SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE DEF14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, for use
of the Commission Only
(as permitted by Rule
14a-6(e)(2))
|X| Definitive Proxy Statement
|_| Definitive additional materials
|_| Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
NATIONS FUND TRUST
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| Fee paid previously with preliminary materials:
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|_| Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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NATIONS FUND TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
TELEPHONE: 800-790-6347
June 28, 1999
Dear Shareholder:
On behalf of the Board of Trustees of Nations Fund Trust (the "Trust"), we
are pleased to invite you to a special meeting of shareholders of the Trust's
Nations Marsico Focused Equities Fund and Nations Marsico Growth & Income Fund
(each a "Fund" and together the "Funds") to be held at 10:00 a.m. (Eastern time)
on August 13, 1999, at One Bank of America Plaza, 33rd Floor, Charlotte, North
Carolina (the "Meeting"). At the Meeting, you will be asked to approve the
proposed reorganization (the "Reorganization") of your Fund into a successor
mutual fund in Nations Institutional Reserves, another registered investment
company within the Nations Funds family.
YOUR NEW MUTUAL FUND (A "SUCCESSOR FUND") WILL HAVE THE SAME NAME,
INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND INVESTMENT RISKS AS
THOSE OF YOUR CURRENT FUND, and the Reorganization will not result in any change
to the investment adviser or sub-adviser who currently manage your Fund. In
addition, the Reorganization will not result in any change to the total
operating expense ratios of the various classes of shares. Similarly, the
features and services that are available to you today will continue to be
available to you as a Successor Fund shareholder after the Reorganization. In
addition, each Successor Fund will be a "feeder" fund in a master/feeder
structure, which simply means that each Successor Fund will invest all of its
assets in a master portfolio that has an identical investment objective and
principal investment strategy. More details about the master/feeder structure
are provided in the accompanying Proxy Statement.
The Reorganization offers several benefits. First, by establishing a
master/feeder structure for the Successor Funds, Nations Master Investment Trust
("NMIT"), which is the registered investment company in the Nations Funds family
that would "house" the master portfolios, would have the potential to attract
other feeders and access additional distribution channels that would not
otherwise be available if the Successor Funds operated on a stand-alone basis.
This could result in higher asset levels, which, in turn, may lead to economies
of scale for NMIT investors, including the Successor Funds. Second, the
Reorganization is part of a broader initiative to streamline the operations of
the Nations Funds family, which currently consists of several registered
investment companies. Over time, management expects to reduce the number of
registered investment companies in the fund family without necessarily impacting
investment alternatives. Streamlining the Nations Funds family may allow it to
achieve cost savings by reducing accounting, legal and securities registration
costs.
If shareholder approval is obtained and the other conditions to the
Reorganization are satisfied, it is anticipated that your Fund would be
reorganized into a corresponding Successor Fund on or about August 20, 1999,
when your Fund shares would be exchanged for shares of the same class of shares
of that corresponding Successor Fund of equal dollar value. The Reorganization
is expected to be tax-free under federal law.
THE TRUST'S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO
APPROVE THE PROPOSED REORGANIZATION.
The formal Notice of Special Meeting, a Proxy Statement and a Proxy Ballot
are enclosed. The proposed Reorganization and the reasons for the unanimous
recommendation of the Trust's Board are discussed in more detail in the enclosed
materials, which you should read carefully. If you have any questions about the
Reorganization, please do not hesitate to contact the Trust at the toll-free
number set forth above.
We look forward to your attendance at the Meeting or receiving your Proxy
Ballot(s) so that your shares may be voted at the Meeting.
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Sincerely,
A. Max Walker
President and Chairman of the Board of Trustees
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
PLEASE VOTE BY RETURNING YOUR PROXY BALLOT TODAY, EITHER IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE AT (704) 388-2641. YOU MAY ALSO SUBMIT
YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED BELOW.
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TWO QUICK AND EASY WAYS TO SUBMIT YOUR PROXY
As a valued Fund shareholder, your proxy vote is important to us. That's why
we've made it faster and easier to submit your proxy at YOUR convenience, 24
hours a day. After reviewing the enclosed PROXY STATEMENT, select one of the
following quick and easy methods to submit your proxy - ACCURATELY and QUICKLY.
ON-LINE BY TOLL-FREE PHONE CALL
1. Read the enclosed PROXY STATEMENT 1. Read the enclosed PROXY STATEMENT
and have your PROXY BALLOT(S)* at and have your PROXY BALLOT(S)* at
hand. hand.
2. Go to Web site WWW.PROXYVOTE.COM 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number 3. Enter the 12-digit Control Number
found on your PROXY BALLOT(S). found on your PROXY BALLOT(S).
4. Submit your proxy using the 4. Submit your proxy using the
easy-to-follow instructions. easy-to-follow instructions.
* DO NOT MAIL THE PROXY BALLOT(S) IF SUBMITTING YOUR PROXY BY INTERNET OR
TELEPHONE.
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NATIONS FUND TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 13, 1999
To Nations Marsico Focused Equities Fund and Nations Marsico Growth & Income
Fund Shareholders:
PLEASE TAKE NOTE THAT a special meeting of the shareholders (the
"Meeting") of Nations Marsico Focused Equities Fund and Nations Marsico Growth &
Income Fund (the "Funds") of Nations Fund Trust. (the "Trust") will be held at
10:00 a.m., Eastern time, on August 13, 1999, at One Bank of America Plaza, 33rd
Floor, Charlotte, North Carolina, for purpose of
considering and voting upon:
ITEM 1. A proposed Agreement and Plan of Reorganization, dated as of June
15, 1999 (the "Reorganization Agreement"), by and between the Trust, on
behalf of the Funds, and Nations Institutional Reserves, on behalf of
corresponding mutual funds (the "Successor Funds"). The Reorganization
Agreement provides for the transfer of the assets and liabilities of the
Funds to the Successor Funds, in exchange for shares of equal value of
designated classes of the Successor Funds.
ITEM 2. Such other business as may properly come before the Meeting or any
adjournment(s).
Item 1 is described in the attached Proxy Statement.
YOUR TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
Shareholders of record as of the close of business on May 13, 1999 are
entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE EACH ACCOMPANYING PROXY BALLOT, WHICH IS BEING SOLICITED BY
THE TRUST'S BOARD OF TRUSTEES. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE
MEETING. SHAREHOLDERS ALSO MAY SUBMIT PROXIES: 1) BY FACSIMILE AT (704)
388-2641; 2) BY DIALING (800) 690-6903; OR 3) ON-LINE AT WEBSITE
WWW.PROXYVOTE.COM. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED
BY SUBMITTING TO THE TRUST A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY
DATED PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
By Order of the Board of Trustees,
Richard H. Blank, Jr.
Secretary and Treasurer
June 28, 1999
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PROXY STATEMENT
Dated June 25, 1999
NATIONS FUND TRUST
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-790-6347
This proxy statement (the "Proxy") is furnished in connection with the
solicitation of proxies by the Board of Trustees of Nations Fund Trust (the
"Trust") at a Special Meeting of Shareholders of the Trust's Nations Marsico
Focused Equities Fund and Nations Marsico Growth & Income Fund (the "Funds") to
be held August 13, 1999 at 10:00 a.m. (Eastern time) at One Bank of America
Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina. This
Special Meeting and any adjournment(s) are referred to as the "Meeting." The
Meeting has been called to consider the following proposal:
A proposed Agreement and Plan of Reorganization, dated as of June
15, 1999 (the "Reorganization Agreement"), by and between the Trust,
on behalf of the Funds, and Nations Institutional Reserves, on
behalf of corresponding mutual funds (the "Successor Funds"). The
Reorganization Agreement provides for the transfer of the assets and
liabilities of the Funds to the Successor Funds, in exchange for
shares of equal value of designated classes of the Successor Funds
(the "Reorganization").
The Successor Funds are referred to as "successors" because they were
created to receive the assets and liabilities and to continue the operations of
the Funds. While there are some differences between the Funds and their
corresponding Successor Funds, which are discussed below, an investment in the
Successor Funds is considered substantially the same as an investment in their
corresponding Funds.
Additional information about the Fund is available in the:
o Prospectuses for the Funds;
o Statement of Additional Information, or SAI, for the Funds; and
o The Funds' annual report to shareholders, including audited financial
statements.
All of this information is in documents filed with the Securities and
Exchange Commission (the "SEC"). The financial statements contained in the
annual reports are legally deemed to be part of this Proxy and are incorporated
by reference. The annual reports to shareholders for the fiscal year ended March
31, 1999 have previously been mailed to shareholders. Additional copies are
available without charge by writing the address given above or by calling
1-800-321-7854 documents also are available on the website of the SEC at
www.sec.gov.
The Successor Funds are not yet operating mutual funds and do not yet have
a prospectus that has been declared effective by the SEC. Copies of the
effective prospectus will be provided to shareholders at the time the
Reorganization is consummated. Shareholders may, after the Reorganization,
obtain a copy of the Statement of Additional Information relating to the
Successor Funds without charge by calling 1-800-321-7854 or by writing Nations
Institutional Reserves at: Nations Institutional Reserves, c/o Stephens Inc.,
One Bank of America Plaza, 33rd Floor, Charlotte, North Carolina 28255.
It is expected that this Proxy will be mailed to shareholders on or about
June 28, 1999.
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I. DESCRIPTION OF THE REORGANIZATION
The Trust's Board of Trustees has called the Meeting to ask shareholders
to consider and vote on one proposal -- approval of the Reorganization
Agreement. Please be sure to read the entire Proxy to determine how the
Reorganization will affect your investment before casting your vote.
DESCRIPTION OF THE PROPOSAL
At meetings held in March and May 1999, the Trust's Board of Trustees
(including a majority of the independent Board members, meaning those who are
not "interested persons" under the Investment Trust Act of 1940 (the "1940
Act")) voted to approve the Reorganization. At the Meeting, the shareholders of
the Fund will be asked to approve the Reorganization. If shareholder approval is
obtained, and the other conditions to the closing of the Reorganization (the
"Closing") are met, shareholders of a Fund will receive shares of a
corresponding Successor Fund equal in value to their holdings of Fund shares
immediately before the Reorganization. Each Fund will then be terminated and
liquidated.
The dollar value and class of the Successor Fund shares received by Fund
shareholders in the Reorganization will be identical to the dollar value and
class of the Fund shares owned by each Fund shareholder immediately before the
Reorganization. EACH SUCCESSOR FUND WILL HAVE THE SAME INVESTMENT OBJECTIVE,
PRINCIPAL INVESTMENT STRATEGIES AND INVESTMENT RISKS AS ITS CORRESPONDING FUND,
AND THE REORGANIZATION WILL NOT RESULT IN ANY CHANGE TO THE INVESTMENT ADVISER
AND INVESTMENT SUB-ADVISER WHO CURRENTLY MANAGE THE FUNDS. Similarly, the
features and services that are available to Fund shareholders today will
continue to be available to Successor Fund shareholders after the
Reorganization. However, the Successor Fund differs in some respects from the
Fund, and these differences are described in more detail below.
It is possible that a majority of a Fund's shareholders entitled to vote
do not approve the Reorganization. In such a case, shareholders will retain
their shares in the Fund and the Board of Trustees of the Trust will contemplate
what further action is appropriate.
The Meeting is scheduled for August 13, 1999, and the Reorganization, if
approved, is expected to occur on or about August 20, 1999.
DESCRIPTION OF THE REORGANIZATION AGREEMENT
The Reorganization Agreement is the governing document of the
Reorganization. Among other things, it provides for (i) the transfer of all of
the assets and liabilities of the Fund to the Successor Fund in exchange for
shares of equal value of designated classes of the Successor Fund; and (ii) the
distribution of such Successor Fund shares to shareholders of the Fund in
liquidation of the Fund. The completion of the Reorganization is conditioned
upon the Trust and Nations Institutional Reserves receiving an opinion from
counsel that the exchange contemplated by the Reorganization will be tax-free
under federal law. The Reorganization Agreement includes a number of other
conditions to completion of the Reorganization , sets forth representations and
warranties of the parties and describes the mechanics of the transaction.
As is discussed in more detail below, each Successor Fund will be a
"feeder" in a master/feeder structure, which simply means that each Successor
Fund will invest all of its assets in a master portfolio that has an identical
investment objective and principal investment strategy as the feeder. In
exchange for investing its assets in a master portfolio, Nations Master
Investment Trust ("NMIT"), the registered investment company that would "house"
such master portfolio, will issue an "interest" in such master portfolio
(similar to a share) to each Fund. Operationally, this exchange--i.e., an
interest in a master portfolio in return for the assets of a Fund--is expected
to occur simultaneously with the closing of the Reorganization and will be
governed by separate agreement.
The Reorganization Agreement also notes that Fund shareholders will
bear the expenses associated with the Reorganization, including the cost of
soliciting proxies to obtain shareholder approval. Shareholder
Communications Corp. and A.D.P. Proxy Services, Inc. have been hired to
conduct the proxy solicitation, and
<PAGE>
provide proxy mailing and recordkeeping services, including vote tabulation. The
cost of employing these entities in connection with the Reorganization is
expected to be approximately $164,680.
The Reorganization may be abandoned at any time before the Closing upon
the mutual consent of the Trust and Nations Institutional Reserves. At any time
before or after approval (to the extent permitted by law) of the agreement by
the shareholders of the Fund (i) the parties may, by written agreement
authorized by the Trust's Board of Trustees and Nations Institutional Reserves'
Board of Trustees, amend any of the provisions of the Reorganization Agreement;
and (ii) either party may waive any default by the other party or the failure to
satisfy any of the conditions to its obligations (the waiver to be in writing
and authorized by an appropriate officer of the relevant party).
The Reorganization Agreement must be approved by a vote of a majority of
all of the shareholders of the Fund who are present at the meeting, either in
person or by proxy. Copies of the Reorganization Agreement are available upon
request by writing or calling the Trust at the toll-free number listed above or
at the SEC's website (www.sec.gov).
THE TRUST'S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT FUND
SHAREHOLDERS VOTE FOR THE REORGANIZATION AGREEMENT.
II. THE PURPOSE OF THE REORGANIZATION
The Reorganization offers several benefits to Fund shareholders:
o By establishing a master/feeder structure for the Successor Funds, NMIT
would have the potential to attract other feeders and access additional
distribution channels that would not otherwise be available if the
Successor Funds operated on a stand-alone basis. This could result in
higher asset levels, which, in turn, may lead to economies of scale for
NMIT investors, including the Successor Funds.
o The Reorganization is one part of a broader initiative to streamline
the operations of the Nations Funds family, which consists of several
registered investment companies. Over time, management expects to
reduce the number of registered investment companies in the fund family
without necessarily impacting investment alternatives. Management
believes that if it were permitted operate the same number of mutual
funds with fewer registered investment companies, certain efficiencies
and benefits to shareholders in the Nations Funds family should accrue
over the long term. These benefits may include, among other things,
cost savings relating to the reduction of certain accounting, legal and
securities registration costs.
o The Successor Funds will have more flexibility in their investment
policies, including policies that permit them to adopt a
"master/feeder" structure. The master/feeder structure would allow a
Successor Fund to combine its assets with those of other similar funds,
thereby potentially achieving economies of scale and other benefits
that come from greater asset size.
The Reorganization will not result in any change to the investment adviser
or sub-adviser who currently manage the Funds. In addition, the Reorganization
will not result in any change to the total operating expense ratios of the
various classes. For more information about fees and expenses, see "IV. Other
Information About the Reorganization--Comparison of Fees and Expenses."
Similarly, the features and services that are available to Fund shareholders
today will also be available to Successor Fund shareholders after the
Reorganization. The exchange of shares in the Reorganization is expected to be
tax-free under federal law.
III. THE EFFECTS OF THE REORGANIZATION
As noted above, there are some differences between each Fund and its
Successor Fund, which are summarized below:
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o After the Reorganization, Fund shareholders will hold shares in a
series of Nations Institutional Reserves, another registered investment
company in the Nations Funds family. Like the Trust, Nations
Institutional Reserves is a Massachusetts business trust. The ten
trustees of the Trust will be the same ten trustees of Nations
Institutional Reserves.
o Each Successor Fund will become a "feeder" in a master/feeder
structure.
o Each Fund and its Successor Fund will have somewhat different
fundamental and non-fundamental investment policies. For example, the
Successor Funds will have the ability under their fundamental policies
to invest all of their assets in master portfolios rather than in
individual securities.
A DIFFERENT REGISTERED INVESTMENT COMPANY
Federal securities laws largely govern the way that mutual funds operate,
but they do not cover every aspect of a fund's existence and operation. State
law and each fund's governing documents fill in most of the gaps and can create
additional operational rules and restrictions that funds must follow. The Trust
is a Massachusetts business trust. The proposed Reorganization would reorganize
the Fund into a series of Nations Institutional Reserves, which also is a
Massachusetts business trust. For Fund shareholders the "move" to a different
registered investment company would be largely on paper; the Successor Funds
would continue to be advised by the same investment adviser and investment
sub-adviser, and have their shares distributed by the same distributor, as each
Fund is currently. The Successor Funds also would continue to be managed on a
day-to-day basis by Thomas F. Marsico, the Funds' current portfolio manager. The
Funds' other service providers would also be unchanged after the Reorganization.
In addition, the ten trustees of the Trust will be the same ten trustees of
Nations Institutional Reserves.
THE MASTER/FEEDER STRUCTURE
The Successor Funds are feeder funds in a master/feeder structure, which
means simply that each such Successor Fund would invest all of its assets in a
master portfolio with identical investment objectives and principal investment
strategies as the corresponding Successor Fund. Each master portfolio would be a
series of NMIT. Each Successor Fund would be an interestholder in a
corresponding master portfolio. One advantage of a master/feeder structure is
that feeder funds investing in the same master portfolio can reduce their
expenses through sharing the costs of managing a large pool of assets. Another
advantage of such a structure is that the master portfolios will have
opportunities to pursue other distribution channels--such as offshore fund
investors--that would not otherwise be available to stand-alone mutual funds.
While no other feeder funds currently invest in the master portfolios
corresponding to the Successor Funds, such feeders may so invest in the future.
All feeders in a master portfolio will invest on the same terms and
conditions as each Successor Fund and will pay a proportionate share of the
master portfolio's expenses. However, other investors in a master portfolio are
not required to sell their shares at the same offering price as the Successor
Funds and could be sold with different sales loads and on-going administrative
and other expenses. Therefore, Successor Fund shareholders may have different
returns than other shareholders that invest in the master portfolios. In
addition, the Successor Funds may withdraw their entire investment from a master
portfolio if the Board of Trustees of Nations Institutional Reserves determines
that it is in the best interests of such Successor Fund to do so. Also other
investors in a master portfolio may similarly withdraw their investment at any
time. The Successor Funds might withdraw, for example, if a master portfolio
changed its investment objective, policies and limitations in a manner
unacceptable to the Board of Trustees of Nations Institutional Reserves. A
withdrawal could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution) by a master portfolio to a Successor Fund. That
distribution could result in a less diversified portfolio of investments for a
Successor Fund and could adversely affect the liquidity of the Successor Fund's
investment portfolio. In addition, if securities were distributed, the Successor
Fund generally would incur brokerage commissions, capital gains or losses,
and/or other charges in converting the securities to cash. This could result in
a lower net asset value of a shareholder's shares and/or certain tax
consequences for a shareholder.
MODERNIZED AND STREAMLINED INVESTMENT POLICIES AND RESTRICTIONS
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The Funds' investment objectives, principal investment strategies and
investment risks will not change as a result of the Reorganization.
However, the Successor Funds will have a more modernized and streamlined
set of fundamental and non-fundamental investment policies and restrictions.
Some of the Funds' current investment policies and restrictions may limit their
portfolio manager from investing in a security that is both consistent with the
investment objective of a Fund and also a good investment. One reason for
changing some of these investment policies is to remove restrictions that
unnecessarily hamper a portfolio manager's investment discretion. Many of these
restrictions were put in place by the Funds as a result of the directives of
various state securities commissions. Recent changes to federal securities laws
have superseded these directives. Another reason is the desire to migrate
towards uniform investment policies for similarly managed funds in the Nations
Funds family.
One of the differences between the Successor Funds' fundamental policies
and those of the Funds is that the Successor Funds will have the ability under
its fundamental policies to invest all of its assets in a master portfolio
rather than in individual securities.
For a detailed comparison of the fundamental investment policies and
limitations of the Funds and the Successor Funds see Appendix I to this Proxy.
IV. OTHER INFORMATION ABOUT THE REORGANIZATION
COMPARISON OF FEES AND EXPENSES. The Reorganization will not result in any
change to the total operating expense ratios of the various classes. As noted
above, the Successor Funds will become "feeders" in a master/feeder structure.
It is expected that one or more additional mutual funds or collective investment
vehicles will become additional feeders to each corresponding master portfolio.
In such a case, the resulting higher asset levels in each master portfolio could
lead to various benefits, including economies of scale (and possibly cost
savings), for investors in such master portfolios, including the Successor
Funds. However, if one or more additional feeders were not established for
either master portfolio, and a Successor Fund remained the sole investor in a
master/feeder structure, expenses could be higher than they would be for a fund
that invests directly in securities. If this were to occur, the Board of
Trustees of Reserves would most likely consider what further action would be
appropriate, including converting a Successor Fund back into a fund that invests
directly in securities.
INVESTMENT ADVISER AND OTHER SERVICE PROVIDERS. The Funds and Successor
Funds have the same service providers except that certain of the service
providers for the Successor Funds will provide their services indirectly through
the corresponding master portfolios. Upon the Closing, these service providers
will continue to serve the Successor Funds in the capacities indicated below.
SERVICE PROVIDERS FOR THE FUNDS AND THE SUCCESSOR FUNDS
-------------------------------------------------------
Investment Adviser: NationsBanc Advisors, Inc.
Investment Sub-Adviser: Marsico Capital Management, LLC
Distributor: Stephens Inc.
Co-Administrator: NationsBanc Advisors, Inc.
Co-Administrator: Stephens Inc.
Sub-Administrator: The Bank of New York
Custodian: The Bank of New York
Transfer Agent: First Data Investor Services
Group, Inc.
Sub-Transfer Agent: NationsBank, N.A. (for Primary
A and B shares only)
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SERVICE PROVIDERS FOR THE FUNDS AND THE SUCCESSOR FUNDS
-------------------------------------------------------
Independent Auditors: PricewaterhouseCoopers LLP
SALES LOADS, SHAREHOLDER TRANSACTIONS AND SERVICES. Shares of the Funds
and corresponding Successor Funds have both identical front-end or contingent
deferred sales charges, if any, and identical dividend policies. Other features,
such as exchange and redemption policies, of the classes of the Funds and
corresponding Successor Funds are substantially similar.
ACCOUNTING TREATMENT OF THE REORGANIZATION. The Successor Funds will
become the accounting successor of their corresponding Funds as of the Closing,
which means that the financial statements and performance history of the Funds'
and their classes will become those of the corresponding Successor Funds as
though such financial statements and performance history were the Successor
Funds' own.
FEDERAL INCOME TAX CONSEQUENCES. The Funds and Successor Funds each intend
to qualify, as of the Closing, as a separate "regulated investment company"
under the Internal Revenue Code of 1986, as amended (the "Code"). Accordingly,
the Funds and the Successor Funds have been, and expect to continue to be,
relieved of federal income tax liability.
Consummation of the Reorganization with respect to the Funds and the
Successor Funds is subject to the condition that the Trust and Nations
Institutional Reserves receive an opinion from Morrison & Foerster LLP
substantially to the effect that, for federal income tax purposes: (i) the
transfer of all of the assets and liabilities of the Funds to the Successor
Funds in exchange for shares of the Successor Funds, and the distribution of
those shares to shareholders of the Funds, will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and the Funds and the
Successor Funds will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code in respect of the Reorganization; (ii) no gain or
loss will be recognized by the Funds upon the transfer of their assets and
liabilities to the Successor Funds solely in exchange for the shares of the
Successor Funds; (iii) no gain or loss will be recognized by the Successor Funds
upon the receipt of the assets and assumption of liabilities of the Funds solely
in exchange for the shares of the Successor Funds; (iv) the basis of the Funds'
assets received by the Successor Funds pursuant to the Reorganization will be
the same as the basis of those assets in the hands of the Funds immediately
prior to the Reorganization; (v) the holding period of the Funds' assets in the
hands of the Successor Funds will include the period for which such assets have
been held by the Funds; (vi) no gain or loss will be recognized by the Funds on
the distribution to its shareholders of the shares of the Successor Funds; (vii)
no gain or loss will be recognized by the shareholders of the Funds upon their
receipt of the shares of the Successor Funds in exchange for such shareholders'
shares of the Funds; (viii) the basis of the shares of the Successor Funds
received by the shareholders of the Funds will be the same as the basis of the
shares of the Funds surrendered by such shareholders pursuant to the
Reorganization; (ix) the holding period for the shares of the Successor Funds
received by shareholders of the Funds will include the period during which such
shareholders held Fund shares surrendered in exchange therefor, provided that
such Fund shares are held as capital assets in the hands of the Funds'
shareholders on the date of the exchange; and (x) each Successor Fund will
succeed to and take into account the tax attributes, described in Section 381(c)
of the Code, of the corresponding Fund as of the date of the Closing, subject to
the conditions and limitations specified in the Code. Shareholders of the Funds
should note, however, that the sale of securities by the Funds prior to the
Closing whether in the ordinary course of business or in anticipation of the
Closing, could result in a taxable capital gains distribution to them by the
Funds taxable as net capital gain prior to the closing.
The opinion of Morrison & Foerster LLP with respect to federal income tax
consequences described above will be based upon facts, representations and
assumptions set forth or referred to in the opinion. These representations
include factual representations to be made in certificates delivered to Morrison
& Foerster LLP by the management of the Trust and Reserves. Morrison & Foerster
LLP will neither verify, audit or otherwise confirm the validity of such facts,
representations and assumptions and its opinion may be jeopardized if any of
these facts, representations and assumptions are incorrect in any material
respect. In addition, the Trust and Reserves have not sought and will not seek,
a private ruling from the Internal Revenue Service ("IRS") with respect to the
federal income tax consequences of the Reorganization. The opinion of Morrison &
Foerster LLP is not binding on the IRS and does not preclude the IRS from
adopting a contrary position. Such a contrary position could be sustained by a
court. If the opinion of Morrison & Foerster LLP cannot be relied upon or the
6
<PAGE>
IRS adopts a contrary position which is sustained, the Funds and their
shareholders might have adverse tax consequences, including the taxable receipt
of shares of the Successor Funds and a new holding period in such shares.
However, the Trust and Reserves believe that this possibility is remote and that
the exchange of the Successor Funds' shares for Funds' shares is expected to be
tax-free under federal income tax law. Shareholders of the Funds should consult
their own advisers concerning the potential tax consequences of the
Reorganization to them, including any applicable foreign, state or local income
tax consequences.
BOARD CONSIDERATION. The Trust's Board of Trustees unanimously voted to
approve the Reorganization Agreement at meetings held in March and May 1999. In
reviewing the proposed Reorganization, the Board considered the potential impact
of the Reorganization on the Funds' shareholders. The Board (with the advice and
assistance of independent counsel) reviewed and took into account, among other
things: (1) the Reorganization as part of a broader initiative to streamline the
operations of the Nations Funds family; (2) the fact that the Successor Funds
will be feeders in a master/feeder structure; (3) the investment objective,
principal investment strategies, investment risks, and policies and limitations
of each Fund, and their compatibility with those of each corresponding Successor
Fund; (4) the anticipated tax-free nature of the exchange contemplated by the
Reorganization; (5) the fact that total operating expense ratios would be the
same for each class of each Fund and the corresponding class of the
corresponding Successor Fund, including the fact that Successor Funds' aggregate
master and feeder level fees and expenses would be the same, as of the
Reorganization, as if each corresponding Successor Fund invested directly in
securities; (6) the fact that the expenses associated with the Reorganization
would be borne by Fund shareholders; and (7) that shareholders would remain
invested in the Funds if shareholders did not approve the Reorganization. Based
upon its evaluation of these factors, and its consideration of the expected
benefits of the Reorganization (discussed under "II--The Purpose of the
Reorganization"), and in light of their fiduciary duties under federal and state
law, the Trust's Board of Trustees, including all of the non-interested members
of the Board, determined that the proposed Reorganization is in the best
interests of the shareholders of the Funds and that the interests of the
shareholders of the Funds will not be diluted as a result of the Reorganization.
THE TRUST'S BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE REORGANIZATION AGREEMENT.
V. VOTING INFORMATION
GENERAL INFORMATION. This Proxy is being furnished in connection with the
solicitation of proxies for the Meeting by the Trust's Board of Trustees. It is
expected that the solicitation of proxies will be primarily by mail. Officers
and agents of the Trust also may solicit proxies by telephone, telegraph or
personal interview. Any third party retained to assist in the solicitation will
be paid by the Funds. Any shareholder giving a proxy may revoke it at any time
before it is exercised (i) by submitting to the Trust a written notice of
revocation, (ii) by submitting to the Trust a subsequently dated proxy or by
attending the Meeting and voting in person.
Only shareholders of record at the close of business on May 13, 1999,
will be entitled to vote at the Meeting. On that date, the following number
of shares of each Fund were outstanding and entitled to be voted: Nations
Marsico Focused Equities Fund--47,878,585 and Nations Marsico Growth & Income
Fund--15,500,512.
Each whole and fractional share is entitled to a whole or fractional vote.
If the accompanying proxy ballot is executed and returned in time for the
Meeting, the shares covered thereby will be voted in accordance with the proxy
on all matters that may properly come before the Meeting.
Significant Shareholders. As of May 13, 1999, the officers and Trustees of
the Trust as a group owned less than 1% of either Fund. The tables below show
the name, address and share ownership of each person known to each Trust to have
beneficial or record ownership with respect to 5% or more of a class of the
Funds as of May 13, 1999.
<TABLE>
<CAPTION>
CLASS; AMOUNT PERCENTAGE
NAME AND OF SHARES OWNED; PERCENTAGE PERCENTAGE OF FUND
FUND ADDRESS TYPE OF OWNERSHIP OF CLASS OF FUND POST-CLOSING
- ---- ------- ----------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Nations Marsico NationsBank, N.A. Primary A 52.90% 8.16% 8.16%
Focused Equities Attn: Tony Farrer 3,905,437.55;
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
CLASS; AMOUNT PERCENTAGE
NAME AND OF SHARES OWNED; PERCENTAGE PERCENTAGE OF FUND
FUND ADDRESS TYPE OF OWNERSHIP OF CLASS OF FUND POST-CLOSING
- ---- ------- ----------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Fund 1401 Elm Street, 11th Floor record
Dallas, TX 75202
Charles Schwab & Co. Inc. Primary A 38.88% 6.00% 6.00%
Special Custody Account 2,870,369.54;
For Benefit of Its Customers record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
Stephens Inc. Primary B 100.00% 0.00% 0.00%
Attn: Cindy Cole 1.01; record
111 Center Street
Little Rock, AR 72201
Charles Schwab & Co. Inc. Investor A 18.41% 6.29% 6.29%
Special Custody Account 3,012,899.15;
For Benefit of Its Customers record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
Merrill Lynch, Pierce, Fenner & Investor A 11.01%` 3.76% 3.76%
Smith Inc. For The Sole Benefit of 1,801,265.37
Its Customers
Attn: Service Team
4800 Deer Lake Drive East,
3rd Floor
Jacksonville, FL
32246
Merrill Lynch, Pierce, Fenner & Investor C 42.29% 1.40% 1.40%
Smith Inc. For The Sole Benefit of 668,230.67;
Its Customers record
Attn: Service Team
4800 Deer Lake Drive East,
3rd Floor
Jacksonville, FL 32246
Nations NationsBank, N.A. Primary A 33.99% 8.92% 8.92%
Marsico Growth Attn: Tony Farrer 1,383,177.54;
& Income Fund 1401 Elm Street, record
11th Floor
Dallas, TX 75202
Charles Schwab & Co. Inc. Primary A 21.53% 5.65% 5.65%
Special Custody Account 876,135.53;
For Benefit of Its Customers record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA 94104
FTC & Co. Primary A 16.94% 4.45% 4.45%
Data Lynx House Acct 04/13/98 689,176.29;
PO Box 173736 record
Denver, CO 80217-3736
Stephens Inc. Primary B 100.00% 0.00% 0.00%
Attn: Cindy Cole 1.00;
111 Center Street record
Little Rock, AR 72201
Merrill Lynch, Pierce, Fenner & Investor A
Smith Inc. For The Sole Benefit of 1,791,698.97; 53.00% 11.56% 11.56%
Its Customers record
Attn: Service Team
4800 Deer Lake Drive East,
3rd Floor
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
CLASS; AMOUNT PERCENTAGE
NAME AND OF SHARES OWNED; PERCENTAGE PERCENTAGE OF FUND
FUND ADDRESS TYPE OF OWNERSHIP OF CLASS OF FUND POST-CLOSING
- ---- ------- ----------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C>
Jacksonville, FL 32246
Charles Schwab & Co. Inc. Investor A 11.63% 2.54% 2.54%
Special Custody Account 393,240.33;
For Benefit of Its Customers record
Attn: Mutual Funds
101 Montgomery Street
San Francisco, CA
94104
Merrill Lynch, Pierce, Fenner & Investor C 34.57% 0.80% 0.80%
Smith Inc. For The Sole Benefit of 124,183.72;
Its Customers record
Attn: Service Team
4800 Deer Lake Drive East,
3rd Floor
Jacksonville, FL
32246
NFSC FEBO #W50-714526 Investor C 6.99% 0.16% 0.16%
Ramson, Inc. 25,097.01;
PO Box 9185 record
Jonesboro, AR 72403
</TABLE>
For purposes of the 1940 Act, any person who owns directly or through one
or more controlled companies more than 25% of the voting securities of a company
is presumed to "control" such company. Accordingly, to the extent that a
shareholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a class, or is identified as the holder of record of
more than 25% of a class and has voting and/or investment power, it may be
presumed to control such class.
QUORUM. In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present at the Meeting but sufficient votes to
approve the Reorganization Agreement are not received, one or more
adjournment(s) may be proposed to permit further solicitation of proxies. Any
adjourned session or sessions may be held at a reasonable date after the date
set for the original Meeting without notice except announcement at the Meeting,
and, under the Trust's By-Laws, may be held until a quorum is obtained. If any
adjournment is proposed, the persons named as proxies will vote those proxies in
their sole discretion.
A quorum is constituted with respect to the Funds by the presence in
person or by proxy of the holders of more than one-half of the outstanding
shares of the Fund entitled to vote at the Meeting. For purposes of determining
the presence of a quorum for transacting business at the Meeting, abstentions
will be treated as shares that are present at the Meeting but which have not
been voted. Abstentions will have the effect of a "no" vote for purposes of
obtaining the requisite approvals of the Reorganization Agreement. Broker
"non-votes" (that is, proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owners or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated the same
way as abstentions.
ANNUAL MEETINGS AND SHAREHOLDER MEETINGS. Because the Trust does not hold
annual meetings, there is no stated deadline for submitting shareholder
proposals for inclusion in any future proxy statement of the Trust. Subject to
certain conditions, which are set forth in the Trust's Declaration of Trust and
Code of Regulations, holders of at least 10% of the outstanding shares of either
Fund may have the right to call a meeting of shareholders for the purpose of
voting upon the question of removal of Trustees. In such a case, shareholders
will be assisted by the Trust in shareholder communications.
SHAREHOLDER APPROVAL. The Reorganization Agreement is being submitted for
approval at the Meeting by the Funds' shareholders pursuant to the Trust's
Articles of Incorporation and By-Laws, and was unanimously approved by the
Trust's Boards of Trustees. The Reorganization Agreement must be approved by a
majority of the shares present at the Meeting in person or by proxy.
9
<PAGE>
A vote of the shareholders of the Successor Funds is not being solicited,
since their approval or consent is not necessary for the Reorganization.
OTHER BUSINESS. The Trust's Board knows of no other business to be brought
before the Meeting. However, if any other matters come before the Meeting, it is
the intention that proxies which do not contain specific restrictions to the
contrary will be voted on such matters in accordance with the judgment of the
persons named in the enclosed form of proxy.
HOW TO OBTAIN ADDITIONAL INFORMATION ABOUT THE FUNDS. Additional
information about the Funds is included in its most recent prospectuses and
statement of additional information. You may obtain a prospectus or statement of
additional information without charge by calling 1-800-321-7854 or by writing
the Trust at: Nations Fund Trust, c/o Stephens Inc., One Bank of America Plaza,
33rd Floor, Charlotte, North Carolina 28255.
Reports and other information filed by the Trust can be inspected and
copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549 and at the offices of Nations listed above.
In addition, these materials can be inspected and copied at the SEC's Regional
Offices at 7 World Trade Center, Suite 1300, New York, New York 10048, and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such materials also can be obtained from the Public
Reference Branch, Office of Consumer Affairs and Information Services,
Securities and Exchange Commission, Washington, D.C. 20549, at prescribed rates.
In addition, the SEC maintains a web site (www.sec.gov) that contains reports,
other information and proxy statements filed by the Trust.
FINANCIAL STATEMENTS. The audited financial statements and financial
highlights for the Funds for the fiscal year ended March 31, 1999, and the
independent accountants report thereon, are incorporated by reference into this
Proxy.
SHAREHOLDER INQUIRIES. For additional information call 1-800-790-6347
or write to the Trust at the address on the cover page of this Proxy.
* * *
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
PLEASE VOTE BY RETURNING YOUR PROXY BALLOT TODAY, EITHER IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE AT (704) 388-2641. YOU MAY ALSO SUBMIT
YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED BELOW.
- --------------------------------------------------------------------------------
TWO QUICK AND EASY WAYS TO SUBMIT YOUR PROXY
As a valued Fund shareholder, your proxy vote is important to us. That's why
we've made it faster and easier to submit your proxy at YOUR convenience, 24
hours a day. After reviewing the enclosed PROXY STATEMENT, select one of the
following quick and easy methods to submit your proxy - ACCURATELY and QUICKLY.
ON-LINE BY TOLL-FREE PHONE CALL
1. Read the enclosed PROXY STATEMENT 1. Read the enclosed PROXY STATEMENT
and have your PROXY BALLOT(S)* at and have your PROXY BALLOT(S)* at
hand. hand.
2. Go to Web site WWW.PROXYVOTE.COM 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number 3. Enter the 12-digit Control Number
found on your PROXY BALLOT(S). found on your PROXY BALLOT(S).
4. Submit your proxy using the 4. Submit your proxy using the
easy-to-follow instructions. easy-to-follow instructions.
* DO NOT MAIL THE PROXY BALLOT(S) IF SUBMITTING YOUR PROXY BY INTERNET OR
TELEPHONE.
- --------------------------------------------------------------------------------
10
<PAGE>
11
<PAGE>
APPENDIX I
COMPARISON OF FUNDAMENTAL INVESTMENT POLICIES AND LIMITATIONS OF THE FUNDS
AND THE SUCCESSOR FUNDS
FUNDAMENTAL INVESTMENT POLICIES AND
LIMITATIONS
The Fund may not: The Successor Fund may not:
1. Underwrite securities issued by any 1. Underwrite any issue of securities
other person, except to the extent within the meaning of the 1933 Act
that the purchase of securities and except when it might technically be
the later disposition of such deemed to be an underwriter
securities in accordance with the either (a) in connection with the
Fund's investment program may be disposition of a portfolio
deemed an underwriting. This security, or (b) in connection
restriction shall not limit the with the purchase of securities
Fund's ability to invest in directly from the issuer thereof
securities issued by other in accordance with its investment
registered investment companies. objective. This restriction shall
not limit the Fund's ability to
invest in securities issued by
other registered investment
companies.
2. Invest in real estate or real 2. Purchase or sell real estate,
estate limited partnership except a Fund may purchase
interests. (A Fund may, however, securities of issuers which deal
purchase and sell securities or invest in real estate and may
secured by real estate or interests purchase securities which are
therein or issued by issuers which secured by real estate or
invest in real estate or interests interests in real estate.
therein.) This restriction does
not apply to real estate limited
partnerships listed on a national
stock exchange (E.G., the New York
Stock Exchange).
3. Purchase or sell commodity 3. Purchase or sell commodities,
contracts except that each Fund except that a Fund may to the
may, to the extent appropriate extent consistent with its
under its investment policies, investment objective, invest in
purchase publicly traded securities securities of companies that
of companies engaging in whole or purchase or sell commodities or
in part in such activities, may which invest in such programs, and
enter into futures contracts and purchase and sell options, forward
related options, may engage in contracts, futures contracts, and
transactions on a when-issued or options on futures contracts.
forward commitment basis, and may This limitation does not apply to
enter into forward currency foreign currency transactions
contracts in accordance with its including without limitation
investment policies. forward currency contracts.
I-1
<PAGE>
4. Purchase any securities which would 4. Purchase any securities which would
cause 25% or more of the value of cause 25% or more of the value of its
the Fund's total assets at the time total assets at the time of purchase
of such purchase to be invested in to be invested in the securities of
the securities of one or more one or more issuers conducting their
issuers conducting their principal principal business activities in the
activities in the same industry, same industry, provided that: (a)
provided that this limitation does there is no limitation with respect
not apply to investments in U.S. to obligations issued or guaranteed
Government Obligations. by the U.S. government, any state or
territory of the United States, or
any of their agencies,
instrumentalities or political
subdivisions, and (b)
notwithstanding this limitation or
any other fundamental investment
limitation, assets may be invested
in the securities of one or more
diversified management investment
companies to the extent permitted
by the 1940 Act and the rules and
regulations thereunder.
5. Make loans, except that a Fund may 5. Make loans, except to the extent
purchase and hold debt instruments permitted by the 1940 Act.
(whether such instruments are part
of a public offering or privately
placed), may enter into repurchase
agreements and may lend portfolio
securities in accordance with its
investment policies.
6. Borrow money or issue senior 6. Borrow money, issue senior
securities as defined in the securities or mortgage, pledge or
Investment Trust Act of 1940, as hypothecate its assets except to
amended (the "1940 Act") except the extent permitted under the
that (a) a Fund may borrow money 1940 Act.
from banks for temporary purposes
in amounts up to one-third of the
value of such Fund's total assets
at the time of borrowing, provided
that borrowings in excess of 5% of
the value of such Fund's total
assets will be repaid prior to the
purchase of additional portfolio
securities by such Fund, (b) a Fund
may enter into commitments to
purchase securities in accordance
with the Fund's investment program,
including delayed delivery and
when-issued securities, which
commitments may be considered the
issuance of senior securities, and
(c) a Fund may issue multiple
classes of shares in accordance
with SEC regulations or exemptions
under the 1940 Act. The purchase
or sale of futures contracts and
related options shall not be
considered to involve the borrowing
of money or issuance of senior
securities. Each Fund may enter
into reverse repurchase agreements
or dollar roll transactions. The
purchase or sale of futures
contracts and related options shall
not be considered to involve the
borrowing of money or issuance of
senior securities.
I-2
<PAGE>
7. Except for the Nations Marsico 7. Except for the Nations Marsico
Focused Equities Fund, purchase Focused Equities Fund, purchase
securities of any one issuer (other securities (except securities issued
than U.S. Government Obligations) or guaranteed by the U.S.
if, immediately after such Government, its agencies or
purchase, more than 5% of the value instrumentalities) of any one
of such Fund's total assets would issuer if, as a result, more than
be invested in the securities of 5% of its total assets will be
such issuer, except that up to 25% invested in the securities of such
of the value of the Fund's total issuer or it would own more than
assets may be invested without 10% of the voting securities of
regard to these limitations and such issuer, except that (a) up to
with respect to 75% of such Fund's 25% of its total assets may be
assets, such Fund will not hold invested without regard to these
more than 10% of the voting limitations and (b) a Fund's
securities of any issuer. The assets may be invested in the
Nations Marsico Focused Equities securities of one or more
Fund may not purchase securities of diversified management investment
any one issuer (other than U.S. companies to the extent permitted
Government Obligations) if, by the 1940 Act. The Nations
immediately after such purchase, Marsico Focused Equities Fund may
more than 25% of the value of a not purchase securities of any one
Fund's total assets would be issuer (other than U.S. Government
invested in the securities of one Obligations) if, immediately after
issuer, and with respect to 50% of such purchase, more than 25% of
such Fund's total assets, more than the value of a Fund's total assets
5% of its assets would be invested would be invested in the
in the securities of one issuer. securities of one issuer, and with
respect to 50% of such Fund's
total assets, more than 5% of its
assets would be invested in the
securities of one issuer.
8. Purchase any securities on margin
(except for such short-term credits
as are necessary for the clearance
of purchases and sales of portfolio
securities) or sell any securities
short (except against the box.) For
purposes of this restriction, the
deposit or payment by the Fund of
initial or maintenance margin
connection with futures contracts
and related options and options on
securities is not considered to be
the purchase of a security on
margin.
I-3
<PAGE>
EX-2
This AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made as of
this 28th day of June, 1999 by and between Nations Fund Trust (the "Trust"), a
Massachusetts business trust, for itself and on behalf of its Nations Marsico
Focused Equities Fund and Nations Marsico Growth & Income Fund and Nations
Institutional Reserves ("Reserves"), a Massachusetts business trust, for itself
and on behalf of its Nations Marsico Focused Equities Fund and Nations Marsico
Growth & Income Fund.
WHEREAS, the Trust and Reserves are open-end management investment
companies registered with the Securities and Exchange Commission (the "SEC")
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the parties desire that the Fund Assets and Liabilities (as
defined below) of the Trust's Nations Marsico Focused Equities Fund and Nations
Marsico Growth & Income Fund (collectively, the "Acquired Funds") be conveyed to
and be acquired and assumed, respectively, by Reserves' Nations Marsico Focused
Equities Fund and Nations Marsico Growth & Income Fund (collectively, the
"Acquiring Funds") in exchange for shares of equal U.S. dollar value of such
Acquiring Funds which shall thereafter promptly be distributed to the
shareholders of the corresponding Acquired Funds in connection with its
liquidation as described in this Agreement and set forth in Schedule A attached
hereto (the "Reorganization"); and
WHEREAS, the parties intend that the Reorganization qualify as a
"reorganization," within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), and that the Acquiring Funds and the
Acquired Funds will each be a "party to a reorganization," within the meaning of
Section 368(b) of the Code, with respect to the Reorganization.
NOW, THEREFORE, in accordance with the terms and conditions described
herein, the Acquired Funds and Acquiring Funds shall be consolidated as follows:
1. Conveyance of Fund Assets and Liabilities of the Acquired Funds.
(a)Except as provided below, at the Effective Time of the
Reorganization (as defined in Section 8) all assets of every kind,
and all interests, rights, privileges and powers of the Acquired
Funds (the "Fund Assets"), subject to all liabilities of the
Acquired Funds existing as of the Effective Time of the
Reorganization (the "Liabilities"), shall be transferred by each
Acquired Fund to each corresponding Acquiring Fund and shall be
accepted and assumed by such Acquiring Fund, as more particularly
set forth in this Agreement, such that at and after the Effective
Time of the Reorganization: (i) all Fund Assets of the Acquired
Funds shall become the assets of the Acquiring Funds; and (ii) all
Liabilities of the Acquired Funds shall attach to the Acquiring
Funds, enforceable against the Acquiring Funds to the same extent as
if originally incurred by it.
(b)It is understood and agreed that the Fund Assets shall include all
property and assets of any nature whatsoever, including, without
limitation, all cash, cash equivalents, securities, claims (whether
absolute or contingent, known or unknown, accrued or unaccrued) and
receivables (including dividend and interest receivables) owned or
exercisable by the Acquired Funds, and any deferred or prepaid
expenses shown as an asset on the Acquired Funds' books, that the
Liabilities of the Acquired Funds shall include all liabilities,
whether known or unknown, accrued or unaccrued, absolute or
contingent, in all cases, existing at the Effective Time of the
Reorganization.
(c)At least fifteen (15) business days prior to the Closing Date (as
defined in Section 8), the Acquired Funds will provide to, or cause
to be provided to, the Acquiring Funds, a schedule of its
securities, other assets and its known liabilities. It is understood
and agreed that the Acquired Funds may sell any of the securities or
other assets shown on such schedule prior to the Effective Time of
the Reorganization but will not, without the prior approval of the
Acquiring Funds, acquire any additional securities other than
securities that the Acquiring Funds is not permitted to purchase in
accordance with its
<PAGE>
stated investment objective and policies. At least ten (10) business
days prior to the Closing Date, the Acquiring Funds will advise the
Acquired Funds of any investments of the Acquired Funds shown on
such schedule that the Acquiring Funds would not be permitted to
hold, pursuant to its stated investment objective and policies or
otherwise. The Acquired Funds, if requested by the Acquiring Funds,
will dispose of any such securities prior to the Closing Date to the
extent practicable and consistent with applicable legal
requirements. In addition, if it is determined that the investment
portfolios of the Acquired Funds and Acquiring Funds, when
aggregated, would contain investments exceeding certain percentage
limitations applicable to the Acquiring Funds, the Acquired Funds,
if requested by the Acquiring Funds, will dispose of a sufficient
amount of such investments as may be necessary to avoid violating
such limitations as of the Effective Time of the Reorganization.
(d)The Fund Assets shall be transferred and conveyed to the Acquiring
Funds on the following basis:
(1)In exchange for the transfer of the Fund Assets, the Acquiring
Funds shall simultaneously issue to the Acquired Funds at the
Effective Time of the Reorganization full and fractional Shares
of the Acquiring Funds, as set forth in Schedule A attached
hereto, having an aggregate net asset value equal to the net
value of the Fund Assets minus Liabilities so conveyed and
assumed, all determined in accordance with this Agreement. In
this regard, the number of full and fractional shares of the
Acquiring Funds delivered to the Acquired Funds shall be
determined by dividing the value of the Fund Assets minus
Liabilities, computed in the manner and as of the time and date
set forth in this Agreement, by the net asset value of one
Acquiring Funds share of such designated class, computed in the
manner and as of the time and date set forth in this Agreement.
(2)The net asset value of shares to be delivered by the Acquiring
Funds, and the net value of the Fund Assets minus Liabilities to
be conveyed by the Acquired Funds and assumed by the Acquiring
Funds, shall, in each case, be determined as of the Valuation
Time as defined in Section 3. The net asset value of Shares of
the Acquiring Funds shall be computed in accordance with its then
current valuation procedures. In determining the value of the
Fund Assets, each security to be included in the Fund Assets
shall be priced in accordance with the Acquiring Funds' then
current valuation procedures.
2. Liquidation of the Acquired Funds. At the Effective Time of the
Reorganization, the Acquired Funds shall make a liquidating
distribution to their shareholders as follows: Shareholders of record
of the Acquired Funds shall be credited with full and fractional shares
of the respective Shares that are issued by the Acquiring Funds in
connection with the Reorganization corresponding to the Acquired Funds
shares that are held of record by the shareholder at the Effective Time
of the Reorganization. Each such shareholder also shall have the right
to receive any unpaid dividends or other distributions which were
declared before the Effective Time of the Reorganization with respect
to the Acquired Funds shares that are held of record by the shareholder
at the Effective Time of the Reorganization, and Reserves shall record
on its books the ownership of the respective Acquiring Funds shares by
such shareholders (the "Transferor Record Holders"). All of the issued
and outstanding shares of the Acquired Funds at the Effective Time of
the Reorganization shall be redeemed and canceled on the books of
Reserves at such time. As soon as reasonably possible after the
Effective Time of the Reorganization, the Trust shall wind up the
affairs of the Acquired Funds and shall file any final regulatory
reports, including but not limited to any Form N-SAR and Rule 24f-2
filings, with respect to the Acquired Funds, and also shall take all
other
2
<PAGE>
steps as are necessary and proper to effect the termination or
declassification of the Acquired Funds in accordance with all
applicable laws.
3. Valuation Time. The "Valuation Time" shall be the time as of which the
net asset value of each class of shares of each of the Acquired Funds
and the Acquiring Funds is determined pursuant to their respective
valuation procedures on the Closing Date or such earlier or later time
as may be mutually agreed to in writing by the parties hereto.
4. Certain Representations, Warranties and Agreements of the Trust on
behalf of its Acquired Funds. The Trust, on behalf of itself and, where
appropriate, its Acquired Funds, represents and warrants to, and agrees
with, Reserves on behalf of the corresponding Acquiring Funds as
follows, with such representations, warranties and agreements made on
behalf of the Acquired Funds on a several (and not joint, or joint and
several) basis:
(a)The Trust is a business trust, duly created, validly existing and
in good standing under the laws of the Commonwealth of
Massachusetts. The Trust is registered with the SEC as an open-end
management investment company under the 1940 Act, and such
registration is in full force and effect.
(b)The Trust has the power to own all of its properties and assets and
to consummate the transactions contemplated herein, and has all
necessary federal, state and local authorizations to carry on its
business as now being conducted and to consummate the transactions
contemplated by this Agreement.
(c)This Agreement has been duly authorized by the Board of Trustees of
the Trust on behalf of its Acquiring Funds, and has been executed
and delivered by duly authorized officers of the Trust, and
represents a valid and binding contract, enforceable in accordance
with its terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium, and other similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles. The execution and delivery of this
Agreement does not, and, subject to the approval of shareholders
referred to in Section 6, the consummation of the transactions
contemplated by this Agreement will not, violate the Declaration of
Trust or Code of Regulations of the Trust, or any material agreement
or arrangement to which the Trust is a party or by which it is
bound.
(d)The Trust's Acquired Funds have elected to qualify and have
qualified as regulated investment companies under Part I of
Subchapter M of Subtitle A, Chapter 1, of the Code, as of and since
their first taxable year; have been regulated investment companies
under such Part of the Code at all times since the end of their
first taxable year when they so qualified; and qualify and shall
continue to qualify as regulated investment companies for their
taxable year ending upon its liquidation.
(e)The Trust has valued, and will continue to value, the portfolio
securities and other assets of its Acquired Funds in accordance with
applicable legal requirements.
(f)The proxy statement and form of proxy (the "Proxy Statement") from
its effective date with the SEC, through the time of the
shareholders meeting referred to in Section 6 and the Effective Time
of the Reorganization, insofar as they relate to the Trust, (i)
shall comply in all material respects with the provisions of the
Securities Exchange Act of 1934 as amended (the "1934 Act") and the
1940 Act, the rules and regulations thereunder, and state securities
laws, and (ii) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein not misleading.
(g)All of the issued and outstanding shares of the Trust's Acquired
Funds have been validly issued and are fully paid and
non-assessable, and were offered for sale and sold in
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conformity with the registration requirements of all applicable
federal and state securities laws.
(h)The Trust shall operate the business of its Acquired Funds in the
ordinary course between the date hereof and the Effective Time of
the Reorganization, it being agreed that such ordinary course of
business will include the declaration and payment of customary
dividends and distributions and any other dividends and
distributions deemed advisable in anticipation of the
Reorganization. Notwithstanding anything herein to the contrary, the
Trust may take all appropriate action necessary in order for the
Trust to receive the opinion provided for in Sections 9(e) and
10(g).
(i)At the Effective Time of the Reorganization, the Trust's Acquired
Funds will have good and marketable title to the Fund Assets and
full right, power and authority to assign, deliver and otherwise
transfer such assets.
(j)At the Effective Time of the Reorganization, all federal and other
tax returns and reports of the Acquired Funds required by law to
have been filed by such time shall have been filed, and all federal
and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof and, to the best
knowledge of management of the Trust, no such return or report shall
be currently under audit and no assessment shall have been asserted
with respect to such returns or reports.
5. Certain Representations, Warranties and Agreements of Reserves on
behalf of the Acquiring Funds. Reserves, on behalf of itself and
where appropriate, the Acquiring Funds, represents and warrants to,
and agrees with each of the Trust on behalf of the Acquired Funds as
follows, with such representations, warranties and agreements made
on behalf of the Acquiring Funds on a several (and not joint, or
joint and several) basis:
(a)Reserves is a business trust duly created, validly existing and in
good standing under the laws of the Commonwealth or Massachusetts
and is registered with the SEC as an open-end management investment
company under the 1940 Act and such registration is in full force
and effect.
(b)Reserves has the power to own all of its properties and assets and
to consummate the transactions contemplated herein, and has all
necessary federal, state and local authorizations to carry on its
business as now being conducted and to consummate the transactions
contemplated by this Agreement.
(c)This Agreement has been duly authorized by the Board of Trustees of
Reserves on behalf of the Acquiring Funds, and executed and
delivered by duly authorized officers of Reserves, and represents a
valid and binding contract, enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency,
reorganization, arrangement, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles. The execution and delivery of this
Agreement does not, and the consummation of the transactions
contemplated by this Agreement will not, violate the Declaration of
Trust or By-Laws of Reserves or any material agreement or
arrangement to which it is a party or by which it is bound.
(d)The Acquiring Funds has elected to qualify and has qualified as a
regulated investment company under Part I of Subchapter M of
Subtitle A, Chapter 1, of the Code, as of and since its first
taxable year; has been a regulated investment company under such
Part of the Code at all times since the end of its first taxable
year when it so qualified; and qualifies and shall continue to
qualify as a regulated investment company for its current taxable
year.
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(e)Reserves has valued, and will continue to value, the portfolio
securities and other assets of the Acquiring Funds in accordance
with applicable legal requirements.
(f)The Proxy Statement, from its effective date with the SEC through
the time of the shareholders meeting referred to in Section 6 and at
the Effective Time of the Reorganization, insofar as it relates to
Reserves, or the Acquiring Funds, or the Primary A Shares, Primary B
Shares, Investor A Shares, Investor B Shares or Investor C Shares of
the Acquiring Funds to be issued pursuant thereto (i) shall comply
in all material respects with the provisions of the Securities Act
of 1933, as amended, (the "1933 Act"), the 1934 Act and the 1940
Act, the rules and regulations thereunder, and state securities
laws, and (ii) shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein not misleading.
(g)The shares of the Acquiring Funds to be issued and delivered to the
Acquired Funds for the account of the shareholders of the Acquired
Funds, pursuant to the terms hereof, shall have been duly authorized
as of the Effective Time of the Reorganization and, when so issued
and delivered, shall be duly and validly issued, fully paid and
non-assessable, and no shareholder of the Acquiring Funds shall have
any preemptive right of subscription or purchase in respect thereto.
(h)All of the issued and outstanding shares of the Acquiring Funds
have been validly issued and are fully paid and non-assessable, and
were offered for sale and sold in conformity with the registration
requirements of all applicable federal and state securities laws.
(i)Reserves shall operate the business of the Acquiring Funds in the
ordinary course between the date hereof and the Effective Time of
the Reorganization, except that Reserves shall complete all measures
in respect of the Acquiring Funds prior to the Effective Time of the
Reorganization to ensure that the Reorganization does not qualify as
a "reorganization" within the meaning of Section 368 of the Code,
regardless of whether such measures are in the ordinary course. It
is understood that such ordinary course of business will include the
declaration and payment of customary dividends and distributions and
any other dividends and distributions deemed advisable in
anticipation of the Reorganization.
(j)At the Effective Time of the Reorganization, all federal and other
tax returns and reports of the Acquiring Funds required by law to
have been filed by such time shall have been filed, and all federal
and other taxes shall have been paid so far as due, or provision
shall have been made for the payment thereof and, to the best
knowledge of management of Reserves, no such return or report shall
be currently under audit and no assessment shall have been asserted
with respect to such returns or reports.
7. Shareholder Action. As soon as practicable after the effective date of
the Proxy Statement each the Trust shall hold a meeting(s) of the
shareholders of the Acquired Funds for the purpose of considering and
voting upon:
(a) approval of this Agreement and the Reorganization
contemplated hereby; and
(b) such other matters as may be determined by the Board of
Trustees of the Trust.
8. Regulatory Filings. As soon as practicable, the Trust shall file a
Proxy Statement with the SEC, and, where required, with appropriate
state securities regulatory authorities.
9. Closing Date, Effective Time of the Reorganization. The "Closing Date"
shall be August 20, 1999, or such earlier or later date as may be
mutually agreed in writing by the parties hereto. Delivery of the Fund
Assets and the shares of the Acquiring Funds to be issued pursuant to
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Section 1 and the liquidation of the Acquired Funds pursuant to Section
2 shall occur on the day following the Closing Date, whether or not
such day is a business day, or on such other date, and at such place
and time, as may be mutually agreed in writing, by the parties hereto.
The date and time at which such actions are taken are referred to
herein as the "Effective Time of the Reorganization." To the extent any
Fund Assets are, for any reason, not transferred at the Effective Time
of the Reorganization, the Trust shall cause such Fund Assets to be
transferred in accordance with this Agreement at the earliest
practicable date thereafter.
10.Conditions to the Trust's Obligations on Behalf of its Acquired Funds.
The obligations of the Trust hereunder shall be subject to the
following conditions precedent:
(a)This Agreement and the Reorganization shall have been approved by
the Board of Trustees of the Trust and by a majority of the
shareholders of its Acquired Funds in the manner required by
applicable law and this Agreement.
(b)All representations and warranties of the Trust made in this
Agreement shall be true and correct in all material respects as if
made at and as of the Valuation Time and the Effective Time of the
Reorganization.
(c)The Trust shall have delivered a certificate executed in its name
by its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory and dated as of the
Closing Date, to the effect that the representations and warranties
of the Acquiring Funds made in this Agreement are true and correct
at and as of the Valuation Time and that, to the best of its
knowledge, the Fund Assets include only assets which the Trust's
Acquiring Funds may properly acquire under its investment
objectives, policies and limitations and may otherwise be lawfully
acquired by such Acquiring Funds.
(d)The Trust shall have received an opinion of Morrison & Foerster
LLP, as counsel to the Trust in form reasonably satisfactory to
Reserves and dated the Closing Date, substantially to the effect
that (i) the Trust is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts; (ii)
the shares of the corresponding Acquiring Funds to be delivered to
the Trust's Acquired Funds as provided for by this Agreement are
duly authorized and upon delivery will be validly issued, fully paid
and non-assessable by the Trust; (iii) this Agreement has been duly
authorized, executed and delivered by the Trust, and represents a
legal, valid and binding contract, enforceable in accordance with
its terms, subject to the effect of bankruptcy, insolvency,
moratorium, fraudulent conveyance and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, and such counsel shall express no opinion with
respect to the application of equitable principles in any proceeding
whether at law or in equity; (iv) the execution and delivery of this
Agreement did not, and the consummation of the transactions
contemplated by this Agreement will not, violate the Declaration of
Trust or Code of Regulations of the Trust or any material contract
known to such counsel to which the Trust is a party or by which it
is bound; and (v) no consent, approval, authorization or order of
any court or governmental authority is required for the consummation
by the Trust of the transactions contemplated by this Agreement,
except such as have been obtained under the 1933 Act, the 1934 Act,
the 1940 Act, the rules and regulations under those Acts and such as
may be required by state securities laws or such as may be required
subsequent to the Effective Time of the Reorganization. Such opinion
may rely on the opinion of other counsel to the extent set forth in
such opinion, provided such other counsel is reasonably acceptable
to Reserves.
(e)The Trust shall have received an opinion of Morrison & Foerster
LLP, based upon reasonable representations made in certificates
provided by the Trust, its affiliates and/or principal shareholders
of the Trust's Acquired Funds and/or the corresponding Acquiring
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Funds, addressed to the Trust in a form reasonably satisfactory to
them, and dated the Closing Date, with respect to the matters
specified in Subsection 11(g).
(f)The Trust shall have received (i) a memorandum addressed to the
Trust, in a form reasonably satisfactory to them, prepared by
Morrison & Foerster LLP, or another person approved by the parties,
concerning the registration of shares to be issued by Trust pursuant
to this Agreement under applicable state securities laws or the
exemption from registration under such laws, and (ii) assurance
reasonably satisfactory to it that all permits and other
authorizations necessary under state securities laws to consummate
the transactions contemplated by this Agreement have been obtained.
(g)The Proxy Statement shall have become effective under the 1933 Act
and no stop order suspending the effectiveness shall have been
instituted, or to the knowledge of the Trust, contemplated by the
SEC.
(h)No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to
restrain or prohibit, or obtain damages or other relief in
connection with, this Agreement or the transactions contemplated
herein.
(i)The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking
to enjoin consummation of the transactions contemplated by this
Agreement under Section 25(c) of the 1940 Act.
(j)The Trust on behalf of the Acquired Funds shall have performed and
complied in all material respects with each of its agreements and
covenants required by this Agreement to be performed or complied
with by it prior to or at the Valuation Time and the Effective Time
of the Reorganization.
(k)The Trust shall have received a duly executed instrument whereby
the corresponding Acquiring Funds assume all of the liabilities of
the Trust's Acquired Funds.
11.Conditions to Reserves's Obligations on behalf of the Acquiring Funds.
The obligations of Reserves hereunder shall be subject to the following
conditions precedent:
(a)This Agreement and the Reorganization shall have been approved by
the Board of Trustees of Reserves on behalf of the Acquiring Funds
and by a majority of the shareholders of the Acquired Funds in the
manner required by applicable law and this Agreement.
(b)Reserves shall have delivered to the Trust a statement of assets
and liabilities of the Acquired Funds, showing the tax costs of such
securities by lot and the holding periods of such securities, as of
the Valuation Time, certified by the Treasurer or Assistant
Treasurer of Reserves as having been prepared in accordance with
generally accepted accounting principles consistently applied.
(c)Reserves shall have duly executed and delivered to the Trust such
bills of sale, assignments, certificates and other instruments of
transfer ("Transfer Documents") as the Trust may deem necessary or
desirable to transfer all of the Acquired Funds' right, title and
interest in and to the Fund Assets.
(d)All representations and warranties of Reserves made in this
Agreement shall be true and correct in all material respects as if
made at and as of the Valuation Time and the Effective Time of the
Reorganization.
(e)Reserves shall have delivered a certificate executed in its name by
its President or Vice President and its Treasurer or Assistant
Treasurer, in a form reasonably satisfactory to
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each of the Trust and dated as of the Closing Date, to the effect
that the representations and warranties of the Acquired Funds made
in this Agreement are true and correct at and as of the Valuation
Time.
(f)Reserves shall have received an opinion of Morrison & Foerster LLP,
as counsel to Reserves, in a form reasonably satisfactory to the
Trust and dated the Closing Date, substantially to the effect that
(i) Reserves is a business trust duly established and validly
existing under the laws of the Commonwealth of Massachusetts; (ii)
this Agreement has been duly authorized, executed and delivered by
Reserves and represents a legal, valid and binding contract,
enforceable in accordance with its terms, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance and
similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto, and such counsel shall
express no opinion with respect to the application of equitable
principles in any proceeding, whether at law or in equity; (iii) the
execution and delivery of this Agreement did not, and the
consummation of the transactions contemplated by this Agreement will
not, violate the Declaration of Trust or By-Laws of Reserves or any
material contract known to such counsel to which Reserves is a party
or by which it is bound; and (iv) no consent, approval,
authorization or order of any court or governmental authority is
required for the consummation by Reserves of the transactions
contemplated by this Agreement, except such as have been obtained
under the 1933 Act, the 1934 Act, the 1940 Act, the rules and
regulations under those Acts and such as may be required under the
state securities laws or such as may be required subsequent to the
Effective Time of the Reorganization. Such opinion may rely on the
opinion of other counsel to the extent set forth in such opinion,
provided such other counsel is reasonably acceptable to Reserves.
(g)Reserves shall have received an opinion of Morrison & Foerster LLP,
based upon reasonable representations made in certificates provided
by Reserves, its affiliates and/or principal shareholders of the
Acquired Funds and/or the Acquiring Funds, addressed to Reserves in
a form reasonably satisfactory to the Trust, and dated the Closing
Date, substantially to the effect that, for federal income tax
purposes, the Reorganization will qualify as a "reorganization,"
within the meaning of Section 368(a) of the Code, and the Acquired
Funds and the Acquiring Funds will each be a "party to a
reorganization," within the meaning of Section 368(b) of the Code,
with respect to the Reorganization.
(h)The Fund Assets to be transferred to the Acquiring Funds under this
Agreement shall include no assets which the Acquiring Funds may not
properly acquire pursuant to its investment objectives, policies or
restrictions or may not otherwise lawfully acquire.
(i)The Proxy Statement shall have become effective under the 1933 Act
and no stop order suspending such effectiveness shall have been
instituted or, to the knowledge of Reserves, contemplated by the
SEC.
(j)No action, suit or other proceeding shall be threatened or pending
before any court or governmental agency in which it is sought to
restrain or prohibit or obtain damages or other relief in connection
with this Agreement or the transactions contemplated herein.
(k)The SEC shall not have issued any unfavorable advisory report under
Section 25(b) of the 1940 Act nor instituted any proceeding seeking
to enjoin consummation of the transactions contemplated by this
Agreement under Section 25(c) of the 1940 Act.
(l)Reserves on behalf of the Acquiring Funds shall have performed and
complied in all material respects with each of its agreements and
covenants required by this Agreement to be performed or complied
with by it prior to or at the Valuation Time and the Effective Time
of the Reorganization.
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12. Survival of Representations and Warranties. The representations and
warranties of Reserves on behalf of the Acquiring Funds set forth in
this Agreement shall survive the delivery of the Fund Assets to the
Acquiring Funds and the issuance of the shares of the Acquiring Funds
at the Effective Time of the Reorganization.
13. Termination of Agreement. This Agreement may be terminated by a party
at or, in the case of Subsection 12(c), below, at any time prior to,
the Effective Time of the Reorganization by a vote of a majority of
its Board members as provided below:
(a)By Reserves on behalf of the Acquiring Funds if the conditions set
forth in Section 10 are not satisfied as specified in said Section;
(b)By the Trust on behalf of its Acquired Funds if the conditions set
forth in Section 11 are not satisfied as specified in said Section;
(c)By mutual written consent of Reserves and the Trust.
14. Governing Law. This Agreement and the transactions contemplated
hereby shall be governed, construed and enforced in accordance with
the laws of the State of Maryland, except to the extent preempted by
federal law.
15. Brokerage Fees and Expenses.
(a)Reserves represents and warrants that there are no brokers or
finders entitled to receive any payments in connection with the
transactions provided for herein.
(b)The Trust and Reserves will be each be responsible, on a PRO RATA
basis, for the expenses related to entering into and carrying out
the provisions of this Agreement, whether or not the transactions
contemplated hereby are consummated.
16. Amendments
This Agreement may be amended, modified or supplemented in such manner
as may be mutually agreed upon in writing by the authorized officers of
the Trust, acting on behalf of its Acquired Funds or Reserves, acting
on behalf of the Acquiring Funds; provided, however, that following the
meetings of the shareholders of the Acquired Funds, no such amendment
may have the effect of changing the provisions for determining the
number of shares of the Acquiring Funds to be issued to the Transferor
Record Holders under this Agreement to the detriment of such Transferor
Record Holders, or otherwise materially and adversely affecting the
Acquired Funds, without the Acquired Funds obtaining its shareholders'
further approval.
At any time prior to or (to the fullest extent permitted by law) after
approval of this Agreement by the shareholders of the Acquired Funds,
the Trust on behalf of its Acquired Funds, may waive any breach by
Reserves, on behalf of the Acquiring Funds, or the failure to satisfy
any of the conditions to its obligations (such waiver to be in writing
and signed by an officer of such registered investment companies).
At any time prior to or (to the fullest extent permitted by law) after
approval of this Agreement by the shareholders of the Acquired Funds,
Reserves, on behalf of the Acquiring Funds, may waive any breach by the
Trust on behalf of its Acquired Funds, or the failure to satisfy any of
the conditions to either of their obligations (such waiver to be in
writing and signed by an officer of such registered investment
companies).
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17. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers designated below as of the date first
written above.
NATIONS FUND TRUST
On behalf of its Acquired Funds
identified on Schedule A
By: /s/ Richard H. Blank, Jr.
Richard H. Blank, Jr.
Secretary and Treasurer
NATIONS INSTITUTIONAL RESERVES
On behalf of its Acquiring Funds
identified on Schedule A
By: /s/ Richard H. Blank, Jr.
Richard H. Blank, Jr.
Secretary and Treasurer
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SCHEDULE A
WOULD RECEIVE SHARES OF
SHAREHOLDERS OWNING SHARES THE FOLLOWING RESERVES
OF THE FOLLOWING TRUST'S ACQUIRING FUNDS AND
ACQUIRED FUNDS AND CLASSES: CLASSES:
Nations Marsico Focused Nations Marsico Focused
Equities Fund Equities Fund
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
Nations Marsico Growth & Nations Marsico Growth
Income Fund & Income Fund
Primary A Shares Trust Shares
Primary B Shares Investor Shares
Investor A Shares Market Shares
Investor B Shares Investor Shares
Investor C Shares Investor Shares
11
