SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NATIONS FUND, INC.
(Name of Registrant as Specified in its Charter)
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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NATIONS FUND, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
TELEPHONE: 800-652-5096
June 19, 1999
Dear Shareholder:
On behalf of the Board of Directors of Nations Fund, Inc. (the
"Company"), we are pleased to invite you to a special meeting of shareholders of
the Company's Nations International Equity Fund and Nations International Value
Fund (each a "Fund" and together the "Funds") to be held at 10:00 a.m. (Eastern
time) on August 13, 1999, at One Bank of America Plaza, 33rd Floor, Charlotte,
North Carolina (the "Meeting"). At the Meeting, you will be asked to approve the
proposed reorganization (the "Reorganization") of your Fund into a successor
mutual fund in Nations Institutional Reserves, another registered investment
company within the Nations Funds family.
THE NEW MUTUAL FUND INTO WHICH YOUR FUND WILL BE REORGANIZED (A
"SUCCESSOR" OR "SUCCESSOR FUND") WILL HAVE THE SAME NAME, INVESTMENT OBJECTIVE,
PRINCIPAL INVESTMENT STRATEGIES AND INVESTMENT RISKS AS HAS YOUR FUND, and the
Reorganization will not result in any change to the investment adviser or
sub-adviser(s) who currently manage your Fund. In addition, the Reorganization
will not result in any change to the total operating expense ratios (before or
after waivers and/or reimbursements) of the various classes of shares.
Similarly, the features and services that are available to you today will
continue to be available to you as a Successor Fund shareholder after the
Reorganization. In addition, the Nations International Equity Fund's Successor
will be a "feeder" fund in a master/feeder structure, which simply means that it
will invest all of its assets in a master portfolio that has an identical
investment objective and principal investment strategy. More details about the
master/feeder structure are provided in the accompanying Proxy Statement.
The Reorganization offers several benefits. First, by establishing a
master/feeder structure for Nations International Equity Fund's Successor,
Nations Master Investment Trust ("NMIT"), which is the registered investment
company in the Nations Funds family that would "house" the master portfolio,
would have the potential to attract other feeder portfolios and access
additional distribution channels that would not otherwise be available if the
Successor operated on a stand-alone basis. This could result in higher asset
levels, which, in turn, may lead to economies of scale for NMIT investors,
including Nations International Equity Fund's Successor. Nations International
Value Fund's Successor has reserved the right to convert to a master/feeder
structure, which if adopted in the future, would allow it to combine its assets
with those of other similar funds, thereby potentially achieving economies of
scale and other benefits that come from greater asset size. Second, the
Reorganization is one part of a broader initiative to streamline the operations
of the Nations Funds family, which currently consists of several registered
investment companies. Over time, management expects to reduce the number of
registered investment companies in the fund family without necessarily impacting
investment alternatives. Third, the Successor Funds will be part of a
Massachusetts business trust, which generally has more flexibility in its
operations than a Maryland corporation like the Company. In addition, the
Reorganization is expected to be tax-free under federal law. More details about
the purposes and reasons for the Reorganization are provided in the Proxy
Statement.
If shareholder approval is obtained and the other conditions to the
Reorganization are satisfied, it is anticipated that your Fund would be
reorganized into a corresponding Successor Fund on or about August 20, 1999,
when your Fund shares would be exchanged for shares of the same class of shares
of that corresponding Successor Fund of equal dollar value.
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THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
TO APPROVE THE PROPOSED REORGANIZATION.
The formal Notice of Special Meeting, a Proxy Statement and a Proxy
Ballot are enclosed. The proposed Reorganization and the reasons for the
unanimous recommendation of the Company's Board are discussed in more detail in
the enclosed materials, which you should read carefully. If you have any
questions about the Reorganization, please do not hesitate to contact the
Company at the toll-free number set forth above.
We look forward to your attendance at the Meeting or receiving your
Proxy Ballot(s) so that your shares may be voted at the Meeting.
Sincerely,
A. Max Walker
President and Chairman of the Board of Directors
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
PLEASE VOTE BY RETURNING YOUR PROXY BALLOT TODAY, EITHER IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE AT (704) 388-2641. YOU MAY ALSO SUBMIT
YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED BELOW.
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TWO QUICK AND EASY WAYS TO SUBMIT YOUR PROXY
As a valued Fund shareholder, your proxy vote is important to us. That's why
we've made it faster and easier to submit your proxy at YOUR convenience, 24
hours a day. After reviewing the enclosed PROXY STATEMENT, select one of the
following quick and easy methods to submit your proxy - ACCURATELY and QUICKLY.
<S> <C>
ON-LINE BY TOLL-FREE PHONE CALL
1. Read the enclosed PROXY STATEMENT and have your 1. Read the enclosed PROXY STATEMENT and have your
PROXY BALLOT(S)* at hand. PROXY BALLOT(S)* at hand.
2. Go to Web site WWW.PROXYVOTE.COM 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number 3. Enter the 12-digit Control Number
found on your PROXY BALLOT(S). found on your PROXY BALLOT(S).
4. Submit your proxy using the easy-to-follow 4. Submit your proxy using the easy-to-follow
instructions. instructions.
* DO NOT MAIL THE PROXY BALLOT(S) IF SUBMITTING YOUR PROXY BY INTERNET OR TELEPHONE.
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NATIONS FUND, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON AUGUST 13, 1999
To Nations International Equity Fund and Nations International Value Fund
Shareholders:
PLEASE TAKE NOTE THAT a special meeting of the shareholders (the
"Meeting") of Nations International Equity Fund and Nations International Value
Fund (the "Funds") of Nations Fund, Inc. (the "Company") will be held at 10:00
a.m., Eastern time, on August 13, 1999, at One Bank of America Plaza, 33rd
Floor, Charlotte, North Carolina, for purpose of considering and voting upon:
ITEM 1. A proposed Agreement and Plan of Reorganization, dated as of
June 15, 1999 (the "Reorganization Agreement"), by and between the
Company, on behalf of the Funds, and Nations Institutional Reserves, on
behalf of corresponding mutual funds (the "Successor Funds"). The
Reorganization Agreement provides for the transfer of the assets and
liabilities of the Funds to the Successor Funds, in exchange for shares
of equal value of designated classes of the Successor Funds.
ITEM 2. Such other business as may properly come before the Meeting or
any adjournment(s).
Item 1 is described in the attached Proxy Statement.
YOUR DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU VOTE IN FAVOR OF THE
PROPOSAL.
Shareholders of record as of the close of business on May 13, 1999 are
entitled to notice of, and to vote at, the Meeting or any adjournment(s)
thereof.
SHAREHOLDERS ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN
THE ENCLOSED ENVELOPE EACH ACCOMPANYING PROXY BALLOT, WHICH IS BEING SOLICITED
BY THE COMPANY'S BOARD OF DIRECTORS. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE
MEETING. SHAREHOLDERS ALSO MAY SUBMIT PROXIES: 1) BY FACSIMILE AT (704)
388-2641; 2) BY DIALING (800) 690-6903; OR 3) ON-LINE AT WEBSITE
WWW.PROXYVOTE.COM. PROXIES MAY BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED
BY SUBMITTING TO THE COMPANY A WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY
DATED PROXY OR BY ATTENDING THE MEETING AND VOTING IN PERSON.
By Order of the Board of Directors,
Richard H. Blank, Jr.
Secretary and Treasurer
June 19, 1999
<PAGE>
PROXY STATEMENT
Dated June 19, 1999
NATIONS FUND, INC.
One Bank of America Plaza
101 South Tryon Street
Charlotte, North Carolina 28255
1-800-652-5096
This proxy statement (the "Proxy") is furnished in connection with the
solicitation of proxies by the Board of Directors of Nations Fund, Inc. (the
"Company") at a Special Meeting of Shareholders of the Company's Nations
International Equity Fund and Nations International Value Fund (the "Funds") to
be held August 13, 1999 at 10:00 a.m. (Eastern time) at One Bank of America
Plaza, 101 South Tryon Street, 33rd Floor, Charlotte, North Carolina. This
Special Meeting and any adjournment(s) are referred to as the "Meeting." The
Meeting has been called to consider the following proposal:
A proposed Agreement and Plan of Reorganization, dated as of
June 15, 1999 (the "Reorganization Agreement"), by and between
the Company, on behalf of the Funds, and Nations Institutional
Reserves, on behalf of corresponding mutual funds (the
"Successors" or "Successor Funds"). The Reorganization
Agreement provides for the transfer of the assets and
liabilities of the Funds to the Successor Funds, in exchange
for shares of equal value of designated classes of the
Successor Funds (the "Reorganization").
The Successor Funds are referred to as "successors" because they were
created to receive the assets and liabilities and to continue the operations of
the Funds. While there are some differences between the Funds and their
corresponding Successor Funds, which are discussed below, an investment in the
Successor Fund is considered substantially the same as an investment in the
Funds.
Additional information about the Fund is available in the:
o Prospectuses for the Funds;
o Statement of Additional Information, or SAI, for the Funds; and
o The Funds' annual report to shareholders, including audited
financial statements.
All of this information is in documents filed with the Securities and
Exchange Commission. The financial statements contained in the annual reports
are legally deemed to be part of this Proxy and are incorporated by reference.
The annual reports to shareholders for the fiscal year ended March 31, 1999 have
previously been mailed to shareholders. Additional copies are available without
charge by writing the address given above or by calling 1-800-652-5096. These
documents also are available on the website of the Securities and Exchange
Commission (the "SEC") at www.sec.gov.
The Successor Funds are not yet operating mutual funds and do not yet
have a prospectus that has been declared effective by the SEC. Copies of the
effective prospectus will be provided to shareholders at the time the
Reorganization is consummated. Shareholders may, after the Reorganization,
obtain a copy of the Statement of Additional Information relating to the
Successor Funds without charge by calling 1-800-321-7854 or by writing Nations
Institutional Reserves at: Nations Institutional Reserves, c/o Stephens Inc.,
One Bank of America Plaza, 33rd Floor, Charlotte, North Carolina 28255.
It is expected that this Proxy will be mailed to shareholders on or
about June 19, 1999.
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I. DESCRIPTION OF THE REORGANIZATION
The Company's Board of Directors has called the Meeting to ask
shareholders to consider and vote on one proposal -- approval of the
Reorganization Agreement. Please be sure to read the entire Proxy to determine
how the Reorganization will affect your investment before casting your vote.
DESCRIPTION OF THE PROPOSAL
At meetings held in March and May 1999, the Company's Board of
Directors (including a majority of the independent Board members, meaning those
who are not "interested persons" under the Investment Company Act of 1940 (the
"1940 Act")), voted to approve the Reorganization. At the Meeting, the
shareholders of the Fund will be asked to approve the Reorganization. If
shareholder approval is obtained, and the other conditions to the closing of the
Reorganization (the "Closing") are met, Fund shareholders will receive shares of
a corresponding Successor Fund equal in value to their holdings of Fund shares
immediately before the Reorganization. Each Fund will then be terminated and
liquidated.
The dollar value and class of the Successor Fund shares received by
Fund shareholders in the Reorganization will be identical to the dollar value
and class of the Fund shares owned by each Fund shareholder immediately before
the Reorganization. EACH SUCCESSOR FUND WILL HAVE THE SAME INVESTMENT OBJECTIVE,
PRINCIPAL INVESTMENT STRATEGIES AND INVESTMENT RISKS AS ITS CORRESPONDING FUND,
AND THE REORGANIZATION WILL NOT RESULT IN ANY CHANGE TO THE INVESTMENT ADVISER
AND INVESTMENT SUB-ADVISER(S) WHO CURRENTLY MANAGE THE FUNDS. Similarly, the
features and services that are available to Fund shareholders today will
continue to be available to Successor Fund shareholders after the
Reorganization. However, the Successor Fund differs in some respects from the
Fund, and these differences are described in more detail below.
The Meeting is scheduled for August 13, 1999, and the Reorganization,
if approved, is expected to occur on or about August 20, 1999.
DESCRIPTION OF THE REORGANIZATION AGREEMENT
The Reorganization Agreement is the governing document of the
Reorganization. Among other things, it provides for (i) the transfer of all of
the assets and liabilities of the Fund to the Successor Fund in exchange for
shares of equal value of designated classes of the Successor Fund; and (ii) the
distribution of such Successor Fund shares to shareholders of the Fund in
liquidation of the Fund. The completion of the Reorganization is conditioned
upon the Company and Nations Institutional Reserves receiving an opinion from
counsel that the exchange contemplated by the Reorganization will be tax-free
under federal law. The Reorganization Agreement includes a number of other
conditions to completion of the Reorganization, sets forth representations and
warranties of the parties and describes the mechanics of the transaction.
As is discussed in more detail below, the Nations International Equity
Fund's Successor will be a "feeder" in a master/feeder structure, which simply
means that it will invest all of its assets in a master portfolio that has an
identical investment objective and principal investment strategy. In exchange
for investing its assets in a master portfolio, Nations Master Investment Trust
("NMIT"), which is the registered investment company in the Nations Funds family
that would "house" the master portfolio, will issue an "interest" in such master
portfolio (similar to a share) to the Fund. Operationally, this exchange--i.e.,
an interest in a master portfolio in return for the assets of the Fund--will
occur simultaneously with the closing of the Reorganization and will be governed
by separate agreement. Although the Nations International Value Fund's Successor
has reserved the right to convert to such a master/feeder structure in the
future, it does not currently intend to do so.
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<PAGE>
The Reorganization Agreement also provides that Fund shareholders will
bear the expenses associated with the Reorganization on a pro rata basis,
including the cost of soliciting proxies to obtain shareholder approval.
However, Nations International Equity Fund's investment adviser (and/or its
affiliates) may effectively bear the pro rata portion of the Reorganization
expenses attributable to that Fund, depending upon the Fund's asset levels,
because of a total operating expense ratio commitment in place. Shareholder
Communications Corp. and A.D.P. Proxy Services, Inc. have been hired to conduct
the proxy solicitation, and provide proxy mailing and recordkeeping services,
including vote tabulation. The cost of employing these entities in connection
with the Reorganization is expected to be $_______.
The Reorganization may be abandoned at any time before the Closing upon
the mutual consent of the Company and Nations Institutional Reserves. At any
time before or after approval (to the extent permitted by law) of the agreement
by the shareholders of the Funds (i) the parties may, by written agreement
authorized by the Company's Board of Directors and Nations Institutional
Reserves' Board of Trustees, amend any of the provisions of the Reorganization
Agreement; and (ii) either party may waive any default by the other party or the
failure to satisfy any of the conditions to its obligations (the waiver to be in
writing and authorized by an appropriate officer of the relevant party).
The Reorganization Agreement must be approved by a vote of a majority
of all of the shareholders of each Fund who are present at the meeting, either
in person or by proxy. Copies of the Reorganization Agreement are available upon
request by writing or calling the Company or at the SEC's website (www.sec.gov).
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT FUND
SHAREHOLDERS VOTE FOR THE REORGANIZATION AGREEMENT.
II. THE PURPOSE OF THE REORGANIZATION
The Reorganization offers several benefits to Fund shareholders:
o By establishing a master/feeder structure for Nations International
Equity Fund's Successor, NMIT would have the potential to attract
other feeders and access additional distribution channels that would
not otherwise be available if such Successor operated on a
stand-alone basis. This could result in higher asset levels, which,
in turn, may lead to economies of scale for NMIT investors,
including Nations International Equity Fund's Successor. As
discussed above, Nations International Value Fund's Successor has
reserved the right to convert to a master/feeder structure, which if
adopted in the future, would allow it to combine its assets with
those of other similar funds, thereby potentially achieving
economies of scale and other benefits that come from greater asset
size.
o The Reorganization is one part of a broader initiative to streamline
the operations of the Nations Funds family, which consists of
several registered investment companies. Over time, management
expects to reduce the number of registered investment companies in
the fund family without necessarily impacting investment
alternatives.
o The Successor Funds will have more flexibility in their investment
policies, including policies that permit them to adopt a
"master/feeder" structure. A master/feeder structure, if adopted in
the future, would allow a Successor Fund to combine its assets with
those of other similar funds, thereby potentially achieving
economies of scale and other benefits that come from greater asset
size.
o The Successor Funds will be part of a Massachusetts business trust,
which generally has more flexibility in its operations than a
Maryland corporation like the Company.
3
<PAGE>
o The Reorganization Agreement provides that Fund shareholders will
bear the expenses associated with the Reorganization on a pro rata
basis, including the cost of soliciting proxies to obtain
shareholder approval. However, Nations International Equity Fund's
investment adviser (and/or its affiliates) may effectively bear the
pro rata portion of the Reorganization expenses attributable to that
Fund, depending upon the Fund's asset levels, because of a total
operating expense ratio commitment in place.
o The exchange of shares in the Reorganization is expected to be
tax-free under federal law.
The Reorganization will not result in any change to the investment
adviser or sub-adviser(s) who currently manage either Fund. In addition, the
Reorganization will not result in any immediate change to the total operating
expense ratios (before or after waivers and/or reimbursements) of the various
classes. Similarly, the features and services that are available to Fund
shareholders today will also be available to Successor Fund shareholders after
the Reorganization.
III. THE EFFECTS OF THE REORGANIZATION
As noted above, there are some differences between the Fund and the
Successor Fund, which are summarized below:
o After the Reorganization, Fund shareholders will hold shares in a
series of Nations Institutional Reserves, a registered investment
company in the Nations Funds family. Unlike the Company, which is a
Maryland corporation, Nations Institutional Reserves is a
Massachusetts business trust.
o The Nations International Equity Fund's Successor is a "feeder" in a
master/feeder structure, and Nations International Value Fund's
Successor has reserved the right to convert to a feeder in such a
structure.
o The Fund and the Successor Fund will have somewhat different
fundamental and non-fundamental investment policies. For example,
the Successor Funds will have the ability under their fundamental
policies to invest all of their assets in master portfolios rather
than in individual securities.
A DIFFERENT REGISTERED INVESTMENT COMPANY
Federal securities laws largely govern the way that mutual funds
operate, but they do not cover every aspect of a fund's existence and operation.
State law and each fund's governing documents fill in most of the gaps and can
create additional operational rules and restrictions that funds must follow. The
Company is a Maryland corporation. The proposed Reorganization would reorganize
each Fund into a series of Nations Institutional Reserves, which is a
Massachusetts business trust. For Fund shareholders the "move" to Massachusetts
would be largely on paper; each Successor Fund would continue to be advised by
the same investment adviser and investment sub-adviser(s), and have its shares
distributed by the same distributor , as each Fund is currently. The Funds'
other service providers would also be unchanged after the Reorganization.
Generally, under Massachusetts business trust law, a mutual fund's
governing instrument, called a Declaration of Trust, may establish the way it
will operate with few state law requirements or prohibitions. Thus, mutual funds
generally have more flexibility in their operations and certainty about any
operational restrictions because the restrictions are written in the fund's
declaration of trust. The following discussion outlines some of the differences
between the state law and documents currently governing the Company's Funds and
that which will apply to the Successor Fund as a series of Nations Institutional
Reserves.
o THE BOARD OF TRUSTEES. Maryland corporations are governed by a Board
of Directors. The Successor Funds, as part of a business trust,
instead will be governed by a Board of Trustees. The Board of
Nations Institutional Reserves will have ten Trustees, all ten of
whom currently serve as Directors of the Company.
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<PAGE>
o GOVERNING DOCUMENTS. Maryland corporations are governed by
organizational documents called Articles of Incorporation (or
sometimes called a Charter) and By-Laws. Massachusetts business
trusts are governed by a Declaration of Trust and By-Laws. These
governing documents are generally similar, although there are some
differences. For example, in order for the Company to dissolve under
Maryland law, its Articles of Incorporation and By-Laws provide (and
Maryland law requires) that a majority of all outstanding shares of
the Company must approve such a dissolution. The Declaration of
Trust and By-Laws of Nations Institutional Reserves provides that
only a majority of the shares voted at a meeting is needed to
approve a similar dissolution.
In general, however, the attributes of a share of common stock are
comparable to those of a share of beneficial interest, I.E.,
shares of both are entitled to one vote per share held and
fractional votes for fractional shares held, and will vote in the
aggregate and not by portfolio or class except as otherwise
required by law or when class voting is permitted by its Board.
o SHAREHOLDER LIABILITY. Under Maryland law, shareholders are not
personally liable for the debts of the Fund. By contrast, under
Massachusetts law, interestholders of a Massachusetts business trust
like Nations Institutional Reserves could, under certain
circumstances, be held personally liable for the obligations of the
trust. However, Nations Institutional Reserves has provisions in its
Declarations of Trust that are intended to protect shareholders from
such liability. Thus, the risk of an interestholder incurring a
financial loss on account of interestholder liability is limited to
circumstances in which the trust itself is unable to meet its
obligations (e.g., in the event its liabilities exceed its assets).
This is a highly unlikely event.
THE MASTER/FEEDER STRUCTURE
Nations International Equity Fund's Successor is a feeder fund in a
master/feeder structure, which means simply that it invests all of its assets in
a master portfolio with identical investment objectives and principal investment
strategies. The master portfolio is a series of NMIT--a registered investment
company in the Nations Funds family. The Successor Fund would be, therefore, an
interestholder in the corresponding master portfolio. One advantage of a
master/feeder structure is that feeder funds investing in the same master
portfolio can reduce their expenses through sharing the costs of managing a
large pool of assets. Another advantage of such a structure is that the master
portfolios will have opportunities to pursue other distribution channels--such
as offshore fund investors--that would not otherwise be available to stand-alone
mutual funds. While no other feeder funds currently invest in the master
portfolio, such feeders may so invest in the future.
All feeders in the master portfolio will invest on the same terms and
conditions as the Successor Fund and will pay a proportionate share of the
master portfolio's expenses. However, other investors in the master portfolio
are not required to sell their shares at the same offering price as the
Successor Fund and could be sold with different sales loads and on-going
administrative and other expenses. Therefore, Successor Fund shareholders may
have different returns than other shareholders that invest in the master
portfolio. In addition, the Successor Fund may withdraw its entire investment
from the master portfolio if the Board of Trustees of Nations Institutional
Reserves determines that it is in the best interests of such Successor Fund to
do so. Also other investors in a master portfolio may similarly withdraw their
investment at any time. The Successor Fund might withdraw, for example, if there
were other investors in a master portfolio with voting power to change the
investment objective, policies and limitations of the master portfolio in a
manner unacceptable to the Board of Trustees of Nations Institutional Reserves.
A withdrawal could result in a distribution in kind of portfolio securities (as
opposed to a cash distribution) by a master portfolio to the Successor Fund.
That distribution could result in a less diversified portfolio of investments
for the Successor Fund and could adversely affect the liquidity of the Successor
Fund's investment portfolio. In addition, if securities were distributed, the
Successor Fund generally would incur brokerage tax or other charges in
converting the securities to cash.
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MODERNIZED AND STREAMLINED INVESTMENT POLICIES AND RESTRICTIONS
The Funds' investment objectives, principal investment strategies and
investment risks will not change as a result of the Reorganization.
However, the Successor Funds will have a more modernized and
streamlined set of fundamental and non-fundamental investment policies and
restrictions. Some of the Funds' current investment policies and restrictions
may limit their portfolio managers from investing in a security that is both
consistent with the investment objective of the Funds and also a good
investment. One reason for changing some of these investment policies is to
remove restrictions that unnecessarily hamper the portfolio managers' investment
discretion. Many of these restrictions were put in place by the Funds as a
result of the directives of various state securities commissions. Recent changes
to federal securities laws have superseded these directives. Another reason is
the desire to migrate towards uniform investment policies for similarly managed
funds in the Nations Funds family.
One of the differences between the Successor Funds' fundamental
policies and those of the Funds is that the Successor Funds will have the
ability under its fundamental policies to invest all of its assets in a master
portfolio rather than in individual securities.
For a detailed comparison of the fundamental investment policies and
limitations of the Funds and the Successor Funds see Appendix I to this Proxy.
IV. OTHER INFORMATION ABOUT THE REORGANIZATION
COMPARISON OF FEES AND EXPENSES
The Reorganization will not result in any immediate change to the total
operating expense ratios (before or after waivers and/or reimbursements) of the
various classes.
INVESTMENT ADVISER AND OTHER SERVICE PROVIDERS. The Funds and Successor
Funds have the same service providers. Upon the Closing of the Reorganization,
these service providers will continue to serve the Successor Funds in the
capacities indicated below.
SERVICE PROVIDERS FOR THE FUND AND THE SUCCESSOR FUND
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Investment Adviser: NationsBanc Advisors, Inc.
Investment Sub-Adviser(s): Gartmore Global Partners (for
Nations International Value
Fund and its Successor);
Gartmore Global Partners,
INVESCO Global Asset Management
(N.A.), Inc. and Putnam
Investment Management, Inc.
(for Nations International
Equity Fund and its Successor)
Distributor: Stephens Inc.
Co-Administrator: NationsBanc Advisors, Inc.
Co-Administrator: Stephens Inc.
Sub-Administrator: The Bank of New York
Custodian: The Bank of New York
Transfer Agent: First Data Investor Services
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SERVICE PROVIDERS FOR THE FUND AND THE SUCCESSOR FUND
-----------------------------------------------------
Group, Inc.
Sub-Transfer Agent: NationsBank, N.A. (for Primary
A and B shares only)
Independent Auditors: PricewaterhouseCoopers LLP
SALES LOADS, SHAREHOLDER TRANSACTIONS AND SERVICES. Shares of the Funds
and corresponding Successor Funds have both identical front-end or contingent
deferred sales charges, if any, and identical dividend policies. Other features,
such as exchange and redemption policies, of the classes of the Funds and
corresponding Successor Funds are substantially similar.
ACCOUNTING TREATMENT OF THE REORGANIZATION. The Successor Funds will
become the accounting successor of their corresponding funds as of the Closing,
which means that the financial statements and performance history of the Funds'
and their classes will become those of the Successor Funds and classes as though
such financial statements and performance history were the Successor Funds' own.
FEDERAL INCOME TAX CONSEQUENCES. The Funds and Successor Funds each
intend to qualify, as of the Closing, as a separate "regulated investment
company" under the Internal Revenue Code of 1986, as amended (the "Code").
Accordingly, the Funds and the Successor Funds have been, and expect to continue
to be, relieved of federal income tax liability.
Consummation of the Reorganization with respect to the Funds and the
Successor Funds is subject to the condition that the Company and Nations
Institutional Reserves receive an opinion from Morrison & Foerster LLP
substantially to the effect that, for federal income tax purposes: (i) the
transfer of all of the assets and liabilities of the Funds to the Successor
Funds in exchange for shares of the Successor Funds, and the distribution of
those shares to shareholders of the Funds, will constitute a "reorganization"
within the meaning of Section 368(a) of the Code, and the Funds and the
Successor Funds will each be a "party to a reorganization" within the meaning of
Section 368(b) of the Code in respect of the Reorganization; (ii) no gain or
loss will be recognized by the Funds upon the transfer of their assets and
liabilities to the Successor Funds solely in exchange for the shares of the
Successor Funds; (iii) no gain or loss will be recognized by the Funds upon the
receipt of the assets and assumption of liabilities of the Funds solely in
exchange for the shares of the Successor Funds; (iv) the basis of the Funds'
assets received by the pursuant to the Reorganization will be the same as the
basis of those assets in the hands of the Funds immediately prior to the
Reorganization; (v) the holding period of the Funds' assets in the hands of the
Successor Funds will include the period for which such assets have been held by
the Funds; (vi) no gain or loss will be recognized by the Funds on the
distribution to its shareholders of the shares of the Successor Funds; (vii) no
gain or loss will be recognized by the shareholders of the Funds upon their
receipt of the shares of the Successor Funds in exchange for such shareholders'
shares of the Funds; (viii) the basis of the shares of the Successor Funds
received by the shareholders of the Funds will be the same as the basis of the
shares of the Funds surrendered by such shareholders pursuant to the
Reorganization; (ix) the holding period for the shares of the Successor Funds
received by shareholders of the Funds will include the period during which such
shareholders held Fund shares surrendered in exchange therefor, provided that
such Fund shares are held as a capital asset in the hands of Fund shareholders
on the date of the exchange; and (x) each Successor Fund will succeed to and
take into account the tax attributes, described in Section 381(c) of the Code,
of the Funds as of the date of the Closing, subject to the conditions and
limitations specified in the Code. Shareholders of the Funds should note,
however, that the sale of securities by the Funds prior to the Closing whether
in the ordinary course of business or in anticipation of the closing, could
result in a taxable capital gains distribution prior to the closing.
BOARD CONSIDERATION. The Company's Board of Directors unanimously voted
to approve the Reorganization Agreement at meetings held in March and May 1999.
In reviewing the proposed Reorganization, the Board considered the potential
impact of the Reorganization on the Funds' shareholders. The Board (with the
advice and assistance of independent counsel) reviewed and took into account,
among other things: (1) the
7
<PAGE>
Reorganization as part of a broader initiative to streamline the operations of
the Nations Funds family; (2) the fact that Nations International Equity Fund's
Successor is a feeder in a master/feeder structure; (3) the investment
objective, principal investment strategies, investment risks, and policies and
limitations of each Fund, and their compatibility with those of each
corresponding Successor Fund; (4) the anticipated tax-free nature of the
exchange contemplated by the Reorganization; (5) the fact that total operating
expense ratios (before and after waivers and/or reimbursements) would be the
same for each class of each Fund and the corresponding class of the
corresponding Successor Fund; (6) the fact that a pro rata share of the expenses
associated with the Reorganization would be borne by Nations International Value
Fund shareholders; (7) the fact that Nations International Equity Fund
shareholders would not be bearing any Reorganization expenses due to total
operating expense ratio commitments. Based upon its evaluation of these factors,
and its consideration of the expected benefits of the Reorganization (discussed
under "II--The Purpose of the Reorganization"), and in light of their fiduciary
duties under federal and state law, the Company's Board of Directors, including
all of the non-interested members of the Board, determined that the proposed
Reorganization is in the best interests of the shareholders of the Funds and
that the interests of the shareholders of the Funds will not be diluted as a
result of the Reorganization.
THE COMPANY'S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
SHAREHOLDERS VOTE FOR THE REORGANIZATION AGREEMENT.
V. VOTING INFORMATION
GENERAL INFORMATION. This Proxy is being furnished in connection with
the solicitation of proxies for the Meeting by the Company's Board of Directors.
It is expected that the solicitation of proxies will be primarily by mail.
Officers and agents of the Company also may solicit proxies by telephone,
telegraph or personal interview. The expenses of the Reorganization, including
any expenses associated with retaining a third party, to assist in the
solicitation of proxies, will be borne by Fund shareholders. However, after
giving effect to total operating expense ratio commitments, the Fund's
investment adviser (and/or its affiliates) effectively will bear the pro rata
portion of the expenses attributable to Nations International Equity Fund
shareholders. Any shareholder giving a proxy may revoke it at any time before it
is exercised (i) by submitting to the Company a written notice of revocation,
(ii) by submitting to the Company a subsequently dated proxy or by attending the
Meeting and voting in person.
Only shareholders of record at the close of business on May 13, 1999,
will be entitled to vote at the Meeting. On that date, the following number of
shares of each class of the Funds were outstanding and entitled to be voted.
<TABLE>
<CAPTION>
FUND SHARES ENTITLED TO BE VOTED
---- ---------------------------
<S> <C> <C>
Nations International Equity Fund
Primary A shares xx
Primary B shares xx
Investor A shares xx
Investor B shares xx
Investor C shares xx
Nations International Value Fund
Primary A shares xx
Primary B shares xx
Investor A shares xx
Investor B shares xx
Investor C shares xx
</TABLE>
Each whole and fractional share is entitled to a whole or fractional
vote.
8
<PAGE>
If the accompanying proxy ballot is executed and returned in time for
the Meeting, the shares covered thereby will be voted in accordance with the
proxy on all matters that may properly come before the Meeting.
Significant Shareholders. As of May 13, 1999, the officers and
Directors of the Company as a group owned less than 1% of either Fund. The
tables below show the name, address and share ownership of each person known to
each Company to have beneficial or record ownership with respect to 5% or more
of a class of the Funds as of May 13, 1999.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
CLASS; AMOUNT PERCENTAGE
NAME AND OF SHARES OWNED; PERCENTAGE PERCENTAGE OF FUND
FUND ADDRESS TYPE OF OWNERSHIP OF CLASS OF FUND POST-CLOSING
- - ---- ------- ----------------- -------- ------- ------------
- - ---------------------- ---------------------------- ------------------- ------------- ------------ -----------
- - ---------------------- ---------------------------- ------------------- ------------- ------------ -----------
- - ---------------------- ---------------------------- ------------------- ------------- ------------ -----------
</TABLE>
For purposes of the 1940 Act, any person who owns directly or through
one or more controlled companies more than 25% of the voting securities of a
company is presumed to "control" such company. Accordingly, to the extent that a
shareholder identified in the foregoing table is identified as the beneficial
holder of more than 25% of a class, or is identified as the holder of record of
more than 25% of a class and has voting and/or investment power, it may be
presumed to control such class.
QUORUM. In the event that a quorum is not present at the Meeting, or in
the event that a quorum is present at the Meeting but sufficient votes to
approve the Reorganization Agreement are not received, one or more
adjournment(s) may be proposed to permit further solicitation of proxies. Any
adjourned session or sessions may be held, after the date set for the original
Meeting without notice except announcement at the Meeting, but, under Maryland
law, no more than 120 days after the record date. If any adjournment is
proposed, the persons named as proxies will vote those proxies in their sole
discretion.
A quorum is constituted with respect to the Funds by the presence in
person or by proxy of the holders of more than one-half of the outstanding
shares of the Fund entitled to vote at the Meeting. For purposes of determining
the presence of a quorum for transacting business at the Meeting, abstentions
will be treated as shares that are present at the Meeting but which have not
been voted. Abstentions will have the effect of a "no" vote for purposes of
obtaining the requisite approvals of the Reorganization Agreement. Broker
"non-votes" (that is, proxies from brokers or nominees indicating that such
persons have not received instructions from the beneficial owners or other
persons entitled to vote shares on a particular matter with respect to which the
brokers or nominees do not have discretionary power) will be treated the same
way as abstentions.
ANNUAL MEETINGS AND SHAREHOLDER MEETINGS. The Company does not hold
annual meetings of shareholders for the election of directors and other business
unless otherwise required by the 1940 Act. Under certain circumstances, holders
of at least 10% of the outstanding shares of either Fund may have the right to
call a meeting of shareholders.
SHAREHOLDER APPROVAL. The Reorganization Agreement is being submitted
for approval at the Meeting by the Funds' shareholders pursuant to the Company's
Articles of Incorporation and By-Laws, and was unanimously approved by the
Company's Board of Directors. The Reorganization Agreement must be approved by a
majority of the shares present at the Meeting in person or by proxy.
A vote of the shareholders of the Successor Funds is not being
solicited, since their approval or consent is not necessary for the
Reorganization.
9
<PAGE>
OTHER BUSINESS. The Company's Board knows of no other business to be
brought before the Meeting. However, if any other matters come before the
Meeting, it is the intention that proxies which do not contain specific
restrictions to the contrary will be voted on such matters in accordance with
the judgment of the persons named in the enclosed form of proxy.
HOW TO OBTAIN ADDITIONAL INFORMATION ABOUT THE FUNDS. Additional
information about the Funds is included in its most recent prospectuses and
statement of additional information. You may obtain a prospectus or statement of
additional information without charge by calling 1-800-321-7854 or by writing
the Company at: Nations Fund, Inc., c/o Stephens Inc., One Bank of America
Plaza, 33rd Floor, Charlotte, North Carolina 28255.
Reports and other information filed by the Company can be inspected and
copied at the Public Reference Facilities maintained by the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549. In addition, these materials can be
inspected and copied at the SEC's Regional Offices at 7 World Trade Center,
Suite 1300, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
also can be obtained from the Public Reference Branch, Office of Consumer
Affairs and Information Services, Securities and Exchange Commission,
Washington, D.C. 20549, at prescribed rates.
FINANCIAL STATEMENTS. The audited financial statements and financial
highlights for the Funds for the fiscal year ended March 31, 1999, and the
independent accountants report thereon, are incorporated by reference into this
Proxy.
SHAREHOLDER INQUIRIES. For additional information call 1-800-652-5096
or write to the Company at the address on the cover page of this Proxy.
* * *
10
<PAGE>
YOUR VOTE IS IMPORTANT TO US REGARDLESS OF THE NUMBER OF SHARES THAT YOU OWN.
PLEASE VOTE BY RETURNING YOUR PROXY BALLOT TODAY, EITHER IN THE ENCLOSED
POSTAGE-PAID ENVELOPE OR BY TELEFACSIMILE AT (704) 388-2641. YOU MAY ALSO SUBMIT
YOUR PROXY BY A TOLL-FREE PHONE CALL OR BY VOTING ON-LINE, AS INDICATED BELOW.
<TABLE>
<CAPTION>
- - --------------------------------------------------------------------------- -------------------------------
TWO QUICK AND EASY WAYS TO SUBMIT YOUR PROXY
As a valued Fund shareholder, your proxy vote is important to us. That's why
we've made it faster and easier to submit your proxy at your convenience, 24
hours a day. After reviewing the enclosed Proxy Statement, select one of the
following quick and easy methods to submit your proxy accurately and quickly.
<S> <C>
ON-LINE BY TOLL-FREE PHONE CALL
1. Read the enclosed Proxy Statement and have 1. Read the enclosed Proxy Statement and have your
your Proxy Ballot(s)* at hand. Proxy Ballot(s)* at hand.
2. Go to Web site www.proxyvote.com 2. Call toll-free 1-800-690-6903.
3. Enter the 12-digit Control Number found on 3. Enter the 12-digit Control Number found on your
your Proxy Ballot(s). Proxy Ballot(s).
4. Submit your proxy using the easy-to-follow 4. Submit your proxy using the easy-to-follow
instructions. instructions.
* DO NOT MAIL THE PROXY BALLOT(S) IF SUBMITTING YOUR PROXY BY INTERNET OR TELEPHONE.
- - -----------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE>
APPENDIX I
COMPARISON OF FUNDAMENTAL POLICIES AND LIMITATIONS
OF THE FUNDS AND THE SUCCESSOR FUNDS
<TABLE>
<CAPTION>
FUNDAMENTAL INVESTMENT POLICIES AND LIMITATIONS
The Fund may not: The Successor Fund may not:
<S> <C>
1. Underwrite securities issued by any other 1. Underwrite any issue of securities within the
person, except to the extent that the purchase of meaning of the 1933 Act except when it might
securities and the later disposition of such technically be deemed to be an underwriter either
securities in accordance with the Fund's investment (a) in connection with the disposition of a
program may be deemed an underwriting. This portfolio security, or (b) in connection with the
restriction shall not limit the Fund's ability to purchase of securities directly from the issuer
invest in securities issued by other registered thereof in accordance with its investment objective.
investment companies. This restriction shall not limit the Fund's ability
to invest in securities issued by other registered
investment companies.
2. Invest in real estate or real estate limited 2. Purchase or sell real estate, except a Fund may
partnership interests. (A Fund may, however, purchase securities of issuers which deal or invest
purchase and sell securities secured by real estate in real estate and may purchase securities which are
or interests therein or issued by issuers which secured by real estate or interests in real estate.
invest in real estate or interests therein.) This
restriction does not apply to real estate limited
partnerships listed on a national stock exchange
(e.g., the New York Stock Exchange).
3. Purchase or sell commodity contracts except 3. Purchase or sell commodities, except that a Fund may
that each Fund may, to the extent appropriate under to the extent consistent with its investment
its investment policies, purchase publicly traded objective, invest in securities of companies that
securities of companies engaging in whole or in purchase or sell commodities or which invest in such
part in such activities, may enter into futures programs, and purchase and sell options, forward
contracts and related options, may engage in contracts, futures contracts, and options on futures
transactions on a when-issued or forward commitment contracts. This limitation does not apply to foreign
basis, and may enter into forward currency currency transactions including without limitation
contracts in accordance with its investment forward currency contracts.
policies.
I-1
<PAGE>
(Except for Nations International Value Fund) 4. Purchase any securities which would cause 25%
Purchase any securities which would cause 25% or or more of the value of its total assets at the
more of the value of the Fund's total assets at the time of purchase to be invested in the securities
time of such purchase to be invested in the of one or more issuers conducting their principal
securities of one or more issuers conducting their business activities in the same industry,
principal activities in the same industry, provided provided that: (a) there is no limitation with
that this limitation does not apply to investments respect to obligations issued or guaranteed by
in U.S. Government Obligations. Nations the U.S. government, any state or territory of
International Value Fund may not invest 25% or more the United States, or any of their agencies,
of its total assets in one or more issuers instrumentalities or political subdivisions, and
conducting their principal business activities in (b) notwithstanding this limitation or any other
the same industry (with certain exceptions). fundamental investment limitation, assets may be
invested in the securities of one or more
diversified management investment companies to
the extent permitted by the 1940 Act and the
rules and regulations thereunder.
4. (Except for Nations International Value Fund) make 5. Make loans, except to the extent permitted by the
loans, except that a Fund may purchase and hold 1940 Act.
debt instruments (whether such instruments are part
of a public offering or privately placed), may
enter into repurchase agreements and may lend
portfolio securities in accordance with its
investment policies.
I-2
<PAGE>
5. (Except for Nations International Value Fund) borrow 6. Borrow money, issue senior securities or
money or issue senior securities as defined in the mortgage, pledge or hypothecate its assets except
Investment Company Act of 1940, as amended (the to the extent permitted under the 1940 Act.
"1940 Act") except that (a) a Fund may borrow money
from banks for temporary purposes in amounts up to
one-third of the value of such Fund's total assets
at the time of borrowing, provided that borrowings
in excess of 5% of the value of such Fund s total
assets will be repaid prior to the purchase of
additional portfolio securities by such Fund, (b) a
Fund may enter into commitments to purchase
securities in accordance with the Fund's investment
program, including delayed delivery and when-issued
securities, which commitments may be considered the
issuance of senior securities, and (c) a Fund may
issue multiple classes of shares in accordance with
SEC regulations or exemptions under the 1940 Act.
The purchase or sale of futures contracts and
related options shall not be considered to involve
the borrowing of money or issuance of senior
securities. Each Fund may enter into reverse
repurchase agreements or dollar roll transactions.
The purchase or sale of futures contracts and
related options shall not be considered to involve
the borrowing of money or issuance of senior
securities. Nations International Value Fund may
not borrow money except for temporary purposes in
amounts up to one-third of the value of its total
assets at the time of such borrowing. Whenever
borrowings exceed 5% of the Fund's total assets,
the Fund will not make any investments.
I-3
<PAGE>
6. (Except for the Nations International Value Fund) 7. purchase securities (except securities issued or
purchase securities of any one issuer (other than guaranteed by the U.S. Government, its agencies or
U.S. Government Obligations) if, immediately after instrumentalities) of any one issuer if, as a
such purchase, more than 5% of the value of such result, more than 5% of its total assets will be
Fund's total assets would be invested in the invested in the securities of such issuer or it
securities of such issuer, except that up to 25% of would own more than 10% of the voting securities of
the value of the Fund's total assets may be such issuer, except that (a) up to 25% of its total
invested without regard to these limitations and assets may be invested without regard to these
with respect to 75% of such Fund's assets, such limitations and (b) a Fund's assets may be invested
Fund will not hold more than 10% of the voting in the securities of one or more diversified
securities of any issuer. The Nations management investment companies to the extent
International Value Fund may not purchase permitted by the 1940 Act.
securities of any one issuer (with certain
exceptions, including U.S. Government securities)
if more than 5% of the Fund's total assets will be
invested in the securities of any one issuer,
except that up to 25% of the value of the Fund's
total assets may be invested without regard to the
5% limitation. The Fund may not purchase more than
10% of the outstanding voting securities of any
issuer subject, however, to the foregoing 25%
exception.
7. Purchase any securities on margin (except for such
short-term credits as are necessary for the
clearance of purchases and sales of portfolio
securities) or sell any securities short (except
against the box.) For purposes of this restriction,
the deposit or payment by the Fund of initial or
maintenance margin connection with futures
contracts and related options and options on
securities is not considered to be the purchase of
a security on margin.
</TABLE>
I-4
<PAGE>
********************************************************************************
APPENDIX
NATIONS INTERNATIONAL EQUITY FUND
NATIONS FUND, INC.
PROXY CARD
SPECIAL MEETING OF SHAREHOLDERS-AUGUST 13, 1999
The undersigned hereby appoints Richard H. Blank, Jr. and James E.
Banks, Jr. (the "Proxies") 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 Nations
International Equity Fund (the "Fund") of Nations Fund, Inc. (the "Company") to
be held at One Bank of America Plaza, 33rd Floor, Charlotte, North Carolina at
10:00 a.m. (Eastern time), on Friday, August 13, 1999, and at any adjournment or
adjournments thereof. The proxies will cast votes according to the number of
shares of 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. The undersigned hereby revokes any prior proxy to vote at
such meeting, and hereby ratifies and confirms 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 AND THE PROXY STATEMENT, DATED JUNE 19, 1999.
YOU ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE EACH ACCOMPANYING PROXY BALLOT, WHICH IS BEING SOLICITED BY THE
COMPANY'S BOARD OF DIRECTORS. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE
MEETING. YOU ALSO MAY SUBMIT PROXIES: 1) BY FACSIMILE AT (704) 388-2641; 2) BY
DIALING (800) 690-6903; OR 3) ON-LINE AT WEBSITE WWW.PROXYVOTE.COM. PROXIES MAY
BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO THE COMPANY A
WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE
MEETING AND VOTING IN PERSON.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. PROXIES RETURNED WITHOUT ANY SPECIFICATION WILL
BE VOTED IN FAVOR OF THE PROPOSAL.
Please sign below exactly as your name(s) appear(s) hereon. Corporate proxies
should be signed in full corporate name by an authorized officer. Each joint
owner should sign personally. Fiduciaries should give full titles as such.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
NATIONS INTERNATIONAL EQUITY FUND
VOTE ON PROPOSAL
To approve an Agreement and Plan of Reorganization, dated as of June
15, 1999 (the "Reorganization Agreement"), by and between the Company,
on behalf of the Fund, and Nations Institutional Reserves, on behalf of
a corresponding mutual fund (the "Successor Fund"). The Reorganization
Agreement provides for the transfer of the assets and liabilities of
the Fund to the Successor Fund, in exchange for shares of equal value
of designated classes of the Successor Fund.
|_|FOR |_|AGAINST |_|ABSTAIN
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.
-------------------- -----------
Signature Date
-------------------- -----------
Signature (Joint Owners) Date
<PAGE>
NATIONS INTERNATIONAL VALUE FUND
NATIONS FUND, INC.
PROXY CARD
SPECIAL MEETING OF SHAREHOLDERS-AUGUST 13, 1999
The undersigned hereby appoints Richard H. Blank, Jr. and James E.
Banks, Jr. (the "Proxies") 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 Nations
International Value Fund (the "Fund") of Nations Fund, Inc. (the "Company") to
be held at One Bank of America Plaza, 33rd Floor, Charlotte, North Carolina at
10:00 a.m. (Eastern time), on Friday, August 13, 1999, and at any adjournment or
adjournments thereof. The proxies will cast votes according to the number of
shares of 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. The undersigned hereby revokes any prior proxy to vote at
such meeting, and hereby ratifies and confirms 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 AND THE PROXY STATEMENT, DATED JUNE 19, 1999.
YOU ARE REQUESTED TO MARK, DATE, SIGN AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE EACH ACCOMPANYING PROXY BALLOT, WHICH IS BEING SOLICITED BY THE
COMPANY'S BOARD OF DIRECTORS. THIS IS IMPORTANT TO ENSURE A QUORUM AT THE
MEETING. YOU ALSO MAY SUBMIT PROXIES: 1) BY FACSIMILE AT (704) 388-2641; 2) BY
DIALING (800) 690-6903; OR 3) ON-LINE AT WEBSITE WWW.PROXYVOTE.COM. PROXIES MAY
BE REVOKED AT ANY TIME BEFORE THEY ARE EXERCISED BY SUBMITTING TO THE COMPANY A
WRITTEN NOTICE OF REVOCATION OR A SUBSEQUENTLY DATED PROXY OR BY ATTENDING THE
MEETING AND VOTING IN PERSON.
THIS PROXY WILL BE VOTED AS SPECIFIED BELOW WITH RESPECT TO THE ACTION TO BE
TAKEN ON THE FOLLOWING PROPOSAL. PROXIES RETURNED WITHOUT ANY SPECIFICATION WILL
BE VOTED IN FAVOR OF THE PROPOSAL.
Please sign below exactly as your name(s) appear(s) hereon. Corporate proxies
should be signed in full corporate name by an authorized officer. Each joint
owner should sign personally. Fiduciaries should give full titles as such.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
NATIONS INTERNATIONAL VALUE FUND
VOTE ON PROPOSAL
To approve an Agreement and Plan of Reorganization, dated as of June
15, 1999 (the "Reorganization Agreement"), by and between the Company,
on behalf of the Fund, and Nations Institutional Reserves, on behalf of
a corresponding mutual fund (the "Successor Fund"). The Reorganization
Agreement provides for the transfer of the assets and liabilities of
the Fund to the Successor Fund, in exchange for shares of equal value
of designated classes of the Successor Fund.
|_|FOR |_|AGAINST |_|ABSTAIN
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.
-------------------- -----------
Signature Date
-------------------- -----------
Signature (Joint Owners) Date
