As filed with the Securities and Exchange Commission
on July 3, 1996
Registration No. _______________
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- -------------------------------------------------------------------------------
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. ___ [ ]
Post-Effective Amendment No. ___ [ ]
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1940 [ ]
Amendment No. ___ [ ]
(Check appropriate box or boxes)
------------------------
NATIONS FUND, INC.
(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) 626-2275
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
Morrison & Foerster & Frankel
2000 Pennsylvania Ave., N.W. 919 Third Avenue
Suite 5500 New York, NY 10022
Washington, D.C. 20006
It is proposed that this filing will become effective on August 2, 1996 pursuant
to Rule 488.
No filing fee is required under the Securities Act of 1933 because an indefinite
number of shares of beneficial interest in the Registrant, without par value,
has previously been registered pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended. The Registrant filed on May 24, 1996, the
notice required by Rule 24f-2 for its fiscal period ended March 31, 1996 (File
No. 33-4038; 811-4614).
<PAGE>
Nations Fund, Inc.
Cross-Reference Sheet
Items Required by Form N-14
Part A
Item No. Item Caption Prospectus Caption
1 Beginning of Registration Cover Page of Registration
Statement and Outside Front Cover Statement; Cross-Reference Sheet;
Page of Prospectus Front Cover Page of
Prospectus/Proxy Statement
2 Beginning and Outside Back Cover Table of Contents
Page of Prospectus
3 Fee Table, Synopsis Information, Fee Tables; Summary of
and Risk Factors Reorganization; Risk
Considerations
4 Information About the Transaction The Proposed Transaction
5 Information About the Registrant Summary of Reorganization;
Comparison of Investment
Objectives and Policies;
Additional Comparative Information
6 Information About the Company Summary of Reorganization;
Being Acquired Comparison of Investment
Objectives and Policies;
Additional Comparative Information
7 Voting Information Summary of Reorganization;
Miscellaneous
8 Interest of Certain Persons and NOT APPLICABLE
Experts
9 Additional Information Required NOT APPLICABLE
for Reoffering by Persons Deemed
to be Underwriters
<PAGE>
Part B
10 Cover Page Cover Page
11 Table of Contents Table of Contents
12 Additional Information About the Incorporation of Documents by
Registrant Reference in Statement of
Additional Information
13 Additional Information About the Not Applicable
Company Being Acquired
14 Financial Statements Introductory Note to Financial
Statements
Part C
15-17 Information required to be included in Part
C is set forth under the appropriate Item,
so numbered, in Part C of this Registration
Statement.
<PAGE>
PEACHTREE FUNDS
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone: (800) 626-2275
August 5, 1996
Dear Shareholder of the Peachtree Prime Money Market Fund:
On behalf of the Board of Trustees of Peachtree Funds, we are
pleased to invite you to a Special Meeting of the Shareholders of Peachtree
Funds ("Peachtree Funds") to be held on September 23, 1996.
As you may recall, Bank South Corporation ("Bank South
Corporation") recently merged into NationsBank Corporation. Prior to the merger,
Bank South Corporation was the parent of Bank South, N.A. ("Bank South"), the
prior investment adviser to Peachtree Funds. Because this merger automatically
terminated Bank South's investment advisory agreement with Peachtree Funds, a
special meeting of shareholders of Peachtree Funds was held on January 9, 1996.
At that meeting, the shareholders of Peachtree Funds, among other things,
approved a new investment advisory agreement between Peachtree Funds and
NationsBanc Advisors, Inc. ("NBAI") and a new sub-advisory agreement between
NBAI and its affiliate, TradeStreet Investment Associates, Inc. ("TSIA").
In light of the merger, certain additional changes to the
structure of Peachtree Funds have been proposed. In this regard, the September
23, 1996 Special Meeting is being called to consider an Agreement and Plan of
Reorganization ("Plan") for the Peachtree Prime Money Market Fund (the "Fund").
Under the Plan, each Fund's assets would be acquired by Nations Prime Fund of
Nations Fund, Inc. (the "Company").
The Nations Prime Fund of the Company is sometimes referred to
herein as the "Acquiring Fund." Under the Plan, you would become a shareholder
of the Acquiring Fund and receive shares of the Acquiring Fund equal in value at
the time of issuance to your Fund shares. Shareholders of the Fund will receive
Primary A Shares of the Acquiring Fund. The shares you receive will be free of
commissions and sales loads, and there will be no adverse federal income tax
consequences. You may wish to separately consider any state or local tax
consequences in consultation with your tax advisor.
The primary purpose of combining the Fund and the Acquiring
Fund is to seek to achieve certain economies of scale and eliminate certain
costs associated with operating the Fund and the Acquiring Fund separately,
although no such assurances can be made. The Fund and Acquiring Fund have
substantially similar investment objectives and policies. In this regard:
(Bullet) the Peachtree Prime Money Market Fund, which seeks to
achieve current income consistent with stability of
principal and liquidity, and the Nations Prime Fund, which
seeks the maximization of current income to the extent
consistent with the preservation of capital and the
maintenance of liquidity,
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<PAGE>
both seek to achieve their objectives by investing in a
portfolio of high quality money market instruments with
remaining maturities of 397 days or less.
Although certain differences exist between the investment
policies and restrictions of the Fund and the Acquiring Fund, these differences
are not expected to appreciably increase the level of risk associated with an
investment in the Fund. There also are certain differences between the fee
levels paid by the Fund and the Acquiring Fund. For a discussion of these
differences, see "Summary Comparison of Investment Objectives and Policies" and
"Summary Comparison of Service Arrangements and Fees" in the accompanying
Combined Prospectus/Proxy Statement.
THE BOARD OF TRUSTEES OF PEACHTREE FUNDS HAS UNANIMOUSLY
APPROVED THE PLAN AND RECOMMENDS THAT SHAREHOLDERS OF THE FUND VOTE FOR THE
PLAN. The accompanying Combined Prospectus/Proxy Statement provides details
about the Plan and the Acquiring Fund.
Attached are the formal Notice of Special Meeting and a
Combined Prospectus/Proxy Statement, together with a Proxy Card for you to mark,
sign, date and return to us. Please return your Proxy Card to us so that your
vote will be counted even if you do not attend the Special Meeting in person.
If you are also a shareholder of another portfolio of
Peachtree Funds, you will receive separately proxy materials, including a Proxy
Card, relating to each of those other portfolios. Please remember to complete
and return each Proxy Card you receive from Peachtree Funds.
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF
SHARES THAT YOU OWN. PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY CARD TODAY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
If you have any questions regarding the enclosed materials or
the Special Meeting, please call ________ at (800) 626-2275. We look forward to
receiving your completed Proxy Card very soon.
Sincerely,
------------------------------
Edward C. Gonzales
President
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<PAGE>
PEACHTREE FUNDS
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone: (800) 626-2275
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
PEACHTREE PRIME MONEY MARKET FUND
To Be Held on September 23, 1996
TO THE SHAREHOLDERS of the Peachtree Prime Money Market Fund
(the "Fund") of Peachtree Funds ("Peachtree Funds"):
PLEASE TAKE NOTE that a SPECIAL MEETING OF SHAREHOLDERS of
Peachtree Funds will be held on Monday, September 23, 1996, at 2:15 p.m.
(Eastern time) at the offices of Peachtree Funds, Federated Investors Tower,
19th Floor, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779 (the
"Special Meeting"). The Special Meeting, with respect to the Fund, is being
called for the purposes of considering and voting upon:
(1) A proposal to approve an Agreement and Plan of
Reorganization (the "Plan") for the Fund, and the
transactions contemplated thereby, which include (a)
the transfer of all of the assets of the Peachtree
Prime Money Market Fund of Peachtree Funds to Nations
Prime Fund of Nations Fund, Inc. (the "Acquiring
Fund") in exchange for shares of the Acquiring Fund,
and the assumption by the Acquiring Fund of stated
liabilities of the Fund; and (b) the distribution of
shares of the Acquiring Fund to shareholders of the
Fund.
(2) Such other business as may properly come before the
Special Meeting, or any adjournment(s) thereof,
including any adjournment(s) necessary to obtain
requisite quorums and/or approvals.
YOUR TRUSTEES UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF THIS PROPOSAL.
The Board of Trustees of Peachtree Funds has fixed the close
of business on July 26, 1996, as the record date for the determination of Fund
shareholders entitled to receive notice of and to vote at the Special Meeting or
any adjournment(s) thereof. The enclosed Combined Prospectus/Proxy Statement
contains further information regarding the Special Meeting and the proposal to
be considered. The enclosed Proxy Card is intended to permit you to vote even if
you do not attend the meeting in person.
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In order to have a quorum for action on the proposal, the
holders of more than one-half of the Fund's shares outstanding on the record
date must be present in person or by proxy. Therefore, your proxy is very
important to us. Whether or not you plan to attend the meeting in person, please
mark, sign, date and return the enclosed Proxy Card in the enclosed postage-paid
envelope. Signed but unmarked Proxy Cards will be counted in determining whether
a quorum is present and will be voted in favor of the proposal.
By Order of the Board of Trustees
John W. McGonigle
Secretary
August 5, 1996
YOUR VOTE IS VERY IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES
THAT YOU OWN. PLEASE MARK, SIGN, DATE AND RETURN YOUR PROXY CARD
IMMEDIATELY. ALSO REMEMBER TO COMPLETE AND RETURN EACH PROXY CARD YOU
RECEIVE FROM PEACHTREE FUNDS FOR ANY PORTFOLIO OF WHICH YOU ARE A
SHAREHOLDER.
2
<PAGE>
COMBINED PROSPECTUS/PROXY STATEMENT
August 5, 1996
Peachtree Funds
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
Telephone: (800) 626-2275
Nations Fund, Inc.
111 Center Street
Little Rock, Arkansas 72201
Telephone: (800) 626-2275
-----------------
====================================================================
SHARES OF NATIONS FUND, INC. ("THE COMPANY")
ARE NOT DEPOSITS OR OTHER OBLIGATIONS
OF, OR ISSUED, ENDORSED OR GUARANTEED BY, NATIONSBANK, N.A.
("NATIONSBANK") OR ANY OF ITS AFFILIATES. SUCH SHARES
ARE NOT INSURED BY THE U.S. GOVERNMENT, THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENT AGENCY. AN INVESTMENT IN THE
ACQUIRING FUND INVOLVES CERTAIN RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
NATIONSBANK AND CERTAIN OF ITS AFFILIATES PROVIDE CERTAIN OTHER
SERVICES TO NATIONS FUND, FOR WHICH THEY ARE COMPENSATED.
STEPHENS INC., WHICH IS NOT AFFILIATED WITH NATIONSBANK,
IS THE SPONSOR AND ADMINISTRATOR AND SERVES AS
THE DISTRIBUTOR FOR THE PRIMARY A SHARES OF THE COMPANY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
This Combined Prospectus/Proxy Statement is being furnished to
shareholders of the Peachtree Prime Money Market Fund (the "Fund") of Peachtree
Funds ("Peachtree Funds") in connection with the solicitation of proxies by the
Board of Trustees of Peachtree Funds, to be used at a Special Meeting of
Shareholders of Peachtree Funds ("Special Meeting") to be held on Monday,
September 23, 1996 at the offices of the Peachtree Funds, Federated Investors
Tower,
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<PAGE>
19th Floor, 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779,
beginning at 2:15 p.m. (Eastern time).
The Trustees are seeking your approval of an Agreement and
Plan of Reorganization (the "Plan"), which contemplates that:
Nations Prime Fund of the Company will acquire all of the
assets of the Peachtree Prime Money Market Fund in exchange
for Primary A shares of Nations Prime Fund and the assumption
by Nations Prime Fund of stated liabilities of the Peachtree
Prime Money Market Fund.
Nations Prime Fund is sometimes referred to herein as the
"Acquiring Fund." Following such exchange, the shares of the Acquiring Fund
received by the Fund will be distributed to the Fund shareholders and the Fund
will be dissolved and liquidated. This exchange and distribution transaction is
sometimes referred to herein as the "Reorganization."
As a result of the Reorganization, you will receive full and
fractional Primary A shares of the Acquiring Fund equal in value when issued to
the shares of the Fund owned by you immediately prior to the transaction. No
commissions or sales loads will be charged in connection with the Reorganization
and there will be no federal income tax consequences. You may wish to consider
separately any state or local tax consequences in consultation with your tax
advisor.
As discussed in detail herein, the investment objective and
policies of the Acquiring Fund is substantially similar to those of the Fund.
However, there are some differences between investment strategies, as well as
differences in fee levels, which are described in detail below.
An investment in the Nations Prime Fund is neither insured nor
guaranteed by the U.S. Government; and there can be no assurance that the
Nations Prime Fund will be able to maintain a stable net asset value of $1.00
per share.
This Combined Prospectus/Proxy Statement, which should be
retained for future reference, sets forth concisely the information about the
Acquiring Fund that a prospective investor, including shareholders of the Fund,
should know before investing. Additional information about the Reorganization is
contained in a separate Statement of Additional Information which has been filed
with the Securities and Exchange Commission (the "SEC") and is available without
charge by calling Nations Fund toll free at (800) 626-2275. The Statement of
Additional Information bears the same date as this Combined Prospectus/Proxy
Statement and is incorporated by reference herein.
The Prospectus of the Acquiring Fund relating to its Primary A
Shares, dated July 31, 1996, is incorporated by reference into this Combined
Prospectus/Proxy Statement. In addition, a copy of the Acquiring Fund's
Prospectus relating to its Primary A Shares, accompanies this Combined
Prospectus/Proxy Statement. A copy of the Acquiring Fund's Annual Report for the
fiscal period ended March 31, 1996, also accompanies this Combined
Prospectus/Proxy Statement.
4
<PAGE>
The following documents containing additional information
about the Fund have been filed with the SEC and are incorporated by reference
herein: the Fund's Prospectus dated November 30, 1995, the Fund's Statement of
Additional Information dated November 30, 1995, and the Semi-Annual Report for
the fiscal period ended March 31, 1996.
Copies of the documents referenced may be obtained without
charge by calling Nations Fund at (800) 626-2275.
<PAGE>
TABLE OF CONTENTS
PAGE
FEE TABLE.................................................. 7
SUMMARY OF REORGANIZATION ................................. 6
RISK CONSIDERATIONS ....................................... 17
THE PROPOSED TRANSACTION .................................. 18
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES........... 23
ADDITIONAL COMPARATIVE INFORMATION ........................ 25
MISCELLANEOUS ............................................. 27
EXHIBIT A -- FORM OF AGREEMENT AND PLAN OF REORGANIZATION
5
<PAGE>
FEE TABLE
The following table a) compare the current fees and
expenses for the respective Fund and its corresponding Acquiring Fund, and b)
show the estimated fees and expenses for the corresponding Acquiring Fund on a
pro forma basis after giving effect to the Reorganization. The purposes of these
tables is to assist shareholders in understanding the various costs and expenses
that investors in these portfolios will bear as shareholders. The Examples show
the cumulative expenses attribuatable to a hypothetical $1,000 investment in the
funds over specified periods.
Peachtree Prime Money Market Fund/
Nations Prime Fund
<TABLE>
<CAPTION>
Peachtree Prime
Fund Shares/Primary A Shares Money Market Fund Nations Prime
Fund Pro Forma
<S> <C> <C> <C>
Shareholder Transaction Expenses for Fund Shares/Primary A Shares
Maximum Sales Load Imposed on Purchase of a Share (as a percentage of
Offering
Price)*....................................
None None None
Annual Fund Operating Expenses for Fund Shares/Primary A Shares (as a percentage
of average net assets):
Management Fees (after waivers and/or reimbursements)** 0.19% 0.14% 0.14%
Shareholder Servicing Fees................. None None None
12b-1 Fees................................. None None None
Other Expenses (after waivers and/or reimbursements)** 0.31% 0.16% 0.16%
----- ----- -----
Total Fund Operating Expenses (after waivers and/or reimbursements)** 0.50% 0.30% 0.30%
===== ===== =====
</TABLE>
* There are no sales loads or fees imposed on purchases, reinvested dividends
or redemption of shares.
** Absent fee waivers and expense reimbursements, "Management Fees," and
"Total Operating Expenses" for Shares of the Peachtree Prime Money Market Fund
would have been: 0.50% and 0.81%, respectively. Absent fee waivers and expense
reimbursements, "Management Fees," "Other Expenses" and "Total Operating
Expenses" for Primary A Shares of the Nations Prime Fund would have been: 0.20%,
0.17% and 0.37%, respectively.
6
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Example:
You would pay the following expenses on a $1,000 investment assuming
(1) a 5% annual return and (2) redemption at the end of each time period.
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
Peachtree Prime Money Market Fund $5 $16 $28 $63
Nations Prime Fund (Primary A Shares) $3 $10 $17 $38
<PAGE>
SUMMARY OF REORGANIZATION
Question and Answer Summary
Q. How will the Reorganization affect me?
A. The assets of the Fund will be combined with those of the
Acquiring Fund and you will become a shareholder of the Acquiring Fund. You
will receive Primary A Shares of the Acquiring Fund equal in value at the time
of issuance to the shares of the Fund that you held immediately prior to the
Reorganization.
Q. Why is the Reorganization being recommended?
A. The primary purposes of the proposed Reorganization are to
seek to achieve future economies of scale and eliminate certain costs
associated with operating the Fund and the Acquiring Fund separately. The Fund
and the Acquiring Fund have similar investment objectives and policies, as
described in detail below. The Reorganization will result in combining the
assets of the Fund and the Acquiring Fund and consolidating their operations.
Combining the assets of the Fund and the Acquiring
Fund is intended to provide various benefits to shareholders of the Fund who
become shareholders of the Acquiring Fund (as well as to existing and future
investors in the Acquiring Fund). For example, higher asset levels should enable
the Acquiring Fund to spread fixed and relatively fixed costs, such as
accounting, legal and printing expenses, over a larger asset base, thereby
reducing per-share expense levels. Higher asset levels also should benefit
portfolio management by permitting larger individual portfolio investments (such
as "round-lots" or other quantities that may result in reduced transaction costs
and/or more favorable pricing) and by providing the opportunity for greater
portfolio diversity. In addition, consolidating the operations of the Fund and
the Acquiring Fund should generally benefit the Fund by promoting more efficient
operations on a more cost-effective basis. These benefits, in turn, should have
a favorable effect on the performance of the Acquiring Fund. Finally,
shareholders of the Fund will benefit from the lower total expense ratio of the
Acquiring fund as compared to the Fund.
The completion of the Reorganization is subject to
the satisfaction of a number of conditions (such as approval by the Fund's
shareholders), which are summarized below in "The Proposed Transaction --
Agreement and Plan of Reorganization" section. These conditions are stated in
the Plan, which is attached as Exhibit A to this Combined Prospectus/Proxy
Statement. There can be no assurance that the benefits described here can be
achieved.
Q. Will I have to pay any sales load, commission or other
transactional fee in connection with the Reorganization?
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A. No. The full value of your shares of the Fund will be
exchanged for Primary A Shares of the Acquiring Fund without any sales load,
commission or other transactional fee being imposed. NationsBanc Advisors, Inc.
("NBAI"), a wholly owned subsidiary of NationsBank and the Fund's and Acquiring
Fund's investment adviser, or Stephens Inc. ("Stephens"), the sponsor,
distributor and administrator of the Acquiring Fund, will bear the costs
associated with the Plan, such as printing and mailing costs and other expenses
associated with the Special Meeting. Of course, you may redeem your shares in
the Fund at any time before the effective date of the Reorganization, but
shareholders will not have dissenters' or appraisal rights.
Q. How will the fees paid by the Acquiring Fund compare to
those payable by the Fund?
A. Both before and after fee waivers and/or reimbursements,
the total per share operating expenses of the Primary A Shares of the Acquiring
Fund will be lower than the total per share operating expenses of the Fund.
Q. Who will advise the Acquiring Fund and provide other
services?
A. NBAI provides advisory services to the Acquiring Fund
under arrangements that are substantially identical to those in effect prior to
January 8, 1996 between the Fund and NBAI. TradeStreet Investment Associates,
Inc. ("TSIA"), an affiliate of NBAI and the Fund's sub-adviser, provides
sub-advisory services to the Acquiring Fund, under arrangements substantially
similar to those currently in effect between the Fund and NBAI and between NBAI
and TSIA. The contractual advisory fees payable by the Acquiring Fund are no
higher than the advisory fees payable by the Fund. Stephens serves as
distributor of the Acquiring Fund's shares and is the administrator for the
Acquiring Fund. In addition, First Data Investor Services Group, Inc. ("First
Data"), a wholly owned subsidiary of First Data Corporation, serves as
co-administrator of the Acquiring Fund and NationsBank of Texas, N.A.
("NationsBank Texas") is the custodian of the Acquiring Fund. With the
exception of NBAI and TSIA each of these service providers differs from the
current service providers of the Fund.
Q. Will I have to pay any federal income taxes as a result of
the Reorganization?
A. No. As a condition to the Reorganization, the Fund will
receive an opinion of counsel to the effect that the Reorganization will not
result in any gain or loss for federal income tax purposes to the Fund or its
shareholders under the Internal Revenue Code of 1986, as amended (the "Code").
In addition, such opinion will indicate that the federal income tax basis and
holding period of your Fund shares will carry over to the shares of the
Acquiring Fund that you receive in exchange therefor. Such opinion will also
indicate that the federal income tax holding period of your Fund shares will
carry over to the shares of the Acquiring Fund that you receive in the
exchange, unless you did not hold your Fund shares as a capital asset. You may
wish to consider separately any state and local tax consequences in
consultation with your tax adviser.
8
<PAGE>
Q. Is the Acquiring Fund part of a family of funds?
A. Yes. The Acquiring Fund is part of Nations Fund, Inc.,
which in turn, is part of the Nations Fund Family, which includes all funds of
the Company, Nations Fund Trust, Nations Fund Portfolios, Inc. and Nations
Institutional Reserves. Each is a separate investment company registered under
the Investment Company Act of 1940 (the "1940 Act"). There are more than 40
separate investment portfolios in the Nations Fund Family.
Approval and Consummation of the Proposed Transaction
The Board of Trustees of Peachtree Funds unanimously
determined that the Reorganization is in the best interests of the Fund and that
the interests of the existing shareholders of the Fund will not be diluted as a
result of the Reorganization. Similarly, the Board of Directors of the Company
unanimously determined that the Reorganization is in the best interests of the
Acquiring Fund and that the interests of existing shareholders of the Acquiring
Fund will not be diluted as a result of the Reorganization. Management of
Peachtree Funds believes that the proposed Reorganization of the Fund into the
Acquiring Fund should allow the Acquiring Fund to achieve future economies of
scale and to eliminate certain costs associated with operating the Fund and the
Acquiring Fund separately, although no such assurances can be made. In this
regard, the Company anticipates that the aggregate fees and expenses of the
Acquiring Fund will be reduced over time. Finally, shareholders of the Fund will
benefit immediately from the lower total expense ratio of the Acquiring fund as
compared to the Fund. See "The Proposed Transaction -- Reasons for the Proposed
Transaction."
Shareholders of record of the Fund at the close of business on
July 26, 1996 ("Record Date"), will be entitled to notice of and to vote at the
Special Meeting or any adjournments thereof. As of the Record Date, there were [
] outstanding shares of all portfolios of Peachtree Funds. Of these shares, the
following constituted shares of the Fund:
Total Number of
Fund Shares Outstanding
Peachtree Prime Money Market Fund
Each shareholder of the Fund will be entitled to one vote for
each share, and a fractional vote for each fractional share, held by such
shareholder. Shareholders holding a majority of the outstanding shares of the
Fund at the close of business on the Record Date will be deemed to constitute a
quorum for the transaction of business regarding the Plan at the Special
Meeting. To be approved with respect to the Fund, the Plan will require the
affirmative vote of the holders of a "majority of the outstanding voting
securities," as defined below, of the Fund eligible to vote on the matter. The
Reorganization with respect to the Fund is not contingent on
9
<PAGE>
the approval of the Reorganization with respect to any other funds of Peachtree
Funds. If a Fund's shareholders do not approve the proposed Reorganization,
Peachtree Funds' Board of Trustees will consider what other alternatives would
be in the shareholders' best interest.
Summary Comparison of Investment Objectives and Policies
The investment objective, policies and strategies of the Fund
are substantially similar to those of the Acquiring Fund. The investment
objective of the Fund is fundamental, which means that it cannot be changed
without a vote of the Fund's shareholders. The investment objective of the
Acquiring Fund is non-fundamental and may be changed by the Board of Directors
of the Company.
Peachtree Prime Money Market Fund/Nations Prime Fund
The Peachtree Prime Money Market Fund's investment objective
is to achieve current income consistent with stability of principal and
liquidity. The Peachtree Prime Money Market Fund seeks to achieve this objective
by investing in a portfolio of high quality money market instruments maturing in
13 months or less. It may invest in domestic issues of corporate debt
obligations, including variable rate demand notes, commercial paper (including
Canadian Commercial Paper and Europaper), certificates of deposit, demand and
time deposits, bankers' acceptances and other instruments of domestic and
foreign banks and other depository institutions, short-term credit facilities,
asset-backed securities, including commercial paper, obligations issued or
guaranteed as to payment of principal and interest by the U.S. Government or one
of its agencies or instrumentalities, and other money market instruments.
However, the Peachtree Prime Money Market Fund will invest only in instruments
denominated and payable in U.S. dollars. It may also invest in repurchase
agreements, securities issued by other investment companies and may lend its
portfolio securities to qualified institutional investors. The average maturity
of the securities in the Peachtree Prime Money Market Fund, computed on a
dollar-weighted basis, will be 90 days or less.
The Nations Prime Fund's investment objective is to seek the
maximization of current income to the extent consistent with the preservation of
capital and maintenance of liquidity. The Nations Prime Fund may invest in U.S.
Treasury obligations and other obligations issued or guaranteed as to payment of
principal and interest by the U.S. Government, its agencies or
instrumentalities. It may also invest in bank and commercial instruments
available in the money markets, high quality short-term taxable obligations
issued by state and local governments, their agencies and instrumentalities and
repurchase agreements relating to U.S. Government obligations. The Nations Prime
Fund may also purchase securities issued by other investment companies,
consistent with the Acquiring Fund's investment objectives and policies, and may
engage in reverse repurchase agreements. It may also invest in guaranteed
investment contracts and in instruments issued by certain trusts. It may also
lend its portfolio securities to qualified institutional investors.
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<PAGE>
For more information on the investment objectives, policies
and restrictions of the Fund and the Acquiring Fund, see "Comparison of
Investment Objectives and Policies" below.
Summary Comparison of Service Arrangements and Fees
The Fund and the Acquiring Fund have the same investment
advisers and sub-advisers but currently have different distributors,
administrators, custodians and transfer agents. However, these different
entities provide substantially similar services to the Fund and the Acquiring
Fund.
Investment Advisory Services
Investment Adviser. NBAI serves as investment adviser to both
the Fund and Acquiring Fund. Subject to the general supervision of Peachtree's
Board of Trustees and Nations Fund Inc.'s Board of Directors, and in accordance
with the investment policies of the Fund and Acquiring Fund, NBAI formulates
guidelines and lists of approved investments for the Fund and Acquiring Fund,
makes decisions with respect to and places orders for the Fund's and Acquiring
Fund's purchases and sales of portfolio securities and maintains records
relating to such purchases and sales. From time to time, to the extent
consistent with their investment objectives, policies and restrictions, the Fund
and Acquiring Fund may invest in securities of companies with which NationsBank
has a lending relationship.
Effective January 9, 1996, Peachtree Funds entered into an
Investment Advisory Contract with NBAI. The Advisory Contract provides that in
the absence of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the obligations or duties of NBAI under the Advisory Contract, NBAI
and its affiliates shall not be liable to Peachtree Funds or to any shareholder
for any act or omission in the course of, or connected in any way with,
rendering services or for any losses that may be sustained in the purchase,
holding, or sale of any security. The Advisory Contract will continue for two
years from January 9, 1996, unless terminated, and may be continued from year to
year thereafter by the Board of Trustees. The continuation of the Advisory
Contract must be approved by a majority vote of the Trustees, including a
majority of the Non-Interested Trustees, cast in person at a meeting called for
that purpose. NBAI will have the right, in any year, to notify Peachtree Funds
in writing at least 60 days before the Advisory Contract anniversary date that
it does not desire a renewal of the Advisory Contract. The Trustees, or a
majority of the outstanding voting shares of Peachtree Funds, may terminate the
Advisory Contract at any time without penalty by giving NBAI 60 days' written
notice. The Advisory Contract may not be assigned by NBAI and will terminate
automatically in the event of an assignment. The Advisory Contract provides that
it may be amended by a vote of both a majority of the Trustees, including a
majority of the Non-Interested Trustees, and on behalf of a Fund by the holders
of a majority of the outstanding voting shares of such Fund.
In return for its advisory services to the Funds, NBAI is entitled to a
monthly fee calculated at the indicated annual rate of the Fund's average daily
net assets:
11
<PAGE>
Investment Advisory
Fund Rate of Compensation
---- --------------------
Peachtree Prime Money Market Fund 0.50%
For the fiscal period ended March 31, 1996, after waivers, the Fund
paid advisory fees at the annual rate of 0.19% of the Fund's average daily net
assets. NBAI and the Fund's administrator may terminate this voluntary fee
waiver at any time.
As of March 31, 1996, the Fund had $139,076,628 in total net assets.
NBAI also serves as investment adviser to the Acquiring Fund. In return
for its advisory services to the Acquiring Fund, NBAI is entitled to a monthly
fee calculated at the indicated annual rate of the Acquiring Fund's average
daily net assets:
Investment Advisory
Acquiring Fund Rate of Compensation
Nations Prime Fund 0.20%
For its advisory services provided, NBAI is entitled to receive an
advisory fee at the annual rate of 0.25% of the first $250 million of the
combined average daily net assets of the Acquiring Fund, plus 0.20% of the
combined average daily net assets of the Acquiring Fund in excess of $250
million.
Under its agreement with the Acquiring Fund, NBAI may waive (either
voluntarily or pursuant to applicable state limitations) advisory fees payable
by the Acquiring Fund. For the fiscal period ended March 31, 1996, after
waivers, the Acquiring Fund paid advisory fees at the annual rate of 0.14% of
the Acquiring Fund's average daily net assets.
As of March 31, 1996, the Acquiring Fund had total net assets of
$4,101,773,361.
Investment Sub-Adviser. Effective January 9, 1996, and pursuant to a
sub-advisory agreement, between NBAI and TSIA, and approved by the Peachtree
Funds' Shareholders at the January 8, 1996 Joint Meeting of Shareholders (the
"Peachtree Sub-Advisory Agreement"), TSIA will act as Sub-Adviser to the Funds.
The Peachtree Sub-Advisory Agreement provides that TSIA will furnish
NBAI investment advice, statistical and other factual information, as may be
requested by NBAI. The Peachtree Sub-Advisory Agreement may be terminated by the
Trustees of the Peachtree Funds or by a vote of a majority of the outstanding
voting securities of the Fund on sixty days' written notice to the NBAI or TSIA.
TSIA shall not be liable to the NBAI, the Company, or to any of the Funds or to
any shareholder for any act or omission except due to willful misfeasance, bad
faith, gross
12
<PAGE>
negligence, or reckless disregard of the obligations or duties under the
Peachtree Sub-Advisory Agreement.
In return for its sub-advisory services to the Funds, TSIA is
entitled to receive from NBAI sub-advisory fees, computed daily and payable
monthly at the annual rates listed below as a percentage of the average daily
net assets of the Funds.
Sub-Advisory
Fund Rate of Compensation
Peachtree Prime Money Market Fund 0.055%
On January 1, 1996 NBAI, TSIA and the Company entered into a
sub-advisory agreement (the "Sub-Advisory Agreement") wherein TSIA would be
appointed Sub-Adviser to the Acquiring Fund. The Sub-Advisory Agreement provides
that subject to the supervision of NBAI and the Board of Trustees, TSIA will
provide a continuous investment program for each Fund, including investment
research and management. The investment activities of TSIA shall be subject to
any directives of the Board of Trustees. And the services furnished by TSIA are
not exclusive and TSIA shall be free to furnish similar services to others so
long as its services under the Sub-Advisory Agreement would not be impaired.
TSIA will pay all expenses incurred by it in connection with its activities
under the Sub-Advisory Agreement other than the cost of securities, commodities
and other investments, including transaction charges. Further, TSIA will not be
liable in connection with it performance, except where a loss results from
willful misfeasance, bad faith or gross negligence on the part of TSIA.
In return for its sub-advisory services to the Acquiring Fund,
TSIA is entitled to receive from NBAI sub-advisory fees, computed daily and
payable monthly at the annual rate listed below as a percentage of average daily
net assets.
Sub-Advisory
Acquiring Fund Rate of Compensation
Nations Prime Fund 0.055%
NBAI is a wholly owned subsidiary of NationsBank. NBAI has its
principal offices at One NationsBank Plaza, Charlotte, North Carolina 28225.
TSIA is a wholly owned banking subsidiary of NationsBank, which in turn
is a wholly owned banking subsidiary of NationsBank Corporation, a bank holding
company organized as a North Carolina Corporation. TSIA has its principal
offices at One NationsBank Plaza, Charlotte, North Carolina 28255.
13
<PAGE>
Distribution and Shareholder Servicing Arrangements
Shares of the Fund are distributed by Federated Securities Corp.
("FSC"), a registered broker-dealer. FSC, a subsidiary of Federated Investors,
has its principal offices at Federated Investors Tower, Pittsburgh, Pennsylvania
15222-3779. The Fund has adopted a distribution plan (the "Distribution Plan")
pursuant to Rule 12b-1 under the 1940 Act which permits the Fund to reimburse
FSC up to 0.25% of the Fund's average daily net assets for actual expenses
incurred by FSC in connection with the distribution of Fund shares. The Fund
currently does not reimburse FSC for such expenses. In addition, under a
Shareholder Servicing Plan, the Fund may pay up to 0.25% as a shareholder
services fee to certain financial institutions to compensate financial
institutions which provide administrative and/or distribution related services.
The Fund is not currently paying any shareholder services fees.
Shares of the Acquiring Fund are distributed by Stephens, a full
service broker-dealer, pursuant to a distribution agreement. Stephens has its
principal offices at 111 Center Street, Little Rock, Arkansas 72201. Stephens
receives no compensation in connection with the distribution of the Primary A
Shares of the Acquiring Fund.
Other Services
Administrative Services. Administrative services, which may include
providing general oversight of other service providers, office space, utilities
and various legal and administrative services in connection with the
satisfaction of various regulatory requirements, are provided to the Fund by
Federated Administrative Services ("FAS"). FAS, a subsidiary of Federated
Investors, has its principal offices at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779. For its services, FAS is entitled to receive a fee at
the annual rate of 0.15% of the combined average daily net assets of all
portfolios of Peachtree Funds up to $250 million; 0.125% of the next $250
million of the combined average daily net assets; 0.10% of the next $250 million
of the combined average daily net assets; and 0.075% of the combined average net
assets in excess of $750 million. The fee is allocated among all portfolios of
Peachtree Funds based on their relative net assets. The administrative fee
received during any fiscal year shall be at least $100,000 per Fund.
Stephens, First Data, and NationsBank serve as administrator,
co-administrator, and sub-administrator, respectively, of the Acquiring Fund
under agreements with the Company. First Data, a wholly owned subsidiary or
First Data Corporation, has its principal offices at One Exchange Place, Boston,
Massachusetts 02109. The administrative services provided by Stephens, First
Data and NationsBank are substantially identical to those provided by the
administrator of the Fund. In return for providing administrative services to
the Acquiring Fund and the other funds of the Company, Stephens and First Data
are entitled to a combined fee at the annual rate of 0.10% of the aggregate
average daily net assets of the Acquiring Fund and NationsBank is entitled to a
monthly fee from Stephens based on an annual rate of .01% of the Acquiring
Fund's average daily net assets.
14
<PAGE>
Custodian, Transfer Agent and Other Service Providers. The Bank of New
York serves as the Fund's custodian and is located at 48 Wall Street, New York,
New York 10286. The Bank of New York maintains custody of the Fund's securities,
cash and other property in accordance with the 1940 Act. For such services, the
Bank of New York receives transaction fees and an annual fee from each Fund
based on the market value of the Fund's assets.
For the fiscal period ended March 31, 1996, the total annualized
operating expenses per share of the Fund was as follows:
<TABLE>
<CAPTION>
Peachtree Fund Annualized Operating Expense Ratio
<S> <C>
Peachtree Government Money Market Fund 0.50% of average net assets (0.81% before waiver)
</TABLE>
In addition, FSC provides transfer agency services to the Fund under
its administration agreement with the Fund.
NationsBank Texas serves as the Acquiring Fund's custodian. As such,
among other things, NationsBank Texas maintains custody of the securities, cash
and other property of the Acquiring Fund; delivers securities against payment
upon sale and pays for securities against delivery upon purchase; makes payments
on behalf of the Acquiring Fund for payments of dividends, distributions and
redemptions; endorses and collects on behalf of the Acquiring Fund all checks;
and receives all dividends and other distributions made on securities owned by
the Acquiring Fund. For such services, NationsBank Texas receives an asset-based
fee and transaction charges from the Acquiring Fund.
First Data serves as transfer agent for Primary A Shares of the
Acquiring Fund. For its services, First Data receives a monthly fee based on the
number of shareholder accounts it maintains and is reimbursed for its
out-of-pocket expenses.
For the fiscal year ended March 31, 1996, the total annualized expenses
per share of the Primary A Shares of the Acquiring Fund, after waivers, were as
follows:
<TABLE>
<CAPTION>
Acquiring Fund Annualized Operating Expense Ratio
<S> <C>
Nations Prime Fund .30% of average daily net assets (0.36% before waiver)
Legal Counsel and Independent Accountants.
</TABLE>
Houston, Houston & Donnelly, Pittsburgh, Pennsylvania, and Dickstein,
Shapiro & Morin, L.L.P., Washington, D.C., serve as counsel to Peachtree Funds.
Ernst & Young LLP, Pittsburgh, Pennsylvania, serves as the independent
accountants for Peachtree Funds, and, as such, has audited the financial
statements of Peachtree Funds.
15
<PAGE>
Morrison & Foerster LLP, 2000 Pennsylvania Avenue, N.W., Suite 5500,
Washington, D.C. 20006, is counsel to Nations Funds and special counsel to
NationsBank.
Price Waterhouse LLP, serves as independent accountant to Nations Fund.
Its address is 160 Federal Street, Boston, Massachusetts 02110.
For a complete description of these arrangements, see the section in
the relevant Acquiring Fund's Prospectus entitled "How the Funds Are Managed --
Other Service Providers."
Summary Comparison of Purchase, Redemption and Exchange Procedures
Purchases. Shares of the Peachtree Prime Money Market Fund are offered
at net asset value, without a sales load, to all investors. Purchases of Fund
shares may be made on any day on which the New York Stock Exchange and Federal
Reserve Wire System are open for business. The minimum initial investment in the
Fund by an investor is $1,000 ($500 for individual retirement accounts) and the
minimum subsequent investment is $100.
Primary A Shares of the Acquiring Fund are offered at net asset value
to financial institutions (including NationsBank and its affiliated and
correspondent banks) and fee-based planners acting on behalf of their customers,
employee benefit plans, charitable foundations and endowments. Primary A Shares
may, at times, be sold to other similar categories of investors. There is a
minimum initial investment in Primary A Shares of $1,000 per record holder, but
there is no minimum subsequent investment. Primary A Shares may be purchased on
any day on which the Federal Reserve Bank of New York is open for business.
Redemptions. Redemption orders for the Fund must be placed with the
Fund prior to 4:00 p.m. (Eastern time) in order for the order to be accepted on
that day. Shares may be redeemed on any day that the Fund computes its net asset
value. The Fund computes its net asset value at 12:00 noon (Eastern time) and
4:00 p.m. (Eastern time), Monday through Friday, except on: (i) days on which
changes (if any) in the value of the Fund's portfolio securities do not
materially affect its net asset value; (ii) days during which no shares are
tendered for redemption and no orders to purchase shares are received; and (iii)
the following holidays: New Year's Day, Martin Luther King Day, President's Day,
Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veteran's
Day, Thanksgiving Day and Christmas Day. The Fund does not impose a redemption
fee.
Primary A Shares of the Acquiring Fund may be redeemed in accordance
with the instructions and limitations pertaining to the shareholder's account at
his or her institution. The Company may redeem a shareholder's Primary A Shares
if the investor's account drops below $500 as a result of redemptions and the
investor does not increase the balance to $500 on 60 days' written notice.
Redemption orders for shares of the Acquiring Fund may be placed before 4:00
p.m., Eastern time, on any day that the Acquiring Fund is open for business.
Similarly, no fee is imposed on the redemption of Primary A Shares of the
Acquiring Fund.
Exchanges. Shares of a Fund may be exchanged for shares of the other
funds of Peachtree Funds or certain other funds designated by Bank South, which
are distributed by FSC,
16
<PAGE>
but are not advised by Bank South. However, if shares of the Fund are exchanged
for shares of another fund with a higher front-end sales load than the Fund
being exchanged, then the shareholder generally must pay the difference between
the maximum front-end sales charge applicable to the shares being exchanged and
those being acquired. The shares exchanged must have an aggregate value of at
least $1,000. The Fund imposes a $10 service charge on each exchange.
Primary A Shares of the Acquiring Fund may be exchanged for Primary A
Shares of any other fund of the Nations Fund Family which offer Primary A
Shares. For a listing of the funds of the Nations Fund Family, see the Question
and Answer Summary at the beginning of this Combined Prospectus/Proxy Statement.
An exchange of Primary A Shares for Primary A Shares of another fund is made on
the basis of the next calculated net asset value per share of each fund after
the exchange order is received. The Acquiring Fund and each of the other funds
of Nations Fund may limit the number of times this exchange feature may be
exercised by a shareholder within a specified period of time.
Summary Comparison of Dividend Policies
The Fund declares dividends from net investment income daily and pays
the dividends monthly. Substantially all capital gains, if any, are distributed
at least annually by the Fund. Dividends and distributions are automatically
reinvested in additional shares unless the shareholder has elected to receive
such payment in cash.
The Acquiring Fund declares dividends from net investment income daily
and pays the dividends monthly. The Acquiring Fund's net short-term capital
gains, if any, are distributed at least annually. Dividends and distributions of
the Acquiring Fund are paid in cash within five business days after the end of
the month. The institutions through which Primary A Shares are purchased may
provide for the reinvestment of dividends and distributions made by the
Acquiring Fund.
Summary of Structure and Organization
The Fund is part of Peachtree Funds, a Massachusetts business trust
registered as an open-end management investment company. Peachtree Funds
currently consists of five separate portfolios. The Acquiring Fund is part of
Nations Fund, Inc., a Maryland corporation, which was incorporated in 1983 and
which currently consists of five separate portfolios. The number of portfolios
of Peachtree Funds and the Company is subject to change.
RISK CONSIDERATIONS
Because the investment objective, policies, strategies and restrictions
of the Fund and the Acquiring Fund are substantially similar, the overall level
of investment risk should not materially change as a result of the
Reorganization. For additional information, see "Comparison of Investment
Objectives and Policies" and "Additional Comparative Information" below.
17
<PAGE>
The following risk considerations that an investor should consider are
relevant to both the Fund and the Acquiring Fund (collectively the "funds" or
"fund"). Although NBAI will seek to achieve the investment objective of the
funds, there is no assurance that it will be able to do so. In addition, an
investment in either the Peachtree Prime Money Market Fund or Nations Prime Fund
is neither insured nor guaranteed by the U.S. Government and there can be no
assurance that either fund will be able to maintain a stable net asset value of
$1.00 per share.
No single fund should be considered, by itself, to provide a complete
investment program for any investor. Investments in the funds are not insured
against loss of principal.
The funds' investments may constitute derivative securities, which are
securities whose value is derived, at least in part, from an underlying index or
reference rate. There are certain types of derivative securities that can, under
certain circumstances, significantly increase a purchaser's exposure to market
or other risks. NBAI, however, only purchases derivative securities in
circumstances where it believes such purchases are consistent with such funds'
investment objectives and do not unduly increase the funds' exposure to market
or other risks.
The funds' investments also may constitute U.S. dollar-denominated
securities of foreign issuers. Such securities are subject to different risks
than domestic obligations of domestic banks or corporations. Examples of these
risks include international economic and political developments, foreign
governmental restrictions that may adversely affect the payment of principal or
interest, foreign withholding and taxes on interest income, difficulties in
obtaining or enforcing a judgment against the issuing entity, and the possible
impact of interruptions in the flow of international currency transactions.
Risks may also exist for such securities because the banks issuing these
instruments, or their branches, are not necessarily subject to the same
regulatory requirements that apply to domestic banks, such as reserve
requirements, loan limitations, examinations, accounting, auditing,
recordkeeping, deposit insurance and the public availability of information.
These factors will be carefully considered by NBAI in selecting investments for
the funds.
THE PROPOSED TRANSACTION
Agreement and Plan of Reorganization
The Plan provides that all of the assets of the Fund as of the Closing
Date will be transferred to the Acquiring Fund in exchange for Primary A Shares
of the Acquiring Fund and the assumption by the Acquiring Fund of stated
liabilities of the Fund. The Closing Date is expected to be on or about
September 27, 1996. A copy of the Plan is attached as Exhibit A to this Combined
Prospectus/Proxy Statement. Although portions of the Plan are summarized below,
this summary is qualified in its entirety by reference to the Plan.
Promptly after the Closing Date, the Fund will distribute the Primary A
Shares of the Acquiring Fund to the Fund's respective shareholders of record as
of the close of business on the Closing Date. The Primary A Shares of the
Acquiring Fund which will be issued for distribution to the Fund's shareholders
will be equal in value to the shares of the Fund held as of the Closing
18
<PAGE>
Date. Peachtree Funds will then take all necessary steps to terminate the
qualification, registration and classification of the Fund. All issued and
outstanding shares of the Fund will be redeemed and canceled on the Fund's books
in exchange for shares of the Acquiring Fund. Primary A Shares of the Acquiring
Fund will be represented only by book entries; no share certificates will be
issued unless expressly requested in writing. Certificates are not issued for
fractional shares.
The consummation of the proposed Reorganization is subject to the
satisfaction of a number of conditions set forth in the Plan, including
shareholder approval. The Fund may waive certain conditions at any time before
or after approval of the Plan by the shareholders. The Plan also may be
terminated and the Reorganization abandoned at any time by the mutual written
consent of the Fund and the Acquiring Fund; by either such party without
liability to the other party (unless such party is otherwise in default or in
breach of the Plan) if the closing does not occur within a specified time
period; or by either party without liability to the other party if the other
party materially breaches any of its representations, warranties or covenants or
does not fulfill a condition precedent under the Plan. The Reorganization also
is subject to the condition, which cannot be waived, of obtaining an opinion of
counsel to the effect that the Reorganization constitutes a tax-free
reorganization for federal income tax purposes. NBAI or Stephens will be liable
for the expenses incurred in connection with the Plan, whether or not the
proposed Reorganization is consummated.
Shareholders of the Fund will have no dissenters' rights or appraisal
rights. All shareholders of the Fund as of the Closing Date, including those
that voted against the approval of the Plan, will receive Primary A Shares of
the Acquiring Fund. All shareholders of the Fund have the right at any time up
to the next business day preceding the Closing Date to redeem their shares at
net asset value according to the procedures set forth in the Fund's prospectus.
This summary does not purport to be a complete description of the Plan
and is subject to the terms and conditions of the Plan set forth in Exhibit A.
Reasons for the Proposed Transaction
Currently, the Fund and the Acquiring Fund are investment portfolios of
separate mutual fund companies. Although the Fund and the Acquiring Fund have
substantially similar investment objectives, policies and restrictions, each
must separately bear the costs of its operations. Consolidating their separate
operations should generally benefit the Fund's shareholders by promoting more
efficient operations on a more cost-effective basis. In particular, the
Acquiring Fund currently operates and is expected to continue to operate
following consummation of the Reorganization, with a lower overall expense ratio
than the Fund. Because the Funds and the Acquiring Funds receive investment
advisory services from the same investment adviser, NBAI, and because of the
similarities between the Fund and the Acquiring Fund, the considerations and
risks involved with an investment in the Acquiring Fund are expected to be
comparable to those associated with an investment in the Fund.
The transactions contemplated by the Plan were presented to the Board
of Trustees of Peachtree Funds for consideration at a Board meeting held on
February 29, 1996. The Board of
19
<PAGE>
Trustees of Peachtree Funds concluded unanimously that the Reorganization is in
the best interests of the Fund and that the interests of its existing
shareholders will not be diluted by the Reorganization.
The Board of Trustees of Peachtree Funds, in reaching this conclusion,
considered the costs resulting from the separate operations of the Fund and the
Acquiring Fund in light of their substantially similar investment objectives,
policies and restrictions. The Board of Trustees also considered the potential
expense savings, reduced per-share expenses, and benefits to the portfolio
management process that could result from combining the assets and operations of
the Fund and the Acquiring Fund. In this regard, the Board reviewed information
provided by the investment adviser, distributors and administrators of the Fund
and the Acquiring Fund, relating to the anticipated cost savings to the
shareholders of the Fund as a result of the Reorganization.
In particular, the Board determined that the elimination of duplicative
operations and the increase in asset levels of the Acquiring Fund after the
Reorganization should result in the following benefits for investors, although
there can be no assurances, of course, in this regard:
(1) Achievement of Reduced Per-Share Expenses. Combining
the assets of the Fund with the assets of the Acquiring Fund also
should lead to reduced expenses, on a per-share basis to the
shareholders of the Fund. Any significant reductions in expenses on a
per-share basis should have, in turn, a favorable effect on the total
return of the Acquiring Fund.
(2) Benefits to the Portfolio Management Process. Higher
asset levels also should enable the Acquiring Fund to purchase larger
individual portfolio investments (such as "round-lots" or other
quantities that may result in reduced transaction costs and/or other
more favorable pricing) and provide the opportunity for greater
portfolio diversity.
The Board based its decision to recommend the proposed transaction on
the consideration of a number of factors, including, among other things:
(1) the terms and conditions of the Reorganization and
the fact that it would not result in a dilution of the existing
shareholders' interests;
(2) the compatibility of the Fund's investment
objective, strategy, policies and restrictions with those of the
Acquiring Fund, as well as the views of the investment adviser to the
Fund and the Acquiring Fund that any differences between the investment
policies and restrictions of the Fund and the Acquiring Fund should not
appreciably increase investment risks;
(3) the experience and resources of NBAI and its
affiliates with respect to providing investment management services and
the similarity between the Fund's and the Acquiring Fund's respective
distribution, administrative, transfer agency, shareholder service and
custody arrangements;
(4) the current and projected expense ratios, and
information regarding fees and expenses of the Fund, the Acquiring Fund
and other similar funds;
20
<PAGE>
(5) the conditioning of the Reorganization on the
receipt of a legal opinion confirming the absence of any adverse
federal income tax consequences to the Fund or their shareholders
resulting from the Reorganization; and
(6) other factors deemed relevant.
In particular, the Board considered per share operating expense ratios
(total operating expenses expressed as a percentage of average net assets) both
before and after fee waivers and expense reimbursements for the single class of
shares of the Fund and the Primary A Shares of the Acquiring Fund, and on a pro
forma basis after giving effect to the Reorganization. As of November 30, 1995
these expense ratios, after waivers and reimbursements, were:
Estimated Operating Expense Ratios
Peachtree Prime Money Market Fund / Nations Prime Fund
<TABLE>
<CAPTION>
Peachtree Prime
Money Market Fund Nations Prime Fund Pro Forma (reflects waivers)
<S> <C> <C>
.49% .30% .30%
(Fund Shares) (Primary A Shares) (Fund Shares/Primary A Shares)
</TABLE>
Description of the Securities to be Issued
The Acquiring Fund consists of 4,102,230,903 shares of common stock,
par value of $.001 per share of the Company, which is an open-end series
management investment company incorporated as a Maryland corporation on December
13, 1983. Shares of the Acquiring Fund are divided into the following six
classes of shares: Primary A Shares, Primary B Shares, Investor A Shares,
Investor B Shares, Investor C Shares and Investor D Shares. Shareholders are
entitled to one vote for each share held, and a fractional vote for fractional
shares held on matters on which they are entitled to vote. See "Additional
Comparative Information."
Shareholders of the Fund are offered Primary A Shares of the Acquiring
Fund because of the similarities between the distribution and servicing
arrangements of such shares. Information regarding the Primary B, Investor A,
Investor B, Investor C and Investor D Shares of the Acquiring Fund is contained
in the prospectus for the Acquiring Fund which accompanies this Combined
Prospectus/Proxy Statement.
Federal Income Tax Consequences
As a condition to the closing of the Reorganization, Peachtree Funds
and the Company must receive a favorable opinion from Morrison & Foerster LLP,
counsel to the Company, substantially to the effect that, for federal income tax
purposes: (a) the Reorganization will constitute a "tax-free" reorganization
within the meaning of Section 368(a)(1)(C) of the Code; (b) no gain or loss will
be recognized by the Acquiring Fund or the Fund as a result of the
21
<PAGE>
Reorganization; (c) no gain or loss will be recognized by shareholders of the
Fund upon the exchange of their Fund shares for shares of the Acquiring Fund;
(d) the federal income tax basis of the Acquiring Fund shares received by a Fund
shareholder pursuant to the Reorganization will be the same as the basis of the
shareholder's Fund shares exchanged; (e) the holding period of the Acquiring
Fund shares so received will include the period during which the Fund
shareholder held shares of the Fund, provided such shares were held as a capital
asset; (f) the federal income tax basis of the Fund's assets acquired by the
Acquiring Fund will be the same as the federal income tax basis of such assets
immediately prior to the Reorganization; (g) the holding period of each Fund's
assets acquired by the corresponding Acquiring Fund; and (h) the Acquiring Fund
will succeed to the Fund's tax attributes described in Section 381(c) of the
Code as of the end of the Closing Date will include the period during which
those assets were held by the Fund. Peachtree Funds and the Company do not
intend to seek a private letter ruling with respect to the tax effects of the
Reorganization.
Related Proposals of Interest to Fund Shareholders
Peachtree Government Money Market Fund, Peachtree Equity Fund,
Peachtree Bond Fund and Peachtree Georgia Tax-Free Income Fund also are
considering the approval of a reorganization with the following respective
portfolios of Nations Fund Trust, Nations Government Money Market Fund, Nations
Capital Growth Fund, Nations Strategic Fixed Income Fund and Nations Georgia
Intermediate Municipal Bond Fund. This matter will be considered by the
shareholders of the Peachtree Government Money Market Fund, Peachtree Equity
Fund, Peachtree Bond Fund and Peachtree Georgia Tax-Free Income Fund at the
Special Meeting. The consummation of the Plan with respect to the Fund is not
contingent on the approval of this matter by the Peachtree Government Money
Market Fund, Peachtree Equity Fund, Peachtree Bond Fund and/or Peachtree Georgia
Tax-Free Income Fund
Capitalization
The following table shows the capitalization of the Acquiring Fund and
the Fund as of March 31, 1996 and on a pro forma basis as of that date after
giving effect to the Reorganization:
Peachtree Prime Money Market Fund / Nations Prime Fund
<TABLE>
<CAPTION>
Peachtree Prime Money
Market Fund Nations Prime Fund Pro Forma Combined
<S> <C> <C> <C>
Net assets $139,076,628 $2,472,468,796 $2,611,545,424
(Fund Shares) (Primary A Shares) (Fund Shares/Primary A Shares)
Net asset per share $1.00 $1.00 $1.00
Shares outstanding 139,078,958 2,472,744,594 $2,611,823,552
(Fund Shares) (Primary A Shares) (Fund Shares/Primary A Shares)
Shares authorized Unlimited 10,000,000,000 10,000,000,000
</TABLE>
22
<PAGE>
As of July __, 1996, the net assets of the Fund equaled less than 10%
of the assets of the Acquiring Fund, and therefore, pro forma financial
statements are not provided for the Fund.
COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES
Investment Objectives and Policies
The investment objective and policies of the Fund are substantially
similar to those of the Acquiring Fund. However, the investment objective of the
Fund is "fundamental" which means that it may not be changed without the consent
of a majority of the Fund's outstanding shares, as defined in the 1940 Act. The
investment objective of the Acquiring Fund is "non-fundamental," which means
that it may be changed without a vote of the Acquiring Fund's shareholders.
The Fund's investment objective is to achieve current income consistent
with stability of principal and liquidity. Similarly, the Acquiring Fund's
investment objective is to seek the maximization of current income to the extent
consistent with the preservation of capital and the maintenance of liquidity.
The Fund pursues its investment objective by investing in a portfolio
of high quality money market instruments maturing in 13 months or less. The
average maturity of money market instruments in the Fund's portfolio, computed
on a dollar-weighted basis, is 90 days or less. The Fund may invest in domestic
issues of corporate debt obligations, including variable rate demand notes;
commercial paper; certificates of deposit, demand and time deposits, bankers'
acceptances and other instruments of domestic and foreign banks and other
depository institutions; short-term credit facilities; asset-backed securities,
including commercial paper; U.S.
Government obligations; and other money market instruments.
Similarly, in pursuing its investment objective, the Acquiring Fund may
invest in U.S. Treasury bills, notes and bonds and other instruments issued
directly by the U.S. Government; bank and commercial instruments available in
the money markets, high quality short-term taxable obligations issued by state
and local governments, their agencies and instrumentalities and repurchase
agreements relating to U.S. Government obligations; securities issued by other
investment companies consistent with the Acquiring Fund's investment objective
and policies; and reverse repurchase agreements. In addition, the Acquiring Fund
may lend its portfolio securities to qualified institutional investors. As with
the Fund, the average maturity of money market instruments in the Acquiring
Fund's portfolio, computed on a dollar-weighted basis, is 90 days or less.
23
<PAGE>
Investment Restrictions
The fundamental investment restrictions of the Fund and the Acquiring
Fund are substantially identical except for the following differences:
1. The Acquiring Fund may not borrow money or issue
senior securities as defined in the 1940 Act except that (a) it may borrow money
from banks for temporary purposes in amounts up to one-third of the value of its
total assets at the time of the borrowing, provided that borrowings in excess of
5% of the value of its total assets will be repaid prior to the purchase of
additional portfolio securities, (b) it may enter into commitments to purchase
securities in accordance with its investment program, including delayed delivery
and when-issued securities which may be considered to be the issuance of senior
securities, (c) it may issue multiple classes of shares in accordance with SEC
regulations or exemptions under the 1940 Act, and (d) the purchase and sale of
futures contracts and related options shall not be considered to involve the
borrowing of money or the issuance of senior securities. The Fund has similar
investment restrictions except that exceptions (b) and (d) are not included.
Furthermore, the Fund's restriction provides that the Fund will not borrow money
for investment leverage, but rather as a temporary, extraordinary, or emergency
measure to facilitate management of the portfolio by enabling the Fund to meet
redemption requests when the liquidation of portfolio securities is deemed to be
inconvenient or disadvantageous.
2. The Acquiring Fund and the Fund may not sell
securities short, but the Acquiring Fund may sell short "against the box." A
short sale is the sale of a security that the fund does not own. A short sale is
"against the box" if at all times when the short position is open, the fund owns
an equal amount of securities convertible into, or exchangeable without further
consideration for, securities of the same issuer as the securities sold short.
In addition, the Acquiring Fund has the following non-fundamental
investment restrictions. Except as noted below, these non-fundamental investment
restrictions are substantially similar to fundamental investment restrictions of
the Fund. As discussed above, fundamental restrictions of the Fund may not be
changed without a vote of a majority of the outstanding voting securities of the
Fund; non-fundamental policies may be changed without a shareholder vote.
1. The Acquiring Fund may not purchase securities for
the purpose of exercising control.
2. The Acquiring Fund may not purchase oil, gas or
mineral leases or other interests, except that the Acquiring Fund may purchase
and sell the securities of companies engaged in the exploration, development,
production, refining, transporting and marketing of oil, gas or minerals.
3. The Acquiring Fund may not invest in warrants valued
at the lower of cost or market, in excess of 5% of the value of its assets, and
no more than 2% of the value of its assets may be invested in warrants that are
not listed on the New York or
American Stock Exchange.
4. The Acquiring Fund may not purchase securities of
any one issuer (other than U.S. Government obligations and repurchase agreements
fully collateralized by such obligations) if,
24
<PAGE>
immediately after such purchase, more than 5% of the value of the Fund's assets
would be invested in the securities of such issuer. However, up to 25% of the
Fund's total assets may be invested for a period of three business days in the
securities of a single issuer without regard to such 5% limitation.
5. The Acquiring Fund may not invest more than 10% of
the value of its net assets in illiquid securities, including repurchase
agreements, time deposits and guaranteed investment contracts with maturities in
excess of seven days, illiquid restricted securities and other securities that
are not readily marketable. For purposes of this restriction, illiquid
securities do not include securities which may be resold under Rule 144A or
Section 4(2) under the Securities Act of 1933 and which are deemed liquid under
guidelines adopted by the Company's Board of Directors.
6. The Acquiring Fund may not pledge, mortgage or
hypothecate any assets except to secure permitted borrowings and then only in an
amount up to 33-1/3% of the value of the Acquiring Fund's total assets at the
time of the borrowing. The Fund's substantively identical fundamental
restriction limits such permitted actions to 15% of the value of the Fund's
total assets at the time of the borrowing.
7. The Acquiring Fund may not purchase puts, calls, straddles,
spreads and any combination thereof if by reason thereof the value of it
aggregate investment in such securities will exceed 5% of its total assets. Such
restriction does not apply to (i) the purchase of standby commitments and
futures contracts and related options, and (ii) short-term credits necessary for
the clearance of portfolio securities transactions.
* * * * *
It is not anticipated that the above-mentioned differences in
investment policies and restrictions will, individually or in the aggregate,
result in an appreciable variation between the level of investment risks
associated with an investment in the Fund. For a more complete description of
the Acquiring Fund's investment policies and restrictions, see "Objectives" and
"How Objectives Are Pursued" in the Acquiring Fund's Prospectus and "Additional
Information on Fund Investments" in the Acquiring Fund's Statement of Additional
Information. For a more complete description of the Fund's investment policies
and restrictions, including relevant risk factors, see "Investment Objective,"
"Investment Policies," and "Certain Borrowing and Investment Limitations" in the
Fund's Prospectus and "Investment Objective and Policies" in the Fund's
Statement of Additional Information.
ADDITIONAL COMPARATIVE INFORMATION
Comparison of Rights of Security Holders
The Peachtree Funds is a Massachusetts business trust,
registered under the 1940 Act as an open-end series management investment
company. The Company is a Maryland corporation, registered under the 1940 Act as
an open-end series management investment company. Peachtree Funds was
established under a Declaration of Trust dated September 22,
25
<PAGE>
1993. The Company was incorporated in Maryland on December 13, 1983. Peachtree
Funds is authorized to issue an unlimited number of shares which may be divided
into separate funds and portfolios and separate classes of shares. The Company
has authorized capital stock of 270,000,000,000 shares of common stock, par
value of $.001 per share, which are divided into series or funds each of which
consists of separate class of shares.
Each share of Peachtree Funds represents an equal
proportionate interest in that portfolio with each other share. Shares are
entitled upon liquidation to a pro rata share in the net assets of the
portfolios. Shareholders of Peachtree Funds have no preemptive rights. The
Declaration of Trust provides that the Trustees of Peachtree Funds may create
additional portfolios or classes of shares. All consideration received by
Peachtree Funds for shares of any additional series and all assets in which such
consideration is invested would belong to that portfolio and would be subject to
the liabilities related thereto.
Shares of the Acquiring Fund represent an equal proportionate
interest in the related fund with other shares of the same class, and are
entitled to such dividends and distributions out of the income earned on the
assets belonging to the Acquiring Fund as are declared in the discretion of the
Company's Board of Directors. Once properly issued and outstanding, each share
is fully paid and nonassessable, has only such conversion or exchange rights as
the Board of Directors grants in its discretion, and has no preemptive rights.
Shareholders of the Company do not have cumulative voting rights, and therefore,
the holders of more than 50% of the outstanding shares of all funds voting
together for election of directors may elect all of the members of the Board of
Directors of the Company. The Company normally does not hold annual meetings of
shareholders, except as required under the 1940 Act.
Shares of each class of the Acquiring Fund have equal rights
with respect to voting, except that the holders of shares of a particular class
will have the exclusive right to vote on matters affecting only the rights of
the holders of such class. In the event of dissolution or liquidation, holders
of each class will receive pro rata, subject to the rights of creditors, (a) the
proceeds of the sale of that portion of the assets allocated to that class held
in the respective fund of the Company less (b) the liabilities of the Company
attributable to the respective fund or class or allocated among the funds or
classes based on the respective liquidation value of each fund or class.
For a complete description of the attributes of the Fund's
shares, including how to purchase, redeem or exchange shares and certain
restrictions thereon, taxation of the Fund and its shareholders, and dividend
and distribution policies, see the sections in the Fund's Prospectus entitled
"Investing in the Fund," "Redeeming Shares," "Shareholder Information," and "Tax
Information." Additional information about the Fund is included in the Fund's
Prospectus, dated November 30, 1995, which is incorporated by reference herein,
and in the Fund's Statement of Additional Information, dated November 30, 1995.
Copies of the Statement of Additional Information may be obtained without charge
by calling Peachtree Funds at (800) 626-2275.
For a more complete description of the attributes of the
Acquiring Fund's shares, including how to purchase, redeem or exchange shares,
see the sections in the Acquiring Fund's Prospectus entitled "Organization and
History," "How to Buy Shares," "How to Redeem Shares," "How to Exchange Shares"
26
<PAGE>
and "How Dividends and Distributions are Made; Tax Information." Additional
information about the Acquiring Fund is included in its Prospectus dated July
31, 1996, and Statement of Additional Information dated July 31, 1996, copies of
which may be obtained without charge by calling Nations Fund at (800) 626-2275.
Additional information regarding the Reorganization is
contained in the Statement of Additional Information, dated August 5, 1996, to
this Combined Prospectus/Proxy Statement. The Statement of Additional
Information is incorporated by reference herein and may be obtained by calling
Nations Fund at (800) 626-2275.
MISCELLANEOUS
Additional Information
The Company and Peachtree Funds are each subject to the
informational requirements of the 1940 Act, and in accordance therewith each
files reports, proxy materials and other information with the SEC. Such reports,
proxy materials and other information may be inspected and copied at the public
reference facilities of the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such materials can be obtained from the Public Reference
Branch, Office of Consumer Affairs and Information Services, Securities and
Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates.
Voting Matters
As defined by the 1940 Act, a "majority of the
outstanding voting securities" of the Fund means the vote of (i) 67% or more of
the Fund's outstanding shares present at the Special Meeting, if the holders of
more than 50% of the outstanding shares of the Fund or class are present or
represented by proxy at the Special Meeting, or (ii) more than 50% of the Fund's
or class' outstanding shares, whichever is less. Any proxy which is properly
executed and received in time to be voted at the Special Meeting will be counted
in determining whether a quorum is present and will be voted in accordance with
the instructions marked thereon. In the absence of any instructions, such proxy
will be voted in favor of the approval of the Plan. If the Plan is approved at
the Special Meeting, the effective date of the Reorganization ("Closing Date")
is expected to be on or about September 27, 1996. Abstentions and "broker
non-votes" (i.e., proxies from brokers or nominees indicating that such persons
have not received instructions from the beneficial owners or other persons
entitled to vote shares as to a particular matter with respect to which the
brokers or nominees do not have discretionary power to vote) will not be counted
for or against any proxy to which they relate, but will be counted for purposes
of determining whether a quorum is present and will be counted as votes present
for purposes of determining a "majority of the outstanding voting securities"
present at the Special Meeting. For this reason, abstentions and broker
non-votes will have the effect of a vote against the proposals.
The duly appointed Proxies may, in their discretion, vote upon such other
matters as properly may come before the Special Meeting or any adjournment(s)
thereof, including any proposal to adjourn a meeting at which a quorum is
present to permit the continued solicitation of proxies in
27
<PAGE>
favor of the Reorganization. In case any such adjournment is proposed with
respect to any item, the duly appointed proxies will vote those proxies which
they are entitled to vote for such item in favor of adjournment, and will vote
those proxies required to be voted against such item against adjournment. A
shareholder vote may be taken on one of the items described in this Combined
Prospectus/Proxy Statement prior to any such adjournment if sufficient votes
have been received and it is otherwise appropriate. A shareholder of the Fund
may revoke his or her proxy at any time prior to its exercise by delivering
written notice of revocation or by executing and delivering a later-dated proxy
to the Secretary of Peachtree Funds, at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, or by attending the Special Meeting in person to vote
the shares of the Fund held by such shareholder. The date of the first mailing
of this Combined Prospectus/Proxy Statement to shareholders is approximately
August 5, 1996.
Solicitation of Proxies and Payment of Expenses
The cost of soliciting proxies for the Special Meeting,
consisting principally of printing and mailing expenses, together with the costs
of any supplementary solicitation and proxy soliciting services provided by
third parties, will be borne by NationsBank or Stephens. Proxies will be
solicited in the initial, and any supplemental, solicitation by mail and may be
solicited in person, by telephone, telegraph, or other electronic means by
officers of Peachtree Funds.
Peachtree Funds -- 5% Ownership as of June 26, 1996
<TABLE>
<CAPTION>
Amount % of Fund
Peachtree Fund Name and Address of Shares % of Fund Post-Closing
- -------------- ---------------- --------- --------- ------------
<S> <C> <C> <C> <C>
Prime Money BANK SOUTH 3,243,521.920 5.3523% .08%
Market Fund MONEY MARKET
3550 Cumberland Circle
Atlanta, GA 30339
CLAYTON CO 3,422,776.400 5.6481% .08%
PUBLIC EMPLOYEE-LIQ
200 Galleria, Suite 1200
Atlanta, GA 30339
CLAYTON CO 4,209,324.830 6.9461% .10%
PENSION BD - SAM
112 Smith St.
Jonesboro, GA 30236
HORTON HOMES ESOP 3,594,875.320 5.9321% .09%
P.O. Box 581
Eatonton, GA 31024
DEKALB MEDICAL CTR 3,344,450.450 5.5189% .08%
- MONTAG
2701 Decatur Rd
Decatur, GA 30033
</TABLE>
28
<PAGE>
As of the close of business on July ___, 1996, there were no
persons known to the Company to be owners of record of 5% or more of the
outstanding shares of any fund of the Company, except as indicated below. Unless
otherwise indicated, the address for each recordholder of Primary A Shares is
Attention: 1401 Elm Street, 11th Floor, Dallas, Texas 75202.
As of the close of business on July ____, 1996, the officers
and Directors of the Company as a group beneficially owned less than 1% of the
outstanding shares of the Company. As of the same date, NationsBank and its
affiliates possessed or shared power to dispose or vote with respect to more
than 25% of the outstanding shares of the Company and therefore could be
considered a controlling person of the Company for purposes of the 1940 Act.
Documents Incorporated by Reference
The Prospectus of the Acquiring Fund relating to its Primary A
Shares, dated July 31, 1996, is incorporated by reference into this Combined
Prospectus/Proxy Statement. In addition, the Fund's Prospectus dated November
30, 1995, is incorporated by reference into this Combined Prospectus/Proxy
Statement and may be obtained by calling Nations Fund at 1-800-626-2275. Copies
of documents requested will be sent by first-class mail to the requesting
shareholder within one business day of receipt of the request.
Other Business
The Board of Trustees of the Peachtree Funds knows of no other
business to be brought before the Special Meeting. However, if any other matters
come before the Special Meeting, including any proposal to adjourn the meeting
to permit the continued solicitation of proxies in favor of any of the
proposals, it is their 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 Proxy Card.
Future Shareholder Proposals
Pursuant to rules adopted by the SEC under the Securities
Exchange Act of 1934 (the "1934 Act"), investors may request inclusion in the
Board's proxy statement for shareholder meetings certain proposals for action
which they intend to introduce at such meeting. Any shareholder proposals must
be presented within a reasonable time before the proxy materials for the next
meeting are sent to shareholders. The submission of a proposal does not
guarantee its inclusion in Peachtree Funds' proxy statement and is subject to
limitations under the 1934 Act. It is not presently anticipated that the Company
or Peachtree Funds will hold regular meetings of investors, and no anticipated
date of the next meeting can be provided.
29
<PAGE>
EXHIBIT A
FORM OF
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement")
is made as of this _____ day of ____________, 1996, by and between Nations Fund,
Inc. ("Nations Fund"), a Maryland corporation, for itself and on behalf of the
Nations Prime Fund (the "Acquiring Fund"), a portfolio of Nations Fund, and
Peachtree Funds ("Peachtree Funds"), a Massachusetts business trust, for itself
and on behalf of the Peachtree Prime Fund (the "Acquired Fund"), a portfolio of
Peachtree Funds.
In accordance with the terms and conditions set forth in this
Agreement, the parties desire that all of the assets of the Acquired Fund be
transferred to the Acquiring Fund, as set forth in the table attached hereto as
Schedule A, in exchange for Trust A Shares of common stock of the Acquiring Fund
("Acquiring Fund Shares") and the assumption by the Acquiring Fund of the Stated
Liabilities (as defined in paragraph 1.3) of the Acquired Fund, and that such
Acquiring Fund Shares be distributed immediately after the Closing, as defined
in this Agreement, by the Acquired Fund to its shareholders in liquidation of
the Acquired Fund. This Agreement is intended to be and is adopted as a plan of
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code").
In consideration of the premises and of the covenants and
agreements hereinafter set forth, the parties hereto, intending to be legally
bound hereby, covenant and agree as follows:
1. REORGANIZATION OF ACQUIRED FUND
1.1 Subject to the terms and conditions herein set forth,
and on the basis of the representations and warranties contained herein, the
Acquired Fund shall assign, deliver and otherwise transfer its assets as set
forth in paragraph 1.2 (the "Fund Assets") to the Acquiring Fund, and the
Acquiring Fund shall, as consideration therefor, on the Closing Date (as defined
in paragraph 3.1), (i) deliver to the Acquired Fund full and fractional
Acquiring Fund Shares, the corresponding class and number of which shall be
determined by dividing (a) that portion of the value of the Fund Assets, net of
the Acquired Fund's Stated Liabilities, computed in the manner and as of the
time and date set forth in paragraph 2.1, representative of the shares of
beneficial interest of the Acquired Fund, by (b) the net asset value of one
share of the Acquiring Fund's corresponding class of shares identified in
Schedule A, computed in the manner and as of the time and date set forth in
paragraph 2.2, and (ii) assume the Acquired Fund's Stated Liabilities. Such
transfer, delivery and assumption shall take place at the closing(s) provided
for in paragraph 3.1 (hereinafter sometimes referred to as the "Closing(s)").
Promptly after the Closing(s), the Acquired Fund shall distribute the Acquiring
Fund Shares to the shareholders of the Acquired Fund in liquidation of the
Acquired Fund as provided in paragraph 1.4 hereof. Such transaction(s) are
hereinafter sometimes collectively referred to as the "Reorganization(s)."
A-1
<PAGE>
1.2 (a) With respect to the Acquired Fund, the Fund Assets
shall consist of all property and assets of any nature whatsoever, including,
without limitation, all cash, cash equivalents, securities, claims and
receivables (including dividend and interest receivables) owned by the Acquired
Fund, and any prepaid expenses shown as an asset on the Acquired Fund's books on
the Closing Date.
(b) At least fifteen (15) business days prior to the
Closing Date, the Acquired Fund will provide the Acquiring Fund with a schedule
of its securities and other assets and its known liabilities, and the Acquiring
Fund will provide the Acquired Fund with a copy of the current investment
objective and policies applicable to the Acquiring Fund. The Acquired Fund
reserves the right to sell any of the securities or other assets shown on the
list of the Fund's Assets prior to the Closing Date but will not, without the
prior approval of the Acquiring Fund, acquire any additional securities other
than securities which the Acquiring Fund is permitted to purchase in accordance
with its stated investment objective and policies. At least ten (10) business
days prior to the Closing Date, the Acquiring Fund will advise the Acquired Fund
of any investments of the Acquired Fund shown on such schedule which the
Acquiring Fund would not be permitted to hold, pursuant to its stated investment
objective and policies or otherwise. In the event that the Acquired Fund holds
any investments that the Acquiring Fund would not be permitted to hold under its
stated investment objective or policies, the Acquired Fund, if requested by the
Acquiring Fund, will dispose of such securities prior to the Closing Date to the
extent practicable. In addition, if it is determined that the portfolios of the
Acquired Fund and the Acquiring Fund, when aggregated, would contain investments
exceeding certain percentage limitations to which the Acquiring Fund is or will
be subject with respect to such investments, the Acquired Fund, if requested by
the Acquiring Fund, will dispose of and/or reinvest a sufficient amount of such
investments as may be necessary to avoid violating such limitations as of the
Closing Date.
1.3 The Acquired Fund will endeavor to discharge all of
its known liabilities and obligations prior to the Closing Date. The Acquiring
Fund will assume all liabilities and obligations reflected on an unaudited
statement of assets and liabilities of the Acquired Fund prepared by the or on
behalf of Peachtree Funds as of the Applicable Valuation Date (as defined in
paragraph 2.1), in accordance with generally accepted accounting principles
consistently applied from the prior audited period ("Stated Liabilities"). The
Acquiring Fund shall assume only the Stated Liabilities of the Acquired Fund,
and no other liabilities or obligations, whether absolute or contingent, known
or unknown, accrued or unaccrued.
1.4 Promptly after the Closing, the Acquired Fund will
distribute the Acquiring Fund Shares received by the Acquired Fund pursuant to
paragraph 1.1 pro rata to its shareholders of record determined as of the close
of business on the Closing Date ("Acquired Fund Investors") in complete
liquidation of the Acquired Fund. Such distribution will be accomplished by an
instruction, signed by an appropriate officer of Peachtree Funds, to transfer
the Acquiring Fund Shares then credited to the Acquired Fund's account on the
books of the Acquiring Fund to open accounts on the books of the Acquiring Fund
established and maintained by the Acquiring Fund's transfer agent in the names
of record of the Acquired Fund Investors and representing the respective pro
rata number of shares of the Acquiring Fund due such Acquired Fund Investor. In
exchange for Acquiring shares distributed, all issued and outstanding shares of
beneficial interest
A-2
<PAGE>
of the Acquired Fund will be redeemed and canceled simultaneously therewith on
the Acquired Fund's books; any outstanding share certificates representing
interests in the Acquired Fund will represent the right to receive such number
of Acquiring Fund Shares after the Closing as determined in accordance with
Section 1.1.
1.5 If any request shall be made for a change of the
registration of shares of the Acquiring Fund to another person from the account
of the shareholders in which name the shares are registered in the records of
the Acquired Fund it shall be a condition of such registration of shares that
there be furnished the Acquiring Fund an instrument of transfer properly
endorsed, accompanied by appropriate signature guarantees and otherwise in
proper form for transfer and, if any of such shares are outstanding in
certificated form, the certificates representing such shares, and that the
person requesting such registration shall pay to the Acquiring Fund any transfer
or other taxes required by reason of such registration or establish to the
reasonable satisfaction of the Acquiring Fund that such tax has been paid or is
not applicable.
1.6 Following the transfer of assets by the Acquired Fund
to the Acquiring Fund, the assumption of the Acquired Fund's Stated Liabilities
by the Acquiring Fund, and the distribution by the Acquired Fund of the
Acquiring Fund Shares received by it pursuant to paragraph 1.4, Peachtree Funds
shall terminate the qualification, classification and registration of the
Acquired Fund at all appropriate federal and state agencies. Any reporting or
other responsibility of Peachtree Funds is and shall remain the responsibility
of Peachtree Funds up to and including the date on which the particular Acquired
Fund is terminated and deregistered, subject to any reporting or other
obligations described in paragraph 4.9.
2. VALUATION
2.1 With respect to the Acquired Fund, the value of the
Fund Assets shall be the value of such assets computed as of the time at which
its net asset value is calculated pursuant to the valuation procedures set forth
in the Acquiring Fund's then current Prospectus and Statement of Additional
Information on the Closing Date, or at such time on such earlier or later date
as may mutually be agreed upon in writing among the parties hereto (such time
and date being herein called the "Applicable Valuation Date").
2.2 The net asset value of each share of the Acquiring
Fund shall be the net asset value per share computed on the Applicable Valuation
Date, using the market valuation procedures set forth in the Acquiring Fund's
then current Prospectus and Statement of Additional Information.
2.3 All computations of value contemplated by this Article
2 shall be made by the Acquiring Fund's Co-Administrator in accordance with its
regular practice as pricing agent and reviewed by its independent accountants.
The Acquiring Fund shall cause its Co-Administrator to deliver a copy of its
valuation report, reviewed by its independent accountants to Peachtree Funds and
to the Acquired Fund at the Closing.
A-3
<PAGE>
3. CLOSING(S) AND CLOSING DATE
3.1 The Closing for the Reorganization shall occur on
__________, 1996, and/or on such other date(s) as may be mutually agreed upon in
writing by the parties hereto (each, a "Closing Date"). The Closing(s) shall be
held at the offices of Stephens Inc., 111 Center Street, Suite 300, Little Rock,
Arkansas 72201 or at such other location as is mutually agreeable to the parties
hereto. All acts taking place at the Closing(s) shall be deemed to take place
simultaneously as of 9:00 a.m. Eastern time on the Closing Date unless otherwise
provided.
3.2 The Acquiring Fund's custodian shall deliver at the
Closing a certificate of an authorized officer stating that: (a) the Acquired
Fund's portfolio securities, cash and any other assets have been delivered in
proper form to the Acquiring Fund on the Closing Date and (b) all necessary
taxes including all applicable federal and state stock transfer stamps, if any,
have been paid, or provision for payment shall have been made, by the Acquired
Fund in conjunction with the delivery of portfolio securities. Proper delivery
of cash shall be by wire to Nations Bank of Texas, N.A., the Acquiring Fund's
Custodian, pursuant to instruction to be delivered prior to the Closing.
3.3 Notwithstanding anything herein to the contrary, in
the event that on the Applicable Valuation Date (a) the New York Stock Exchange
shall be closed to trading or trading thereon shall be restricted or (b) trading
or the reporting of trading on such exchange or elsewhere shall be disrupted so
that, in the judgment of both Nations Fund and Peachtree Funds, accurate
appraisal of the value of the net assets of the Acquiring Fund or the Acquired
Fund is impracticable, the Applicable Valuation Date shall be postponed until
the first business day after the day when trading shall have been fully resumed
without restriction or disruption and reporting shall have been restored.
3.4 The Acquired Fund shall provide the Acquiring Fund and
its transfer agents with immediate access from and after the Closing Date to (a)
the computer, electronic or such other forms of records containing the names,
addresses and taxpayer identification numbers of all of the Acquired Fund
Investors and the number and percentage ownership of outstanding Acquired Fund
shares owned by each such Acquired Fund Investor, all as of the Applicable
Valuation Date, and (b) all original documentation (including all applicable
Internal Revenue Service forms, certificates, certifications and correspondence)
relating to the Acquired Fund Investors' taxpayer identification numbers and
their liability for or exemption from back-up withholding. The Acquiring Fund
shall issue and deliver to the Secretary or Assistant Secretary of Peachtree
Funds, acting on behalf of the Acquired Fund, a confirmation evidencing the
Acquiring Fund Shares credited on the Closing Date or shall provide evidence
satisfactory to the Acquired Fund that such Acquiring Fund Shares have been
credited to the Acquired Fund's account on the books of the Acquiring Fund. At
the Closing(s), each party shall deliver to the other such bills of sale,
checks, assignments, share certificates, if any, receipts or other documents of
transfer, assignment or conveyance as such other party or its counsel may
reasonably request.
3.5 Within thirty (30) days after the Closing Date, the
Acquired Fund shall deliver, in accordance with Article 1 hereof, to the
Acquiring Fund a statement of the Fund Assets and Stated Liabilities, together
with a list of the Acquired Fund's portfolio securities and other
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assets showing the respective adjusted bases and holding periods thereof for
income tax purposes, as of the Closing Date, certified by an appropriate officer
of Peachtree Funds.
4. COVENANTS WITH RESPECT TO THE ACQUIRING FUND AND THE ACQUIRED FUND
4.1 With respect to the Acquired Fund, Peachtree Funds has
called or will call a meeting of Acquired Fund shareholders to consider and act
upon this Agreement and to take all other actions reasonably necessary to obtain
the approval of the transactions contemplated herein, including approval for the
Acquired Fund's liquidating distribution of Acquiring Fund Shares contemplated
hereby, and for Peachtree Funds to terminate the Acquired Fund's qualification,
classification and registration if requisite approvals are obtained with respect
to the Acquired Fund. Nations Fund and Peachtree Funds, have jointly prepared
the notice of meeting, form of proxy and proxy statement (collectively, "Proxy
Materials") to be used in connection with such meeting.
4.2 Peachtree Funds, on behalf of the Acquired Fund,
covenants that the Acquiring Fund Shares to be issued hereunder are not being
acquired for the purpose of making any distribution thereof, other than in
accordance with the terms of this Agreement.
4.3 Peachtree Funds, on behalf of the Acquired Fund, will
assist the Acquiring Fund in obtaining such information as the Acquiring Fund
reasonably requests concerning the beneficial ownership of shares of each class
of the Acquired Fund.
4.4 Subject to the provisions hereof, Nations Fund, on its
own behalf and on behalf of the Acquiring Fund, and Peachtree Funds, on its own
behalf and on behalf of the Acquired Fund, will, each, take, or cause to be
taken, all actions, and do, or cause to be done, all things reasonably
necessary, proper or advisable to consummate and make effective the transactions
contemplated herein.
4.5 Peachtree Funds, on behalf of the Acquired Fund, shall
furnish to the Acquiring Fund on the Closing Date, a final statement of the
total amount of the Acquired Fund's assets and liabilities as of the Closing
Date, which statement shall be certified by an appropriate officer of Peachtree
Funds as being determined in accordance with generally accepted accounting
principles consistently applied and as being valued in accordance with paragraph
2.1 hereof. As promptly as practicable, but in any case within sixty (60) days
after the Closing Date, Peachtree Funds, on behalf of the Acquired Fund, shall
furnish the Acquiring Fund, in such form as is reasonably satisfactory to the
Acquiring Fund, a statement certified by an officer of Peachtree Funds of the
Acquired Fund's income and gains or losses for federal income tax purposes that
will be carried over to the Acquiring Fund pursuant to Section 381 of the Code.
4.6 Nations Fund, on behalf of the Acquiring Fund, has
prepared and filed, or will prepare and file with the Securities and Exchange
Commission (the "SEC") a registration statement on Form N-14 under the
Securities Act of 1933, as amended (the "1933 Act"), relating to the Acquiring
Fund Shares (the "Registration Statement"). Peachtree Funds, on behalf of the
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Acquired Fund, has provided or will provide the Acquiring Fund with the Proxy
Materials for inclusion in the Registration Statement, prepared in accordance
with paragraph 4.1, and with such other information and documents relating to
the Acquired Fund as are requested by the Acquiring Fund and as are reasonably
necessary for the preparation of the Registration Statement.
4.7 As soon after the Closing Date as is reasonably
practicable, Peachtree Funds, on behalf of the Acquired Fund: (a) shall prepare
and file all federal and other tax returns and reports of the Acquired Fund
required by law to be filed with respect to all periods ending on or before the
Closing Date but not theretofore filed and (b) shall pay all federal and other
taxes shown as due thereon and/or all federal and other taxes that were unpaid
as of the Closing Date.
4.8 With respect to the Acquiring Fund, Nations Fund
agrees to use all reasonable efforts to operate in accordance with its then
current Prospectus and Statement of Additional Information prepared in
accordance with Form N-1A, including qualifying as a regulated investment
company under Subchapter M of the Code, for at least one (1) year following the
Closing Date.
4.9 Following the transfer of assets by the Acquired Fund
to the Acquiring Fund in exchange for Acquiring Fund Shares and the assumption
of the Stated Liabilities of the Acquired Fund as contemplated herein, Peachtree
Funds will file any final regulatory reports, including but not limited to any
Form N-SAR and Rule 24f-2 filings with respect to the Acquired Fund, promptly
after the Closing Date and also will take all other steps as are necessary and
proper to effect the termination or declassification of the Acquired Fund in
accordance with the laws of the Commonwealth of Massachusetts and other
applicable requirements.
5. REPRESENTATIONS AND WARRANTIES
5.1 Nations Fund, on behalf of itself and the Acquiring
Fund, represents and warrants to the Peachtree Funds as follows:
(a) Nations Fund was duly created pursuant to its
Articles of Incorporation by the Directors for the purpose of acting as a
management investment company under the Investment Company Act of 1940 (the
"1940 Act") and is validly existing under the laws of the State of Maryland, and
the Articles of Incorporation directs the Directors to manage the affairs of
Nations Fund and grant them all powers necessary or desirable to carry out such
responsibility, including administering Nations Fund business as currently
conducted by Nations Fund and as described in the current Prospectuses of
Nations Fund; Nations Fund is registered as an investment company classified as
an open-end management company, under the 1940 Act and its registration with the
SEC as an investment company is in full force and effect;
(b) The Registration Statement, including the current
Prospectus and Statement of Additional Information of the Acquiring Fund,
conform or will conform, at all times up to and including the Closing Date, in
all material respects to the applicable requirements of the 1933 Act and the
1940 Act and the regulations thereunder and do not include or will not include
any untrue statement of a material fact or omit to state any material fact
required to be stated
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therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(c) The Acquiring Fund is not in violation of, and the
execution, delivery and performance of this Agreement by Nations Fund for itself
and on behalf of the Acquiring Fund will not (i) violate Nations Fund's Articles
of Incorporation or By-Laws, or (ii) result in a breach or violation of, or
constitute a default under any material agreement or material instrument, to
which Nations Fund is a party or by which its properties or assets are bound.
(d) Except as previously disclosed in writing to the
Peachtree Funds, no litigation or administrative proceeding or investigation of
or before any court or governmental body is presently pending or, to Nations
Fund's knowledge, threatened against Nations Fund or its business, the Acquiring
Fund or any of its properties or assets, which, if adversely determined, would
materially and adversely affect Nations Fund or the Acquiring Fund's financial
condition or the conduct of their business, and Nations Fund knows of no facts
that might form the basis for the institution of any such proceeding or
investigation, and the Acquiring Fund is not a party to or subject to the
provisions of any order, decree or judgment of any court or governmental body
which materially and adversely affects, or is reasonably likely to materially
and adversely affect, its business or its ability to consummate the transactions
contemplated herein;
(e) All issued and outstanding shares of common stock,
including shares to be issued in connection with the Reorganization, of each
class of the Acquiring Fund will, as of the Closing Date, be duly authorized and
validly issued and outstanding, fully paid and non-assessable and the Acquiring
Fund does not have outstanding any option, warrants or other rights to subscribe
for or purchase any of its shares;
(f) The execution, delivery and performance of this
Agreement on behalf of the Acquiring Fund will have been duly authorized prior
to the Closing Date by all necessary action on the part of Nations Fund, the
Directors and the Acquiring Fund, and this Agreement will constitute a valid and
binding obligation of Nations Fund and the Acquiring Fund 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;
(g) The Acquiring Fund Shares to be issued and
delivered to the Acquired Fund for the account of the Acquired Fund Investors,
pursuant to the terms hereof, will have been duly authorized as of the Closing
Date and, when so issued and delivered, will be duly and validly issued, fully
paid and non-assessable, and the shares of each class of the Acquiring Fund
issued and outstanding prior to the Closing Date were offered and sold in
compliance with the applicable registration requirements, or exemptions
therefrom, of the 1933 Act, and all applicable state securities laws, and the
regulations thereunder;
(h) On the effective date of the Registration
Statement, at the time of the meeting of the Acquired Fund shareholders and on
the Closing Date, any written information furnished by Nations Fund with respect
to the Acquiring Fund for use in the Proxy Materials, the
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<PAGE>
Registration Statement or any other materials provided in connection with the
Reorganization does not and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the information provided
not misleading;
(i) No governmental consents, approvals,
authorizations or filings are required under the 1933 Act, the Securities
Exchange Act of 1934 (the "1934 Act"), the 1940 Act or Maryland law for the
execution of this Agreement by Nations Fund, for itself and on behalf of the
Acquiring Fund, or the performance of the Agreement by Nations Fund for itself
and on behalf of the Acquiring Fund, except for such consents, approvals,
authorizations and filings as have been made or received, and except for such
consents, approvals, authorizations and filings as may be required subsequent to
the Closing Date;
(j) The Statement of Assets and Liabilities, Statement
of Operations and Statements of Changes in Net Assets of the Acquiring Fund as
of and for the year ended May 31, 1995, audited by Price Waterhouse LLP (copies
of which have been or will be furnished to the Acquired Fund) fairly present, in
all material respects, the Acquiring Fund's financial condition as of such date
and its results of operations for such period in accordance with generally
accepted accounting principles consistently applied and as of such dates there
were no liabilities of the Acquiring Fund (contingent or otherwise) known to
Nations Fund that were not disclosed therein but that would be required to be
disclosed therein in accordance with generally accepted accounting principles;
(k) Since the date of the most recent audited
financial statements, there has not been any material adverse change in the
Acquiring Fund's financial condition, assets, liabilities or business, other
than changes occurring in the ordinary course of business;
(l) For each full and partial taxable year from its
inception through the Closing Date, the Acquiring Fund has qualified as a
separate regulated investment company under Subchapter M of the Code and has
taken all necessary and required actions to maintain such status;
(m) All federal and other tax returns and reports of
Nations Fund and the Acquiring Fund required by law to be filed on or before the
Closing Date have been or will be filed, and all federal and other taxes owed by
Nations Fund on behalf of the Acquiring Fund have been or will be paid so far as
due, and to the best of Nations Fund's knowledge, no such return is currently
under audit and no assessment has been asserted with respect to any such return;
and
(n) At the Closing Date, the Acquiring Fund will have
good and marketable title to its assets and full right, power and authority to
assign, deliver and otherwise transfer such assets.
5.2 Peachtree Funds, on behalf of itself and the Acquired
Fund, represents and warrants to Nations Fund as follows:
(a) Peachtree Funds was duly created pursuant to its
Declaration of Trust by the Trustees for the purpose of acting as a management
investment company under the
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1940 Act and is validly existing under the laws of the Commonwealth of
Massachusetts, and the Declaration of Trust directs the Trustees to manage the
affairs of Peachtree Funds and grants them all powers necessary or desirable to
carry out such responsibility, including administering Peachtree Funds' business
as currently conducted by Peachtree Funds and as described in the current
Prospectuses of Peachtree Funds; Peachtree Funds is registered as an investment
company classified as an open-end management company, under the 1940 Act and its
registration with the SEC as an investment company is in full force and effect;
(b) All of the issued and outstanding shares
representing units of beneficial interest of the Acquired Fund have been offered
and sold in compliance in all material respects with applicable registration
requirements of the 1933 Act and state securities laws;
(c) The Acquired Fund is not in material violation of,
and the execution and the performance of the Agreement by Peachtree Funds for
itself and on behalf of the Acquired Fund does not and will not (i) violate
Peachtree Funds' Declaration of Trust or By-Laws, or (ii) result in a breach or
violation of, or constitute a default under, any term of any material agreement
or material instrument to which Peachtree Funds is a party or by which its
properties or assets are bound;
(d) Except as previously disclosed in writing to
Nations Fund, no litigation or administrative proceeding or investigation of or
before any court or governmental body is presently pending or, to Peachtree
Funds' knowledge, threatened against the Acquired Fund or any of its properties
or assets which, if adversely determined, would materially and adversely affect
the Acquired Fund's financial condition or the conduct of its business, and
Peachtree Funds knows of no facts that might form the basis for the institution
of any such proceeding or investigation, and the Acquired Fund is not a party to
or subject to the provisions of any order, decree or judgment of any court or
governmental body that materially and adversely affects, or is reasonably likely
to materially and adversely affect, its business or its ability to consummate
the transactions contemplated herein;
(e) The Statement of Assets and Liabilities, Statement
of Operations and Statement of Changes in Net Assets of the Acquired Fund as of
and for the year ended September 30, 1995, audited by Ernst & Young, LLP (copies
of which have been or will be furnished to the Acquiring Fund) fairly present,
in all material respects, the Acquired Fund's financial condition as of such
date and its results of operations for such period in accordance with generally
accepted accounting principles consistently applied, and as of such date there
were no liabilities of the Acquired Fund (contingent or otherwise) known to
Peachtree Funds that were not disclosed therein but that would be required to be
disclosed therein in accordance with generally accepted accounting principles;
(f) Since the date of the most recent audited
financial statements, there has not been any material adverse change in the
Acquired Fund's financial condition, assets, liabilities or business, other than
changes occurring in the ordinary course of business, or any incurrence by the
Acquired Fund of indebtedness maturing more than one year from the date such
indebtedness was incurred, except as otherwise disclosed in writing to and
accepted by the Acquiring Fund, prior to the Closing Date (for the purposes of
this subparagraph (f), neither a
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decline in the Acquired Fund's net asset value per share nor a decrease in the
Acquired Fund's size due to redemptions shall be deemed to constitute a material
adverse change);
(g) All federal and other tax returns and reports of
Peachtree Funds and the Acquired Fund required by law to be filed, with respect
to all periods ending on or before the Closing Date, have been or will be filed,
and all federal and other taxes owed by Peachtree Funds or the Acquired Fund
have been or will be paid so far as due, and to the best of Peachtree Funds'
knowledge, no such return is currently under audit and no assessment has been
asserted with respect to any such return;
(h) For each full and partial taxable year from its
inception through the Closing Date, the Acquired Fund has qualified as a
separate regulated investment company under Subchapter M of the Code and has
taken all necessary and required actions to maintain such status;
(i) All issued and outstanding shares of the Acquired
Fund are, and on the Closing Date will be, duly authorized and validly issued
and outstanding, and fully paid and non-assessable, and all such shares will, at
the time of the Closing, be held by the persons and in the amounts set forth in
the list of Acquired Fund Investors provided to the Acquiring Fund, pursuant to
paragraph 3.4, and the Acquired Fund does not have outstanding any options,
warrants or other rights to subscribe for or purchase any of its shares, nor is
there outstanding any security convertible into any of its shares;
(j) At the Closing Date, the Acquired Fund will have
good and marketable title to its Fund Assets and full right, power and authority
to assign, deliver and otherwise transfer such Fund Assets hereunder, and upon
delivery and payment for such Fund Assets as contemplated herein, the Acquiring
Fund will acquire good and marketable title thereto, subject to no restrictions
on the ownership or transfer thereof other than such restrictions as might arise
under the 1933 Act;
(k) The execution, delivery and performance of this
Agreement on behalf of the Acquired Fund will have been duly authorized prior to
the Closing Date by all necessary action on the part of Peachtree Funds, the
Trustees and the Acquired Fund, and this Agreement will constitute a valid and
binding obligation of Peachtree Funds and the Acquired Fund 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;
(l) From the effective date of the Registration
Statement, through the time of the meeting of the Acquired Fund Investors, and
on the Closing Date, the Proxy Materials: (i) comply in all material respects
with the applicable provisions of the 1933 Act, the 1934 Act and the 1940 Act
and the regulations thereunder and (ii) do 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 therein not misleading, and as of such dates
and times, any written information furnished by Peachtree Funds, on behalf of
the Acquired Fund, for use in the Registration Statement or in any other manner
that may be necessary in connection with the
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transactions contemplated hereby does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the information
provided not misleading; and
(m) No governmental consents, approvals,
authorizations or filings are required under the 1933 Act, the 1934 Act, the
1940 Act or Massachusetts law for the execution of this Agreement by Peachtree
Funds, for itself and on behalf of the Acquired Fund, or the performance of the
Agreement by Peachtree Funds for itself and on behalf of the Acquired Fund,
except for such consents, approvals, authorizations and filings as have been
made or received, and except for such consents, approvals, authorizations and
filings as may be required subsequent to the Closing Date.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRED FUND
The obligations of Peachtree Funds to consummate the
Reorganization with respect to the Acquired Fund shall be subject to the
performance by Nations Fund, for itself and on behalf of the Acquiring Fund, of
all the obligations to be performed by it hereunder on or before the Closing
Date and, in addition thereto, the following conditions with respect to the
Acquiring Fund:
6.1 All representations and warranties of Nations Fund
with respect to the Acquiring Fund contained herein shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated herein, as of the Closing Date with the same
force and effect as if made on and as of the Closing Date.
6.2 Nations Fund, on behalf of the Acquiring Fund, shall
have delivered to the Peachtree Funds at the Closing a certificate executed on
behalf of the Acquiring Fund by Nations Fund's President, Secretary or Assistant
Secretary in a form reasonably satisfactory to the Peachtree Funds and dated as
of the Closing Date, to the effect that the representations and warranties of
Nations Fund with respect to the Acquiring Fund made herein are true and correct
at and as of the Closing Date, except as they may be affected by the
transactions contemplated herein, and as to such other matters as the Acquired
Fund shall reasonably request.
6.3 The Acquired Fund shall have received at the Closing a
favorable opinion of Morrison & Foerster LLP, counsel to Nations Fund (based
upon or subject to such representations, assumptions, limitations or opinions of
local counsel as such counsel may deem appropriate or necessary), dated as of
the Closing Date, in a form (including the representations, assumptions,
limitations or opinions of local counsel upon which it is based or to which it
is subject) reasonably satisfactory to the Acquired Fund, substantially to the
effect that:
(a) Nations Fund is a duly registered, open-end,
management investment company, and its registration with the SEC as an
investment company under the 1940 Act is in full force and effect; (b)
the Acquiring Fund is a portfolio of Nations Fund, which is a
corporation duly created pursuant to its Articles of Incorporation, is
validly existing and in good standing under the laws of the State of
Maryland, and the Articles of Incorporation direct the Directors to
manage the affairs of Nations Fund and grant them all
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powers necessary or desirable to carry out such responsibility,
including administering Nations Fund's business as described in the
current Prospectuses of Nations Fund; (c) this Agreement has been duly
authorized, executed and delivered on behalf of Nations Fund and the
Acquiring Fund and, assuming due authorization, execution and delivery
of this Agreement on behalf of the Acquiring Fund, is a valid and
binding obligation of Nations Fund enforceable against Nations Fund 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; (d) the Acquiring Fund Shares
to be issued to the Acquired Fund Investors pursuant to this Agreement
are duly registered under the 1933 Act on the appropriate form, and are
duly authorized and upon such issuance will be validly issued and
outstanding and fully paid and non-assessable, and no shareholder of
the Acquiring Fund has any preemptive rights to subscription or
purchase in respect thereof; (e) the Registration Statement has become
effective with the SEC and, to the best of such counsel's knowledge, no
stop order suspending the effectiveness thereof has been issued and no
proceedings for that purpose have been instituted or are pending or
threatened; (f) no consent, approval, authorization, filing or order of
any court or governmental authority of the United States or any state
is required for the consummation by Nations Fund of the Reorganization
with respect to the Acquiring Fund; and (g) to the best knowledge of
such counsel, no litigation or administrative proceeding or
investigation of or before any court or governmental body is presently
pending or threatened as to Nations Fund or the Acquiring Fund or any
of their properties or assets and neither Nations Fund nor the
Acquiring Fund is a party to or subject to the provisions of any order,
decree or judgment of any court or governmental body that materially
and adversely affects its business.
6.4 As of the Closing Date with respect to the
Reorganization of the Acquired Fund, there shall have been no material change in
the investment objective, policies and restrictions nor any material change in
the investment management fees, fee levels payable pursuant to the 12b-1 plan of
distribution, other fees payable for services provided to the Acquiring Fund,
fee waiver or expense reimbursement undertakings, or sales loads of the
Acquiring Fund from those fee amounts, undertakings and sales load amounts
described in the Prospectus of the Acquiring Fund delivered to the Acquired Fund
pursuant to paragraph 4.1 and in the Proxy Materials.
6.5 With respect to the Acquiring Fund, the Board of
Directors of Nations Fund shall have determined that the Reorganization is in
the best interests of the Acquiring Fund and that the interests of the existing
shareholders of the Acquiring Fund would not be diluted as a result of the
Reorganization.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF ACQUIRING FUND
The obligations of Nations Fund to consummate the
Reorganization with respect to the Acquiring Fund shall be subject to the
performance by Peachtree Funds of all the
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obligations to be performed by it hereunder, with respect to the Acquired Fund,
on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of Peachtree Funds
with respect to the Acquired Fund contained herein shall be true and correct in
all material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date, with
the same force and effect as if made on and as of the Closing Date.
7.2 Peachtree Funds, on behalf of the Acquired Fund, shall
have delivered to the Acquiring Fund at the Closing a certificate executed on
behalf of the Acquired Fund, by Peachtree Funds' President, Secretary or
Assistant Secretary, in form and substance satisfactory to the Acquiring Fund
and dated as of the Closing Date, to the effect that the representations and
warranties of Peachtree Funds with respect to the Acquired Fund made herein are
true and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated herein and as to such other matters as the
Acquiring Fund shall reasonably request.
7.3 The Acquiring Fund shall have received at the Closing
a favorable opinion from Dickstein, Shapiro & Morin, L.L.P., counsel to
Peachtree Funds (based upon or subject to such representations, assumptions,
limitations or opinions of local counsel as such counsel may deem appropriate or
necessary), dated as of the Closing Date, in a form (including the
representations, assumptions, limitations or opinions of local counsel upon
which it is based or to which it is subject) reasonably satisfactory to the
Acquiring Fund, substantially to the effect that:
(a) Peachtree Funds is a duly registered,
open-end investment company, and its registration with the SEC as an
investment company under the 1940 Act is in full force and effect; (b)
the Acquired Fund is a portfolio of Peachtree Funds, Peachtree Funds is
a business trust duly created pursuant to its Declaration of Trust, is
validly existing and in good standing under the laws of the
Commonwealth of Massachusetts, and the Declaration of Trust directs the
Trustees to manage the affairs of Peachtree Funds and grants them all
powers necessary or desirable to carry out such responsibility,
including administering Peachtree Funds' business as described in the
current Prospectus of Peachtree Funds; (c) this Agreement has been duly
authorized, executed and delivered by Peachtree Funds on behalf of
Peachtree Funds and the Acquired Fund and, assuming due authorization,
execution and delivery of this Agreement on behalf of the Acquiring
Fund, is a valid and binding obligation of Peachtree Funds, enforceable
against Peachtree Funds 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; (d) no
consent, approval, authorization, filing or order of any court or
governmental authority of the United States or any state is required
for the consummation of the Reorganization with respect to the Acquired
Fund, except for such consents, approvals, authorizations and filings
as have been made or received, and except for such consents, approvals,
authorizations and filings as may be required subsequent to the Closing
Date; and (e) to the best knowledge of such counsel, no litigation or
administrative proceeding or investigation of or before any court or
governmental body is presently pending or threatened as to Peachtree
Funds or the Acquired Fund or any of
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<PAGE>
their properties or assets and neither Peachtree Funds nor the Acquired
Fund is a party to or subject to the provisions of any order, decree or
judgment of any court or governmental body that materially and
adversely effects its business.
7.4 Nations Fund, on behalf of the Acquiring Fund, shall
have received from Ernst & Young, LLP a letter addressed to Nations Fund, on
behalf of the Acquiring Fund, and dated as of the Closing Date with respect to
the Acquired Fund, in form and substance satisfactory to Nations Fund, to the
effect that:
(a) they are independent accountants with respect to
Peachtree Funds and the Acquired Fund within the meaning of the 1933 Act and the
applicable regulations thereunder;
(b) in their opinion, the audited financial statements
and the Per Share Data provided in accordance with Item 3 in Form N-1A (the "Per
Share Data") of the Acquired Fund included or incorporated by reference in the
Registration Statement and Proxy Statement and previously reported on by them
comply as to form in all material aspects with the applicable accounting
requirements of the 1933 Act and the published rules and regulations thereunder;
(c) on the basis of limited procedures agreed upon by
Nations Fund, on behalf of the Acquiring Fund and Peachtree Funds, on behalf of
the Acquired Fund, and described in such letter (but not an examination in
accordance with generally accepted auditing standards), the information relating
to the Acquired Fund appearing in the Registration Statement and Proxy Statement
that is expressed in dollars or percentages of dollars (with the exception of
performance comparisons) has been obtained from the accounting records of the
Acquired Fund or from schedules prepared by officers of Peachtree Funds having
responsibility for financial and reporting matters and such information is in
agreement with such records, schedules or computations made therefrom.
7.5 Peachtree Funds shall have delivered to the Acquiring
Fund, pursuant to paragraph 5.2(e), copies of financial statements of the
Acquired Fund as of and for the period ended September 30, 1995, audited by
Ernst & Young, LLP.
7.6 With respect to the Acquired Fund, the Board of
Trustees of Peachtree Funds shall have determined that the Reorganization is in
the best interests of the Acquired Fund and that the interests of the existing
investors in the Acquired Fund would not be diluted as a result of the
Reorganization.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE ACQUIRING FUND AND
THE ACQUIRED FUND
The obligations of the Acquiring Fund and of the Acquired Fund
herein are each subject to the further conditions that on or before the Closing
Date with respect to the Acquiring Fund and the Acquired Fund:
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8.1 This Agreement and the transactions contemplated
herein shall have been approved by the requisite vote of the holders of the
outstanding shares of beneficial interest in the Acquired Fund in accordance
with the provisions of Peachtree Funds' Declaration of Trust and the
requirements of the 1940 Act, and certified copies of the resolutions evidencing
such approval shall have been delivered to the Acquiring Fund.
8.2 On the Closing Date, no action, suit or other
proceeding shall be 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 any of the transactions contemplated herein.
8.3 All consents of other parties and all other consents,
orders, approvals and permits of federal, state and local regulatory authorities
(including, without limitation, those of the SEC and of state securities
authorities) deemed necessary by Nations Fund, on behalf of the Acquiring Fund
or by Peachtree Funds, on behalf of the Acquired Fund, to permit consummation,
in all material respects, of the transactions contemplated herein shall have
been obtained, except where failure to obtain any such consent, order or permit
would not, in the opinion of the party asserting that the condition to closing
has not been satisfied, involve a risk of a material adverse effect on the
assets or properties of the Acquiring Fund or the Acquired Fund.
8.4 The Registration Statement shall have become effective
under the 1933 Act, no stop orders suspending the effectiveness thereof shall
have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or be
pending, threatened or contemplated under the 1933 Act.
8.5 The Acquired Fund shall have declared a dividend or
dividends which, together with all previous such dividends, shall have the
effect of distributing to the Acquired Fund's shareholders substantially all of
the Acquired Fund's investment company taxable income for all taxable years
ending on or prior to the Closing Date (computed without regard to any deduction
for dividends paid) and substantially all of its net capital gain for all
taxable years ending on or prior to the Closing Date (after reduction for any
capital loss carry forward.)
8.6 The Acquiring Fund and the Acquired Fund shall have
received from Price Waterhouse LLP a letter dated as of the Closing Date, in
form and substance satisfactory to Nations Fund and to Peachtree Funds, to the
effect that on the basis of limited procedures agreed upon by Nations Fund, on
behalf of the Acquiring Fund and Peachtree Funds, on behalf of the Acquired
Fund, (but not an examination in accordance with generally accepted auditing
standards): (i) the data utilized in the calculations of the projected expense
ratio appearing in the Registration Statement and Proxy Materials agree with
underlying accounting records of the Acquiring Fund and the Acquired Fund or to
written estimates by Stephens Inc. and were found to be mathematically correct;
and (ii) the calculation of net asset value per share of the Acquired Fund as of
the Valuation Date was determined in accordance with generally accepted
accounting practices and the portfolio valuation practices of the Acquiring
Fund.
A-15
<PAGE>
8.7 Nations Fund shall have received the opinion of
Morrison & Foerster LLP addressed to both the Acquiring Fund and the Acquired
Fund substantially to the effect that, for federal income tax purposes:
(a) the transfer of all or substantially all of the
Acquired Fund assets in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain identified liabilities of the
Acquired Fund will constitute a "reorganization" within the meaning of Sections
368(a)(1)(C) of the Code and the Acquiring Fund and the Acquired Fund will each
be a "party to a reorganization" within the meaning of Section 368(b) of the
Code; (b) no gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the Acquiring
Fund Shares and the assumption by the Acquiring Fund of certain identified
liabilities of the Acquired Fund, or upon the distribution of Acquiring Fund
Shares in exchange for their Shares of the Acquired Fund; (c) no gain or loss
will be recognized by the Acquired Fund upon the transfer of the Acquired Fund
assets to the Acquiring Fund in exchange for the Acquiring Fund Shares and the
assumption by the Acquiring Fund of certain identified liabilities of the
Acquired Fund or upon the distribution (whether actual or constructive) of the
Acquiring Fund Shares to shareholders in exchange for their shares of the
Acquired Fund; (d) no gain or loss will be recognized by the Acquired Fund
Shareholders upon the exchange of their Acquired Fund Shares for the Acquiring
Fund Shares; (e) the aggregate federal income tax basis for the Acquiring Fund
Shares received by each of the Acquired Fund Shareholders pursuant to the
Reorganization will be the same as the aggregate federal income tax basis of the
Shareholder's Acquired Fund shares exchanged thereafter; (f) the holding period
of the Acquiring Fund Shares to be received by each Acquired Fund Shareholder
will include the period during which the Acquired Fund shares exchanged therefor
were held by such shareholder (provided the Acquired Fund shares were held as
capital assets); (g) the federal income tax basis of the Acquired Fund assets
acquired by the Acquiring Fund will be same as the federal income tax basis of
such assets in the hands of the Acquired Fund immediately prior to the
Reorganization, and the holding period of the assets of the Acquired Fund
received by the Acquiring Fund will include the period during which those assets
were held by the Acquired Fund; and (h) each Acquiring Fund will succeed to the
corresponding Fund's tax attributes described in Section 381(c) of the Code as
of the end of the Closing Date.
Notwithstanding anything herein to the contrary, neither the
Acquiring Fund nor the Acquired Fund may waive the condition set forth in this
paragraph 8.7.
9. BROKERAGE FEES AND EXPENSES
9.1 Nations Fund, for itself and on behalf of the
Acquiring Fund and Peachtree Funds, for itself and on behalf of the Acquired
Fund, represent and warrant that there are no brokers or finders entitled to
receive any payments in connection with the transactions provided for herein.
9.2 Except as may be otherwise provided herein, the
Acquired Fund and the Acquiring Fund shall be liable for its expenses incurred
in connection with entering into and carrying out the provisions of this
Agreement, whether or not the transactions contemplated
A-16
<PAGE>
hereby are consummated. The expenses payable by the Acquired Fund hereunder
shall include (i) fees and expenses of its counsel and independent accountants
incurred in connection with the Reorganization; (ii) all fees and expenses
related to the liquidation of the Acquired Fund; (iii) fees and expenses of the
Acquired Fund's custodian and transfer agent(s) incurred in connection with the
Reorganization; and (iv) any special pricing fees associated with the valuation
of the Acquired Fund's portfolio on the Applicable Valuation Date. The expenses
payable by the Acquiring Fund hereunder shall include (i) fees and expenses of
its counsel and independent accountants incurred in connection with the
Reorganization; (ii) expenses associated with preparing this Agreement and
preparing and filing the Registration Statement under the 1933 Act covering the
Acquiring Fund Shares to be issued in the Reorganization; (iii) registration or
qualification fees and expenses of preparing and filing such forms, if any, as
are necessary under applicable state securities laws to qualify the Acquiring
Fund Shares to be issued in connection with the Reorganization; (iv) any fees
and expenses of the Acquiring Fund's custodian and transfer agent(s) incurred in
connection with the Reorganization; and (v) any special pricing fees associated
with the valuation of the Acquiring Fund's portfolio on the Applicable Valuation
Date.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 This Agreement constitutes the entire agreement
between the parties and supersedes any prior or contemporaneous understanding or
arrangement with respect to the subject matter hereof.
10.2 The representations, warranties and covenants
contained in this Agreement or in any document delivered pursuant hereto or in
connection herewith shall not survive the consummation of the transactions
contemplated herein.
11. TERMINATION
11.1 This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing:
(a) by the mutual written consent of Nations Fund and
the Peachtree Funds;
(b) by either Nations Fund or the Peachtree Funds by
notice to the other, without liability to the terminating party on account of
such termination (provided any such termination shall not excuse the terminating
party from any liability arising out of a default or breach of this Agreement by
such terminating party) if such Closing shall not have occurred on or before
December 31, 1996; or
(c) by either Nations Fund or the Peachtree Funds, in
writing without liability to the terminating party on account of such
termination (provided any such termination shall not excuse the terminating
party from any liability arising out of a material default or breach of this
Agreement by such terminating party), if (i) the other party shall fail to
perform in any material respect its agreements contained herein required to be
performed prior to the Closing
A-17
<PAGE>
Date, (ii) the other party materially breaches or shall have breached any of its
representations, warranties or covenants contained herein, or (iii) any other
express condition precedent to the obligations of the terminating party has not
been met and it reasonably appears that it will not or cannot be met.
11.2 Termination of this Agreement pursuant to paragraphs
11.1(a) or (b) shall terminate all obligations of Peachtree Funds, Nations Fund,
the Acquired Fund and the Acquiring Fund and there shall be no liability for
damages on the part of Nations Fund, Peachtree Funds, or the trustees, directors
or officers of Nations Fund and/or Peachtree Funds, to any other party or its
trustees, directors or officers on account of termination pursuant to paragraphs
11.1(a) or (b); provided, however, that notwithstanding any termination of this
Agreement pursuant to paragraph 11.1, such termination shall not relieve either
party of its respective obligations pursuant to Section 9.2 hereof.
12. 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 Nations Fund, acting on behalf of the Acquiring Fund and the authorized
officers of Peachtree Funds, acting on behalf of the shareholders of the
Acquired Fund; provided, however, that following the meeting of the shareholders
of the Acquired Fund, no such amendment may have the effect of changing the
provisions for determining the number of shares of the Acquiring Fund to be
issued to the Acquired Fund Investors under this Agreement to the detriment of
such Acquired Fund Investors, or otherwise materially and adversely affecting
the Acquired Fund, without the Acquired Fund obtaining the Acquired Fund
Investors' further approval except that nothing in this paragraph 12 shall be
construed to prohibit the Acquiring Fund and the Acquired Fund from amending
this Agreement to change the Closing Date or Applicable Valuation Date by mutual
agreement.
A-18
<PAGE>
13. NOTICES
Any notice, report, statement or demand required or permitted
by any provision of this Agreement shall be in writing and shall be given by
prepaid telegraph, telecopy, certified mail or overnight express courier
addressed to:
For Nations Fund, on behalf of itself and the Acquiring Fund:
Richard H. Blank, Jr.
Secretary
c/o Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
With copies to:
Robert M. Kurucza, Esquire and
Marco E. Adelfio, Esquire
Morrison & Foerster LLP
2000 Pennsylvania Avenue, N.W.
Suite 5500
Washington, D.C. 20006
For Peachtree Funds, on behalf of itself and the Acquired Fund:
Grant Anderson
Corporate Counsel
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
With copies to:
Matthew G. Maloney, Esquire
Dickstein, Shapiro & Morin, L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
A-19
<PAGE>
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT; LIMITATION OF LIABILITY
14.1 The article and paragraph headings contained herein
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to Articles, paragraphs,
subparagraphs or Exhibits shall be construed as referring to Articles,
paragraphs or subparagraphs hereof or Exhibits hereto, respectively. Whenever
the terms hereto, hereunder, herein or hereof are used in this Agreement, they
shall be construed as referring to this entire Agreement, rather than to any
individual Article, paragraph, subparagraph or sentence.
14.2 This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
14.3 This Agreement shall be governed by and construed in
accordance with the laws of Maryland.
14.4 This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns, but no
assignment or transfer hereof or of any rights or obligations hereunder shall be
made by any party without the written consent of the other parties. Nothing
herein expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and their
respective successors and assigns, any rights or remedies under or by reason of
this Agreement.
14.5 It is expressly agreed that the obligations of
Nations Fund and/or Peachtree Funds hereunder shall not be binding upon any of
the Trustees or Directors, shareholders, nominees, officers, agents, or
employees of Nations Fund and/or Peachtree Funds personally, but shall bind only
the assets and the property of the Acquiring Fund of Nations Fund, as provided
in its Articles of Incorporation and the Acquired Fund of Peachtree Funds, as
provided in its Declaration of Trust. The execution and delivery by such
officers shall not be deemed to have been made by any of them individually or to
impose any liability on any of them personally, but shall bind only the assets
and the property of the respective Acquiring Fund of Nations Fund as provided in
its Articles of Incorporation and the Acquired Fund of Peachtree Funds, as
provided in its Declaration of Trust.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be duly executed by its authorized officer, and attested by its
Secretary.
NATIONS FUND, INC., for itself and on behalf of the
Acquiring Fund
By:
Name:
A-20
<PAGE>
Title:________________________________________________
PEACHTREE FUNDS, for itself and on behalf of the
Acquired Fund
By:
Name:
Title:________________________________________________
A-21
<PAGE>
SCHEDULE A
Acquiring Fund Acquired Fund
Nations Prime Fund Peachtree Prime Fund
Primary A Shares
A-22
<PAGE>
Statement of Additional Information
Dated August 5, 1996
Peachtree Funds
Federated Investors Tower
Pittsburgh, PA 15222-3779
(800) 626-2275
Nations Fund Inc.
One NationsBank Plaza
Charlotte, NC 28255
(800) 626-2275
(September 23, 1996 Special Meeting of Shareholders of Peachtree Funds)
This Statement of Additional Information is not a prospectus but should
be read in conjunction with the Combined Prospectus/Proxy Statement dated the
date hereof, for the Special Meeting of Shareholders of Peachtree Funds to be
held September 23, 1996. Copies of the Combined Prospectus/Proxy Statement may
be obtained at no charge by writing or calling Peachtree Funds or the Company at
the addresses or telephone numbers set forth above. Unless otherwise indicated,
capitalized terms used herein and not otherwise defined have the same meanings
as are given to them in the Combined Prospectus/Proxy Statement.
Incorporation of Documents by Reference in Statement of Additional Information
Further information about Primary A Shares of the Acquiring Fund is
contained in and incorporated herein by reference to the statement of additional
information for the Primary A Shares of the Acquiring Fund dated July 31, 1996.
The audited financial statements and related independent auditors'
report for the Acquiring Fund contained in the Annual Report for the period year
ended March 31, 1996 are hereby incorporated by reference. No other parts of the
Annual Report are incorporated by reference.
Further information about the shares of the Fund is contained in and
incorporated herein by reference to the statement of additional information for
the shares of the Fund dated November 30, 1995.
The audited financial statements of the Fund for the year ended
September 30, 1995 contained in the Fund's Annual Report and the unaudited
financial statements for the Fund contained in the Semi-Annual Report for the
six-month period ended March 31, 1996, are hereby incorporated by reference.
1
<PAGE>
Table of Contents
General
Information...................................................3
Pro Forma Financial Information...............................4
2
<PAGE>
General Information
As a result of the merger of Bank South into NationsBank on January 9,
1996, the investment advisory agreement between Peachtree Funds and Bank South,
in accordance with applicable law and their terms, terminated automatically.
Shortly thereafter, a new Advisory and Sub-Advisory Contract was approved by the
shareholders of the Fund in order to ensure continuity in the provision of
investment advisory services to the Fund.
Accordingly, the Board of Trustees of Peachtree Funds is proposing that
the shareholders of the Fund approve an Agreement and Plan of Reorganization for
the Fund, and the transactions contemplated thereby, which include (a) the
transfer of all of the assets of the Fund to the Acquiring Fund of the Company
in exchange for Primary A Shares of the Acquiring Fund, and the assumption by
the Acquiring Fund of stated liabilities of the Fund; and (b) the distribution
of Primary A Shares of the Acquiring Fund to shareholders of the Fund.
The Primary A Shares issued by the Company will have an aggregate value
equal to the aggregate value of the shares of the Fund that are outstanding
immediately before the Closing.
After the transfer of their assets and liabilities in exchange for
Primary A Shares of the Acquiring Fund, the Fund will distribute the Primary A
Shares of the Acquiring Fund to its shareholders in liquidation of the Fund.
Each shareholder owning shares of the Fund at the Closing will receive Primary A
Shares of the Acquiring Fund, as specified above, of equal value, and will
receive any unpaid dividends or distributions that were declared before the
Closing on shares of the Fund. The Company will establish an account for each
former shareholder of the Fund reflecting the appropriate number of Primary A
Shares distributed to the shareholder. These accounts will be identical to the
accounts currently maintained by Peachtree Funds for each shareholder. Upon
completion of the Reorganization, all outstanding shares of the Fund will be
redeemed and canceled in exchange for Primary A Shares of the Acquiring Fund,
and Peachtree Funds will wind up its affairs, and be deregistered as an
investment company under the 1940 Act.
3
<PAGE>
Pro Forma Financial Information
Pro forma financial information giving effect to the proposed transfer
of the assets and liabilities of the Fund to the Acquiring Fund is not presented
in this Statement of Additional Information because, as of June 28, 1996, the
aggregate net asset value of the Fund was less than 10% of the aggregate net
asset value of Acquiring Fund.
4
NATIONS FUND, INC.
ONE NATIONSBANK PLAZA
33rd Floor
Charlotte, NC 28255
1-800-626-2275
FORM N-14
PART C
OTHER INFORMATION
Item 15. Indemnification.
Under the terms of the Maryland Corporation Law and the Registrant's
Charter and By-Laws, incorporated by reference as Exhibits (1) and 2(a) hereto,
provides for the indemnification of Registrant's directors and employees.
Indemnification of Registrant's principal underwriter, custodian, and transfer
agent is provided for, respectively, in the Registrant's:
1. Administration Agreement with Stephens Inc.;
2. Co-Administration Agreement with First Data Investors Services Group, Inc.
(formerly, The Shareholder Services Group, Inc.);
3. Mutual Fund Custody Agreement with NationsBank Texas;
4. Custody Agreement with Boston Safe Deposit and Trust Company;
5. Transfer Agency Agreement with NationsBank Texas; and
6. Transfer Agency and Registrar Agreement with First Data Investors Services
Group, Inc. (formerly, The Shareholder Services Group, Inc.).
The Registrant has entered into a Cross Indemnification Agreement with Nations
Fund Trust (the "Trust") and Nations Portfolios, Inc. ("Portfolios") dated June
27, 1995. The Trust and/or the Portfolios will indemnify and hold harmless the
Company against any losses, claims, damages or liabilities, to which the Company
may become subject, under the Securities Act of 1933 (the "Act") and the 1940
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Prospectuses,
any Preliminary Prospectuses, the Registration Statements, any other
Prospectuses relating to the securities, or any amendments or supplements to the
foregoing (hereinafter referred to collectively as the "Offering Documents"), or
arise out of or are based upon the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged
C-1
<PAGE>
omission was made
in the Offering Documents in reliance upon and in conformity with written
information furnished to the Company by the Trust and/or Portfolios expressly
for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim; provided, however, that the Trust and/or Portfolios
shall not be liable in any such case to the extent that any such loss, claim,
damage, or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the Offering
Documents in reliance upon and in conformity with written information furnished
to the Trust and/or Portfolios by the Company expressly for use in the Offering
Documents.
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 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 each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation.
Registrant has obtained from a major insurance carrier a directors' and
officers' liability policy covering certain types of errors and omissions. In no
event will Registrant indemnify any of its directors, 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 Registrant. Registrant will comply with Rule 484 under the Act and Release
No. 11330 under the 1940 Act, in connection with any indemnification.
Insofar as indemnification for liability arising under the Act may be permitted
to directors, officers, and controlling persons of Registrant pursuant to the
foregoing provisions, or otherwise, Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by Registrant of expenses incurred or paid by a director,
officer, or controlling person of Registrant in the successful defense of any
action, suit, or proceeding) is asserted by such director, officer, or
controlling person in connection with the securities being registered,
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 Act and will be governed by the final adjudication of such
issue.
C-2
<PAGE>
Item 16. 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. 33-4038; 8114614). All references to the "Peachtree Registration
Statement" in the following list of Exhibits refer to Peachtree Funds'
Registration Statement on Form N-1A (File Nos. 33-50635; 811-7101).
Exhibit Number Description
(1)(a) Articles of Incorporation dated December 9, 1983 and
filed December 13, 1983, are incorporated by
reference to Post-Effective Amendment No. 29 filed
on March 19, 1996.
(1)(b) Articles of Amendment dated March 10, 1986 and filed
March 11, 1986 are incorporated by reference to
Post-Effective Amendment No. 29 filed on March 19,
1996.
(1)(c) Articles of Amendment dated July 31, 1986 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(d) Articles Supplementary dated July 31, 1986 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(e) Articles of Amendment dated October 4, 1989 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(f) Articles Supplementary dated November 30, 1989 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(g) Articles Supplementary dated March 26, 1991 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(h) Articles Supplementary dated April 15, 1992 and
filed April 24, 1992, are incorporated by reference
to Post-Effective Amendment No. 29 filed on March
19, 1996.
(1)(i) Articles Supplementary filed September 22, 1992 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(j) Articles Supplementary dated February 18, 1993 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on
C-3
<PAGE>
Exhibit Number Description
March 19, 1996.
(1)(k) Articles Supplementary dated July 9, 1993 and filed
July 12, 1993 are incorporated by reference to
Post-Effective Amendment No. 29 filed on March 19,
1996.
(1)(1) Articles Supplementary dated March 21, 1994 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(m) Articles Supplementary filed December 21, 1994 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(1)(n) Articles Supplementary dated March 18, 1996 are
incorporated by reference to Post-Effective
Amendment No. 29 filed on March 19, 1996.
(2)(a) By-Laws are incorporated by reference to
Registrant's Registration Statement, filed March 17,
1986.
(2)(b) Amended and Restated By-Laws effective as of October
2, 1989, are incorporated by reference to
Post-Effective Amendment No. 5, filed August 1,
1989.
(2)(c) Amendment to By-Laws dated September 6, 1991, is
incorporated by reference to Post-Effective
Amendment No. 11, filed September 30, 1991.
(3) Not Applicable.
(4) Form of Agreement and Plan of Reorganization, filed
herewith as Exhibit A to the Combined
Prospectus/Proxy Statement.
(5)(a) Not Applicable.
(6)(a) Investment Advisory Agreement between NationsBanc
Advisors, Inc ("NBAI") and Registrant is
incorporated by reference to Post-Effective
Amendment No. 28, filed January 29, 1996. to
Post-Effective Amendment No. 41, filed January 29,
1996.
(6)(b) Sub-Investment Advisory Agreement between
TradeStreet Investment Associates, Inc.
("TradeStreet") and Registrant is incorporated by
reference to Post-Effective Amendment No. 28,
C-4
<PAGE>
Exhibit Number Description
filed
January 29, 1996.
(7) Distribution Agreement between Registrant and
Stephens Inc. dated March 31, 1993, is incorporated
by reference to Post-Effective Amendment No. 18,
filed March 26, 1993.
(8) Not Applicable.
(9)(a) Mutual Fund Custody Agreement between Registrant and
NCNB Texas National Bank dated July 31, 1990,
relating to Prime, Government and Tax-Exempt Money
Market Portfolios, is incorporated by reference to
Post-Effective Amendment No. 8, filed January 24,
1991.
(9)(b)(i) Amendment No. 1 to Mutual Fund Custody Agreement
dated July 31, 1990, between Registrant and
NationsBank Texas dated July 31, 1990 relating to
Nations Government Securities Fund and Nations
Equity Income Fund, is incorporated by reference to
Post-Effective Amendment No. 20, filed March 26,
1993.
(9)(b)(ii) Global Custody Agreement between the Registrant, on
behalf of Nations International Equity Fund, and
Morgan Guaranty Trust Company of New York is
incorporated by reference to post-Effective
Amendment No. 2, filed September 28, 1995.
(10)(a) Shareholder Services Plan relating to the Primary B
Shares, is incorporated by reference to
Post-Effective Amendment No. 13, filed April 30,
1992.
(l0)(b) Form of Shareholder Servicing Agreement, relating to
the Primary B Shares, is incorporated by reference
to Post-Effective Amendment No. 19 to its
Registration Statement, filed May 27, 1993.
(l0)(c) Shareholder Servicing Plan for Investor A Shares
incorporated by reference to Post-Effective
Amendment No. 21, filed March 29, 1994
(l0)(d) Forms of Shareholder Servicing Agreement for
Investor A Shares are incorporated by reference to
Post-Effective Amendment No. 21, filed March 29,
1994.
(l0)(e) Amended and Restated Shareholder Servicing Plan for
Investor B Shares of the Money Market Funds and
Investor C Shares (formerly Investor B Shares) of
the Non-Money Market Funds is
C-5
<PAGE>
Exhibit Number Description
incorporated by
reference to Post-Effective Amendment No. 21, filed
March 29, 1994.
(l0)(f) Forms of Shareholder Servicing Agreement for
Investor B Shares of the Money Market Funds and
Investor C Shares (formerly Investor B Shares) of
the Non-Money Market Funds are incorporated by
reference to Post-Effective Amendment No. 21, filed
March 29, 1994.
(l0)(g) Shareholder Servicing Plan for Investor C Shares of
the Money Market Funds and Investor N Shares
(formerly Investor C Shares) of the Non-Money Market
Funds is incorporated by reference to Post-Effective
Amendment No. 21, filed March 29, 1994.
(10)(h) Forms of Shareholder Servicing Agreement for
Investor C Shares of the Money Market Funds and
Investor N Shares (formerly Investor C Shares) of
the Non-Money Market Funds are incorporated by
reference to Post-Effective Amendment No. 21, filed
March 29, 1994.
(l0)(i) Shareholder Administration Agreement for Primary B
Shares is incorporated by reference to
Post-Effective Amendment No. 28, filed January 29,
1996.
(l0)(j) Transfer Agency Agreement between Registrant and
NCNB Texas National Bank, dated October 1, 1991,
relating to Institutional Classes (currently known
as Primary Shares), is incorporated by reference to
Post-Effective Amendment No. 14, filed July 30,
1992.
(10)(k) Transfer Agency and Registrar Agreement, dated June
1, 1992, between Registrant and The Shareholder
Servicing Group, Inc., relating to Investor Shares,
is incorporated by reference to Post-Effective
Amendment No. 14, filed July 30, 1992.
(l0)(l) Amendment No. 1 dated February 3, 1993, to the
Transfer Agency and Registrar Agreement between
Registrant and The Shareholder Services Group, Inc.
dated April 25, 1992, relating to the Money Market
Funds' Investor B Shares and the Non-Money Market
Funds' Investor C Shares of the Company, is
incorporated by reference to Post-Effective
Amendment No. 20, filed March 26, 1993.
(l0)(m) Amendment No. 2 to the Transfer Agency and Registrar
Agreement between Registrant and The Shareholder
Services Group, Inc. dated April 25, 1992, relating
to the addition of the Investor C
C-6
<PAGE>
Exhibit Number Description
Shares to the
Money Market Funds of the Company, is incorporated
by reference to Post-Effective Amendment No. 20,
filed March 26, 1993.
(l0)(n) Cross-Indemnification dated June 27, 1995 between
the Company, Nations Fund Trust and Nations Fund
Portfolios, Inc. is incorporated by reference to
Post-Effective Amendment No. 26, filed June 30,
1995.
(11) Opinion and Consent of Morrison & Foerster LLP,
filed herewith. (12) Tax Opinion of Morrison &
Foerster LLP, filed herewith.
(13)(a) Prototype Individual Retirement Account Plan, is
incorporated by reference to Amendment No. 20, filed
March 26, 1993.
(13)(b) Amended and Restated Shareholder Servicing and
Distribution Plan pursuant to Rule 12b-1, relating
to Investor A Shares, is incorporated by reference
to Post-Effective Amendment No. 21, filed March 29,
1994.
(13)(c) Form of Sales Support Agreement, relating to
Investor A Shares is incorporated by reference to
Post-Effective Amendment No. 21, filed March 29,
1994.
(13)(d) Amended and Restated Distribution Plan, relating to
Investor B Shares of the Money Market Funds and
Investor C Shares (formerly Investor B Shares) of
the Non-Money Market Funds is incorporated by
reference to Post-Effective Amendment No. 21, filed
March 29, 1994.
13(e) Form of Sales Support Agreement relating to Investor
B Shares of the Money Market Funds and Investor C
Shares (formerly Investor B Shares) of the Non-Money
Market Funds is incorporated by reference to
Post-Effective Amendment No. 21, filed March 29,
1994.
13(f) Distribution Plan relating to the non-money market
funds' Investor N Shares (formerly Investor C
Shares) is incorporated by reference to
Post-Effective Amendment No. 21, filed March 29,
1994.
13(g) Form of Sales Support Agreement, relating to
non-money market funds' Investor N Shares (formerly
Investor C Shares) is incorporated by reference to
Post-Effective Amendment No. 21, filed March 29,
1994.
C-7
<PAGE>
Exhibit Number Description
13(h) Shareholder Administration Plan for Primary B Shares
is incorporated by reference to Post-Effective
Amendment No. 28, filed January 29, 1996.
14(a) Consent of Independent Auditors - Price Waterhouse
LLP, filed herewith.
14(b) Consent of Independent Auditors - Ernst & Young LLP,
filed herewith.
15 Not Applicable
16 Powers of Attorney, filed herewith.
17(a) Declaration, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, of the Registrant,
filed herewith.
17(b) Form of Proxy Ballot, filed herewith.
17(c)(i) Prospectus for the Primary A Shares of Nations Prime
Fund, Nations Treasury Fund, Nations Government
Money Market Fund, Nations, Tax Exempt Fund, Nations
Value Fund, Nations Equity Income Fund, Nations
International Equity Fund, Nations Emerging Markets
Fund, Nations Pacific Growth Fund, Nations Capital
Growth Fund, Nations Emerging Growth Fund, Nations
Disciplined Equity Fund, Nations Equity Index Fund,
Nations Balanced Assets Fund, Nations
Short-Intermediate Government Fund, Nations
Government Securities Fund, Nations Short-Term
Income Fund, Nations Diversified Income Fund,
Nations Strategic Fixed Income Fund, Nations Global
Government Income Fund, Nations Municipal Income
Fund, Nations Short-Term Municipal Income Fund,
Nations Intermediate Municipal Bond Fund, Nations
Florida Intermediate Municipal Bond Fund, Nations
Florida Municipal Bond Fund, Nations Georgia
Intermediate Municipal Bond Fund, Nations Georgia
Municipal Bond Fund, Nations Maryland Intermediate
Municipal Bond Fund, Nations Maryland Municipal Bond
Fund, Nations North Carolina Intermediate Municipal
Bond Fund, Nations North Carolina Municipal Bond
Fund, Nations South Carolina Intermediate Municipal
Bond Fund, Nations South Carolina Municipal Bond
Fund, Nations Tennessee Intermediate Municipal Bond
Fund, Nations Tennessee Municipal Bond Fund, Nations
Texas Intermediate Municipal Bond Fund,
C-8
<PAGE>
Exhibit Number Description
Nations
Texas Municipal Bond Fund, Nations Virginia
Intermediate Municipal Bond Fund, Nations Virginia
Municipal Bond Fund incorporated by reference to
Post-Effective Amendment No. 30 to the Registration
Statement, as filed on May 31, 1996.
17(c)(ii) Prospectus for Peachtree Government Money Market
Fund and Peachtree Prime Money Market Fund,
incorporated by reference to Post-Effective
Amendment No. 7 to the Peachtree Registration
Statement, as filed on November 22, 1995.
17(c)(iii) Annual Report for Nations Prime Fund for the period
ended March 31, 1996, filed on May 31, 1996.
18(c)(iv) Annual Report for Peachtree Prime Money Market Fund
for the year ended September 30, 1995, filed on
December 1, 1995.
17(c)(v) Semi-Annual Report for Peachtree Prime Money Market
Fund for the period ended March 31, 1996, filed on
June 3, 1996.
Item 17. Undertakings.
(1) Registrant agrees that, prior to any public reoffering
of the securities registered through the use of a
prospectus which is a part of this registration
statement by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c) of the
Securities Act of 1933, the reoffering prospectus will
contain the information called for by the applicable
registration form for the reofferings by persons who
may be deemed underwriters, in addition to the
information called for by the other items of the
applicable form.
(2) The undersigned registrant agrees that every prospectus
that is filed under paragraph (1) above will be filed
as part of an amendment to the registration statement
and will not be used until the amendment is effective,
and that, in determining any liability under the
Securities Act of 1933, each post-effective amendment
shall be deemed to be a new registration statement for
the securities offered therein, and the offering of the
securities at that time shall be deemed to be the
initial bona fide offering of them.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant has duly caused his Registration Statement on Form N-14 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Little Rock, State of Arkansas on the1st day of July, 1996.
C-9
<PAGE>
NATIONS FUND, INC.
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 Registration Statement on Form N-14 has been signed below by the following
persons in the capacities and on the date indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
<S> <C> <C>
* President and Chairman of the Board July 1, 1996
- ---------------------------------
(A. Max Walker) of Directors (Principal Executive
Officer)
* Treasurer and Vice President July 1, 1996
- ---------------------------------
(Richard H. Rose) (Principal Financial and Accounting
Officer)
* Director July 1, 1996
- ---------------------------------
(Edmund L. Benson, III)
* Director July 1, 1996
- ---------------------------------
(James Ermer)
* Director July 1, 1996
- ---------------------------------
(William H. Grigg)
* Director July 1, 1996
- ---------------------------------
(Thomas F. Keller)
* Director July 1, 1996
- ---------------------------------
(Charles B. Walker)
* Director July 1, 1996
- ---------------------------------
(Thomas S. Word)
</TABLE>
/s/ Richard H. Blank, Jr.
Richard H. Blank, Jr.
*Attorney-In-Fact
C-10
<PAGE>
Nations Fund, Inc.
File Nos. 33-4038; 811-4614
Exhibit Number Description
Ex-99.11 Opinion and Consent of Morrison & Foerster LLP
Ex-99.12 Tax Opinion of
Morrison & Foerster LLP
Ex-99.14(a) Opinion and Consent of Auditors - Price
Waterhouse LLP
Ex-99.14(b) Opinion and Consent of Auditors - Ernst & Young LLP
Ex-99.16 Powers of Attorney
Ex-99.17(a Declaration pursuant to Rule 24f-2 under
the Investment
Company Act of 1940 of the Registrant
Ex-99.17(b) Form of Proxy Ballot
Ex-99.11
[MORRISON & FOERSTER LLP LETTERHEAD]
July 2, 1996
Nations Fund, Inc.
One NationsBank Plaza
Charlotte, NC 28255
Re: Shares of Common Stock of Nations Fund, Inc.
Ladies/Gentlemen:
We refer to the Registration Statement on Form N-14 (the "Registration
Statement") of Nations Fund, Inc. (the "Company") relating to the registration
of an indefinite number of shares of common stock, par value $.001 per share
(the "Shares"), of a Fund of the Company ("Fund").
We have been requested by the Company to furnish this opinion as
Exhibit 11 to the Registration Statement.
We have examined documents relating to the organization of the Company
and the authorization and issuance of the Shares. We have also made such
inquiries of the Company and examined such questions of law as we have deemed
necessary for the purpose of rendering the opinion set forth herein. We have
assumed the genuineness of all signatures and the authenticity of all items
submitted to us as originals and the conformity with originals of all items
submitted to us as copies.
Based upon and subject to the foregoing, we are of the opinion that:
The issuance of the Shares by the Company has been duly and validly
authorized by all appropriate corporate action and, assuming delivery in
accordance with the description set forth in the Combined Prospectus/Proxy
Statement included in the Registration Statement, the Shares will be legally
issued, fully paid and nonassessable.
<PAGE>
Nations Fund
July 2, 1996
Page Two
We consent to the inclusion of this opinion as an exhibit to the
Registration Statement.
In addition, we hereby consent to the use of our name in the Combined
Prospectus/Proxy Statement, and under the heading "Counsel" in the Statement of
Additional Information, which is incorporated by reference into the Registration
Statement.
Very truly yours,
/s/ MORRISON & FOERSTER LLP
MORRISON & FOERSTER LLP
Ex-99.12
[MORRISON & FOERSTER LLP LETTERHEAD]
July 2, 1996
Nations Prime Fund
c/o Nations Fund, Inc.
One NationsBank Plaza
33rd Floor
101 South Tryon Street
Charlotte, NC 28255
Peachtree Prime Money Market Fund
c/o Peachtree Funds
Federated Investors Tower, 19th Floor
Pittsburgh, PA 15222-3779
Ladies and Gentlemen:
We have acted as counsel to Nations Fund, Inc. (the "Company"), a
Maryland corporation, in connection with the proposed acquisition by Nations
Prime Fund (the "Acquiring Fund"), a portfolio of the Company, of all of the
assets and the assumption of all of the liabilities of the Peachtree Prime Money
Market Fund (the "Acquired Fund"), a portfolio of the Peachtree Funds (the
"Peachtree Funds"), a Massachusetts business trust, solely in exchange for
voting shares of the Acquiring Fund which shall thereafter be distributed to the
shareholders of the Acquired Fund pursuant to a Form of Agreement and Plan of
Reorganization, is attached hereto as Exhibit A (the "Plan"). The transaction
contemplated by the Plan with respect to the Acquiring Fund and the Acquired
Fund is referred to herein as a "Reorganization." At your request, we are
rendering our opinion concerning the material federal income tax consequences of
the Reorganization.
For purposes of the opinion set forth below, we have relied, with
your consent, upon the accuracy and completeness of the statements and
representations (which statements and representations we have neither
investigated nor verified) contained in the certificate of the Company for
itself and on behalf of the Acquiring Fund and Peachtree Funds for itself and on
behalf of the Acquired Fund, incorporated herein by reference, and have assumed
that such certificate will be accurate and complete as of the Closing Date of
the Reorganization (the "Closing Date"). We have also relied upon the accuracy
of the Registration Statement on Form N-14 and the Combined Prospectus/Proxy
Statement (the "Prospectus") to be filed with the Securities and Exchange
Commission on July 2, 1996 in connection with the Reorganization. Any
capitalized terms used and not defined herein has the meaning given to it in the
Prospectus or the appendices thereto (including the Plan).
<PAGE>
Nations Fund, Inc.
Peachtree Funds
July 2, 1996
Page 2
We have also assumed that the transaction contemplated by the Plan
will be consummated in accordance therewith and as described in the Prospectus
and that, as described in the Plan, prior to the Closing Date, the Acquired Fund
will dispose of and/or reinvest any investments which would violate stated
investment objectives or policies or certain percentage limitations of the
Acquiring Fund.
Based upon and subject to the foregoing, it is our opinion that,
under currently applicable law, the Reorganization will constitute a
reorganization within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986, as amended (the "Code"), that the Acquiring Fund and the
Acquired Fund will each be a party to a reorganization within the meaning of
Section 368(b) of the Code, and that, accordingly, the following will be the
material federal income tax consequences of the Reorganization:
(1) No gain or loss will be recognized by the Acquired Fund on the
transfer of its assets to the Acquiring Fund solely for voting shares of the
Acquiring Fund (the "Acquiring Fund Shares") and the assumption by the Acquiring
Fund of the Acquired Fund's liabilities.
(2) No gain or loss will be recognized by the Acquiring Fund on its
receipt of assets from the Acquired Fund solely in exchange for Acquiring Fund
Shares, on the assumption by the Acquiring Fund of the Acquired Fund's
liabilities, or upon the distribution of Acquiring Fund Shares to the Acquired
Fund shareholders in exchange for their shares of the Acquired Fund.
(3) The federal income tax basis of the Acquired Fund's assets received by
the Acquiring Fund pursuant to the Plan will be the same as the federal income
tax basis of those assets in the hands of the Acquired Fund immediately prior to
the Reorganization.
(4) The holding period of the Acquired Fund's assets received by the
Acquiring Fund pursuant to the Plan will include the period for which such
assets were held by the Acquired Fund.
(5) No gain or loss will be recognized by the Acquired Fund on the
distribution to its shareholders of the Acquiring Fund Shares received by the
Acquired Fund pursuant to the Plan.
(6) No gain or loss will be recognized by the shareholders of the Acquired
Fund on the receipt of the Acquiring Fund Shares in exchange for such
shareholders' shares in the Acquired Fund.
(7) The federal income tax basis of the Acquiring Fund Shares received by
the shareholders of the Acquired Fund will be the same as the federal income tax
basis of the Acquired Fund shares exchanged pursuant to the Plan.
<PAGE>
Nations Fund, Inc.
Peachtree Funds
July 2, 1996
Page 3
(8) The holding period for the Acquiring Fund Shares for which shares of
the Acquired Fund are exchanged pursuant to the Plan will include the period
that such exchanged shares were held by the holder, provided such shares were
held as a capital asset of the holder.
(9) The Acquiring Fund will succeed to and take into account the tax
attributes, described in Section 381(c) of the Code, of the Acquired Fund as of
the date of the Reorganization, subject to the conditions and limitations
specified in the Code.
This opinion may not be applicable to certain classes of Acquired
Fund shareholders, including securities dealers, foreign persons and persons who
acquired their stock pursuant to the exercise of employee stock options or
rights or otherwise as compensation.
This opinion is based upon existing law and currently applicable
Treasury regulations promulgated under the Code, published administrative
positions of the Internal Revenue Service contained in revenue rulings and
revenue procedures currently in effect, and judicial decisions, all of which are
subject to change either prospectively or retroactively. There can be no
assurance that changes in the law will not take place which could affect the
opinions expressed herein or that contrary positions may not be taken by the
Internal Revenue Service.
Very truly yours,
/s/ MORRISON & FOERSTER LLP
MORRISON & FOERSTER LLP
<PAGE>
Ex-99.14(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Combined Prospectus/Proxy Statement
constituting part of this registration statement on Form N-14 (the "Registration
Statement") of our reports dated May 17, 1996, relating to the financial
statements and financial highlights of the Portfolios that comprise Nations Fund
Trust and Nations Fund, Inc. which are also incorporated by reference in the
Registration Statement. We also consent to the reference to us under the heading
"Independent Accountants" in such Registration Statement.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Boston, Massachusetts
July 1, 1996
Ex-99.14(b)
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Independent
Accountants" and to the incorporation by reference with respect to the financial
statements for the year ended September 30, 1995 of Peachtree Prime Money Market
Fund to the Registration Statement on Form N-14 and related Combined
Prospectus/Proxy Statement of Peachtree Funds Trust and Nations Fund, Inc.
/s/ Ernst & Young LLP
Pittsburgh, Pennsylvania
July 1, 1996
Ex-99.16
POWER OF ATTORNEY
Edmund L. Benson, III, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ Edmund L. Benson, III
Edmund L. Benson, III
<PAGE>
Ex-99.16
POWER OF ATTORNEY
James Ermer, whose signature appears below, does hereby constitute
and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio, Steven G.
Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ James Ermer
James Ermer
<PAGE>
Ex-99.16
POWER OF ATTORNEY
William H. Grigg, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ William H. Grigg
William H. Grigg
<PAGE>
Ex-99.16
POWER OF ATTORNEY
Thomas F. Keller, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ Thomas F. Keller
Thomas F. Keller
<PAGE>
Ex-99.16
POWER OF ATTORNEY
A. Max Walker, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 an officer of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ A. Max Walker
A. Max Walker
<PAGE>
Ex-99.16
POWER OF ATTORNEY
Charles B. Walker, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ Charles B. Walker
Charles B. Walker
<PAGE>
Ex-99.16
POWER OF ATTORNEY
Thomas S. Word, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ Thomas S. Word, Jr.
Thomas S. Word, Jr.
<PAGE>
Ex-99.16
POWER OF ATTORNEY
Richard H. Rose, whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 an officer of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ Richard H. Rose
Richard H. Rose
<PAGE>
Ex-99.16
POWER OF ATTORNEY
Carl E. Mundy, Jr., whose signature appears below, does hereby
constitute and appoint R. Gregory Feltus, Robert M. Kurucza, Marco E. Adelfio,
Steven G. Cravath and Richard H. Blank, Jr., 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, Inc. (the "Company") to comply
with the Investment Company Act of 1940, as amended, and the Securities Act of
1933, as amended ("Acts"), and any rules, regulations or requirements of the
Securities and Exchange Commission in respect thereof, in connection with the
filing and effectiveness of the Company's Registration Statement(s) on Form N-14
pursuant to said Acts, 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 of the Company such Registration
Statement(s), and any and all amendments thereto, filed with the Securities and
Exchange Commission under said Acts, 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 thereof.
Dated: June 10, 1996
/s/ Carl E. Mundy, Jr.
-------------------------------
Carl E. Mundy, Jr.
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington D. C. 20549
FORM 24F-2: Annual Notice of Securities Sold, Pursuant to
Rule 24F-2
Read instructions at end of Form before preparing Form. Please print or type.
1. Name and address of issuer:
Nations Fund, Inc.
111 Center Street
Little Rock, AR 72201
2. Name of each series or class of funds for which this notice is filed:
Nations Equity Income Fund-Primary A Shares. Nations Equity Income Fund-Investor
A Shares. Nations Equity Income Fund-Investor C Shares. Nations Equity Income
Fund-Investor N Shares. Nations Government Securities Fund-Primary A Shares.
Nations Government Securities Fund-Investor A Shares. Nations Government
Securities Fund-Investor C Shares. Nations Government Securities Fund-Investor N
Shares. Nations International Equity Fund-Primary A Shares. Nations
International Equity Fund-Investor A Shares. Nations International Equity
Fund-Investor C Shares. Nations International Equity Fund-Investor N Shares.
Nations Prime Fund-Primary A Shares. Nations Prime Fund-Primary B Shares.
Nations Prime Fund-Investor A Shares. Nations Prime Fund-Investor B Shares.
Nations Prime Fund-Investor C Shares. Nations Prime Fund-Investor D Shares.
Nations Treasury Fund-Primary A Shares. Nations Treasury Fund-Primary B Shares.
Nations Treasury Fund-Investor A Shares. Nations Treasury Fund-Investor B
Shares. Nations Treasury Fund-Investor C Shares. Nations Treasury Fund-Investor
D Shares.
3. Investment Company Act File Number: 811-4614
Securities Act File Number: 33-4038
4. Last day of fiscal year for which this notice is filed:
March 31, 1996
5. Check box if this notice is being filed more than 180 days after the close
of the issuer's fiscal year end for purposes of reporting securities sold
after the close of the fiscal year but before termination of the issuer's
24f-2 declaration: [ ]
6. Date of termination of issuer's declaration under Rule 24f-2(a)(1), if
applicable (see Instruction A.6):
<PAGE>
N/A
7. Number and amount of securities of the same class or series which had been
registered under the Securities Act of 1933 other than pursuant to Rule 24f-2
in a prior fiscal year, but which remained unsold at the beginning of the
fiscal year:
N/A
8. Number and amount of securities registered during the fiscal year other
than pursuant to Rule 24f-2:
N/A
9. Number and aggregate sale price of securities sold during the fiscal year:
Number: 19,932,731,631 shares
Sale Price: $20,321,696,966.97
10. Number and aggregate sale price of securities sold during the fiscal year
in reliance upon registration pursuant to Rule 24f-2:
Number: 19,932,731,631 shares
Sale Price: $20,321,696,966.97
2
<PAGE>
11. Number and aggregate sale price of securities issued during the fiscal
year in connection with dividend reinvestment plans, if applicable (see
Instruction B.7):
Number: 59,496,499 shares
Sale Price: $75,205,884.00
12. Calculation of registration fee:
(i) Aggregate sale price of securities sold during the fiscal year
in reliance on Rule 24f-2 (from Item 10):
$20,321,696,966.97
(ii) Aggregate price of shares issued in connection with
dividend reinvestment plans (from Item 11, if applicable):
+75,205,884.00
(iii) Aggregate price of shares redeemed or repurchased during
the fiscal year (if applicable):
- 20,698,095,188.00
(iv) Aggregate price of shares redeemed or repurchased and
previously applied as a reduction to filing fees pursuant to Rule 24e-2
(if applicable):
0.00
(v) Net aggregate price of securities sold and issued during
the fiscal year in reliance on Rule 24f-2 [line (i), plus line (ii),
less line (iii), plus line (iv)] (if applicable):
($301,192,337.03)
(vi) Multiplier prescribed by Section 6(b) of the Securities
Act of 1933 or other applicable law or regulation (see Instruction C.6):
x 1/29 of 1%
(vii) Fee due [line (i) or line (v) multiplied by line (vi)]:
($103,859.43)
Instruction: Issuers should complete lines (ii), (iii), (iv) and (v) only if the
form is being filed within 60 days after the close of the issuer's fiscal year.
See Instruction C.3.
Check box if fees are being remitted to the Commission's lockbox depository as
described in Section 3a of the Commission's Rule of Informal and Other
Procedures (17 CFR 202.3a). [ ]
3
<PAGE>
Date of mailing or wire transfer of filing fees to the Commission's lockbox
depository:
N/A
SIGNATURES
This report has been signed below by the following persons on behalf of the
issuer and in the capacities and on the dates indicated.
By: \s\ James Edward Banks, Jr.
Assistant Secretary
Date: May 24, 1996
4
<PAGE>
MORRISON & FOERSTER LLP LETTERHEAD
May 24, 1996
Nations Fund, Inc.
111 Center Street
Little Rock, Arkansas 72201
Re: Issuance and Sale of Shares of Nations Fund, Inc.;
Registration on Form N-1A Pursuant to Rule 24f-2
Ladies and Gentlemen:
Nations Fund, Inc. (the "Company") has requested our opinion in connection
with the sale or issuance by the Company of 19,992,228,130 shares of common
stock (the "Shares"), in the aggregate, of all classes of Shares of all
portfolios of the Company (collectively, the "Funds").
We have examined documents relating to the organization of the Company and
the authorization for registration and sale of Shares of each of the Funds. The
opinion given below only relates to the law of the State of Maryland, the state
of incorporation of the Company, and is subject to the condition that the
Company is in compliance with the provisions of any applicable laws, regulations
and permits of any state or foreign country in which any Shares of any of the
Funds are sold.
Based upon and subject to the foregoing, we are of the opinion that:
The issuance and sale of the Shares by the Company have been duly
and validly authorized by all appropriate action and, assuming delivery by sale
or in accord with the Funds' dividend reinvestment plan was in accordance with
the description set forth in the Company's current prospectuses under the
Securities Act of 1933, the Shares have been legally issued, fully paid and are
non-assessable.
We consent to the submission of a copy of this opinion to the Securities
and Exchange Commission in connection with the filing of the Company's Rule
24f-2 Notice under the Investment Company Act of 1940, as amended.
Very truly yours,
/s/ MORRISON & FOERSTER LLP
MORRISON & FOERSTER LLP
Ex-99.17(b)
PROXY CARD
PEACHTREE PRIME MONEY MARKET FUND
Special Meeting of Shareholders-September 23, 1996
The undersigned hereby appoints _____________ and _____________, and
each of them, attorneys and proxies of the undersigned, each with power of
substitution and resubstitution, to attend, vote and act for the undersigned at
the Special Meeting of Shareholders of Peachtree Funds ("Peachtree Funds") to be
held at the offices of Peachtree Funds, Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779 at 2:15 p.m. on September 23, 1996, and at any
adjournment or adjournments thereof, casting votes according to the number of
shares of each class of the Peachtree Prime Money Market Fund (the "Fund") which
the undersigned may be entitled to vote with respect to the proposals set forth
below, in accordance with the specification indicated, if any, and with all the
powers which the undersigned would possess if personally present, hereby
revoking any prior proxy to vote at such meeting, and hereby ratifying and
confirming all that said attorneys and proxies, or either of them, may lawfully
do by virtue thereof.
THE UNDERSIGNED HEREBY ACKNOWLEDGES RECEIPT OF THE NOTICE OF SPECIAL MEETING OF
SHAREHOLDERS OF PEACHTREE FUNDS AND THE COMBINED PROSPECTUS/PROXY STATEMENT,
DATED AUGUST 5, 1996.
THIS PROXY IS SOLICITED BY THE BOARD OF TRUSTEES ON BEHALF OF THE FUND AND
PEACHTREE FUNDS. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN
THE ENCLOSED POSTAGE-PAID ENVELOPE.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSALS. IN THE ABSENCE OF ANY SPECIFICATION, THIS
PROXY WILL BE VOTED IN FAVOR OF THE PROPOSALS.
PROPOSALS:
(1) To approve the Agreement and Plan of Reorganization ("Plan"), and
the transactions contemplated thereby, which include (a) the
transfer of all of the assets of the Fund to the Nations Prime
Fund ("Acquiring Fund") of Nations Fund, Inc. in exchange for
shares of the Acquiring Fund and the assumption by the Acquiring
Fund of stated liabilities of the Fund; and (b) the distribution
to Fund shareholders of the shares of the Acquiring Fund so
received.
[ ]YES [ ]NO [ ]ABSTAIN
(2) To transact such other business as may properly come before the
meeting, or any adjournment(s) thereof, including any
adjournment(s) necessary to obtain requisite quorums and/or
approvals.
[ ]YES [ ]NO [ ]ABSTAIN
1
Prime Fund
PROXY CARD
<PAGE>
In their discretion, the Proxies, and either of them, are authorized to
vote upon any other business that may properly come before the meeting, or any
adjournment(s) thereof, including any adjournment(s) necessary to obtain
requisite quorums and/or approvals.
Please sign above exactly
as your name(s) appear(s)
hereon. Fiduciaries should
give full titles as such.
____________________, 1996
(Please date)
2
Prime Fund
PROXY CARD
