate, to maintain a registered office, to designate a registered agent
for service of process, or to include such other information shall not affect
the validity of the establishment of the Trust, the Declaration, the By-Laws or
any action taken by the Trustees, the Trust officers or any other Person with
respect to the Trust except insofar as a provision of the DBTA would have
governed, in which case the Delaware common law governs.
11.2 Governing Law. This Declaration is executed by all of the
Trustees and delivered with reference to the DBTA and the laws of the State of
Delaware, and the rights of all parties and the validity and construction of
every provision hereof shall be subject to and construed according to DBTA and
the laws of the State of Delaware (unless and to the extent otherwise provided
for and/or preempted by the 1940 Act or other applicable federal securities
laws). Reference shall be specifically made to DBTA as to the construction of
matters not specifically covered herein or as to which an ambiguity exists
(unless and to the extent otherwise provided for and/or preempted by the 1940
Act or other applicable Federal securities laws).
11.3 Counterparts. This Declaration may be simultaneously executed
in several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any such original counterpart.
11.4 Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust or of any recording office
in which this Declaration may be recorded, appears to be a Trustee hereunder,
certifying to: (a) the number or identity of Trustees or Holders, (b) the due
authorization of the execution of any instrument or writing, (c) the form of any
vote passed at a meeting of Trustees or Holders, (d) the fact that the number of
Trustees or Holders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-Laws
adopted by or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any person dealing with the Trustees and their successors.
11.5 Provisions in Conflict With Law or Regulations.
(a) The provisions of this Declaration are severable, and
if the Trustees shall determine, with the advice of counsel, that any of such
provisions is in conflict with the 1940 Act, the DBTA, or with other applicable
laws and regulations, the conflicting provisions shall be deemed never to have
constituted a part of this Declaration; provided, however, that such
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determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted prior to
such determination.
(b) If any provision of this Declaration shall be held
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall attach only to such provision in such jurisdiction and
shall not in any manner affect such provision in any other jurisdiction or any
other provision of this Declaration in any jurisdiction.
11.6 Trust Only. It is the intention of the Trustees to create only
a business trust under the DBTA with the relationship of Trustee and beneficial
owner between the Trustees and each Holder from time to time. It is not the
intention of the Trustees to create a general partnership, limited partnership,
joint stock association, corporation, bailment, or any form of legal
relationship other than a Delaware business trust. Nothing in this Declaration
of Trust shall be construed to make the Holders, either by themselves or with
the Trustees, partners or members of a joint stock association.
11.7 Withholding. Should any Holder be subject to withholding
pursuant to the Code, or any other provision of law, the Trust shall withhold
all amounts otherwise distributable to such Holder as shall be required by law
and any amounts so withheld shall be deemed to have been distributed to such
Holder under this Declaration of Trust. If any sums are withheld pursuant to
this provision, the Trust shall remit the sums so withheld to and file the
required forms with the Internal Revenue Service, or other applicable government
agency.
11.8 Headings and Construction. Headings are placed herein for
convenience of reference only and shall not be taken as a part hereof or control
or affect the meaning, construction or effect of this instrument. Whenever the
singular number is used herein, the same shall include the plural; and the
neuter, masculine and feminine genders shall include each other, as applicable.
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IN WITNESS WHEREOF, the undersigned have caused these presents to
be executed as of the 5th day of February, 1998.
/s/ Edmund L. Benson, III
- --------------------------------
Edmund L. Benson, III, Trustee
/s/ James Ermer
- --------------------------------
James Ermer, Trustee
/s/ William H. Grigg
- --------------------------------
William H. Grigg, Trustee
/s/ Thomas F. Keller
- --------------------------------
Thomas F. Keller, Trustee
/s/ Carl E. Mundy, Jr.
- --------------------------------
Carl E. Mundy, Jr., Trustee
/s/ A. Max Walker
- --------------------------------
A. Max Walker, Trustee
/s/ Charles B. Walker
- --------------------------------
Charles B. Walker, Trustee
/s/ Thomas S. Word
- --------------------------------
Thomas S. Word, Trustee
/s/ James B. Sommers
- --------------------------------
James B. Sommers, Trustee
24
AMENDED AND RESTATED
BYLAWS
OF
NATIONS ANNUITY TRUST
a Delaware Business Trust
February 5, 1998
Principal Place of Business:
One Bank of America Plaza
33rd Floor
Charlotte, North Carolina 28255
<PAGE>
AMENDED AND RESTATED
BY-LAWS
OF
NATIONS ANNUITY TRUST
These BY-LAWS are made as of the 5th day of February, 1998, and
adopted pursuant to Section 2.7 of the Amended and Restated Declaration of Trust
of NATIONS ANNUITY TRUST, dated February 5, 1998, as from time to time amended
(hereinafter called the "Declaration"). All words and terms capitalized in these
By-Laws shall have the meaning or meanings set forth for such words or terms in
the Declaration.
ARTICLE I
Meetings of Holders
Section 1.1 Annual Meeting. An annual meeting of the Holders of
Interests in the Trust, which may be held on such date and at such hour as may
from time to time be designated by the Board of Trustees (the "Trustees" or the
"Board") and stated in the notice of such meeting, is not required to be held
unless certain actions must be taken by the Holders as set forth in Section 9.7
of the Declaration, or except when the Trustees consider it necessary or
desirable.
Section 1.2 Chairman. The President or, in his absence, the Chief
Operating Officer shall act as chairman at all meetings of the Holders and, in
the absence of both of them, the Trustee or Trustees present at the meeting may
elect a temporary chairman for the meeting, who may be one of themselves or an
officer of the Trust.
Section 1.3 Proxies; Voting. Holders may vote either in person or
by duly executed proxy and each Holder shall be entitled to a vote proportionate
to his Interest in the Trust, all as provided in Article IX of the Declaration.
No proxy shall be valid after eleven (11) months from the date of its execution,
unless a longer period is expressly stated in such proxy.
Section 1.4 Fixing Record Dates. For the purpose of determining
the Holders who are entitled to notice of or to vote or act at a meeting,
including any adjournment thereof, or who are entitled to participate in any
distributions, or for any other proper purpose, the Trustees may from time to
time fix a record date in the manner provided in Section 9.3 of the Declaration.
If the Trustees do not, prior to any meeting of the Holders, so fix a record
date, then the date of mailing notice of the meeting shall be the record date.
Section 1.5 Inspectors of Election. In advance of any meeting of
the Holders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If
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Inspectors of Election are not so appointed, the chairman, if any, of any
meeting of the Holders may, and on the request of any Holder or his proxy shall,
appoint Inspectors of Election of the meeting. The number of Inspectors shall be
either one or three. If appointed at the meeting on the request of one or more
Holders or proxies, a Majority Interests Vote shall determine whether one or
three Inspectors are to be appointed, but failure to allow such determination by
the Holders shall not affect the validity of the appointment of Inspectors of
Election. In case any person appointed as Inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment made by the Trustees in
advance of the convening of the meeting or at the meeting by the person acting
as chairman. The Inspectors of Election shall determine the Interests owned by
Holders, the Interests represented at the meeting, the existence of a quorum,
the authenticity, validity and effect of proxies, shall receive votes, ballots
or consents, shall hear and determine all challenges and questions in any way
arising in connection with the right to vote, shall count and tabulate all votes
or consents, determine the results, and do such other acts as may be proper to
conduct the election or vote with fairness to all Holders. If there are three
Inspectors of Election, the decision, act or certificate of a majority is
effective in all respects as the decision, act or certificate of all. On request
of the chairman, if any, of the meeting, or of any Holder or his proxy, the
Inspectors of Election shall make a report in writing of any challenge or
question or matter determined by them and shall execute a certificate of any
facts found by them.
Section 1.6 Records at Meetings of Holders. At each meeting of the
Holders there shall be open for inspection the minutes of the last previous
meeting of Holders of the Trust and a list of the Holders of the Trust,
certified to be true and correct by the Secretary or other proper agent of the
Trust, as of the record date of the meeting. Such list of Holders shall contain
the name of each Holder in alphabetical order, the Holder's address and
Interests owned by such Holder. Holders shall have the right to inspect books
and records of the Trust during normal business hours and for any purpose not
harmful to the Trust.
ARTICLE II
Trustees
Section 2.1 Annual and Regular Meetings. Regular meetings of the
Trustees may be held without call or notice at such place or places and times as
the Trustees may by resolution provide from time to time.
Section 2.2 Special Meetings. Special Meetings of the Trustees
shall be held upon the call of the chairman, if any, the President, the Chief
Operating Officer, the Secretary, an Assistant Secretary or any two Trustees, at
such time, on such day and at such place, as shall be designated in the notice
of the meeting.
Section 2.3 Notice. Notice of a meeting shall be given by mail
(which term shall include overnight mail) or by telegram (which term shall
include a cablegram or telefacsimile) or delivered personally (which term shall
include notice by telephone). If notice is given by mail, it shall be mailed not
later than 72 hours preceding the meeting and if given by telegram or
personally, such notice shall be delivered not later than 24 hours preceding the
meeting. Notice
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of a meeting of Trustees may be waived before or after any meeting by signed
written waiver. Neither the business to be transacted at, nor the purpose of,
any meeting of the Board of Trustees need be stated in the notice or waiver of
notice of such meeting, and no notice need be given of action proposed to be
taken by written consent. The attendance of a Trustee at a meeting shall
constitute a waiver of notice of such meeting except where a Trustee attends a
meeting for the express purpose of objecting, at the commencement of such
meeting, to the transaction of any business on the ground that the meeting has
not been lawfully called or convened.
Section 2.4 Chairman; Records. The Trustees shall appoint a
Chairman of the Board from among their number. Such Chairman of the Board shall
act as chairman at all meetings of the Trustees; in his absence the President
shall act as chairman; and, in the absence of the Chairman of the Board and the
President, the Chief Operating Officer shall act as Chairman. In the absence of
all of them, the Trustees present shall elect one of their number to act as
temporary chairman. The results of all actions taken at a meeting of the
Trustees, or by written consent of the Trustees, shall be recorded by the
Secretary.
Section 2.5 Qualifications of Trustees. Except as provided in the
following sentence, no person shall be qualified to stand for election or
appointment as a Trustee if such person has already reached the age of 70. Each
Trustee shall retire from service on the Board of Trustees no later than the end
of the calendar year in which such Trustee reaches age 70, provided that (i) any
Trustee who is a Trustee as of January 25, 1995 and who had reached the age of
70 prior to such date may continue to serve as a Trustee of the Company until
the end of the calendar year in which such Trustee reaches age 75 and may
continue to serve for successive annual periods thereafter upon the vote of a
majority of the other Trustees; and (ii) any person who has already reached the
age of 70 may stand for election or appointment, pursuant to a vote of the
Trustees, in connection with an investment company reorganization or merger, and
any such person may continue to serve for successive annual periods thereafter
upon the vote of a majority of the other Trustees.
Section 2.6 Audit Committee. The Trustees may, by the affirmative
vote of a majority of the entire Board, appoint from its members an Audit
Committee composed of two or more Trustees who are not "interested persons" (as
defined in the Investment Company Act of 1940, as amended (the "1940 Act")) of
the Trust, as the Board may from time to time determine. The Audit Committee
shall: (a) recommend independent public accountants for selection by the Board,
(b) review the scope of audit, accounting and financial internal controls and
the quality and adequacy of the Trust's accounting staff with the independent
public accountants and such other persons as may be deemed appropriate, (c)
review with the accounting staff and the independent public accountants the
compliance of transactions of the Trust with its investment adviser,
administrator or any other service provider with the financial terms of
applicable contracts or agreements, (d) review reports of the independent public
accountants and comment to the Board when warranted, (e) report to the Board at
least once each year and at such other times as the committee deems desirable,
and (f) be directly available at all times to independent public accountants and
responsible officers of the Trust for consultation on audit, accounting and
related financial matters.
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Section 2.7 Nominating Committee of Trustees. The Trustees may, by
the affirmative vote of a majority of the entire Board, appoint from its members
a Trustee Nominating Committee composed of two or more Trustees. The Trustee
Nominating Committee shall recommend to the Board a slate of persons to be
nominated for election as Trustees by the Holders at a meeting of the Holders
and a person to be elected to fill any vacancy occurring for any reason in the
Board. Notwithstanding anything in this Section to the contrary, if the Trust
has in effect a plan pursuant to Rule 12b-1 under the 1940 Act, the selection
and nomination of those Trustees who are not "interested persons" (as defined in
the 1940 Act) shall be committed to the discretion of such disinterested
Trustees.
Section 2.8 Executive Committee. The Trustees may appoint from its
members an Executive Committee composed of those Trustees as the Board may from
time to time determine, of which committee the Chairman of the Board shall be a
member. In the intervals between meetings of the Board, the Executive Committee
shall have the power of the Board to: (a) determine the value of securities and
assets owned by the Trust, (b) elect or appoint officers of the Trust to serve
until the next meeting of the Board and (c) take such action as may be necessary
to manage the portfolio security loan business of the Trust. All action by the
Executive Committee shall be recorded and reported to the Board at its meeting
next succeeding such action.
Section 2.9 Other Committees. The Board may appoint from among its
members other committees composed of two or more of its Trustees which shall
have such powers as may be delegated or authorized by the resolution appointing
them.
Section 2.10 Committee Procedures. The Trustees may at any time
change the members of any committee, fill vacancies or discharge any committee.
In the absence of any member of any committee, the member or members thereof
present at any meeting, whether or not they constitute a quorum, may unanimously
appoint to act in the place of such absent member a member of the Board who,
except in the case of the Executive Committee, is not an "interested person" of
the Trust as the Board may from time to time determine. Each committee may fix
its own rules of procedure and may meet as and when provided by those rules.
Copies of the minutes of all meetings of committees other than the Nominating
Committee and the Executive Committee shall be distributed to the Board unless
the Board shall otherwise provide.
ARTICLE III
Officers
Section 3.1 Officers of the Trust; Compensation. The officers of
the Trust shall consist of the Chairman of the Board, if any, a President, a
Secretary, a Treasurer and such other officers or assistant officers, including
Chief Operating Officer, Vice Presidents and Assistant Secretaries, as may be
elected by the Trustees. Any two or more of the offices may be held by the same
person, except that the same person may not be both President and Secretary. The
Trustees may designate a Vice President as an Executive Vice President and may
designate the order in which the other Vice Presidents may act. The Chairman, if
any, shall be a Trustee, but
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no other officer of the Trust need be a Trustee. The Board of Trustees may
determine what, if any, compensation shall be paid to officers of the Trust.
Section 3.2 Election and Tenure. At the initial organization
meeting the Trustees shall elect the Chairman of the Board, if any, President,
Chief Operating Officer, if any, Secretary, Treasurer and such other officers as
the Trustees shall deem necessary or appropriate in order to carry out the
business of the Trust. Such officers shall hold office until their successors
have been duly elected and qualified. The Trustees may fill any vacancy in
office or add any additional officers at any time.
Section 3.3 Removal of Officers. Any officer may be removed at any
time, with or without cause, by action of a majority of the Trustees. This
provision shall not prevent the making of a contract of employment for a
definite term with any officer and shall have no effect upon any cause of action
which any officer may have as a result of removal in breach of a contract of
employment. Any officer may resign at any time by notice in writing signed by
such officer and delivered or mailed to the President, Chief Operating Officer,
if any, or Secretary, and such resignation shall take effect immediately, or at
a later date according to the terms of such notice in writing.
Section 3.4 Bonds and Surety. Any officer may be required by the
Trustees to be bonded for the faithful performance of his duties in such amount
and with such sureties as the Trustees may determine.
Section 3.5 President and Vice-Presidents. The President shall be
the chief executive officer of the Trust and, subject to the control of the
Trustees, shall have general supervision, direction and control of the business
of the Trust and of its employees and shall exercise such general powers of
management as are usually vested in the office of president of a corporation.
The President shall preside at all meetings of the Holders and, in the absence
of the Chairman of the Board, the President shall preside at all meetings of the
Trustees. Subject to direction of the Trustees, the President shall have the
power, in the name and on behalf of the Trust, to execute any and all loan
documents, contracts, agreements, deeds, mortgages, and other instruments in
writing, and to employ and discharge employees and agents of the Trust. Unless
otherwise directed by the Trustees, the President shall have full authority and
power, on behalf of all of the Trustees, to attend and to act and to vote, on
behalf of the Trust at any meetings of business organizations in which the Trust
holds an interest, or to confer such powers upon any other persons, by executing
any proxies duly authorizing such persons. The President shall have such further
authorities and duties as the Trustees shall from time to time determine. In the
absence or disability of the President, the Chief Operating Officer, if any, or,
in the absence or disability of both of them, the Vice Presidents in order of
their rank or the Vice President designated by the Trustees, shall perform all
of the duties of President, and when so acting shall have all the powers of and
be subject to all of the restrictions upon the President. Subject to the
direction of the President, the Chief Operating Officer, if any, the Treasurer
and each Vice President shall have the power in the name and on behalf of the
Trust to execute any and all loan documents, contracts, agreements, deeds,
mortgages and other instruments in writing, and, in addition, shall have such
other duties and powers as shall be designated from time to time by the
Trustees, the Chairman, or the President.
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Section 3.6 Chief Operating Officer. The Chief Operating Officer,
if any, shall have the authority and duties that generally pertain to such
office, including, but not limited to, those delegated by the Chairman, if any,
or the President.
Section 3.7 Secretary. The Secretary shall keep the minutes of all
meetings of, and record all votes of, Holders, Trustees and any committees of
Trustees, provided that, in the absence or disability of the Secretary, the
Holders or Trustees or committee may appoint any other person to keep the
minutes of a meeting and record votes. The Secretary shall be custodian of the
seal of the Trust, if any, and he (and any other person so authorized by the
Trustees) shall affix the seal or, if permitted, a facsimile thereof, to any
instrument executed by the Trust which would be sealed by a Delaware corporation
executing the name or a similar instrument and shall attest the seal and the
signature or signatures of the officer or officers executing such instrument on
behalf of the Trust. The Secretary shall also perform any other duties commonly
incident to such office in a Delaware corporation, and shall have such other
authorities and duties as the Trustees shall from time to time determine.
Section 3.8 Treasurer. Except as otherwise directed by the
Trustees, the Treasurer shall have the general supervision of the monies, funds,
securities, notes receivable and other valuable papers and documents of the
Trust, and shall have and exercise under the supervision of the Trustees and of
the Chairman, the President and the Chief Operating Officer all powers and
duties normally incident to his office. He or she may endorse for deposit or
collection all notes, checks and other instruments payable to the Trust or to
its order. He or she shall deposit all funds of the Trust as may be ordered by
the Trustees, the Chairman of the Board, the President or the Chief Operating
Officer. The Treasurer shall keep accurate account of the books of the Trust's
transactions which shall be the property of the Trust and which, together with
all other property of the Trust in his possession, shall be subject at all times
to the inspection and control of the Trustees. Unless the Trustees shall
otherwise determine, the Treasurer shall be the principal accounting officer of
the Trust and shall also be the principal financial officer of the Trust. He or
she shall have such other duties and authorities as the Trustees shall from time
to time determine. Notwithstanding anything to the contrary herein contained,
the Trustees may authorize any adviser or administrator to maintain bank
accounts and deposit and disburse funds on behalf of the Trust.
Section 3.9 Other Officers and Duties. The Trustees may elect such
other officers and assistant officers as they shall from time to time determine
to be necessary or desirable in order to conduct the business of the Trust.
Assistant officers shall act generally in the absence of the officer whom they
assist and shall assist that officer in the duties of his office. Each officer,
employee and agent of the Trust shall have such other duties and authority as
may be conferred upon him by the Trustees or delegated to him by the President
or by any other appropriate officers.
ARTICLE IV
Custodian
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Section 4.1 Appointment and Duties. The Board of Trustees shall at
all times employ a custodian or custodians with authority as its agent, but
subject to such restrictions, limitations and other requirements, if any, as may
be contained in these By-Laws:
(a) to hold the securities owned by the Trust and deliver the same
upon written order;
(b) to receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or elsewhere as the Trustees may
direct;
(c) to disburse such funds upon orders or vouchers;
(d) if authorized by the Trustees, to keep the books and accounts
of the Trust and furnish clerical and accounting services; and
(e) if authorized to do so by the Trustees, to compute the net
income and net assets of the Trust;
all upon such basis of compensation as may be agreed upon between the Trustees
and the custodian. The Trustees may also authorize the custodian to employ one
or more sub-custodians, from time to time, to perform such of the acts and
services of the custodian and upon such terms and conditions as may be agreed
upon between the custodian and such sub-custodian and approved by the Trustees.
Section 4.2 Central Certificate System. Subject to such rules,
regulations and orders as the Securities and Exchange Commission (the
"Commission") may adopt, the Trustees may direct the custodian to deposit all or
any part of the securities owned by the Trust in a system for the central
handling of securities established by a national securities exchange or a
national securities association registered with the Commission under the
Securities Exchange Act of 1934, or any such other person or entity with which
the Trustees may authorize deposit in accordance with the 1940 Act, pursuant to
which system all securities of any particular class or series of any issuer
deposited within the system are treated as fungible and may be transferred or
pledged by bookkeeping entry without physical delivery of such securities. All
such deposits shall be subject to withdrawal only upon the order of the Trust.
ARTICLE V
Miscellaneous
Section 5.1 Depositories. In accordance with Article IV of these
By-Laws, the portfolios of the Trust shall be deposited in such depositories as
the Trustees shall designate and shall be drawn out on checks, drafts or other
orders signed by such officer, officers, agent or agents (including any adviser
or administrator), as the Trustees may from time to time authorize.
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Section 5.2 Signatures. All contracts and other instruments shall
be executed on behalf of the Trust by such officer, officers, agent or agents,
as provided in these By-Laws or as the Trustees may from time to time by
resolution or authorization provide.
Section 5.3 Seal. The seal of the Trust, if any, may be affixed to
any document, and the seal and its attestation may be lithographed, engraved or
otherwise printed on any document with the same force and effect as if it had
been imprinted and attested manually in the same manner and with the same effect
as if done by a Delaware corporation.
Section 5.4 Fiscal Year. The fiscal year of the Trust shall end on
such date of each year as id determined from time to time by the Board.
ARTICLE VI
Interests
Section 6.1 Non-Transferability of Interests. Interests shall not
be transferable. Except as otherwise provided by law, the Trust shall be
entitled to recognize the exclusive right of a person in whose name Interests
stand on the record of Holders as the owners of such Interests for all purposes,
including, without limitation, the rights to receive distributions, and to vote
as such owner, and the Trust shall not be bound to recognize any equitable or
legal claim to or interest in any such Interests on the part of any other
person.
Section 6.2 Regulations. The Trustees may make such additional
rules and regulations, not inconsistent with these By-Laws, as they may deem
expedient concerning the sale and purchase of Interests of the Trust.
Section 6.3 Distribution Disbursing Agents and the Like. The
Trustees shall have the power to employ and compensate such distribution
disbursing agents, warrant agents and agents for the reinvestment of
distributions as they shall deem necessary or desirable. Any of such agents
shall have such power and authority as is delegated to any of them by the
Trustees.
Last Amended: November 17, 1999
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INVESTMENT ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of this 25th day of February, 1998, by and
between NATIONS ANNUITY TRUST, a Delaware business trust (the "Trust"), and
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"), on
behalf of those portfolios of the Trust now or hereafter identified on Schedule
I hereto (each a "Portfolio" and collectively, the "Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Trust and the Adviser desire to enter into an agreement to
provide for investment advisory services to the Trust upon the terms and
conditions hereinafter set forth; and
WHEREAS, the Trust and the Adviser contemplate that certain duties of the
Adviser under this Agreement will be delegated to one or more investment
sub-adviser(s) (the "Sub-Adviser(s)") pursuant to separate sub-advisory
agreement(s) (the "Sub-Advisory Agreement(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment. The Trust hereby appoints the Adviser to act as investment
adviser to each Portfolio for the period and on the terms set forth in this
Agreement. The Adviser accepts such appointment and agrees to furnish the
services herein set forth for the compensation herein provided. In the event
that the Trust establishes one or more portfolios other than the Portfolios with
respect to which it desires to retain the Adviser to act as investment adviser
hereunder, it shall notify the Adviser in writing. If the Adviser is willing to
render such services under this Agreement it shall notify the Trust in writing
whereupon such portfolio shall become a Portfolio hereunder and shall be subject
to the provisions of this Agreement except to the extent that said provisions
(including those relating to the compensation payable by the Portfolio to the
Adviser) are modified with respect to such Portfolio in writing by the Trust and
the Adviser at the time.
2. Delegation of Responsibilities. Subject to the approval of the Trust's
Board of Trustees and, if required, the shareholders of the Portfolios, the
Adviser may, pursuant to the Sub-Advisory Agreement(s), delegate to the
Sub-Adviser(s) those of its duties hereunder identified in the Sub-Advisory
Agreement(s), provided that the Adviser shall continue to supervise and monitor
the performance of the duties delegated to the Sub-Adviser(s) and any such
delegation shall not relieve the Adviser of its duties and obligations under
this Agreement. The Adviser shall be solely responsible for compensating the
Sub-Adviser(s) for services rendered under the Sub-Advisory Agreement(s).
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3. Delivery of Documents. The Trust has furnished the Adviser with copies,
properly certified or authenticated, of each of the following:
(a) the Trust's Certificate of Trust as filed with the Secretary
of State of Delaware on November 24, 1997, and Declaration of Trust and all
amendments thereto (such Declaration of Trust, as presently in effect and as it
shall from time to time be amended, is herein called the "Declaration of
Trust");
(b) the Trust's By-Laws and amendments thereto (such By-Laws, as
presently in effect and as it shall from time to time be amended, is herein
called the "By-Laws");
(c) votes of the Trust's Board of Trustees authorizing the
appointment of the Adviser and approving this Agreement;
(d) the Trust's Registration Statement, as amended, on Form N-1A
under the Securities Act of 1933, as amended (the "1933 Act") (File No.
333-40265) and under the 1940 Act (File No. 811-08481); and
(e) the most recent prospectus of the Trust relating to each
Portfolio (such prospectus) together with the related statement of additional
information, as presently in effect and all amendments and supplements thereto,
are herein called the "Prospectus").
The Trust will furnish the Adviser from time to time with copies of all
amendments of or supplements to the foregoing, if any.
4. Management. Subject to the supervision of the Trust's Board of
Trustees, the Adviser will provide a continuous investment program for each
Portfolio, including investment research and management with respect to all
securities, investments, cash and cash equivalents in each Portfolio. The
Adviser will determine from time to time what securities and other investments
will be purchased, retained or sold by the Portfolios and will place the daily
orders for the purchase or sale of securities. The Adviser will provide the
services rendered by it under this Agreement in accordance with each Portfolio's
investment objective, policies and restrictions as stated in the Prospectus and
votes of the Trust's Board of Trustees. The Adviser further agrees that it will:
(a) update each Portfolio's cash availability throughout the day
as required;
(b) maintain historical tax lots for each portfolio security held
by each Portfolio;
(c) transmit trades to the Trust's custodian for proper
settlement;
(d) maintain all books and records with respect to each
Portfolio's securities and transactions;
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(e) supply the Trust and its Board of Trustees with reports and
statistical data as requested; and
(f) prepare a quarterly broker security transaction summary and
monthly security transaction listing for each Portfolio.
5. Other Covenants. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under this Agreement in
accordance with other applicable law, including but not limited to the 1940 Act
and the Advisers Act;
(b) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or carry
Portfolio shares;
(d) will place orders pursuant to its investment determinations
for the Portfolios either directly with the issuer or with any broker or dealer.
Subject to the other provisions of this paragraph, in executing portfolio
transactions and selecting brokers or dealers, the Adviser will use its best
efforts to seek on behalf of each Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the Adviser
shall consider all factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting the
broker/dealer to execute a particular transaction, the Adviser may also consider
the brokerage and research services (as those terms are defined in Section 28(e)
of the Securities Exchange Act of 1934, as amended) provided to the Portfolio(s)
and/or other accounts over which the Adviser or an affiliate of the Adviser
exercises investment discretion. The Adviser is authorized, subject to the prior
approval of the Trust's Board of Trustees, to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for any Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Adviser to the
particular Portfolio and to the Trust. In addition, the Adviser is authorized to
take into account the sale of shares of the Trust in allocating purchase and
sale orders for portfolio securities to brokers or dealers (including brokers
and dealers that are affiliated with the Adviser or the Trust's principal
underwriter), provided that the Adviser believes that the quality of the
transaction and the commission are comparable to what they would be with other
qualified firms. In no instance, however, will portfolio securities be purchased
from or sold to the Adviser or the Trust's principal underwriter for the
Portfolios or an affiliated person of either acting as principal or broker,
except as permitted by the Commission or applicable law;
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(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. In making investment recommendations for a
Portfolio, its investment advisory personnel will not inquire or take into
consideration whether the issuer (or related supporting institution) of
securities proposed for purchase or sale for the Portfolio's account are
customers of the commercial departments of its affiliates. In dealing with
commercial customers, such commercial departments will not inquire or take into
consideration whether securities of those customers are held by the Portfolio;
and
(f) will treat confidentially, and as proprietary information of
the Trust, all records and other information relative to the Trust and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder (except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may not be withheld
and will be deemed granted where the Adviser may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested to divulge such
information by duly constituted authorities, or when so requested by the Trust).
6. Services Not Exclusive. The services furnished by the Adviser hereunder
are deemed not to be exclusive, and the Adviser shall be free to furnish similar
services to others so long as its services under this Agreement are not impaired
thereby. To the extent that the purchase or sale of securities or other
investments of the same issuer may be deemed by the Adviser to be suitable for
two or more accounts managed by the Adviser, the available securities or
investments may be allocated in a manner believed by the Adviser to be equitable
to each account. It is recognized that in some cases this procedure may
adversely affect the price paid or received by a Portfolio or the size of the
position obtainable for or disposed of by a Portfolio.
7. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Adviser hereby agrees that all records which it
maintains for each Portfolio are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's request.
The Adviser further agrees to preserve for the periods prescribed by Rule 31a-2
under the 1940 Act the records required to be maintained by Rule 31a-1 under the
1940 Act.
8. Expenses. During the term of this Agreement, the Adviser will pay all
expenses incurred by it in connection with its activities under this Agreement
other than the cost of securities, commodities and other investments (including
brokerage commissions and other transaction charges, if any) purchased or sold
for the Portfolios. In addition, if the aggregate expenses borne by any
Portfolio in any fiscal year exceed the applicable expense limitations imposed
by the securities regulations of any state in which its shares are registered or
qualified for sale to the public, the Adviser together with the Portfolio's
administrator(s) shall reimburse such Portfolio for such excess in proportion to
the fees otherwise payable to them for such year. The obligation of the Adviser
to reimburse the Trust hereunder is limited in any fiscal year to the amount of
its fee hereunder for such fiscal year, provided, however, that notwithstanding
the foregoing, the Adviser shall reimburse the Trust for the full amount of its
share of any such excess expenses regardless of the fees paid to it during such
fiscal year to the extent that the
-4-
<PAGE>
securities regulations of any state having jurisdiction over the Trust so
require. Such expense reimbursement, if any, will be estimated, reconciled and
paid on a monthly basis.
9. Compensation. For the services provided to each Portfolio and the
expenses assumed pursuant to this Agreement, the Trust will pay the Adviser and
the Adviser will accept as full compensation therefor a fee for that Portfolio
determined in accordance with Schedule I attached hereto. The fee attributable
to each Portfolio shall be a separate charge to such Portfolio and shall be the
several (and not joint or joint and several) obligation of each such Portfolio.
The Trust and the Adviser may, from time to time, agree to reduce, limit or
waive the amounts payable hereunder with respect to one or more Portfolios for
such period or periods they deem advisable.
10. Limitation of Liability. The Adviser shall not be liable for any error
of judgment or mistake of law or for any loss suffered by the Trust in
connection with the performance of this Agreement, except a loss resulting from
a breach of fiduciary duty with respect to the receipt of compensation for
services or a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser or any of its officers, directors,
employees or agents, in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
11. Duration and Termination. This Agreement shall become effective with
respect to a Portfolio when approved in accordance with the requirements of the
1940 Act, and shall continue in effect for a period of two years from the date
first written above. This Agreement shall thereafter continue from year to year,
provided that the continuation of the Agreement is specifically approved at
least annually:
(a) (i) by the Trust's Board of Trustees, or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Trust's
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at
a meeting specifically called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to any
Portfolio at any time, without the payment of any penalty, by the Trust (by vote
of the Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the particular Portfolio), or by the Adviser on sixty (60)
days' written notice. The notice provided for herein may be waived by the party
entitled to receipt thereof. This Agreement will immediately terminate in the
event of its assignment. As used in this Agreement, the terms "majority of the
outstanding voting securities," "interested persons" and "assignment" shall have
the same meanings as such terms have in the 1940 Act.
12. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party
-5-
<PAGE>
against which enforcement of the change, waiver, discharge or termination is
sought. No amendment of this Agreement affecting a Portfolio shall be effective
until approved by vote of a majority of the outstanding voting securities of
such Portfolio. However, this shall not prevent the Adviser from reducing,
limiting or waiving its fee.
13. Release. The names "Nations Annuity Trust" and "Trustees of Nations
Annuity Trust" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust and the Certificate of Trust dated November 24, 1997, which
is hereby referred to and a copy of which is on file at the office of the
Secretary of State of Delaware and the principal office of the Trust. The
obligations of "Nations Annuity Trust" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property (as defined in the Declaration of Trust) and all persons
dealing with any class of shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement of any claims against the
Trust.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of 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 and shall be
governed by Delaware law.
15. Counterparts. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
-6-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By:/s/ A. Max Walker
--------------------------------------
A. Max Walker
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By:/s/ Edward D. Bedard
--------------------------------------
Edward D. Bedard
Senior Vice President and Chief
Operating Officer
-7-
<PAGE>
SCHEDULE I
The Trust shall pay the Adviser as full compensation for services
provided and expenses assumed hereunder an advisory fee for each Portfolio,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Portfolio:
-------------------------------------------------- -------------------
Rate of
Portfolio Compensation
-------------------------------------------------- -------------------
Nations Balanced Assets Portfolio 0.65%
-------------------------------------------------- -------------------
Nations Disciplined Equity Portfolio 0.65%
-------------------------------------------------- -------------------
Nations International Growth Portfolio 0.80%
-------------------------------------------------- -------------------
Nations Managed Index Portfolio 0.40%
-------------------------------------------------- -------------------
Nations Managed SmallCap Index Portfolio 0.40%
-------------------------------------------------- -------------------
Nations Marsico Focused Equities Portfolio 0.75%
-------------------------------------------------- -------------------
Nations Marsico Growth & Income Portfolio 0.75%
-------------------------------------------------- -------------------
Nations Value Portfolio 0.65%
-------------------------------------------------- -------------------
-8-
SUB-ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of this 25th day of February, 1998, by and among
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
TRADESTREET INVESTMENT ASSOCIATES, INC., a Maryland corporation (the
"Sub-Adviser"), and NATIONS ANNUITY TRUST, a Delaware business trust (the
"Trust"), on behalf of those portfolios of the Trust now or hereafter identified
on Schedule I hereto (each a "Portfolio" and collectively, the "Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Sub-Adviser also is registered with the Commission under the
Advisers Act as an investment adviser;
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement of even date herewith (the "Investment Advisory Agreement"),
pursuant to which the Adviser shall act as investment adviser with respect to
the Portfolios; and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser, with
the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Portfolios upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints, and the Trust
hereby approves, the Sub-Adviser to render investment research and advisory
services to the Adviser and the Trust with respect to the Portfolios, under the
supervision of the Adviser and subject to the policies and control of the
Trust's Board of Trustees, and the Sub-Adviser hereby accepts such appointment,
all subject to the terms and conditions contained herein.
2. Investment Services. Subject to the supervision of the Adviser and the
Trust's Board of Trustees, the Sub-Adviser will provide a continuous investment
program for each Portfolio, including investment research and management with
respect to all securities, investments, cash and cash equivalents in each
Portfolio. The Sub-Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold by the Portfolios and will
place the daily orders for the purchase or sale of securities. The Sub-Adviser
-1-
<PAGE>
will provide the services rendered by it under this Agreement in accordance with
each Portfolio's investment objective, policies and restrictions as stated in
the Prospectus and votes of the Trust's Board of Trustees. The Sub-Adviser shall
provide such additional services related to the continuous investment program,
including recordkeeping services, as may reasonably be requested from time to
time by the Trust or the Adviser.
3. Control by Board of Trustees. As is the case with respect to the
Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. Other Covenants. In carrying out its obligations under this Agreement,
the Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under this Agreement in
accordance with other applicable law, including but not limited to the 1940 Act
and the Advisers Act;
(b) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or carry
Portfolio shares;
(d) will place orders pursuant to its investment determinations
for the Portfolios either directly with the issuer or with any broker or dealer.
Subject to the other provisions of this paragraph, in executing portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its best
efforts to seek on behalf of each Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting the
broker/dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended) provided to
the Portfolio(s) and/or other accounts over which the Sub-Adviser or an
affiliate of the Sub-Adviser exercises investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of Trustees, to
pay to a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for any Portfolio which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Sub-Adviser determines in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Sub-Adviser to the particular Portfolio and to the Trust. In addition,
the Sub-Adviser is authorized to take into account the sale of shares of the
Trust in allocating purchase and sale orders for portfolio securities to brokers
or dealers
-2-
<PAGE>
(including brokers and dealers that are affiliated with the Sub-Adviser or the
Trust's principal underwriter), provided that the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what they would
be with other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Sub-Adviser or the Trust's principal
underwriter for the Portfolios or an affiliated person of either acting as
principal or broker, except as permitted by the Commission or applicable law;
(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. In making investment recommendations for a
Portfolio, its investment advisory personnel will not inquire or take into
consideration whether the issuer (or related supporting institution) of
securities proposed for purchase or sale for the Portfolio's account are
customers of the commercial departments of its affiliates. In dealing with
commercial customers, such commercial departments will not inquire or take into
consideration whether securities of those customers are held by the Portfolio;
and
(f) will treat confidentially, and as proprietary information of
the Trust, all records and other information relative to the Trust and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder (except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may not be withheld
and will be deemed granted where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Trust).
5. Services Not Exclusive. The services furnished by the Sub-Adviser
hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. To the extent that the purchase or sale of securities
or other investments of the same issuer may be deemed by the Sub-Adviser to be
suitable for two or more accounts managed by the Sub-Adviser, the available
securities or investments may be allocated in a manner believed by the
Sub-Adviser to be equitable to each account. It is recognized that in some cases
this procedure may adversely affect the price paid or received by a Portfolio or
the size of the position obtainable for or disposed of by a Portfolio.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for each Portfolio are the property of the Trust and further agrees to
surrender promptly to the Adviser or the Trust any of such records upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
7. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased or sold for the Portfolios. In addition, the Sub-Adviser
-3-
<PAGE>
acknowledges that the Adviser has agreed, pursuant to the Investment Advisory
Agreement, that, if the aggregate expenses borne by any Portfolio in any fiscal
year exceed the applicable expense limitations imposed by the securities
regulations of any state in which its shares are registered or qualified for
sale to the public, the Adviser together with the Portfolio's administrator(s)
shall reimburse such Portfolio for such excess in proportion to the fees
otherwise payable to them for such year. If, for any fiscal year of a Portfolio,
the amount of the aggregate advisory fee which the Trust would otherwise be
obligated to pay is reduced pursuant to expense limitation provisions of the
Investment Advisory Agreement, the fee which the Sub-Adviser would otherwise
receive pursuant to this Agreement shall be reduced proportionately.
8. Compensation. For the services provided to each Portfolio and the
expenses assumed pursuant to this Agreement, the Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee
for that Portfolio determined in accordance with Schedule I attached hereto. The
Adviser and the Sub-Adviser may, from time to time, agree to reduce, limit or
waive the amounts payable hereunder with respect to one or more Portfolios for
such period or periods they deem advisable. It is understood that the Adviser
shall be responsible for the Sub-Adviser's fee for its services hereunder, and
the Sub-Adviser agrees that it shall have no claim against the Trust or the
Portfolio with respect to compensation under this Agreement.
9. Liability of Sub-Adviser. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Adviser or
the Trust in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the performance of
its duties, or from reckless disregard by it of its obligations and duties under
this Agreement.
10. Duration and Termination. This Agreement shall become effective with
respect to a Portfolio when approved by the Trustees of the Trust, and shall
continue in effect for a period of two years from the date first written above.
This Agreement shall thereafter continue from year to year, provided that the
continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees, or (ii) by the
vote of "a majority of the outstanding voting securities" of a
Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Trust's
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at
a meeting specifically called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to any
Portfolio at any time, without the payment of any penalty, by the Trust (by vote
of the Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the particular Portfolio), or by the Sub-Adviser or Adviser
on sixty (60) days' written notice to the other parties to this Agreement.
-4-
<PAGE>
The notice provided for herein may be waived by the party entitled to receipt
thereof. This Agreement will immediately terminate in the event of its
assignment. As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.
11. Amendment of this Agreement. No provision 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. No amendment of this Agreement affecting a
Portfolio shall be effective until approved by vote of a majority of the
outstanding voting securities of such Portfolio. However, this shall not prevent
the Sub-Adviser from reducing, limiting or waiving its fee.
12. Release. The names "Nations Annuity Trust" and "Trustees of Nations
Annuity Trust" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust and the Certificate of Trust, dated November 24, 1997,
which is hereby referred to and a copy of which is on file at the office of the
Secretary of State of Delaware and the principal office of the Trust. The
obligations of "Nations Annuity Trust" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property (as defined in the Declaration of Trust) and all persons
dealing with any class of shares of the Trust must look solely to the property
belonging to such class for the enforcement of any claims against the Trust.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of 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 and shall be
governed by Delaware law.
14. Counterparts. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By: /s/ A. Max Walker
----------------------------------------
A. Max Walker
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Edward D. Bedard
----------------------------------------
Edward D. Bedard
Senior Vice President and Chief
Operating Officer
TRADESTREET INVESTMENT ASSOCIATES, INC.
By: /s/ Holly Deem
----------------------------------------
Holly Deem
President
-6-
<PAGE>
SCHEDULE I
The Adviser shall pay the Sub-Adviser as full compensation for services
provided and expenses assumed hereunder a sub-advisory fee for each Portfolio,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Portfolio:
----------------------------------------------------- -------------------
Rate of
Portfolio Compensation
----------------------------------------------------- -------------------
Nations Balanced Assets Portfolio 0.25%
----------------------------------------------------- -------------------
Nations Disciplined Equity Portfolio 0.25%
----------------------------------------------------- -------------------
Nations Managed Index Portfolio 0.10%
----------------------------------------------------- -------------------
Nations Managed SmallCap Index Portfolio 0.10%
----------------------------------------------------- -------------------
Nations Value Portfolio 0.25%
----------------------------------------------------- -------------------
-7-
SUB-ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made as of this 8th day of February, 1999, by and among
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
MARSICO CAPITAL MANAGEMENT, LLC, Delaware corporation (the "Sub-Adviser"), and
NATIONS ANNUITY TRUST, a Delaware business trust (the "Trust"), on behalf of
those portfolios of the Trust now or hereafter identified on Schedule I hereto
(each a "Portfolio" and collectively, the "Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Sub-Adviser also is registered with the Commission under the
Advisers Act as an investment adviser;
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement dated February 25, 1998, as amended thereto (the "Investment
Advisory Agreement"), pursuant to which the Adviser shall act as investment
adviser with respect to the Portfolios; and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser, with
the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Portfolios upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints, and the Trust
hereby approves, the Sub-Adviser to render investment research and advisory
services to the Adviser and the Trust with respect to the Portfolios, under the
supervision of the Adviser and subject to the policies and control of the
Trust's Board of Trustees, and the Sub-Adviser hereby accepts such appointment,
all subject to the terms and conditions contained herein.
2. Investment Services. Subject to the supervision of the Adviser and the
Trust's Board of Trustees, the Sub-Adviser will provide a continuous investment
program for each Portfolio, including investment research and management with
respect to all securities, investments, cash and cash equivalents in each
Portfolio. The Sub-Adviser will determine from time to time what securities and
other investments will be purchased, retained or sold by the
-1-
<PAGE>
Portfolios and will place the daily orders for the purchase or sale of
securities. The Sub-Adviser will provide the services rendered by it under this
Agreement in accordance with each Portfolio's investment objective, policies and
restrictions as stated in the Prospectus and votes of the Trust's Board of
Trustees. The Sub-Adviser shall provide such additional services related to the
continuous investment program, including recordkeeping services, as may
reasonably be requested from time to time by the Trust or the Adviser.
3. Control by Board of Trustees. As is the case with respect to the
Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. Other Covenants. In carrying out its obligations under this Agreement,
the Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the
Commission and will in addition conduct its activities under this Agreement in
accordance with other applicable law, including but not limited to the 1940 Act
and the Advisers Act;
(b) will use the same skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or carry
Portfolio shares;
(d) will place orders pursuant to its investment determinations
for the Portfolios either directly with the issuer or with any broker or dealer.
Subject to the other provisions of this paragraph, in executing portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its best
efforts to seek on behalf of each Portfolio the best overall terms available. In
assessing the best overall terms available for any transaction, the Sub-Adviser
shall consider all factors that it deems relevant, including the breadth of the
market in the security, the price of the security, the financial condition and
execution capability of the broker or dealer, and the reasonableness of the
commission, if any, both for the specific transaction and on a continuing basis.
In evaluating the best overall terms available, and in selecting the
broker/dealer to execute a particular transaction, the Sub-Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934, as amended) provided to
the Portfolio(s) and/or other accounts over which the Sub-Adviser or an
affiliate of the Sub-Adviser exercises investment discretion. The Sub-Adviser is
authorized, subject to the prior approval of the Trust's Board of Trustees, to
pay to a broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for any Portfolio which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if, but only if, the Sub-Adviser determines in
good faith that such commission was reasonable in relation to the value of the
brokerage and research services provided by such broker or dealer, viewed in
terms of that particular transaction or in terms of the overall responsibilities
of the Sub-Adviser to the particular Portfolio and to the Trust. In addition,
the Sub-Adviser is authorized to take into account the sale of shares of the
-2-
<PAGE>
Trust in allocating purchase and sale orders for portfolio securities to brokers
or dealers (including brokers and dealers that are affiliated with the
Sub-Adviser or the Trust's principal underwriter), provided that the Sub-Adviser
believes that the quality of the transaction and the commission are comparable
to what they would be with other qualified firms. In no instance, however, will
portfolio securities be purchased from or sold to the Sub-Adviser or the Trust's
principal underwriter for the Portfolios or an affiliated person of either
acting as principal or broker, except as permitted by the Commission or
applicable law;
(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. In making investment recommendations for a
Portfolio, its investment advisory personnel will not inquire or take into
consideration whether the issuer (or related supporting institution) of
securities proposed for purchase or sale for the Portfolio's account are
customers of the commercial departments of its affiliates. In dealing with
commercial customers, such commercial departments will not inquire or take into
consideration whether securities of those customers are held by the Portfolio;
and
(f) will treat confidentially, and as proprietary information of
the Trust, all records and other information relative to the Trust and prior,
present or potential shareholders, and will not use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder (except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may not be withheld
and will be deemed granted where the Sub-Adviser may be exposed to civil or
criminal contempt proceedings for failure to comply, when requested to divulge
such information by duly constituted authorities, or when so requested by the
Trust).
5. Services Not Exclusive. The services furnished by the Sub-Adviser
hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. To the extent that the purchase or sale of securities
or other investments of the same issuer may be deemed by the Sub-Adviser to be
suitable for two or more accounts managed by the Sub-Adviser, the available
securities or investments may be allocated in a manner believed by the
Sub-Adviser to be equitable to each account. It is recognized that in some cases
this procedure may adversely affect the price paid or received by a Portfolio or
the size of the position obtainable for or disposed of by a Portfolio.
6. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for each Portfolio are the property of the Trust and further agrees to
surrender promptly to the Adviser or the Trust any of such records upon request.
The Sub-Adviser further agrees to preserve for the periods prescribed by Rule
31a-2 under the 1940 Act the records required to be maintained by Rule 31a-1
under the 1940 Act.
7. Expenses. During the term of this Agreement, the Sub-Adviser will pay
all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other
-3-
<PAGE>
transaction charges, if any) purchased or sold for the Portfolios. In addition,
the Sub-Adviser acknowledges that the Adviser has agreed, pursuant to the
Investment Advisory Agreement, that, if the aggregate expenses borne by any
Portfolio in any fiscal year exceed the applicable expense limitations imposed
by the securities regulations of any state in which its shares are registered or
qualified for sale to the public, the Adviser together with the Portfolio's
administrator(s) shall reimburse such Portfolio for such excess in proportion to
the fees otherwise payable to them for such year.
8. Compensation. For the services provided to each Portfolio and the
expenses assumed pursuant to this Agreement, the Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee
for that Portfolio determined in accordance with Schedule I attached hereto. The
Adviser and the Sub-Adviser may, from time to time, agree to reduce, limit or
waive the amounts payable hereunder with respect to one or more Portfolios for
such period or periods they deem advisable. It is understood that the Adviser
shall be responsible for the Sub-Adviser's fee for its services hereunder, and
the Sub-Adviser agrees that it shall have no claim against the Trust or the
Portfolio with respect to compensation under this Agreement.
9. Liability of Sub-Adviser. The Sub-Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by the Adviser or
the Trust in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the performance of
its duties, or from reckless disregard by it of its obligations and duties under
this Agreement.
10. Duration and Termination. This Agreement shall become effective with
respect to a Portfolio when approved by the Trustees of the Trust, and shall
continue in effect for a period of two years from the date first written above.
This Agreement shall thereafter continue from year to year, provided that the
continuation of the Agreement is specifically approved at least annually:
(a) (i) by the Trust's Board of Trustees, or (ii) by the
vote of "a majority of the outstanding voting securities" of a
Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Trust's
Trustees who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at
a meeting specifically called for such purpose.
Notwithstanding the foregoing, this Agreement may be terminated as to any
Portfolio at any time, without the payment of any penalty, by the Trust (by vote
of the Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the particular Portfolio), or by the Sub-Adviser or Adviser
on sixty (60) days' written notice to the other parties to this Agreement. The
notice provided for herein may be waived by the party entitled to receipt
thereof. This Agreement will immediately terminate in the event of its
assignment. As used in this
-4-
<PAGE>
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meanings as such terms
have in the 1940 Act.
11. Amendment of this Agreement. No provision 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. No amendment of this Agreement affecting a
Portfolio shall be effective until approved by vote of a majority of the
outstanding voting securities of such Portfolio. However, this shall not prevent
the Sub-Adviser from reducing, limiting or waiving its fee.
12. Release. The names "Nations Annuity Trust" and "Trustees of Nations
Annuity Trust" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust and the Certificate of Trust, dated November 24, 1997,
which is hereby referred to and a copy of which is on file at the office of the
Secretary of State of Delaware and the principal office of the Trust. The
obligations of "Nations Annuity Trust" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but bind
only the Trust Property (as defined in the Declaration of Trust) and all persons
dealing with any class of shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement of any claims against the
Trust.
13. Use of the Name "Marsico". Sub-Adviser hereby consents to and grants a
non-exclusive license for the use by the Trust to the phrase "Marsico Capital"
and the identifying word "Marsico" in the name of the Portfolios and any logo or
symbol authorized by the Sub-Adviser. Such consent is conditioned upon the
Trust's employment of Sub-Adviser or its affiliates as investment sub-adviser to
the Portfolios. Sub-Adviser may from time to time use the phrase "Marsico
Capital" or the identifying word "Marsico" or logos or symbols used by
Sub-Adviser in other connections and for other purposes, including without
limitation in the names of other investment companies, corporations or
businesses that it may manage, advise, sponsor or own or in which it may have a
financial interest. Sub-Adviser may require the Trust to cease using the phrase
"Marsico Capital" or the identifying word "Marsico" in the name of the
Portfolios or any logo or symbol authorized by Sub-Adviser if the Trust ceases
to employ Sub-Adviser or an affiliate thereof as investment sub-adviser.
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Agreement shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of 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 and shall be
governed by Delaware law.
15. Counterparts. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By: /s/ James E. Banks, Jr.
---------------------------------
James E. Banks, Jr.
Assistant Secretary
NATIONSBANC ADVISORS, INC.
By: /s/ Robert H. Gordon
---------------------------------
Robert H. Gordon
President
MARSICO CAPITAL MANAGEMENT, LLC
By: /s/ Barbara M. Japha
---------------------------------
Barbara M. Japha
President and General Counsel
-6-
<PAGE>
SCHEDULE I
The Adviser shall pay the Sub-Adviser as full compensation for services
provided and expenses assumed hereunder a sub-advisory fee for each Portfolio,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Portfolio:
Rate of
Portfolio Compensation
--------- ------------
Nations Marsico Focused Equities Portfolio 0.45%
Nations Marsico Growth & Income Portfolio 0.45%
Approved: January 25, 1999
-7-
SUB-ADVISORY AGREEMENT
NATIONS ANNUITY TRUST
THIS AGREEMENT is made this 25th day of February, 1998, by and
among NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
GARTMORE GLOBAL PARTNERS, a general partnership organized under the laws of the
State of Delaware (the "Sub-Adviser"), and NATIONS ANNUITY TRUST, a Delaware
business trust, (the "Trust") on behalf of the portfolio or portfolios of the
Trust as now or hereafter may be identified on Schedule I hereto (each a
"Portfolio" and collectively, the "Portfolios").
RECITALS
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Sub-Adviser is also registered with the Commission
under the Advisers Act as an investment adviser and is regulated by the
Investment Management Regulatory Organization Limited ("IMRO") of the United
Kingdom in the conduct of its investment business and is a member of IMRO;
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement of even date herewith (the "Investment Advisory Agreement"),
pursuant to which the Adviser shall act as investment adviser with respect to
the Portfolios; and
WHEREAS, pursuant to such Investment Advisory Agreement, the
Adviser, with the approval of the Trust, wishes to retain the Sub-Adviser for
purposes of rendering advisory services to the Adviser and the Trust in
connection with the Portfolios upon the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints, and
the Trust hereby approves, the Sub-Adviser to render investment research and
advisory services to the Adviser and the Trust with respect to the Portfolios,
under the supervision of the Adviser and subject to the policies and control of
the Trust's Board of Trustees, and the Sub-Adviser hereby accepts such
appointment, all subject to the terms and conditions contained herein.
2. Investment Services. The specific duties of the Adviser
delegated to the Sub-Adviser shall be the following:
<PAGE>
(a) obtaining and evaluating pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally
or the Portfolios specifically, and whether concerning the individual
issuers whose securities are included in the Portfolios or the
activities in which such issuers engage, or with respect to securities
which the Adviser or Sub-Adviser considers desirable for inclusion in
the Portfolios;
(b) investing and reinvesting, on an ongoing basis, assets
held in the Portfolios in strict accordance with the investment policies
of the Portfolios as set forth in the registration statement of the
Trust with respect to the Portfolios, as the same may be amended from
time to time;
(c) in accordance with policies and procedures established
by the Board of Trustees of the Trust and the Adviser, selecting brokers
and dealers to execute portfolio transactions for the Portfolios and
selecting the markets on or in which the transactions will be executed;
(d) voting, either in person or by general or limited
proxy, or refraining from voting, any securities held in the Portfolios
for any purposes; exercising or selling any subscription or conversion
rights; consenting to and joining in or opposing any voting trusts,
reorganizations, consolidations, mergers, foreclosures and liquidations
and in connection therewith, depositing securities, and accepting and
holding other property received therefor, all as may be considered
appropriate by the Sub-Adviser; and
(e) performing other acts necessary or appropriate in
connection with the proper management of the Portfolios, consistent with
its obligations hereunder, and as may be directed by the Adviser and/or
the Trust's Board of Trustees.
In carrying out its obligations under clauses (b) to (e),
inclusive, of this Paragraph 2, the Sub-Adviser shall act only as agent of the
Trust and/or the Portfolio and shall not act as principal. The Sub-Adviser shall
not be responsible for the administration of the Portfolio, for the execution
and settlement of transactions in securities or derivative instruments nor for
the custody of any such securities or instruments or documents of title and the
Sub-Adviser shall not hold any money or other assets of the Portfolio or the
Trust.
3. Control by Board of Trustees. As is the case with respect to
the Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Portfolios, shall
at all times be subject to any directives of the Board of Trustees of the Trust.
Without limiting the right of the Board of Trustees of the Trust to issue
directives, the Board of Trustees shall take into consideration any views or
opinions that may be expressed by the Adviser or Sub-Adviser in formulating
policies, procedures and directives. The Sub-Adviser shall not be obligated to
conform its activities to any directive of the Board of Trustees of the Trust to
the extent that compliance with such directive would be in contravention of any
law, rule or regulation applicable to the Sub-Adviser.
2
<PAGE>
4. Compliance with Applicable Requirements. In carrying out its
obligations under this Agreement, the Sub-Adviser shall at all times conform to:
(a) all applicable provisions of the 1940 Act and any rules
and regulations adopted thereunder;
(b) the provisions of the registration statement of the
Trust applicable to the Portfolios, as the same may be amended from time
to time, under the Securities Act of 1933, as amended (the "1933 Act")
and the 1940 Act;
(c) the Conduct of Business Rules of IMRO ("IMRO Rules") to
the extent that the IMRO Rules are not inconsistent with any applicable
requirements under the 1940 Act, the Advisers Act or other United States
federal or state law; and
(d) such policies and procedures that may be established by
the Board of Trustees of the Trust and communicated to the Sub-Adviser
from time to time.
In addition, any code of ethics adopted by the Sub-Adviser
pursuant to Rule 17j-1 under the 1940 Act shall include policies, prohibitions
and procedures which substantially conform to the recommendations regarding
personal investing approved by the Board of Governors of the Investment Company
Institute on June 30, 1994, as such recommendations may amended from time to
time.
5. Compensation. The Adviser shall pay the Sub-Adviser, as
compensation for services rendered hereunder, fees, payable monthly, at the
annual rates indicated on Schedule I hereto, as such Schedule may be
supplemented and amended from time to time. It is understood that the Adviser
shall be responsible for the Sub-Adviser's fee for its services hereunder, and
the Sub-Adviser agrees that it shall have no claim against the Trust or the
Portfolio with respect to compensation under this Agreement. The Sub-Adviser's
fees shall be pro-rated for portions of months in which sub-advisory services
are provided.
The average daily net asset value of the Portfolios shall be
determined in the manner set forth in the Declaration of Trust and registration
statement of the Trust, as amended from time to time.
6. Expenses of the Portfolios. All of the ordinary business
expenses incurred by the Sub-Adviser in the operations of the Portfolios and the
offering of their shares shall be borne by the Portfolios unless specifically
provided otherwise in this Agreement. These expenses borne by the Portfolios
include but are not limited to brokerage commissions, taxes, legal, auditing, or
governmental fees, the cost of preparing share certificates, custodian, transfer
agent and shareholder service agent costs, expenses of issue, sale, redemption
and repurchase of shares, Trustee and shareholder meetings, the cost of
preparing and distributing reports and notices to shareholders, the fees and
other expenses incurred by the Portfolios in connection with membership in
investment company organizations and the cost of printing copies of prospectuses
and statements of additional information distributed to the Portfolios'
shareholders.
3
<PAGE>
7. Expense Limitation. If, for any fiscal year of a Portfolio, the
amount of the aggregate advisory fee which the Trust would otherwise be
obligated to pay with respect to the Portfolio is reduced pursuant to expense
limitation provisions of the Investment Advisory Agreement, the fee which the
Sub-Adviser would otherwise receive pursuant to this Agreement shall be reduced
proportionately.
8. Non-Exclusivity. The services of the Sub-Adviser to the Adviser
and the Trust with respect to the Portfolio are not to be deemed to be
exclusive, and the Sub-Adviser shall be free to render investment advisory and
administrative or other services to others (including other investment
companies) and to engage in other activities. It is understood and agreed that
the officers and directors of the Sub-Adviser are not prohibited from engaging
in any other business activity or from rendering services to any other person,
or from serving as partners, officers, directors or trustees of any other firm
or trust, including other investment advisory companies.
9. Records. The Sub-Adviser shall provide to the Adviser, with
respect to the orders the Sub-Adviser places for the purchases and sales of
portfolio securities of the Portfolios, the documents and records required
pursuant to Rule 31a-1 under the 1940 Act as well as such records as the
Portfolios' administrator(s) reasonably request to be maintained, including, but
not limited to, trade tickets and confirmations for portfolio trades. All such
records shall be maintained in a form acceptable to the Portfolios and in
compliance with the provisions of Rule 31a-1. All such records will be the
property of the Portfolios and will be available for inspection and use by the
Portfolios. The Sub-Adviser will promptly notify the Adviser and the Portfolios'
administrator(s) if it experiences any difficulty in providing the records in an
accurate and complete manner.
10. Term and Approval. This Agreement shall become effective when
approved, and shall continue in effect for a period of two years from the date
first written above. This Agreement shall thereafter continue from year to year,
provided that the continuation of the Agreement is specifically approved at
least annually:
(a) (i) by the Trust's Board of Trustees, or (ii) by the
vote of "a majority of the outstanding voting securities" of the
Portfolio (as defined in Section 2(a)(42) of the 1940 Act); and
(b) by the affirmative vote of a majority of the Trustees
of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 1940 Act) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at a
meeting specifically called for such purpose.
11. Termination. This Agreement may be terminated at any time with
respect to a Portfolio, without the payment of any penalty, by vote of the
Trust's Board of Trustees or by vote of a majority of the Portfolio's
outstanding voting securities, or by the Adviser, or by the Sub-Adviser on sixty
(60) days' written notice to the other parties to this Agreement. Any party
entitled to notice may waive the notice provided for herein. This Agreement
shall automatically terminate in the event of its assignment, the term
"assignment" for purposes of this paragraph having the meaning defined in
Section 2(a)(4) of the 1940 Act.
4
<PAGE>
12. Liability of Sub-Adviser. In the absence of willful
misfeasance, bad faith, gross negligence or reckless disregard of obligations or
duties hereunder on the part of the Sub-Adviser or any of its officers,
directors, employees or agents, the Sub-Adviser shall not be subject to
liability to the Adviser or to the Trust for any act or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security (including
derivatives). For purposes of this paragraph and paragraph 13, brokers or
dealers selected to execute portfolio transactions for the Portfolios in
accordance with Paragraph 2(c) hereof shall not be considered agents of the
Sub-Adviser.
13. Indemnification. In the absence of willful misfeasance, bad
faith, gross negligence or reckless disregard of duties hereunder on the part of
the Sub-Adviser, or any officers, directors, employees or agents thereof, the
Trust hereby agrees to indemnify and hold harmless the Sub-Adviser against all
claims, actions, suits or proceedings at law or in equity whether brought by a
private party or a governmental department, commission, board, bureau, agency or
instrumentality of any kind: (a) arising from the advertising, solicitation,
sale, purchase or pledge of securities, whether of the Portfolios or other
securities, undertaken by the Portfolios or the Trust's officers, Trustees,
employees, agents or affiliates, or (b) resulting from any violations of the
securities laws, rules, regulations, statutes and codes, whether federal or of
any state, by the Portfolios, or the Trust's officers, Trustees, employees or
affiliates.
14. Notices. Any notices under this Agreement shall be in writing
and shall be duly given if delivered, mailed (postage prepaid, effective upon
receipt) or telegraphed, telexed or transmitted by similar telecommunications
device (effective upon completion of transmission, with a confirming copy
delivered or mailed postage prepaid) to such address or number as may be
designated for the receipt of such notice, with a copy to the Trust. Until
further notice, it is agreed that the address and telefax number of the Trust
shall be 111 Center Street, Little Rock, Arkansas 72201, Fax No. (501) 377-2331;
that of Sub-Adviser and the Adviser respectively shall be One NationsBank Plaza,
Charlotte, North Carolina 28255, Fax No. (704) 388-2187.
15. Questions of Interpretation. Any question of interpretation of
any term or provision of this Agreement having a counterpart in or otherwise
derived from a term or provision of the 1940 Act shall be resolved by reference
to such term or provision of the 1940 Act and to interpretations thereof, if
any, by the United States courts or in the absence of any controlling decision
of any such court, by rules, regulations or orders of the Commission issued
pursuant to the 1940 Act. In addition, where the effect of a requirement of the
1940 Act reflected in any provision of this Agreement is revised by rule,
regulation or order of the Commission, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
16. IMRO Rules. Addendum A attached hereto sets forth certain
requirements under the IMRO Rules which are applicable to the Sub-Adviser, that
are expressly incorporated herein and made a part hereof, but only to the extent
that such requirements are not inconsistent with any applicable requirements
under the 1940 Act, the Advisers Act or other United States Federal or state
law.
5
<PAGE>
17. Counterparts. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in triplicate by their respective officers on the day and year
first written above.
NATIONS ANNUITY TRUST
on behalf of the Portfolios
By:/s/ A. Max Walker
-----------------------------------
A. Max Walker
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By:/s/ Edward D. Bedard
-----------------------------------
Edward D. Bedard
Senior Vice President and Chief
Operating Officer
GARTMORE GLOBAL PARTNERS
By:/s/ Robin Maxwell
-----------------------------------
Robin Maxwell
Senior Vice President
6
<PAGE>
SCHEDULE I
The Trust shall pay the Sub-Adviser as full compensation for services
provided and expenses assumed hereunder a sub-advisory fee for each Portfolio,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Portfolio:
--------------------------------------------------------- -------------------
Rate of
Portfolio Compensation
--------------------------------------------------------- -------------------
Nations International Growth Portfolio 0.70%
--------------------------------------------------------- -------------------
Approved: December 9, 1997
<PAGE>
ADDENDUM A
1. For the purposes of this Agreement, the Trust, the Portfolios and the
Adviser shall each be regarded as a Non-Private Customer under IMRO
Rules.
2. To the extent that the Sub-Adviser receives any commissions or other
forms of remuneration, directly or indirectly, in connection with
portfolio transactions, no portion of the Sub-Adviser's accrued
investment advisory fee shall be abated thereby.
3. Subject to the supervision of the Adviser and the policies and ultimate
control of the Trust's Board of Trustees, the Sub-Adviser shall advise
the Trust and the Adviser on the management of the Portfolios'
investments in accordance with the terms of this Agreement and in
accordance with the investment parameters (including, inter alia,
percentage limitations, quality standards, investment selection criteria
and types of permissible investments and investment techniques, such as
borrowing, options and futures transactions, portfolio securities
lending, etc.) established pursuant to the investment objectives,
policies and restrictions specifically embodied in the Trust's
Registration Statement on Form N-1A, and any amendments thereto, under
the 1933 Act and the 1940 Act (the "Trust's Registration Statement").
4. The Sub-Adviser shall not have or maintain custody of any securities,
cash or other assets of the Portfolios. Custody of the Portfolios' assets
will be maintained by the custodian bank pursuant to an agreement
approved by the Trust's Board of Trustees. It is expected that such
custodian, or any successor thereto, will not be an "Associate" of the
Sub-Adviser as that term is defined under IMRO Rules.
5. In the event the Portfolios or the Adviser have a significant complaint
regarding the services provided by the Sub-Adviser under the Sub-Advisory
Agreement by and among the Trust, the Adviser and the Sub-Adviser, a
Portfolio officer should communicate such complaint to the Sub-Adviser,
whereupon such complaint will be recorded on a standard form prepared by
the Sub-Adviser for such purposes. The Sub-Adviser's complaints procedure
requires that if a complaint has not been cleared within twenty-eight
(28) days, the Sub-Adviser must so advise IMRO and the Portfolios also
must be advised that they have the right to issue the complaint directly
with a referee appointed by IMRO. A statement describing rights to
compensation in the event of the Sub-Advisers' inability to meet any
liabilities to the Trust or the Adviser will be made available on
request.
6. The Sub-Adviser will provide to the Trust's Board of Trustees written
financial reports and analyses on the Portfolios' securities transactions
and the operations of comparable investment companies on a quarterly
basis or more frequently as reasonably requested by the Board of
Trustees. Such reports and analyses shall include information as at the
last day of an applicable reporting period.
7. The Portfolios may from time to time request or instruct the Sub-Adviser,
directly or through the Adviser, to act or not to act regarding certain
portfolio-related investments and/or operational matters. Such request or
instructions will be communicated orally or in
1
<PAGE>
writing to the Sub-Adviser, directly or through the Adviser and will be
acknowledged in the same manner in which they are communicated. To the
extent that a particular request or instruction is, or may be, refused
(i.e., because it: (a) is in contravention of (i) a law or regulation,
(ii) an investment policy of the Portfolio, or (iii) a provision of this
Agreement; or (b) is not operationally feasible), such refusal shall be
communicated by the Sub-Adviser, including through the Adviser, and the
Portfolio and the Sub-Adviser, upon advice of counsel, shall discuss
alternatives and determine an appropriate course of action which will be
reported to the full Board at the next meeting of the Trust's Board of
Trustees for its approval.
8. Notwithstanding that all required disclosure concerning the risks
associated with the Portfolios' permissible investments and investment
techniques is included in the Trust's Registration Statement, which
Statement is intended for review by the investors in the Portfolios and
to be retained by them for future reference, with respect to the
Portfolios' specified use of options and futures transactions, particular
attention is drawn to the risk warnings set out in the Annex-Risk Warning
which receipt of is acknowledged by the Trust and the Adviser. However,
nothing stated therein shall be interpreted to modify any provision of
this Agreement.
9. Except as permitted by or pursuant to Section 17 of the 1940 Act and the
Rules promulgated thereunder, the Sub-Adviser, or an "affiliate" thereof
(as that term is defined in the 1940 Act), may not effect transactions:
(i) with or for the Portfolios in which the Sub-Adviser or such affiliate
has directly or indirectly a material interest or a relationship of any
kind with another party which may involve a conflict with the
Sub-Adviser's responsibilities to the Portfolios as a sub-investment
sub-adviser; or (ii) with or through the agency or another person with
whom the Sub-Adviser or such affiliate maintains an arrangement as
described in Rule 1.7(l) of Chapter II of the IMRO Rules.
10. Upon termination of the Sub-Advisory Agreement by and among the Trust,
the Adviser and the Sub-Adviser, unless otherwise directed by the Trust's
Board of Trustees, all securities positions and other portfolio
transactions then in progress shall be transferred to the successor
investment adviser selected by the Board of Trustees. Such termination
shall be without prejudice to the completion of any transactions in
securities already initiated for the Portfolio.
11. The Sub-Adviser shall be entitled at its discretion to disclose any
information known to it relating to the Portfolio's business or affairs
to the Financial Services Authority or to IMRO on the terms that the
information so disclosed shall not without its consent be further
disclosed otherwise than is permitted in respect of Restricted
Information under the provisions of Part VIII of the Financial Services
Act of 1986.
12. The Sub-Adviser shall be entitled at its discretion to disclose the
identity of the Trust and the Portfolio(s) as may be appropriately
required by Counterparties to transactions properly involving the
Portfolios.
2
DISTRIBUTION AGREEMENT
NATIONS ANNUITY TRUST
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Gentlemen:
This is to confirm that, in consideration of the agreements
hereinafter contained, the undersigned, Nations Annuity Trust (the "Trust"), a
Delaware business trust, has agreed that Stephens Inc. (the "Distributor") shall
be, for the period of this Agreement, the exclusive distributor of the shares of
common stock in all classes of shares ("Shares") of the investment portfolios of
the Trust listed on Schedule I (individually, a "Portfolio" and collectively the
"Portfolios"). Absent written notification to the contrary by either the Trust
or the Distributor, each new investment portfolio established in the future
shall automatically become a "Portfolio" for all purposes hereunder and shares
of each new class established in the future shall automatically become "Shares"
for all purposes hereunder as if set forth on Schedule I.
1. Services as Distributor.
1.1 The Distributor will act as agent for the distribution of
Shares in accordance with the instructions of the Trust's Board of Trustees and
the Trust's registration statement and prospectus then in effect under the
Securities Act of 1933, as amended (the "1933 Act"), and will transmit promptly
any orders received by it for the purchase or redemption of Shares to the Trust
or its transfer agent.
1.2 The Distributor agrees to use appropriate efforts to solicit
orders for the sale of Shares and will undertake such advertising and promotion
as it believes appropriate in connection with such solicitation. The Trust
understands that the Distributor is and may in the future be the distributor of
shares of other investment company portfolios including portfolios having
investment objectives similar to those of the Portfolios. The Trust further
understands that existing and future investors in the Portfolios may invest in
shares of such other portfolios. The Trust agrees that the Distributor's duties
to such portfolios shall not be deemed in conflict with its duties to the Trust
under this paragraph 1.2.
1.3 The Distributor shall, at its own expense, finance such
activities as it deems reasonable and which are primarily intended to result in
the sale of Shares, including, but not limited to, advertising, compensation of
underwriters, dealers and sales personnel, the printing and mailing of
prospectuses to other than current shareholders, and the printing and mailing of
sales literature. The Distributor shall be responsible for reviewing and
providing advice and counsel on all sales literature (e.g., advertisements,
brochures and shareholder communications) with respect to each of the
Portfolios. In addition, the Distributor will provide one or more
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persons, during normal business hours, to respond to telephone questions with
respect to the Portfolios.
1.4 All activities by the Distributor and its agents and employees
as distributor of Shares shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations made or
adopted pursuant to the Investment Company Act of 1940, as amended (the "1940
Act") by the Securities and Exchange Commission (the "SEC") or any securities
association registered under the Securities Exchange Act of 1934, as amended.
1.5 Whenever in their judgment such action is warranted by unusual
market, economic or political conditions, or by other circumstances of any kind,
the Trust's officers may decline to accept any orders for, or make any sales of
Shares until such time as those officers deem it advisable to accept such orders
and to make such sales.
1.6 The Trust agrees at its own expense to execute any and all
documents and to furnish any and all information and otherwise to take all
actions that may be reasonably necessary in connection with the registration or
qualification of Shares for sale in such states as the Distributor may designate
to the Trust and the Trust may approve, and the Trust shall pay all fees and
other expenses incurred in connection with such registration or qualification.
1.7 The Trust shall furnish from time to time, for use in
connection with the sale of Shares, such information with respect to the
Portfolios and Shares as the Distributor may reasonably request; and the Trust
warrants that the statements contained in any such information shall fairly show
or represent what they purport to show or represent. The Trust shall also
furnish the Distributor upon request with: (a) audited annual and unaudited
semi-annual statements of the Trust's books and accounts with respect to each
Portfolio, and (b) from time to time such additional information regarding the
Portfolios' financial condition as the Distributor may reasonably request.
1.8 The Distributor may be reimbursed for all or a portion of the
expenses described above to the extent permitted by a distribution plan adopted
by the Trust on behalf of a Portfolio pursuant to Rule 12b-1 under the 1940 Act.
No provision of this Agreement shall be deemed to prohibit any payments by a
Portfolio to the Distributor or by a Portfolio or the Distributor to investment
dealers, banks or other financial institutions through whom shares of the
Portfolio are sold where such payments are made under a distribution plan
adopted by the Trust on behalf of such Portfolio pursuant to Rule 12b-1 under
the 1940 Act. In addition, the Distributor shall be entitled to retain any
front-end sales charge imposed upon the sale of the Shares (and reallow a
portion thereof) as specified in the Trust's registration statement and the
Trust shall pay to the Distributor the proceeds from any contingent deferred
sales charge imposed on the redemption of the shares as specified in the Trust's
registration statement.
1.9 The Distributor will execute and deliver agreements with
broker/dealers, financial institutions and other industry professionals based on
the forms attached hereto or based on the additional forms of agreement approved
from time to time by the Trust's Board of Trustees with respect to the various
classes of shares of the Portfolios, including but not limited
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to forms of sales support agreements approved in connection with a distribution
approved in accordance with Rule 12b-1 under the 1940 Act.
2. Representations; Indemnification.
2.1 The Trust represents to the Distributor that all registration
statements and prospectuses filed by the Trust with the SEC under the 1933 Act,
with respect to Shares have been prepared in conformity with the requirements of
the 1933 Act and rules and regulations of the SEC thereunder. As used in this
Agreement, the terms "registration statement" and "prospectus" shall mean any
registration statement and then current prospectus (together with any related
then current statement of additional information) filed with the SEC with
respect to Shares, and any amendments and supplements thereto which at any time
shall have been filed therewith. The Trust represents and warrants to the
Distributor that any registration statement and prospectus, when such
registration statement becomes effective, will contain all statements required
to be stated therein in conformity with the 1933 Act and the rules and
regulations of the SEC; that all statements of fact contained in any such
registration statement and prospectus will be true and correct when such
registration statement and prospectus become effective; and that neither any
registration statement nor any prospectus when any registration statement
becomes effective will include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading to a purchaser of Shares. The Trust may, but
shall not be obligated to, propose from time to time such amendment or
amendments to any registration statement and such supplement or supplements to
any prospectus which in light of future developments, may, in the opinion of the
Trust's counsel, be necessary or advisable. The Trust shall promptly notify the
Distributor of any advice given to it by the Trust's counsel regarding the
necessity or advisability so to amend or supplement such registration statement
or prospectus. If the Trust shall not propose such amendment or amendments
and/or supplement or supplements within fifteen days after receipt by the Trust
of a written request from the Distributor to do so, the Distributor may, at its
option, terminate this Agreement. The Trust shall not file any amendment to any
registration statement or supplement to any prospectus without giving the
Distributor reasonable notice thereof in advance; provided, however, that
nothing contained in this Agreement shall in any way limit the Trust's right to
file at any time such amendments to any registration statement and/or
supplements to any prospectus, of whatever character, as the Trust may deem
advisable, such right being in all respects absolute and unconditional.
2.2 The Trust authorizes the Distributor and dealers to use any
prospectus in the form furnished from time to time in connection with the sale
of Shares and represented by the Trust as being the then current form of
prospectus. The Trust agrees to indemnify, defend and hold the Distributor, its
several officers and directors, and any person who controls the Distributor
within the meaning of Section 15 of the 1933 Act free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers and directors, or any such controlling person, may incur under the 1933
Act or under common law or otherwise, arising out of or based upon any untrue
statement, or alleged untrue statement, of a material fact contained in any
registration statement or any prospectus or arising out of or based upon any
omission, or alleged omission, to
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state a material fact required to be stated in any registration statement or
prospectus or necessary to make any statement in such documents not misleading;
provided, however, that the Trust's agreement to indemnify the Distributor, its
officers or directors, and any such controlling person shall not be deemed to
cover any claims, demands, liabilities or expenses arising out of any untrue
statement or alleged untrue statement or omission or alleged omission made in
any registration statement or prospectus or in any financial or other statements
in reliance upon and in conformity with any information furnished to the Trust
by the Distributor or any affiliate thereof and used in the preparation thereof;
and further provided that the Trust's agreement to indemnify the Distributor and
the Trust's representations and warranties herein set forth shall not be deemed
to cover any liability to the Trust or its shareholders to which the Distributor
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties, or by reason of the Distributor's
reckless disregard of its obligations and duties under this Agreement. The
Trust's agreement to indemnify the Distributor, its officers and directors, and
any such controlling person, as aforesaid, is expressly conditioned upon the
Trust's being notified of any action brought against the Distributor, its
officers or directors, or any such controlling person, such notification to be
given by letter or by telegram or transmitted by similar telecommunications
device, addressed to the Trust at its principal office and sent to the Trust by
the person against whom such action is brought, within a reasonable period of
time after the summons or other first legal process shall have been served. The
failure to so notify the Trust of any such action shall not relieve the Trust
from any liability which the Trust may have to the person against whom such
action is brought by reason of any such untrue, or allegedly untrue, statement
or omission, or alleged omission, otherwise than on account of the Trust's
indemnity agreement contained in this paragraph 2.2. The Trust will be entitled
to assume the defense of any suit brought to enforce any such claim, demand or
liability, but, in such case, such defense shall be conducted by counsel of good
standing chosen by the Trust and approved by the Distributor, which approval
shall not unreasonably be withheld. In the event the Trust elects to assume the
defense of any such suit and retain counsel of good standing approved by the
Distributor, the defendant or defendants in such suit shall bear the fees and
expenses of any additional counsel retained by any of them; but in case the
Trust does not elect to assume the defense of any such suit, or in case the
Distributor reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse the Distributor, its officers and directors, or the
controlling person or persons named as defendant or defendants in such suit, for
the fees and expenses of any counsel retained by the Distributor or them. The
Trust's indemnification agreement contained in this paragraph 2.2 and the
Trust's representations and warranties in this Agreement shall remain operative
and in full force and effect regardless of any investigation made by or on
behalf of the Distributor, its officers and directors, or any controlling
person, and shall survive the delivery of any Shares. This agreement of
indemnity will inure exclusively to the Distributor's benefit, to the benefit of
its several officers and directors, and their respective estates, and to the
benefit of the controlling persons and their successors. The Trust agrees
promptly to notify the Distributor of the commencement of any litigation or
proceedings against the Trust or any of its officers or Trustees in connection
with the issue and sale of any Shares.
2.3 The Distributor agrees to indemnify, defend and hold the
Trust, its several officers and Trustees, and any person who controls the Trust
within the meaning of Section 15 of the 1933 Act free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigation or defending such claims, demands or liabilities
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and any counsel fees incurred in connection therewith) which the Trust, its
officers or Trustees or any such controlling person, may incur under the 1933
Act or under common law or otherwise, but only to the extent that such liability
or expense incurred by the Trust, its officers or Trustees, or such controlling
person resulting from such claims or demands, shall arise out of or be based
upon any untrue, or alleged untrue, statement of a material fact contained in
information furnished by the Distributor or any affiliate thereof to the Trust
or its counsel and used in the Trust's registration statement or corresponding
statements made in the prospectus, or shall arise out of or be based upon any
omission, or alleged omission, to state a material fact in connection with such
information furnished by the Distributor or any affiliate thereof to the Trust
or its counsel required to be stated in such answers or necessary to make such
information not misleading. The Distributor's agreement to indemnify the Trust,
its officers and Trustees, and any such controlling person, as aforesaid, is
expressly conditioned upon the Distributor's being notified of any action
brought against the Trust, its officers or Trustees, or any such controlling
person, such notification to be given by letter or telegram addressed to the
Distributor at its principal office in Little Rock, Arkansas and sent to the
Distributor by the person against whom such action is brought, within a
reasonable period of time after the summons or other first legal process shall
have been served. The Distributor shall have the right to control the defense of
such action, with counsel of its own choosing, satisfactory to the Trust, if
such action is based solely upon such alleged misstatement or omission on the
Distributor's part or any affiliate thereof, and in any other event the Trust,
its officers or Trustees or such controlling person shall each have the right to
participate in the defense or preparation of the defense of any such action. The
failure so to notify the Distributor of any such action shall not relieve the
Distributor or any affiliate thereof from any liability which the Distributor or
any affiliate thereof may have to the Trust, its officers or Trustees, or to
such controlling person by reason of any such untrue or alleged untrue
statement, or omission or alleged omission, otherwise than on account of the
Distributor's indemnity agreement contained in this paragraph 2.3.
2.4 No Shares shall be offered by either the Distributor or the
Trust under any of the provisions of this Agreement and no orders for the
purchase or sale of Shares hereunder shall be accepted by the Trust if and so
long as the effectiveness of the registration statement then in effect or any
necessary amendments thereto shall be suspended under any of the provisions of
the 1933 Act, or if and so long as a current prospectus, as required by Section
10(b) of the 1933 Act is not on file with the SEC; provided, however, that
nothing contained in this paragraph 2.4 shall in any way restrict or have any
application to or bearing upon the Trust's obligation to repurchase Shares from
any shareholder in accordance with the provisions of the Trust's prospectus or
Declaration of Trust.
2.5 The Trust agrees to advise the Distributor as soon as
reasonably practical:
(a) of any request by the SEC for amendments to the
registration statement or prospectus then in effect;
(b) of the issuance by the SEC of any stop order suspending
the effectiveness of the registration statement or prospectus then in effect or
of the initiation of any proceeding for that purpose;
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(c) of the happening of any event that makes untrue any
statement of a material fact made in the registration statement or prospectus
then in effect or which requires the making of a change in such registration
statement or prospectus in order to make the statements therein not misleading;
(d) of all actions of the SEC with respect to any amendment
to any registration statement or prospectus which may from time to time be filed
with the SEC; and
(e) if a current prospectus is not on file with the SEC.
For purposes of this section, informal requests by or acts of the
staff of the SEC shall not be deemed actions of or requests by the SEC.
3. Confidentiality.
The Distributor agrees on behalf of itself and its employees to
treat confidentially and as proprietary information of the Trust all records and
other information relative to the Portfolios and/or the Trust and its prior,
present or potential shareholders, and not to use such records and information
for any purpose other than performance of its responsibilities and duties
hereunder, except after prior notification to and approval in writing by the
Trust, which approval shall not be unreasonably withheld and may not be withheld
where the Distributor may be exposed to civil or criminal contempt proceedings
for failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
4. Limitations of Liability.
Except as provided in paragraph 2.3, the Distributor shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or any Portfolio in connection with matters to which this agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on its part in the performance of its duties or from reckless
disregard of its obligations and duties under this agreement.
5. Term.
This agreement shall become effective on the date of its execution
and, unless sooner terminated as provided herein, shall continue in effect for a
period of two years from the date written below. This Agreement shall thereafter
continue from year to year, provided such continuance is specifically approved
at least annually by (i) the Trust's Board of Trustees, or (ii) by a vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Portfolio, provided that in either event the continuance is also approved by
the majority of the Trust's Trustees who are not parties to this agreement or
interested persons (as defined in the 1940 Act) of any such party, by vote cast
in person at a meeting called for the purpose of voting on such approval. This
agreement is not assignable and is terminable with respect to a Portfolio,
without penalty, on not less than sixty (60) days' notice, by the Trust's Board
of Trustees, by vote of a majority (as defined in the 1940 Act) of the
outstanding voting securities of such
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Portfolio, or by the Distributor. This agreement will also terminate
automatically in the event of its assignment (as defined in the 1940 Act).
6. Miscellaneous.
6.1 No provision of this Agreement may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which an enforcement of the change, waiver, discharge or
termination is sought.
6.2 This agreement shall be governed by the laws of the State of
Arkansas.
7. Counterparts.
7.1 This Agreement may be executed in any manner of counterparts,
each of which shall be deemed an original.
Please confirm that the foregoing is in accordance with your
understanding by indicating your acceptance hereof at the place indicated below,
whereupon it shall become a binding agreement between us.
Yours very truly,
NATIONS ANNUITY TRUST
By: /s/ A. Max Walker
-------------------------------------
Name: A. Max Walker
Title: President and Chairman of
the Board of Trustees
Accepted:
STEPHENS INC.
By:/s/ Richard H. Blank, Jr.
---------------------------------
Name: Richard H. Blank, Jr.
Title: Vice President
Dated as of February 25, 1998
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SCHEDULE I
1. Nations Balanced Assets Portfolio
2. Nations Disciplined Equity Portfolio
3. Nations International Growth Portfolio
4. Nations Managed Index Portfolio
5. Nations Managed SmallCap Index Portfolio
6. Nations Marsico Focused Equities Portfolio
7. Nations Marsico Growth & Income Portfolio
8. Nations Value Portfolio
8
NATIONS FUNDS
RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES
PREAMBLE
Effective on or before January 26, 1995, the regulated investment
companies advised by NationsBank, N.A. (Carolinas) or its affiliates (the
"Nations Funds") have adopted THE NATIONS FUNDS RETIREMENT PLAN FOR ELIGIBLE
DIRECTORS/TRUSTEES (the "Plan") for the benefit of each of the directors and
trustees of each of the Nations Funds who is not an employee of any of the
Nations Funds, or their distributor, administrator or advisor, or any of their
affiliates. As the Plan does not benefit any employees of the Nations Funds, it
is not intended to be classified as an employee benefit plan within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended.
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
1.1 Definitions.
Unless a different meaning is plainly implied by the context; the
following terms as used in this Plan shall have the following meanings;
(a) "Accrued Benefit" shall mean, as of any date prior to a
Participant's Normal Retirement Date, his Retirement Benefit, determined as of,
and commencing on, his Normal Retirement Date, but based upon his Compensation
and Years of Service computed as of such date of determination.
(b) "Administrator" shall mean the administrative committee
provided for in Article VI.
(c) "Board of Directors" shall mean the Board of Directors of each
of the Nations Funds.
(d) "Compensation" shall mean, for any Director, the aggregate
amount of director's fees paid or accrued by the Nations Funds for such Director
during the calendar year during which the Director's Retirement occurs,
including amounts of director's fees deferred during such fiscal year under a
separate agreement between the Nations Funds and the Director. In addition, for
purposes of this Plan, "Compensation" shall include fees which would have been
paid or accrued by the Nations Funds for such Director during the calendar year
during which the Director's Retirement occurs but for the execution of a waiver
of such fees by the Director. In the
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event the Director's Retirement occurs on other than the last day of the
calendar year, his Compensation for such calendar year shall be annualized, if
necessary, to reflect the amount he would have received (including deferred
amounts) had his Retirement occurred on the last day of such calendar year. The
amount of such annualized Compensation shall be determined by the Administrator.
(e) "Deferred Retirement Date" shall mean the first day of the
month coincident with or next following the date on which a Participant
terminated Service after his Normal Retirement Date.
(f) "Director" shall mean an individual who is a director or
trustee of one or more of the Nations Funds which have adopted the Plan but who
is not an employee of any of the Nations Funds, or their distributor,
administrator or advisor, or any of their affiliates. A director or trustee
shall not be considered to be an employee of any of the Nations Funds for
purposes of this Plan solely by reason of holding a position as an officer of a
Fund, provided the director or trustee receives no compensation from the Fund
other than director's or trustee's fees.
(g) "Disability" shall mean the inability of the Participant to
participate in meetings of the Board of Directors, either in person or by
telephone, for a period of at least nine (9) consecutive months.
(h) "Effective Date" shall mean, with respect to each of the
Nations Funds, the date on which this Plan was adopted (as shown on the last
page hereof).
(i) "Fund" shall mean a Nations Fund which has adopted this Plan.
(j) "Nations Funds" shall mean the regulated investment companies
advised by NationsBank, N.A. (Carolinas), or its affiliates.
(k) "Normal Retirement Date" shall mean the date on which a
Participant has both attained age 65 and has completed at least five continuous
and non-forfeited Years of Service with one or more of the Nations Funds.
(l) "Participant" shall mean a Director who has met all of the
eligibility requirements of the Plan and who is currently included in the Plan
as provided in Article II hereof.
(m) "Plan" shall mean the "Nations Funds Retirement Plan for
Eligible Directors/ Trustees" as described herein or as hereafter amended from
time to time.
(n) "Plan Year" shall mean a calendar year.
(o) "Retirement" shall mean a Director's termination of his active
Service with the Nations Funds on or after his Normal Retirement Date, due to
his death, Disability, or voluntary or involuntary termination of his Service.
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(p) "Retirement Benefit" shall mean the benefit described under
Sections 3.1 or 3.2 hereof to which a Participant is entitled on or after his
Normal or Deferred Retirement Date.
(q) "Service" shall mean an individual's serving as a Director of
one or more of the Nations Funds.
(r) "Year of Service" shall mean each complete calendar year
during which the Director was a Director for the entirety of such calendar year,
including years of unbroken service prior to the Effective Date. For all
purposes of this Plan, in the event a Director ceases to serve as a Director
prior to his Normal Retirement Date, he shall forfeit credit for all Years of
Service completed prior to such cessation even if he subsequently again becomes
a Director. Furthermore, any unbroken service provided by a Participant (i) to a
Nations Fund immediately prior to its being advised by NationsBank, N.A.
(Carolinas) (or any of its affiliates) or (ii) to a predecessor of a Nations
Fund immediately prior to its being merged into such Nations Fund, will be taken
into account in determining such Participant's Years of Service, subject to all
restrictions and other forfeiture provisions contained herein.
1.2 Plurals and Gender.
Where appearing in the Plan, the masculine gender shall include
the feminine and neuter genders, and the singular shall include the plural, and
vice versa, unless the context clearly indicates a different meaning.
1.3 Directors/Trustees.
Where appropriate, the term "director" shall also refer to
"trustee," "directorship" shall also refer to "trusteeship" and "Board of
Directors" shall also refer to "Board of Trustees."
1.4 Headings.
The headings and sub-headings in this Plan are inserted for the
convenience of reference only and are to be ignored in any construction of the
provisions hereof.
1.5 Severability.
In case any provision of this Plan shall be held illegal or void,
such illegality or invalidity shall not affect the remaining provisions of this
Plan, but shall be fully severable, and the Plan shall be construed and enforced
as if said illegal or invalid provisions had never been inserted herein.
ARTICLE II
PARTICIPATION
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2.1 Commencement of Participation.
Each Director shall become a Participant hereunder on the later of
the Effective Date or the date his directorship of one or more of the Nations
Funds commences.
2.2 Termination of Participation.
After commencement or resumption of his participation, a Director
shall remain a Participant until the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death;
(c) The date on which he otherwise incurs a termination of
Service; or
(d) The effective date of the termination of the Plan.
2.3 Resumption of Participation.
Any Participant whose Service terminates and who thereafter again
becomes a Director shall resume participation immediately upon again becoming a
Director except that, as provided in Section 1.1(t) hereof, if his Service is
terminated prior to his Normal Retirement Date, for all purposes of this Plan he
shall forfeit credit for all Years of Service completed prior to such
termination of his Service.
2.4 Determination of Eligibility.
The Administrator shall determine the eligibility of Directors in
accordance with the provisions of this Article.
ARTICLE III
BENEFITS UPON RETIREMENT
AND OTHER TERMINATION OF SERVICE
3.1 Normal Retirement.
Upon Retirement a Participant shall be entitled to receive an
annual benefit from the Nations Fund commencing on the first day of the calendar
quarter coincident with or next following his date of Retirement, payable in
quarterly installments for a period of no more than five (5) years (thus
equaling no more than twenty (20) quarterly installments) equal to five
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percent (5%) of his Compensation paid by the Nations Fund multiplied by the
number of his non-forfeited Years of Service (not in excess of ten (10) Years of
Service) completed with respect to any of the Nations Funds.
3.2 Deferred Retirement.
In the event that a Participant remains in Service with the
Nations Funds after his Normal Retirement Date, he shall not be entitled to any
benefits hereunder until his Deferred Retirement Date. Commencing on the first
day of the calendar quarter following his Deferred Retirement Date, a
Participant shall be entitled to receive a Retirement Benefit from the Nations
Funds paid in twenty (20) quarterly installments in an amount equal to the
quarterly Retirement Benefit he would have received from the Nations Funds under
Section 3.1 hereof had his Retirement occurred on his Normal Retirement Date,
except that such quarterly benefit shall be computed by including the number of
any additional Years of Service which have accrued since his Normal Retirement
Date (subject to the ten (10) Years of Service limitation set forth under
Section 3.1 hereof) and by taking into account any increases in Compensation
received since his Normal Retirement Date.
3.3 Other Termination of Service.
Upon termination of his participation in this Plan for any reason
prior to his Normal Retirement Date, a Participant shall not be entitled to any
benefit hereunder.
3.4 Benefits Calculated in the Aggregate for all of the Nations Funds.
With respect to each Participant, the benefits payable hereunder
shall be based on the aggregate Compensation paid by the Nations Funds and on
the Participant's non-forfeited Years of Service. Each Fund's share of the
obligation to provide such benefits shall be determined by use of accounting
methods adopted by the Administrator.
ARTICLE IV
DEATH BENEFITS
4.1 Death Prior to Commencement of Benefits.
In the event of a Participant's death on or after his Normal
Retirement Date, but prior to the commencement of his Retirement Benefits under
Article III hereof, the surviving spouse (if any) of such Participant shall be
entitled to receive a quarterly survivor's benefit for no more than five (5)
years (thus, not exceeding twenty (20) quarterly installments) beginning on the
first day of the calendar quarter next following the date of the Participant's
death equal to fifty percent (50%) of the amount of the quarterly installments
of Retirement Benefits that would have been paid to the Participant under
Sections 3.1 or 3.2 hereof based upon the Participant's Compensation and Years
of Service as of his date of death.
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4.2 Death Subsequent to Commencement of Benefits.
In the event a Participant dies after the commencement of his
Retirement Benefit under Article III, but prior to the cessation of the payment
of such Retirement Benefits, the surviving spouse (if any) of such Participant
shall be entitled to receive survivor's benefits equal to fifty percent (50%) of
the amount of the annual Retirement Benefits payable to the Participant under
Article III hereunder, paid at such times, and for such period, as such
Retirement Benefits would have continued to have been paid to the Participant
had he not died.
4.3 Death of Spouse.
(a) In the event a Participant is not survived by a spouse, no
benefits will be paid hereunder upon the Participant's death.
(b) If a deceased Participant's surviving spouse dies while
receiving survivor's benefits hereunder, any installments not paid at the time
of the surviving spouse's death shall be forfeited.
ARTICLE V
SUSPENSION OF BENEFITS
5.1 Suspension of Benefits Upon Resumption of Service.
In the case of a Participant who, at a time when he is receiving
Retirement Benefits under Article III of this Plan, resumes Service with any
Nations Fund, such Retirement Benefits shall be suspended until his subsequent
Retirement, termination of Service, or death. Subject to the Years of Service
limitations of Section 3.1 hereof, in the event of his Retirement or termination
of Service following such a suspension, the quarterly amount of his remaining
Retirement Benefits shall thereafter be adjusted to reflect any additional Years
of Service completed by, or a higher rate of Compensation received by, such
Participant.
ARTICLE VI
ADMINISTRATOR
6.1 Appointment of Administrator.
This plan shall be administered by the Nominating and Compensation
Committees of the Boards of Directors of the Nations Funds. The members of such
committees are not "interested persons" (within the meaning of Section 2(a)(19)
of the Investment Company Act of 1940, as amended) of any of the Nations Funds.
The term "Administrator" as used in this Plan shall refer to the members of such
committees, either individually or collectively, as appropriate.
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6.2 Powers and Duties of Administrator.
Except as provided below, the Administrator shall be authorized in
connection with the administration of this Plan:
(a) To promulgate and enforce such rules, regulations and
procedures as shall be proper for the efficient administration of the Plan;
(b) To determine all questions arising in the administration,
interpretation and application of the Plan, including questions of eligibility
and of the status and rights of the Participants and any other persons
hereunder;
(c) To decide any dispute arising hereunder; provided, however,
that no Administrator shall participate in any matter involving any questions
relating solely to his own participation or benefits under this Plan;
(d) To advise the Boards of Directors of the Nations Funds
regarding the known future need for funds to be available for distribution;
(e) To correct defects, supply omissions and reconcile
inconsistencies to the extent necessary to effectuate the Plan;
(f) To compute the amount of benefits and other payments which
shall be payable to any Participant or surviving spouse in accordance with the
provisions of the Plan and to determine the person or persons to whom such
benefits shall be paid;
(g) To make recommendations to the Boards of Directors of the
Nations Funds with respect to proposed amendments to the Plan;
(h) To file all reports with government agencies; Participants and
other parties as may be required by law, whether such reports are initially the
obligation of the Nations Funds, or the Plan;
(i) To engage an independent actuary on behalf of the Plan and to
cause the liabilities of the Plan to be evaluated by the actuary; and
(j) To have all such other powers as may be necessary to discharge
its duties hereunder.
6.3 Action by Administrator.
The Administrator may elect a Chairman and Secretary from among
its members and may adopt rules for the conduct of its business. A majority of
the members then serving shall constitute a quorum for the transaction of
business. All resolutions or other action taken by the Administrator shall be by
vote of a majority of those present at such meeting and entitled to vote.
Resolutions may be adopted or other action taken without a meeting upon written
consent signed
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by at least a majority of the members. All documents, instruments, orders,
requests, directions, instructions and other papers shall be executed on behalf
of the Administrator by either the Chairman or the Secretary of the
Administrator, if any, or by any member or agent of the Administrator duly
authorized to act on the Administrator's behalf.
6.4 Participation by Administrators.
No Administrator shall be precluded from becoming a Participant in
the Plan if he would be otherwise eligible, but he shall not be entitled to vote
or act upon matters or to sign any documents relating specifically to his own
participation under the Plan, except when such matters or documents relate to
benefits generally. If this disqualification results in the lack of a quorum,
then the Boards of Directors, by majority vote of the members of a majority of
such Boards of Directors (a "Majority Vote"), shall appoint a sufficient number
of temporary Administrators, who shall serve for the sole purpose of determining
such a question.
6.5 Agents and Expenses.
The Administrator may employ agents and provide for such clerical,
legal, actuarial, accounting, medical, advisory or other services as it deems
necessary to perform its duties under this Plan. The cost of such services and
all other expenses incurred by the Administrator in connection with the
administration of the Plan shall be allocated to each Fund pursuant to the
method utilized under Section 3.4 hereof with respect to costs related to
benefit accruals. For purposes of the preceding sentence, if an individual
serves as a Director for more than one Fund, he shall be deemed to be a separate
Director for each such Fund in determining the aggregate number of Directors of
the Nations Funds.
6.6 Allocation of Duties.
The duties, powers and responsibilities reserved to the
Administrator may be allocated among its members so long as such allocation is
pursuant to written procedures adopted by the Administrator, in which case no
Administrator shall have any liability, with respect to any duties, powers or
responsibilities not allocated to him, for the acts or omissions of any other
Administrator.
6.7 Delegation of Duties.
The Administrator may delegate any of its duties to employees of
the Nations Funds' distributor, administrator or adviser, or any of their
affiliates, or to any other person or firm, provided that the Administrator
shall prudently choose such agents and rely in good faith on their actions.
6.8 Records and Reports.
The Administrator shall maintain adequate records of its actions
and proceedings in administering this Plan and shall file all reports and take
all other actions as it deems appropriate in order to comply with any federal or
state law.
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6.9 Information from the Nations Funds.
The Nations Funds shall promptly furnish all necessary information
to the Administrator to permit it to perform its duties under this Plan. The
Administrator shall be entitled to rely upon the accuracy and completeness of
all information furnished to it by the Nations Funds, unless it knows or should
have know that such information is erroneous.
6.10 Reservation of Rights by Boards of Directors.
When rights are reserved in this plan to the Boards of Directors,
such rights shall be exercised only by Majority Vote of the Boards of Directors,
except where the Boards of Directors, by unanimous written resolution, delegate
any such rights to one or more persons or to the Administrator. Subject to the
rights reserved to the Boards of Directors as set forth in this Plan, no member
of the Boards of Directors shall have any duties or responsibilities under this
Plan, except to the extent he shall be acting in the capacity of an
Administrator.
6.11 Liability and Indemnification.
(a) The Administrator shall perform all duties required of it
under this Plan in a prudent manner. The Administrator shall not be responsible
in any way for any action or omission of the Nations Funds or any other
fiduciaries in the performance of their duties and obligations as set forth in
this Plan. The Administrator also shall not be responsible for any act or
omission of any of its agents provided that such agents were prudently chosen by
the Administrator and that the Administrator relied in good faith upon the
action of such agents.
(b) The Administrator shall not be relieved from responsibility or
liability for any responsibility, obligation or duty imposed upon it under this
Plan. Except for its own gross negligence, willful misconduct or willful breach
of the terms of this Plan, the Administrator shall be indemnified and held
harmless by the Nations Funds against liability or losses occurring by reason of
any act or omission of the Administrator.
ARTICLE VII
AMENDMENTS AND TERMINATION
7.1 Amendments.
The Boards of Directors reserve the right at any time and from
time to time, and retroactively, if deemed necessary or appropriate by them, to
amend in whole or in part by Majority Vote any or all of the provisions of this
Plan, provided that:
(a) No amendment shall make it possible for any part of a
Participant's Accrued Benefit or Retirement Benefit to be used for, or diverted
to, purposes other than for the exclusive
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benefit of Participants or their surviving spouses, except to the extent
otherwise provided in this Plan;
(b) No amendment may reduce any Participant's Accrued Benefit as
of the effective date of the amendment;
Amendments may be made in the form of Board of Directors'
resolutions or separate written document.
7.2 Termination.
Except as provided below, the Boards of Directors reserve the
right to terminate this Plan at any time by Majority Vote by giving to the
Administrator notice in writing of such desire to terminate. The Plan shall
terminate upon the date of receipt of such notice and the rights of all
Participants to their Accrued Benefits (determined as of the date the Plan is
terminated) shall become payable upon the earlier of the effective date of the
termination of the Plan, or, with respect to each Participant, upon his Normal
Retirement Date in quarterly installments or in an actuarially equivalent lump
sump as determined by the Administrator.
7.3 Change in Control.
In the event of the voluntary resignation of, or a vote or action
to replace, or a decision not to stand for re-election by, two or more of the
directors of a Nations Fund, in connection with a transaction that involves a
change in control or management of a Nations Fund or an affiliated person of a
Nations Fund, the Plan shall terminate with respect to the directors of the
Nations Fund who have resigned, been replaced or declined to stand for
re-election, on the date they cease being directors and the rights of all such
directors to their Accrued Benefits (determined as of the date of termination of
the Plan) shall become payable in quarterly installments or in an actuarially
equivalent lump sum as determined by the Administrator.
ARTICLE VIII
MISCELLANEOUS
8.1 Rights of Creditors.
(a) The Plan is unfunded. Neither the Participant nor any other
persons shall have any interest in any fund or in any specific asset or assets
of any of the Nations Funds by reason of any Accrued Benefit or Retirement
Benefit hereunder, nor any rights to receive distribution of any Retirement
Benefit except as and to the extent expressly provided hereunder.
(b) The Accrued Benefits and Retirement Benefits of each
Participant are unsecured and shall be subject to the claims of the general
creditors of the Nations Funds.
8.2 Liability Limited.
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Neither the Nations Funds, the Administrator, nor any agents,
employees, officers, directors or shareholders of any of them, nor any other
person shall have any liability or responsibility with respect to this Plan,
except as expressly provided herein.
8.3 Incapacity.
If the Administrator shall receive evidence satisfactory to it
that a Participant or surviving spouse entitled to any benefit under the Plan
is, at the time when such benefit becomes payable, physically or mentally
incompetent to give a valid release therefor, and that another person or an
institution is then maintaining or has custody of such Participant or surviving
spouse and that no guardian, committee or other representative of the estate of
such Participant or surviving spouse shall have been duly appointed, the
Administrator may make payment of such benefit otherwise payable to such
Participant or surviving spouse to such other person or institution, and the
release of such other person or institution shall be a valid and complete
discharge for the payment of such benefit.
8.4 Cooperation of Parties.
All parties to this Plan and any person claiming any interest
hereunder agree to perform any and all acts and execute any and all documents
and papers which are necessary or desirable for carrying out this Plan or any of
its provisions.
8.5 Governing Law.
This Plan has been adopted in the State of North Carolina and all
questions pertaining to its validity, construction and administration shall be
determined in accordance with the laws of that State.
8.6 No Guarantee of Directorship.
Nothing contained in this Plan shall be construed as a guaranty or
right of any Participant to be continued as a Director of one or more of the
Nations Funds (or of a right of a Director to any specific level of
Compensation) or as a limitation of the right of any of the Nations Funds, by
shareholder action or otherwise, to remove any of its directors.
8.7 Counsel.
The Administrator may consult with legal counsel, who may be
counsel for one or more of the Board of Directors of the Nations Funds and for
the Administrator, with respect to the meaning or construction of this Plan, its
obligations or duties hereunder or with respect to any action or proceeding or
any question of law, and they shall be fully protected with respect to any
action taken or omitted by them in good faith pursuant to the advice of legal
counsel.
8.8 Spendthrift Provision.
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A Participant's interest in his Accrued Benefit or Retirement
Benefit and the interest of a surviving spouse of a Participant in any benefit
payable under Article IV hereof shall not be subject to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charges and any
attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber or
charge the same shall be void; nor shall any portion of any such right hereunder
be in any manner payable to any assignee, receiver or trustee, or be liable for
such person's debts, contracts, liabilities, engagements or torts, or be subject
to any legal process to levy upon or attach.
8.9 Forfeiture for Cause.
Notwithstanding any other provision of this Plan to the contrary,
any benefits to which a Participant (or his surviving spouse) may otherwise be
entitled hereunder will be forfeited in the event the Administrator, in its sole
discretion, determines that a Participant's termination of Service is due to
such Participant's willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of the office of Director.
ARTICLE IX
CLAIMS PROCEDURE
9.1 Notice of Denial.
If a Participant is denied any Retirement Benefit (or a surviving
spouse is denied a survivor's benefit) under this Plan, either in total or in an
amount less than the full Retirement Benefit to which he would normally be
entitled, the Administrator shall advise the Participant (or surviving spouse)
in writing of the amount of his Retirement Benefit (or survivor's benefit), if
any, and the specific reasons for the denial. The Administrator shall also
furnish the Participant (or surviving spouse) at that time with a written notice
containing:
(a) A specific reason with reference to pertinent Plan provisions.
(b) A description of any additional material or information
necessary for the Participant (or surviving spouse) to perfect his claim, if
possible, and an explanation of why such material or information is needed.
(c) An explanation of the Plan's claim review procedure.
9.2 Right to Reconsideration.
Within 60 days of receipt of the information stated in Section 9.1
above, the Participant (or surviving spouse) shall, if he desires further
review, file a written request for reconsideration with the Administrator.
9.3 Review of Documents.
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So long as the Participant's (or surviving spouse's) request for
review is pending (including the 60-day period in 9.2 above), the Participant
(or surviving spouse) or his duly authorized representative may review pertinent
Plan documents and may submit issues and comments in writing to the
Administrator.
9.4 Decision by Administrator.
A final and binding decision shall be made by the Administrator
within 60 days of the filing by the Participant (or surviving spouse) of his
request for reconsideration, provided, however, that if the Administrator, in
its discretion, feels that a hearing with the Participant (or surviving spouse)
or his representative present is necessary or desirable, this period shall be
extended an additional 60 days.
9.5 Notice by Administrator.
The Administrator's decision shall be conveyed to the Participant
(or surviving spouse) in writing and shall include specific reasons for the
decision and the provisions of the Plan on which the decision is based.
Adopted on January 26, 1995 by:
Nations Fund, Inc.
Nations Fund Trust
The Capitol Mutual Funds
Adopted on January 25, 1995 by:
Nations Fund Portfolios, Inc.
Amended on July 13, 1995 by:
Nations Fund, Inc.
Nations Fund Trust
The Capitol Mutual Funds
Nations Fund Portfolios, Inc.
Adopted on August 6, 1997 by:
Nations Annuity Trust
Adopted on February 24, 1999 by:
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Nations Master Investment Trust
Adopted on December 9, 1999 by:
Nations Funds Trust
14
CUSTODY AGREEMENT
THIS AGREEMENT is made as of the 19th day of October, 1998 by
and between The Bank of New York, a New York corporation authorized to do a
banking business ("Custodian"), and Nations Annuity Trust, a Delaware business
trust (the "Trust").
W I T N E S S E T H
WHEREAS, the Trust is a registered open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain Custodian to serve as
custodian for the Trust, on behalf of its portfolios listed on Schedule I
(individually a "Portfolio" and collectively the "Portfolios") and to provide
the services described herein, and Custodian is willing to serve and to provide
such services; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the Trust and Custodian hereby agree as follows:
1. Appointment. The Trust hereby appoints Custodian to act as custodian
of its portfolio securities, cash and other property on the terms set forth in
this Agreement. Custodian accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Paragraph 23 hereof. Custodian agrees to comply with all relevant provisions of
the 1940 Act and applicable rules and regulations thereunder.
The Trust may from time to time issue separate series or classes, and
classify and reclassify shares of any such series or class. The Trust shall
promptly specify to Custodian in writing such series or classes, or any
reclassification and thereafter Custodian shall identify to each such series or
class Property, as hereinafter defined, belonging to such series or class, and
such reports, confirmations and notices to the Trust as are called for under
this Agreement shall identify the series or class to which such report,
confirmation or notice pertains.
2. Delivery of Documents. The Trust has furnished Custodian with copies
properly certified or authenticated of each of the following:
(a) votes of the Trust's Board of Trustees authorizing the
appointment of Custodian as custodian of portfolio securities, cash and other
property of the Trust, respectively, and approving and consenting to this
Agreement;
(b) schedules identifying and containing the signatures of all
of the Trust's officers and any other persons authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined, on behalf
of the Portfolios of the Trust;
(c) the Trust's current Registration Statement on Form N-1A
under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act"),
as filed with the Securities
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and Exchange Commission (the "SEC"), relating to shares of beneficial interest
of the Trust, without par value (the "Shares");
(d) the current prospectuses and statement of additional
information of each of the Portfolios, including all amendments and supplements
thereto (the "Prospectuses"); and
(e) a copy of the opinion of counsel for the Trust, filed with
the SEC as part of the Trust's current registration statement.
The Trust will furnish Custodian from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to any of the foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any of the Trust's officers, and any other person,
whether or not any such person is an officer or employee of the Trust, duly
authorized by the Board of Trustees of the Trust to give Oral and Written
Instructions to Custodian on behalf of the Trust and listed on a schedule
provided to Custodian pursuant to Section 2 of this Agreement. Authorized
Persons duly authorized by the Board of Trustees of the Trust to buy and sell
foreign currency on a spot and forward basis and options to buy and sell foreign
currency are denoted by an asterisk thereon.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system maintained by a clearing agency
registered with the SEC under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
(c) "Composite Currency Unit". Shall mean the European
Currency Unit or any other composite unit consisting of the aggregate of
specified amounts of specified Currencies as such unit may be constituted from
time to time.
(d) "Currency". Shall mean money denominated in a lawful
currency of any country or the European Currency Unit.
(e) "FX Transaction". Shall mean any transaction for the
purchase by one party of an agreed amount in one Currency against the sale by it
to the other party of an agreed amount in another Currency.
(f) "Instructions". Shall mean instruction communications
transmitted by appropriately safeguarded (whether by password protection or
other means) electronic or telecommunications media including but not limited to
S.W.I.F.T., LASER, computer-to-computer interface, dedicated transmission line
and tested telex.
(g) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by Custodian from
an Authorized Person or from a person reasonably believed by Custodian to be an
Authorized Person.
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(h) "Officer's Certificate". The term "Officer's Certificate"
as used in this Agreement means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
Custodian signed or reasonably believed by Custodian to be signed by two
officers of the Trust listed on a schedule provided to Custodian pursuant to
Section 2 of this Agreement.
(i) "Property". The term "Property", as used in this
Agreement, means:
(i) any and all securities and other property of the
Trust which the Trust may from time to time deliver to Custodian, as applicable,
or which Custodian may from time to time hold for the Trust;
(ii) all income in respect of any securities or other
property described in immediately preceding clause (i);
(iii) all proceeds of sales of any of such securities
or other property described in preceding clause (i) actually received by
Custodian; and
(iv) proceeds of the sale of Shares received by
Custodian from time to time from or on behalf of the Trust.
(j) "Securities Depository". As used in this Agreement, the
term "Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Trust's Board of Trustees approving deposits by Custodian
therein.
(k) "Written Instructions". As used in this Agreement,
"Written Instructions" means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
Custodian, signed or reasonably believed by Custodian to be signed by an
appropriate number of Authorized Person(s), and the term Written Instructions
shall also include Instructions, except that Instructions need not be signed or
reasonably believed to be signed by any Authorized Person(s) where such
Instructions are transmitted by Software pursuant to Paragraph 26A. A fax
receipt or comparable confirmation of transmission of any Written Instructions
shall be deemed evidence of actual receipt by Custodian.
4. Delivery and Registration of the Property. The Trust shall deliver
or cause to be delivered to Custodian all securities and all monies owned by the
Portfolios, including cash received for the issuance of Shares, at any time
during the period of this Agreement, except for securities and monies to be
delivered to any sub-custodian appointed, with approval of the Trust, by
Custodian pursuant to Paragraphs 7, 27, or 28(g) hereof. Custodian will not be
responsible for such securities and such monies until actually received by it.
All securities delivered to Custodian or any such sub-custodian (other than in
bearer form) shall be registered in the name of the Portfolio or in the name of
a nominee of a Portfolio or in the name of Custodian or any nominee of Custodian
(with or without indication of fiduciary status) or in the name of any
sub-custodian or any nominee of such sub-custodian appointed, with approval of
the Trust, pursuant to Paragraphs 7, 27, or 28(g) hereof or shall be properly
endorsed and in form for transfer satisfactory to Custodian.
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5. Voting and Other Rights. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Trust. Custodian's only duty with respect to such rights
shall be to mail to the Trust within two (2) business days following receipt by
Custodian any documents received by Custodian as custodian, including notices of
corporate action, proxies, proxy soliciting materials and offering circulars,
with any elections or proxies for securities registered in a nominee name
executed by such nominee. In addition, Custodian shall provide notice of
Custodian's receipt of such documents by electronic means (e.g., posting notice
on LASER), as agreed between the parties. Where warrants, options, tenders or
other securities have fixed expiration dates, the Trust understands that in
order for Custodian to act, Custodian must receive the Trust's instructions at
its offices in New York, addressed as Custodian may from time to time request,
by no later than noon (New York City time) at least one (1) business day prior
to the last scheduled date to act with respect thereto (or such earlier date or
time as Custodian may reasonably notify the Trust). Absent Custodian's timely
receipt of such instructions, such instructions will expire without liability to
Custodian. Custodian shall have no duty to forward to the Trust any annual,
quarterly or special reports issued by companies whose securities are held by
Custodian hereunder.
6. Receipt and Disbursement of Money.
(a) Custodian shall open and maintain a custody account for
each Portfolio of the Trust, subject only to draft or order by Custodian acting
pursuant to the terms of this Agreement, and, subject to Paragraphs 7, 27, or
28(g) hereof, shall hold in such account, subject to the provisions hereof, all
cash received by it from or for the Portfolios. Custodian shall make payments of
cash to, or for the account of, each Portfolio from such cash only: (i) for the
purchase of securities for the Portfolios as provided in Paragraph 14 hereof;
(ii) upon receipt of an Officer's Certificate for the payment of dividends or
other distributions on or with respect to Shares, or for the payment of
interest, taxes, administration, distribution or advisory fees or expenses which
are to be borne by the Portfolios under the terms of this Agreement and, with
respect to each Portfolio, and under the terms of any investment advisory
agreements, administration agreements or distribution agreements; (iii) upon
receipt of Written Instructions for payments in connection with the conversion,
exchange or surrender of securities owned or subscribed to by the Portfolios and
held by or to be delivered to Custodian; (iv) to a sub-custodian pursuant to
Paragraphs 7, 27, or 28(g) hereof; (v) for the redemption of Shares; or (vi)
upon receipt of an Officer's Certificate for other corporate purposes.
(b) Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as Custodian
for the Portfolios.
7. Receipt of Securities.
(a) Except as provided by Paragraphs 7(c), 8, 27, or 28(g)
hereof, and except as otherwise directed by Oral or Written Instructions
described in Paragraph 11 hereof, Custodian shall hold and physically segregate
in a separate account with respect to each Portfolio, identifiable from those of
any other person, all securities and non-cash property received by it for the
Portfolios. All such securities and non-cash property are to be held or disposed
of by Custodian for each Portfolio pursuant to the terms of this Agreement. In
the absence of Written Instructions accompanied by a certified resolution
authorizing the specific transaction by the Trust's Board of Trustees, and
subject to Paragraph 25 hereof, Custodian shall
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<PAGE>
have no power or authority to withdraw, deliver, assign, hypothecate, pledge or
otherwise dispose of any such securities and investments, except in accordance
with the express terms provided for in this Agreement. In no case may any
trustee, officer, employee or agent of the Trust withdraw any securities. In
connection with its duties under this Paragraph 7(a), Custodian may enter into
sub-custodian agreements with other banks or trust companies for the receipt of
certain securities and cash to be held by Custodian for the account of a
Portfolio pursuant to this Agreement, provided Custodian obtains the prior
written approval of the Trust to any such sub-custody arrangement. Custodian
will provide the Trust with a copy of each sub-custodian agreement it executes
pursuant to this Paragraph 7(a). Custodian shall be liable for acts or omissions
of any such sub-custodian selected by it pursuant to this Paragraph 7(a), under
the standards of care provided for herein, except for any such sub-custodian
engaged at the specific direction of the Portfolios. Notwithstanding anything
herein to the contrary, this Paragraph 7(a) shall not apply to Custodian's
engagement of foreign sub-custodians, which shall instead be governed by
Paragraph 27 hereof.
(b) Promptly after the close of business on each day,
Custodian shall furnish the Trust with confirmations and a summary of all
transfers to or from the account of each Portfolio during said day. Where
securities are transferred to the account of any Portfolio established at a
Securities Depository or the Book Entry System pursuant to Paragraph 8 herein,
Custodian shall also, by book-entry or otherwise, identify as belonging to such
Portfolio the quantity of securities in a fungible bulk of securities registered
in the name of Custodian (or its nominee) or shown in Custodian's account on the
books of a Securities Depository or the Book-Entry System. At least monthly and
from time to time, Custodian shall furnish the Trust with a detailed statement
of the Property held for each Portfolio under this Agreement.
(c) Notwithstanding any provision elsewhere contained herein,
Custodian shall not be required to obtain possession of any instrument or
certificate representing any futures contract, any option, or any futures
contract option until after it shall have determined, or shall have received an
Officer's Certificate from the Trust stating that any such instruments or
certificates are available. The Trust shall deliver to Custodian such an
Officer's Certificate no later than the business day preceding the availability
of any such instrument or certificate. Prior to such availability, Custodian
shall comply with the 1940 Act in connection with the purchase, sale,
settlement, closing out or writing of futures contracts, options, or futures
contract options by making payments or deliveries specified in such Officer's
Certificates or Written Instructions received by Custodian in connection with
any such purchase, sale, writing, settlement or closing out upon its receipt
from a broker, dealer, or futures commission merchant of a statement or
confirmation reasonably believed by Custodian to be in the form customarily used
by brokers, dealers, or future commission merchants with respect to such futures
contracts, options, or futures contract options, as the case may be, confirming
that the same is held by such broker, dealer or futures commission merchant, in
book-entry form or otherwise, in the name of Custodian (or any nominee of
Custodian) as Custodian for the Portfolio, provided, however, that
notwithstanding the foregoing, and subject to Paragraph 13(b) hereof, payments
to or deliveries from any margin account, and payments with respect to future
contracts, options, or future contract options to which a margin account
relates, shall be made in accordance with the terms and conditions of the
Trust's relevant margin account agreement. Whenever any such instruments or
certificates are available, Custodian shall, notwithstanding any provision in
this Agreement to the contrary, make payment for any futures contract, option,
or futures contract option for which such instruments or such certificates are
available against the delivery to
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Custodian of such instrument or such certificate, and deliver any futures
contract, option or futures contract option for which such instruments or such
certificates are available only against receipt by Custodian of payment
therefor. Any such instrument or certificate delivered to Custodian shall be
held by Custodian hereunder in accordance with, and subject to, the provisions
of this Agreement.
8. Use of Securities Depository or the Book-Entry System. The Trust
shall deliver to Custodian a certified vote of the Board of Trustees of the
Trust approving, authorizing and instructing Custodian on a continuous and
ongoing basis until instructed to the contrary by Written Instructions: (i) to
deposit in a Securities Depository or the Book-Entry System all securities of
the Portfolios held hereunder eligible for deposit therein, and (ii) to utilize
a Securities Depository or the Book-Entry System to the extent possible in
connection with the performance of its duties hereunder, including without
limitation, settlements of purchases and sales of securities by the Portfolios,
and deliveries and returns of securities loaned, subject to repurchase
agreements or used as collateral in connection with borrowings. Without limiting
the generality of such use, the following provisions shall apply thereto:
(a) Securities and any cash of the Portfolios deposited by
Custodian in a Securities Depository or the Book-Entry System will at all times
be segregated from any assets and cash controlled by Custodian in other than a
fiduciary or custodian capacity. Subject to Paragraph 28(m) hereof, Custodian
and its sub-custodians, if any, will pay out money only upon receipt of
securities and will deliver securities only upon receipt of money, absent
Written Instructions to the contrary.
(b) All books and records maintained by Custodian that relate
to the Portfolios' participation in a Securities Depository or the Book-Entry
System will at all times during Custodian's regular business hours be open to
inspection by the Trust's duly authorized employees or agents and the Trust's
independent auditors in accordance with applicable regulations, it being
understood, however, that such records may be kept in an off site Custodian
storage location and the Trust will be furnished with all information in respect
of the services rendered to it as it may require.
(c) Custodian will provide the Trust with copies of any report
obtained by Custodian on the system of internal accounting control of the
Securities Depository or Book-Entry System promptly after receipt of such a
report by Custodian. Custodian will also provide the Trust with such reports on
its own system of internal control as the Trust may reasonably request from time
to time.
9. Instructions Consistent With the Charter, Etc. Unless otherwise
provided in this Agreement, Custodian shall act only upon Officer's
Certificates, Oral Instructions and/or Written Instructions. Custodian may
assume that any Officer's Certificate, Oral Instructions or Written Instructions
received hereunder are not in any way inconsistent with any provision of the
Declaration of Trust or By-Laws or any vote of the Trust's Board of Trustees, or
any committee thereof. Custodian shall be entitled to rely upon any Oral
Instructions or Written Instructions actually received by Custodian pursuant to
this Agreement, and upon any certificate, oral instructions, or written
instructions reasonably believed by Custodian to be an Officer's Certificate,
Oral Instructions or Written Instructions. The Trust agrees to forward to
Custodian, Written Instructions confirming Oral Instructions in such manner that
the Written Instructions are
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received by Custodian at the close of business of the same day that such Oral
Instructions are given to Custodian. The Trust agrees that the fact that such
confirming Written Instructions are not received by Custodian shall in no way
affect the validity of any of the transactions authorized by the Trust by giving
Oral Instructions, and that Custodian's records with respect to the content of
Oral Instructions shall be controlling.
10. Transactions Not Requiring Instructions. Custodian is authorized to
take the following action without Oral Instructions, Written Instructions, or an
Officer's Certificate:
(a) Collection of Income and Other Payments. Custodian shall
subject to Paragraph 28(f) hereof:
(i) Collect and receive for the account of any
Portfolio, all income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items, included or to
be included in the Property of any Portfolio, and promptly advise the Trust of
such receipt and shall credit such income, as collected, to such Portfolio of
the Trust. From time to time, Custodian may elect, but shall not be so
obligated, to credit the account with interest, dividends or principal payments
on payable or contractual settlement date, in anticipation of receiving same
from a payor, central depository, Securities Depository, broker or other agent
employed by the Trust or Custodian. Any such crediting and posting shall be at
the Trust's sole risk, and Custodian shall be authorized to reverse (A) any such
advance posting in the event it does not receive good funds from any such payor,
central depository, Securities Depository, broker or agent, and (B) any other
payment or crediting, including, without limitation, payments made by check or
draft, in the event it does not receive good funds or final payment;
(ii) With respect to securities of foreign issue, and
subject to Paragraph 27 hereof, effect collection of dividends, interest and
other income, and to promptly transmit to the Trust all reports, written
information or notices actually received by Custodian as Custodian, including
notices of any call for redemption, offer of exchange, right of subscription,
reorganization, or other proceedings affecting such securities, or any default
in payments due thereon. It is understood, however, that Custodian shall be
under no responsibility for any failure or delay in effecting such collections
or giving such notice with respect to securities of foreign issue, regardless of
whether or not the relevant information is published in any financial service
available to it unless such failure or delay is due to Custodian's own
negligence. Collections of income in foreign currency are, to the extent
possible, to be converted into United States dollars unless otherwise instructed
in writing, and in effecting such conversion Custodian may use such methods or
agencies as it may see fit, including the facilities of its own foreign division
at customary rates. All risk and expenses incident to such collection and
conversion are for the account of the Portfolios and Custodian shall have no
responsibility for fluctuations in exchange rates affecting any such
conversions;
(iii) Endorse and deposit for collection in the name
of the Trust and each of its Portfolios, checks, drafts, or other orders for the
payment of money on the same day as received;
(iv) Receive and hold for the account of each of the
Portfolio's securities received by the Portfolios as a result of a stock
dividend, share split-up or
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reorganization, recapitalization, readjustment or other rearrangement or
distribution of rights or similar securities issued with respect to any
portfolio securities of the Portfolios held by Custodian hereunder;
(v) Present for payment and collect the amount
payable upon all securities which may mature or be called, redeemed or retired,
or otherwise become payable on the date such securities become payable, but,
with respect to calls, early redemptions, or early retirements, only if
Custodian either: (i) receives a written notice of the same, or (ii) notice of
the same appears in one or more of the publications then listed in Appendix A
hereto, which Appendix may be amended to add other publications at any time by
Custodian without prior notice to or consent from the Trust and which may be
amended to delete a publication with the prior notice and consent from the
Trust;
(vi) Subject to Paragraphs 28(e) and (f) hereof, take
any action which may be necessary and proper in connection with the collection
and receipt of such income and other payments and the endorsement for collection
of checks, drafts and other negotiable instructions; and
(vii) With respect to domestic securities, to
exchange securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is changed, and to
surrender securities at maturity or when advised by the Trust or the investment
adviser to the Trust of an earlier call for redemption, against payment therefor
in accordance with accepted industry practice. When fractional shares of stock
of a declaring corporation are received as a stock distribution, Custodian is
authorized to sell the fraction received and credit the Trust's account. Unless
specifically instructed to the contrary in writing, Custodian is authorized to
exchange securities in bearer form for securities in registered form. If any
Property registered in the name of a nominee of Custodian is called for partial
redemption by the issuer of such Property, Custodian is authorized to allot the
called portion to the respective beneficial holders of the Property in such
manner deemed to be fair and equitable by Custodian in its reasonable
discretion.
(b) Miscellaneous Transactions. Custodian is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:
(i) for examination by a broker selling for the
account of the Trust in accordance with street delivery custom;
(ii) for the exchange for interim receipts or
temporary securities for definitive securities;
(iii) for transfer of securities into the name of the
Portfolios or Custodian or a nominee of either, or for exchange of securities
for a different number of bonds, certificates, or other evidence, representing
the same aggregate face amount or number of units bearing the same interest
rate, maturity date and call provisions, if any; provided that, in any such
case, the new securities are to be delivered to Custodian.
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11. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions, and not otherwise, Custodian, directly or through the use
of a Securities Depository or the Book-Entry System, shall:
(a) execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents, authorizations, and any
other instruments whereby the authority of the Portfolios as owners of any
securities may be exercised;
(b) deliver any securities held for any Portfolio against
receipt of other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
(c) deliver any securities held for any Portfolio to any
protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, against receipt of such certificates or
deposit, interim receipts or other instruments or documents as may be issued to
it to evidence such delivery;
(d) make such transfers or exchanges of the assets of any
Portfolio and take such other steps as shall be stated in said instructions to
be for the purposes of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Portfolios;
(e) subject to Paragraph 25(b) hereof, release securities
belonging to any Portfolio to any bank or trust company for the purpose of
pledge or hypothecation to secure any loan incurred by such Portfolio; provided,
however, that securities shall be released only upon payment to Custodian of the
monies borrowed, except that in cases where additional collateral is required to
secure a borrowing already made, subject to proper prior authorization, further
securities may be released for that purpose; and pay such loan upon redelivery
to it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(f) deliver any securities held for any Portfolio upon the
exercise of a covered call option written by such Portfolio on such securities;
(g) release and deliver securities owned by a Portfolio in
connection with any repurchase agreement entered into on behalf of such
Portfolio, but subject to Paragraph 28(m) hereof, only on receipt of payment
therefor; and pay out monies of such Portfolio in connection with such
repurchase agreements, but only upon the delivery of the securities;
(h) otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions specifying the purpose of such
transfer, including without limitation, loans of securities, short sales, or
reverse repurchase agreements, and subject to Paragraph 7(a) hereof.
12. Segregated Accounts. Custodian shall upon receipt of Written or
Oral Instructions establish and maintain a segregated account or accounts on its
records for and on behalf of any Portfolio, into which account or accounts shall
be credited, but only pursuant to an
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Officer's Certificate or Written Instructions specifying the particular
securities and/or amount of cash, cash and/or securities, including securities
in the Book-Entry System: (i) for the purposes of compliance by the Portfolios
and the Trust with the procedures required by a securities or option exchange,
(ii) for the purpose of compliance by the Portfolios and the Trust with the 1940
Act and Release No. 10666 or any subsequent release or releases of the SEC
relating to the maintenance of segregated accounts by registered investment
companies, and (iii) for other proper corporate purposes.
13. Dividends and Distributions.
(a) The Trust shall furnish Custodian with appropriate
evidence of action by the Trust's Board of Trustees declaring and authorizing
the payment of any dividends and distributions. Upon receipt by Custodian of an
Officer's Certificate with respect to dividends and distributions declared by
the Trust's Board of Trustees and payable to shareholders of any Portfolio who
are entitled to receive cash for fractional shares and those who have elected in
the proper manner to receive their distributions on dividends in cash, and in
conformance with procedures mutually agreed upon by Custodian and the Trust, and
the Trust's administrator or transfer agent, Custodian shall pay to the
Portfolio's transfer agent, as agent for the shareholders, an amount equal to
the amount indicated in said Officer's Certificate as payable by the Portfolio
to such shareholders for distribution in cash by the transfer agent to such
shareholders.
(b) Custodian may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that the Trust uses (each an
"FCM Agreement"), pursuant to which the Portfolios' margin deposits in any
transactions involving futures contracts and options on futures contracts will
be held by Custodian in accounts (each an "FCM Account") subject to the
disposition by the FCM involved in such contracts in accordance with the
customer contract between the FCM and the Trust ("FCM Contract"), SEC rules
governing such segregated accounts, Commodity Futures Trading Commission
("CFTC") rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into by Custodian upon receipt by Custodian of
Written Instructions from the Trust which state that: (i) an FCM Contract has
been entered into; (ii) the Trust is in compliance with all the rules and
regulations of the CFTC; and (iii) the FCM Agreement is acceptable to the Trust.
Transfers of initial margin shall be made into an FCM Account only upon Written
Instructions; transfers of premium and variation margin may be made into an FCM
Account pursuant to Oral Instructions. Transfers of funds from an FCM Account to
the FCM for which Custodian holds such an account may only occur in accordance
with the terms of the FCM Agreement.
14. Purchase of Securities. Promptly after each purchase of securities
by the Trust on behalf of any Portfolio, the Trust shall deliver to Custodian
Oral or Written Instructions specifying with respect to each such purchase: (a)
the name of the issuer and the title of the securities; (b) the number of shares
of the principal amount purchased and accrued interest, if any; (c) the dates of
purchase and settlement; (d) the purchase price per unit; (e) the total amount
payable upon such purchase; (f) the name of the person from whom or the broker
through whom the purchase was made; and (g) the Portfolio for which the purchase
was made. Custodian shall upon receipt of securities purchased by or for the
Trust pay out of the monies held for the account of the Trust the total amount
payable to the person from whom or the broker through whom the purchase was
made, provided that the same conforms to the total amount payable as set forth
in such Oral or Written Instructions.
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15. Sales of Securities. Promptly after each sale of securities by the
Portfolios or the Trust shall deliver to Custodian Oral or Written Instructions,
specifying with respect to each such sale: (a) the name of the issuer and the
title of the security; (b) the number of shares or principal amount sold, and
accrued interest, if any; (c) the dates of sale; (d) the sale price per unit;
(e) the total amount payable to the Trust upon such sale; (f) the name of the
broker through whom or the person to whom the sale was made; and (g) the
Portfolio for which the sale was made. Custodian shall, subject to Paragraph
28(m) hereof, deliver the securities against payment of the total amount payable
to the Trust upon such sale, provided that the same conforms to the total amount
payable as set forth in such Oral and Written Instructions.
16. Records. The books and records pertaining to the Portfolios and the
Trust which are in the possession of Custodian shall be the property of the
Trust. Such books and records shall be prepared and maintained as required by
the 1940 Act and other applicable securities laws and rules and regulations. The
SEC, the Trust, or the Trust's authorized representatives, shall have access to
such books and records at all times during Custodian's normal business hours.
Upon the reasonable request of the Trust, copies of any such books and records
shall be provided by Custodian to the Trust or the Trust's authorized
representative, and the Trust shall reimburse Custodian reasonable expenses for
providing such copies. Upon reasonable request of the Trust, Custodian shall
provide in hard copy, tape or on micro-film, or such other medium as agreed to
among the Trust and Custodian, and any books and records maintained by
Custodian.
17. Reports.
(a) Custodian shall furnish the Trust the following reports:
(i) such periodic and special reports as the Trust
may reasonably request from time to time;
(ii) a monthly statement summarizing all transactions
and entries for the account of each Portfolio;
(iii) a monthly report of portfolio securities
belonging to each Portfolio showing the adjusted average cost of each issue
and market value at the end of such month;
(iv) a monthly report of the cash account of each
Portfolio showing disbursements;
(v) the reports to be furnished to the Trust pursuant
to Rule 17f-4 under the 1940 Act; and
(vi) such other information as may be agreed upon
from time to time between the Trust and Custodian.
(b) Subject to Paragraphs 5 and 27(g) hereof, Custodian shall
transmit promptly to the Trust any proxy statement, proxy materials, notice of a
call or conversion or similar communications actually received by Custodian as
custodian of the Property.
(c) Custodian shall report as the market value at the end of
each month the last closing bid, offer or sale price to the extent, and as the
same, is furnished to Custodian by a
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pricing or similar service utilized or subscribed to by Custodian. Custodian
shall not be responsible for, have any liability with respect to, or be under
any duty to inquire into, nor deemed to make any assurances with respect to, the
accuracy or completeness of such information, even if The Bank of New York in
performing services for others, including services similar to those performed
hereunder, receives different valuations of the same or different securities of
the same issuer.
18. Cooperation with Accountants. Custodian shall cooperate with the
Trust's independent certified public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement, to assure
that the necessary information is made available to such accountants.
19. Confidentiality. Custodian agrees on behalf of itself and its
employees to treat all record and other information relative to the Trust, its
prior, present or potential shareholders, its service providers and its prior,
present or potential customers, as confidential information, and to protect and
safeguard the same to the extent required by applicable law, provided, however,
that Custodian may make such disclosure as required by applicable law,
regulation, court order, decrees or legal process and upon receipt of any of the
foregoing requiring such disclosure, Custodian's only obligation shall be to
notify the Trust thereof. Custodian further agrees not to otherwise use such
records and information for any purpose other than performance of its
responsibilities and duties hereunder, except after prior notification to and
approval in writing by the Trust.
20. Equipment Failures. In the event of equipment failures beyond
Custodian's control, Custodian shall take reasonable steps to minimize service
interruptions but shall not have any further liability with respect thereto.
Notwithstanding the foregoing, Custodian shall maintain sufficient back up
electronic data processing equipment to enable Custodian to fulfill its
obligations under this Agreement consistent with standard industry practices.
21. Right to Receive Advice.
(a) Advice of Portfolio. If Custodian shall be in doubt as to
any action to be taken or omitted by it, either may request, and shall receive,
from the Trust clarification or advice, including Oral or Written Instructions.
(b) Advice of Counsel. If Custodian shall be in doubt as to
any question of law involved in any action to be taken or omitted by Custodian,
it may request at its option advice from its own counsel, at its own expense, or
advice from the Trust's counsel.
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by Custodian
pursuant to subparagraph (a)of this paragraph and advice received by Custodian
pursuant to subparagraph (b) of this paragraph, Custodian shall be entitled to
rely on and follow the advice received pursuant to subparagraph (b) alone.
(d) Protection of Custodian. Custodian shall be protected in
any action or inaction which it takes or omits to take in reliance on any
directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this section which it, after receipt of any such
directions, advice or Oral or Written Instructions, in good faith reasonably
believes to be consistent with such directions, advice or Oral or Written
Instructions, as the case may be.
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Nothing in this Paragraph 21 shall be construed as imposing upon Custodian any
obligation: (i) to seek such directions, advice or Oral or Written Instructions,
or (ii) to act in accordance with such directions, advice or Oral or Written
Instructions when received, unless, under the terms or another provision of this
Agreement, the same is a condition to Custodian's properly taking or omitting to
take such action. Nothing in this Paragraph 21(d) shall excuse Custodian when an
action or omission on the part of Custodian constitutes willful misfeasance or
bad faith, or negligence or reckless disregard by Custodian of its duties under
this Agreement.
22. Compliance with Governmental Rules and Regulations. Custodian
undertakes to comply with the laws, rules and regulations of governmental
authorities having jurisdiction over Custodian and its express duties hereunder.
23. Compensation. As compensation for the services rendered by
Custodian during the term of this Agreement, the Trust shall pay to Custodian,
in addition to reimbursement of its out-of-pocket expenses, such compensation as
may be agreed upon from time to time in writing by the Trust and Custodian as
set forth in Schedule III.
24. Indemnification. The Trust agrees to indemnify Custodian against,
and hold harmless from all taxes, charges, expenses (including reasonable fees
and expenses of counsel), assessments, claims, losses, demands and liabilities
whatsoever (including, without limitation, liabilities arising under the 1933
Act, the 1934 Act and the 1940 Act, and any state and foreign securities laws,
all as currently in effect or as may be amended from time to time) and expenses,
including without limitation, reasonable attorney's fees and disbursements,
howsoever arising or incurred because of or in connection with this Agreement,
except for such liability, claim, loss, demand, charge, expense, tax or
assessment arising out of Custodian's, or such nominees', willful misconduct or
negligence or reckless disregard of its duties under this Agreement. For the
purposes of this Agreement, including, without limitation, for purposes of
Paragraphs 24 and 28, neither Custodian's acceptance of Instructions in
accordance with Paragraph 26A nor Custodian's use of Foreign Sub-Custodians
pursuant to agreements that do not permit actual examination by independent
public accountants, nor the denial of examination by any Foreign Sub-Custodian,
as defined in Paragraph 27, shall, in and of itself, constitute, or be deemed to
constitute, a breach by Custodian of this Agreement or negligence, willful
misconduct, or reckless disregard of its duties by Custodian, provided the
relevant agreement between Custodian and a Foreign Sub-Custodian satisfies the
requirements of Rule 17f-5.
25. Overdrafts or Indebtedness.
(a) Custodian shall advance funds under this Agreement with
respect to any Portfolio which results in an overdraft because the moneys held
by Custodian in the separate account for such Portfolio shall be insufficient to
pay the total amount payable upon a purchase of securities by such Portfolio, as
set forth in an Officer's Certificate or Oral or Written Instructions, or which
results in an overdraft in the separate account of such Portfolio for some other
reason, or if the Trust is for any other reason indebted to Custodian, including
any indebtedness to The Bank of New York under the Trust's Cash Management and
Related Services Agreement, (except a borrowing for investment or for temporary
or emergency purposes using securities as collateral pursuant to a separate
agreement and subject to the provisions of Paragraph 25(b) hereof), such
overdraft or indebtedness shall be deemed to be a loan made by Custodian to the
Trust for such Portfolio payable on demand and shall bear interest from the date
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incurred at a rate per annum (based on a 360-day year for the actual number of
days involved) equal to the overdraft rate specified in Schedule III to this
Agreement. In addition, the Trust hereby agrees that Custodian shall have a
continuing lien, security entitlement and security interest in and to any
property at any time held by it for the benefit of such Portfolio or in which
the Portfolio may have an interest which is then in Custodian's possession or
control or in possession or control of any third party acting on Custodian's
behalf. The Trust authorizes Custodian, in its sole discretion, at any time to
charge any such overdraft or indebtedness together with interest due thereon
against any balance of account standing to such Portfolio's credit on
Custodian's books. In addition, the Trust hereby covenants that on each Business
Day on which either it intends to enter a Reverse Repurchase Agreement and/or
otherwise borrow from a third party, or which next succeeds a Business Day on
which at the close of business the Trust had outstanding a Reverse Repurchase
Agreement or such a borrowing, it shall prior to 1:00 p.m., New York City time,
advise Custodian, in writing, of each such borrowing, shall specify the
Portfolio to which the same relates, and shall not incur any indebtedness not so
specified other than from Custodian.
(b) The Trust will cause to be delivered to Custodian by any
bank (including, if the borrowing is pursuant to a separate agreement,
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using securities held by Custodian hereunder as collateral
for such borrowings, a notice or undertaking in the form currently employed by
such bank setting forth the amount which such bank will loan to the Trust
against delivery of a stated amount of collateral. The Trust shall promptly
deliver to Custodian Written Instruction specifying with respect to each such
borrowing: (a) the Portfolio to which such borrowing relates; (b) the name of
the bank; (c) the amount and terms of the borrowing, which may be set forth by
incorporating by reference an attached promissory note, duly endorsed by the
Portfolio, or other loan agreement; (d) the time and date, if known, on which
the loan is to be entered into; (e) the date on which the loan becomes due and
payable; (f) the total amount payable to the Portfolio on the borrowing date;
(g) the market value of securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular securities and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the 1940 Act and the
Portfolio's prospectus. Custodian shall deliver on the borrowing date specified
in Written Instructions the specified collateral and the executed promissory
note, if any, against delivery by the lending bank of the total amount of the
loan payable, provided that the same conforms to the total amount payable as set
forth in such Written Instructions. Custodian may, at the option of the lending
bank, keep such collateral in its possession, but such collateral shall be
subject to all rights therein given the lending bank by virtue of any promissory
note or loan agreement. Custodian shall deliver such securities as additional
collateral as may be specified in Written Instructions to collateralize further
any transaction described in this Paragraph 25(b). The Trust shall cause all
securities released from collateral status to be returned directly to Custodian,
and Custodian shall receive from time to time such return of collateral as may
be tendered to it. In the event that the Trust fails to specify in Written
Instructions the Portfolio, the name of the issuer, the title and number of
shares or the principal amount of any particular securities to be delivered as
collateral by Custodian, Custodian shall not be under any obligation to deliver
any securities.
26A. Instructions.
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(a) It is understood and agreed that Custodian may, from time
to time, provide software to the Trust for purposes of enabling a Portfolio to
transmit Instructions to Custodian (the "Software"). Such Software has been
designed to include password protection or other features to restrict the use of
the Software to Authorized Persons; provided, however, that the Custodian makes
no warranty or representations of any kind with respect to such protections or
features, express or implied, including, but not limited to, any implied
warranties of merchantability or fitness for a particular purpose. The Trust and
the Custodian shall use commercially reasonable efforts to develop other
mechanisms (i) to enable the Trust to restrict the use of the Software to
Authorized Persons, (ii) to identify transmissions from a terminal other than an
authorized terminal, and (iii) for the prompt and accurate transmission of
Instructions by Authorized Persons to Custodian. It is further understood and
agreed that Custodian may provide specialized hardware or other equipment to
enable the Trust and the Portfolios to utilize the Software. With respect to any
such Software, Custodian grants to the Trust and its service providers a
personal, nontransferable and nonexclusive license to use the Software solely
for the purpose of transmitting Instructions to, and receiving communications
from, Custodian in connection with its account(s). The Trust and its service
providers agree not to sell, reproduce, lease or otherwise provide, directly or
indirectly, the Software or any portion thereof to any third party without the
prior written consent of Custodian. At no time shall the Trust be obligated to
use the Software to transmit Instructions to Custodian.
(b) The Trust shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and transmit Instructions to
Custodian; provided, however, that the parties acknowledge and agree that if any
specialized equipment is necessary to enable the Trust to utilize the Software,
Custodian shall, at its own expense, provide and maintain such equipment.
(c) The Trust acknowledges that the Software, all data bases
made available to the Trust by utilizing the Software (other than data bases
relating solely to the assets of the Portfolios and transactions with respect
thereto), and any proprietary data, processes, information and documentation
(other than those which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the "Information"),
are the exclusive and confidential property of Custodian. The Trust shall keep
the Information confidential by using the same care and discretion that the
Trust uses with respect to its own confidential property and trade secrets and
shall neither make nor permit any disclosure without the prior written consent
of Custodian. Upon termination of this Agreement or the Software license granted
hereunder for any reason, the Trust shall return to Custodian all copies of the
Information which are in its possession or under its control or which the Trust
distributed to third parties.
(d) Custodian reserves the right to modify the Software from
time to time upon reasonable prior notice and the Trust shall, if it desires in
its sole discretion to continue to use the Software, install new releases of the
Software as Custodian may direct. The Trust agrees not to modify or attempt to
modify the Software without Custodian's prior written consent. The Trust
acknowledges that any modifications to the Software, whether by the Trust or
Custodian and whether with or without Custodian's consent, shall become the
property of Custodian.
(e) Where the method for transmitting Instructions by the
Trust involves an automatic systems acknowledgment to the Trust by Custodian of
its receipt of such Instructions,
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including any transmission of Instructions using the Software, then (i) if an
acknowledgment is not actually received by the Trust, Custodian shall not be
deemed to have received any such Instructions, and (ii) if an acknowledgment is
actually received by the Trust, the Custodian shall be deemed to have received
such Instructions and shall be responsible for any error, omission, interruption
or delay in connection with the transmission of such Instructions; provided,
however, that the Trust shall promptly review all acknowledgments actually
received and notify the Custodian in the event of any apparent discrepancy.
(f) (i) The Trust agrees that where it delivers to Custodian
Instructions hereunder using the Software, it shall be the Trust's sole
responsibility to ensure that only persons duly authorized by the Trust and the
correct number of such persons transmit such Instructions to Custodian and the
Trust will cause all such persons to treat applicable use and authorization
codes, passwords and authentication keys with extreme care, and authorizes
Custodian to act in accordance with and rely upon Instructions received by it
pursuant hereto using the Software.
(ii) The Trust hereby represents, acknowledges and agrees that
it is fully informed of the protections and risks associated with the various
methods of transmitting Instructions to Custodian and that there may be more
secure methods of transmitting Instructions to Custodian than the method(s)
selected by the Trust.
(iii) With respect to all Oral Instructions and all Written
Instructions other than Instructions delivered to Custodian using the Software
provided by Custodian, Custodian shall exercise all commercially reasonable
efforts to form a reasonable belief that each such instruction has been given by
an Authorized Person and, where required, signed by an appropriate number of
Authorized Person(s).
(g) The Trust shall notify Custodian of any errors, omissions
or interruptions in, or delay or unavailability of, its ability to send
Instructions using the Software provided by Custodian as promptly as
practicable, and in any event within 24 hours after the earliest of (i)
discovery thereof, (ii) the business day on which discovery should have occurred
through the exercise of reasonable care and (iii) in the case of any error, the
date of actual receipt of the earliest notice which reflects such error, it
being agreed that discovery and receipt of notice may only occur on a business
day. Custodian shall, as promptly as practicable, and in any event within 24
hours after the earliest of (i) discovery thereof, (ii) the business day on
which discovery should have occurred through the exercise of reasonable care and
(iii) in the case of any error, the date of actual receipt of the earliest
notice which reflects such error, it being agreed that discovery and receipt of
notice may only occur on a business day, advise the Trust whenever Custodian
learns or reasonably should have learned, of any errors, omissions or
interruption in, or delay or unavailability of, the Trust's ability to send
Instructions using the Software provided by Custodian.
26B. FX Transactions
(a) Whenever a Portfolio shall enter into an FX Transaction,
the Portfolio shall promptly deliver to Custodian a Certificate or Oral
Instructions specifying with respect to such FX Transaction: (a) the Series to
which such FX Transaction is specifically allocated; (b) the type and amount of
Currency to be purchased by the Portfolio; (c) the type and amount of
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Currency to be sold by the Portfolio; (d) the date on which the Currency to be
purchased is to be delivered; (e) the date on which the Currency to be sold is
to be delivered; and (f) the name of the person from whom or through whom such
Currencies are to be purchased and sold. Unless otherwise instructed by a
Certificate or Oral Instructions, Custodian shall deliver, or shall instruct a
Foreign Sub-Custodian to deliver, the Currency to be sold on the date on which
such delivery is to be made, as set forth in the Certificate, and shall receive,
or instruct a Foreign Sub-Custodian to receive, the Currency to be purchased on
the date as set forth in the Certificate.
(b) Where the Currency to be sold is to be delivered on the
same day as the Currency to be purchased, as specified in the Certificate or
Oral Instructions, Custodian or a Foreign Sub-Custodian may arrange for such
deliveries and receipts to be made in accordance with the customs prevailing
from time to time among brokers or dealers in Currencies, and such receipt and
delivery may not be completed simultaneously. The Portfolio assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Portfolio has been received in full.
(c) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian, any office, branch
or subsidiary of The Bank of New York, or any Foreign Sub-Custodian (as defined
below) acting as principal or otherwise through customary banking channels. The
Portfolio may issue a standing Certificate with respect to foreign exchange
transactions but Custodian may establish rules or limitations concerning any
foreign exchange facility made available to the Portfolio. The Portfolio shall
bear all risks of investing in securities or holding Currency. Without limiting
the foregoing, the Portfolio shall bear the risks that rules or procedures
imposed by a Foreign Sub-Custodian or foreign depositories, exchange controls,
asset freezes or other laws, rules, regulations or orders shall prohibit or
impose burdens or costs on the transfer to, by or for the account of the
Portfolio of securities or any cash held outside the Portfolio's jurisdiction or
denominated in Currency other than its home jurisdiction or the conversion of
cash from one Currency into another Currency. Custodian shall not be obligated
to substitute another Currency for a Currency (including a Currency that is a
component of a Composite Currency Unit) whose transferability, convertibility or
availability has been affected by such law, regulation, rule or procedure.
Neither Custodian nor any Foreign Sub-Custodian shall be liable to the Portfolio
for any loss resulting from any of the foregoing events.
27. Duties of Custodian with Respect to Property of any Portfolio
Held Outside of the United States.
(a) Custodian is authorized and instructed to employ, as
sub-custodian for each Portfolio's foreign securities and other assets, the
foreign banking institutions and foreign securities depositories and clearing
agencies selected from time to time by Custodian as the Foreign Custody Manager
appointed by the Trust's Board of Trustees ("Foreign Sub-Custodians") to carry
out their respective responsibilities in accordance with the terms of the
sub-custodian agreement between each such Foreign Sub-Custodian and Custodian
(each such agreement, a "Foreign Sub-Custodian Agreement"). Upon
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receipt of an Officer's Certificate, the Trust may designate any additional
foreign sub-custodian with which Custodian has an agreement for such entity to
act as Custodian's agent, as its sub-custodian and any such additional foreign
sub-custodian shall be deemed a Foreign Sub-Custodian hereunder. Upon receipt of
an Officer's Certificate, Custodian shall cease using any one or more Foreign
Sub-Custodians for the Portfolio's assets.
(b) Each Foreign Sub-Custodian Agreement shall be
substantially in the form delivered to the Trust herewith and will not be
amended in a way that materially adversely affects the Trust without the Trust's
prior written consent.
(c) Custodian shall identify on its books as belonging to each
Portfolio the Foreign Securities of such Portfolio held by each Foreign
Sub-Custodian. At the election of the Trust, it shall be entitled to be
subrogated to any claims by the Trust or any Portfolio against a Foreign
Sub-Custodian as a consequence of any loss, damage, cost, expense, liability or
claim sustained or incurred by the Trust or any Portfolio if and to the extent
that the Trust or such Portfolio has been made whole by Custodian for any such
loss, damage, cost, expense, liability or claim.
(d) Upon request of the Trust, Custodian will, consistent with
the terms of the applicable Foreign Sub-Custodian Agreement, use reasonable
efforts to arrange for the independent accountants of the Trust to be afforded
access to the books and records of any Foreign Sub-Custodian insofar as such
books and records relate to the performance of such Foreign Sub-Custodian under
its agreement with Custodian on behalf of the Trust.
(e) Custodian will supply to the Trust from time to time, as
mutually agreed upon, statements in respect of the securities and other assets
of each Portfolio held by Foreign Sub-Custodians, including but not limited to,
an identification of entities having possession of each Portfolio's Foreign
Securities and other assets, and advices or notifications of any transfers of
Foreign Securities to or from each custodial account maintained by a Foreign
Sub-Custodian for Custodian on behalf of the Portfolio.
(f) Custodian agrees that it will use reasonable care in
monitoring compliance by each Foreign Sub-Custodian with the terms of the
relevant Foreign Sub-Custodian Agreement and that if it learns of any breach of
such Foreign Sub-Custodian Agreement believed by Custodian to have a material
adverse effect on the Trust or any Portfolio it will promptly notify the Trust
in writing of such breach. Custodian also agrees to use reasonable and diligent
efforts to enforce its rights under the relevant Foreign Sub-Custodian
Agreement.
(g) Custodian shall transmit promptly to the Trust all
notices, reports or other written information received pertaining to the
Portfolios' Foreign Securities, including without limitation, notices of
corporate action, proxies and proxy solicitation materials.
(h) Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for securities received for the account of the
Trust or any Portfolio and delivery of securities maintained for the account of
the Trust or any Portfolio may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivery of securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.
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(i) With respect to any losses or damages arising out of or
relating to any actions or omissions of any Foreign Sub-Custodian, the sole
responsibility and liability of Custodian shall be to take all appropriate and
reasonable action at the Trust's expense to recover such loss or damage from the
Foreign Sub-Custodian. It is expressly understood and agreed that Custodian's
sole responsibility and liability shall be limited to amounts so recovered from
the Foreign Sub-Custodian.
28. Concerning Custodian.
(a) (i) Custodian shall exercise care and diligence and act in
good faith and use all commercially reasonable efforts in the performance of its
duties hereunder. Custodian shall be responsible to the Trust for its own
failure or the failure of any sub-custodian that it shall appoint (other than a
foreign sub-custodian referred to in Paragraph 27 or a sub-custodian appointed
by Custodian at the specific direction of the Trust) or that of its employees or
agents, to perform its duties, obligations or responsibilities in accordance
with this Agreement, but only to the extent that such failure results from acts
or omissions that constitute willful misfeasance, bad faith or negligence on the
part of Custodian, or on the part of its employees or agents, or reckless
disregard of such duties, obligations and responsibilities.
(ii) Without limiting the generality of the
foregoing or any other provision of this Agreement, in no event shall Custodian
be liable to the Portfolio or any third party nor, except as otherwise provided
in this subparagraph for special, indirect or consequential damages or lost
profits or loss of business, arising under or in connection with this Agreement,
even if previously informed of the possibility of such damages and regardless of
the form of action. Custodian may, with respect to questions of law arising
under any FCM Agreement, apply for and obtain the advice and opinion of counsel
to the Trust at the expense of the Trust, or of its own counsel at its own
expense, and shall be fully protected with respect to anything done or omitted
by it in good faith in conformity with such advice or opinion. Custodian shall
be liable to the Trust for any loss or damage resulting from the use of the
Book-Entry System or any Securities Depository arising by reason of any
negligence or willful misconduct on the part of Custodian or any of its
employees or agents.
(iii) Custodian's liability pursuant to the last
sentence of subparagraph (a)(i) shall include, but not be limited to,
reimbursing the Trust for court-ordered damage awards, fines, penalties, and
judicially-approved settlements (and attorney's fees and disbursements relating
thereto) arising out of or in connection with the conduct giving rise to such
liability.
(iv) If the Trust receives notice of the
commencement of any action, suit, or proceeding (an "Action"), or notice that
any Action may be commenced, for which Custodian may be liable to the Trust
pursuant to this Paragraph 28, the Trust shall give notice to Custodian of the
commencement of the Action or of the possibility that an Action will be
commenced. Any omission to notify Custodian will not relieve Custodian from any
liability which it may have under this Paragraph, except to the extent the
failure to notify Custodian prejudices the rights of Custodian. Custodian will
be entitled at its sole expense and liability, to exercise full control of the
defense, compromise or settlement of any such Action, provided that Custodian:
(1) notifies the Trust in writing of Custodian's intention to assume such
defense; and (2) retains legal counsel reasonably satisfactory to the Trust to
conduct the defense of such
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Action. If Custodian advises the Trust that it does not wish to exercise full
control of any defense, compromise or settlement of any Action, Custodian shall
be responsible for the fees and expenses of counsel selected by the Trust, in
addition to any other amounts for which Custodian may be liable pursuant to this
Paragraph 28. The other person will cooperate with the person assuming the
defense, compromise or settlement of any Action in accordance with this
Paragraph in any manner that such person reasonably may request. If Custodian so
assumes the defense of any such Action, the Trust will have the right to employ
a separate counsel and to participate in (but not control) the defense,
compromise or settlement of the Action, but the fees and expenses of such
counsel will be at the expense of the Trust unless: (a) Custodian has agreed to
pay such fees and expenses, (b) any relief other than the payment of money
damages is sought against the Trust, or (c) the Trust has been advised by its
counsel that there may be one or more defenses available to it which are
different from or additional to those available to Custodian and that a conflict
of interest therefore exists, and in any such case that portion of the fees and
expenses of such separate counsel that are reasonably related to matters for
which Custodian is liable pursuant to this Paragraph will be paid by Custodian.
The Trust will not settle or compromise any such Action for which Custodian is
liable pursuant to this Paragraph without the prior written consent of
Custodian, unless Custodian has failed, after reasonable notice, to undertake
control of such Action in the manner provided in this Paragraph. Custodian will
not settle or compromise any such Action in which any relief other than the
payment of money damages is sought against the Trust without the consent of the
Trust, such consent not to be unreasonably withheld. In the event that Custodian
intends to settle or compromise any Action in which solely money damages are
sought, Custodian shall give the Trust fifteen (15) business days prior written
notice.
(b) Without limiting the generality of the foregoing,
Custodian shall be under no obligation to inquire into, and shall not be liable
for:
(i) the validity of the issue of any securities
purchased, sold, or written by or for the Trust or any Portfolio, the legality
of the purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor;
(ii) the legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid therefor;
(iii) the legality of the declaration or payment of
any dividend by the Trust;
(iv) the legality of any borrowing by the Trust
using securities as collateral;
(v) the legality of any loan of portfolio
securities, or under any duty or obligation to see to it that any cash
collateral delivered to it by a broker, dealer, or financial institution or held
by it at any time as a result of such loan of portfolio securities is adequate
collateral for or against any loss Custodian, the Trust or any Portfolio might
sustain as a result of such loan. Custodian specifically, but not by way of
limitation, shall not be under any duty or obligation periodically to check or
notify the Trust or any Portfolio that the amount of such cash collateral held
by Custodian for the Trust is sufficient collateral for the Trust, but such duty
or obligation shall be the sole responsibility of the Trust. In addition,
Custodian shall be under no
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duty or obligation to see that any broker, dealer or financial institution to
which portfolio securities are lent makes payment to it of any dividends or
interest which are payable to or for the account of the Trust during the period
of such loan or at the termination of such loan, provided, however, that
Custodian shall promptly notify the Trust in the event that such dividends or
interest are not paid and received when due; or
(vi) the sufficiency or value of any amounts of
money and/or securities held in any segregated account described in Paragraph
12(a) hereof in connection with transactions by the Portfolios, or whether such
segregated account provides the compliance intended to be achieved. In addition,
Custodian shall not be under any duty or obligation to see that any broker,
dealer, FCM or Clearing Member makes payment to the Portfolio of any variation
margin payment or similar payment which the Portfolio may be entitled to receive
from such broker, dealer, FCM or Clearing Member, to see that any payment
received by Custodian from any broker, dealer, FCM or Clearing Member is the
amount the Trust is entitled to receive, or to notify the Trust or a Portfolio
of Custodian's receipt or non-receipt of any such payment.
(c) Custodian shall not be liable for, or considered to be
sub-custodian or custodian of, any money, whether or not represented by any
check, draft, or other instrument for the payment of money, received by
Custodian on behalf of the Trust until Custodian actually receives and collects
such money directly or by the final crediting of the account representing the
Portfolio's interest at the Book-Entry System or a Securities Depository.
(d) Custodian shall not have any responsibility or be liable
for ascertaining or acting upon any calls, conversions, exchange offers,
tenders, interest rate changes or similar matters relating to securities held in
a Securities Depository, unless Custodian shall have actually received timely
notice from such Securities Depository. In no event shall Custodian have any
responsibility or liability for the failure of any Securities Depository to
collect, or for the late collection or late crediting by a Securities Depository
of any amount payable upon securities deposited in a Securities Depository which
may mature or be redeemed, retired, called or otherwise become payable. Upon
receipt of Written Instructions from the Trust of an overdue amount on
securities held in a Securities Depository Custodian shall make a claim against
a Securities Depository on behalf of the Trust, except that Custodian shall not
be under any obligation to appear in, prosecute or defend any action suit or
proceeding in respect to any securities held by a Securities Depository which in
its opinion may involve it in expense or liability, unless indemnity
satisfactory to it against all expense and liability be furnished as often as
may be required.
(e) Custodian shall not be under any duty or obligation to
take action to effect collection of any amount due to the Trust from a transfer
agent of the Trust nor to take any action to effect payment or distribution by
the transfer agent of the Trust of any amount paid by Custodian to the transfer
agent of the Trust in accordance with this Agreement.
(f) Custodian shall not be under any duty or obligation to
take action to effect collection of any amount, if the securities upon which
such amount is payable are in default, or if payment is refused after due demand
or presentation, unless and until: (i) it shall be directed to take such action
by Written Instructions, and (ii) it shall be assured to its reasonable
satisfaction of reimbursement of its costs and expenses in connection with any
such action.
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(g) Custodian may in addition to the employment of Foreign
Sub-Custodians pursuant to Paragraphs 7 and 27, hereof appoint one or more
banking institutions as Depository or Depositories, as a sub-custodian or as
sub-custodians, or as a co-custodian or as co-custodians, including, but not
limited to, banking institutions located in foreign countries, of securities and
moneys at any time owned by the Portfolios, upon such terms and conditions as
may be approved in an Officer's Certificate or contained in an agreement
executed by Custodian and the Trust and the appointed institution.
(h) Custodian shall not be under any duty or obligation: (i)
to ascertain whether any securities at any time delivered to, or held by it or
by any Foreign Sub-Custodian, for the account of the Trust and specifically
allocated to a Portfolio are such as properly may be held by the Trust or such
Portfolio under the provisions of its Prospectus, or (ii) to ascertain whether
any transactions by the Portfolio, whether or not involving Custodian, are such
transactions as may properly be engaged in by the Portfolio.
(i) Custodian shall charge its compensation and any expenses
with respect to the Portfolios of the Trust incurred by Custodian in the
performance of its duties under this Agreement only against the money of the
Portfolio or Portfolios of the Trust from which such compensation or expenses is
actually due and payable, and under no circumstances shall any compensation or
expenses due to Custodian be considered to be a joint, or joint and several,
obligation of the Portfolios of the Trust. To the extent that Custodian is
entitled to recover from the Trust any loss, damage, liability or expense
(including counsel fees) under this Agreement, Custodian shall charge the amount
due in respect of such loss, damage, liability or expense (including counsel
fees) only against the money held by it for the Portfolio or Portfolios of the
Trust that is/are identified by the Trust in an Officer's Certificate, unless
and until the Trust instructs Custodian by an Officer's Certificate to charge
against money held by it for the account of a Portfolio such Portfolio's pro
rata share (based on such Portfolio's net asset value at the time of the charge
in proportion to the aggregate net asset value of all Portfolios at that time)
of the amount of such loss, damage, liability or expense (including counsel
fees).
(j) Custodian shall be entitled to rely upon any Officer's
Certificate, Written Instructions, notice or other instrument in writing
received by Custodian and reasonably believed by Custodian, to be an Officer's
Certificate or Written Instructions. Custodian shall be entitled to rely upon
any Oral Instructions actually received by Custodian. The Trust agrees to
forward to Custodian Written Instructions confirming such Oral Instructions in
such manner so that such Written Instructions are received by Custodian, whether
by hand delivery, telecopier or other similar device, or otherwise, by the close
of business of the same day that such Oral Instructions are received by
Custodian. The Trust agrees that the fact that such confirming instructions are
not received, or that contrary instructions are received, by Custodian shall in
no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Trust. The Trust agrees that Custodian
shall not incur any liability to the Trust in acting upon Oral Instructions
given to Custodian hereunder concerning such transactions provided such
instructions reasonably appear to have been received from an Authorized Person.
(k) Custodian shall be entitled to rely upon any instrument,
instruction or notice received by it and reasonably believed by it to be given
in accordance with the terms and conditions of any FCM Agreement. Without
limiting the generality of the foregoing, Custodian shall not be under any duty
to inquire into, and Custodian shall not be liable for, the accuracy of
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any statements or representations contained in any such instrument or other
notice including, without limitation, any specification of any amount to be paid
to a broker, dealer, futures commission merchant or clearing member.
(l) Custodian shall provide the Trust with any report obtained
by Custodian on the system of internal accounting control of the Book-Entry
System, any Securities Depository utilized hereunder the Depository or the
Options Clearing Corporation, and with such reports on its own systems of
internal accounting control as the Trust may reasonably request from time to
time.
(m) Subject to the foregoing provisions of this Agreement,
including, without limitation, those contained in Paragraph 27 hereof, Custodian
may deliver and receive securities, and receipts with respect to such
securities, and arrange for payments to be made and received by Custodian in
accordance with the customs prevailing from time to time among brokers or
dealers in such securities. When Custodian is instructed to deliver securities
against payment, delivery of such securities and receipt of payment therefor may
not be completed simultaneously. The Portfolio assumes all responsibility and
liability for all credit risks involved in connection with Custodian's delivery
of securities pursuant to proper instructions of the Portfolio, which
responsibility and liability shall continue until final payment in full has been
received by Custodian.
(n) Custodian shall not have any duties or responsibilities
whatsoever except such duties and responsibilities as are specifically set forth
in this Agreement, and no covenant or obligation shall be implied in this
Agreement against Custodian.
29. Termination. Any of the parties hereto may terminate this Agreement
by giving to the other parties a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. Upon the date set forth in such notice this Agreement
shall terminate, and Custodian shall on that date deliver directly to the Trust
or a successor custodian designated by the Trust all securities and moneys then
owned by the Trust and held by Custodian, after deducting all fees, expenses and
other amounts for the payment or reimbursement of which it shall then be
entitled; provided, however, that transaction fees and expenses payable by the
Trust in connection with a deconversion to a successor custodian shall be
limited to Custodian's actual direct cost.
30. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed: (a) if to Custodian, at Custodian's address, 90
Washington Street, 22nd Floor, New York, New York 10286, Attention: Frank Ajosa;
(b) if to the Trust, at the address of the Trust, 111 Center Street, Little
Rock, Arkansas 72201, Attention: Richard H. Blank, Jr., Secretary; or (c) if to
none of the foregoing, at such other address as shall have been notified to the
sender of any such Notice or other communication. Notice shall be deemed to have
been given when actually received by the other party. All postage, cable,
telegram, telex and facsimile sending device charges arising from the sending of
a Notice hereunder shall be paid by the sender.
31. Further Actions. Each party agrees to perform such further acts and
execute such further documents as it deems necessary to effectuate the purposes
hereof.
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32. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
33. Miscellaneous.
(a) The Trust agrees that Custodian may be a counterparty in
any purchase or sale of foreign currency by or for the Trust on a spot or
forward basis, and on any option to buy or sell foreign currency.
(b) This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. 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. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
34. Release. The names "Nations Annuity Trust" and "Trustees of Nations
Annuity Trust" refer respectively to the Trust created and the Trustees, as
trustees but not individually or personally, acting from time to time under a
Declaration of Trust and Certificate of Trust dated November 24, 1997, which is
hereby referred to and a copy of which is on file at the office of the Secretary
of the State of Delaware and at the principal office of the Trust. The
obligations of "Nations Annuity Trust" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, or representatives of the Trust personally, but bind
only the Trust Property (as defined in the Declaration of Trust), and all
persons dealing with any class of Shares of the Trust Property, and all persons
dealing with any class of Shares of the Trust must look solely to the Trust
Property belonging to such class for the enforcement of any claims against the
Trust.
35. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
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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 above
written.
NATIONS ANNUITY TRUST
By:/s/ Richard H. Blank, Jr.
---------------------------
Richard H. Blank, Jr.
Secretary
THE BANK OF NEW YORK
By:/s/ Stephen E. Grunston
---------------------------
Stephen E. Grunston
Vice President
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SCHEDULE I
The Custody Agreement between Nations Annuity Trust, and Sub-Custodian
applies to the following Portfolios of the Trust:
Nations Annuity Balanced Assets Portfolio
Nations Disciplined Equity Portfolio
Nations Annuity Managed Index Portfolio
Nations Annuity Managed SmallCap Index Portfolio
Nations Annuity Marsico Focused Equities Portfolio
Nations Annuity Marsico Growth & Income Portfolio
Nations Annuity International Growth Portfolio
Nations Annuity Value Portfolio
26
<PAGE>
SCHEDULE II
I, Ira Rosner, a Vice President with THE BANK OF NEW YORK do hereby designate
the following publications:
The Bond Buyer
Depository Trust Company Services
Financial Daily Card Service
JJ Kenney Municipal Bond Service
London Financial Times
Standard & Poor's Called Bond Record
Wall Street Journal
27
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SCHEDULE III
Domestic Custodian Fee Schedule
For
Nations Annuity Trust
SAFEKEEPING/INCOME COLLECTION/REPORTING DTC-ID AFFIRMATION
ALL SYSTEMS DEVELOPMENT AND USAGE CHARGES
3/4ths of one basis point per annum on the aggregate net assets of
all Nations' Non-Money Market Funds up to $10 billion.
1/2 of a basis point on the excess.
SECURITY TRANSACTION CHARGES/PAYDOWNS
$ 5 Paydowns
$ 7 DTC/FRB/PTC
$15 Physicals, options and futures
$40 Euro C/D's
OTHER CHARGES
$ 5 Bank official checks
$ 2 Money transfers in/out of the Fund's custodian account not
related to securities transactions.
EARNINGS CREDITS ON BALANCES/INTEREST ON OVERDRAFTS
Earnings credits are provided to each Fund on 80% of the daily balance in the
domestic custodian account computed at the 90-day T-bill rate on the day of the
balance.
Overdrafts, excluding bank errors, will cause a reduction of earnings credits
daily, computed at 1% above the average Federal Funds rate on the day of the
overdraft.
Credits and debits will be accumulated daily and offset monthly against the
Bank's domestic custodian fees. To the extent a net debit is accumulated, each
Fund will be billed for the expense. To the extent a net earnings credit is
generated, such excess earnings credit can be carried forward to the next
succeeding month. However, no earnings credit will be carried forward after
year-end.
OUT-OF-POCKET EXPENSES
28
<PAGE>
None.
BILLING CYCLE
The above fees are billed monthly.
29
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SCHEDULE IV
OVERDRAFT RATE
30
Amendment to the
CUSTODY AGREEMENT
THIS AMENDMENT is made as of September 1, 1999, to the Custody
Agreement dated as of October 19, 1998 (the "Agreement"), by and between The
Bank of New York ("Custodian") and Nations Annuity Trust ("Annuity Trust"), on
behalf of its respective portfolios listed on Schedule I attached thereto.
RECITALS
WHEREAS, the parties hereto desire to amend certain schedules
underlying the provisions of the Agreement.
NOW THEREFORE, the Custodian and Annuity Trust agree that the Agreement
shall be amended as follows:
1. Pursuant to Paragraph 23 of the Agreement, the underlying Schedule III to the
Custody Agreement for Annuity Trust is revised. The revised Schedule III
reflects a modification in fees that Annuity Trust will pay for the Custodian's
services as they relate to securities of foreign issue. Specifically, Schedule
III is amended by the addition of the Global Fee Schedule attached hereto, which
may be amended from time to time by mutual consent of the parties hereto.
The terms and provisions of this Amendment shall be deemed a part of
the Agreement for all purposes. To the extent that any provisions of the
Amendment modify or are otherwise inconsistent with any provisions of the
Agreement, the terms of this Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first written
above.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
------------------------
Stephen E. Grunston
Vice President
NATIONS ANNUITY TRUST
By: /s/ James E. Banks, Jr.
------------------------
James E. Banks, Jr.
Assistant Secretary
Amendment to the
CUSTODY AGREEMENT
THIS AMENDMENT is made as of February 14, 2000, to the Custody
Agreement dated as of October 19, 1998 (the "Agreement"), by and between The
Bank of New York ("Custodian") and Nations Annuity Trust (the "Trust"), on
behalf of its respective portfolios listed on Schedule I attached thereto.
RECITALS
WHEREAS, the parties hereto desire to amend certain provisions of the
Agreement.
NOW THEREFORE, the Custodian and the Trust agree that the Agreement
shall be amended as follows:
1. Paragraph 25 is hereby amended by deleting subsection (a) in its
entirety and inserting the following:
"(a) Custodian shall advance funds under this Agreement with
respect to any Fund which results in an overdraft because the moneys
held by Custodian in the separate account for such Fund shall be
insufficient to pay the total amount payable upon a purchase of
securities by such Fund, as set forth in an Officer's Certificate or
Oral or Written Instructions, or which results in an overdraft in the
separate account of such Fund for some other reason, or if the Trust is
for any other reason indebted to Custodian, including any indebtedness
to The Bank of New York under the Trust's Cash Management and Related
Services Agreement, (except a borrowing for investment or for temporary
or emergency purposes using securities as collateral pursuant to a
separate agreement and subject to the provisions of Paragraph 25(b)
hereof), such overdraft or indebtedness shall be deemed to be a loan
made by Custodian to the Trust for such Fund payable on demand and
shall bear interest from the date incurred at a rate per annum (based
on a 360-day year for the actual number of days involved) equal to the
overdraft rate specified in Schedule III to this Agreement. In
addition, the Trust hereby agrees that to the extent of such overdraft
or indebtedness, Custodian shall have a continuing lien, security
entitlement and security interest in and to any property at any time
held by it for the benefit of such Fund or in which the Fund may have
an interest which is then in Custodian's possession or control or in
possession or control of any third party acting on Custodian's behalf.
The Trust authorizes Custodian, in its sole discretion, at any time to
charge any such overdraft or indebtedness together with interest due
thereon against any balance of account standing to such Fund's credit
on Custodian's books. In addition, the Trust hereby covenants that on
each Business Day on which either it intends to enter a Reverse
Repurchase Agreement and/or otherwise borrow from a third party, or
which next succeeds a Business Day on which at the close of business
the Trust had outstanding a Reverse Repurchase Agreement or such a
borrowing, it shall
<PAGE>
prior to 1:00 p.m., New York City time, advise Custodian, in writing,
of each such borrowing, shall specify the Fund to which the same
relates, and shall not incur any indebtedness not so specified other
than from Custodian."
The terms and provisions of this Amendment shall be deemed a part of
the Agreement for all purposes. To the extent that any provisions of the
Amendment modify or are otherwise inconsistent with any provisions of the
Agreement, the terms of this Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first written
above.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
-------------------------------
Stephen E. Grunston
Vice President
NATIONS ANNUITY TRUST
By: /s/ James E. Banks, Jr.
---------------------------------
James E. Banks, Jr.
Assistant Secretary
CO-ADMINISTRATION AGREEMENT
This CO-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
December 1, 1998 by and among STEPHENS INC. ("Stephens"), NATIONSBANC ADVISORS,
INC. ("NBAI") and NATIONS ANNUITY TRUST (the "Annuity Trust").
WHEREAS, the Annuity 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 Annuity Trust desires to retain Stephens and NBAI to
render certain administrative services for the investment portfolios of the
Annuity Trust listed on Schedule I (individually, a "Fund" and collectively, the
"Funds"), and Stephens and NBAI are willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment.
(a) The Annuity Trust hereby appoints Stephens to act as
Co-Administrator of the Funds and Stephens hereby accepts such appointment and
agrees to render such services and duties set forth in Paragraph 3, for the
compensation and on the terms herein provided. Absent written notification to
the contrary by the Annuity Trust, NBAI or Stephens, each new investment
portfolio established in the future by the Annuity Trust shall automatically
become a "Fund" for all purposes hereunder as if listed on Schedule I.
(b) The Annuity Trust also hereby appoints NBAI to act as
Co-Administrator of the Funds, and NBAI hereby accepts such appointment and
agrees to render such services and duties set forth in Paragraph 4, for the
compensation and on the terms herein provided. Absent written notification to
the contrary by either the Annuity Trust or NBAI, each new investment portfolio
established in the future by the Annuity Trust shall automatically become a
"Fund" for all purposes hereunder as if listed on Schedule I.
2. Delivery of Documents. The Annuity Trust has furnished Stephens and
NBAI with copies properly certified or authenticated of each of the following:
(a) The Annuity Trust's most recent Post-Effective Amendment to
its Registration Statement on Form N-1A (the "Registration Statement") under the
Securities Act of 1933, as amended, and under the 1940 Act (File Nos. 333-40265
and 811-08481), as filed with the Securities and Exchange Commission (the "SEC")
relating to the Funds' shares (the "Shares");
(b) The Funds' most recent Prospectus(es); and
(c) The Funds' most recent Statement(s) of Additional Information.
1
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The Annuity Trust will furnish Stephens and NBAI from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to the foregoing. Furthermore, the Annuity Trust will provide Stephens and NBAI
with any other documents that Stephens and NBAI may reasonably request and will
notify Stephens and NBAI as soon as possible of any matter materially affecting
either Stephens' or NBAI's performance of its services under this Agreement.
3. Duties as Co-Administrator. Subject to the supervision and direction
of the Board of Trustees of the Annuity Trust, Stephens, as Co-Administrator,
will assist in supervising various aspects of the Annuity Trust's administrative
operations and undertakes to perform the following specific services from and
after the effective date of this Agreement:
(a) Maintaining office facilities for the Annuity Trust (which may
be in the offices of Stephens or a corporate affiliate);
(b) Furnishing clerical services, internal executive and
administrative services and stationery and office supplies in connection with
the foregoing;
(c) Assist in furnishing statistical and research data and data
processing services in connection with the foregoing;
(d) Furnishing corporate secretarial services, including assisting
in the coordination of the preparation and distribution of materials for Board
of Trustees meetings;
(e) Providing the services of certain persons who may be appointed
as officers of the Annuity Trust by the Annuity Trust's Board of Trustees;
(f) Assist in coordinating the provision of legal advice and
counsel to the Annuity Trust with respect to regulatory matters, including
monitoring regulatory and legislative developments which may affect the Annuity
Trust and assisting in the strategic response to such developments, counseling
and assisting the Annuity Trust in routine regulatory examinations or
investigations of the Annuity Trust, and working closely with outside counsel to
the Annuity Trust in connection with any litigation in which the Annuity Trust
is involved;
(g) Assist in coordinating the preparation of reports to the
Annuity Trust's shareholders of record and the SEC including, but not
necessarily limited to, Annual Reports and Semi-Annual Reports to Shareholders
and on Form N-SAR and Notices pursuant to Rule 24f-2 under the 1940 Act;
(h) Coordinating with the Annuity Trust regarding the
jurisdictions in which the Shares shall be registered or qualified for sale and,
in connection therewith, being responsible for the registration or qualification
and the maintenance of such registration or qualification of Shares for sale
under the securities laws of any state. Payment of share registration fees and
any fees for qualifying or continuing the qualification of the
2
<PAGE>
Annuity Trust or any Fund as a dealer or broker shall be made or reimbursed by
the Annuity Trust or that Fund, respectively;
(i) Assisting in the preparation and filing on a timely basis of
various reports, registration statements and post-effective amendments thereto,
and other documents required by federal, state and other applicable laws and
regulations, other than those filed or required to be filed by NBAI or the
Funds' Sub-Advisers, Transfer Agent, Sub-Transfer Agent or Custodian;
(j) Performing certain compliance procedures for the Annuity Trust
which will include, among other matters, monitoring compliance with personal
trading guidelines by the Annuity Trust's Board of Trustees; and
(k) Generally assisting in all aspects of the Annuity Trust's
operations.
In performing all services under this Agreement, Stephens shall (i) act
in conformity with: the Annuity Trust's Declaration of Trust and Bylaws, the
1940 Act and the rules thereunder, and other applicable laws and regulations, as
the same may be amended from time to time, and the Annuity Trust's Registration
Statement, as such Registration Statement may be amended from time to time; (ii)
consult and coordinate with the Annuity Trust, as necessary and appropriate; and
(iii) advise and report to the Annuity Trust, as necessary or appropriate, with
respect to any compliance matters that come to its attention.
Stephens represents and warrants to the Annuity Trust that it will use
reasonable efforts to perform its duties and obligations under this Agreement
without: (a) any failure of its computer systems, or those used by it in the
performance of its duties hereunder, to properly record, store, process,
calculate or present calendar dates falling on and after, and time spans
including, January 1, 2000 as a result of the occurrence of, or use of data
containing, such date; (b) any failure of its computer systems, or those used by
it in the performance of its duties hereunder, to calculate any information
dependent on or relating to dates on or after January 1, 2000; or (c) any loss
of functionality or performance with respect to the maintenance of records or
processing of data containing dates falling on or after January 1, 2000 ((a),
(b), and (c) above shall be referred to as "Y2K Failures"). Notwithstanding the
above, Stephens shall not be liable for any Y2K Failures caused by Y2K Failures
in a third party system with which Stephens interfaces or from which Stephens
receives data in connection with the performance of its duties hereunder.
In performing its services under this Agreement, Stephens shall
cooperate and coordinate with NBAI as necessary and appropriate and shall
provide such information as is reasonably necessary or appropriate for NBAI to
perform its responsibilities to the Annuity Trust.
4. Duties as Co-Administrator. Subject to the supervision and direction
of the Board of Trustees of the Annuity Trust, NBAI, as Co-Administrator, will
assist in supervising various aspects of the Annuity Trust's administrative
operations and
3
<PAGE>
undertakes to perform the following specific services, from and after the
effective date of this Agreement:
(a) providing accounting and bookkeeping services (including the
maintenance for the periods prescribed by Rule 31a-2 under the 1940 Act of such
accounts, books and records of the Annuity Trust as may be required by Section
31(a) of the 1940 Act and the rules thereunder). NBAI further agrees that all
such records which it maintains for the Annuity Trust are the property of the
Annuity Trust and further agrees to surrender promptly to the Annuity Trust any
of such records upon the Annuity Trust's request;
(b) valuing each Fund's assets and calculating the net asset value
and the net income of the shares of each Fund in accordance with the Annuity
Trust's current Prospectus(es), applicable pricing procedures and resolutions of
the Annuity Trust's Board of Trustees, provided, that in performing such
services, NBAI shall obtain security market quotes from independent pricing
services, or if such quotes are unavailable, obtain such prices from the Funds'
Sub-Advisers;
(c) accumulating information for reports to the Annuity Trust's
shareholders of record and the SEC including, but not necessarily limited to,
Annual Reports and Semi-Annual Reports to Shareholders and on Form N-SAR and
Notices pursuant to Rule 24f-2 under the 1940 Act;
(d) preparing and filing on a timely basis the Annuity Trust's tax
returns and other tax filings;
(e) monitoring the development and implementation of certain
compliance procedures for the Annuity Trust including, but not limited to,
monitoring (i) each Fund's status as a regulated investment company under
Sub-Chapter M of the Internal Revenue Code of 1986, as amended, including
performing, on a monthly basis and based upon information provided by the Fund's
Sub-Advisers, the 90% gross income and asset diversification tests derived from
such Sub-Chapter; and (ii) compliance by each Fund with its investment
objective, policies and restrictions, and applicable laws and regulations;
(f) preparing and furnishing to the Annuity Trust monthly broker
security transaction summaries and monthly security transaction listings and (at
the Annuity Trust's request) performance information (including yield and total
return information) calculated in accordance with applicable U.S. securities
laws and reporting to external databases such information as may reasonably be
requested;
(g) assisting the Annuity Trust and its agents in their
accumulation and preparation of materials for the Board of Trustees' meetings
and for regulatory examinations and inspections of the Annuity Trust, to the
extent such materials relate to the services being performed for the Annuity
Trust by NBAI; and
4
<PAGE>
(h) coordinate the provisions of services to the Annuity Trust by
other service providers to the Annuity Trust, including the transfer agent,
sub-transfer agent and custodian.
In performing all services under this Agreement, NBAI shall (i) act in
conformity with the Annuity Trust's Declaration of Trust and Bylaws; the 1940
Act and the rules thereunder, and other applicable laws and regulations, as the
same may be amended from time to time; and the Annuity Trust's Registration
Statement, as such Registration Statement may be amended from time to time, (ii)
consult and coordinate with the Annuity Trust, as necessary and appropriate, and
(iii) advise and report to the Annuity Trust, as necessary or appropriate, with
respect to any compliance matters that come to its attention.
NBAI represents and warrants to the Annuity Trust that it will use
reasonable efforts to perform its duties and obligations under this Agreement
without: (a) any failure of its computer systems to properly record, store,
process, calculate or present calendar dates falling on and after, and time
spans including, January 1, 2000 as a result of the occurrence of, or use of
data containing, such date; (b) any failure of its computer systems to calculate
any information dependent on or relating to dates on or after January 1, 2000;
or (c) any loss of functionality or performance with respect to the maintenance
of records or processing of data containing dates falling on or after January 1,
2000 ((a), (b), and (c) above shall be referred to as "Y2K Failures").
Notwithstanding the above, NBAI shall not be liable for any Y2K Failures caused
by Y2K Failures in a third party system with which NBAI interfaces or from which
NBAI receives data in connection with the performance of its duties hereunder
including, without limitation, the system of any sub-administrator engaged
pursuant to Paragraph 4.
In connection with its duties under this Paragraph 4, it is understood
and agreed that NBAI may, at its own expense, enter into sub-administration
agreements with other service providers and the Fund(s), provided that each such
service provider agrees with NBAI and the Fund(s) to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder. In
addition, upon notice to the Board of Trustees of the Annuity Trust, the parties
agree that NBAI may from time to time assume some or all of Stephens' duties set
forth in Paragraph 3 above.
In performing its responsibilities under this Agreement, NBAI shall
cooperate and coordinate with Stephens as necessary and appropriate and shall
provide such information within its possession or control as is reasonably
necessary or appropriate to Stephens to enable it to perform its
responsibilities to the Annuity Trust.
5. Compensation.
(a) Stephens shall bear all expenses in connection with the
performance of its services under this Agreement, except those enumerated in
Paragraph 5(a)(2) below.
(1) Stephens will from time to time employ or associate with
such person or persons as Stephens may believe to be particularly suited to
assist it in performing
5
<PAGE>
services under this Agreement. Such person or persons may be officers and
employees of both Stephens and the Annuity Trust. The compensation of such
person or persons shall be paid by Stephens and no obligation shall be incurred
on behalf of the Annuity Trust or NBAI in such respect.
(2) Stephens shall not be required to pay any of the following
expenses incurred by the Annuity Trust: investment advisory expenses; costs of
printing and mailing stock certificates, prospectuses, reports and notices;
interest on borrowed money; brokerage fees and commissions; taxes and fees
payable to federal, state and other governmental agencies; fees of Trustees of
the Annuity Trust who are not affiliated with Stephens; outside auditing
expenses; outside legal expenses; fees of any other service provider to the
Annuity Trust; or other expenses not specified in this Section 5(a) which may be
properly payable by the Annuity Trust and which are approved by the Annuity
Trust's President or Treasurer.
(3) The Annuity Trust will compensate Stephens for its
services rendered pursuant to this Agreement in accordance with Schedule A. In
addition, the Annuity Trust shall reimburse Stephens for certain reasonable
out-of-pocket distributions made in connection with fulfilling its obligations
under the Agreement. The items eligible for reimbursement are set forth on
Schedule A.
(b) NBAI shall bear all expenses in connection with the
performance of its services under this Agreement, except those enumerated in
5(b)(2) below.
(1) NBAI will from time to time employ or associate with such
person or persons as NBAI may believe to be particularly suited to assist it in
performing services under this Agreement. Such person or persons may be officers
and employees of both NBAI and the Annuity Trust. The compensation of such
person or persons shall be paid by NBAI and no obligation shall be incurred on
behalf of the Annuity Trust or Stephens in such respect.
(2) NBAI shall not be required to pay any of the following
expenses incurred by the Annuity Trust: investment advisory expenses; costs of
printing and mailing stock certificates, prospectuses, reports and notices;
interest on borrowed money; brokerage fees and commissions; taxes and fees
payable to federal, state and other governmental agencies; fees of Trustees of
the Annuity Trust who are not affiliated with NBAI; outside auditing expenses;
outside legal expenses; fees of independent pricing services utilized by NBAI to
value each Fund's assets; fees of any other service provider to the Annuity
Trust (other than a sub-administrator engaged pursuant to Paragraph 4); or other
expenses not specified in this Section 5(b) which may be properly payable by the
Annuity Trust and which are approved by the Annuity Trust's President or
Treasurer.
(3) The Annuity Trust will compensate NBAI for its services
rendered pursuant to this Agreement in accordance with Schedule A. In addition,
the Annuity Trust shall reimburse NBAI for certain reasonable out-of pocket
distributions made in connection with fulfilling its obligations under the
Agreement. The items eligible for reimbursement are set forth on Schedule A.
6
<PAGE>
6. Limitation of Liability; Indemnification.
(a) Stephens shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Annuity Trust in connection with
the performance of its obligations and duties under this Agreement, except a
loss resulting from Stephens' willful misfeasance, bad faith or gross negligence
in the performance of such obligations and duties, or by reason of its reckless
disregard thereof.
(b) NBAI shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Annuity Trust in connection with
the performance of its obligations and duties under this Agreement, except a
loss resulting from NBAI's willful misfeasance, bad faith or gross negligence in
the performance of such obligations and duties, or by reason of its reckless
disregard thereof.
(c) The Annuity Trust, on behalf of each Fund, will indemnify
Stephens and/or NBAI against and hold each harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit relating to the
particular Fund and not resulting from the willful misfeasance, bad faith or
gross negligence of Stephens and/or NBAI in the performance of such obligations
and duties or by reason of their reckless disregard thereof. Stephens and/or
NBAI will not confess any claim or settle or make any compromise in any instance
in which the Annuity Trust will be asked to provide indemnification, except with
the Annuity Trust's prior written consent. Any amounts payable by the Annuity
Trust under this Section 6(c) shall be satisfied only against the assets of the
Fund involved in the claim, demand, action or suit and not against the assets of
any other investment portfolio of the Annuity Trust.
7. Effective Date; Termination of Agreement.
(a) This Agreement shall become effective, on a Fund by Fund
basis, upon the completion of the transfer of a Fund's accounting function to
The Bank of New York, notice of which shall be provided by the Annuity Trust to
Stephens and NBAI for each Fund. This Agreement shall remain in full force and
effect with respect to such Fund(s) unless terminated pursuant to the provisions
of Section 7(c).
(b) The parties agree that the administration arrangements
between Stephens and the Annuity Trust, dated September 1, 1993, and the
sub-administration arrangements between Stephens and NBAI, dated November 18,
1997, with respect to the Funds shall be terminated on a Fund by Fund basis upon
the effectiveness of this Agreement.
(c) This Agreement may be terminated at any time without
payment of any penalty, upon 60 days' written notice, by vote of the Board of
Trustees of the Annuity Trust, by Stephens or by NBAI. Stephens and NBAI will
each cooperate with and assist the Annuity Trust, its agents and any successor
administrator or administrators in the substitution/conversion process.
(d) Sections 6 and 9 shall survive this Agreement's
termination.
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8. Amendments. No provision of this Agreement may be changed,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, discharge or termination is
sought.
9. Confidentiality. All books, records, information and data pertaining
to the business of the Annuity Trust, its prior, present or potential
shareholders and NBAI's customers that are exchanged or received pursuant to the
performance of Stephens' and/or NBAI's duties under this Agreement shall remain
confidential and shall not be disclosed to any other person, except as
specifically authorized by the Annuity Trust or as may be required by law, and
shall not be used for any purpose other than performance of NBAI's and Stephens'
responsibilities and duties hereunder.
10. Service to Other Companies or Accounts. The Annuity Trust
acknowledges that both Stephens and NBAI now act, will continue to act and may
act in the future as investment adviser to fiduciary and other managed accounts,
and as investment adviser, investment sub-adviser and/or administrator to other
investment companies or series of investment companies, and the Annuity Trust
has no objection to either Stephens or NBAI so acting. The Annuity Trust further
acknowledges that the persons employed by both Stephens and NBAI to assist in
the performance of their duties under this Agreement may not devote their full
time to such service and nothing contained in this Agreement shall be deemed to
limit or restrict the right of Stephens or NBAI or any affiliate of either to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
11. Miscellaneous.
(a) Any notice or other instrument authorized or required by
this Agreement to be given in writing to the Annuity Trust, Stephens or NBAI
shall be sufficiently given if addressed to that party and received by it at its
office set forth below or at such other place as it may from time to time
designate in writing.
To the Annuity Trust:
Nations Annuity Trust
111 Center Street, Suite 3000
Little Rock, Arkansas 72201
Attention: Secretary
To Stephens:
Stephens Inc.
111 Center Street, Suite 3000
Little Rock, Arkansas 72201
Attention: Richard H. Blank, Jr.
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To NBAI:
NationsBanc Advisors, Inc.
One Bank of America Plaza
33rd Floor
Charlotte, NC 28255
Attention: Edward D. Bedard
(b) This Agreement shall extend to and shall be binding upon
the parties hereto and their respective successors and assigns; provided,
however, that this Agreement shall not be assignable without the written consent
of the other parties.
(c) This Agreement shall be construed in accordance with the
laws of the State of Delaware.
(d) This Agreement may be executed in any number of
counterparts each of which shall be deemed to be an original and which
collectively shall be deemed to constitute only one instrument.
(e) The captions of this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect.
(f) This Agreement constitutes the entire agreement between
the parties hereto with respect to the matters described herein.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
STEPHENS INC.
By: /s/ Richard H. Blank, Jr.
----------------------------
Richard H. Blank, Jr.
Senior Vice President
NATIONSBANC ADVISORS, INC.
By: /s/ Edward D. Bedard
----------------------------
Edward D. Bedard
Senior Vice President and
Chief Operating Officer
NATIONS ANNUITY TRUST
By: /s/ James E. Banks, Jr.
----------------------------
James E. Banks, Jr.
Assistant Secretary
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SCHEDULE I
1. Nations Value Portfolio
2. Nations International Growth Portfolio
3. Nations Disciplined Equity Portfolio
4. Nations Marsico Focused Equities Portfolio
5. Nations Marsico Growth & Income Portfolio
6. Nations Managed Index Portfolio
7. Nations Managed SmallCap Index Portfolio
8. Nations Balanced Assets Portfolio
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SCHEDULE A
For services rendered pursuant to this Agreement, the Annuity Trust
will pay Stephens and NBAI, in the aggregate, an administration fee, computed
daily and payable monthly, based on annual rate of each Fund's daily net assets
as follows:
1. Money Market Funds: 0.10%
2. Fixed Income Funds: 0.22%
3. International Funds: 0.22%
4. Domestic Equity Funds: 0.23%
It is understood and agreed among the parties that the aggregate
administration fee payable hereunder shall be divided by and between Stephens
and NBAI, as they may agreed from time to time.
In addition to the asset-based fee set forth above, the Annuity Trust
shall reimburse Stephens, NBAI and any sub-administrator engaged pursuant to
Paragraph 4 for certain reasonable out-of-pocket expenses incurred by them in
connection with the performance of their respective duties hereunder.
Reimbursable out-of-pocket expenses shall include the following:
reasonable costs associated with postage (including overnight services),
telephone, telecommunications (including facsimiles), duplicating, pricing
services, and forms and supplies.
A-1
SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
December 1, 1998 by and among THE BANK OF NEW YORK ("BNY"), NATIONSBANC
ADVISORS, INC. ("NBAI") and NATIONS ANNUITY TRUST (the "Annuity Trust").
WHEREAS, the Annuity Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, NBAI serves as the Co-Administrator for the investment
portfolios of the Annuity Trust pursuant to a separate Co-Administration
Agreement; and
WHEREAS, NBAI desires to retain BNY to render certain
sub-administrative services to the Annuity Trust and to NBAI, as
Co-Administrator of the Annuity Trust, and BNY is willing to render such
services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
(a) NBAI hereby appoints BNY to act as Sub-Administrator of the Annuity
Trust and to render sub-administrative services for each portfolio of the
Annuity Trust listed on Schedule I (individually, a "Fund" and collectively, the
"Funds") and BNY hereby accepts such appointment and agrees to render the
services and duties set forth in Schedule II as it may be amended from time to
time, for the compensation and on the terms herein provided. Each new investment
portfolio established in the future by the Annuity Trust or NBAI will become a
"Fund" for all purposes hereunder when BNY receives a revised Schedule I from
NBAI or the Annuity Trust that includes such new portfolio.
(b) Subject to the other provisions of this Section 1, in performing
all services under this Agreement, BNY shall (i) act in conformity with the
Annuity Trust's Declaration of Trust and Bylaws (the "Bylaws"), the 1940 Act and
the rules thereunder, including but not limited to Rules 31a-1 to 31a-3, and
other applicable laws and regulations, as the same may be amended from time to
time, and the Annuity Trust's Registration Statement, as such Registration
Statement may be amended from time to time; (ii) consult and coordinate with
NBAI and the Annuity Trust, as necessary and appropriate; and (iii) advise and
report to NBAI and the Annuity Trust, as necessary or appropriate, with respect
to any compliance matters that come to its attention. In performing all services
under this Agreement BNY shall meet the minimum quality of service standards set
forth on Schedule III.
(c) The Annuity Trust has furnished BNY and NBAI with copies properly
certified or authenticated of each of the following: (i) the Annuity Trust's
Declaration of Trust or other organizational document and all amendments thereto
(the "Declaration"); (ii) the Annuity Trust's Bylaws; (iii) resolutions of the
Annuity Trust's Board of Trustees or other governing body (the
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"Board") authorizing the execution, delivery and performance of this Agreement
by the Annuity Trust; (iv) the Annuity Trust's most recent Post-Effective
Amendment to its Registration Statement on Form N-1A (the "Registration
Statement") under the Securities Act of 1933, as amended, and under the 1940 Act
(File Nos. 333-40265 and 881-08481), as filed with the Securities and Exchange
Commission (the "SEC") relating to the Funds' shares (the "Shares"); (iv) the
Funds' current Prospectus(es); (v) the Funds' current Statement(s) of Additional
Information; and (vi) the pricing procedures applicable to the calculation of
the Funds' net asset values as approved by the Annuity Trust's Board (the
"Pricing Procedures"). It is solely the Annuity Trust's responsibility to
furnish BNY from time to time with copies, properly certified or authenticated,
of all amendments of or supplements to the foregoing, and BNY will not be held
to have knowledge of any such amendments or supplements until the same are
actually received by BNY. Furthermore, the Annuity Trust will provide BNY with
any other documents that BNY and NBAI may reasonably request and will notify BNY
and NBAI as soon as possible of any matter materially affecting either BNY's or
NBAI's performance of its services under this Agreement.
(d)(i) BNY undertakes to report on a regular basis to NBAI and the
Annuity Trust regarding: (A) the readiness of its computer systems, or those
used by it in the performance of its duties hereunder, properly to record,
store, process, calculate or present calendar dates falling on and after, and
time spans including, September 9, 1999, January 1, 2000 or February 29, 2000
(the "Subject Dates") as a result of the occurrence, or use of data containing
any such Subject Dates; (B) the readiness of its computer systems or those used
by it in the performance of its duties hereunder, to calculate any information
dependent on or relating to dates on or after the Subject Dates; and (C) its
ability to perform the administration and fund accounting services set forth in
Schedule II (the "Services") in accordance with any applicable performance
standards set forth in Schedule III (the "Standards") with respect to the
maintenance of records or processing of data containing dates falling on or
after the Subject Dates, provided that, with respect to computers used but not
owned by BNY and third-party computer systems other than InvestOne, BNY's
responsibility shall be limited to seeking similar reports from such owners or
third parties and promptly forwarding such reports to NBAI. Without limiting the
foregoing, BNY undertakes to notify NBAI and the Annuity Trust, in writing, of
any concerns believed by BNY to be material regarding the events described in
this paragraph, provided that, with respect to computers owned by others and
third-party computer systems other than InvestOne, BNY's responsibility shall be
limited to seeking similar notice from such owners or third parties and promptly
forwarding such notifications to NBAI.
(ii) NBAI or the Annuity Trust shall have the right to terminate this
Agreement if there is a "material failure" by BNY to perform any of the Services
in accordance with the Standards due to a failure by computers owned or used by
BNY in performing its duties hereunder to properly process the occurrence of the
Subject Dates or data containing the Subject Dates. As used in this Section
1(d), the term "material failure" shall be limited to a failure to provide any
of the Services in accordance with the Standards, provided that no such failure
shall be deemed a "material failure" if such failure occurs at or about the time
other major financial institutions similar to BNY providing similar services in
a similar volume to investment companies similar to the Annuity Trust are
experiencing similar failures, and, provided further, that no failure by BNY
shall be or be deemed a "material failure" if BNY substantially provides the
Services under a contingency plan, it being agreed that, to the extent that the
parties mutually
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agree, the time frames and deadlines set forth in Schedule III of this Agreement
and elsewhere shall not be considered in determining whether BNY is
substantially providing the Services in accordance with the Standards. NBAI and
the Annuity Trust agree to act reasonably and in good faith in considering any
request by BNY to extend time frames and deadlines.
(iii) In the event there is a "material failure" by BNY to provide the
Services and such "material failure" is not cured by BNY within 10 days after
such material failure arises, NBAI or the Annuity Trust shall have the right to
terminate this Agreement upon the giving of 60 days written notice to BNY. BNY
shall, notwithstanding any other provision contained in this Agreement, have no
liability to the Annuity Trust or NBAI under this Agreement if such "material
failure" initially arose out of or was caused by a failure of a computer used
but not owned by BNY or owned by a third party (other than InvestOne) to
properly process the Subject Dates or data containing the Subject Dates, and BNY
shall be entitled to any compensation and reimbursement for out-of-pocket
expense as may then be due and payable, as well as agreed-upon out-of-pocket
expenses incurred in connection with such a termination. If such a termination
is the result of a "material failure" initially arising out of, or caused by a
failure of computers owned by BNY or a failure by InvestOne, then, first, BNY's
liability hereunder for such failure shall, notwithstanding any other provision
contained in this Agreement to the contrary, be limited to the lesser of (x) the
fees paid to a successor service provider during the six months next succeeding
the date of termination to the extent such fees exceed the fees that would have
been paid to BNY hereunder, and (y) $1,000,000; and second, BNY shall not be
entitled to out-of-pocket expenses incurred in connection with such a
termination.
(iv) In the event of conflict between this Section 1(d) and any other
provision contained in this Agreement, this Section 1(d) shall control.
(v) NBAI and the Annuity Trust each agree to hold all of the provisions
of this Section 1(d) in strict confidence and not to disclose, nor permit
disclosure of, such provisions.
(e) Subject to the direction and approval of the Annuity Trust's Board
and appropriate officers and the provisions of this Agreement, BNY shall provide
to each Fund the administrative services set forth on Schedule II attached
hereto. In performing such services hereunder, BNY shall provide, at its
expense, office space, facilities, equipment and personnel. BNY shall not
provide any services relating to the management, investment advisory or
sub-advisory functions of any Fund, distribution of shares of any Fund,
maintenance of any Fund's financial records (except as otherwise agreed by the
parties) or any services normally performed by the Funds' counsel or independent
accountants. Upon receipt of the Annuity Trust's prior written consent, BNY may
delegate any of its duties and obligations hereunder to any delegee or agent
whenever and on such terms and conditions as it deems necessary or appropriate.
Unless expressly agreed in writing, BNY shall not be relieved of liability or
responsibility for the performance of any duties or obligations delegated to a
delegee or agent, provided that BNY shall have no liability for duties or
obligations that are delegated to a delegee or agent at the instruction of the
Annuity Trust or NBAI. The Annuity Trust and NBAI shall cause their respective
officers, and shall use reasonable efforts to cause the Annuity Trust's or
NBAI's legal counsel, independent accountants, and transfer agent to cooperate
with BNY and to provide BNY, upon BNY's reasonable written request, such
information, documents and advice relating to such Fund as is within the
possession or knowledge of such persons, in order to enable BNY
3
<PAGE>
to perform its duties hereunder. Such cooperation or provision of information,
documents or advice shall be at no cost to BNY, provided BNY's request is
reasonable and NBAI shall have been notified of the request. In connection with
its duties hereunder, BNY shall be entitled to reasonably rely upon any
documents relating to a Fund provided to BNY by any of the aforementioned
persons. BNY may apply to the Annuity Trust or NBAI for written instructions
with respect to any matter arising in connection with BNY's performance
hereunder. If, after a reasonable period of time, BNY receives no response to
any such application, BNY may then notify the Annuity Trust or NBAI of
reasonable action that BNY shall take if written instructions are not received
within a stated period of time after such notice, and then BNY shall not be
liable for taking such reasonable action as if written instructions had been
provided. BNY is entitled to reasonably rely and act in accordance with written
instructions believed to have been given by authorized persons and shall incur
no costs for such reasonable reliance. BNY shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement and Schedule II hereto, and no covenant
or obligation shall be implied against BNY in connection with this Agreement.
(f) The Annuity Trust and NBAI, for itself and not for the others,
hereby represents and warrants to BNY, which representations and warranties
shall be deemed to be continuing, that: (i) it is duly organized and existing
under the laws of the jurisdiction of its organization, with full power to carry
on its business as now conducted, to enter into this Agreement and to perform
its obligations hereunder; (ii) this Agreement has been duly authorized,
executed and delivered by it in accordance with all requisite action and
constitutes a valid and legally binding obligation, enforceable in accordance
with its terms; (iii) it is conducting its business substantially in compliance
with all applicable laws and regulations, both state and federal, and has
obtained all regulatory licenses, approvals and consents necessary to carry on
its business as now conducted; (iv) there is no statute, regulation, rule, order
or judgment binding on it and no provision of its Declaration or Bylaws, nor of
any mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of this
Agreement; and (v) the Annuity Trust and NBAI will use reasonable efforts to
promptly notify BNY of any errors or omissions contained in any reports,
calculations, valuations and other items of information, provided that any
failure by the Annuity Trust or NBAI to detect any such errors or omissions
shall not relieve BNY of any resulting liability therefrom. To the extent that
NBAI has actual knowledge of any such error or omission and fails to use
reasonable efforts to promptly notify BNY, BNY shall be relieved of any
liability that BNY may have mitigated had NBAI provided notice of such error or
omission to BNY.
(g) BNY hereby represents and warrants to the Annuity Trust and NBAI,
which representations and warranties shall be deemed to be continuing, that: (i)
it is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by it in accordance
with all requisite action and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms; and (iii) it is conducting
its business substantially in compliance with all applicable laws and
regulations, both state and federal, and has obtained all regulatory licenses,
approvals and consents necessary to carry on its business as now conducted;
there is no statute, regulation, rule, order or judgment binding on it and no
provision of its Declaration or Bylaws, nor of any mortgage, indenture, credit
agreement or other contract
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binding on it or affecting its property which would prohibit its execution or
performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities to be
furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement, BNY shall be entitled to receive a monthly fee
from NBAI and reimbursement for out-of-pocket expenses as set forth in Schedule
IV to this Agreement. It is understood that NBAI shall be responsible for BNY's
monthly fee for its services hereunder, and BNY agrees that it shall have no
claim against the Annuity Trust or the Funds with respect to compensation under
this Agreement.
3. Recordkeeping. BNY shall, as agent for the Annuity Trust, and
subject to the direction and approval of the Annuity Trust's Board and the
provisions of this Agreement, maintain and keep current the books, accounts and
other documents, if any, pursuant to the services and duties provided by BNY as
set forth in Schedule II of this Agreement, and preserve any such books,
accounts and other documents in accordance with the applicable provisions of
Rule 31a-2 of the 1940 Act. Such books, accounts and other documents shall be
made available upon reasonable request for inspection by officers, employees and
auditors of the Annuity Trust and NBAI during BNY's normal business hours. All
records maintained and preserved by BNY pursuant to this Agreement which the
Annuity Trust is required to maintain and preserve in accordance with Rule 31a-2
of the 1940 Act shall be and remain the property of the Annuity Trust and shall
be surrendered to the Annuity Trust promptly upon request in the form in which
such records have been maintained and preserved. Upon reasonable request of the
Annuity Trust, BNY shall provide in data files or hard copy, whichever the
Annuity Trust shall reasonably elect, any records included in any such delivery
which are maintained by BNY on a computer disc, or are similarly maintained, and
the Annuity Trust shall reimburse BNY for its expenses of providing such hard
copy.
4. Standard of Care; Indemnification.
(a) BNY shall at all times act in good faith and agrees to use its best
efforts to fulfill its obligations under this Agreement, but assumes no
responsibility for loss or damage to the Annuity Trust unless such loss or
damages is caused by BNY's own negligence, bad faith or willful misconduct or
that of its directors, officers or employees. BNY shall be responsible hereunder
for all direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing agents and reimbursement to the Funds for net asset value
breaks (as calculated under the Pricing Procedures).
(b) The Annuity Trust, on behalf of each Fund, will indemnify BNY
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses of a
defense against any claim, demand, action or suit), relating to the particular
Fund and arising from any one or more of the following: (i) errors in records or
instructions, explanations, information, specifications or documentation of any
kind, as the case
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may be, supplied to BNY by any person described in Section 1 hereof or by any
third party described in Section 5; (ii) action or inaction taken or omitted to
be taken by BNY pursuant to written or oral instructions described in this
Agreement (or otherwise without bad faith, negligence or willful misconduct);
(iii) any action taken or omitted to be taken by BNY in good faith in accordance
with the advice or opinion of counsel for a Fund, the Annuity Trust, NBAI
(obtained in accordance with the procedures set forth in this Agreement) or its
own counsel; (iv) any improper use by the Fund, the Annuity Trust, NBAI or their
respective agents, of any valuations or computations supplied by BNY pursuant to
this Agreement; (v) the method of valuation of the securities and the method of
computing a Fund's net asset value or any other amount computed by BNY
hereunder, provided BNY has followed the Pricing Procedures; and (vi) any
valuation of securities, net asset value or other amount provided by a Fund or
NBAI. BNY will not confess any claim or settle or make any compromise in any
instance in which the Annuity Trust will be asked to provide indemnification,
except with the Annuity Trust's prior written consent. Any amounts payable by
the Annuity Trust under this Section 4(b) shall be satisfied only against the
assets of the Fund involved in the claim, demand, action or suit and not against
the assets of any other investment portfolio of the Annuity Trust.
5. Fund Accounting Services.
(a) BNY, in performing the services required of it under the terms of
this Agreement, shall be entitled to rely fully on the accuracy and validity of
any and all instructions, explanations, information, specifications and
documentation furnished to it by a Fund and shall have no duty or obligation to
review the accuracy, validity or propriety of such instructions, explanations,
information, specifications or documentation, including, without limitation,
evaluations of securities; the amounts or formula for calculating the amounts
and times of accrual of Fund's liabilities and expenses; the amounts receivable
and the amounts payable on the sale or purchase of securities; and amounts
receivable or amounts payable for the sale or redemption of Fund shares effected
by or on behalf of the Fund. In the event BNY's computations hereunder rely, in
whole or in part, upon information, including, without limitation, bid, offer or
market values of securities or other assets, or accruals of interest or earnings
thereon, from a pricing or similar service utilized, or subscribed to, by BNY
which BNY in its judgment deems reliable, or any other third party pricing
source designated by the Annuity Trust, BNY shall not be responsible for, under
any duty to inquire into, or deemed to make any assurances with respect to, the
accuracy or completeness of such information. BNY shall not be required to
inquire into any valuation of securities or other assets by the Fund or any
third party described in this Section, even though BNY in performing services
similar to the services provided pursuant to this Agreement for others may
receive different valuations of the same or different securities of the same
issuers.
(b) Subject to the provisions of this Agreement and the direction and
approval of the Annuity Trust's Board, BNY shall perform the computations
described in Schedule II at such times and dates and in the manner specified or
described in the then-current Prospectus(es) of a Fund. To the extent valuation
of securities or a computation specified or described in a Fund's Pricing
Procedures or then-current effective Prospectus is at any time inconsistent with
any applicable laws or regulations, the Annuity Trust or NBAI shall immediately
so notify BNY in writing and thereafter shall furnish BNY at all appropriate
times with the values of such securities and such Fund's net asset value or
other amounts otherwise to be calculated by BNY,
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or, subject to the prior approval of BNY, instruct BNY in writing to value
securities and make such computations in a manner which the Annuity Trust or
NBAI then represents in writing to be consistent with all applicable laws and
regulations. The Annuity Trust or NBAI may also from time to time, subject to
the prior approval of BNY, instruct BNY in writing to make computations other
than as specified in this Section of this Agreement. By giving such instruction,
the Annuity Trust or NBAI shall be deemed to have represented that such
instruction is consistent with all applicable laws and regulations and the
then-current effective Prospectus of the particular Fund. The Annuity Trust or
NBAI shall have sole responsibility for determining the method of valuation of
securities and the method of computations, and all computations, valuation of
securities and the method of computing each Fund's net asset value shall be
subject to approval by the Annuity Trust and NBAI. BNY shall not be liable for
relying on any price provided by any pricing service believed by BNY to be
reliable, and the Annuity Trust or NBAI shall furnish values when the same are
not available from a pricing service utilized by BNY, with such furnishing to
constitute an instruction to BNY to rely on the provided values.
(c) BNY shall be responsible for determining and properly reflecting in
the computations made by it made by it under this Agreement: (i) the taxable
nature of any distribution or amount received or deemed received by, or payable
to, a Fund; (ii) the taxable nature or effect on a Fund or its shareholders of
any corporate actions, class actions, tax reclaims, tax refunds, or similar
events; (iii) the taxable nature or taxable amount of any distribution or
dividend paid, payable or deemed paid, by a Fund to its shareholders; (iv) the
effect under any federal, state, or foreign income tax laws of a Fund making or
not making any distribution or dividend payment, or any election with respect
thereto; or (v) any tax accounting; provided, however, that if BNY is not
certain of the taxable nature, amount or effect of any such item, it may seek
instructions regarding the proper treatment of such item from the Annuity Trust
or NBAI in accordance with the procedures set forth in Section 1(e), above, and
shall have no liability for acting in reliance on such instructions.
6. Termination of Agreement.
(a) This Agreement shall become effective as of the date first set
forth above and shall remain in full force and effect unless terminated pursuant
to the provisions of Section 6(b).
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days' written notice to BNY, by NBAI or by vote of the Board of
the Annuity Trust, or upon 180 days' written notice to NBAI and the Annuity
Trust, by BNY. Upon any such termination, BNY will cooperate with and assist the
Annuity Trust, NBAI, their agents and any successor administrator(s) or
sub-administrator(s) in the substitution/conversion process. In connection with
any termination of this Agreement, unless BNY is in breach of this Agreement,
the Funds and NBAI agree to pay BNY any compensation and reimbursement for
out-of-pocket expenses as may then be due and payable, as well as agreed-upon
out-of-pocket expenses incurred in connection with a termination. If BNY is in
breach of this Agreement, the Funds and NBAI may offset any compensation or
reimbursement amounts owed to BNY by the amount of damages, costs and expenses
incurred as a result of BNY's breach, including costs, expenses and reasonable
incremental fees for a period not to exceed one year incurred in connection with
a conversion by the Annuity Trust and NBAI to a successor service provider. In
the event of a
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dispute as to the amount of such damages, the Funds and NBAI agree to escrow the
set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
7. Amendments. Except as expressly provided in the first paragraph of
Section 1, no provision of this Agreement may be amended or modified orally, but
only by an instrument in writing signed by the party against which enforcement
of the amendment or modification is sought.
8. Confidentiality. All books, records, information and data pertaining
to the business of the Annuity Trust, or its prior, present or potential
shareholders that are exchanged or received in connection with the performance
of BNY's duties under this Agreement shall remain confidential and shall not be
disclosed to any other person, except as specifically authorized by the Annuity
Trust or as may be required by law, and shall not be used for any purpose other
than performance of its responsibilities and duties hereunder, and except that
BNY retains the right to disclose matters subject to confidentiality to its
examiners, regulators, internal or external auditors, its accountants, its
internal and external counsel, and to any other entity whenever it is advised by
its internal or external counsel that it is reasonably likely that BNY would be
liable for a failure to do so. BNY will endeavor to provide written notice to
the Annuity Trust and NBAI at least five business days prior to any disclosures
pursuant to this Section 8, but, provided it shall have provided as much notice
as is reasonably practicable under the circumstances, BNY shall have no
liability for any failure to do so.
9. Service to Other Companies. The Annuity Trust and NBAI acknowledge
that BNY now provides, will continue to provide and may in the future provide
administrative or other services to other investment companies or series of
investment companies, and the Annuity Trust and NBAI have no objection to BNY so
doing. The Annuity Trust and NBAI further acknowledge that the persons employed
by BNY to assist in the performance of BNY's duties under this Agreement may not
devote their full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of BNY or any affiliate of BNY to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
10. Conversion Schedule. If the Annuity Trust and NBAI, in the exercise
of their reasonable judgment, cannot meet the conversion schedule set forth in
Schedule VI as a result of BNY's inability to provide, or to confirm that it is
capable of providing, the services described in Schedule II or to meet the
quality of service standards set forth in Schedule III with respect to one or
more Funds in accordance with the conversion schedule attached as Schedule VI,
then BNY shall be obligated to pay any resulting incremental costs incurred by
the Annuity Trust or NBAI, including any incremental fees payable to First Data
Investors Services Group by the Annuity Trust or NBAI.
11. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflict of laws principles thereof.
Each Fund, the Annuity Trust
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and NBAI hereby consent to the jurisdiction of a state or federal court situated
in New York City, New York in connection with any dispute arising hereunder. To
the extent that in any such jurisdiction any of the aforementioned persons may
now or hereafter be entitled to claim, for itself or its assets, immunity from
suit, execution, attachment (before or after judgment) or other legal process,
each irrevocably agrees not to claim, and it hereby waives, such immunity.
(b) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
(c) Each and every right granted to BNY, the Annuity Trust or NBAI
hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of BNY, the Annuity Trust or
NBAI to exercise, and no delay in exercising, any right will operate as a waiver
thereof, nor will any single or partial exercise by BNY, the Annuity Trust or
NBAI of any right preclude any other or future exercise thereof or the exercise
of any other right.
(d) BNY shall not be responsible for delays or errors that occur by
reason of circumstances beyond its reasonable control in the performance of its
duties under this Agreement, provided that reasonable back-up and disaster
recovery systems are in place, including, without limitation, labor
difficulties, mechanical breakdowns, computer breakdowns or malfunctions
(hardware or software), flood or catastrophe, acts of God, failures of
transportation, communication or power supply, or other similar circumstances.
Nor shall BNY be responsible for delays or failures to supply the information or
services specified in this Agreement where such delays or failures are caused by
the failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
BNY in the performance of its duties under this Agreement.
(e) Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Annuity Trust, BNY and/or NBAI shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To the Annuity Trust:
Nations Annuity Trust
111 Center Street
Little Rock, Arkansas 72201
Attention: Richard H. Blank, Jr.
To NBAI:
NationsBanc Advisors, Inc.
One Bank of America Plaza
101 South Tryon Street, NC1-002-33-31
Charlotte, NC 28255-0001
Attention: Edward D. Bedard
9
<PAGE>
To BNY:
The Bank of New York
90 Washington Street
22nd Floor
New York, NY 10286
Attention: Stephen E. Grunston
(f) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement may not be assigned by BNY, nor may BNY delegate
responsibility for the performance of any of its duties hereunder, without the
written consent of the other parties hereto.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(h) The captions of this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect.
(i) This Agreement constitutes the entire agreement between the parties
hereto with respect to the provision by BNY of sub-administrative services and
the receipt of fees therefor, and supersedes all prior arrangements or
understandings, written or oral, with respect to the provision by BNY of such
services and the receipt of fees therefor.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By: /s/ Stephen E. Grunston
---------------------------
Stephen E. Grunston
Vice President
NATIONSBANC ADVISORS, INC.
By: /s/ Edward D. Bedard
---------------------------
Edward D. Bedard
Senior Vice President and
Chief Operating Officer
NATIONS ANNUITY TRUST
By: /s/ James E. Banks, Jr.
---------------------------
James E. Banks, Jr.
Assistant Secretary
11
<PAGE>
SCHEDULE I
1. Nations Annuity Value Portfolio
2. Nations International Growth Portfolio
3. Nations Disciplined Equity Portfolio
4. Nations Marsico Focused Equities Portfolio
5. Nations Marsico Growth & Income Portfolio
6. Nations Managed Index Portfolio
7. Nations Managed SmallCap Index Portfolio
8. Nations Balanced Assets Portfolio
I-1
<PAGE>
SCHEDULE II
FUND ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in
addition to any other services agreed to from time to time:
o Monitor and document compliance by the Funds with their policies and
restrictions as delineated in their Prospectuses and Statements of
Additional Information, including any supplements or amendments thereto,
and with the rules and regulations under the 1940 Act utilizing Charles
River Development's compliance monitoring system or by such other means as
the parties may agree. NBAI shall be responsible for communicating such
policies and restrictions, including any changes thereto, to BNY by such
means as the parties agree.
o Provide income attribution summary schedules necessary for year-end tax
reporting, including the attached examples. Provide a gross up for foreign
taxes on a per share basis and the redesignation of income and capital
gains on a per share basis.
o Prepare federal, state, excise and local income tax returns for the Funds
and file such returns upon the approval of the Funds' independent
accountants; monitor, report on and prepare periodic worksheet and tax
provision packages with respect to Sub-Chapter M qualifications; prepare
and file all Form 1099s with respect to the Funds' Trustees; monitor
compliance with Section 4982 of the Internal Revenue Code; calculate and
maintain records pertaining to original issue discount and premium
amortization as required; identify wash sales and all other book/tax
differences, and report results to the Funds' independent accountants and
Funds management; and such other duties relating to federal and/or state
tax compliance as the parties may agree. BNY shall be responsible for
providing all pertinent tax information to the Funds' independent
accountants.
o Prepare Return of Capital Statement of Position 93-2 adjustments.
o Support NBAI in its preparation of the schedules and provide NBAI unaudited
quarterly and semi-annual and audited annual financial statements and
schedules of Fund investments by providing, without limitation, each Funds'
schedule of investments and general ledger in electronic format and/or hard
copy, as required, and such other information as may be necessary to
complete such financial reports.
o Prepare statistical reports for outside information services (referenced in
Schedule V), and such other information services as the parties may agree,
including the ICI expense survey.
o Attend Fund shareholder and Board of Trustees meetings as requested by
NBAI, including making such presentations as are appropriate, and, with
respect to the Fund administration services described herein, provide such
periodic and special reports to the Annuity Trust and NBAI as the Annuity
Trust and NBAI shall reasonably request.
II-1
<PAGE>
FUND ACCOUNTING SERVICES
BNY shall provide all accounting and recordkeeping services necessary
and appropriate for the business of the Funds, including but not limited to
those set forth below.
Required Records; Ledgers and Journals
BNY shall keep current the following accounts and records relating to
the business of the Funds, in such form as is required by the 1940 Act and the
rules thereunder, and generally accepted accounting principles, to support all
filings under applicable federal and state tax laws and regulations and as may
be mutually agreed to among the Annuity Trust, NBAI and BNY, and shall make
available to NBAI and/or the Annuity Trust upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31
and the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
II-2
<PAGE>
Daily Accounting Services
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP)
Per Share Pursuant to SEC formulas:
o Update the valuation of security positions held by each Fund's
portfolio in accordance with the Fund's Pricing Procedures and any
other appropriate procedures established by the Board and NBAI as
NBAI shall provide BNY in writing
o When instructed by NBAI, enter manual prices supplied by broker
and link to pricing procedures
o Calculate each Fund's NAV/POP in accordance with the applicable
Pricing Procedures approved by the Annuity Trust's Board of
Trustees and prepare NAV proof sheet. Review components of change
in NAV for reasonableness based on the tolerance levels as NBAI
shall direct BNY in writing
o Review variance reporting for price changes in individual
securities using variance levels established by Fund and report to
Fund portfolio managers and to NBAI
o Review for ex-dividend items indicated by pricing sources; trace
to general ledger for agreement
o Communicate required pricing and yield information (NAV/POP), as
appropriate, to NBAI, the Funds' Transfer Agent and Sub-Transfer
Agent and, electronically, to NASDAQ and to such other third
parties as designated by the Funds with respect to its various
distribution channels. In addition, provide Fund share activity to
NBAI.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
o Calculate, subject to the approval of NBAI, net investment income
available for distribution daily as appropriate
o Calculate daily dividend rate, and 1, 7, 30-day yields/SEC yields
o Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
o Receive daily cash and transaction statements from the Funds'
Custodian
o Complete daily bank cash reconciliations (including documentation
of any reconciling items) and notify the Funds' Custodian
o Report investable cash to NBAI and Fund sub-advisers
4. Daily Expense Accruals:
o Accrue individual expenses on a daily basis based on Instructions
provided by NBAI, except for those instances where such an
adjustment would cause a full penny break in NAV, in which case
such adjustment will be included in the calculation of NAV on the
day received
o If applicable, accrue daily amortization of organization expense
as instructed by NBAI
II-3
<PAGE>
o If applicable, accrue daily Rule 12b-1 Plan expenses
o Adjust expense accruals as instructed by NBAI and provide reports
as requested by NBAI
5. Verify and Record All Daily Income Accruals for Debt Issues:
o Track income and provide year end tax schedules
o Review and verify all interest and amortization reports
o Periodic tie-out of receivables
o Ensure security masters denote proper interest and amortization
methods as per the fund set up sheets as instructed by NBAI
6. Monitor Securities:
o Review each funds portfolio holding and current days security
trades for dividend activity
o Interface with Funds' Custodian for timely collection and postings
of corporate actions, dividends and interest pre-payments
7. Enter All Security Trades:
o Review verification of trade and interest calculations
o Verify settlement through custodian statements
o Maintain security ledger transaction reporting
o Maintain tax lot holdings o Determine realized gains or losses on
security trades
o Provide broker commission information
8. Enter All Fund Share Transactions:
o Periodically reconcile dividend payable amounts with the Funds'
Transfer Agent
o Process activity identified on transfer agent reports
o Verify settlement through custodian statements
o Reconcile to transfer agency report balances
o Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
o Post manual entries to general ledger
o Post custodian bank activity
o Require automated settled transactions between custody and
activity records (prepare, clear and post)
o Post shareholder and security transactions
o Post and verify income and expense accruals and resolve
differences
o Prepare general ledger
o Post corporate action activity
II-4
<PAGE>
10. Review and Reconcile Custodian Statements:
o Verify all posted interest, dividends, expenses, and shareholder
and security payments/receipts, etc. when requested
o Post all cash settlement activity to trial balance
o Reconcile to ending cash balance accounts
o Report to NBAI the status of past due items and failed trades with
the custodian
o Reconcile cash exception Income items, tax reclaims and past due
income items with custody area
11. Preparation of Accounting Reports:
o Price Variance Report
o Trial Balance
o Portfolio Valuation
o NAV Calculation Report
o Cash Availability
o Change in NAV
o Non-standard entries
o Stale Price Report
o Other such reports as may be reasonably be requested by NBAI
Monthly/Quarterly Services
BNY shall provide the following services on a monthly or quarterly
basis, within such timeframe as may be mutually agreed upon by BNY, the Annuity
Trust and NBAI:
1. Submission of Monthly Accounting Reports as mutually agreed upon
2. Reconcile Asset Listing to Custodian Asset Listing
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
4. Prepare Documentation Supporting the Preparation of:
o SEC yield reporting
o Income by state reporting
o Standard Industry Code Valuation Report (please provide NBAI's
industry code classifications/is there a standard for all funds)
o Alternative Minimum Tax Income segregation schedule
II-5
<PAGE>
5. Provide Upon Request Broker Commission and Net Trade Reports
Annual (and Semi-Annual) Accounting Services
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in
accordance with standard audit assistance requirements
2. Provide NBAI with information to assist NBAI in the preparation of NSAR
filings
Other Core Services
BNY shall provide the following services:
o Accrete discounts and amortize premiums to put and call events as
directed by NBAI and in a manner acceptable under generally
accepted accounting principles
o Process principal repayments on mortgage backed securities
o Update variable securities with current rates
o Process corporate action events through a primary vender feed, and
monitor results via Reuters, Bloomberg, or other available sources
as the parties may agree
o Perform automated portfolio pricing with a second vendor as
requested by NBAI
o Produce documents and respond to inquiries during account and SEC
examinations
Money Market Funds: Prepare daily mark to market reports and analysis
in compliance with Rule 2a-7 including:
o Calculating the daily portfolio weighted average maturity
o Report portfolio diversification based on trade/security
information provided by NBAI by:
Country, State, Tier, Liquidity, Asset Backed Securities,
Industry, Letter of Credit
o Listing percentage of portfolio maturing in specified intervals
(i.e., number of days)
o Providing issuer and guarantor diversification exception reporting
International Funds: BNY shall provide the following services:
o Report in base and local currency
II-6
<PAGE>
o Processing of tax liability on foreign income subject to approval
of NBAI
o Daily variance analysis performed on FX rates for security
position held
o Produce automated bifurcation reporting in compliance with IRC
Section 988
o Mark to market security receivables and payables on a daily basis
o Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as agreed
upon from time to time (i.e., financial statement production).
II-7
<PAGE>
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------------
Service Standard
- ------------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C> <C>
1. Daily Cash Availability |_| 100% accuracy and delivery by 9:00 a.m. EST for
Money Market Funds and 9:30 a.m. EST for all
others
|_| Compensation for uninvested cash at Nations Cash
Reserves' mill rate
- ------------------------------------------------------------ ---------------------------------------------------------------
2. Calculation of daily NAVs |_| 100% accuracy by 5:00 p.m. EST including pricing,
expense accruals, cash activity, manual entries,
S/H activity. Delivery by 5:45 p.m. EST
- ------------------------------------------------------------ ---------------------------------------------------------------
3. Review of daily NAVs |_| 100% review by 5:30 p.m. EST
|_| Review of NAV components for
reasonableness including analysis
of the change in the NAV and the change
in mill rates.
|_| Review of price variance report
|_| Review of manual proof
- ------------------------------------------------------------ ---------------------------------------------------------------
4. NASDAQ Reporting |_| 100% accuracy and communication by 5:45 p.m. EST
- ------------------------------------------------------------ ---------------------------------------------------------------
5. Daily Pricing and Rate Report (DPRR) |_| 100% accuracy in nightly transmission of DPRRs
|_| Money Market Funds-5:30 p.m. EST
|_| All other funds- 6:00 p.m. EST
- ------------------------------------------------------------ ---------------------------------------------------------------
6. FundStation Report (SubM) |_| 100% accuracy and nightly transmission by 7:00 p.m.
EST
- ------------------------------------------------------------ ---------------------------------------------------------------
7. Processing of trade tickets |_| 100% accuracy and processed by T+1 if received by
the following cut-off times:
|_| All Funds (except International) - 10:00 am (T+1)
|_| International - 12:00 p.m. (T+1)
|_| Same day settlements - 1:30 p.m.
- ------------------------------------------------------------ ---------------------------------------------------------------
</TABLE>
III-1
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------------
Service Standard
- ------------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C> <C>
8. Problem Resolution (general) |_| NAV impact analysis within 1 day
|_| Clear and timely communication of 100% of issues
|_| Ongoing Tracking
- ------------------------------------------------------------ ---------------------------------------------------------------
9. Cash reconciliations |_| Performed daily and sent daily to NBAI (Money Market
Funds) and sent weekly to NBAI (all other funds)
|_| Issues communicated to NBAI same day
|_| Outstanding items addressed within 1 business day
- ------------------------------------------------------------ ---------------------------------------------------------------
10. Position Reconciliations |_| Performed daily and sent weekly to NBAI
|_| Issues communicated to NBAI same day
|_| Open issues addressed within 2 business days
- ------------------------------------------------------------ ---------------------------------------------------------------
11. Tax reporting
|_| Federal, state, tax returns |_| Tax provision package prepared within time
parameters as set by NBAI/Independent tax
|_| Tax provision packages including Sub-M and excise personnel (PWC)
tax amounts/ distributions
|_| Estimates of tax requirements prepared as required
|_| Identification of all book/tax differences by NBAI for proper tax planning
|_| Capital gain estimate preparations
- ------------------------------------------------------------ ---------------------------------------------------------------
12. Statistical Reports |_| Filed within the time parameters as set forth by
each statistical service
- ------------------------------------------------------------ ---------------------------------------------------------------
13. Expense accruals/payments |_| Payments made on the business day written
instructions from an authorized signator received
|_| Expense accruals made with 100% accuracy based upon
written instructions from NBAI
- ------------------------------------------------------------ ---------------------------------------------------------------
14. Management Reports |_| Provided to NBAI within 10 business days of month end
- ------------------------------------------------------------ ---------------------------------------------------------------
</TABLE>
III-2
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------ ---------------------------------------------------------------
Service Standard
- ------------------------------------------------------------ ---------------------------------------------------------------
<S> <C> <C> <C>
15. Year end tax reports |_| Provided to NBAI within the time frame agreed to
- ------------------------------------------------------------ ---------------------------------------------------------------
16. Annual/Semi-Annual Reports |_| Provide Trial Balance within 5 business days after
annual/semi-annual period
|_| Provide additional financial statement support as
agreed to
- ------------------------------------------------------------ ---------------------------------------------------------------
17. Daily Reports |_| To be provided on the following day
|_| Provide detailed portfolio valuation
|_| Trial Balance
- ------------------------------------------------------------ ---------------------------------------------------------------
18. Daily Cash Sweep |_| 100% accuracy and communication by 2:00 p.m. EST
|_| Nations Cash Reserves
|_| AIM
|_| Nuveen
- ------------------------------------------------------------ ---------------------------------------------------------------
19. Post Dividends / Corporate Actions |_| 100% accuracy and posted on effective date
- ------------------------------------------------------------ ---------------------------------------------------------------
20. Monthly Reconciliations |_| Complete reconciliations within 10 business days
- ------------------------------------------------------------ ---------------------------------------------------------------
21. Reporting to Sub-Advisors |_| Provide nightly and other periodic reporting to
Nations Funds Sub-Advisors
- ------------------------------------------------------------ ---------------------------------------------------------------
22. Compliance |_| Provide compliance reports as requested by NBAI
- ------------------------------------------------------------ ---------------------------------------------------------------
</TABLE>
III-3
<PAGE>
SCHEDULE IV
(Attached)
IV-1
<PAGE>
SCHEDULE V
All Database Companies Quarterly List
- ----------------------- --------------
AMG Data Services Lipper
Barron's Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End Only)
Lipper Lipper - International (Closed End Only)
Media General
Moody's Investors Service
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
<PAGE>
SCHEDULE VI
Conversion Schedule
- -----------------------------------------------------------------------------
Fund Type Number of Funds No Later Than
- -----------------------------------------------------------------------------
Money Market Funds 9 Funds 12/1/98
- -----------------------------------------------------------------------------
Variable Annuity Funds 8 Funds 12/31/98
- -----------------------------------------------------------------------------
International Funds: 8 Funds 12/31/98
- Global Government
- Emerging Markets
- Pacific Growth
- International Equity
- International Growth
- International Value
- 2 Marsico Funds
- -----------------------------------------------------------------------------
All Remaining Funds 44 Funds 2/15/99
- -----------------------------------------------------------------------------
VI-1
TRANSFER AGENCY AND SERVICES AGREEMENT
(With Facilities Management Arrangement)
THIS AGREEMENT, dated as of this first day of June, 1995 between
NATIONS FUND, INC., a Maryland corporation, NATIONS FUND TRUST, a Massachusetts
business trust, THE CAPITOL MUTUAL FUNDS, a Massachusetts business trust,
NATIONS FUND PORTFOLIOS, INC., a Maryland corporation, and each other investment
company which may become a party hereto pursuant to the terms of this Agreement
(individually a "Fund", and collectively, the "Funds"), each with its principal
place of business at 111 Center Street, Little Rock, Arkansas 72201 and
additional offices at 101 South Tryon Street, Charlotte, North Carolina 28255,
and THE SHAREHOLDER SERVICES GROUP, INC. (the "Transfer Agent"), a Massachusetts
corporation with principal offices at One Exchange Place, 53 State Street,
Boston, Massachusetts 02109.
WITNESSETH
WHEREAS, each Fund desires to appoint the Transfer Agent as its
transfer agent, dividend disbursing agent and agent in connection with certain
other activities and the Transfer Agent desires to accept such appointment;
WHEREAS, each Fund may authorize the issuance of Shares in separate
series, with each such series representing interests in a separate portfolio of
securities and other assets ("Portfolio");
WHEREAS, each Fund and each Portfolio of a Fund subject to this
Agreement, including any investment company or Portfolio as may be added to this
Agreement pursuant to Section 17, shall be identified in the attached Schedule
G; and
WHEREAS, the Transfer Agent and NationsBank, N.A. (Carolinas)
("NationsBank") have entered into a Facilities Management Agreement ("Facilities
Agreement") dated June 1, 1995 pursuant to which the Transfer Agent has
established a servicing and processing center to provide transfer agent services
on behalf of the Funds in Charlotte, North Carolina (the "Charlotte Facility").
NOW THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the Funds and the Transfer Agent agree as follows:
Article 1 Definitions
1.1 Whenever used in this Agreement, the following words and phrases, unless the
context otherwise requires, shall have the following meanings:
(a) "Articles of Incorporation" shall mean the Articles of
Incorporation, Declaration of Trust, or other similar organizational
document as the case may be, of a Fund as the same may be amended from
time to time.
<PAGE>
(b) "Authorized Person" of a Fund shall be deemed to include
(i) any authorized officer of the Fund; (ii) the members of the Joint
Operations Board (as hereinafter defined); or (iii) any person, whether
or not such person is an officer or employee of the Fund, duly
authorized to give Oral Instructions or Written Instructions on behalf
of the Fund as indicated in writing to the Transfer Agent from time to
time.
(c) "Board of Directors" of a Fund shall mean the Board of
Directors or Board of Trustees of the Fund, as the case may be.
(d) "Commission" shall mean the Securities and Exchange
Commission.
(e) "Custodian" of a Fund refers to any custodian or
subcustodian of securities and other property which the Fund may from
time to time deposit, or cause to be deposited or held under the name
or account of such a custodian pursuant to a Custodian Agreement.
(f) "Joint Operations Board" shall mean the joint board
comprised of one senior representative from the Transfer Agent, one
individual designated by the Funds jointly to represent their
respective interests and the most senior Transfer Agent manager of the
Charlotte Facility.
(g) "1940 Act" shall mean the Investment Company Act of 1940
and the rules and regulations promulgated thereunder, all as amended
from time to time.
(h) "Oral Instructions" shall mean instructions, other than
Written Instructions, actually received by the Transfer Agent from a
person reasonably believed by the Transfer Agent to be an Authorized
Person;
(i) "Prospectus" of a Fund shall mean collectively the most
recently dated Fund Prospectuses and Statements of Additional
Information, including any supplements thereto, if any, with respect to
each Portfolio of the Fund which have become effective under the
Securities Act of 1933 and the 1940 Act.
(j) "Shares" of a Fund refers collectively to such shares of
capital stock or beneficial interest, as the case may be, or class
thereof, of the Fund as may be issued from time to time.
(k) "Shareholder" shall mean a record owner of Shares.
(l) "Written Instructions" shall mean a written communication
signed by a person reasonably believed by the Transfer Agent to be an
Authorized Person and actually received by the Transfer Agent. Written
Instructions shall include manually executed originals and authorized
electronic transmissions, including telefacsimile of a manually
executed original or other process.
2
<PAGE>
Article 2 Appointment of the Transfer Agent
2.1 Each Fund hereby appoints and constitutes the Transfer Agent as
transfer agent and dividend disbursing agent for Shares of the Fund and the
Transfer Agent hereby accepts such appointments and agrees to perform the duties
hereinafter set forth.
Article 3 Duties of the Transfer Agent
3.1 The Transfer Agent shall be responsible for:
(a) Administering and performing the customary services of a
transfer agent; agent in connection with dividend and distribution
functions; and agent in connection with shareholder account and
administrative functions in connection with the issuance, transfer and
redemption or repurchase (including coordination with the Custodian) of
Shares, as more fully described in the written schedule of Duties of
the Transfer Agent annexed hereto as Schedule A and incorporated
herein, and in accordance with the terms of each Fund's Prospectus,
applicable law and the procedures established from time to time between
the Transfer Agent and the Funds.
(b) Recording the issuance of Shares and maintaining pursuant
to Commission Rule 17Ad-10(e) a record of the total number of Shares
which are authorized, based upon data provided to it by each Fund, and
issued and outstanding. The Transfer Agent shall provide each Fund on a
regular basis with the total number of Shares which are authorized and
issued and outstanding and shall have no obligation, when recording the
issuance of Shares, to monitor the issuance of such Shares or to take
cognizance of any laws relating to the legality or validity of the
issue or sale of such Shares, which functions shall be the sole
responsibility of the Fund.
(c) Notwithstanding any of the foregoing provisions of this
Agreement, the Transfer Agent shall be under no duty or obligation to
inquire into, and shall not be liable for: (i) the legality of the
issuance or sale of any Shares or the sufficiency of the amount to be
received therefor; (ii) the legality of the redemption of any Shares,
or the propriety of the amount to be paid therefor; (iii) the legality
of the declaration of any dividend by the Board of Directors, or the
legality of the issuance of any Shares in payment of any dividend; or
(iv) the legality of any recapitalization or readjustment of the
Shares.
3.2 In addition, each Fund shall verify the establishment of shares or
share transactions for each State prior to activation on the Transfer Agent's
system and thereafter monitor the daily activity of shares for each State based
upon daily transactions recorded by the Transfer Agent and transmitted to the
Fund or its designated agent. The responsibility of the Transfer Agent for a
Fund's blue sky State registration status is solely limited to the initial
establishment of shares or share transactions subject to blue sky compliance by
the Fund and the reporting of such transactions to the Fund as provided above.
3
<PAGE>
3.3 In addition to the duties set forth herein, the Transfer Agent
shall perform such other duties and functions, and shall be paid such amounts
therefor, as may from time to time be agreed upon in writing between the Funds
and the Transfer Agent.
Article 4 Duties of the Joint Operations Board
4.1 The Joint Operations Board will be responsible for the following
with respect to the services to be performed by the Transfer Agent under this
Agreement (the "Services"):
(a) General oversight of the provision of Services by the
Transfer Agent, including, but not limited to, the creation and
quarterly review of quality standards governing the Services pursuant
to Article 5 hereof, the establishment of strategic and/or operational
goals with respect to the Services to be provided at the Charlotte
Facility, and addressing such issues and concerns that may arise from
time to time amongst the Funds and the Transfer Agent under this
Agreement.
(b) Review and approval of, from a technical feasibility
standpoint, imaging and other new technologies proposed to be used by
the Transfer Agent in performing the Services at the Charlotte
facility.
(c) Review and approval of the Charlotte Facility budget and
expense statements, including those costs for which compensation is
sought by the Transfer Agent pursuant to Article 8 hereof.
(d) Review of those costs incurred by the Transfer Agent,
other than in connection with the Charlotte Facility, for which
compensation is sought by the Transfer Agent pursuant to Article 8
hereof.
4.2 With respect to matters described in Section 4.1 above, the
decision of the Funds' representative on the Joint Operations Board shall
control.
4.3 On a monthly basis, the Transfer Agent shall provide to the Joint
Operations Board a statement of the internal and external costs incurred by the
Transfer Agent in connection with the provision of Services for which the
Transfer Agent will seek reimbursement under Article 8 hereof.
Article 5 Quality Standards
5.1 The quality of service provided by the Transfer Agent hereunder
shall be maintained at or above the levels set forth in Schedule B hereto. Such
quality standards shall govern the Services provided by the Transfer Agent until
a new set of quality standards is established pursuant to Section 5.2 hereof.
5.2 As soon as practicable after the first ninety (90) days of
operation of the Charlotte Facility, the Joint Operations Board shall establish
a new set of quality standards reasonably acceptable to the Funds and the
Transfer Agent.
4
<PAGE>
5.3 The Joint Operations Board shall review and update, if necessary,
the quality standards on a semi-annual basis.
5.4 If, at any time during the term of this Agreement, 20% or more of
the then-current quality standards (e.g., 2 or more out of 10 standards) are not
met by the Transfer Agent during any month (as evidenced by monthly reports),
the Funds shall promptly notify the Transfer Agent in writing of such failure
and the details relating to such failure. If, any of the failed quality
standards are not met by the Transfer Agent during the three month period
commencing thirty (30) days after the Transfer Agent receives such notice, the
Funds shall have the right to terminate this Agreement on thirty (30) days
notice.
5.5 Notwithstanding the foregoing, the Funds shall not have the right
to terminate this Agreement based on the failure by the Transfer Agent to have
satisfied a quality standard if such failure was caused directly by the negative
vote of the Funds' representative on the Joint Operations Board with respect to
a commercially reasonable funding request of the Transfer Agent for the
Charlotte Facility.
Article 6 Recordkeeping and Other Information
6.1 The Transfer Agent shall create and maintain all records required
of it pursuant to its duties hereunder and as set forth in Schedule A in
accordance with all applicable laws, rules and regulations, including records
required by Section 31(a) of the 1940 Act. All records shall be available during
regular business hours for inspection and use by the Funds. Where applicable,
such records shall be maintained by the Transfer Agent for the periods and in
the places required by Rule 31a-2 under the 1940 Act.
6.2 To the extent required by Section 31 of the 1940 Act, the Transfer
Agent agrees that all such records prepared or maintained by the Transfer Agent
relating to the Services are the property of the relevant Fund and will be
preserved, maintained and made available in accordance with such section, and
will be surrendered promptly to such Fund on and in accordance with the Fund's
request.
6.3 In case of any requests or demands for the inspection of
Shareholder records of a Fund, the Transfer Agent will endeavor to notify the
Fund of such request and secure Written Instructions as to the handling of such
request. The Transfer Agent reserves the right, upon prior notice to the Fund,
to exhibit the Shareholder records to any person whenever it is advised by its
counsel that it may be held liable for the failure to comply with such request.
6.4 Upon reasonable notice by a Fund, the Transfer Agent shall make
available during regular business hours such of its facilities and premises
employed in connection with the performance of its duties under this Agreement
for reasonable visitation by the Fund, or any person retained by the Fund as may
be necessary for the Fund to evaluate the quality of the Services performed by
the Transfer Agent pursuant hereto.
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Article 7 Fund Instructions
7.1 The Transfer Agent will have no liability when acting for a Fund in
accordance with Written or Oral Instructions believed to have been executed or
orally communicated by an Authorized Person of the Fund and will not be held to
have any notice of any change of authority of any person until receipt of a
Written Instruction thereof from the Fund. The Transfer Agent will also have no
liability when processing Share certificates for a Fund which it reasonably
believes to bear the proper manual or facsimile signatures of the officers of
the Fund and the proper countersignature of the Transfer Agent.
7.2 The Transfer Agent may request Written Instructions from a Fund and
may seek advice from legal counsel for the Fund with prior notice to the Fund,
or its own legal counsel, with respect to any matter arising in connection with
this Agreement, and it shall not be liable for any action taken or not taken or
suffered by it in good faith in accordance with such Written Instructions or in
accordance with the opinion of counsel for the Fund or for the Transfer Agent.
Written Instructions requested by the Transfer Agent will be provided by the
Fund within a reasonable period of time.
7.3 The Transfer Agent, its officers, agents or employees, shall accept
Oral Instructions or Written Instructions given to them with respect to a Fund
by any person representing or acting on behalf of the Fund only if said
representative is an Authorized Person of the Fund. The Funds agree that all
Oral Instructions shall be followed within one business day by confirming
Written Instructions, and that the Funds' failure to so confirm shall not impair
in any respect the Transfer Agent's right to reply on Oral Instructions.
Article 8 Compensation
8.1 The Funds shall reimburse the Transfer Agent for all the Transfer
Agent's "Costs" incurred in connection with the provision of Services as set
forth in the written Schedule of Costs annexed hereto as Schedule C and
incorporated herein and in addition the Funds shall compensate the Transfer
Agent for the following amounts (the "Margin");
(a) During the first 36 months of the Initial Term (as defined
below), an amount equal to 15% of such Costs during each month.
(b) During the last 24 months of the Initial Term and during
each Renewal Term (as defined below), an amount equal to 12.5% of such
Costs during each month.
8.2 Notwithstanding the foregoing, the charges incurred by the Transfer
Agent under the Facilities Agreement with NationsBank and such other expenses
set forth in the written schedule of Non-Margin Expenses annexed hereto as
Schedule D shall not be included as Costs in connection with the calculation of
the Margin amounts set forth in Subsections 8.1(a) and (b).
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8.3 In addition to the Costs and Margin described above, the Fund shall
reimburse the Transfer Agent, and will be billed separately for, those
out-of-pocket expenses incurred by the Transfer Agent in the performance of its
duties hereunder as specified in the written schedule of out-of-pocket expenses
annexed hereto as Schedule E and incorporated herein.
8.4 The Funds agree to pay all fees and out-of-pocket expenses within
thirty (30) days following the receipt of the respective invoice. The Funds
shall not be obligated to pay amounts that are reasonably in dispute until such
dispute is resolved.
Article 9 Documents
9.1 In connection with the appointment of the Transfer Agent, each Fund
shall, on or before the date this Agreement goes into effect, but in any case
within a reasonable period of time for the Transfer Agent to prepare to perform
its duties hereunder, deliver or cause to be delivered to the Transfer Agent the
documents set forth in the written schedule of Fund Documents annexed hereto as
Schedule F.
Article 10 Transfer Agent System
10.1 The Transfer Agent shall retain title to and ownership of any and
all data bases, computer programs, screen formats, report formats, interactive
design techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by the Transfer Agent in connection with
the services provided by the Transfer Agent to the Fund herein (the "Transfer
Agent System").
10.2 The Transfer Agent hereby grants to each Fund a limited license to
the Transfer Agent System for the sole and limited purpose of having the
Transfer Agent provide the services contemplated hereunder and nothing contained
in this Agreement shall be construed or interpreted otherwise and such license
shall immediately terminate upon the termination of this Agreement.
10.3 The Transfer Agent agrees to provide the Funds with full access to
the Transfer Agent System and all enhancements thereto to the same extent that
such is made available to other Transfer Agent clients.
10.4 In the event the Funds desire the Transfer Agent to develop any
enhancements for the Transfer Agent System, the parties shall agree on the
staffing requirements which will be subject to the approval of the Joint
Operations Board.
10.5 In the event the Funds request an enhancement to the Transfer
Agent System which is estimated to require 5,000 programming hours or more
("Enhancement Project") and the Funds agree to assume the cost of such
Enhancement Project, the Funds and the Transfer Agent shall agree in writing on
any restrictions imposed on the Transfer Agent with respect to the use of such
enhancement prior to commencement of the Enhancement Project.
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10.6 Each Fund reserves the right to review and examine "imaging" and
significant other technological developments to be implemented with the Transfer
Agent System from a technical feasibility standpoint.
Article 11 Representations and Warranties of the Transfer Agent
11.1 The Transfer Agent represents and warrants to each Fund that:
(a) It is a corporation duly organized and existing and in
good standing under the laws of the Commonwealth of Massachusetts;
(b) It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into and perform this Agreement;
(c) All requisite corporate proceedings have been taken to
authorize it to enter into this Agreement;
(d) It is duly registered with the appropriate regulatory
agencies as a transfer agent and such registration will remain in
effect for the duration of this Agreement;
(e) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
Article 12 Representations and Warranties of the Funds
12.1 Each Fund represents and warrants to the Transfer Agent that:
(a) It is duly organized and existing and in good standing
under the laws of the jurisdiction in which it is organized;
(b) It is empowered under applicable laws and by its Articles
of Incorporation and By-Laws to enter into this Agreement;
(c) All corporate proceedings required by said Articles of
Incorporation, By-Laws and applicable laws have been taken to authorize
it to enter into this Agreement;
(d) A registration statement under the Securities Act of 1933,
as amended, is currently effective and will remain effective, and all
appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of the Fund being
offered for sale;
(e) All outstanding Shares are validly issued, fully paid and
non-assessable and that, when Shares are hereafter issued in accordance
with the terms of the Fund's Articles of Incorporation and its
Prospectus, such Shares shall be validly issued, fully paid and
non-assessable.
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Article 13 Indemnification
13.1 The Transfer Agent shall not be responsible for and each Fund
shall indemnify and hold the Transfer Agent harmless from and against any and
all claims, costs, expenses (including reasonable attorneys' fees), losses,
damages, charges, payments and liabilities of any sort or kind which may be
asserted against the Transfer Agent or for which the Transfer Agent may be held
to be liable (a "Claim") arising out of or attributable to any of the following:
(a) Any actions of the Transfer Agent required to be taken
pursuant to this Agreement for the Fund unless such Claim resulted from
a negligent act or failure to act or bad faith by the Transfer Agent in
the performance of its duties hereunder.
(b) The Transfer Agent's reasonable reliance on, or reasonable
use of information, data, records and documents (including but not
limited to magnetic tapes, computer printouts, hard copies and
microfilm copies) received by the Transfer Agent from the Fund, or any
authorized third party acting on behalf of the Fund, including but not
limited to the prior transfer agent for the Fund, in the performance of
the Transfer Agent's duties and obligations hereunder.
(c) The reliance on, or the implementation of, any Written or
Oral Instructions or any other instructions or requests of the Fund
which are deemed to be provided by an Authorized Person of the Fund.
(d) The offer or sales of Shares by the Fund in violation of
any requirement under the securities laws or regulations of any state
that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any state with respect
to the offer or sale of such Shares in such state.
(e) The Fund's refusal or failure to comply with the terms of
this Agreement, or any Claim which arises out of the Fund's negligence
or misconduct or the breach of any representation or warranty of the
Fund made herein.
13.2 In any case in which a Fund may be asked to indemnify or hold the
Transfer Agent harmless, the Transfer Agent will notify the Fund promptly after
identifying any situation which it believes presents or appears likely to
present a claim for indemnification against the Fund although the failure to do
so shall not prevent recovery by the Transfer Agent, unless the Fund is actually
prejudiced thereby, and the Transfer Agent shall keep the Fund advised with
respect to all developments concerning such situation. The Fund shall have the
option to defend the Transfer Agent against any Claim which may be the subject
of this indemnification, and, in the event that the Fund so elects, such defense
shall be conducted by counsel chosen by the Fund and satisfactory to the
Transfer Agent, and thereupon the Fund shall take over complete defense of the
Claim and the Transfer Agent shall sustain no further legal or other expenses in
respect of such Claim. The Transfer Agent will not confess any Claim or make any
compromise in any case in which the Fund will be asked to provide
indemnification, except with the Fund's prior written consent. The obligations
of the parties hereto under this Article shall survive the termination of this
Agreement, so long as the Transfer Agent and the Fund act in good faith and are
not negligent in their actions.
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Article 14 Standard of Care
14.1 The Transfer Agent shall at all times act in good faith and agrees
to use its best efforts within commercially reasonable limits to ensure the
accuracy of all services performed under this Agreement, but assumes no
responsibility for loss or damage to the Funds unless said errors are caused by
the Transfer Agent's own negligence, bad faith or willful misconduct or that of
its employees.
Article 15 Consequential Damages
15.1 In no event and under no circumstances shall either a Fund or the
Transfer Agent be liable to another party for consequential or indirect loss of
profits, reputation or business or any other special damages under any provision
of this Agreement or for any act or failure to act hereunder.
Article 16 Term and Termination
16.1 This Agreement shall be effective on the date first written above
and shall continue for a period of sixty (60) months (the "Initial Term"),
unless earlier terminated pursuant to the terms of this Agreement. Thereafter,
this Agreement shall automatically be renewed for successive terms of
twenty-four (24) months ("Renewal Terms") each, unless terminated pursuant to
this Agreement.
16.2 The Funds or the Transfer Agent may terminate this Agreement at
the end of the Initial Term or at the end of any subsequent Renewal Term upon
not less than nine (9) months prior written notice to the other parties.
16.3 Upon a minimum of nine (9) months prior written notice from the
Boards of Directors of the Funds, the Funds may terminate this Agreement at the
end of the thirty-sixth (36th) or forty-eighth (48th) month of the Initial Term.
16.4 The Funds shall have the right to terminate this Agreement
immediately upon the insolvency or bankruptcy of the Transfer Agent or the
appointment of a receiver for the Transfer Agent, or with respect to any of its
assets, or any change in the financial condition of the Transfer Agent which
impedes the ability of the Transfer Agent to perform any of its obligations
hereunder which is not cured by the Transfer Agent within thirty (30) days of
such occurrence. The Funds shall have the right to seek to renegotiate this
Agreement and, if such negotiations are not successful within a reasonable
period of time, not to exceed ninety (90) days, to terminate this Agreement upon
the transfer of ownership of a controlling interest in the Transfer Agent by or
to any person other than a person who was an affiliate of the Transfer Agent or
its parent company immediately before the transfer.
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16.5 In the event that the total number of combined Shareholder
accounts for the Funds and any other open-end investment companies affiliated
with the Funds by reason of having a common investment adviser exceeds three
times the 1994 Shareholder account base of 130,000 due to merger or acquisition
activity involving the investment adviser or any affiliates of the adviser, the
Funds shall have the right to terminate this Agreement upon nine (9) months
prior written notice to the Transfer Agent. As used in this Article 16,
"affiliates of the adviser" shall mean (i) a direct or indirect owner of 50% or
more of the outstanding common stock of the adviser (a "parent") or (ii) any
company or association whose outstanding common stock is at least 50% owned,
directly or indirectly, by the adviser or by a parent.
16.6 In the event this Agreement is terminated by the Funds pursuant to
Section 5.4, all expenses associated with the movement of records and materials
to a successor transfer agent will be borne by the Transfer Agent. In the event
of a termination pursuant to any other sections, all expenses associated with
conversion will be borne by the Funds. The Transfer Agent shall cooperate with
any such conversion to a successor transfer agent and shall use its best efforts
to mitigate the costs associated with such transfer.
16.7 If a party hereto is guilty of a material failure to perform its
duties and obligations hereunder (a "Defaulting Party") the other party (the
"Non-Defaulting Party") may give written notice thereof to the Defaulting Party,
and if such material breach shall not have been remedied within thirty (30) days
after such written notice is given, then the Non-Defaulting Party may terminate
this Agreement by giving thirty (30) days written notice of such termination to
the Defaulting Party. If the Transfer Agent is the Non-Defaulting Party, its
termination of this Agreement shall not constitute a waiver of any other rights
or remedies of the Transfer Agent with respect to services performed prior to
such termination or rights of the Transfer Agent to be reimbursed for
out-of-pocket expenses incurred prior to such termination. In all cases,
termination by the Non-Defaulting Party shall not constitute a waiver by the
Non-Defaulting Party of any other rights it might have under this Agreement or
otherwise against the Defaulting Party. The Defaulting Party shall not be
released from any liability with respect to such services performed prior to
such termination.
16.8 In the event of termination of this Agreement by the Funds
pursuant to Sections 16.3 or 16.5:
(a) Prior to the effective date of the termination, the Funds
shall reimburse the Transfer Agent for all unamortized costs incurred
by the Transfer Agent in establishing the Charlotte Facility.
(b) Prior to the effective date of the termination, the Funds
shall assume any and all obligations that the Transfer Agent may have
to third parties arising out of or in connection with the Transfer
Agent's operations at the Charlotte Facility and that the Transfer
Agent is not able to terminate prior to the effective date of the
termination of this Agreement.
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(c) Prior to the effective date of the termination, the Funds
shall pay the Transfer Agent an amount equal to 80% of the cumulative
Margin (as defined in Section 8.1) paid by the Funds to the Transfer
Agent for the twelve months preceding the notice of termination, unless
the Funds' investment adviser or any affiliate of the adviser has
acquired an entity providing comparable transfer agency services to
those provided under this Agreement.
(d) The Funds shall reimburse the Transfer Agent for all
reasonable expenses (other than accrued vacation, sick or other leave)
incurred by the Transfer Agent in connection with the termination of
the Transfer Agent's employees located at the Charlotte Facility, or,
at the option of the Funds, the transfer of such employees to another
entity providing services to the Funds. The Transfer Agent shall be
obligated to seek to minimize any such expenses to the extent
commercially practicable.
(e) The Transfer Agent shall transfer to the Funds all
physical assets located at the Charlotte Facility.
Article 17 Additional Portfolios and Funds
17.1 In the event that a Fund establishes one or more Portfolios in
addition to those identified initially on Schedule G, with respect to which the
Fund desires to have the Transfer Agent render services as transfer agent under
the terms hereof, the Fund shall so notify the Transfer Agent in writing, and if
the Transfer Agent agrees in writing to provide such services (such agreement
not to be withheld unreasonably), Schedule G shall be amended to include such
additional Portfolios.
17.2 Subsequent to the effective date of this Agreement, one or more
registered investment companies (a "New Fund") for which NationsBank or any of
its affiliates acts as investment adviser may become a party to this Agreement
upon execution of a written adoption agreement by such New Fund pursuant to
which such New Fund agrees to be bound by the terms of this Agreement (an
"Adoption Agreement"). Following the execution of an Adoption Agreement by a New
Fund, such New Fund shall be deemed a Fund for all purposes of this Agreement
and shall have all the rights, obligations and duties of a Fund under this
Agreement.
Article 18 Confidentiality
18.1 In connection with the services provided by the Transfer Agent
hereunder, certain confidential and proprietary information regarding the
Transfer Agent and the Fund may be disclosed to the other. In connection
therewith, the parties agree as follows:
(a) "Confidential Information" shall mean:
(i) any data or information that is competitively
sensitive material, and not generally known to the public,
including, but not limited to, information about product
plans, marketing strategies, finance, operations, customer
relationships, customer profiles, sales estimates, business
plans, and internal performance results relating to the past,
present or future business activities of the Transfer Agent or
the Fund, their respective parent corporation, their
respective subsidiaries and affiliated companies and the
customers, clients and suppliers of any of the foregoing;
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(ii) any scientific or technical information, design,
process, procedure, formula, or improvement that is
commercially valuable and secret in the sense that its
confidentiality affords the Transfer Agent or the Fund a
competitive advantage over its competitors; and
(iii) all confidential or proprietary concepts,
documentation, reports, data, specifications, computer
software, source code, object code, flow charts, databases,
inventions, know-how, show-how and trade secrets, whether or
not patentable or copyrightable.
(b) Confidential Information includes, without limitation, all
documents, inventions, substances, engineering and laboratory
notebooks, drawings, diagrams, specifications, bills of material,
equipment, prototypes and models, and any other tangible manifestation
of the foregoing which now exist or come into the control or possession
of the party.
18.2 Except as expressly authorized by prior written consent of the
disclosing party ("Discloser"), the party receiving Confidential Information
("Recipient") shall:
(a) limit access to Discloser's Confidential Information to
Recipient's employees and agent who have a need-to-know in connection
with the subject matter thereof;
(b) advise those employees and agents who have access to the
Confidential Information of the proprietary nature thereof and of the
obligations set forth in this Confidential Agreement;
(c) take appropriate action by instruction or agreement with
the employees and agents having access to Discloser's Confidential
Information to fulfill Recipient's obligations under this
Confidentiality Agreement;
(d) safeguard all of Discloser's Confidential Information by
using a reasonable degree of care, but not less than that degree of
care used by Recipient in safeguarding its own similar confidential
information or material;
(e) use all of Discloser's Confidential Information solely for
purposes for which the Confidential Information was conveyed; and
(f) not disclose any of Discloser's Confidential Information,
or information derived therefrom, to third parties.
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18.3 Upon Discloser's request, Recipient shall surrender to Discloser
all memoranda, notes, records, drawings, manuals, and other documents or
materials (and all copies of same) relating to or containing Discloser's
Confidential Information. When Recipient returns the materials, Recipient shall
certify in writing that it has returned all materials containing or relating to
the Confidential Information.
18.4 The obligations of confidentiality and restriction on use in this
Article 18 shall not apply to any Confidential Information that Recipient
proves:
(a) Was in the public domain prior to the date of this
Agreement or subsequently came into the public domain through no fault
of Recipient; or
(b) Was received by Recipient from a third party without
Recipient's knowledge that the third party was not legally entitled to
disclose such information; or
(c) Was already in Recipient's possession prior to receipt
from Discloser; or
(d) Is required to be disclosed in a judicial or
administrative proceeding after reasonable legal remedies for
maintaining such information in confidence have been exhausted
including, but not limited to, giving Discloser as much advance notice
as practical of the possibility of disclosure to allow Discloser to
take appropriate legal action to seek to prevent such disclosure; or
(e) Is subsequently and independently developed by Recipient's
employees, consultants or agents without reference to Confidential
Information.
18.5 The Funds and the Transfer Agent agree that money damages would
not be a sufficient remedy to an injured party for breach of this Article 18.
Accordingly, in addition to all other remedies that a party may have, a party
shall be entitled to specific performance and injunctive or other equitable
relief against another party as a remedy for any breach of the obligations set
forth in this Article 18. The parties agree to waive any requirement for a bond
in connection with any such injunctive or other equitable relief.
18.6 The rights and obligations established by this Article 18 shall
survive the termination of this Agreement.
Article 19 Force Majeure
19.1 In the event a party is unable to perform its obligations under
the terms of this Agreement because of acts of God or by reason of circumstances
beyond its control, including war, national emergencies, strikes, labor
difficulties, insurrection, riots or the failure or unavailability of
transportation or communication services or power supplies, such party shall not
be liable for damages incurred by any other party resulting from such failure to
perform. The above in no way relieves the Transfer Agent or the Funds of
responsibility for exercising all backup and contingency plans available and in
effect at such time and does not affect any other remedies that a party may have
under this Agreement.
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Article 20 Amendments
20.1 This Agreement may only be amended or modified by a written
instrument executed by all parties except that Schedule A may be amended in the
manner set forth in Section 17.1.
Article 21 Subcontracting
21.1 Each Fund agrees that the Transfer Agent, in its discretion, may
after notification to the Funds, subcontract for certain of the services to be
provided by the Transfer Agent under this Agreement or the Schedules hereto;
provided that the appointment of any such subcontractor shall not relieve the
Transfer Agent of its responsibilities hereunder.
Article 22 Arbitration
22.1 Any claim or controversy arising out of or relating to this
Agreement, or breach hereof, shall be settled by arbitration administered by the
American Arbitration Association in Charlotte, North Carolina in accordance with
its applicable rules, except that the Federal Rules of Evidence and the Federal
Rules of Civil Procedure with respect to the discovery process shall apply.
22.2 The parties hereby agree that judgment upon the award rendered by
the arbitrator may be entered in any court having jurisdiction.
22.3 The parties acknowledge and agree that the performance of the
obligations under this Agreement necessitates the use of instrumentalities of
interstate commerce and, notwithstanding other general choice of law provisions
in this Agreement, the parties agree that the Federal Arbitration Act shall
govern and control with respect to the provisions of this Article 22.
Article 23 Notice
23.1 Any notice or other instrument authorized or required by this
Agreement to be given in writing to a party, shall be sufficiently given if
addressed to that party and received by it at its office set forth below or at
such other place as such party may from time to time designate in writing.
To either of the Funds:
[Name of Applicable Fund]
111 Center Street
Little Rock, Arkansas 72201
Attention: Corporate Secretary
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To the Transfer Agent:
The Shareholder Services Group
One Exchange Place
53 State Street
Boston, Massachusetts 02109
Attention: President
with a copy to:
General Counsel (same address)
Article 24 Successors
24.1 This Agreement shall extend to and shall be binding upon the
parties hereto, and their respective successors and assigns, provided, however,
that this Agreement shall not be assigned to any person other than a person
controlling, controlled by or under common control with the assignor without the
written consent of the other party, which consent shall not be unreasonably
withheld.
Article 25 Governing Law
25.1 This Agreement shall be governed exclusively by the laws of the
Commonwealth of Massachusetts without reference to the choice of law provisions
thereof. Subject to Article 22 hereof, each party hereto hereby (i) consents to
the personal jurisdiction of the Commonwealth of Massachusetts courts over the
parties hereto, hereby waiving any defense of lack of personal jurisdiction; and
(ii) appoints the person to whom notices hereunder are to be sent as agent for
service of process.
Article 26 Counterparts
26.1 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.
Article 27 Captions
27.1 The captions of this Agreement are included for convenience of
reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect.
Article 28 Use of Transfer Agent/Fund Name
28.1 The Funds shall not use the name of the Transfer Agent in any
Prospectus, Statement of Additional Information, Shareholders' report, sales
literature or other material relating to the Fund in a manner not approved prior
thereto in writing by the Transfer Agent; provided, that the Transfer Agent need
only receive notice of all reasonable uses of its name which merely refer in
accurate terms to its appointment hereunder or which are required by any
government agency or applicable law or rule.
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28.2 The Transfer Agent shall not use the name of a Fund or material
relating to a Fund on any documents or forms for other than internal use in a
manner not approved prior thereto in writing by such Fund; provided, that the
Fund need only receive notice of all reasonable uses of its name which merely
refer in accurate terms to the appointment of the Transfer Agent as transfer
agent for the Fund or which are required by any government agency or applicable
law or rule.
Article 29 Relationship of Parties
29.1 The parties agree that they are independent contractors and not
partners or co-venturers and nothing contained herein shall be interpreted or
construed otherwise.
29.2 The parties hereby acknowledge and agree that each Fund has
entered into this Agreement independently on behalf of itself and its Portfolios
which are now or may hereafter be identified on Schedule G. Notwithstanding
anything to the contrary contained in this Agreement, (i) each Fund individually
shall have the rights and obligations of a Fund as set forth in this Agreement,
(ii) any action by a Fund in violation of this Agreement shall not affect the
rights and obligations of any other Fund under this Agreement, and (iii) the
Transfer agent, in seeking to enforce any provisions of this Agreement with
respect to a Portfolio, shall look solely to the assets and revenues of such
Portfolio and that in no event shall the Transfer Agent in seeking to enforce
such obligation have recourse to the independent assets or revenues of any other
Portfolio.
Article 30 Entire Agreement; Severability
30.1 This Agreement and the Schedules attached hereto constitute the
entire agreement of the parties hereto relating to the matters covered hereby
and supersede any previous agreements. If any provision is held to be illegal,
unenforceable or invalid for any reason, the remaining provisions shall not be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, as of the day and year first above
written.
NATIONS FUND, INC.
By: /s/ Richard H. Blank, Jr.
--------------------------
Title: Secretary
--------------------------
NATIONS FUND TRUST
By: /s/ Richard H. Blank, Jr.
--------------------------
Title: Secretary
--------------------------
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THE CAPITOL MUTUAL FUNDS
By: /s/ Richard H. Blank, Jr.
--------------------------
Title: Secretary
--------------------------
NATIONS FUND PORTFOLIOS, INC.
By: /s/ Richard H. Blank, Jr.
--------------------------
Title: Secretary
--------------------------
THE SHAREHOLDER SERVICES
GROUP, INC.
By: /s/ (Illegible)
--------------------------
Title: (Illegible)
--------------------------
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Schedule A
DUTIES OF THE TRANSFER AGENT
1. Shareholder Information. The Transfer Agent shall maintain a record
of the number of Shares held by each Shareholder of record which shall include
full registration information, including, but not limited to, name, address and
taxpayer identification number and which shall indicate whether such Shares are
held in certificated or uncertificated form.
2. Shareholder Services. The Transfer Agent shall respond as
appropriate to all inquiries and communications from Shareholders relating to
Shareholder accounts with respect to its duties hereunder and as may be from
time to time mutually agreed upon between the Transfer Agent and the Funds.
3. Share Certificates.
(a) At the expense of the appropriate Fund, each Fund shall supply the
Transfer Agent with adequate supply of blank share certificates to meet the
Transfer Agent's requirements therefor. Such Share certificates shall be
properly signed by facsimile. Each Fund agrees that, notwithstanding the death,
resignation, or removal of any officer of the Fund whose signature appears on
such certificates, the Transfer Agent or its agent may continue to countersign
certificates which bear such signatures until otherwise directed by Written
Instructions.
(b) The Transfer Agent shall issue replacement Share certificates in
lieu of certificates which have been lost, stolen or destroyed, upon receipt by
the Transfer Agent of properly executed affidavits and lost certificate bonds,
in form satisfactory to the Transfer Agent, with the appropriate Fund and the
Transfer Agent as obligees under the bond.
(c) The Transfer Agent shall also maintain a record of each certificate
issued, the number of Shares represented thereby and the Shareholder of record.
With respect to Shares held in open accounts or in uncertificated form (i.e., no
certificate being issued with respect thereto) the Transfer Agent shall maintain
comparable records of the Shareholders thereof, including their names, addresses
and taxpayer identification number. The Transfer Agent shall further maintain a
stop transfer record on lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. The
Transfer Agent will address and mail to Shareholders of the Funds, all reports
to Shareholders, dividend and distribution notices and proxy material for the
Funds' meetings of Shareholders. In connection with meetings of Shareholders,
the Transfer Agent will prepare Shareholder lists, mail and certify as to the
mailing of proxy materials, process and tabulate returned proxy cards, report on
proxies voted prior to meetings, act as inspector of election at meetings and
certify Shares voted at meetings.
1
<PAGE>
5. Sales of Shares
(a) The Transfer Agent shall not be required to issue any Shares of a
Fund where it has received a Written Instruction from the Fund or official
notice from any appropriate authority that the sale of the Shares of the Fund
has been suspended or discontinued. The existence of such Written Instructions
or such official notice shall be conclusive evidence of the right of the
Transfer Agent to rely on such Written Instructions or official notice.
(b) In the event that any check or other order for the payment of money
is returned unpaid for any reason, the Transfer Agent will endeavor to: (i) give
prompt notice of such return to the Fund or its designee; (ii) place a stop
transfer order against all Shares issued as a result of such check or order; and
(iii) take such actions as the Transfer Agent may from time to time deem
appropriate.
6. Transfer and Repurchase
(a) The Transfer Agent shall process all requests to transfer or redeem
Shares in accordance with the transfer or repurchase procedures set forth in the
Funds' Prospectus.
(b) The Transfer Agent will transfer or repurchase Shares upon receipt
of Oral or Written Instructions or otherwise pursuant to the Prospectus and
Share certificates, if any, properly endorsed for transfer or redemption,
accompanied by such documents as the Transfer Agent reasonably may deem
necessary.
(c) The Transfer Agent reserves the right to refuse to transfer or
repurchase Shares until it is satisfied that the endorsement on the instructions
is valid and genuine. The Transfer Agent also reserves the right to refuse to
transfer or repurchase Shares until it is satisfied that the requested transfer
or repurchase is legally authorized, and it shall incur no liability for the
refusal, in good faith, to make transfers or repurchases which the Transfer
Agent, in its good judgment, deems improper or unauthorized, or until it is
reasonably satisfied that there is no basis to any claims adverse to such
transfer or repurchase.
(d) When Shares are redeemed, the Transfer Agent shall, upon receipt of
the instructions and documents in proper form, deliver to the Custodian and the
appropriate Fund or its designee a notification setting forth the number of
Shares to be redeemed. Such redeemed Shares shall be reflected on appropriate
accounts maintained by the Transfer Agent reflecting outstanding Shares of the
Fund and Shares attributed to individual accounts.
(e) The Transfer Agent, upon receipt of the monies paid to it by the
Custodian for the redemption of Shares, pay such monies as are received from the
Custodian, all in accordance with the procedures described in the Written
Instructions received by the Transfer Agent from the Funds.
2
<PAGE>
(f) The Transfer Agent shall not process or effect any repurchase with
respect to Shares of the Fund after receipt by the Transfer Agent or its agent
of notification of the suspension of the determination of the net asset value of
the Fund.
7. Dividends
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of a Fund with respect to Shares of the
Fund, the Fund shall furnish or cause to be furnished to the Transfer Agent
Written Instructions setting forth the date of the declaration of such dividend
or distribution, the ex-dividend date, the date of payment thereof, the record
date as of which Shareholders entitled to payment shall be determined, the
amount payable per Share to the Shareholders of record as of that date, the
total amount payable to the Transfer Agent on the payment date and whether such
dividend or distribution is to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the
Board of Directors, the Fund will pay to the Transfer Agent sufficient cash to
make payment on such payment date to the Shareholders of record on the record
date.
(c) If, prior to the payment date, the Transfer Agent does not receive
sufficient cash from the Fund to make total dividend and/or distribution
payments to all Shareholders of the Fund of the record date, the Transfer Agent
will, upon notifying the Fund, withhold payment to all Shareholders of record as
of the record date until sufficient cash is provided to the Transfer Agent.
8. In addition to and neither in lieu nor in contravention of the
services set forth above, the Transfer Agent shall: (i) perform all the
customary services of a transfer agent, registrar, dividend disbursing agent and
agent of the dividend reinvestment and cash purchase plan as described herein
consistent with those requirements in effect as at the date of this Agreement.
The detailed definition, frequency, limitations and associated costs (if any)
set out in the attached fee schedule, include but are not limited to:
maintaining all Shareholder accounts, preparing Shareholder meeting lists,
mailing proxies, tabulating proxies, mailing Shareholder reports to current
Shareholders, withholding taxes on U.S. resident and non-resident alien accounts
where applicable, preparing and filing U.S. Treasury Department Forms 1099 and
other appropriate forms required with respect to dividends and distributions by
federal authorities for all Shareholders.
3
<PAGE>
Schedule B
Quality Standards
(Effective October 2, 1995 as updated on September 25, 1995)
For all funds, open-end and closed-end, serviced by TSSG, under the Transfer
Agency and Services Agreement (with Facilities Management Arrangement) dated
June 1, 1995, the following quality standards shall apply. This schedule shall
replace the temporary quality standard Schedule B in the original agreement as
referenced in Section 5.2.
Financials:
- -----------
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials:
- --------------
Maintenances 98%
Transfers 98%
Correspondence 98%
Adjustments 98%
Telephone Calls 98%
New Accounts:
- ------------
New Account Set-ups 98%
- --------------------------------------------------------------------------------
Performance Standards
- --------------------------------------------------------------------------------
Telephone Performance Standards
================================================================================
Average speed of answer 20 seconds or less
- ------------------------------------- ------------------------------------------
Calls abandoned 2% of calls that wait 20 second or more
- ------------------------------------- ------------------------------------------
Service level* 80%
- ------------------------------------- ------------------------------------------
Article 1 --------------------
*Represents the percentage of calls answered within 20 seconds.
<PAGE>
Schedule B
[List of Initial Quality Standards based on
1994 quarterly senior management reports]
Nations Fund
Financial Transactions
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Maintenance 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable levels
Closed End Funds
Financials 98%
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Certificate Processing 98%
Maintenance 98%
Transfers 98%
New Accounts 98%
% = minimum acceptable levels
Capitol Funds
Financials
Subscriptions 98%
Redemptions 98%
Exchanges 98%
Non-Financials
Maintenance 98%
Transfers 98%
1
<PAGE>
New Accounts 98%
% = minimum acceptable levels
2
<PAGE>
Schedule C
Schedule of Costs
1. For purposes of this Agreement, "Costs" shall mean all internal and
external costs incurred by the Transfer Agent in connection with and properly
allocated to the Services provided under the Agreement, including, but not
limited to, the costs involved with the operation of the Charlotte Facility,
those costs reasonably incurred by the Transfer Agent to achieve the quality
standards imposed on it under the terms of this Agreement and the Transfer
Agent's overhead, depreciation and amortization costs, excepting out-of-pocket
expenses and such other costs agreed to in writing by the Transfer Agent and the
Funds.
2. The Funds shall have the right to audit, at their own expense, the
books and records of the Transfer Agent with respect to the Costs for which the
Transfer Agent seeks reimbursement under Article 8 on an annual basis, or more
frequently if the Funds have a reasonable basis to dispute any cost for which
the Transfer Agent seeks reimbursement.
3. The Transfer Agent shall use its best efforts to minimize the costs
incurred by it in connection with the provisions of services under this
Agreement to the extent such action is commercially reasonable and consistent
with the quality standards imposed under this Agreement.
<PAGE>
Schedule D
Non-Margin Expenses
- - Facilities related expenses as incurred by the Transfer Agent
under the Facilities Management Agreement between the Transfer
Agent and NationsBank
- - Out-of-Pocket expenses
- - Sub-Transfer Agent Fees and Expenses
- - Any other expenses agreed to in writing by the Transfer Agent and the Funds
<PAGE>
Schedule E
OUT-OF-POCKET EXPENSES
The Funds shall reimburse the Transfer Agent monthly for reasonable
out-of-pocket expenses incurred in connection with the provision of Services
under this Agreement, including, but not limited to the following items:
- Microfiche/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and
stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct
pass through to the Funds
- Due diligence mailings
- Telephone and telecommunication costs, including all lease,
maintenance and line costs (excluding such telephone and
telecommunications costs provided by NationsBank pursuant to the
Facilities Agreement)
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings (including all periodic
statements)
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and
any expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved by the Funds
- Temporary staff, as approved by the Funds
- Travel and entertainment, as approved by the Funds
- Record retention, retrieval and destruction costs, including, but
not limited to exit fees charged by third party record keeping
vendors
- Third party audit reviews
- All conversion costs: including System start up costs
- Insurance
- Such other miscellaneous expenses reasonably incurred by the
Transfer Agent in performing its duties and responsibilities under
this Agreement.
- Systems Programming utilizing non-dedicated systems resources at
$100 per hour
The Funds agree that postage and mailing expenses will be paid on the
day of or prior to mailing as agreed with the Transfer Agent. In addition, the
Funds will promptly reimburse the Transfer Agent for any other unscheduled
expenses incurred by the Transfer Agent whenever the Funds and the Transfer
Agent mutually agree that such
1
<PAGE>
expenses are not otherwise properly borne by the Transfer Agent as part of its
duties and obligations under the Agreement.
2
<PAGE>
Schedule F
Fund Documents
- Certified copy of the Articles of Incorporation of the Fund, as
amended
- Certified copy of the By-laws of the Fund, as amended
- Copy of the resolution of the Board of Directors authorizing the
execution and delivery of this Agreement
- Specimens of the certificates for Shares of the Fund, if
applicable, in the form approved by the Board of Directors of the
Fund, with a certificate of the Secretary of the Fund as to such
approval
- All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by
the Fund
- Certified list of Shareholders of the Fund with the name, address
and taxpayer identification number of each Shareholder, and the
number of Shares of the Fund held by each, certificate numbers and
denominations (if any certificates have been issued), lists of any
accounts against which stop transfer orders have been placed,
together with the reasons therefore, and the number of Shares
redeemed by the Fund.
- All notices issued by the Fund with respect to the Shares in
accordance with and pursuant to the Articles of Incorporation or
By-laws of the Fund or as required by law and shall perform such
other specific duties as are set forth in the Articles of
Incorporation including the giving of notice of any special or
annual meetings of shareholders and any other notices required
thereby.
<PAGE>
SCHEDULE G
FUND PORTFOLIOS
NATIONS FUND TRUST:
1. Nations Government Money Market Fund
2. Nations Tax Exempt Fund
3. Nations Value Fund
4. Nations Strategic Growth Fund
5. Nations Capital Growth Fund
6. Nations Emerging Growth Fund
7. Nations Equity Index Fund
8. Nations Managed Index Fund
9. Nations Managed SmallCap Index Fund
10. Nations Managed Value Index Fund
11. Nations Managed SmallCap Value Index Fund
12. Nations Disciplined Equity Fund
13. Nations Balanced Assets Fund
14. Nations Short-Intermediate Government Fund
15. Nations Short-Term Income Fund
16. Nations Diversified Income Fund
17. Nations Strategic Fixed Income Fund
18. Nations Municipal Income Fund
19. Nations Short-Term Municipal Income Fund
20. Nations Intermediate Municipal Bond Fund
21. Nations Florida Intermediate Municipal Bond Fund
22. Nations Florida Municipal Bond Fund
23. Nations Georgia Intermediate Municipal Bond Fund
24. Nations Georgia Municipal Bond Fund
25. Nations Maryland Intermediate Municipal Bond Fund
26. Nations Maryland Municipal Bond Fund
27. Nations North Carolina Intermediate Municipal Bond Fund
28. Nations North Carolina Municipal Bond Fund
29. Nations South Carolina Intermediate Municipal Bond Fund
30. Nations South Carolina Municipal Bond Fund
31. Nations Tennessee Intermediate Municipal Bond Fund
32. Nations Tennessee Municipal Bond Fund
33. Nations Texas Intermediate Municipal Bond Fund
34. Nations Texas Municipal Bond Fund
35. Nations Virginia Intermediate Municipal Bond Fund
36. Nations Virginia Municipal Bond Fund
NATIONS FUND, INC.:
1. Nations Prime Fund
2. Nations Treasury Fund
1
<PAGE>
3. Nations Equity Income Fund
4. Nations U.S. Government Bond Fund
5. Nations Small Company Growth Fund
6. Nations Government Securities Fund
7. Nations International Growth Fund
NATIONS RESERVES:
1. Nations Government Reserves
2. Nations Municipal Reserves
3. Nations Cash Reserves
4. Nations Treasury Reserves
5. Nations Money Market Reserves
6. Nations California Tax Exempt Reserves
7. Nations Asset Allocation Fund
8. Nations Capital Income Fund
9. Nations California Municipal Bond Fund
10. Nations Intermediate Bond Fund
11. Nations Blue Chip Fund
12. Nations Marsico Focused Equities Fund
13. Nations Marsico Growth & Income Fund
14. Nations International Equity Fund
15. Nations International Value Fund
16. Nations Emerging Markets Fund
NATIONS LIFEGOAL FUNDS, INC.
1. Nations LifeGoal Growth Portfolio
2. Nations LifeGoal Balanced Growth Portfolio
3. Nations LifeGoal Income and Growth Portfolio
NATIONS ANNUITY TRUST:
1. Nations Value Portfolio
2. Nations International Growth Portfolio
3. Nations Disciplined Equity Portfolio
4. Nations Marsico Focused Equities Portfolio
5. Nations Marsico Growth & Income Portfolio
6. Nations Managed Index Portfolio
7. Nations Managed SmallCap Index Portfolio
8. Nations Balanced Assets Portfolio
2
<PAGE>
NATIONS FUNDS TRUST:
1. Nations High Yield Bond Fund
2. Nations Kansas Municipal Income Fund
3. Nations MidCap Index Fund
CLOSED END FUNDS:
1. Nations Balanced Target Maturity Fund
2. Nations Government Income Term Trust 2003, Inc.
3. Nations Government Income Term Trust 2004, Inc.
Last Amended: February 14, 2000
3
ADOPTION AGREEMENT AND
AMENDMENT TO TRANSFER AGENCY
AND SERVICES AGREEMENT
(With Facilities Management Arrangement)
This Adoption Agreement and Amendment, dated as of February 25,
1998, is made to the Transfer Agency and Services Agreement dated as of June 1,
1995, as amended (the "Agreement"), by and among NATIONS FUND, INC., NATIONS
FUND TRUST, THE CAPITOL MUTUAL FUNDS, d/b/a NATIONS INSTITUTIONAL RESERVES,
NATIONS FUND PORTFOLIOS, INC., NATIONS LIFEGOAL FUNDS, INC., and each other
party which may become a party thereto pursuant to the terms of the Agreement
(individually, a "Fund," and collectively, the "Funds") and FIRST DATA INVESTOR
SERVICES GROUP, INC., formerly known as THE SHAREHOLDER SERVICES GROUP, INC.
(the "Transfer Agent").
RECITALS
WHEREAS, the Transfer Agent serves as transfer agent, dividend
disbursing agent and agent in connection with certain other services for the
Funds pursuant to the Agreement; and
WHEREAS, Section 17.2 of the Agreement provides that, subsequent to
the date of the Agreement, a registered investment company (a "New Fund") for
which NationsBank, N.A., or any of its affiliates acts as investment adviser may
become a party to the Agreement upon execution of a written adoption agreement
(an "Adoption Agreement") by such New Fund pursuant to which such New Fund
agrees to be bound by the terms of the Agreement; and
WHEREAS, the Board of Trustees of Nations Annuity Trust ("Annuity
Trust") has approved the selection of the Transfer Agent to serve as the
transfer and dividend disbursing agent for all classes of shares of the
portfolios of Annuity Trust; and
WHEREAS, Annuity Trust is advised by NationsBanc Advisors, Inc., an
affiliate of NationsBank, N.A.;
AGREEMENT
NOW THEREFORE, in consideration of the promises and mutual
covenants herein contained, the Funds and the Transfer Agent agree that the
Agreement shall be amended as follows:
1. The Funds hereby authorize the addition of Annuity Trust as a
party to the Agreement effective upon the execution of this Adoption Agreement
and Amendment to Transfer Agency and Services Agreement.
2. Annuity Trust agrees to be bound by the terms of the Agreement.
3. Annuity Trust is hereby deemed a Fund for all purposes of the
Agreement and shall have all the rights, obligations and duties of a Fund under
the Agreement.
4. Schedule G, attached hereto, is hereby attached to the Agreement
as Schedule G and is deemed a part of the Agreement.
<PAGE>
5. The terms and provisions of this Adoption Agreement and Amendment shall be
deemed a part of the Agreement for all purposes. To the extent that any
provisions of this Adoption Agreement and Amendment modify or are otherwise
inconsistent with any provisions of the Agreement, the provisions of this
Adoption Agreement and Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Adoption
Agreement and Amendment to be executed by their duly authorized officers, as of
the day and year first above written.
FIRST DATA INVESTOR SERVICES GROUP,
INC., formerly, THE
SHAREHOLDER SERVICES GROUP, INC.
By: /s/ James L. Fox
------------------------------------------
Name: James L. Fox
Title: Chief Operating Officer
NATIONS FUND, INC.
By: /s/ A. Max Walker
------------------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board of Directors
NATIONS FUND TRUST
By: /s/ A. Max Walker
------------------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board of Trustees
THE CAPITOL MUTUAL FUNDS, d/b/a
NATIONS INSTITUTIONAL RESERVES
By: /s/ A. Max Walker
------------------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board of Trustees
2
<PAGE>
NATIONS FUND PORTFOLIOS, INC.
By: /s/ A. Max Walker
------------------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board of Directors
NATIONS LIFEGOAL FUNDS, INC.
By: /s/ A. Max Walker
------------------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board of Directors
NATIONS ANNUITY TRUST
By: /s/ A. Max Walker
------------------------------------------
Name: A. Max Walker
Title: President and Chairman
of the Board of Trustees
3
<PAGE>
SCHEDULE G
I) NATIONS FUND TRUST
o Nations Government Money Market Fund
o Nations Tax Exempt Fund
o Nations Value Fund
o Nations Capital Growth Fund
o Nations Emerging Growth Fund
o Nations Disciplined Equity Fund
o Nations Equity Index Fund
o Nations Managed Index Fund
o Nations Managed SmallCap Index Fund
o Nations Managed Value Index Fund
o Nations Managed SmallCap Value Index Fund
o Nations Marsico Focused Equities Fund
o Nations Marsico Growth & Income Fund
o Nations Balanced Assets Fund
o Nations Short-Intermediate Government Fund
o Nations Short-Term Income Fund
o Nations Diversified Income Fund
o Nations Strategic Fixed Income Fund
o Nations Municipal Income Fund
o Nations Short-Term Municipal Income Fund
o Nations Intermediate Municipal Bond Fund
o Nations Florida Intermediate Municipal Bond Fund
o Nations Florida Municipal Bond Fund
o Nations Georgia Intermediate Municipal Bond Fund
o Nations Georgia Municipal Bond Fund
o Nations Maryland Intermediate Municipal Bond Fund
o Nations Maryland Municipal Bond Fund
o Nations North Carolina Intermediate Municipal Bond Fund
o Nations North Carolina Municipal Bond Fund
o Nations South Carolina Intermediate Municipal Bond Fund
o Nations South Carolina Municipal Bond Fund
o Nations Tennessee Intermediate Municipal Bond Fund
o Nations Tennessee Municipal Bond Fund
o Nations Texas Intermediate Municipal Bond Fund
o Nations Texas Municipal Bond Fund
o Nations Virginia Intermediate Municipal Bond Fund
o Nations Virginia Municipal Bond Fund
o Nations Kansas Intermediate Municipal Bond Fund
o Nations Missouri Intermediate Municipal Bond Fund
II) NATIONS FUND, INC.
o Nations Prime Fund
o Nations Treasury Fund
o Nations Equity Income Fund
o Nations International Equity Fund
o Nations Government Securities Fund
o Nations International Growth Fund
o Nations U.S. Government Bond Fund
o Nations Small Company Growth Fund
o Nations International Value Fund
4
<PAGE>
III) NATIONS PORTFOLIOS, INC.
o Nations Emerging Markets Fund
o Nations Pacific Growth Fund
o Nations Global Government Income Fund
IV) THE CAPITOL MUTUAL FUNDS, d/b/a NATIONS INSTITUTIONAL RESERVES
o Nations Cash Reserves
o Nations Treasury Reserves
o Nations Government Reserves
o Nations Municipal Reserves
o Nations Money Market Reserves
V) NATIONS LIFEGOAL FUNDS, INC.
o LifeGoal Growth Portfolio
o LifeGoal Balanced Growth Portfolio
o LifeGoal Income and Growth Portfolio
VI) NATIONS ANNUITY TRUST
o Nations Value Portfolio
o Nations International Growth Portfolio
o Nations Disciplined Equity Portfolio
o Nations Marsico Focused Equities Portfolio
o Nations Marsico Growth & Income Portfolio
o Nations Managed Index Portfolio
o Nations Managed SmallCap Index Portfolio
o Nations Balanced Assets Portfolio
Effective Date: February 25, 1998
5
Amendment to the
TRANSFER AGENCY AND SERVICES AGREEMENT
(with Facilities Management Arrangement)
THIS AMENDMENT dated as of this 1st day of December, 1999 is made to
the Transfer Agency and Services Agreement dated as of June 1, 1995, as amended
(the "Agreement"), by and between Nations Annuity Trust, and each other
investment company which may become a party hereto pursuant to the terms of this
Agreement (individually a "Fund", and collectively, the "Funds"), and Investor
Services Group, Inc. f/k/a The Shareholder Services Group, Inc. (the "Transfer
Agent").
RECITALS
WHEREAS, the parties hereto desire to amend certain provisions of this
Agreement.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the Funds and the Transfer Agent agree that the Agreement
shall be amended as follows:
1. Article 3 is hereby amended by adding the following new Section 3.4:
"3.4 In addition, the Transfer Agent shall perform the
related print mail services in connection with the services set
forth herein. Fees for such services shall be agreed upon from
time to time by the parties."
2. Section 8.1 is hereby amended by deleting subsections (a) and (b) in their
entirety and inserting the following:
"(a) For the period December 1, 1998 through December
31, 1999, an amount equal to 22.5% of such Costs during each
month.
(b) For the period from January 1, 2000 through
December 31, 2002 and during each Renewal Term (as defined below),
an amount equal to 15% of such Costs during each month."
3. Article 16 - Term and Termination is hereby amended as follows:
(a) The first sentence of Section 16.1 is deleted in
its entirety and replaced with "This Agreement shall be effective
on the date first written above and shall continue through
December 31, 2002 (the "Initial Term"), unless earlier terminated
pursuant to terms of this Agreement."
(b) Section 16.3 is deleted in its entirety.
<PAGE>
(c) Section 16.5 is deleted in its entirety and
replaced with the following new Section 16.5:
"16.5 In the event that the total combined assets of
the Funds and any other open end investment companies affiliated
with the Funds by reason of having a common investment advisor is
increased by $18 billion or more due to a merger or acquisition
involving the investment advisor or any affiliates of the
investment advisor, the Funds shall have the right to terminate
this Agreement upon twelve (12) months prior written notice to the
Transfer Agent. As used in this Article 16, "affiliates of the
advisor" shall mean (i) a direct or indirect owner of 50% or more
of the outstanding common stock of the advisor (a "parent") or
(ii) any company or association whose outstanding common stock is
at least 50% owned, directly or indirectly, by the advisor or by a
parent."
(d) Modify Section 16.8 by deleting the phrase
"Sections 16.3 or" and inserting the word "Section".
4. The following new provision is hereby added to Schedule A-- Duties of the
Transfer Agent:
"Cash Management Services. (a) The Transfer Agent shall establish
demand deposit accounts (DDA's) with a cash management provider to facilitate
the receipt of purchase payments and the processing of other Shareholder-related
transactions. The Transfer Agent shall retain any excess balance credits earned
with respect to the amounts in such DDA's ("Balance Credits") after such Balance
Credits are first used to offset any banking service fees charged in connection
with banking services provided on behalf of the Fund. Balance Credits will be
calculated and applied toward the Fund's banking service charges regardless of
the withdrawal of DDA balances described in Section (b) below.
(b) DDA balances which cannot be forwarded on the day of receipt
may be withdrawn on a daily basis and invested in U.S. Treasury and Federal
Agency obligations, money market mutual funds, repurchase agreements, money
market preferred securities (rated A or better), commercial paper (rated A1 or
P1), corporate notes/bonds (rated A or better) and/or Eurodollar time deposits
(issued by banks rated A or better). Investor Services Group bears the risk of
loss on any such investment and shall retain any earnings generated thereby.
Other similarly rated investment vehicles may be used, provided however,
Investor Services Group shall first notify the Fund of any such change.
(c) The Transfer Agent may facilitate the payment of distributions
from the Fund which are made by check ("Distributions") through the "IPS
Official Check" program. "IPS Official Check" is a product and service provided
by the Transfer Agent's affiliate, Integrated Payment Systems ("IPS"). IPS is
licensed and regulated as an "issuer of payment instruments". In the event the
IPS Official Check program is utilized, funds used to cover such Distributions
shall be forwarded to and held by IPS. IPS may invest such funds while awaiting
presentment of items for payment. In return the services provided by IPS, IPS
imposes a $.07 per item charge which shall be paid by the Funds as out-of-pocket
expense and shall retain, and share with the Transfer Agent, the benefit of the
revenue generated from its investment practices."
2
<PAGE>
5. Schedule D -- Non-Margin Expenses is amended by adding the following items:
- Print Mail Fees
- Systems Programming utilizing non-dedicated
systems resources at $100 per/hr
- All conversion costs: including System start
up costs
- Overtime, as approved by the Funds
- Travel and Entertainment, as approved by the
Funds
6. Schedule E -- Out-of-Pocket Expenses is amended by deleting the following
items:
- Printing costs, including certificates,
envelopes, checks and stationary
- Due diligence mailings
- Ad hoc reports
- Daily & Distribution advice mailings
(including all periodic reports)
- Year-end for production and mailings
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- All conversion costs: including System start
up costs
- Systems Programming utilizing non-dedicated
systems resources at $100 per/hr
- Overtime, as approved by the Funds
- Travel and Entertainment, as approved by the
Funds
The terms and provisions of this Amendment shall be deemed a part of
the Agreement for all purposes. To the extent that any provisions of this
Amendment modify or are otherwise inconsistent with any provisions of the
Agreement, the terms of this Amendment shall control. In all other respects, the
Agreement shall remain in full force and effect.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers, as of the day and year first written
above.
INVESTOR SERVICES GROUP, INC.
By: /s/ Jylanne M. Dunne
----------------------
Name: Jylanne M. Dunne
Title: Senior Vice President
NATIONS ANNUITY TRUST
By: /s/ James E. Banks, Jr.
----------------------
James E. Banks, Jr.
Assistant Secretary
4
FUND PARTICIPATION AGREEMENT
THIS AGREEMENT is made this 13th day of March, 1998, between
NATIONSBANC ADVISORS, INC., a registered investment advisor, (the "Advisor"),
NATIONS ANNUITY TRUST, an open-end management investment company organized as a
Delaware business trust (the "Trust"), and HARTFORD LIFE INSURANCE COMPANY, a
life insurance company organized under the laws of the State of Connecticut (the
"Company"), on its own behalf and on behalf of each segregated asset account of
the Company set forth on Schedule A, as may be amended from time to time (the
"Accounts").
W I T N E S S E T H:
WHEREAS, Advisor is duly registered as an investment advisor under the
Investment Advisers Act of 1940, as amended, and any applicable state securities
laws; and,
WHEREAS, the Trust has registered with the Securities and Exchange
Commission as an open-end management investment company under the Investment
Company Act of 1940, as amended (the "1940 Act"), and has registered the offer
and sale of its shares under the Securities Act of 1933, as amended (the "1933
Act"); and
WHEREAS, the Trust desires to act as an investment vehicle for separate
accounts established for variable annuity contracts, and may, in the future,
desire to act as an investment vehicle for separate accounts established for
variable life insurance policies, in each case, to be offered by insurance
companies that have entered into participation agreements with the Trust (the
"Participating Insurance Companies"); and
WHEREAS, the beneficial interest in the Trust is divided into several
series of shares, each series representing an interest in a particular managed
portfolio of securities and other assets (the "Funds"); and
WHEREAS, the Company has registered or will register certain variable
life insurance policies and/or variable annuity contracts under the 1933 Act
(the "Contracts"); and
WHEREAS, the Company has registered or will register each Account as a
unit investment trust under the 1940 Act; and
WHEREAS, the Company desires to utilize shares of one or more Funds as
an investment vehicle of the Accounts;
NOW THEREFORE, in consideration of their mutual promises, the parties
agree as follows:
<PAGE>
ARTICLE I
Sale of Trust Shares
1.1 The Trust shall make shares of its Funds available to the Accounts
at the net asset value next computed after receipt of such purchase order by the
Trust (or its agent), as established in accordance with the provisions of the
then current prospectus of the Trust. Shares of a particular Fund of the Trust
shall be ordered in such quantities and at such times as determined by the
Company to be necessary to meet the requirements of the Contracts. The Officers
or Trustees of the Trust (the "Trustees") may refuse to sell shares of any Fund
to any person, or suspend or terminate the offering of shares of any Fund if
such action is required by law or by regulatory authorities having jurisdiction
or is, in the sole discretion of the Officers or Trustees acting in good faith
and in light of their fiduciary duties under federal and any applicable state
laws, necessary in the best interests of the shareholders of such Fund.
1.2 The Trust will redeem any full or fractional shares of any Fund
when requested by the Company on behalf of an Account at the net asset value
next computed after receipt by the Trust (or its agent) of the request for
redemption, as established in accordance with the provisions of the then current
prospectus of the Trust. The Trust shall make payment for such shares in the
manner established from time to time by the Trust, but in no event shall payment
be delayed for a greater period than is permitted by the 1940 Act.
1.3 For the purposes of Sections 1.1 and 1.2, the Trust hereby appoints
the Company as its agent for the limited purpose of receiving and accepting
purchase and redemption orders resulting from investment in and payments under
the Contracts. Receipt by the Company shall constitute receipt by the Trust
provided that (i) such orders are received by the Company in good order prior to
the time the net asset value of each Fund is priced in accordance with its
prospectus and (ii) the Trust receives written notice of such orders by 9:30
a.m. New York time on the next following Business Day. "Business Day" shall mean
any day on which the New York Stock Exchange is open for trading and on which
the Trust calculates its net asset value pursuant to the rules of the Securities
and Exchange Commission.
1.4 Purchase orders that are transmitted to the Trust in accordance
with Section 1.3 shall be paid by the Company no later than 12:00 noon New York
time on the same Business Day that the Trust receives notice of the order.
Payments shall be made in federal funds transmitted by wire.
1.5 Issuance and transfer of the Trust's shares will be by book entry
only. Stock certificates will not be issued to the Company or the Account.
Shares ordered from the Trust will be recorded in the appropriate title for each
Account or the appropriate subaccount of each Account.
1.6 The Trust shall furnish prompt notice to the Company of any income
dividends or capital gain distributions payable on the Trust's shares. The
Company hereby elects to receive all such income dividends and capital gain
distributions as are payable on a Fund's shares in additional shares of that
Fund. The Trust shall notify the Company of the number of shares so issued as
payment of such dividends and distributions.
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1.7 The Trust shall make the net asset value per share for each Fund
available to the Company on a daily basis as soon as reasonably practical after
the net asset value per share is calculated and shall use its best efforts to
make such net asset value per share available by 7 p.m. New York time.
1.8 The Trust agrees that its shares will be sold only to Participating
Insurance Companies and their separate accounts and to certain qualified pension
and retirement plans to the extent permitted by any exemptive order that may be
obtained by the Trust from the SEC (any such order is referred to herein as the
Exemptive Order. No shares of any Fund will be sold directly to the general
public. The Company agrees that Trust shares will be used only for the purposes
of funding the Contracts and Accounts listed in Schedule A, as amended from time
to time.
1.9 The Trust agrees that, to the extent required by the SEC pursuant
to the Exemptive Order or otherwise, all Participating Insurance Companies shall
have the obligations and responsibilities regarding pass-through voting and
conflicts of interest corresponding to those contained in Section 2.7 and
Article IV of this Agreement.
ARTICLE II
Obligations of the Parties
2.1. The Trust shall prepare and be responsible for filing with the SEC
and any state regulators requiring such filing, all shareholder reports,
notices, proxy materials (or similar materials such as voting instruction
solicitation materials), prospectuses and statements of additional information
of the Trust. The Trust shall bear the costs of registration and qualification
of its shares, preparation and filing of the documents listed in this Section
2.1 and all taxes to which an issuer is subject on the issuance and transfer of
its shares.
2.2. As mutually agreed, the Trust shall either (a) provide the Company
with as many copies of the Trust's current prospectus, annual report,
semi-annual report and other shareholder communications, including any
amendments or supplements to any of the foregoing, as the Company shall
reasonably request; or (b) provide the Company in electronic format (PDF) of
such documents in a form suitable for printing. The Trust shall provide the
Company with a copy of its statement of additional information in a form
suitable for duplication by the Company. The Trust shall provide the Company
with copies of any Trust-sponsored proxy materials in such quantity as the
Company shall reasonably require for distribution to Contract owners.
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2.3. The Trust and Company shall pay no fee or other compensation to
each other under this agreement. All expenses incident to the performance of the
Company's obligations under this agreement shall be borne by the Company, except
as expressly provided otherwise. All expenses incident to the performance of the
Trust's obligation under this agreement shall be borne by the Trust, except as
expressly provided otherwise. The Company shall bear all costs associated with
printing and distributing such documents to persons who are not Contract owners,
including the costs of printing prospectuses that are used for marketing
purposes. The Trust shall bear the costs of printing and distributing the
Trust's prospectus, statement of additional information, shareholder reports and
other shareholder communications to Contract owners for which the Trust is
serving or is to serve as an investment vehicle. If the parties agree to have
such documents printed by the Company in accordance with Section 2.2(b), the
Trust shall reimburse the Company for all actual reasonable expenses incurred in
connection therewith. The Trust shall bear the costs of distributing Trust
sponsored proxy materials (or similar materials such as voting solicitation
instructions) to Contract owners. The Company assumes sole responsibility for
ensuring that all proxy materials are delivered to Contract owners in accordance
with applicable federal and state securities laws.
2.4. The Company shall furnish, or cause to be furnished, to the Trust
or its designee, a copy of each Contract prospectus or statement of additional
information in which the Trust or the Advisor is named at least ten Business
Days prior to the filing of such document with the SEC. The Company shall
furnish, or shall cause to be furnished, to the Trust or its designee, each
piece of sales literature or other promotional material in which the Trust or
the Advisor is named, at least five Business Days prior to its use. No such
material shall be used if the Trust or its designee reasonably objects to such
use within five Business Days after receipt of such material.
2.5. The Company shall not give any information or make any
representations or statements on behalf of the Trust or concerning the Trust or
the Advisor other than information or representations or statements contained in
and accurately derived from the registration statement or prospectus for the
Trust shares (as such registration statement and prospectus may be amended or
supplemented from time to time), reports of the Trust, Trust-sponsored proxy
statements, or in sales literature or other promotional material approved by the
Trust or its designee, except as required by legal process or regulatory
authorities or with the written permission of the Trust or its designee.
2.6. The Trust or Advisor shall not give any information or make any
representations or statements on behalf of the Company or concerning the
Company, the Accounts or the Contracts other than information, statements or
representations contained in and accurately derived from the registration
statement or prospectus for the Contracts (as such registration statement and
prospectus may be amended or supplemented from time to time), or in materials
approved by the Company for distribution including sales literature or other
promotional materials, except as required by legal process or regulatory
authorities or with the written permission of the Company.
2.7. So long as, and to the extent that the SEC requires pass-through
voting privileges for variable Contract owners, pursuant to the Exemption Order
or otherwise, the Company will provide pass-through voting privileges to owners
of policies whose cash values are invested, through the Accounts, in shares of
the Trust. The Trust shall require all Participating Insurance Companies to
handle voting privileges in the same manner and the Company shall be responsible
for assuring that the Accounts handle voting privileges in the manner
established by the Trust. With respect to each Account, the Company will vote
shares of the Trust held by the Account and for which no timely voting
instructions from policyowners are received as well as shares it owns that are
held by that Account, in the same proportion as those shares for which voting
instructions are received. The Company and its agents will in no way recommend
or oppose or interfere with the solicitation of proxies for Trust shares held by
Contract owners without the prior written consent of the Trust, which consent
may be withheld in the Trust's sole discretion.
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2.8. The Company shall promptly notify the Trust of any applicable
state insurance laws that restrict the Funds' investments or otherwise affect
the operation of the Trust and shall promptly notify the Trust of any changes in
such laws.
ARTICLE III
Representations and Warranties
3.1. The Company represents and warrants that it is an insurance
company duly organized and in good standing under the laws of the State of
Connecticut and that it has legally and validly established each Account as a
segregated asset account under such law on the date set forth in Schedule A. The
Company shall amend its registration statement under the 1933 Act and the 1940
Act from time to time as required in order to effect the continuous offering of
its Contracts. The Company shall register and qualify the Contracts for sale in
accordance with securities laws of the various states only if and to the extent
deemed necessary by the Company.
3.2. The Company represents and warrants that each Account has been
legally and validly established as a segregated asset account under applicable
state law and has been registered or, prior to any issuance or sale of the
Contracts, will be registered as a unit investment trust in accordance with the
provisions of the 1940 Act.
3.3. The Company represents and warrants that the Contracts or
interests in the Accounts will be issued and sold in compliance in all material
respects with all applicable federal and state securities and insurance
suitability requirements and are or, prior to issuance, will be registered as
securities under the 1933 Act.
3.4. The Trust represents and warrants that it is duly organized and
validly existing under the laws of the State of Delaware.
3.5. The Trust represents and warrants that the Trust shares offered
and sold pursuant to this Agreement will be registered under the 1933 Act and
the Trust shall be registered under the 1940 Act prior to any issuance or sale
of such shares. The Trust shall amend its registration statement under the 1933
Act and the 1940 Act from time to time as required in order to effect the
continuous offering of its shares. The Trust shall register and qualify its
shares for sale in accordance with the laws of the various states only if and to
the extent deemed advisable by the Trust.
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3.6. The Trust and Advisor represent and warrant that the investments
of each Portfolio will comply with the diversification requirements set forth in
Section 817(h) of the Internal Revenue Code of 1986, as amended, and the rules
and regulations thereunder. In the event the Trust ceases to so qualify, it will
take all reasonable steps (a) to notify the Company of such event and (b) to
adequately diversify the Fund so as to achieve compliance within the grace
period afforded by Regulation 817-5.
3.7. The Company represents and warrants that the Contracts are
currently treated as annuity contracts under applicable provisions of the
Internal Revenue Code of 1986, as amended, and that it will make every effort to
maintain such treatment and that it will notify the Trust immediately upon
having a reasonable basis for believing that the Contracts have ceased to be so
treated or that they might not be so treated in the future.
3.8. The Trust represents that to the extent that it decides to finance
distribution expenses pursuant to Rule 12b-1 under the Investment Company Act of
1940, as amended, the Trust undertakes to have its Board of Trustees approve any
plan under Rule 12b-1 to finance distribution expenses.
3.9. The Advisor represents and warrants that it is duly registered as
an investment advisor under the Investment Advisers Act of 1940, as amended, and
any applicable state securities laws.
ARTICLE V
Potential Conflicts
4.1. The parties acknowledge that the Trust's shares may be made
available for investment to other Participating Insurance Companies. In such
event, the Trustees will monitor the Trust for the existence of any material
irreconcilable conflict between the interests of the contract owners of all
Participating Insurance Companies. An irreconcilable material conflict may arise
for a variety of reasons, including: (a) an action by any state insurance
regulatory authority; (b) a change in applicable federal or state insurance,
tax, or securities laws or regulations, or a public ruling, private letter
ruling, no-action or interpretative letter, or any similar action by insurance,
tax, or securities regulatory authorities; (c) an administrative or judicial
decision in any relevant proceeding; (d) the manner in which the investments of
any Fund are being managed; (e) a difference in voting instructions given by
variable annuity contract and variable life insurance contract owners; or (f) a
decision by an insurer to disregard the voting instructions of contract owners.
The Trustees shall promptly inform the Company if they determine that an
irreconcilable material conflict exists and the implications thereof.
4.2. The Company agrees to promptly report any potential or existing
conflicts of which it is aware to the Trustees. The Company will assist the
Trustees in carrying out their responsibilities under the Exemptive Order by
providing the Trustees with all information reasonably necessary for the
Trustees to consider any issues raised including, but not limited to,
information as to a decision by the Company to disregard Contract owner voting
instructions.
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4.3. If it is determined by a majority of the Trustees, or a majority
of its disinterested Trustees, that a material irreconcilable conflict exists
that affects the interests of Contract owners, the Company shall, in cooperation
with other Participating Insurance Companies whose contract owners are also
affected, at its expense and to the extent reasonably practicable (as determined
by the Trustees) take whatever steps are necessary to remedy or eliminate the
irreconcilable material conflict, which steps could include: (a) withdrawing the
assets allocable to some or all of the Accounts from the Trust or any Fund and
reinvesting such assets in a different investment medium, including (but not
limited to) another Fund of the Trust, or (b) submitting the question of whether
or not such segregation as described below should be implemented to a vote of
all affected Contract owners and, as appropriate, segregating the assets of any
appropriate group (i.e., annuity contract owners, life insurance contract
owners, or variable contract owners of one or more Participating Insurance
Companies) that votes in favor of such segregation, or offering to the affected
Contract owners the option of having their assets segregated; or (c)
establishing a new registered management investment company or separate account.
4.4. If a material irreconcilable conflict arises because of a decision
by the Company to disregard Contract owner voting instructions and that decision
represents a minority position or would preclude a majority vote, the Company
may be required, at the Trust's election, to withdraw the affected Account's
investment in the Trust and terminate this Agreement with respect to such
Account; provided, however that such withdrawal and termination shall be limited
to the extent required by the foregoing material irreconcilable conflict as
determined by a majority of the disinterested Trustees. Any such withdrawal and
termination must take place within six (6) months after the Trust gives written
notice that such an election has been made. Until the end of such six (6) month
period, the Trust shall continue to accept and implement orders by the Company
for the purchase and redemption of shares of the Trust.
4.5. If a material irreconcilable conflict arises because a particular
state insurance regulator's decision applicable to the Company conflicts with
the majority of other state regulators, then the Company will withdraw the
affect Account's investment in the Trust and terminate this Agreement with
respect to such Account within six (6) months after the Trustees inform the
Company in writing that it has determined that such decision has created an
irreconcilable material conflict; provided, however, that such withdrawal and
termination shall be limited to the extent required by the foregoing material
irreconcilable conflict as determined by a majority of the disinterested
Trustees. Until the end of such six (6) month period, the Trust shall continue
to accept and implement orders by the Company for the purchase and redemption of
shares of the Trust.
4.6. For purposes of Sections 4.3 through 4.6 of this Agreement, a
majority of the disinterested Trustees shall determine whether any proposed
action adequately remedies any irreconcilable material conflict, but in no event
will the Company be required to establish a new funding medium for the Contracts
if an offer to do so has been declined by vote of a majority of Contract owners
materially adversely affected by the irreconcilable material conflict. In the
event that the Trustees determine that any proposed action does not adequately
remedy any irreconcilable material conflict, then the Company will withdraw the
Account's investment in the Trust and terminate this Agreement within six (6)
months after the Trustees inform the Company in writing of the foregoing
determination; provided, however, that such withdrawal and termination shall be
limited to the extent required by any such material irreconcilable conflict as
determined by a majority of the disinterested Trustees.
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4.7. The Company shall at least annually submit to the Trustees such
reports, materials or data as the Trustees may reasonably request so that the
Trustees may fully carry out their duties and responsibilities as Trustees; and
said reports, materials and data shall be submitted more frequently if deemed
appropriate by the Trustees.
4.8. If and to the extent that Rule 6e-2 and Rule 6e-3(T) are amended,
or Rule 6e-3 is adopted, to provide exemptive relief from any provision of the
1940 Act or the rules promulgated thereunder with respect to mixed or shared
funding (as defined in the Exemptive Order) on terms and conditions materially
different from those contained in the Exemptive Order, then the Trust and/or the
Participating Insurance Companies, as appropriate, shall take such steps as may
be necessary to comply with Rules 6e-2 and 6e-3(T), as amended, and Rule 6e-3,
as adopted, to the extent such rules are applicable. The provisions of the
Article IV shall become effective and shall continue in effect only so long as
the Trust operates pursuant to an Exemptive Order that contains conditions
substantially identical to those contained in this Article IV. The Company and
the Trustee agree to negotiate in good faith any modifications to the provisions
of this Article IV that may be necessary or appropriate to comply with the
Exemptive Order or any such Rule amendment or adoption.
ARTICLE V
Indemnification
5.1. Indemnification By the Company. Except to the extent provided in
Sections 5.4 and 5.5, the Company agrees to indemnify and hold harmless the
Trust and the Advisor and each of their respective Trustees, officers, employees
and agents and each person, if any, who controls the Trust or the Advisor within
the meaning of Section 15 of the 1933 Act (collectively, the "Indemnified
Parties" for purposes of this Article V) against any and all losses, claims,
damages, liabilities (including amounts paid in settlement with the written
consent of the Company) or expenses (including the reasonable costs of
investigating or defending any alleged loss, claim, damage, liability or expense
and reasonable legal counsel fees incurred in connection therewith)
(collectively, "Losses"), to which the Indemnified Parties may become subject
under any statute or regulation, or at common law or otherwise, insofar as such
Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in a registration statement or
prospectus for the Contracts or for any fund managed by the Company or any
affiliated Company that is available as an investment vehicle for the Contracts
(an "HL Fund"), or in the Contracts themselves or in sales literature generated
or approved by the Company on behalf of the Contracts, the HL Funds, or the
Accounts (or any amendment or supplement to any of the foregoing) (collectively,
"Company Documents" for the purposes of this Article V), or arise out of or are
based upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, provided that this indemnity shall not apply as to any Indemnified
Party if such statement or omission or such alleged statement or omission was
made in reliance upon and was accurately derived from written information
furnished to the Company by or on behalf of the Trust for use in Company
Documents or otherwise for use in connection with the sale of the Contracts or
Trust shares; or
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(b) arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived from
Trust Documents as defined in Section 5.2(a)) or wrongful conduct of the Company
or persons under its control, with respect to the sale or distribution of the
Contracts, HL Fund shares or Trust shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Trust Documents as defined in Section
5.2(a) or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon and
accurately derived from written information furnished to the Trust or the
Advisor by or on behalf of the Company or persons under its control; or
(d) arise out of o result from any failure by the Company to provide
the services or furnish the materials required under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Company in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Company.
5.2. Indemnification By the Trust. Except to the extent provided in
Sections 5.4 and 5.5, the Trust agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees and agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Article
V) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Trust) or expenses (including
the reasonable costs of investigating or defending any alleged loss, claim,
damage, liability or expense and reasonable legal counsel fees incurred in
connection therewith) (collectively, "Losses"), to which the Indemnified Parties
may become subject under any statute or regulation, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration statement
or prospectus for the Trust (or any amendment or supplement thereto),
(collectively, "Trust Documents" for the purposes of this Article V), or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from written
information furnished to the Trust by or on behalf of the Company or persons
under its control for use in Trust Documents or otherwise for use in connection
with the sale of the Contracts or Trust shares; or
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(b) arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived from
Company Documents) or wrongful conduct of the Trust or persons under its
control, with respect to the sale or distribution of the Contracts or Trust
shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading if such statement or
omission was made in reliance upon and accurately derived from written
information furnished to the Company by or on behalf of the Trust or persons
under its control; or
(d) arise out of or result from any failure by the Trust to provide the
services or furnish the materials required under the terms of this Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Trust in this Agreement or arise out
of or result from any other material breach of this Agreement by the Trust.
5.3. Indemnification By Advisor. Except to the extent provided in
Sections 5.4 and 5.5, the Advisor agrees to indemnify and hold harmless the
Company and each of its directors, officers, employees and agents and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act (collectively, the "Indemnified Parties" for purposes of this Article
V) against any and all losses, claims, damages, liabilities (including amounts
paid in settlement with the written consent of the Advisor) or expenses
(including the reasonable costs of investigating or defending any alleged loss,
claim, damage, liability or expense and reasonable legal counsel fees incurred
in connection therewith) (collectively, "Losses"), to which the Indemnified
Parties may become subject under any statute or regulations, or at common law or
otherwise, insofar as such Losses:
(a) arise out of or are based upon any untrue statements or alleged
untrue statements of any material fact contained in the registration statement
or prospectus for the Trust (or any amendment or supplement thereto),
(collectively, "Trust Documents" for the purposes of this Article V), or arise
out of or are based upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, provided that this indemnity shall not apply as to any
Indemnified Party if such statement or omission or such alleged statement or
omission was made in reliance upon and was accurately derived from (i) written
information furnished to the Advisor by or on behalf of the Company or persons
under its control for use in Trust Documents or otherwise for use in connection
with the sale of the Contracts or Trust shares or (ii) information furnished to
the Advisor by or on behalf of any third party, other than any subadviser or any
affiliate to Advisors, for use in Trust Documents; or
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(b) arise out of or result from statements or representations (other
than statements or representations contained in and accurately derived from
Company Documents) or wrongful conduct of the Advisor or persons under its
control, with respect to the sale or distribution of the Contracts or Trust
shares; or
(c) arise out of or result from any untrue statement or alleged untrue
statement of a material fact contained in Company Documents or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading if such statement or
omission was made in reliance upon and accurately derived from written
information furnished to the Company by or on behalf of the Advisor or persons
under its control; or
(d) arise out of or result from any failure by the Advisor to provide
the services or furnish the materials required of it under the terms of this
Agreement; or
(e) arise out of or result from any material breach of any
representation and/or warranty made by the Advisor in this Agreement or arise
out of or result from any other material breach of this Agreement by the
Advisor.
5.4. Neither the Company, the Trust nor the Advisor shall be liable
under the indemnification provisions of Sections 5.1, 5.2 or 5.3, as applicable,
with respect to any Losses incurred or assessed against an Indemnified Party
that arise from such Indemnified party's willful misfeasance, bad faith or
negligence in the performance of such Indemnified Party's duties or by reason of
such Indemnified Party's reckless disregard of obligations or duties under this
Agreement.
5.5. Neither the Company, the Trust nor the Advisor shall be liable
under the indemnification provisions of Sections 5.1, 5.2 or 5.3, as applicable,
with respect to any claim made against an Indemnified Party unless such
Indemnified Party shall have notified the other party in writing within a
reasonable time after the summons, or other first legal process giving
information on the nature of the claim, shall have been served upon or otherwise
received by such Indemnified Party (or after such Indemnified Party shall have
received notice of service upon or other notification to any designated agent),
but failure to notify the party against whom indemnification is sought of any
such claim shall not relieve that party from any liability which it may have to
the Indemnified Party in the absence of Sections 5.1, 5.2 and 5.3.
5.6. In case any such action is brought against any Indemnified Party,
the indemnifying party shall be entitled to participate, at its own expense, in
the defense of such action. The indemnifying party also shall be entitled to
assume the defense thereof, with counsel reasonably satisfactory to the party
named in the action. After notice from the indemnifying party to the Indemnified
Party of an election to assume such defense, the Indemnified Party shall bear
the fees and expenses of any additional counsel retained by it, and the
indemnifying party will not be liable to the Indemnified party under this
Agreement for any legal or other expenses subsequently incurred by such party
independently in connection with the defense thereof other than reasonable costs
of investigation.
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ARTICLE VI
Termination
6.1. This Agreement may be terminated by any party for any reason by
one years advance written notice delivered to the other parties.
6.2. Notwithstanding any termination of this Agreement, the Trust
shall, at the option of the Company, continue to make available additional
shares of the Trust (or any Fund) pursuant to the terms and conditions of this
Agreement for all Contracts in effect on the effective date of termination of
this Agreement, provided that the Company continues to pay the costs set forth
in Section 2.3.
6.3. The provisions of Article V shall survive the termination of this
Agreement, and the provision of Article IV and Section 2.8 shall survive the
termination of this Agreement as long as shares of the Trust are held on behalf
of Contract owners in accordance with Section 6.2.
ARTICLE VII
Notices
Any notice shall be sufficiently given when sent by registered or
certified mail to the other party at the address of such party set forth below
or at such other address as such party may from time to time specify in writing
to the other party.
If to the Advisor:
NationsBanc Advisors, Inc.
NCI - 002-33-31
101 South Tryon Street
Charlotte, NC 28255
Attention: Robert H. Gordon
President
If to the Trust:
Nations Annuity Trust
NCI-002-33-31
101 South Tryon Street
Charlotte, NC 28255
Attention: Richard H. Blank, Jr.
Corporate Secretary
12
<PAGE>
If to the Company:
Hartford Life Insurance Company
200 Hopmeadow Street
Simsbury, Connecticut 06089
Attention: Lynda Godkin
General Counsel
ARTICLE VIII
Miscellaneous
8.1. The captions in this Agreement are included for convenience of
reference only and in no way define or delineate any of the provisions hereof or
otherwise affect their construction or effect.
8.2. This Agreement may be executed simultaneously in two or more
counterparts, each of which taken together shall constitute one and the same
instrument.
8.3. This Agreement constitutes the entire agreement among the parties
with respect to the matters covered hereby. If any provision of this Agreement
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of the Agreement shall not be affected thereby.
8.4. This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the State of Delaware.
8.5. The parties to this Agreement acknowledge and agree that all
liabilities of the Trust arising, directly or indirectly, under this Agreement,
of any and every nature whatsoever, shall be satisfied solely out of the assets
of the Trust and that no Trustee, officer, agent or holder of shares of
beneficial interest of the Trust shall be personally liable for any such
liabilities. Obligations and liabilities with respect to a Fund may be satisfied
from the assets belonging to that Fund but no other assets.
8.6. Each party shall cooperate with each other party and all
appropriate governmental authorities (including without limitation the SEC, the
National Association of Securities Dealers, Inc., and state insurance
regulators) and shall permit such authorities reasonable access to its books and
records in connection with an investigation or inquiry relating to this
Agreement or the transactions contemplated hereby.
8.7. The rights, remedies and obligations contained in this Agreement
are cumulative and are in addition to any and all rights, remedies and
obligations, at law or in equity, which the parties hereto are entitled to under
state and federal laws.
8.8. The parties to this Agreement acknowledge and agree that this
Agreement shall not be exclusive in any respect.
8.9. Neither this Agreement nor any rights or obligations hereunder may
be assigned by either party without the prior written approval of the other
party.
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8.10. No provisions of this Agreement may be amended or modified in any
manner except by a written agreement properly authorized and executed by both
parties.
IN WITNESS WHEREOF, the parties have caused their duly authorized officers to
execute this Participation Agreement as of the date and year first above
written.
NATIONSBANC ADVISORS, INC.
By: /s/ Edward D. Bedard
Edward D. Bedard
Senior Vice President and
Chief Operating Officer
NATIONS ANNUITY TRUST
By: /s/ A. Max Walker
A. Max Walker
President
HARTFORD LIFE INSURANCE COMPANY
By: /s/ Peter W. Cummins
Peter W. Cummins
Senior Vice President
14
<PAGE>
Schedule A
Separate Accounts
Name of Separate Account
Separate Account Two of Hartford Life Insurance Company
15
SHAREHOLDER SERVICING AND DISTRIBUTION PLAN
NATIONS ANNUITY TRUST
This SHAREHOLDER SERVICING AND DISTRIBUTION PLAN (the "Plan") has
been adopted by the Board of Trustees of NATIONS ANNUITY TRUST (the "Trust") in
conformance with Rule 12b-1 under the Investment Company Act of 1940 as amended
(the "1940 Act").
Section 1. Payments for Services. Under the terms of this Plan,
the Trust may act as a distributor of the Shares of which a Portfolio is the
issuer, pursuant to Rule 12b-1 under the 1940 Act. The Trust may incur as a
distributor of the shares of each Portfolio ("Shares") expenses of up to
twenty-five one-hundredths of one percent (0.25%) per annum of the average daily
net assets of the Trust attributable to the Shares of the Portfolios (as defined
on Exhibit A).
Section 2. Expenses Covered by the Plan. Amounts set forth in
Section 1 may be expended when and if authorized in advance by the Trust's Board
of Trustees. Such amounts may be used to finance any activity which is primarily
intended to result in the sale of the Shares, including, but not limited to,
expenses of organizing and conducting sales seminars, printing of prospectuses
and statements of additional information (and supplements thereto) and reports
for other than existing shareholders, preparation and distribution of
advertising material and sales literature, supplemental payments to the Trust's
distributor (the "Distributor") and the cost of administering this Plan, as well
as the shareholder servicing activities described below. All amounts expended
pursuant to this Plan shall be paid:
(a) to the Distributor for reimbursements of distribution-related
expenses actually incurred by the Distributor, including, but not limited
to, expenses of organizing and conducting sales seminars, printing of
prospectuses and statements of additional information (and supplements
thereto) and reports for other than existing shareholders, preparation and
distribution of advertising material and sales literature and costs of
administering this Plan; or
(b) to certain broker/dealers and other financial institutions
("Agents") who offer shares to their customers and who have entered into (i)
Shareholder Servicing Agreements substantially in the form of Exhibit C, and
(ii) Sales Support Agreements substantially in the form of Exhibit B, for
providing the services contemplated thereunder.
The shareholder servicing activities for which compensation may be
received under this Plan may include, among other things: (i) providing general
shareholder liaison services; (ii) processing purchases and redemption requests;
(iii) processing dividend and distribution payments; (iv) providing sales
information periodically to customers, including information showing their
contracts' positions in the Portfolios; (v) providing sub-accounting; (vi)
responding to inquiries from customers; (vii) arranging for bank wires; and
(viii) providing such other similar services as may be reasonably requested.
Servicing agents may include participating insurance companies.
1
<PAGE>
Section 3. Except for the payments specified in Section 1, no
additional payments are to be made by the Trust under this Plan, provided that
nothing herein shall be deemed to preclude the payments such Portfolios are
otherwise obligated to make to: (a) NationsBanc Advisors, Inc. ("NBAI"),
pursuant to the Investment Advisory Agreement; and (b) TradeStreet Investment
Associates, Inc. ("TradeStreet"), Gartmore Global Partners ("Gartmore") and
Marsico Capital Management LLC ("Marsico Capital") pursuant to Investment
Sub-Advisory Agreements; (c) NationsBank of Texas, N.A. ("NationsBank Texas")
and The Bank of New York ("BONY"), pursuant to the Custody and Sub-Custody
Agreement; (d) First Data Investor Services Group, Inc. ("First Data"), pursuant
to the Transfer Agency and Registrar Agreement; (e) Stephens Inc. ("Stephens"),
pursuant to the Administration Agreement; (f) NBAI pursuant to the
Sub-Administration Agreement; (g) First Data, pursuant to the Co-Administration
Agreement, Servicing Agents, pursuant to Shareholder Servicing Agreements; and
(h) for the expenses otherwise incurred by a Portfolio and the Trust on behalf
of the Shares in the normal conduct of such Portfolio's business pursuant to the
Investment Advisory Agreement and Investment Sub-Advisory Agreements, the
Custody and Sub-Custody Agreements, the Transfer Agency and Registrar Agreement,
the Administration Agreement, the Sub-Administration Agreement, the
Co-Administration Agreement and the Shareholder Servicing Agreements. To the
extent any such payments by the Trust on behalf of a Portfolio to NBAI,
TradeStreet, Gartmore, Marsico Capital, NationsBank Texas, First Data, Stephens,
or BONY; by NBAI, NationsBank Texas, First Data, BONY, or Stephens or Servicing
Agents, or any affiliate thereof, to any party pursuant to any agreement; or,
generally, by the Trust on behalf of a Portfolio to any party, are deemed to be
payments for the financing of any activity primarily intended to result in the
sale of the Shares within the context of Rule 12b-1 under the 1940 Act, then
such payments shall be deemed to have been approved pursuant to this Plan
without regard to Section 1.
Section 4. Reports of Distributor. The officers of the Trust shall
report quarterly in writing to the Board of Trustees on the amounts and purpose
of payments for any of the activities in Section 2 and shall furnish the Board
of Trustees with such other information as the Board may reasonably request in
connection with such payments in order to enable the Board to make an informed
determination on the nature and value of such expenditures.
Section 5. Approval of Plan. This Plan shall continue in effect
for a period of more than one year from the date written below only so long as
such continuance is specifically approved at least annually by the Trust's Board
of Trustees, including the Trustees who are not interested persons of the Trust
and have no direct or indirect financial interest in the operation of this Plan
or in any Agreements related to this Plan ("Disinterested Trustees"), by vote
cast in person at a meeting called for the purpose of voting on this Plan.
Section 6. Termination. This Plan may be terminated at any time by
vote of a majority of the Disinterested Trustees or with respect to a particular
Portfolio by vote of a majority of the outstanding voting securities of the
Shares of such Portfolio, on not more than sixty (60) days' written notice to
any other party to the Plan, and shall terminate automatically in the event of
any act that constitutes an assignment of the Distribution Agreement or the
Investment Advisory Agreement.
Section 7. Amendments. This Plan may be amended at any time by the
Board of Trustees provided that: (a) any amendment to increase materially the
costs which a Portfolio may bear for distribution pursuant to this Plan shall be
effective only upon approval by a vote of a majority of the outstanding Shares
of such Portfolio, and (b) any material amendments of the terms of this Plan
shall become effective only upon approval as provided in Section 6 thereof.
2
<PAGE>
Section 8. Selection/Nomination of Trustees. So long as this Plan
is in effect, the selection and nomination of the Trust's Disinterested Trustees
shall be committed to the discretion of such Disinterested Trustees.
Section 9. Governing Law. This Plan shall be subject to the laws
of the State of Delaware and shall be interpreted and construed to further
promote the operation of the Trust as an open-end management investment company.
As used herein the terms "open-end management investment company," "assignment,"
"principal underwriter," "interested person," and "majority of the outstanding
voting securities" shall have the meanings set forth in the Securities Act of
1933, as amended or the 1940 Act, and the rules and regulations thereunder.
Section 10. Scope of Liability. Nothing herein shall be deemed to
protect the parties to any Agreement entered into pursuant to this Plan against
any liability to the Trust or its shareholders to which they would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of their duties hereunder, or by reason of their reckless disregard
of their obligations and duties hereunder.
Section 11. Records. The Trust will preserve copies of this Plan,
Agreements and any written reports regarding this Plan presented to the Board of
Trustees for a period of not less than six years.
Section 12. Limitation of Liability. The names "Nations Annuity
Trust" and "Trustees of Nations Annuity Trust" refer respectively to the trust
created and the Trustees, as trustees but not individually or personally, acting
from time to time under a Declaration of Trust and Certificate of Trust dated
November 24, 1997, which is hereby referred to and a copy of which is on file at
the office of the Secretary of State of Delaware and at the principal office of
the Trust. The obligations of "Nations Annuity Trust" entered into in the name
or on behalf thereof by any of the Trustees, officers, representatives or agents
are made not individually, but in such capacities, and are not binding upon any
of the Trustees, Shareholders, officers, representatives or agents of the Trust
personally, but bind only the Trust Property (as defined in the Declaration of
Trust), and all persons dealing with a Portfolio's Shares of the Trust must look
solely to the Trust Property belonging to such Portfolio's Shares for the
enforcement of any claims against the Trust.
3
<PAGE>
EXHIBIT A
NATIONS ANNUITY TRUST
Nations Balanced Assets Portfolio
Nations Disciplined Equity Portfolio
Nations International Growth Portfolio
Nations Managed Index Portfolio
Nations Managed SmallCap Index Portfolio
Nations Marsico Focused Equities Portfolio
Nations Marsico Growth & Income Portfolio
Nations Value Portfolio
4
POWER OF ATTORNEY
Edmund L. Benson, III, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Edmund L. Benson, III
-----------------------------
Edmund L. Benson, III
<PAGE>
POWER OF ATTORNEY
James Ermer, whose signature appears below, does hereby constitute
and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M. Kurucza, Marco
E. Adelfio and Steven G. Cravath, each individually, his true and lawful
attorneys and agents, with power of substitution or resubstitution, to do any
and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ James Ermer
-----------------------------
James Ermer
<PAGE>
POWER OF ATTORNEY
William H. Grigg, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ William H. Grigg
-----------------------------
William H. Grigg
<PAGE>
POWER OF ATTORNEY
Thomas F. Keller, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Thomas F. Keller
-----------------------------
Thomas F. Keller
<PAGE>
POWER OF ATTORNEY
Dr. Cornelius J. Pings, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., James E. Banks,
Jr., Robert M. Kurucza, Marco E. Adelfio and Steven G. Cravath, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable Nations Fund
Trust, Nations Fund, Inc., Nations Reserves, Nations LifeGoal Funds, Inc.,
Nations Annuity Trust, Nations Master Investment Trust and Nations Funds Trust
(each a Company and collectively the "Companies"), to comply with the Investment
Company Act of 1940, as amended, and the Securities and Exchange Act of 1933, as
amended (together the "Acts"), and any other applicable federal securities laws,
or rules, regulations or requirements of the Securities and Exchange Commission
in respect thereof, in connection with the filing and effectiveness of each
Company's Registration Statement on Form N-1A pursuant to the Acts, and any and
all amendments thereto, and to determine the states in which appropriate filings
should be made and to take any and all necessary and appropriate actions to make
any and all such filings, and any and all amendments thereto, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
director/trustee of the Companies, such Registration Statement and filings, any
and all exemptive applications under the Acts, and any and all amendments and
any other instruments or documents related thereto, and the undersigned does
hereby ratify and confirm all that said attorneys and agents, individually or
collectively, shall do or cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Dr. Cornelius J. Pings
-----------------------------
Dr. Cornelius J. Pings
<PAGE>
POWER OF ATTORNEY
A. Max Walker, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ A. Max Walker
-----------------------------
A. Max Walker
<PAGE>
POWER OF ATTORNEY
Charles B. Walker, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Charles B. Walker
-----------------------------
Charles B. Walker
<PAGE>
POWER OF ATTORNEY
Thomas S. Word, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio, and Steven G. Cravath, each individually, his true
and lawful attorneys and agents, with power of substitution or resubstitution,
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Thomas S. Word, Jr.
-----------------------------
Thomas S. Word, Jr.
<PAGE>
POWER OF ATTORNEY
Carl E. Mundy, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ Carl E. Mundy, Jr.
-----------------------------
Carl E. Mundy, Jr.
<PAGE>
POWER OF ATTORNEY
James B. Sommers, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., Robert M.
Kurucza, Marco E. Adelfio and Steven G. Cravath, each individually, his true and
lawful attorneys and agents, with power of substitution or resubstitution, to do
any and all acts and things and to execute any and all instruments which said
attorneys and agents, each individually, may deem necessary or advisable or
which may be required to enable Nations Fund Trust, Nations Fund, Inc., Nations
Reserves, Nations LifeGoal Funds, Inc., Nations Annuity Trust, Nations Master
Investment Trust and Nations Funds Trust (each a Company and collectively the
"Companies"), to comply with the Investment Company Act of 1940, as amended, and
the Securities and Exchange Act of 1933, as amended (together the "Acts"), and
any other applicable federal securities laws, or rules, regulations or
requirements of the Securities and Exchange Commission in respect thereof, in
connection with the filing and effectiveness of each Company's Registration
Statement on Form N-1A pursuant to the Acts, and any and all amendments thereto,
and to determine the states in which appropriate filings should be made and to
take any and all necessary and appropriate actions to make any and all such
filings, and any and all amendments thereto, including specifically, but without
limiting the generality of the foregoing, the power and authority to sign in the
name and on behalf of the undersigned as a director/trustee of the Companies,
such Registration Statement and filings, any and all exemptive applications
under the Acts, and any and all amendments and any other instruments or
documents related thereto, and the undersigned does hereby ratify and confirm
all that said attorneys and agents, individually or collectively, shall do or
cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ James B. Sommers
-----------------------------
James. B. Sommers
<PAGE>
POWER OF ATTORNEY
William P. Carmichael, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Richard H. Blank, Jr., James E. Banks,
Jr., Robert M. Kurucza, Marco E. Adelfio and Steven G. Cravath, each
individually, his true and lawful attorneys and agents, with power of
substitution or resubstitution, to do any and all acts and things and to execute
any and all instruments which said attorneys and agents, each individually, may
deem necessary or advisable or which may be required to enable Nations Fund
Trust, Nations Fund, Inc., Nations Reserves, Nations LifeGoal Funds, Inc.,
Nations Annuity Trust, Nations Master Investment Trust and Nations Funds Trust
(each a Company and collectively the "Companies"), to comply with the Investment
Company Act of 1940, as amended, and the Securities and Exchange Act of 1933, as
amended (together the "Acts"), and any other applicable federal securities laws,
or rules, regulations or requirements of the Securities and Exchange Commission
in respect thereof, in connection with the filing and effectiveness of each
Company's Registration Statement on Form N-1A pursuant to the Acts, and any and
all amendments thereto, and to determine the states in which appropriate filings
should be made and to take any and all necessary and appropriate actions to make
any and all such filings, and any and all amendments thereto, including
specifically, but without limiting the generality of the foregoing, the power
and authority to sign in the name and on behalf of the undersigned as a
director/trustee of the Companies, such Registration Statement and filings, any
and all exemptive applications under the Acts, and any and all amendments and
any other instruments or documents related thereto, and the undersigned does
hereby ratify and confirm all that said attorneys and agents, individually or
collectively, shall do or cause to be done by virtue hereof.
Dated: December 9, 1999
/s/ William P. Carmichael
-----------------------------
William P. Carmichael
